European Midday Briefing: Investors Await Delayed U.S. Inflation Data

MARKET WRAPS Stocks

European indexes were struggling for direction ahead of the release of some delayed U.S. data and increasing bets of a December rate cut by the Federal Reserve.

Traders price in a nearly 81% chance of a December rate cut after Fed Governor Christopher Waller endorsed a rate reduction, citing a soft labor market and slowing inflation .

Delayed September retail sales and producer price index data is due at 1330 GMT and the Conference Board's consumer confidence survey is due at 1500 GMT.

The PPI will be among the last inflation readings the Fed sees before its rate decision next month.

"With few other data prints on the agenda, the market reaction could be larger than usual and may very well affect sentiment surrounding the FOMC December meeting," Danske Bank said.

In London, bank shares rose ahead of Wednesday's budget. This follows reports the banking sector would be spared when Treasury chief Rachel on Wednesday, according to Interactive Investor.

U.S. Markets

Stock futures were flat to edging down early Tuesday.

Together with the shutdown-delayed economic data, investors will parse earnings from Abercrombie & Fitch, Alibaba, Analog Devices, Best Buy, J.M. Smucker, Kohl's, Autodesk, Dell, HP and Workday.

Forex

The euro is yet to see any meaningful boost from positive developments in Ukraine peace talks given its wide undervaluation versus the dollar, ING said. The euro versus the safe-haven Swiss franc "may prove to be a more preferred way to play Ukraine peace hopes, but euro-dollar undervaluation cannot be dismissed, and a return above $1.160 in the near-term remains our baseline."

The dollar traded steady, ahead of key U.S. indicators for the U.S.

Implied volatility for the euro-sterling exchange rate was rising ahead of Wednesday's U.K. budget, ING said. The gap between one-week euro-sterling implied volatility and realized volatility has widened the most since the 2022 mini budget that sparked market turmoil due to unfunded tax cuts. "This signals that despite some recovery in back-end gilts, the currency market remains concerned ahead of tomorrow's budget."

Bitcoin fell after failing to sustain a recovery following a rebound in U.S. tech stocks.

"The cryptocurrency remains on track for its worst monthly performance since 2022, having lost nearly 20% since the start of the month ," Deutsche Bank said.

Bonds

Treasury yields edged marginally higher across maturities .

Ten-year Bunds remained attractive to buy when yields were above 2.70% , Commerzbank said.

Deutsche Bank anticipates a mild selloff in Treasury and European bond markets in its outlook for 2026, expecting 10-year Treasury yields to reach 4.45% and 10-year Bund yields 3.10%.

This bearish view is based on higher-equilibrium interest rates and continued upside to global term premia, driven by the global economy's transition from tight monetary policy to a global fiscal impulse .

Morgan Stanley said intra-eurozone government bond yield spreads were expected to hover around current levels next year, with periphery generally outperforming core countries.

"We see conflicting pressures for eurozone government bond spreads in 2026, with macro and technicals going in opposite directions ."

Gilt Investors remained cautious ahead of the U.K. budget. "If tax increases are heavily backloaded, gilt investors might question the credibility of the [budget] plan," Tickmill Group said.

Energy

Oil prices slipped following Monday's gains, with investors keeping a close eye on Ukraine-Russia developments as a peace deal could result in the release of more Russian crude into an already oversupplied market.

"The oil market received a boost from a broader risk-on move, with equities rallying and the market pricing in a higher probability of the U.S. Federal Reserve cutting interest rates on Dec. 10," ING said.

Meanwhile, signs of increased disruption to Russian crude exports due to U.S. sanctions were also offering some support.

According to ANZ Research, the discount on Russia's flagship Urals crude for Indian refiners has widened to as much as $7 a barrel compared to Brent, as buyers become increasingly concerned about the impact of sanctions.

Gas

European natural-gas prices continued to trade below 30 euros a megawatt hour on signs of ample supply amid strong LNG imports and steady Norwegian flows.

"Ukrainian peace talks weighed on prices somewhat, while weather forecasts for December suggest milder-than-usual temperatures after a recent cold spell," ING said.

Colder weather in recent days led to gas storage in the EU falling more rapidly.

According to industry group Gas Infrastructure Europe, EU gas storage is now 78.7% full , below the five-year average of 89%.

Metals

Gold prices rose, however Sucden expects the metal to stay range-bound this week, with direction driven primarily by shifts in rate expectations and the tone of Fed communication.

"With Treasury yields stable and the dollar consolidating near recent highs, upside for gold remains limited in the near term."

Nickel

Headlines about a potential slowdown in Indonesian output was supporting prices, Sucden Financial said. ANZ Research noted that a major Indonesian plant was planning to cut output "due to constraints at its waste tailings site."

The rapid expansion of the nickel industry in Indonesia, which now accounts for more than half the world's output, has attracted increased local scrutiny , ANZ added.

EMEA HEADLINES

German Economy Shows Signs of Revival

The German economy may be showing signs of a life after more than half a decade of stagnation.

Europe's largest economy has suffered a series of recent blows, including a surge in energy costs after Russia's full-scale invasion of Ukraine, higher tariffs on its exports to the U.S and fierce competition from China in key sectors such as automobiles.

ABN Amro to Shrink Workforce, Dispose of Unit as Part of 2028 Growth Plan

Dutch bank ABN Amro plans to slash thousands of jobs and sell its personal loans subsidiary as part of its new strategic plan to boost profitability and capital returns in the next three years.

The lender on Tuesday said that it targets a return on equity-a key profitability metric-of at least 12% in 2028, supported by more than 10 billion euros ($11.52 billion) in income and a cost-to-income ratio below 55%.

Parts of Europe at Risk of Downward 'Spiral' if Older Voters Stymie Reforms, EBRD Warns

Economies that escaped from Communism more than three decades ago are at risk of falling into a downward spiral if older voters and political leaders prevent the changes needed to offset the hit to growth from aging populations, the European Bank for Reconstruction and Development warned.

The graying of the population is a headwind for economic growth and a driver of rising government debts around the world, but is particularly acute in parts of Europe that had been led by Communist parties until the late 1980s and early 1990s.

GLOBAL NEWS

China's Xi Calls Trump in Unusual Move to Discuss Taiwan, Ukraine

In an unusual diplomatic move, China's leader Xi Jinping initiated a phone call with President Trump on Monday to discuss Taiwan, a flashpoint that has surged to the forefront in recent days as Japan takes a more assertive stance on the island's autonomy.

While Taiwan was Xi's focus, Trump steered the conversation to Ukraine, said people familiar with the matter, as Washington-Kyiv peace talks appear to make progress and Trump tries to decisively end Russia's war in Ukraine.

Colombia Orders Probe Into Ties Between Military and Drug Traffickers

The Colombian military said Monday it had opened an investigation into allegations that senior army and intelligence officials advised the leader of an armed drug-trafficking group about how to secretly buy weapons and evade military scrutiny.

The revelations, reported by the major Colombian media outlet, Caracol, have stoked fears that former guerrilla fighters who now smuggle cocaine have infiltrated high levels of the security forces under President Gustavo Petro, a former member of a leftist guerrilla organization. Petro has feuded with President Trump over U.S. airstrikes on alleged drug boats in the Caribbean Sea and Pacific Ocean and overseen fraying relations with the U.S. over soaring drug-crop cultivation and cocaine trafficking.

How the U.S. Drafted a Russia-Friendly Peace Plan for Ukraine

WASHINGTON-It started with an October order from President Trump to his national security team: Come up with a plan to end the Ukraine war just as they had halted the fighting in Gaza.

On a flight back from the Middle East, in the afterglow of brokering a deal between Israel and Hamas, envoys Steve Witkoff and Jared Kushner began writing the first draft of what would eventually become a 28-point peace framework to end the four-year war, according to U.S. officials and a person familiar with the situation.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

November 25, 2025 05:16 ET (10:16 GMT)