At Friday's close, the Dow Jones Index (US30) was up by 0.82% (+2.46% for the week), while the S&P 500 Index (US500) was up by 0.59% (+0.87% for the week). The NASDAQ Technology Index (US100) closed positively by 0.55% (+0.46% for the week) on Friday. Stocks were boosted by the latest economic data, as well as dovish comments from US Fed chief Jerome Powell.

The ISM Manufacturing Index for November was unchanged at 46.7, which was weaker than expectations of a rise to 47.8 and was the 13th consecutive month of contraction in manufacturing activity. Dovish comments from the Fed on Friday put pressure on the dollar. Fed Chair Powell signaled that the Fed will leave interest rates unchanged at the December 12-13 FOMC meeting.

Canada added 24,900 jobs in November, 15,000 more than analysts had forecast, with the unemployment rate rising to 5.8% from 5.7%. Bank of Canada Governor Tiff Macklem said in a recent speech that "interest rates can now be quite restrictive" as excess demand has disappeared and weak growth is expected to persist, leading most to conclude that the central bank has peaked on rates this cycle and the BoC is expected to leave rates unchanged this Wednesday. That said, polls suggest the Bank of Canada will start cutting interest rates in the second quarter of next year as inflation slows and the economy grows. Economists believe the underlying cost of borrowing will fall by at least one percentage point by the end of 2024.

Equity markets in Europe were mostly up on Friday. Germany's DAX (DE40) rose by 1.12% (+2.44% for the week), France's CAC 40 (FR40) gained 0.48% (+0.73% for the week), Spain's IBEX 35 (ES35) jumped by 0.82% (+2.15% for the week), and the UK's FTSE 100 (UK100) closed positively by 1.01% (+0.55% for the week).

The European Central Bank (ECB) should not cause “unnecessary damage” to the economy and financial stability by keeping interest rates high, new Bank of Italy Governor Fabio Panetta said on Thursday. Panetta, a spokesman for the ECB's governing council, added that the round of monetary tightening, which saw a streak of 10 consecutive rate hikes through September, has yet to have its full impact and will continue to dampen demand going forward. In his first major speech since taking the helm of Italy's central bank, Panetta warned that the eurozone economy would remain weak in the final three months of this year and that risks to the economy were tilted to the downside. Market swaps tied to ECB meeting dates estimate an 81% probability that the ECB will cut the benchmark rate by 25 bps at its March 7 meeting and more than estimated (+183%) the probability of a 25 bps rate cut at the ECB's April 11 meeting.

On Friday, crude oil prices were pressured by Thursday's negative impact when OPEC+ said it would cut oil production levels by 1.0 million bpd, but did not provide details on how the cut would be implemented. The market is disappointed that additional OPEC oil production cuts will be announced by each country individually, suggesting that the cuts can only be voluntary. The rift between Angola and other OPEC+ members persists and is bearish, signaling increasing infighting between members of the organization.

Asian markets were mostly down last week. Japan's Nikkei 225 (JP225) was down by 0.83% for the week, China's FTSE China A50 (CHA50) decreased by 2.53% for the 5 trading days, Hong Kong's Hang Seng (HK50) lost 4.79% for the week, and Australia's ASX 200 (AU200) was positive 0.46% for the week.

An interest rate survey conducted from November 29 to December 1 showed that 28 out of 30 economists, including representatives from Australia's four largest banks, expect the Central Bank of Australia (RBA) to leave the official money rate unchanged on December 5.

Bank Indonesia (BI) will keep the benchmark rate at the current level until 2024 unless there are any major changes in global dynamics, Bank Governor Perry Warjiyo said on Wednesday, signaling the central bank has completed its rate hike cycle. Warjiyo said the benchmark 7-day rate at 6% should be enough to keep domestic inflation within the target range of 1.5% to 3.5% in 2024 and 2025. The bank's inflation target range for this year is between 2% and 4%. BI has raised interest rates by a total of 250 basis points between August 2022 and October, with the latest rate hike in response to a sharp fall in the rupee amid capital outflows associated with US monetary tightening.

• S&P 500 (US500) 4,594.63 +26.83 (+0.59%)
• Dow Jones (US30) 36,245.50 +294.61 (+0.82%)
• DAX (DE40) 16,397.52 +182.09 (+1.12%)
• FTSE 100(UK100) 7,529.35 +75.60 (+1.01%)
• USD Index 103.19 −0.30 (−0.29%)

News feed for 2023.12.04:

• – German Trade Balance (m/m) at 09:00 (GMT+2);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+2);
• – Eurozone ECB President Lagarde Speaks at 16:00 (GMT+2);
• – US Factory Orders (m/m) at 17:00 (GMT+2).

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Analytical Overview Of The Main Currency Pairs - Friday, Dec. 1
There Is Still Disagreement On Production Quotas Within OPEC+. Inflationary Pressures Are Easing In The Eurozone