EMEA Morning Briefing: U.S. Data Reinforce Expectations for Rate Cut

MARKET WRAPS

Watch For:

EU retail sales; trading updates from Frasers, SSP Group

Opening Call:

European stock futures were higher in tandem with gains in Asian stock benchmarks; the dollar and Treasury yields rose; oil futures also gained, and gold declined.

Equities:

Stock futures point to a higher open in European markets. Lower interest rate prospects helped propel U.S. stocks higher on Wednesday. Although next week's interest rate decision from the Federal Reserve will be a close call among increasingly divided policymakers, the latest measure of private sector job growth released Wednesday helped tip the scales toward a cut.

"The modest fall in the ADP payrolls measure in November, coming on the back of a similar message from the Fed's Beige Book, should be enough to persuade the FOMC to vote for another cut next week," said Stephen Brown, deputy chief North America economist at Capital Economics.

Forex:

Sterling could underperform other G-10 currencies in 2026 as the Bank of England could cut interest rates more than expected, Standard Chartered strategists said. The BOE could cut rates to a low of 3.0% from 4.0% currently, below market pricing of 3.4%, to offset potentially weaker growth stemming from tighter fiscal tightening, they said. "The growing possibility of leadership challenges to the ruling government is also sterling-negative."

StanChart sees a risk the euro rises above its end-2026 forecast of 0.88 pounds, despite betting the European Central Bank will cut rates further.

Bonds:

Treasury yields rose as investors focus on U.S. data ahead of the Fed rate decision next week. Data Wednesday backed the idea that U.S. employment is weakening fast enough to secure a third consecutive interest rate cut by the Fed next week. ADP says private employers shed 32,000 jobs last month.

Weekly jobless claims later Thursday are expected to increase to 220,000 from 216,000, in a WSJ consensus. There will be no official payrolls data before the Fed meeting. Odds of a 25 basis point cut have reached 89% on the CME's FedWatch tool.

Energy:

Oil ticked up as markets stay focused on geopolitical tensions. Russia-Ukraine peace talks have yet to yield results and the Trump administration's friction with Venezuela's government continues.

Trump's latest remarks--particularly around potential military action against drug-trafficking nations and a firmer stance toward Venezuela--have fueled geopolitical risk premium priced into oil, said Nadir Belbarka at XMArabia. With the White House signaling possible strikes, markets are eyeing heightened risk of supply disruptions, the analyst said.

"The administration's proposed rollback of U.S. fuel-economy standards also suggests a longer-term policy shift that could lift domestic fossil-fuel demand, supporting prices," he added.

Metals:

Gold declined. However, sentiment is likely supported by U.S. payroll data, which added to concerns about the weakness in labor markets being worse than expected, reinforcing expectations that the Federal Reserve will cut interest rates, ANZ Research analysts said.

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Copper fell after the base metal's price rose to a fresh record Wednesday on supply worries. Data from the LME showed a spike in orders to withdraw copper from its Asian warehouses, with the request equating to the biggest tonnage increase since 2013, ANZ Research analysts said. This likely came amid concerns over U.S. levies on refined copper next year, which has led to traders accumulating the metal, they added.

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Iron ore prices were lower, weighed by subdued demand and strong supply. Weak demand is leading to high inventories of iron ore, which have pressured prices, Everbright Futures analysts said.

TODAY'S TOP HEADLINES

Kevin Hassett, Trump's Likely Pick for Next Fed Chair, Divides Markets

President Donald Trump has said he has narrowed down his search for the next Federal Reserve chair to one candidate, and nearly all signs point to his longtime economic advisor Kevin Hassett as that person.

While the president has said he won't make the official announcement until early next year, Trump smirked when reporters asked if it would be Hassett, which many have taken as a positive signal. Prediction site Polymarket is pricing about an 80% chance Kevin Hassett is the president's pick.

Wall Street Wants In on the 'Trump Accounts' for Babies

It took four years-and one important poker game-but a plan to set up investment accounts for young Americans is moving forward. And Wall Street senses an opportunity.

All manner of financial institutions are vying for a role in the program, from banks such as JPMorgan Chase to brokerages such as Charles Schwab and Robinhood Markets to money managers including BlackRock.

BOJ's Ueda Says Unsure How Many More Rate Hikes He Will Make

TOKYO-Japan's central bank is still unsure on the interest rate level considered ideal for the economy, Gov. Kazuo Ueda said, signaling that it is unclear when the tightening cycle will come to an end.

Speaking at a parliamentary committee on Thursday, Ueda said the Bank of Japan is still working on narrowing a range for the neutral rate-the level viewed as consistent with economic stability.

Glencore Restructures Operations in Bet on Copper Production

Glencore cut around 1,000 jobs as part of a restructuring that bets big on growing copper demand.

The commodities giant said it would invest heavily to increase copper production to around 1.6 million metric tons a year by 2035 as part of its goal of becoming one of the world's biggest copper miners. Glencore produced around 950,000 tons of the industrial metal last year.

Europe Scales Back Plan to Make Massive Loans to Ukraine

The European Union has scaled back a plan to use Russia's frozen assets to make a massive loan to Ukraine, seeking to address Belgian concerns and leaving a window open for Washington's push to employ the money to lure Russia into a peace deal.

The EU is now proposing to lend Ukraine about $105 billion over the next two years-down from a previous plan to loan as much as $186 billion. The reduction would leave reserves that the Trump administration has proposed using as part of a potential peace plan.

Sam Altman Has Explored Deal to Build Competitor to Elon Musk's SpaceX

OpenAI Chief Executive Sam Altman has explored putting together funds to either acquire or partner with a rocket company, a move that would position him to compete against Elon Musk's SpaceX.

Altman reached out to at least one rocket maker, Stoke Space, in the summer, and the discussions picked up in the fall, according to people familiar with the talks. Among the proposals was for OpenAI to make a series of equity investments in the company and end up with a controlling stake. Such an investment would total billions of dollars over time.

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Expected Major Events for Thursday

06:45/SWI: Nov Unemployment

07:00/SWE: 3Q Balance of Payments

07:30/HUN: Oct Retail Sales

08:00/AUT: 3Q GDP

08:00/CZE: 3Q Wages

08:00/SVK: Oct Internal trade, incl Wholesale & Retail

08:30/SWI: Nov procure.ch Purchasing Managers' Index

09:00/UK: Nov UK monthly car registrations figures

09:30/UK: Nov S&P Global UK Construction PMI

10:00/EU: Oct Retail trade

10:00/CYP: Nov CPI

11:00/IRL: 3Q GDP

11:00/IRL: 3Q Balance of Payments

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(END) Dow Jones Newswires

December 04, 2025 00:14 ET (05:14 GMT)