Overnight, the dollar has retreated from the gains it made last week, mainly due to Trump’s selection of Scott Bessent as Treasury Secretary. This choice is seen as measured and likely to inject greater stability into the U.S. economy and financial markets. The yield on 10-year Treasuries dropped five basis points to 4.35%, while GBPUSD bounced back to 1.26. Bessent, who runs the macro hedge fund Key Square Group, has indicated support for Trump’s tariff and tax cut plans. However, investors expect him to prioritize economic and market stability over political maneuvering.
The week ahead is dominated by Thanksgiving in the U.S., followed by Black Friday. Financial markets will turn their focus to Europe, with Eurozone inflation data set for release on Friday, providing further insights into the path of European Central Bank (ECB) monetary policy. Inflation rebounded to 2% in October after falling below the ECB’s 2% target the previous month. Data from last Friday showed that business activity in the bloc deteriorated sharply in November, with the services sector contracting and manufacturing sinking deeper into recession. The ECB has already cut rates three times this year, and markets anticipate another 25-basis-point rate cut in December due to concerns over the region’s economic outlook. Meanwhile, ratings agency Standard & Poor’s is set to review France’s credit rating after Fitch and Moody’s recently downgraded their outlooks to negative. EURUSD parity predictions by year-end are gaining traction among financial commentators.
As for today:
The focus is on central bank speakers. In the UK, we will hear from BOE Deputy Governor Clare Lombardelli and rate-setter Swati Dhingra. In Europe, ECB Chief Economist Philip Lane and Governing Council Member Gabriel Makhlouf will also share their views.
