US Non-Farm employment, Australia, and Canada rate decisions.

Created: 4th December 2023

So, what do we know?

(A forex, index, and commodity market review)

Global stocks extended gains further last week as investors continue to believe that central banks have likely concluded their interest rate tightening cycle.


Weekly change (amount change and percentage change on the week)


FTSE +33 +0.44%

DAX +405 +2.52%

DOW +858 +2.42%

S&P +37 +0.81%

NASDQ +14 +0.08%

NIKKEI -270 -0.80%

Hang Seng 769 -4.35%


Global stocks recorded substantial gains in November with the MSCI World Index, which includes shares across 23 developed markets, up 9% which is its best performance monthly performance for three years, since November 2020.


Not surprisingly much of the gains were underpinned by significant gains in the US. The S&P500 gained 8.9% and the Nasdaq Composite 10.7%. This is the best monthly performance since July 2022 which now puts S&P500 gains for the year at 18% and the technology focussed NASDAQ at a whopping 45%. The S&P500 now sits just 5% away from the all-time high reached in early January 2022. Last week’s close matched the most recent highs at the start of August and traders will be keen to see the market rise above that level this week. An extraordinary year to date which is perhaps not what some analysts were predicting at the outset of 2023 with inflation still running very hot and with the peak in interest rates looking very uncertain.


As discussed over the past three weeks, analysts have become increasingly convinced that interest rates have now peaked and that the next move in US rates will be down, sometime in May or June next year. The US Dollar had been suffering losses since mid-November as the prediction of no further rates rises, with possible cuts in Q2 next year, undermined the US Dollar against other majors. Whilst this argument is understood, what is not clear is what course of action Central Banks in other key developed economies will follow. Last week’s Eurozone Flash Headline CPI data released on Thursday came in at 2.4% and the Core Inflation rate at 3.6% - 0.3% lower than consensus forecasts on both counts. Markets are now concluding that Eurozone rates have peaked and that the next move, like in the US, will be down. The timing will depend on data throughout the Eurozone over the next three months but with disinflation in Germany and weakening economic data, there remains a risk that the ECB has tightened too much. What is clear is that the ECB has concluded its interest rate tightening cycle.

The UK’s FTSE100 had its best close since Mid-October despite comments from the Bank of England that markets could have a false impression that there was no longer an inflationary threat as the UK economy, in keeping with the Eurozone, was suffering slowing demand, a weakening labour market and further pain for mortgage holders coming down the track.


EURUSD -0.54 -0.49%

GBPUSD +1.06 +0.84%

USDJPY -2.65 -1.77%


The US Dollar clawed back some its losses sustained since Mid-November as interest rate expectations started to affect other developed economies. Particularly in the Eurozone, some economists are concerned that the ECB may have made a policy mistake by tightening too much. A further shift in Eurozone rate expectations will add further pressure on the Euro. As already discussed, there are some that believe the ECB may have made a policy mistake by raising rates as high as they have done. Too slow to act when inflation started rising alarmingly and possibly too slow to react when the Eurozone economy started to slow.

Sterling had one of its better weeks last week, especially against the Euro. EURGBP rate plunged last week to 0.8552, the Euro’s weakest level versus Sterling in nearly three months. Several analysts have warmed to the UK economy, where monetary policy seems to have had the desired effect with inflation falling sharply, in tune with other developed economies.

Unlike some nations (Germany) within the Eurozone, the UK’s GDP has performed far better than first thought. In terms of economic position, the UK’s GDP now places it on a par with the likes of France, Japan, and Spain, and better than Germany and Italy.

Clearly something that the media here in the UK don’t seem to want to celebrate. Good news clearly doesn’t sell.


Gold +70 +3.49%

UK OIL -1.09 -1.36%

US OIL -0.83 +1.10%


Sunday night saw gold jump in what looked initially like a trading anomaly, as prices surged $70 in 20 minutes. This move was likely in reaction to news that an American warship, and other commercial ships, were attacked by Yemen's Houthi group who are funded by Iran. Denials and the fact that the attack involved a few drones, resulted in a full retracement by gold. Gold’s trend accelerated last week with Chinese central bank buying the main cause, although this move above the $2,000 level looks more convincing this time, pulling in more speculative interest.

Despite the co-ordinated cuts in production announced last week at the OPEC+ cartel meeting, traders seem less convinced by the announcements which suggest members are far from convinced of the cartel’s strategy to bolster prices. Some of OPEC+ production cuts have been replaced by non-member production increases and with global demand prospects weakening, it’s probably not surprising oil struggled last week.


What don’t we know….yet?


(What traders need to look out for in the week ahead)

The release of the US Non-Farm Employment data is the highlight this week, which is usually released on the first Friday each month, but Thanksgiving pushed it into this week. We also have both the Australian and Canadian central bank rate decisions.



Eurozone ECB Chair, Lagarde, speaking about monetary policy in Paris. Will the pressure build on Central Bankers as inflation tumbles along with economic activity prospects. EURO sensitive.



China Caixin Services PMI. Hovering but just above 50. China still struggling but modest signs of improvement

Australia RBA Policy decision. No change expected in interest rates following last month’s hike. AUD sensitive.

US ISM Services. Picking up. Expected at 52.5 versus 51.8.



UK Construction PMI. The construction sector is in dire state. The ravages of inflation and much higher interest rates have knocked this sector badly. GBP sensitive.

UK Andrew Bailey, BoE Governor, holding a press conference about the Financial Stability Report. No impact expected. Unless he mentions interest rates of course.

US ADP Employment change. 120K new jobs expected last month. The trend is pointing to a softening in the labour market which supports the interest rate outlook.

Canada Bank of Canada rate decision. Rates expected to be kept on hold at 5%, which will be the third month in a row of unchanged rates. CAD sensitive.





US Non-Farm employment change. Unlike the more volatile ADP data from Wednesday, this data has continued to paint a picture of a cooling labour market. 185K new jobs expected after 150K jobs the previous month. Average earnings expected at +0.3% after last month’s +0.2% reading. US Dollar and US and global assets sensitive to this news. Unless we see a noticeable jump in hirings there is unlikely to be much reaction.

US Prelim University of Michigan Consumer sentiment. 62 versus 61.3 last month. Consumer confidence has been waning over the past four months which suggests retail sales and economic activity may struggle in the coming months. USD and US assets sensitive.