French Industrial Rebound Loses Steam

ING

Forex

Economic

Summary:

Momentum weakens

Manufacturing output in France edged down slightly in October, falling by 0.1% after a strong 0.9% increase in September. Across the broader industrial sector, production rose by 0.2% on the month, following a 0.7% gain in September. Sector performance was mixed: output in electrical, electronic, and IT equipment dropped sharply by 2.2%, while coke and refining surged by 3.6%, and most other sectors remained broadly stable.

Over the past three months, manufacturing output has been up 0.2% compared to the previous three-month period and 1.1% year-on-year. The picture is far bleaker in the construction sector, where output fell by 0.6% on the month and 1.4% over the year.

These figures paint a mixed picture of French industry. After a rebound since June, momentum appears to be fading, and business sentiment does not point to an imminent recovery. Production expectations among manufacturers declined in November, while order books contracted sharply. As a result, industrial output is likely to make a smaller contribution to GDP growth in the fourth quarter.

Military spending and uncertainty in 2026

Looking ahead to 2026, the outlook remains mixed. On the positive side, France should continue to benefit from rising global military spending. As the world's second-largest arms exporter, with defence accounting for nearly 5% of total industry, France is the European country most exposed to this trend. Between 2022 and 2025, defence-related production grew by more than 20%, while overall industrial output remained flat. Order books and sentiment in the defence sector remain strong, suggesting that military spending will continue to support industrial production and GDP growth.

On the downside, political and fiscal uncertainty is likely to weigh on domestic investment and moderate activity growth, putting pressure on industrial production for domestic use. Overall, industrial growth should remain subdued in the first half of the year, with a possible pickup in the second half, supported by Germany's infrastructure plan – provided it delivers.

We forecast GDP growth of 0.9% in 2026, following 0.8% in 2025.

Source: ING

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Glendon

Commodity

Economic

Gold prices held close to 4,200 USD per ounce on Friday, with investors focused on a significant, delayed inflation report ahead of next week's Federal Reserve policy decision.

All attention is on the release of the September Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation gauge. The data could be decisive in shaping expectations for the timing and scale of upcoming monetary easing.

Earlier in the week, further signs of a cooling labour market emerged. ADP reported an unexpected decline of 32,000 in private sector payrolls, while the Challenger report recorded 71,000 layoffs in November – bringing the year-to-date total to nearly 1.17 million.

This combination of soft employment figures has reinforced investor conviction that the Fed will cut rates as early as next week, with the market-implied probability now standing at approximately 87%.

Adding to the dovish narrative are reports that White House economic adviser Kevin Hassett may succeed Jerome Powell as Fed Chair in May. Markets interpret this as a potential tilt towards more aggressive policy easing.

Despite a moderately lower weekly close, gold remains well-supported heading into the critical data release.

Technical Analysis: XAU/USD

H4 Chart:

On the H4 chart, gold (XAU/USD) is consolidating after its recent advance toward 4,220–4,230 USD. The price remains above the middle Bollinger Band, with the upper band turning slightly upward, suggesting an attempt to recover from recent weakness.

Key resistance is around 4,265 USD, a level the market has repeatedly tested without securing a decisive breakout. A sustained move above this level would clear the path towards 4,300 USD and beyond.

Immediate support is marked at 4,163 USD. A break below this level would increase selling pressure and raise the risk of a decline towards the next demand zone near 4,136 USD. A close below 4,136 USD would signal a transition into a deeper corrective phase.

H1 Chart:

On the H1 chart, XAU/USD is trading within a tightening range between 4,188 USD and 4,220 USD, reflecting mixed short-term momentum. The middle Bollinger Band is providing near-term equilibrium, confirming the absence of a clear directional bias.

The upper Bollinger Band is capping advances near 4,220–4,225 USD, with several rejections from this zone indicating local overbought conditions. The lower band is offering support around 4,185–4,190 USD.

A sustained move above 4,220 USD would signal a resumption of bullish momentum, initially targeting 4,235–4,240 USD, and potentially 4,265 USD. Conversely, a break below 4,185 USD would open the way towards 4,163 USD. A loss of this support could intensify corrective pressure and expose the 4,136 USD level.

Conclusion

Gold remains in a holding pattern near 4,200 USD as traders await the delayed PCE inflation report. While labour market softness has bolstered expectations for Fed easing, the technical picture reflects consolidation within a defined range. A decisive reaction to today's data is likely to set the tone ahead of next week's FOMC meeting, with a break above 4,265 USD opening the door to further gains, while a drop below 4,163 USD risks a deeper correction.

Source: ACTIONFOREX

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FXOpen

Forex

Commodity

The ADX indicator on the 4-hour XAU/USD chart has dropped to a multi-month low, signalling the absence of a clear trend.

At the same time, a technical assessment of price movements allows for the construction of a symmetrical triangle pattern with a central axis around $4,205 — indicating that the current price reflects an equal balance of major drivers, including:

→ Weakening conditions in the US labour market. According to media reports, ADP recorded an unexpected decline of 32,000 private-sector jobs, while Challenger reported 71,000 layoffs in November, bringing the total number of job cuts since the start of the year close to 1.17 million.

→ Rumours that White House economic adviser Kevin Hassett may replace Federal Reserve Chair Jerome Powell in May — a development that has strengthened expectations of more aggressive policy easing in 2026.

It is worth noting that on 1 December, gold briefly rose above the November high — a move that coincided with silver reaching an all-time record (as suggested in our analysis on 27 November). However, the bulls failed to hold the price above $4,245, indicating a lack of sufficient buying interest. It appears that traders require stronger justification to purchase gold at such elevated levels.

Most likely, market participants have adopted a wait-and-see stance ahead of key releases:
→ Personal Consumption Expenditure (PCE) data for September, whose publication was delayed by the shutdown;
→ Next week's FOMC decision (10 December).

Although the market currently appears balanced, XAU/USD may be functioning like a "compressed spring". Be prepared for bursts of volatility.

Source: FXOpen

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Gerik

Economic

Stocks

Market Opens with Modest Gains as Fed Signals Drive Sentiment

European equity markets showed a moderate but broad-based uptick on Friday, with the pan-European Stoxx 600 climbing 0.18% shortly after the bell. Major indices across the region reflected similar momentum: Germany’s DAX rose 0.45%, France’s CAC 40 added 0.13%, the UK’s FTSE 100 increased 0.17%, and Spain’s IBEX 35 edged up 0.29%. The rally was primarily driven by investor anticipation of a potential interest rate cut from the Federal Reserve in its upcoming Federal Open Market Committee (FOMC) meeting next week.

The causality here is clear: market optimism was fueled by the belief that looser monetary policy could ease borrowing costs and support equity valuations. This is a direct causal relationship rather than a coincidental correlation, as traders priced in an 87.1% probability of a 25-basis-point rate cut, according to CME’s FedWatch Tool.

Inflation Data and U.S. Labor Market Trends Underpin Policy Bets

Investor focus also remains sharply fixed on upcoming U.S. data releases, especially the personal consumption expenditures (PCE) index, consumer spending figures, and the University of Michigan’s consumer sentiment survey. These indicators are crucial inputs for the Fed’s policy considerations. Meanwhile, the latest U.S. jobless claims, which fell by 27,000 in the week ending November 29, undercut some arguments for aggressive easing, as the data suggested a still-resilient labor market.

This relationship illustrates a nuanced interplay between data and policy: while falling jobless claims might normally signal economic strength (and thus reduce the need for easing), the broader context of slowing inflation and consumption still supports market confidence in a rate cut. Here, the relationship between economic data and market expectations is partly causal (in terms of influencing Fed policy) and partly correlational (in terms of how investors perceive trends across multiple indicators).

Geopolitical Risk from Ukraine War Continues to Hover Over Markets

Another influential yet less predictable factor is the evolving geopolitical landscape. Investors are keeping an eye on U.S.-led diplomatic efforts to resolve the war in Ukraine, which could affect energy markets, defense stocks, and overall European sentiment. Recent developments include Russian President Vladimir Putin’s state visit to India and his warning that Russia may forcibly take Donbas if Ukrainian forces don’t withdraw. Additionally, the European Union is considering using frozen Russian assets to fund aid for Kyiv—a proposal Russia has warned could be interpreted as an act of war.

In this case, the link between geopolitical risk and equity market performance is best understood as a correlation rather than direct causation. While no immediate sell-off occurred, the uncertainty continues to weigh on investor psychology and adds a layer of risk that tempers bullishness from monetary factors.

Mixed Signals in Corporate Headlines Add to Market Texture

Corporate news added both drag and lift to the broader market. Swiss Re shares dropped 5.6% after the reinsurer released modest 2026 financial targets, including a $4.5 billion profit and a 7% annual dividend growth plan. While this reflects stable earnings potential, investor expectations may have been higher, leading to the sell-off. Conversely, Ocado surged 10.2% after reports that U.S. retailer Kroger would compensate the UK online grocer with $350 million for a canceled American distribution center project.

These reactions highlight how firm-specific developments can generate sharp divergences in stock performance, independent of macro factors, reinforcing the complexity of sentiment in a market driven by both top-down and bottom-up signals.

Upcoming European Economic Data Will Shape Regional Outlook

Investors are also awaiting key economic releases from the eurozone, including EU-wide GDP figures, German factory orders, French trade data, and Italian retail sales. These will serve as precursors to the following week’s interest rate decisions from the European Central Bank, the Bank of England, Sweden’s Riksbank, and Norway’s Norges Bank, all scheduled for December 18.

While these data points may not shift markets as forcefully as U.S. policy decisions, they carry causal weight for regional monetary authorities and could significantly impact local bond yields and equity valuations.

European stocks are navigating a delicate equilibrium between central bank easing hopes and geopolitical instability. The market reaction so far suggests cautious optimism, driven largely by confidence in upcoming Fed policy. However, potential shocks whether from Ukraine-related developments or macroeconomic disappointments could shift sentiment quickly. Investors remain in a wait-and-see mode, with eyes trained on both economic dashboards and diplomatic chessboards.

Source: CNBC

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Gerik

Economic

Stocks

Chey Tae-won: AI’s Growth Is Real, But Stocks May Cool Off

At a recent forum in Seoul, SK Group Chairman Chey Tae-won pushed back on fears that the artificial intelligence industry is in a speculative bubble. Responding to questions from the Bank of Korea governor, Chey emphasized that while AI is not in a bubble, AI-related stocks have surged too quickly, creating a risk of short-term corrections.

"Overshooting is not a new phenomenon for high-growth industries," Chey noted, pointing out that rapid capital inflows and investor enthusiasm often lead to stock valuations outpacing actual business fundamentals, especially in transformative sectors like artificial intelligence.

AI Boom Driving SK Hynix Supercycle

SK Group is the parent company of SK Hynix, one of the world’s leading suppliers of high-end memory chips. The firm plays a critical role in the AI ecosystem, particularly by supplying memory chips for Nvidia’s flagship AI chipsets used in data centers.

Over the past year, SK Hynix shares have soared 214%, fueled by the massive demand from AI data infrastructure builders. In October, SK Hynix reported record-breaking quarterly profits and revealed that its chip production for 2026 is already sold out, reinforcing the narrative of an ongoing "chip super cycle."

This kind of performance has placed SK Hynix at the forefront of the global AI investment wave, mirroring similar growth seen in companies like Nvidia, AMD, and other AI hardware leaders.

Market Valuations vs. Real Profits: A Familiar Dilemma

Despite the earnings momentum, Chey noted that investors should be cautious, as AI stock prices may have outpaced current profit realities. This echoes broader market sentiment: while the AI revolution is expected to drive major productivity gains across industries, questions linger about how and when these gains will convert into sustainable, widespread profits.

Chey emphasized that a correction would be a natural, healthy adjustment, not a signal of a collapsing bubble. “It’s part of the maturation process of any high-growth sector,” he said.

AI Still Has a Long Runway But Stocks May Need to Breathe

Chey Tae-won’s remarks offer a grounded perspective amid growing excitement and skepticism around AI. While SK Group remains bullish on the long-term potential of artificial intelligence, particularly in its core semiconductor business, the chairman’s candid warning about overheated valuations serves as a reality check for investors.

As the AI narrative continues to unfold, markets may need to recalibrate expectations and align valuations more closely with fundamentals, even as the industry itself marches forward with accelerating technological breakthroughs.

Source: Reuters

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Daniel Carter

Economic

UK house prices stalled ahead of the budget, according to data from one of the biggest mortgage lenders that suggested fears of tax rises had a dampening effect on the property market.

Halifax said that average property values were unchanged at £299,892 ($400,430) in November after a 0.5% gain the previous month. Values were up 0.7% from a year earlier, the weakest rate since March 2024.

The figures suggest the market may have been held back by growing concerns that would Chancellor of the Exchequer Rachel Reeves' would target the property market in her Nov. 26 budget. It chimes with Bank of England data showing a slight dip in mortgage approvals in October.

However, Halifax's report contrasts with recent data from Nationwide Building Society showing prices climbing by more than expected last month. Differences may reflect the loan book of each lender. The figures are based on the valuations carried out by lenders to determine the true worth of a property prior to it being bought.

While Reeves postponed much of the pain for households from her £26 billion of tax increases, her new levy on homes worth more than £2 million may hit the top of the property ladder and her squeeze on rental incomes on landlords may tempt more to exit the sector. Fears that Reeves might target homes well below that level proved unfounded.

Home buyers have enjoyed an easing in mortgage rates this year and climbing real incomes, supporting the market. Mortgage holders with variable rate loans are expected to get further relief later this month with markets betting on a Bank of England cut in interest rates to 3.75%. However, they also faced a hike in stamp duty in April and a subdued economic backdrop with unemployment ticking higher in recent months.

"This consistency in average prices reflects what has been one of the most stable years for the housing market over the last decade," said Amanda Bryden, head of mortgages at Halifax. "Even with the changes to Stamp Duty back in spring and some uncertainty ahead of the Autumn Budget, property values have remained steady."

Bryden said Halifax expects prices will "continue to grow gradually into 2026" given the prospect of further rate cuts.

Prices in London, the highest in the country at an average of £539,766, slipped back 1% year-on-year. The South East and East of England also saw small price falls, while Northern Ireland continued to be the best-performing region after a 8.9% gain.

"The outlook for 2026 rests on the path of mortgage rates and the resilience of household incomes," said Karen Noye, mortgage expert at Quilter. "Greater clarity post budget and the prospect of lower borrowing costs give the market a firmer footing, but affordability will remain the defining constraint."

Source: Bloomberg Europe

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Samantha Luan

Political

Stocks

India's government is reviewing a telecom industry proposal to force smartphone firms to enable satellite location tracking that is always activated for better surveillance, a move opposed by Apple, Google and Samsung due to privacy concerns, according to documents, emails and five sources.

A fierce privacy debate erupted in India this week after Prime Minister Narendra Modi's government was forced to rescind an order requiring smartphone makers to preload a state-run cyber safety app on all devices after activists and politicians raised concerns about potential snooping.

For years, the Modi administration has been concerned its agencies do not get precise locations when legal requests are made to telecom firms during investigations. Under the current system, the firms are limited to using cellular tower data that can only provide an estimated area location, which can be off by several meters.

The Cellular Operators Association of India (COAI), which represents Reliance's Jio and Bharti Airtel, has proposed that precise user locations should only be provided if the government orders smartphone makers to activate A-GPS technology - which uses satellite signals and cellular data - according to a June internal federal IT ministry email.

That would require location services to always be activated in smartphones with no option for users to disable them. Apple, Samsung and Alphabet's Google have told New Delhi that should not be mandated, said three of the sources who have direct knowledge of the deliberations.

A measure to track device-level location has no precedent anywhere else in the world, lobbying group India Cellular & Electronics Association (ICEA), which represents both Apple and Google, wrote in a confidential July letter to the government, which was viewed by Reuters.

"The A-GPS network service ... (is) not deployed or supported for location surveillance," said the letter, which added that the measure "would be a regulatory overreach."

'DEDICATED SURVEILLANCE DEVICE'

India's home ministry had scheduled a meeting of top smartphone industry executives to discuss the matter on Friday but it was postponed, a source with direct knowledge of the matter said. On Thursday, Reuters sent questions related to this topic to the ministry.

India's IT and home ministries, which are both analysing the telecom industry's proposal, did not respond to Reuters queries.

Apple, Samsung, Google, Reliance and Airtel did not respond to requests for comment. Lobby groups ICEA and COAI also did not respond.

At this point, no policy decision has been made by the IT or home ministries.

Taking advantage of A-GPS technology - which is typically only turned on when certain apps are running or when emergency calls are being made - could provide authorities with location data precise enough that a user can be tracked to within about a meter, according to technology experts.

"This proposal would see phones operate as a dedicated surveillance device," said Junade Ali, a digital forensics expert associated with Britain's Institution of Engineering and Technology.

Cooper Quintin, a security researcher at the U.S.-based Electronic Frontier Foundation, said he had not heard of any such proposal elsewhere, calling it "pretty horrifying."

Governments worldwide routinely seek new ways to better track cellphone users' movements or data. Russia has mandated the installation of a state-backed communications app on all mobile phones in the country.

TELCOS VS SMARTPHONE FIRMS

India is the world's second-biggest mobile market with 735 million smartphones as of mid-2025, where Google's Android powers more than 95% of the devices, with the rest using Apple's iOS, Counterpoint Research says.

Apple and Google's lobby group, the ICEA, argued in their July letter that there are significant "legal, privacy, and national security concerns" with the proposal from the telecom group.

It warned their user base would include people from the military, judges, corporate executives and journalists, adding that proposed location tracking risked their security given that they hold sensitive information.

Even the old way of location tracking is becoming problematic, the telecom group said, as smartphone makers show a pop-up message to users, alerting them that their "carrier is trying to access your location."

"A target can easily ascertain that he is being tracked by security agencies," said the telecom group, urging the government to order phone makers to disable the pop-up features.

Privacy concerns should take priority and India should also not consider disabling the pop-ups, Apple and Google's group argued in its July letter to the government.

This will "ensure transparency and user control over their location."