Global equity funds draw ninth weekly inflow in a row

Global investors stepped up purchases in equity funds in the week ended Nov. 27, encouraged by prospects of robust US growth under the Trump administration and boosted by cooling treasury yields.

Investors pumped a substantial USD 12.19 billion into global equity funds, a jump of 32% compared with about USD 9.24 billion worth of net acquisitions in the week before, LSEG Lipper data showed. It marked the ninth consecutive weekly inflow.

On Friday, global shares were on track for their best month since May, driven by optimism about strong US growth and the artificial intelligence investment boom, despite concerns over political turmoil and economic slowdown in Europe.

Last week, US President-elect Donald Trump’s appointment of fiscal hawk Scott Bessent as US Treasury Secretary raised market expectations of controlled debt levels in his second term, leading to a drop in Treasury yields.

Investors picked a significant USD 12.78 billion worth of US equity funds, extending net purchases into a fourth successive week. However, they withdrew USD 1.17 billion and USD 267 million out of Asian and European funds, respectively.

The financial sector witnessed robust demand as it drew USD 2.65 billion in net purchases, the fifth weekly inflow in a row. Investors also snapped up consumer discretionary, tech, and industrials sector funds totaling a hefty USD 1.01 billion, USD 807 million, and USD 778 million, respectively.

Global bond funds witnessed inflows for the 49th successive week. Investors poured USD 8.82 billion into these funds.

Corporate bond funds received a net USD 2.16 billion, the biggest weekly inflow in four weeks. Government bond funds and loan participation funds also witnessed notable purchases, totaling a net USD 1.9 billion and USD 1.34 billion, respectively.

At the same time, investors ditched USD 12.87 billion worth of money market funds in a second straight week of net sales.

The gold and precious metals funds gained a net USD 538 million, marking a 14th weekly inflow in 16 weeks.

Data covering 29,635 emerging market funds indicated that equity funds were out of favor for a fifth consecutive week with about USD 4.3 billion in net sales. Investors also divested bond funds to the tune of 2.58 billion, logging a sixth weekly net sales.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Gareth Jones)

Dollar faces crunch week for US rates, yen holds gains

SYDNEY – The dollar started in a cautious mood on Monday in what is shaping up to be a critical week for the prospect of US rate cuts, while the yen’s recent rebound was underpinned by wagers on rising rates at home.

Over the weekend, Bank of Japan Governor Kazuo Ueda said the next interest rate hikes are “nearing in the sense that economic data are on track,” following figures showing Tokyo inflation picked up in October.

Markets now imply a 56% chance the BOJ will hike by a quarter point to 0.5% at its policy meeting on Dec. 18-19.

Barclays economist Christian Keller said data on labor earnings this week should show a further pickup and all the signs were pointing to another strong “shunto” wage round in February.

“The wage and inflation picture continues to support further rate hikes, though whether the BOJ moves in December or January remains a close call,” he added.

The risk of an early hike was enough to keep the dollar pinned at 149.60 yen JPY=EBS, having shed 3.3% last week in its worst run since July. Support lies around 149.40/47 and 147.35.

The euro held at USD 1.0555, after bouncing 1.5% last week and away from a one-year trough of USD 1.0425. That left the dollar index flat at 105.790 =USD, having closed out November with a gain of 1.8% even after last week’s setback.

“Given the continued resilience of the US economy and a worsening outlook elsewhere, we don’t think this is the start of a deeper setback for the dollar,” said Jonas Goltermann, deputy chief markets economist at Capital Economics.

“But the bar for a further shift in expected interest rates in favor of the US in the near term is quite high,” he added. “A period of consolidation into year-end looks to us like the most likely scenario, although the risks remain skewed in favor of the dollar over the course of 2025.”

Key to the outlook for rates will be the November payrolls report due Friday where median forecasts favor a rise of 195,000 following October’s weather and strike-hit report, which could also be revised given a low response rate for that survey.

The jobless rate is seen edging up to 4.2%, from 4.1%, which should keep the Federal Reserve on course to cut by 25 basis points on Dec. 18.

Markets imply a 65% chance of such an easing, though they also only have two more cuts priced in for all of 2025.

A host of Fed officials are due to speak this week, including Fed Chair Jerome Powell on Wednesday, while other data include surveys of manufacturing and services.

The European Central Bank is also seen cutting rates this month, with markets implying a 27% chance it might even ease by 50 basis points on Dec. 12.

Political uncertainty is another drag for the single currency as investors wait to see if France’s government can survive the week intact.

France’s far-right National Rally leaders said on Sunday that the government had rebuffed its calls for more budget concessions, raising the chances of a no-confidence vote in the coming days that could topple Prime Minister Michel Barnier.

The threat of an ever-wider budget deficit saw French yields match those in Greece while the spread over German yields reached the highest since 2012.

(Reporting by Wayne Cole; Editing by Sam Holmes)

Gold braces for worst month in over a year on Trump-driven sell-off

Gold prices gained on Friday, boosted by a drop in the dollar and persistent geopolitical tensions, but bullion was still set for its worst monthly loss since September last year after a post-election sell-off driven by Donald Trump’s win.

Spot gold climbed 0.5% to USD 2,652.71 per ounce, as of 01:40 p.m. ET (1840 GMT), but was set for a weekly fall of over 2% after a sharp decline earlier this week. US gold futures settled 0.6% higher at USD 2,681.

Gold has dropped 3% so far this month, its worst monthly slide since September 2023, as “Trump euphoria” lifted the dollar earlier this month and stalled gold’s rally, triggering a post-election sell-off.

The dollar index fell to its lowest in over two weeks, but remains on track for a 2% rise in November as Trump’s Nov. 5 win fuelled expectations of big fiscal spending, higher tariffs, and tighter borders.

Gold, buoyed by geopolitical tensions and Federal Reserve interest rate cuts this year, now faces pressure as higher tariffs could stoke inflation and lead the Fed to adopt a cautious approach to further rate cuts.

It’s uncertain as of now, how Trump’s pledged tariffs will play out, said Jim Wyckoff, a senior market analyst at Kitco Metals.

However, “the uncertainty of the matter, the tariffs that could prompt a slowdown in economic growth could actually be beneficial for the gold market from a safe-haven basis.”

Bullion is traditionally seen as a safe investment during economic, geopolitical uncertainties and tends to thrive in a lower interest rate environment.

“Persistent global uncertainties continue to drive demand for gold as a safe-haven asset,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.

On Thursday, Israel’s military reported suspects in southern Lebanon, calling it a ceasefire breach with Hezbollah, while Russia launched its second major attack on Ukraine’s energy infrastructure this month.

Spot silver added 0.9% to USD 30.54 per ounce, platinum gained 1.7% to USD 946.83 and palladium rose 0.7% to USD 981.63, although they were all set for monthly losses.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Mohammed Safi Shamsi)

Trump’s BRICS warning shines light on emerging FX

The global market spotlight on Monday looks set to zoom in on the dollar, especially its performance against emerging market currencies, after US President-elect Donald Trump’s weekend warning against the so-called ‘BRICS’ nations.

In a social media post on Saturday, Trump demanded that the ‘BRICS’ countries – Brazil, Russia, India, China and South Africa – commit to not creating a new currency or supporting another currency that would replace the US dollar, or face 100% tariffs.

This comes after Trump had already injected additional volatility into world currency markets last week by proposing big tariffs against China, Mexico, and Canada – countries the US has some of its largest trade deficits with.

The dollar’s path on Monday will be fascinating to observe. It snapped an eight-week winning streak last week with its steepest weekly fall since mid-August, as US rate cut expectations cooled and Treasury yields fell.

But much of the dollar’s downward momentum last week was down to its weakness against the euro and yen. It has been much firmer against other G10 currencies – not least the Canadian dollar – and especially emerging and Asian currencies.

Sentiment toward emerging markets as the final month of the year begins is still mostly downbeat. Outflows from EM bond funds remain heavy, and according to analysts at Barclays EM hard-currency bond funds last week registered their second-largest outflow so far this year.

But there are more encouraging signs from China that the raft of stimulus and support measures from Beijing in recent months may be beginning to bear fruit.

A private survey on Sunday showed that new home prices in China rose at a year-on-year rate of 2.40% in November versus 2.08% in October. And on Saturday, China’s official purchasing managers index data showed that factory activity expanded modestly for a second straight month in November, and at its fastest pace in seven months.

Is there light at the end of the tunnel for China’s domestic economy? With Trump ramping up the trade threats ahead of his inauguration next month, policymakers in Beijing and China bulls will certainly be hoping so.

Asia’s economic calendar on Monday sees the release of a raft of manufacturing PMI reports, including China’s ‘unofficial’ Caixin manufacturing PMI data for November. Will that reinforce the modestly encouraging signals from the ‘official’ figures over the weekend?

Economists polled by Reuters expect a reading of 50.5, up from 50.3 in October, which would mark the fastest pace of expansion since June.

Other regional highlights on Monday include the latest Australian retail sales data and inflation figures from Indonesia. According to a Reuters poll, consumer prices rose at an annual rate of 1.50% in November, cooling from 1.71% the previous month. That would be the lowest rate of annual inflation since June 2021.

Here are key developments that could provide more direction to markets on Monday:

– China Caixin manufacturing PMI (November)

– Australia retail sales (November)

– Indonesia inflation (November)

(Reporting by Jamie McGeever; Editing by Diane Craft)

Jobs data set to pave way for rates path, stocks

NEW YORK – The coming week will give investors a fresh view into the health of the US economy with the release of a closely watched employment report that could help determine the trajectory of interest rates in the months ahead.

Stocks are heading into December with the benchmark S&P 500 near record highs following an over 25% year-to-date gain. Part of that performance has been fueled by expectations that the Federal Reserve will continue cutting interest rates into next year, after reducing borrowing costs by 75 basis points in 2024.

But uncertainty over the Fed’s rate trajectory has increased in recent months as a spate of robust economic data – including a blowout jobs report for September – stirs concerns that inflation could rebound if the central bank lowers rates too far, undoing two years of progress in tamping down prices.

While investors have largely welcomed evidence of economic strength, another round of strong jobs data on Dec. 6 could further erode expectations for Fed cuts and fuel wariness over inflation, investors said.

The jobs data “is going to provide a more clear picture of the underlying trend, which is important as there’s a lot of debate and uncertainty around the path for interest rates by the Fed,” said Angelo Kourkafas, senior investment strategist at Edward Jones.

Wall Street has already tempered expectations for cuts over the coming year. Fed funds futures show investors betting the rate will fall to 3.8% by the end of next year, from its current 4.5% to 4.75% range. That is more than 100 points higher than what they had priced in September.

Fed Chair Jerome Powell said earlier this month that the central bank does not need to rush to lower rates, citing a solid job market and inflation that remains above its 2% target.

The Fed is “starting to question out loud how much more easing the economy, especially the labor market, really needs,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

Futures late on Wednesday were pricing a roughly 70% chance that the central bank will cut rates by 25 basis points at its Dec 17-18 meeting, according to CME Fedwatch.

Economists polled by Reuters expect payrolls to have climbed by 183,000 jobs in November, and a report that far exceeds those forecasts could shake confidence in a December move and bruise stocks, said Anthony Saglimbene, chief market strategist at Ameriprise Financial.

“There might be a little bit of a sell-off here if you see the jobs report come in stronger than expected,” he said.

Equities have gotten a boost from the view that President-elect Donald Trump’s policies such as tax cuts and deregulation could spur growth despite their inflationary potential.

Stocks in recent days largely shrugged off Trump’s pledge to impose big tariffs on Canada, Mexico, and China, America’s three largest trading partners. More optimism was reflected in the Conference Board’s survey released on Tuesday, which showed a record 56.4% of consumers expect stock prices to increase over the next year.

Meanwhile, the S&P 500 is trading at more than 22 times earnings estimates for the next 12 months, its highest P/E valuation in more than three years, according to LSEG Datastream.

To strategists at Yardeni Research, the mounting optimism could be a worrisome signal.

“A more immediate risk to the stock market rally than tariffs is that investors are getting too bullish,” Yardeni Research said in a note on Thursday. “From a contrarian perspective, this suggests that a pullback is likely.”

(Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili and David Gregorio)

Oil up as Israel, Hezbollah trade accusations of ceasefire violation

Oil prices ticked up on Thursday after Israel and Lebanese armed group Hezbollah traded accusations that their ceasefire had been violated, and as Israeli tanks fired on south Lebanon.

OPEC+ also delayed by a few days a meeting likely to extend production cuts.

Brent crude futures edged up by 34 cents, or 0.5%, to USD 73.17 a barrel by 2026 GMT. US West Texas Intermediate crude futures were up 16 cents, or 0.2%, at USD 68.88. Trading was thin because of the US Thanksgiving holiday.

Israel’s military said the ceasefire was violated after what it called suspects, some in vehicles, arrived at several areas in the southern zone.

The deal, which took effect on Wednesday, was intended to allow people in both countries to start returning to homes in border areas shattered by 14 months of fighting.

The Middle East is one of the world’s major oil-producing regions, and while the ongoing conflict has not so far not impacted supply it has been reflected in a risk premium for traders.

Elsewhere, OPEC+, comprising the Organization of the Petroleum Exporting Countries and allies including Russia, delayed its next policy meeting to Dec. 5 from Dec. 1 to avoid a conflict with another event.

Also supporting prices, OPEC+ sources have said there will again be discussion over another delay to an oil output increase scheduled for January.

“It’s highly unlikely they are going to announce an increase in production at this meeting,” said Rory Johnston, analyst at Commodity Context.

The group pumps about half the world’s oil but has maintained production cuts to support prices. It hopes to unwind those cuts, but weak global demand has forced it to delay the start of gradual increases.

A further delay has mostly been factored in to oil prices already, said Suvro Sarkar at DBS Bank. “The only question is whether it’s a one-month pushback, or three, or even longer.”

Depressing prices slightly, US gasoline stocks rose 3.3 million barrels in the week ending Nov. 22, the US Energy Information Administration said on Wednesday, countering expectations of a small draw in fuel stocks ahead of holiday travel. EIA/S

Slowing fuel demand growth in top consumers China and the US has weighed on oil prices this year.

(Reporting Nia Williams in British Columbia and by Paul Carsten and Enes Tunagur in London; Editing by David Goodman, Jason Neely, David Evans, David Gregorio, and Diane Craft)

Euro eases, dollar perks up in muted holiday trade

The euro dipped against the dollar on Thursday as traders reined in bets of more interest rate cuts by the European Central Bank, while broader currency moves were muted in US holiday-thinned trading.

The Japanese yen slipped to 151.58 per dollar but with its 2.1% gain this week the currency has recovered losses suffered since the US election and was heading for its best weekly showing in three months. Markets see about a 53% chance the Bank of Japan will raise rates next month.

Broad trade was light as US stock and bonds markets were shut for the Thanksgiving holiday.

The dollar index ticked up to 106.21 after dropping to as low as 105.85 in the prior session, a two-week trough.

“It’s likely to be a subdued couple of days to wrap up the week but I expect the dollar should rebound as December gets underway,” said Michael Brown, senior research strategist at Pepperstone, adding that Wednesday’s move that put the dollar back under 106 seemed a bit “detached from fundamentals.”

“We’re still talking about US exceptionalism, an incredibly long laundry list of issues in the eurozone and now we’ve got French budget worries this morning.”

The euro slipped 0.2% to USD 1.054625 after its sharp rise on Wednesday following hawkish remarks from European Central Bank board member Isabel Schnabel

The comments prompted investors to pull back on more aggressive rate cut expectations and buy the common currency which is on track for its worst month in two-and-a-half years.

German annual inflation was flat in November despite expectations of a second consecutive increase. It comes ahead of euro zone inflation data on Friday which could offer hints on the ECB’s next steps.

Money markets now see only a 13% chance of a larger 50 basis points rate cut by the ECB, whereas last Friday it was a toss-up. A 25 bps move is fully priced in.

“Today’s macro data releases in the eurozone should encourage the ECB hawks to object to a 50bp rate cut in December,” said Carsten Brzeski, global head of macro at ING.

Eyes are also on France’s fragile coalition government, which is struggling to pass a budget.

HOLIDAY LULL

Sterling was little changed at USD 1.2666 versus the greenback, while the Swedish crown firmed against the dollar and euro as data showed sentiment among businesses and consumers in Sweden picked up in November.

The Australian dollar recovered from early weakness and gained slightly to USD 0.6501. Reserve Bank of Australia governor Michele Bullock said that core inflation was too high to allow for rate cuts in the near term.

While the currency majors were in a bit of a lull, there was some action in emerging markets.

Russia’s rouble strengthened to just over 110 per dollar after shedding nearly a third of its value since August as the Russian central bank said it would stop forex purchases until the end of the year to support the currency.

Brazil’s real touched a record low on concern over the impact of tax cuts on a stretched budget.

South Korea’s won was a little weaker after the central bank cut rates at a second straight meeting – an outcome only four of 38 economists polled by Reuters had foreseen.

(Reporting by Tom Westbrook and Medha Singh; Editing by Sonali Paul, Kim Coghill and Susan Fenton)

Gold gains on safe-haven demand, US markets closed for Thanksgiving

Gold prices rose on Thursday as geopolitical uncertainty and trade war concerns boosted safe-haven demand, with low trading volumes expected as US markets are closed for the Thanksgiving holiday.

Spot gold was up 0.2% to USD 2,641.79 per ounce at 10:07 a.m. ET (1507 GMT). US gold futures were steady at USD 2,642.00. Bullion posted its deepest one-day decline in more than five months earlier on Monday.

Geopolitical risks remain elevated with the ongoing war in Russia-Ukraine, and while an Israel-Hezbollah ceasefire is in force, Israel’s contingencies for retaliation keep tensions alive, said Aneeka Gupta, director of macroeconomic research at WisdomTree.

US President-elect Donald Trump’s pledge to hit Canada and Mexico with tariffs was also having an effect, she added. “It did increase a bit of concern on the possible repercussions from these two countries. So that continues to remain an important support factor for gold.”

However, Trump’s tariff plans are also seen as potential drivers of inflation, which could prompt the US Federal Reserve to slow its interest rate cutting, potentially limiting any further rally in non-yielding bullion.

Data on Wednesday showed progress in lowering US inflation appears to have stalled in the past months, suggesting the Fed may proceed cautiously with further rate cuts.

Markets now see a 70% chance of a quarter-point rate cut in December. Gold tends to do well in a lower interest rate environment.

Following a Republican clean sweep in the Nov. 5 US election, bullion saw a sharp sell-off.

“After that sell-off … there has been some revived investor interest that has given some support, while weaker-handed holders were flushed out,” said StoneX analyst Rhona O’Connell.

“The market now is a bit more careful and prices probably will be range-bound with more downward bias going into the year-end,” said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.

Spot silver rose 0.5% to USD 30.22 per ounce, platinum was up 0.9% to USD 935.25 and palladium gained 0.6% to USD 978.12.

(Reporting by Rahul Paswan and Sherin Elizabeth Varghese in Bengaluru. Editing by Jason Neely, Mark Potter, and David Evans)

China stocks drop on heightened trade tensions, automakers’ price war

HONG KONG – China and Hong Kong stocks fell on Thursday, as investors feared an escalation of the trade war with the US and a further ban on chip sales to China, while a price war between automakers in the country looked set to intensify.

**The blue-chip CSI 300 index closed down 0.88%, while the Shanghai Composite index slid 0.43% at 3,295.70.

** Most sectors closed lower as investors were largely in a wait-and-see mode for clarity on US President-elect Donald Trump’s trade policies and its potential consequences.

** Auto stocks were the biggest decliners, falling by more than 2%, after media reports said that BYD and other automakers pushed suppliers to cut prices, signaling that a brutal price war in the world’s largest auto market is set to escalate.

** BYD’s Hong Kong and mainland shares fell 2.6% and 2.3% respectively, while SAIC Motor Corp declined by 2.8%.

** In Hong Kong, the Hang Seng Index was down 236.17 points or 1.2% at 19,366.96. The Hang Seng China Enterprises index fell 1.46%, while the Hang Seng Tech lost 1.52%.

** China’s state media warned Trump his pledge to slap additional tariffs on Chinese goods could drag the world’s top two economies into a mutually destructive tariff war.

** “A key risk for China’s economy and markets in 2025 comes from Trump’s policies-the proposed tariffs of 60% could reduce GDP growth by up to 2% over the next four to six quarters,” Michelle Qi, head of China equities at Eastspring Investments, said in a note.

** Sentiment was further dented after Bloomberg News reported that the Biden administration could announce additional curbs on sales of semiconductor equipment and artificial intelligence memory chips to China as soon as next week.

** That also weighed on the broader consumer stocks listed both onshore and offshore.

** The smaller Shenzhen index ended down 0.65% and the start-up board ChiNext Composite index was weaker by 1.77%.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.52%, while Japan’s Nikkei index closed up 0.56%.

(Reporting by Summer Zhen; Editing by Abinaya Vijayaraghavan and Varun H K)

Oil steady after surprise rise in US gasoline stocks

Oil prices were little changed on Wednesday, pressured by a large surprise build in US gasoline stocks and worries about US interest rate cuts next year, but prices drew support from concerns about supply eased after a ceasefire deal between Israel and Hezbollah.

Brent crude futures settled 2 cents higher at USD 72.83 a barrel. US West Texas Intermediate crude slipped 5 cents to USD 68.72.

US gasoline stocks rose by 3.3 million barrels in the week to 212.2 million barrels, the Energy Information Administration said, counter to analysts’ expectations in a Reuters poll for a draw of 46,000 barrels.

Crude stocks fell by 1.8 million barrels in the week ended Nov. 22, the EIA added, far exceeding analysts’ expectations in a Reuters poll for a draw of 605,000 barrels.

Market sources, citing the American Petroleum Institute, had said on Tuesday that oil inventories fell by 5.94 million barrels and fuel inventories rose last week.

“It is surprising to see gasoline inventories building so much and implied demand not really budging week-on-week, given expected record travel this Thanksgiving,” said Matt Smith, an analyst at Kpler.

Oil prices also were dented by US data showing progress on lowering inflation appears to have stalled in recent months, which could narrow the scope for the Federal Reserve to cut interest rates in 2025.

Traders added to bets the US central bank will lower borrowing costs by 25 basis points at its Dec. 17-18 meeting, according to CME Group’s FedWatch tool. However, they anticipate the Fed will leave rates unchanged at its meetings in January and March.

Slower-than-expected rate cuts would keep the cost of borrowing elevated, which could slow economic activity and dampen demand for oil.

Both oil benchmarks settled lower on Tuesday after Israel agreed to a ceasefire deal with Lebanon’s Hezbollah group, effective Wednesday after both sides accepted the agreement brokered by the US and France. The ceasefire started on Wednesday.

“The real question will be for how long it (the ceasefire) will truly be honored,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Oil gained support after sources from the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and allies led by Russia, said it is discussing a further delay to the oil output increase set for January.

The group, which produces about half of the world’s oil, had aimed to gradually ease production cuts through 2024 and 2025, but weaker global demand and rising output outside OPEC+ have cast doubt on that plan. The decision will be made at a Dec. 1 meeting.

The heads of commodities research at Goldman Sachs and Morgan Stanley said oil prices are undervalued, citing a market deficit and risk to Iranian supply from possible sanctions when US President-elect Donald Trump takes office.

Sources also told Reuters on Tuesday that crude oil would not be exempt from the 25% tariffs that Trump has threatened to impose on all products coming into the US from Mexico and Canada.

Oil industry analysts and traders warned the move would likely raise oil prices for US refiners, squeezing margins and driving up the cost of fuel.

(Reporting by Arunima Kumar in Bengaluru, Yuka Obayashi in Tokyo and Emily Chow in Singapore; editing by David Goodman, Jason Neely, Jonathan Oatis, David Gregorio and Paul Simao)

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