At Monday’s close, the Dow Jones Index (US30) was down 0.54%. The S&P 500 Index (US500) fell by 0.61%. The Nasdaq Technology Index (US100) lost 0.84%. Stocks in the US started the week lower as Nvidia shares fell amid an antitrust investigation in China, and investors were cautious ahead of a crucial inflation report. The Consumer Price Index is expected to rise slightly to 2.7% y/y in November from 2.6% y/y in October. Meanwhile, the Consumer Price Index, excluding food and energy, is expected to be unchanged from October at 3.3% y/y in November.

Advanced Micro Devices (AMD) shares closed down more than 5% after Bank of America Global Research downgraded the stock to “Neutral” from “Buy,” citing downside risks to the company’s 2025 expectations. Nvidia (NVDA) fell more than 2% after China Central Television reported that China’s State Administration of Market Regulation has begun inspecting the company over suspected antitrust violations.

In Mexico, November inflation fell short of expectations, with core inflation falling to 4.55% year-on-year, the lowest in eight months, and core inflation falling to 3.58%, the lowest since April 2020. With economists expecting a sharper decline, the report came out positive for the Mexican peso (MXN) as it maintains flexibility in the Bank of Mexico’s rate-cut cycle.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) fell by 0.19%, France’s CAC 40 (FR40) closed higher by 0.72%, Spain’s IBEX 35 (ES35) lost 0.50%, and the UK’s FTSE 100 (UK100) closed up 0.52%. The DAX Index (DE40) retreated from a record high on Monday as traders await Thursday’s decision by the ECB, which is expected to announce a fourth rate cut of 25 basis points. Swaps discount the odds of a 25 bps ECB rate cut at the Dec. 12 meeting by 100% and a 50 bps rate cut at the same meeting by 7%.

WTI crude oil prices rose above $68 a barrel amid optimism over China’s move to looser monetary policy and geopolitical uncertainty in the Middle East. China, the world’s largest oil importer, signaled a “moderately loose” monetary policy for 2025, marking the first major turn toward faster economic growth in over a decade. The move boosted risk sentiment and helped crude oil prices. Geopolitical tensions also provided support as reports of Syrian President Bashar al-Assad’s ouster raised fears of further instability in the Middle East.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 0.18%, China’s FTSE China A50 (CHA50) gained 1.31%, Hong Kong’s Hang Seng (HK50) rose by 2.76%, and Australia’s ASX 200 (AU200) gained 0.03%. On Monday, Asian stock markets received support from China’s monetary policy changes. China’s Politburo, the 24 most senior officials of the ruling Communist Party led by President Xi Jinping, announced today that it would pursue a “moderately loose” monetary policy strategy next year and promised to be “more active” on fiscal policy, signaling further easing is coming. Investors will now turn their attention to this week’s Central Economic Work Conference, where China is expected to outline its economic priorities and targets for 2025.

The ASX 200 Index (AU200) fell by 0.36% on Tuesday to close at 8,393 after the Reserve Bank of Australia (RBA) left the rate unchanged at 4.35% for the ninth consecutive meeting, as expected. However, the central bank said it had “some confidence” that inflation was returning to target. RBA chief Michele Bullock also emphasized that the change in the wording of the statement was intentional and reflected softening economic data. The RBA added that it will continue to base its decisions on the data and its evolving assessment of risks, including geopolitical uncertainty.