In the UK, economic data revealed an unexpected 0.1% contraction in gross domestic product (GDP) for October, following a similar decline in September.
Despite this, the three-month growth rate through October was a positive 0.1%, bolstered by the construction and services sectors.
Political changes in France captured attention as well, with President Emmanuel Macron appointing former Justice Minister François Bayrou as prime minister, replacing Michel Barnier. This leadership shift could have broader implications for French economic and political policy in the coming months.
In Japan, stock markets posted modest gains, with the Nikkei 225 Index rising 0.97% and the broader TOPIX Index increasing 0.71%.
Investor sentiment was bolstered by China’s announcement of additional fiscal measures and a slight easing of monetary policy. Speculation grew that the Bank of Japan (BoJ) may delay a rate hike until January 2025, shifting the timeline from December. This shift drove the yen to weaken against the U.S. dollar, moving to the JPY 153 range from the previous week’s 150.
The BoJ’s potential shift to a January rate hike was supported by the idea that the central bank would have the benefit of reviewing two additional inflation reports, the quarterly economic report, and insights from regional managers.
Japan’s final GDP figures for the third quarter showed a 0.3% quarter-on-quarter increase, higher than the 0.2% consensus estimate. The BoJ’s quarterly tankan survey also showed improved sentiment among large manufacturers, indicating optimism about business conditions.
China’s equity markets, however, experienced declines. The Shanghai Composite Index fell 0.36%, and the CSI 300 declined 1.01%, while the Hang Seng Index in Hong Kong managed a 0.53% gain. Sentiment was dampened by underwhelming policy announcements from China’s Central Economic Work Conference.
Officials pledged a more proactive fiscal policy and signaled an increased budget deficit for 2025 but failed to provide concrete details, leading to investor disappointment. China’s latest inflation figures revealed lingering deflationary pressure. The consumer price index (CPI) rose just 0.2% year over year in November, while core inflation edged up slightly to 0.3%.
Global markets faced a week of mixed results, with U.S. stocks showing divergence as the Nasdaq hit a record high while most other indexes declined, European markets reacting to central bank rate cuts and economic slowdowns, and Asian markets reflecting optimism in Japan but weakness in China due to underwhelming policy announcements.
