Financial Market Newsletter

The U.S Federal Reserve (FED) has cut its benchmark interest rate for the third time since the European Central Bank’s (ECB) most recent rate reduction in June. The federal funds rate now stands at 3,5% - 3,75%, down from 4,25% - 4,5%, while the ECB has lowered its policy rate to an equivalent level of 2%.

Federal Reserve officials agreed to cut interest rates for a third consecutive meeting but signaled that this may be the final reduction for now amid widening divisions over the path of policy ahead.

The USD strengthened on Tuesday evening (+0,15%) after better-than-expected labor-market data indicated that the U.S job market has not fully weakened ahead of the Federal Reserve’s anticipated rate cut on Thursday morning.

China’s goods trade surplus surpassed USD 1 trillion for the first time this year, marking a milestone that underscores the country’s manufacturing prowess across sectors ranging from high-end electric vehicles to inexpensive T-shirts.

Federal Reserve policymakers are expected to vote in favor of another interest-rate cut this week to safeguard the labor market amid mounting signs of weakness. A December rate reduction would extend the easing cycle that began with policy cuts in September and October.

Kevin Hassett, Director of the National Economic Council, said the Federal Reserve should cut interest rates at next week’s meeting and projected a reduction of 0,25%, as growing signals suggest President Donald Trump may nominate him as the next Chair of the U.S Central Bank.

U.S businesses in November recorded the largest round of job cuts since early 2023, intensifying concerns about a pronounced weakening in the labor market.

The OECD said the global economy is withstanding the countervailing U.S tariffs better than expected, with growth supported by massive investment in artificial intelligence and by both fiscal and monetary policy measures.

Manufacturing activity in the United States contracted for the ninth consecutive month in November, a decline that businesses largely attributed to President D. Trump’s tariff policies.