Will Europe be a beacon of stability and growth?

Key data to move markets today

EU: German Retail Sales and Unemployment Rate, CPI and Harmonised Index of Consumer Prices, French CPI, Spanish Harmonised Index of Consumer Prices, Italian GDP and CPI, and a speech by German Bundesbank President Joachim Nagel
USA: Stock markets will close at 1:00 pm EST and bond markets will close at 2:00 pm EST

US Stock Indices

Markets were closed for the US Thanksgiving holiday. 

European Stock Indices

CAC 40 +0.04%
DAX +0.18%
FTSE 100 +0.02%

Commodities

Gold spot -0.11% to $4,151.27 an ounce
Silver spot +0.21% to $53.44 an ounce
West Texas Intermediate +0.91% to $59.08 a barrel
Brent crude +0.57% to $63.39 a barrel

Gold prices declined slightly on Thursday, retreating from the near two-week high reached in the prior session.

Spot gold fell -0.11% to $4,157.27 per ounce. Although gold has decreased -5.11% since setting a record high of $4,381.21 on 20^th October, it has generally remained above the $4,000 per ounce key level.

Oil prices advanced Thursday as market participants considered a breakthrough in talks to end the war in Ukraine. Trading activity was subdued due to the Thanksgiving holiday in the US.

Brent crude futures closed 36 cents higher, or +0.57%, to $63.39 per barrel. US WTI crude futures increased 53 cents, or +0.91%, to $59.08 per barrel.

The market remains caught between optimism and skepticism regarding the prospects for renewed peace efforts in Ukraine.

Reuters reported two delegates from OPEC+ and a source familiar with the group's discussions saying OPEC+ is expected to maintain current oil output levels at its meetings on Sunday. 

Additionally, these delegates suggested the group is expecting to agree on a mechanism to evaluate members' maximum production capacities. Eight OPEC+ members, which have been incrementally raising production throughout 2025, are projected to continue their policy of pausing output increases into Q1 2026.

Note: As of 5 pm EST 27 November 2025

Currencies

EUR +0.01% to $1.1595
GBP -0.02% to $1.3238
Bitcoin +0.95% to $91,045.06
Ethereum +0.39% to $3,033.93

The US dollar was on track for its sharpest weekly decline in four months on Thursday, as investors now largely expect the Fed to cut rates next week. With US markets closed for Thanksgiving, trading volumes were thin, resulting in amplified price movements.

The US dollar index edged down -0.02% to 99.55, retreating from the six-month high reached the previous week. The euro ended trading +0.01% to $1.1595, after touching a one-and-a-half-week high earlier in the session at $1.1613.

The British pound retreated on Thursday after a five-day rally as market attention returned to underlying economic fundamentals. Analysts expressed skepticism regarding the likelihood of the fiscal tightening measures outlined in Wednesday’s budget being fully implemented. Concerns around economic growth and uncertainty around the BoE’s rate path trajectory are likely to keep pressure on the pound.

Sterling declined -0.02% to $1.3238, having previously reached a new one-month high of $1.3269 earlier in the session. The euro achieved a fresh one-month high against the pound at 87.46 pence and remained relatively stable on the day at 87.59 pence. 

The Japanese yen strengthened +0.11% to ¥156.30, supported by a more hawkish stance from BoJ officials.

Fixed Income

US markets were closed in observance of the Thanksgiving holiday
German 10-year bund +1.1 basis points to 2.685%
UK 10-year gilt +2.9 basis points to 4.456%

Eurozone government bond yields remained largely unchanged on Thursday, yet appeared on track for a second consecutive weekly decrease. Minutes from the European Central Bank's latest meeting indicated that policymakers see little urgency to reduce interest rates at this stage.

Germany's 10-year Bund yield rose +1.1 bps to 2.685%. German 2-year Schatz was +1.5 bps to 2.034%. On the long end of the curve, the 30-year yield was +0.9 bps higher to 3.316%.

The yield on French 10-year bonds rose +0.9 bps to 3.412%. Italian 10-year yields increased by +0.8 bps to 3.404%, leaving the spread over Bunds at 71.9 bps.

In a statement Thursday, ECB policymaker Martins Kazaks emphasised that it remains premature for the central bank to consider additional interest rate cuts, noting that euro area inflation could still surpass current expectations. ‘Given the data we have received up to now, I don’t think the time is ripe for discussing a rate cut,’ the Latvian central bank governor commented in an interview.

UK bond markets exhibited relative stability following Wednesday’s budget from the Chancellor of the Exchequer, Rachel Reeves. The yield on 30-year gilts — sensitive to long-term fiscal developments — declined -1.1 bps to 5.205%, extending Wednesday's -4.7 bps drop, the largest since April. This decrease was partly attributed to expectations of a reduction in gilt supply over the coming year and the shift away from long-term borrowing by the UK government, after it said it was considering selling more short-term Treasury bills.

Note: As of 5 pm EST 27 November 2025

Global Macro Updates

ECB October minutes. The minutes from the October ECB meeting showed no significant deviation from the economic outlook presented in the September staff projections. Policymakers assessed that recent incoming data was generally consistent with their previous evaluations of inflation trends.

It was noted that the forthcoming December staff projections would likely align closely with those of September. While inflation is anticipated to drop below 2% in 2026, it is expected to return to the target level in 2027. The minutes reiterated that the risks to the inflation outlook remain balanced, with an unusually high degree of uncertainty.

Some members expressed concerns about potential downside risks stemming from a stronger euro, trade-related factors, and weaker demand, whereas more hawkish members highlighted external forecasts that exceed staff estimates and referenced recent surveys indicating upside risks. 

There were subtle indications regarding future policy direction, including a mention that the December projections will, for the first time, extend to 2028 and provide a comprehensive perspective on the outlook. It was suggested that greater emphasis should be placed on the near-term horizon.

The prevailing view was that the rate-cutting cycle has ended. Policy adjustments should only be considered in the event of a significant departure from the inflation target. Nonetheless, the importance of maintaining flexibility and readiness to act was stressed, with the threshold for any change in policy seen as higher than usual.

Economic sentiment in the eurozone is improving. The European Commission's eurozone economic sentiment indicator rose slightly in November. It came in at 97.0 — matching market expectations and improving marginally from the previous reading of 96.8. A closer look reveals that confidence strengthened in the services, retail trade, and construction sectors, although these gains were nearly offset by a decline in industry sentiment. Expectations in the industrial sector deteriorated considerably, driven by more negative assessments of past production levels and export order books.

The services sector benefited from an improved past business situation and expected demand, matching positive services PMI data. Consumer confidence also advanced, supported by favourable views on past demand, past business situation, and expected demand. This trend aligns with the ECB's outlook for positive real income growth to support household consumption. The improved consumer outlook has translated into stronger retail trade confidence, although there remains a degree of caution regarding the future business situation. Construction sector sentiment picked up, reflecting more optimistic employment prospects. 

Against this backdrop, the employment expectations indicator remained positive. While some surveys have indicated a slight softening in employment levels in Germany and France, the remainder of the euro area has experienced an increase in employment. Selling price expectations have strengthened across all four business sectors and exceeds the long-term average.

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