MARKET WRAPS Stocks:
European shares were on the rise as investors awaited eurozone employment and GDP data, as well as an update on U.S. inflation.
Friday's U.S. data focus is on September PCE inflation , the Fed's preferred gauge of inflation, which was delayed by the longest U.S. government shutdown.
The central bank is widely expected to cut its short-term target rate on Dec. 10, and the PCE will likely be the last reading out before the Fed's decision.
The Fed could pause rate cuts after its next meeting, with the path for its monetary policy in the second half of 2026 remaining highly uncertain, T. Rowe Price's Blerina Uruci said.
"My biggest disagreement with the market is the pricing of cuts in the first half of 2026 , which I think is too dovish," Uruci added.
Eurozone wage and final estimate third-quarter GDP data are also expected on Friday.
"The data will give us the first full picture of wage developments in the third quarter," Danske said. The data are very important for the European Central Bank outlook since services inflation is what currently keeps inflation from falling below target, it added.
Macquarie's base case for the ECB is to stay on hold over the forecast horizon, albeit with risks toward further rate cuts.
Shares on the Move
U.K. miners rose in early European trading after a bumper week for commodities. Cautious buying ahead of next week's Federal Reserve interest rate decision and geopolitical tensions are a catalyst for miners, Interactive Investor said.
U.S. Markets:
Stock futures were up with all eyes turning to the key PCE report, as it could provide further clues on the Fed's rate-cut path.
Labor market data provided conflicting readings on Thursday, with weekly jobless claims hitting a three-year low .
Economists polled by The Wall Street Journal project the PCE index accelerated slightly in September.
Forex:
The euro edged higher. The cost for eurozone bond investors to hedge their U.S. investments against the risk of a weaker dollar is tumbling and this should boost the euro, ING said.
These hedging costs will probably fall further as the Federal Reserve is likely to cut interest rates again, it added.
The dollar fell ahead of the PCE release.
Sterling rose, with its current rally reflecting a short squeeze as traders close earlier bets against the currency taken ahead of last week's U.K. budget, ING said.
Bonds:
Bund yields were little changed on the day but could continue edging higher, Jefferies said. The bank expects some bearish pressure on Bunds--pushing yields higher--in the coming weeks, even though yields will likely keep within a tight range.
Ten-year eurozone government bond yields were expected to see some upward pressure from rising Treasury yields in 2026, Macquarie said.
Treasury yields traded lower, reversing some of Thursday's increases that were driven by better-than-expected jobless claims data.
Treasury yields seemed likely to remain constrained in a narrow range to start the new year as the U.S. economy continues to expand, said Federated Hermes.
Energy:
Oil prices were on track for weekly gains, buoyed by diminishing prospects of a Russia-Ukraine peace deal in the short term and growing tensions between the U.S. and Venezuela.
"Conflict-related risk premia are providing an offset to the oversupply that has been building in 4Q 2025 and which we expect to spill over into the new year," BMI, a unit of Fitch Solutions, said.
Metals:
Gold prices rose on a softer U.S. dollar.
"Gold managed to hold its ground, after the latest U.S jobs data did little to sway expectations of a Fed interest rate cut next week, " ANZ said.
The latest U.S. jobs data did little to sway expectations of a Fed rate cut next week, with applications for unemployment benefits hitting their lowest in more than three years, ANZ added.
Gold is likely to sustain its strong trend-like rally in 2026, UOB said. "The case for gold as a safe haven to diversify one's portfolio remains strong," it added.
Copper
Copper gained in early trade. The metal has gained more than 7% since the start of November and is up 30% since 2025 began, likely on ongoing supply disruptions , ANZ said.
Iron
Iron ore prices were lower in early trade, weighed by weak demand and strong supply. Demand for iron ore is getting more subdued while its supply remains at a high place , which have pressured prices, Baocheng Futures said.
EMEA HEADLINES
German Factory Orders Rise Again
German manufacturing orders rose again in October, driven by an uptick in domestic demand and signaling continued resilience in the factory sector amid trade uncertainty.
Total orders rose 1.5% on month, accelerating further after a 1.1% jump in September, statistics agency Destatis said Friday. A consensus of economists polled by The Wall Street Journal expected a rise of 0.5%.
Equinor Makes North Sea Gas Discoveries
Equinor made two new discoveries of gas and condensate in the North Sea, the Norwegian energy major's largest discoveries so far this year.
Initial estimates indicate the reservoirs could contain 30 million to 110 million barrels of recoverable oil equivalent, the company said Friday.
Swiss Re Targets Higher Profit in 2026, Sets Out Buyback Program
Swiss Re forecast higher net profit for 2026 and said it would launch a buyback program of $500 million.
The Zurich-based reinsurer said Friday that it expects to achieve net profit of $4.5 billion in 2026. For the current year, it targets net profit of more than $4.4 billion.
European Leaders Warn Zelensky to Be Wary in U.S. High-Speed Push for Peace
BERLIN-In recent days, European leaders have delivered a stark warning to Ukrainian President Volodymyr Zelensky: Don't give in to Russian demands without ironclad security commitments from the U.S.
The message reflects European leaders' growing wariness of Washington's high-speed effort to reach a peace deal that has left them on the sidelines.
GLOBAL NEWS
Why investors see Friday's inflation report as a gut check of vibes on the economy
U.S. stocks have clawed their way back to the doorstep of record territory after a volatile month on Wall Street, but persistent inflation worries and souring consumer sentiment are keeping investors uneasy ahead of the Federal Reserve's last policy meeting of the year.
That's why Friday's release of the September report for the Fed's preferred inflation gauge - the personal consumption expenditures price index - comes at a crucial time for investors. The hope is that the new PCE report, while delayed, will provide a hard-data reality check that will either confirm the downbeat economic mood or prove, once again, that the vibes are all wrong.
German Factory Orders Rise Again
German manufacturing orders rose again in October, driven by an uptick in domestic demand and signaling continued resilience in the factory sector amid trade uncertainty.
Total orders rose 1.5% on month, accelerating further after a 1.1% jump in September, statistics agency Destatis said Friday. A consensus of economists polled by The Wall Street Journal expected a rise of 0.5%.
India Central Bank Delivers Rate Cut to Boost Economy
India's central bank cut its key policy rate, snapping a two-meeting run of pauses as cooling inflation creates room to lend the economy more support against tariff risks.
The Reserve Bank of India on Friday voted unanimously to lower its policy repo rate to 5.25% from 5.50%. The RBI also voted to keep its monetary policy stance at neutral.
European Leaders Warn Zelensky to Be Wary in U.S. High-Speed Push for Peace
BERLIN-In recent days, European leaders have delivered a stark warning to Ukrainian President Volodymyr Zelensky: Don't give in to Russian demands without ironclad security commitments from the U.S.
The message reflects European leaders' growing wariness of Washington's high-speed effort to reach a peace deal that has left them on the sidelines.
Israel's Latest Military Tech: Tested in Gaza, Wanted by the West
TEL AVIV-Israel is leveraging the war in Gaza to market its latest military technology.
U.S. and European buyers are lining up.
Prominent Anti-Hamas Militia Leader Killed in Gaza
The head of the most prominent anti-Hamas militia backed by Israel in Gaza has been killed, removing a key figure in a policy to build up armed alternatives to the militant group.
Yasser Abu Shabab, the young leader of a militia called the Popular Force, which holds sway in a small slice of territory in the southern Gaza city of Rafah, was shot and killed while intervening in a Palestinian clan dispute, his militia said late Thursday.
A Sprawling Fraud Scandal Puts Minnesota's Somali Community in the Spotlight
Massive fraud blamed on dozens of Minnesota residents of Somali descent has jumped to national attention, with House Republicans launching an investigation into how pervasive corruption in the state's social-services system was allowed to fester under Democratic Gov. Tim Walz's administration.
The probe by the GOP-led House Oversight Committee deepens scrutiny of the scandal in Minnesota, where federal prosecutors say the fraud exceeded $1 billion and that dozens of people bilked taxpayers by setting up scam social-services companies. Close to 60 defendants have been convicted, and federal prosecutors last week charged the 78th person in a prong of the cases that authorities called "the largest Covid-19 fraud scheme in the country."
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12-05-25 0515ET
