European shares start mixed but FTSE on its best month this year
As traders run down to the end of the year money seems to be helping the London markets catch up. Underperforming for much of the year, this month is looking as though it may be the best month of 2023.
Outside of this the drop in the US dollar continues and base metals have an end of year rally, many hitting new recent highs.
Santa Rally underway
All three main US indices set new record highs. FTSE100 on track for best month in 2023. The dollar basket fell for a sixth day as traders bet on Fed rate cut next year.
Japan's economic data analysis
Japan's economic data adds weight to the argument that the BoJ should look at tightening its ultra-loose monetary policy at some point possibly sooner than later. Industrial production in Japan declined by 0.9% in November MoM, shifting from a 1.3% growth in the previous month. It was however better than market estimates of a 1.6% fall. It was the first contraction since August. Retail sales accelerated for the first time in three months. The index rose 5.3% in November YoY, exceeding the market forecast of 5%. It was also the 21st straight month of expansion in retail sales.
US macroeconomic indicators
A few macroeconomic indicators are due this afternoon in the US. Initial jobless claims. The number of Americans filing for unemployment benefits last week is expected to rise to 210,000 last week. Wholesale inventories are anticipated to fall by 0.4% in November MoM. And later at 3pm, pending home sales to fall by 1.5% in November MoM.
Post-Christmas shopping spree
The post-Christmas shopping spree made a strong start, according to research group MRI Software. Footfall rose 4% across all UK retail destinations on Boxing Day, compared to last year. Stores in central London saw the biggest rise in footfall, up 10.6% partly explained by an inflow of tourists for the holidays. But the overall shopper numbers were still weaker compared to pre-pandemic figures, with footfall 14.9% lower than 2019 levels.
As for retail sales during the Christmas period, Mastercard data, which measures both in-store and online retail sales, showed a 2.6% rise in sales value for the Nov. 1-Dec. 24 period compared to last year. Another survey by GlobalData estimates a 2.9% decline on Boxing Day and anticipates a 3.8% decline during the week following Christmas.
US crude oil inventories rose by 1.84 million barrels last week according to the API. In 2023, crude oil inventories increased so far by just over in 21 million barrels.
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