On Monday, the Dow Jones (US30) fell by 0.29%. The S&P 500 Index (US500) gained 0.24%. The Nasdaq Technology Index (US100) added 1.12%. Better-than-expected US economic news on the ISM Manufacturing Index for November and construction spending for October bolstered the outlook for a soft landing and boosted stocks. The US Manufacturing PMI for November rose 1.9 to a 5-month high of 48.4, beating expectations of 47.5. US construction spending for October rose 0.4% mom, stronger than expectations of 0.2% mom.

Tesla (TSLA) shares are up more than 4% after Roth Capital Partners upgraded the stock to “buy” from “neutral.” Shares of Cloudflare (NET) are up more than 5% after Morgan Stanley upgraded the stock to overweight from equal weight with a $130 price target.

Equity markets in Europe rallied on Monday. Germany’s DAX (DE40) rose by 1.57%, France’s CAC 40 (FR40) closed higher by 0.02%, Spain’s IBEX 35 (ES35) gained 0.81%, and the UK’s FTSE 100 (UK100) closed up 0.31%. The S&P German Manufacturing PMI for November from S&P was revised down 0.2 to 43.0 from the previously reported 43.2. ECB Governing Council spokesman Kazaks said that the ECB is likely to cut interest rates at next week’s meeting and that a larger move is currently under discussion. Swaps are discounting the chances at 100% for a 25 bp rate cut by the ECB at its December 12 policy meeting and at 18% for a 50 bp rate cut at the same meeting.

Political unrest in France has heightened concerns about Eurozone stability. France’s far-right party threatened to topple the fragile government of Prime Minister Michel Barnier in a no-confidence vote, escalating the standoff over the national budget.

WTI crude prices stabilized near $68 a barrel on Tuesday as traders await Thursday’s OPEC+ meeting for further guidance on global supply. The group is expected to postpone a small production increase for the third time amid concerns that the market will be oversupplied next year. At the same time, Saudi Arabia, the world’s biggest exporter, is expected to cut crude prices for Asian buyers to the lowest level in four years.

Asian markets were mostly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 0.80%, China’s FTSE China A50 (CHA50) gained 1.36%, Hong Kong’s Hang Seng (HK50) rose 0.65%, and Australia’s ASX 200 (AU200) gained 0.14%. Hong Kong stocks fell by 0.6% to 19,437 in Tuesday morning session, reversing gains in the previous two sessions after the US imposed restrictions on the sale of 24 types of manufacturing equipment and three software tools, and blacklisted another 140 Chinese entities. In response, Beijing said on Monday that Washington was abusing export controls and exerting unilateral pressure, adding that it would take necessary actions to protect its interests.

The offshore yuan fell to 7.31 per dollar, hitting a one-year low, as the dollar strengthened on expectations of strong US economic performance and weak Chinese growth. The dollar gained further support after Trump warned of potential 100% tariffs on BRICS countries that support an alternative to the US dollar. Meanwhile, persistent tariff risks and weakness in the Chinese economy put additional pressure on the yuan. On Monday, the PBOC chief signaled rate cuts later in the year and plans to strengthen countercyclical measures next year.

On Tuesday, the New Zealand dollar continued its recent decline to US$0.587. It was pressured by continued weakness in the yuan, which has been weakened by threats of US tariffs and ongoing economic uncertainty in China. The NZD is often seen as a liquid proxy for the yuan due to China’s significant role as New Zealand’s largest trading partner.