"Concerns around the incessant rise in borrowing costs does create a worrying backdrop to the likely 25-basis point cut tomorrow, highlighting fears around the potential implications for global debt levels as the growing reliance on short-term debt means any rise in yields puts additional stress on the system. Notably, the main mover in the bond market today has been the Australian treasuries, coming off the back of an RBA pause which came alongside a warning that price pressures were building as demand runs stronger."
"US tech stocks will be in the limelight today, following Trumps agreement to allow the export of advanced chips such as Nvidia's H200 to China. Understandably this is a win for the likes of Nvidia, AMD and Intel, with China representing far more than simply one more market to expand into. The debate over who leads in the AI war highlights the fact that China will arguably provide a market as big as the US should these companies manage to become embedded into the fabric of their build-out."
Markets in Europe opened mixed as traders priced in an expected 25-basis-point Federal Reserve cut. Rising borrowing costs create a worrying backdrop to the likely cut, raising concerns about global debt and reliance on short-term funding that amplifies stress when yields rise. Australian treasuries led bond-market moves after an RBA pause accompanied by warnings of building price pressures and stronger demand. Signs of higher inflation and a softer jobs market in the US appear to be emerging in Australia, increasing fears of global stagnation. Chip export approvals to China boost major US vendors but may accelerate Chinese competition. JOLTS and ADP data, and an 89% market-implied December cut probability, will influence the Fed's outlook.
Read at London Business News | Londonlovesbusiness.com
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