Morning Wrap: Focus on Germany’s CPI and Black Friday

Stocks lost momentum on the last trading day of the month, despite rising expectations for interest rate cuts by the Federal Reserve, putting the global stock index on track for its best week since June. Trading was disrupted by a bug at the Chicago Mercantile Exchange.

Futures and options trading on CME was halted due to a technical issue. A CME spokesperson said trading was stopped because of a cooling problem at one of the data centers. The bug affected, among other things, trading in U.S. Treasury futures, crude oil contracts, and S&P 500 futures. Forex trading on the EBS platform was also interrupted amid the CME shutdown.

Overnight, Asian stocks traded without significant movement, putting them on track for their first monthly decline since March. Asian markets are catching their breath after a very strong rally. Much of the recent strength came from a sharp reversal in positioning — weaker U.S. data and relief that the AI slowdown isn’t turning into something more chaotic. The overnight session feels more like a pause than a shift in trend.

Stocks rose this week and are on pace to end both the week and the month strongly, as investors reinforce their bets on Fed monetary easing. Traders now assign nearly an 80% probability of a quarter-point rate cut next month, with expectations for three more cuts by the end of 2026. This momentum has pushed global equities close to erasing all their November losses, after concerns over volatile AI valuations triggered sell-offs earlier in the month.

Before the start of today’s morning trading session, traders are turning their attention to the German economy. The focus of today’s European session is the German CPI data.

The German states will publish their consumer price data for November today.

Germany remains the main challenge for the ECB in its efforts to further ease monetary policy at the start of the year. Core annual inflation in October stood at 2.8% — one of the highest readings and arguably the most significant, given that Germany is the largest economy in Europe.

For November, headline annual inflation is expected to reach 2.4%, slightly above the 2.3% reported last month. Since price pressures remain persistent and well above the 2% threshold, the ECB will have little choice but to stay on the sidelines and adopt a more cautious approach to policymaking.

The German DAX index has reclaimed its position above the 200MA and is heading toward a test of diagonal resistance. Money flows are positive, supported by bullish sentiment as the holiday trading season begins. The Sequential indicator continues its upward printing, reinforcing the momentum.

European stocks are heading for a modest finish to November; Puma climbs.

European equities are seeing slight gains in premarket trading and are set to open in the green, with expectations of ending November with a small advance. Shares of Puma SE jumped following rumors of a potential takeover.

Financial services and automotive stocks are outperforming, while the technology and healthcare sectors are recording the largest declines.

We are gearing up for a classic year-end rally. Investors still want to finish the year strong, and any pullback is likely to be bought by participants who remain underweight in their portfolios.

European equities have rebounded this week after global markets were shaken by concerns about high-tech valuations and the uncertain outlook for U.S. monetary policy. The Stoxx 600 has now erased its November losses and is heading toward a fifth consecutive month of gains.

Positive momentum for a strong month-end in Europe is also supported by yesterday’s comments from Putin:

• Putin stated that the U.S. peace plan could serve as a basis for an agreement with Ukraine.
• Putin said he is ready to discuss Europe’s security concerns and noted that some points of the peace plan require further discussion.

Earlier this week, a report in ABC News suggesting that Ukraine had reached an agreement with the U.S. on the terms of a peace deal triggered a similar market reaction. At the time, traders observed that such moves were likely to fade due to the lack of any comment from Russia. As such, these latest remarks from Putin are a step forward toward reaching an agreement between Russia and Ukraine. However, he also stated that several points of the peace plan still need to be discussed, as some obstacles remain.

After U.S. markets were closed yesterday for Thanksgiving, trading will resume today with a shortened session, which will end at 1:00 p.m. ET / 8:00 p.m. Bulgarian time.

Silver is trading close to 54 dollars per ounce, just below the record high reached in October. The precious metal is heading for its seventh consecutive monthly increase, the longest such streak since 1980.

Gold is on track for a fourth monthly gain, driven by increased expectations of another rate cut in the U.S. Rate cuts typically lift the price of the metal, which carries no yield. Bullion has gained in nearly every month this year and is heading toward its best annual performance since 1979.

Brent crude oil has stabilized above 63 dollars per barrel and is heading for a fourth monthly decline in November, the longest streak since the period up to May 2023. OPEC+ countries will meet on Sunday and are expected to maintain their plan to pause production increases at the start of 2026.