ECB Flags Rising Stablecoin Risks Amid Surging Market Growth

Cryptocurrency

Summary:

Their market value has climbed to new record highs, crossing 300 billion dollars and capturing around 8% of the entire crypto market. This rapid rise has brought excitement as well as concern.

Investors see stablecoins as useful tools for trading, payments and moving money quickly, but regulators worry that their fast growth and growing links to traditional finance could increase financial risks. As the market expands, the question becomes whether stablecoins can scale safely or whether their own weak spots could lead to trouble.

Why Stablecoins Matter More Than Ever

Stablecoins are tokens designed to keep a steady price, usually tied to a major currency like the US dollar. This simple idea has made them essential to the crypto world. Today, about 80% of trading on major crypto platforms involves stablecoins because traders use them to move in and out of positions without returning to a bank for money every time. Two names dominate this space.

Tether holds 184 billion dollars in value, and USD Coin holds 75 billion dollars. Together, they represent almost all stablecoin supply. A big trend pushing growth is new regulatory clarity. The European Union launched its MiCAR rulebook last year, giving issuers clear obligations, while the United States recently passed the GENIUS Act. Hong Kong has put rules in place as well. This wave of regulation has helped investors feel more comfortable, lifting demand around the world.

Source: DeFillama

While people often mention cross-border payments and inflation protection as stablecoin use cases, real data tells a different story. Only a small share of activity comes from everyday users. One study shows that less than 1% of stablecoin volume comes from retail-sized transfers. For now, stablecoins remain tools built mainly for traders rather than the general public.

Source: ecb.europa.eu

Where the Risks Begin to Surface

Rapid growth comes with challenges. A stablecoin must always be redeemable at the price it promises. If users lose trust, they may all rush to withdraw at once, leading to a run and breaking the coin's price. This has happened before in crypto and can shake markets quickly. The biggest risk comes from the fact that leading stablecoins hold huge piles of assets in traditional financial markets.

Tether and USDC together rank among the largest buyers of US Treasury bills. If either one faced a run, they might need to sell these assets quickly, which could hurt wider markets. Some analysts even project that stablecoins could reach two trillion dollars in size by 2028, which would increase the stakes.

Source: CryptoSlate

Risk Warnings and Disclaimers

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Adam

Cryptocurrency

Stocks

Economic

There was a lot of investor hand-wringing and head-scratching experienced this past week. On Wednesday night, NVDA announced its earnings. And, not only were its earnings exceptionally strong, beating Wall Street’s expectations for both revenue and earnings per share, but they also provided strong forward-looking guidance.

At the time, the pundits claimed that this eased investor concern about a potential "AI bubble." So, Wednesday night and Thursday morning provided us with a gap higher in the stock price. As the day progressed, not only did the entire gap-up dissolve, but the stock ended the day in the red by almost 3%, approaching its lowest levels over the last month. And, again, to belabor the point, NVDA struck the lowest price for the stock over the last month on a day when it reported outstanding earnings and forward-looking guidance.

How could this even be possible? By every metric known to the mass investor community, this stock should have soared on Thursday and held a strong bullish move into the close. Well, by every metric other than the one that really matters - investor sentiment.

You see, earnings or forecasts do not drive stock prices, despite the erroneous belief held by the common investor. In fact, one of my long-term clients once noted:

“Having worked for many listed companies and regarded as an insider with access to company confidential information, I have sometimes struggled to understand the correlation between business results and the share price.”

I have outlined the reasons for this in detail in an article I penned a number of years ago, and I strongly urge you to read it here

So, I am not going to go into detail regarding my perspective again. But, I will point out something else I have discussed over the years.

Until the times of R.N. Elliott (the creator of Elliott Wave analysis), the world applied the Newtonian laws of physics as the analysis tool for the stock markets. Basically, these laws provide that movement in the universe is caused by outside forces. Newton formulated these laws of external causality into his three laws of motion: 1 – a body at rest remains at rest unless acted upon by an external force; 2 – a body in motion remains in motion in a straight line unless acted upon by an external force; and 3 – for every action, there is an equal and opposite reaction.

But, as Einstein stated:

“During the second half of the nineteenth century new and revolutionary ideas were introduced into physics; they opened the way to a new philosophical view, differing from the mechanical one.”

Yet, even though physics has moved away from the Newtonian viewpoint, financial market analysis has not.

“Many services and financial commentators in newspapers persist in discussing current events as causes of advances and declines. They have available the daily news and market behavior. It is therefore a simple matter to fit one to the other. When news is absent and the market fluctuates, they say its behavior is “technical.” Every now and then, some important event occurs. If London declines and New York advances, or vice versa, the commentators are befuddled. Mr. Bernard Baruch recently said that prosperity will be with us for several years “regardless of what is done or not done.” - R.N. Elliott

In the dark ages, the world was supposed to be flat. We persist in perpetuating similar delusions.” - R. N. Elliott

To explain this another way, taking a mechanical view of market dynamics is not the appropriate approach to profit in the market. You see, external events affect the markets only insofar as they are interpreted by the market participants. Yet, such interpretation is guided by the prevalent social mood. Therefore, the important factor to understand is not the social event itself, but rather the underlying social mood, which will provide the “spin” on that external event.

So, while an event, earnings or economic report can act as a catalyst for a stock or market move, the substance of that event, earnings or economic report will not necessarily be indicative as to the direction of the move. That is why we so often see markets and stocks moving in the opposite direction we normally expect based upon the substance of the event, earnings or economic report. The more important and driving factor is where we are in the market sentiment cycle, which will provide the spin as to how market participants will interpret the event, earnings or report with their buying or selling.

In our case, NVDA topped with a spike high at the end of October, completing an Elliott Wave 5th wave in its sentiment cycle. Therefore, the rally we saw this past week was simply part of a corrective rally, which ultimately led to lower levels, which, again, was within our expectations. This is a much more reasonable, understandable, consistent, and intellectually honest explanation as to what occurred after the earnings announcement, especially as compared to the mental gymnastics you likely heard as strained explanations from the pundits.

And, speaking of mental gymnastics, the decline we have seen this past week in the equity market seems to have taken many by surprise. But, the mental gymnastics that were on display as the media tried to explain the decline have been nothing short of perfect Olympic 10 score movement.

Many analysts and pundits in the media went on and on about how Bitcoin seemingly caused the equity market decline seen this past week. And, after I finished chuckling at the absurdity of this perspective, as they truly had to stretch for this “reason,” I saw they were all silent as Bitcoin continued lower during the middle of week whereas the stock market rallied.

At some point, you, as an investor, must seek out intellectual honesty and consistency in the analysis you choose to follow rather than superficial excuses that are completely ignored hours later.

Clearly, the media is only able to provide a very superficial and mechanical perspective of how the market works. This is how they try to satisfy the common investor’s need for control. From a psychological perspective, investors feel as though they are in control if they can understand the reason why a market move occurs. And, it seems that they will accept any reason whatsoever, no matter how absurd or stretched the logic behind it presents.

But, I have a secret for you. Investors are not in control of the market no matter how much they believe they “know” the reasons for a market move. In fact, no one is.

If investors are being honest with themselves, they would track these reasons over time, which will then, no doubt, lead them to recognize that these pundits and analysts will often provide to you the exact same reason for a market decline as they do for a market rally at times. I have actually seen it myself wherein they provided the exact same reason for a decline as for a rally all within one 24-hour period. Yes, my friends, intellectual honesty is not going to be found in the media amongst the pundits and analysts alike. “Reasons” will not help you in increasing your profitability in the market, and will often detract from it.

This leads me to again present a quote from Robert Prechter’s seminal book, The Socionomic Theory of Finance (which I strongly suggest to each and every investor):

“Observers’ job, as they see it, is simply to identify which external events caused whatever price changes occur. When news seems to coincide sensibly with market movement, they presume a causal relationship. When news doesn’t fit, they attempt to devise a cause-and-effect structure to make it fit. When they cannot even devise a plausible way to twist the news into justifying market action, they chalk up the market moves to “psychology,” which means that, despite a plethora of news and numerous inventive ways to interpret it, their imaginations aren’t prodigious enough to concoct a credible causal story.

Most of the time it is easy for observers to believe in news causality. Financial markets fluctuate constantly, and news comes out constantly, and sometimes the two elements coincide well enough to reinforce commentators’ mental bias towards mechanical cause and effect. When news and the market fail to coincide, they shrug and disregard the inconsistency. Those operating under the mechanics paradigm in finance never seem to see or care that these glaring anomalies exist.”

So, are you going to ignore the action you saw with your own eyes this past week? Are you going to shrug and disregard the inconsistency between the earnings, guidance and stock price? Are you going to ignore the glaring anomalies you witnessed yourself? Only you are responsible for growing and protecting your investment account. The question you need to honestly ask yourself is if you are using the proper tools in doing so?

Source: investing

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Adam

Economic

Something in the US economy isn’t adding up, and it’s rattling the people charged with wrangling inflation and keeping the labor market intact.

US companies have sharply slowed their hiring this year, hesitant to invest without knowing the full effects of President Donald Trump’s sweeping economic policies. The economy lost jobs in June and August, and the average pace of job gains for the three months ending in September was only around 62,000, according to the Labor Department.

Yet workers’ productivity, a key driver of economic output, remains high. And gross domestic product, which captures all the goods and services produced in the economy, has stayed robust.

That dichotomy of an expanding economy and a softening labor market presents a conundrum for policymakers at the Federal Reserve, complicating their efforts to determine whether the economy needs cooling or boosting.

“The divergence between solid economic growth and weak job creation created a particularly challenging environment for policy decisions,” Fed officials noted in their October meeting, according to minutes released Thursday.

A growing economy, boosted by resilient consumers and massive investments in AI, should be spurring hiring, especially now that the Fed has started lowering borrowing costs. But that hasn’t happened, and there are fears it won’t.

“When it comes to monetary policy, the narrative next year is going to be about how to handle a jobless expansion,” Ryan Sweet, chief US economist at Oxford Economics, told CNN. “How do you try to get businesses to hire more?”

Why GDP has been strong but not job growth

The recent string of record highs in the stock market suggests that many American businesses are optimistic about the value of AI. However, that confidence has so far not translated into an expansion of their workforce.

Business spending on information processing equipment and software accounted for 4.4% of GDP in the second quarter, according to Commerce Department data, slightly below a peak reached in 2000 when businesses ramped up similar investments during the dot-com boom. Solid consumer spending this year has also kept company profits afloat.

“Firms are investing a lot in this new technology, but sometimes that means reducing other expenditures, such as hiring,” said Eugenio Alemán, chief economist at Raymond James. He added that strong AI investment likely persisted in the third quarter and should peak sometime next year.

The government shutdown likely dented GDP in the current quarter that stretches from October through December, but the US economy is widely expected to recoup most of those losses early next year.

Meanwhile, the US labor market has been stymied by Trump’s significant policy changes since the beginning of the year.

“It’s been a challenging year for employment precisely because of the changes in trade and immigration policy affecting both labor supply and demand,” said James Ragan, director of wealth management research at DA Davidson.

It’s unclear whether rate cuts can eventually counteract the corrosive effects of major policy changes that have stoked uncertainty to bolster hiring, economists say.

“Fortunately, we’re not seeing a lot of layoffs, because that’s how you turn a jobless expansion into a recession,” Sweet said. “The economy can grow without creating a lot of jobs, but productivity growth has to be decent.”

Fed officials are expected to deliver a few more rate cuts through 2026, according to their latest economic projections from September.

The problem with a jobless expansion

A jobless expansion could quickly translate into a recession.

“You’re very vulnerable to anything that goes wrong,” Sweet said. “The labor market is your line of defense, and if that starts to fray, then it’s game over.”

It also raises the risk the Fed commits a policy mistake.

In a speech last month, Fed Governor Christopher Waller described the divergence between GDP and job growth as a “conflict” that should work itself out — for better or worse.

“Something’s gotta give — either economic growth softens to match a soft labor market, or the labor market rebounds to match stronger economic growth,” he said.

And if job growth remains inconsistent with GDP, that puts the US economy in a precarious position.

Persistently strong economic growth also makes Fed officials less confident that they should be lowering interest rates, and there’s already plenty of hesitance to continue with rate cuts within the central bank’s rate-setting committee.

“With two rate cuts now in place, I’d find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected or that the labor market will cool more rapidly,” Dallas Fed President Lorie Logan said Friday at an event in Zurich, adding that there are signs that “policy most likely isn’t very restrictive.”

Source: finance.yahoo

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Daniel Carter

Economic

The Office for Budget Responsibility (OBR) has reportedly downgraded its forecast for UK growth in each year to 2030-31 as part of a review undertaken before the budget that will argue a lack of investment under Tory administrations undermined the UK's potential economic expansion.

The chancellor's efforts to increase growth will be unable to offset annual downgrades by the OBR, Sky News reported, undermining Labour's chances at the next election in 2029.

The Treasury refused to comment on the leak. A spokesperson said: "We know there is more to do. That's why we are investing £120bn more than the previous government in national infrastructure, cutting red tape and unnecessary regulation for businesses, introducing a new planning bill and securing new trade deals across the globe."

Reeves has already acknowledged publicly that growth forecasts will be hit due to the OBR's revision of its assumptions about productivity, which measures the output of a worker for each hour.

It was understood that a downgrade was likely once it was agreed by senior executives at the independent forecaster – including its chair, Richard Hughes – that previous growth rates were overly optimistic. A downgrade could slice £10bn to £20bn from future tax receipts each year.

Reeves has battled to convince the OBR that measures in her first two budgets will turn the situation around and improve growth, allowing for more generous settlements closer to the election.

Treasury officials are likely to be concerned that the OBR believes the economic outlook continues to remain subdued despite extra investment.

In her search for extra taxes, Reeves could hit more than 100,000 high-value properties with a levy that applies to those worth more than £2m, raising £400m to £450m, the Times has reported.

She is also expected to freeze income tax thresholds for an extra two years to 2030, which would pull more people into higher tax bands as wages rise.

Other tax-raising measures are expected to include a pay per mile scheme for electric cars, to start to fill the gap left by petrol duty as more people move to EVs, and measures to make salary sacrifice schemes less generous, including those for pension contributions.

The chancellor is also expected to lift the two-child limit for universal credit and the government has already announced a freeze on rail fares and prescription fees in an attempt to ease the cost of living crisis.

Source: GUARDIAN

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Adam

Economic

What happened last week

Mixed US labour data: September's non-farm payroll report showed employment gains of 119,000, while unemployment rose to 4.4% — the highest since 2021. July and August figures were revised down by 33,000 combined. However, four-week average jobless claims through mid-November declined versus late September. These mixed signals may prove insufficient to convince the Federal Reserve (Fed) that a December rate cut is necessary.

Japan's gigantic fiscal stimulus: Prime Minister Takaichi announced a ¥21.3 trillion stimulus package, allocating ¥11.7 trillion to price relief including energy subsidies and family support. The administration projects this will reduce inflation by 0.7 percentage points, challenging conventional beliefs regarding fiscal spending's inflationary impact.

US rate cut odds: October's Federal Open Market Committee (FOMC) minutes showed many members favoured holding rates through year-end, causing December cut probability to fall from 50% to 30%. However, this reversed after New York Fed President Williams signalled scope for near-term adjustment, pushing cut odds back to 70%. Cut expectations will drive risk sentiments.

Concerns on the UK economy: The composite purchasing managers' index (PMI) fell from 52.2 to 50.5 in November, signalling slowdown. Job losses accelerated and manufacturing gains couldn't offset service sector weakness. Retail sales declined 1.1% month-on-month (MoM) ahead of Black Friday promotions, while inflation fell for the first time since March to 3.6%.

Markets in focus

Volatility spiked in US equity markets

US equity markets experienced heightened turbulence as investors reassessed artificial intelligence (AI) sector valuations alongside Fed monetary policy trajectories. The S&P 500 and Dow Jones Industrial Average both declined 1.9% over the week, whilst the Nasdaq 100 plummeted 3.1%, positioning for its weakest monthly performance since March.

Thursday witnessed particularly acute volatility, with the Nasdaq 100 initially advancing 2.4% before reversing sharply to close 2.4% lower — a 1200-point intraday swing. The Volatility Index (VIX) spiked to 28.3 intraday before retreating to current levels around 23.

Market anxiety centred on technology sector valuations amid aggressive capital expenditure plans and mounting debt issuance. Amazon's first US dollar bond offering in three years attracted USD 80 billion in demand, ultimately raising USD 15 billion. Combined with offerings from Alphabet, Meta, Microsoft and Oracle, these hyperscalers have issued $121 billion in high-grade bonds this year.

Nvidia's third-quarter results last Wednesday demonstrated over 60% year-on-year (YoY) growth in both revenue and earnings, accompanied by constructive forward guidance. However, strong fundamental performance proved insufficient to alleviate valuation concerns. Although Nvidia shares initially surged 5% in extended trading, gains reversed entirely by Thursday's close. Elevated accounts receivable and inventory levels prompted additional investor scrutiny.

Technical analysis of the US Tech 100 index reveals an Elliott Wave corrective pattern, with the decline since 11 November resembling Wave C. Given Wave C typically matches or exceeds Wave A in magnitude, the drawdown may extend towards 24,000. Friday's rebound could signal budding recovery, though confirmation requires a decisive move above the 50-day moving average (MA) at 25,061. Critical support resides around 23,000; a breach would materially increase bear market probability.

Figure 1: US Tech 100 index (daily) price chart

as of 22 Nov 2025. Past performance is not a reliable indicator of future performance.

Hang Seng Index posts worst week since April

Diminished global risk appetite significantly impacted Hong Kong equity markets, with year-end profit-taking intensifying pressure. The Hang Seng Index (HSI) tumbled 5.1% last week — its steepest weekly decline since April's 'Liberation Day' sell-off — though maintaining gains exceeding 25% year-to-date. Technology sector weakness was more pronounced, with the Hang Seng Tech Index plunging 7.2%.

Concerns regarding US AI sector valuations and capital spending reverberated across Asian markets. Despite delivering results exceeding expectations and demonstrating robust AI demand growth, Baidu and Lenovo shares both declined approximately 8% over the week. Alibaba retreated nearly 5% ahead of this week's earnings announcement.

On the other hand, Chinese authorities reportedly are considering additional property market stimulus measures, including mortgage subsidies for first-time homebuyers and enhanced tax rebates for existing mortgage holders. Mainland property developers China Overseas Land and Longfor Group reversed weekly losses following these reports.

The index's breach below its 50-day MA combined with subdued momentum indicated by the relative strength index (RSI) suggests continuation of the downtrend. The HSI appears positioned for a corrective Wave C pattern within Elliott Wave theory, targeting approximately 24,800. Significant support lies at the 200-day MA of 24,323. Any recovery will encounter resistance around 26,250 (50-day MA); a decisive breakthrough above this level would be required to reverse the bearish trend.

Figure 2: Hang Seng Index (daily) price chart

as of 22 Nov 2025. Past performance is not a reliable indicator of future performance.

Japanese yen extends weakness

The yen continued its decline against the dollar, surpassing 157 — its weakest level in 10 months — before partially recovering. The currency has been pressured by fluctuating expectations for a December Fed rate reduction alongside mounting fiscal concerns as Prime Minister Takaichi implements the substantial stimulus package. The 20-year government bond yield reached its highest level since 1999.

Japan's core inflation, excluding fresh food prices, accelerated to 3.0% in October from 2.9% in September. Higher grain costs and surging import prices attributable to yen weakness drove the acceleration. Markets increasingly question the Bank of Japan's (BoJ) policy independence, as the central bank maintains its cautious stance despite core inflation exceeding the 2% target for 43 consecutive months. The BoJ cites the need for additional evidence of sustainable domestic demand and wage growth, alongside clarity regarding US tariff implications. Prime Minister Takaichi has urged continued BoJ caution.

Finance Minister Katayama's strong warnings regarding sharp, unidirectional yen movements and acknowledgment that intervention remains an option strengthen the case for potential currency intervention. However, such interventions cannot be deployed arbitrarily given limited foreign reserves and requires coordination with fiscal and monetary policy to prove effective. Japan expended approximately USD 100 billion across four interventions in 2024 when USD/JPY approached 160. As of end-September 2025, Japan's foreign currency reserves stood at USD 1148 billion.

USD/JPY has appreciated over 12% since its 22 April trough, with momentum accelerating over the past six weeks. The decisive break above February's high demonstrates robust momentum. Absent central bank intervention, we anticipate brief consolidation at current levels before the pair extends towards the 158.9–160 resistance zone, though the RSI indicates overbought conditions. Should yen-supportive factors emerge, USD/JPY will find support at the 20-day MA around 154.

Figure 3: USD/JPY (daily) price chart

as of 22 November 2025. Past performance is not a reliable indicator of future performance.

The week ahead

The forthcoming week presents crucial inflation data that will directly influence Fed policy deliberations, alongside key economic indicators from China and Australia that may reshape growth expectations across major economies.

Tuesday's US producer price index (PPI) assumes particular significance as it is likely to be the final critical inflation gauge available before the Fed's December policy meeting. Markets anticipate a 0.3% MoM increase in September's PPI, reversing the previous month's 0.1% decline. This rebound would reflect businesses adjusting pricing structures to accommodate persistent cost pressures, particularly in the goods sector. The reading carries heightened importance following the postponement of October's personal consumption expenditures (PCE) report, originally scheduled for 26 November, which removes a key datapoint from policymakers' assessment framework. A substantially stronger-than-expected PPI outcome could reinforce concerns that inflationary pressures remain entrenched, potentially constraining the Fed's capacity to reduce rates in December despite recent labour market softening.

Australian inflation data on Wednesday will clarify the Reserve Bank of Australia's (RBA) policy path — the trimmed mean inflation unexpectedly rose to 3% in Q3. The central bank is expecting the inflation rate to peak in the next few months and is therefore in a wait-and-see mode before considering further rate reduction.

Sunday's China PMI readings will shed light on the domestic economy after a range of lacklustre trade, retail and investment data two weeks ago. The manufacturing component has remained below the 50 expansion threshold since April, registering 49.0 in October. The non-manufacturing index, which encompasses services and construction, hovers around 50, suggesting momentum is subdued despite policy support measures. Markets will scrutinise whether the extended US-China trade truce has stabilised export demand and whether domestic service activities have resumed following the Golden Week holiday. A further deterioration in either index would intensify concerns regarding China's economic trajectory and its implications for global growth.

On the corporate front, Chinese technology companies deliver key earnings insights this week. Alibaba reports Tuesday, with investors scrutinising whether cloud computing momentum has sustained growth despite broader consumption challenges. Meituan's Friday results will reveal how the food delivery sector leader is doing under extreme competitive pressures that drove profit down 97% previously.

Figure 4: China's PMI trend

Source: ig

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Devin

Economic

It should be another busy, holiday-shortened, week after a volatile one last week as markets whipsawed around big moves in Fed pricing and AI bubble risk fears. Before we get to Thanksgiving, DB's Jim Reid writes that in the US, delayed post-shutdown data will be compressed into the first three days because of the holiday. Tomorrow brings September's retail sales and PPI, followed on Wednesday by jobless claims and durable goods orders. The claims data will be particularly important as they cover the November survey week, and the Federal Reserve is expected to lean heavily on these figures and other alternative indicators ahead of its December meeting, given there'll be no more payroll data prior to the FOMC.

Globally, attention will turn to inflation reports from Europe and Japan, as well as the long-awaited UK Budget, which could prove pivotal for the country's fragile fiscal outlook. Perhaps the most significant geopolitical development will be Ukraine's response to the US ultimatum to accept the 28-point peace plan agreed with Russia, with an ultimatum set for before Thanksgiving on Thursday, although the US seem to have indicated over the weekend that there is some room for negotiation.

Let's start with the US, and for tomorrow's September PPI data, benign prints are expected by DB economists for headline (+0.2% vs -0.1% last) and core (+0.2% vs -0.1%), echoing recent CPI trends. Categories feeding into core PCE will be in focus, with forecasts pointing to a 0.26% monthly gain, keeping the annual rate near 2.9%. This will be the last inflation update before the Fed's December decision, as October CPI and November CPI have been pushed back to mid-December.

Retail sales are forecast by DB economists to show modest gains after strong summer spending: headline +0.1% (vs +0.6% last), ex-auto +0.2% (vs +0.7%), while retail control may dip slightly (-0.1% vs +0.7%). Even so, Q3 retail control growth is tracking at 6.8% annualized —the strongest since early 2023—supporting expectations for robust goods spending once GDP data is published. Factory sector updates arrive Wednesday with durable goods orders for September and the Chicago PMI for November (45.0 vs 43.8). Headline orders are expected to fall (-2.4% vs +2.9%), but ex-transportation (+0.2% vs +0.4%) and core orders (+0.2% vs +0.6%) should post moderate gains, implying a solid 5.3% annualised increase for Q3. Don't forget Black Friday where we will start to see early evidence of how strong consumer spending is into the important Christmas period.

No Fed speakers are scheduled at this stage. The blackout period begins on Saturday ahead of the December meeting but with Thanksgiving on Thursday, it will start a lot earlier than it normally would.

European data highlights include preliminary November CPI prints for Germany (2.6% YoY expected), France (0.92%) and Italy (1.23%) on Friday, alongside Q3 GDP releases for Norway, Sweden and Switzerland. Germany's Ifo survey kicks off the week today, followed by consumer confidence on Thursday and retail sales Friday. France will also report confidence and spending data that day. In the UK, the Autumn Budget on Wednesday will be the main event. Expectations point to roughly £35bn in fiscal consolidation, marking a second historic tax-raising budget under Chancellor Reeves. See our economist Sanjay Raja's preview here in what is one of the most hotly anticipated UK budgets in recent memory. Sanjay may need a lie down in a dark room after Wednesday as it's fair to say he's been in high demand of late.

From central banks, the ECB will publish its October meeting account on Thursday and its consumer expectations survey Friday. In New Zealand, the RBNZ meets Wednesday, with a 25bps rate cut anticipated. Elsewhere, Australia reports October CPI (Wednesday), Canada releases Q3 GDP, and China publishes October industrial profits. Japan's focus will be on November Tokyo CPI and October activity data (Friday).

Source: Zero Hedge

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Winkelmann

Political

Economic

Key points:

· With incomes threatened, content creators turn abroad

· Some eye US, British markets as law worries advertisers

· Smaller domestic players face severe losses

Australia is home for YouTube star Jordan Barclay, the place where he was born, went to school and built a company worth $50 million by age 23 that produces gaming content for 23 million subscribers.

Now, with a world-first social media ban on Australian children younger than 16 set to take effect on December 10, he is thinking of leaving his Melbourne studio and moving abroad.

"We're going to move overseas because that's where the money is going to be," said Barclay, whose seven YouTube channels include EYstreem, Chip and Milo, and Firelight.

"We can't afford to keep doing business if advertisers leave Australia."

Nine participants interviewed by Reuters in Australia's social media industry, estimated to generate annual revenue of A$9 billion ($5.82 billion), did not put a dollar figure on the ban's impact but agreed it could lead to a drop in advertisers and views.

YouTubers, who get paid 55% of ad revenue and up to 18 Australian cents per 1,000 views, could be hit hardest, said social media researcher Susan Grantham at Griffith University.

"If it is one clean sweep and all these accounts disappear, then instantaneously, it's going to be detrimental to the influencer economy."

The law requires companies to block the accounts of more than a million people under the cut-off age, punishing "systemic breaches" with penalties of up to A$49.5 million.

While teenagers can still watch YouTube without an account, the site's algorithm will fail to drive traffic to popular posts, reducing views.

Equally, creators on YouTube, TikTok and Meta'sInstagram stand to lose earnings through promotions if the number of their followers fall, Grantham said.

Advertisers are also on edge about campaigns targeting younger audiences, said Stephanie Scicchitano, general manager at Sydney-based talent agency Born Bred Talent.

FEWER SPONSORSHIP DEALS AS BAN DEADLINE NEARS

Barclay's company Spawnpoint Media sells advertising to companies such as Lego and Microsoft, but clients' interest in sponsorship deals has declined as the ban approaches, he said.

"They're worried about what the ban could mean later," he said. "If it expands, if it grows ... it makes sense for us to invest overseas and not here."

The United States could be among his options, he said, pointing to more favourable laws and government support in such markets.

Some creators are already leaving to avoid the curbs, such as influencers the Empire Family, who told followers in October they were relocating to Britain.

The careers of those creating content featuring children younger than 16, such as family vloggers and child influencers, were particularly at risk, said Crystal Abidin, the director of the Influencer Ethnography Research Lab.

"They agree that in order to continue, it's an easy decision to immigrate," she said.

Children's musicians Tina and Mark Harris, whose Lah-Lah YouTube channel has 1.4 million subscribers, said, "Any negative impact on income is going to hurt."

CONCERN ABOUT LASTING REPUTATIONAL HARM

But their main concern was lasting reputational damage from the government's description of YouTube's harm to children.

"Parents will get the jitters and stay away from YouTube in droves," Mark Harris said.

"Maybe that's hyperbole, we just don't know."

Initially exempted from the ban, Alphabet-ownedYouTube was added later at the urging of Australia's internet regulator, which said 37% of minors reported seeing harmful content on YouTube, the worst showing for a platform.

The ban "does a disservice" to creators of high-quality content for children, said Shannon Jones, who runs Australia's largest YouTube channel, Bounce Patrol, with more than 33 million subscribers.

Byron Bay creator Junpei Zaki, 28, whose output is mostly drawn from interactions with 22 million followers across TikTok and YouTube, expects the ban to cause a "guaranteed drop" in likes and comments from Australia.

"It ... does feel like I'm ignoring my Australian audience that helped get me here, because they can't interact."

HIT MAGNIFIED FOR SMALLER CREATORS

Zaki estimates he will lose 100,000 followers to the ban, a blip in his global reach, but warned that smaller creators with domestic audiences would be hit harder.

At the House of Lim food stall in Sydney's west, 15-year-old owner Dimi Heryxlim has built a following by posting vlogs of his routine running the kitchen after school.

Losing access to his TikTok and Instagram accounts "will be a bad thing", he said, as some customers recognise him from his videos, but he plans to return as soon as he turns 16.

"If I can't get my account back, I'll just get a new account and start everything from scratch," said Heryxlim.