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Financial markets are calm after the fall of Bashar al-Assad in Syria, where people are celebrating a new era after five decades of dynastic rule. It comes amid political turmoil in France and South Korea.
The South Korean stock market tumbled by 2.8% and the country’s currency fell towards a 15-month low against the dollar amid uncertainty over the fate of president Yoon Suk Yeol, even though the authorities pledged to stabilise markets. Yoon has been banned from leaving the country, as opposition politicians accused his party of staging a 'second coup' by refusing to impeach him over his botched declaration of martial law last week.
The opposition leader Lee Jae-myung warned that the political fallout is causing financial market volatility and threatens the economy.
Japan’s Nikkei index rose by 0.3%, helped by an upward revision to economic growth and MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.15% higher.
The price of gold and crude oil has risen slightly. Brent crude futures climbed by 0.66% to $71.59 a barrel. Spot gold rose by 0.3% to $2,639 an ounce, as China’s central bank resumed gold purchases after a six-month hiatus.
Rachel Reeves is heading to Brussels for her first meeting with eurozone finance ministers today to reset ties with the EU. The chancellor will tell them that reducing the UK’s trade barriers with the European Union will improve the growth prospects for both. She plans to end the UK’s “fractious” post-Brexit accord with the EU, a relationship she said had been defined by “division and chaos”, by promising closer ties in the first speech by a UK chancellor to eurozone finance ministers since 2020.
Reeves will say she wants to adopt a “business-like” approach through an “economic reset” with the EU, offering the goal of driving up trade and growth.
China’s consumer inflation hit a five-month low in November as prices for fresh food pulled back and factory deflation persisted, suggesting Beijing’s efforts to shore up demand with fresh stimulus measures have had little impact. China is also bracing for new tariffs from the second Donald Trump presidency next year.
The consumer price index rose at an annual rate of 0.2% last month, according to data from China's National Bureau of Statistics, down from October’s 0.3% and less than the 0.5% forecast by analysts. Consumer prices fell by 0.6% in October from September, faster than October’s 0.3% monthly drop.
Core inflation, excluding volatile food and fuel prices, edged higher to 0.3% from 0.2%, though.
This week is packed with central bank meetings. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: 'The European Central Bank (ECB), the Bank of Canada (BoC), the Reserve Bank of Australia (RBA) and the Swiss National Bank (SNB) will announce their latest policy verdict throughout this week and all – except the RBA – are expected to lower their rates.
'The BoC is expected to cut by 50bp while the SNB and the ECB are expected to announce a 25bp cut. Some investors are convinced that the ECB could announce more than a 25bp cut. Either it could go bigger with a 50bp cut, or cut by 25bp but shift their focus from inflation to economic growth. I believe that the second option is more plausible. If that’s the case, we should not see a significant selloff in the euro post-decision.'
The Agenda
• 1pm GMT: Bank of England deputy governor Dave Ramsden speech on financial stability
We'll be tracking all the main events throughout the day … |
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