Market Overview by Mike Dolan

U.S. Treasury Yields

Long-dated U.S. Treasury yields are decreasing despite post-election narratives, with the 30-year 'long bond' yield dropping to 4.31%, marking a six-week low. This has narrowed the 2-30 year yield curve to just 16 basis points, the flattest since August. Economic uncertainty looms, especially with the upcoming payroll report expected to show a 200,000 increase in November jobs, despite previous worries following October's low gain of 12,000 jobs.

Economic Indicators

Recent economic updates have shown signs of softness, particularly in the ISM service sector survey, jobless claims, and hiring rates. The Citi U.S. economic surprise index, while still positive, has dipped to its lowest since October. Ahead of the jobs report, Federal Reserve futures indicate a hesitant market with only a 65% chance of a rate cut this month.

European Market Developments

In France, political tensions eased after President Emmanuel Macron announced intentions to appoint a new prime minister to focus on budget approvals. French bond yields fell to two-month lows, and the CAC40 index rose over 1% as optimism about the parliamentary budget increased.

The European Central Bank is expected to implement another quarter-point rate cut next week.

Asian Market Reactions

In South Korea, tensions escalated with calls for President Yoon Suk Yeol’s removal over martial law attempts. Conversely, Chinese stocks improved amid expectations for supportive domestic policies. The Chinese Ministry of Finance has also proposed incentives for domestic product purchases.

Cryptocurrency and Company News

Bitcoin dipped below $100,000. President-elect Donald Trump named David Sacks as his crypto advisor. In corporate news, UnitedHealth’s stock fell 5.2% following the tragic murder of its CEO, impacting the healthcare sector negatively. Meanwhile, Direct Line saw an 8.5% rise after proposing a takeover by Aviva, contingent on a formal offer.

Key Developments Ahead

• U.S. November employment report
• University of Michigan December consumer sentiment survey
• October consumer credit
• Canada November employment report

Federal Reserve Speech Updates: Speakers include Michelle Bowman, Austan Goolsbee, Beth Hammack, and Mary Daly.