Fra Danske Bank:
August Hyldgaard, [email protected] , Assistant Analyst
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In the US, the delayed October nonfarm payrolls (NFP) and full November jobs report are both due for release at 14:30 CET. We expect that delayed seasonal hiring will weigh on October NFP and forecast job growth at only 20k. Reversal of this effect likely supported November NFP growth to +50k. Both estimates are below the September pace, which is driven by a further slowdown in labour supply growth. We forecast November unemployment rate steady at 4.4%. October retail sales data and December flash PMIs are also due for release.
In the euro area, the flash PMI report for December is released. Activity in the final quarter of the year has been decent according to the latest two PMI reports that surpassed expectations. We expect the manufacturing PMI to rise slightly to 49.9 from 49.6 while we expect services to fall marginally to 53.3 from 53.6, thereby showing broadly the same picture of decent activity as in November and supporting the ECB’s “good place” assessment of the euro area economy.
UK labour market data is released ahead of the Bank of England meeting on Thursday. Recent data has been soft with accelerating job loss and unemployment edging higher. This report will be key in combination with tomorrow’s CPI data for the Bank of England to weigh the pros and cons for cutting the Bank Rate on Thursday.
Economic calendar
In Japan, the manufacturing PMI remained in contractionary territory despite the increase to 49.7 from 48.7 in November. However, the increase was above market consensus of 48.8 and was the highest reading in three months. Demand conditions improved, however new export orders declined.
In the Ukraine war, Ukrainian President Zelenskyy offered to drop demands of NATO membership and cede territory to Russia during talks in Berlin. US officials offered security guarantees as Zelenskyy said he would require “Article 5-like guarantees” from the US, Europe and other countries. A draft peace agreement was said to be close by US officials, although territorial issues remain. Over the weekend Russia appeared ready to reject all proposals from Ukraine and Europe throwing doubt on whether a ceasefire is reachable within the foreseeable future.
In France, the Senate approved a reworked 2026 budget bill. The bill is expected by the French government to push the public deficit to 5.3% of GDP and above the government’s 4.7-5.0% target. The National Assembly overwhelmingly rejected the bill last month and a joint committee of seven lawmakers and seven senators will meet on Friday to attempt a compromise. If they fail to reach an agreement, the National Assembly will have the final say on the 2026 budget.
In the US, New York Fed President Williams said he sees interest rates as modestly restrictive, downside risks to employment and expects inflation to return to 2% by 2027. Fed Governor Miran held a speech offering insight into his diverging view on Fed policy rates. Miran argued that current empirical Fed models overvalue the neutral interest rate and due to rapid changes in immigration, tariffs and tax law, the real neutral rate is at 0%.
Equities: Global equity markets appeared broadly unchanged on the surface yesterday, but beneath the headline performance a clear rotation continued to unfold. The healthcare versus technology rotation persisted, with tech acting as the key drag: the sector ended the day around 1% lower, while healthcare outperformed, rising 1.3%. Overall, the S&P 500 closed down -0.2%, while the NASDAQ underperformed, ending the session -0.6%. In contrast, European equities delivered a positive performance, with the STOXX 600 finishing the day +0.7%. Overnight, most Asian equity indices are trading weaker.
FI and FX: There was modest movement in both US and European bond yields/interest rates ahead of the US labour market data today and the ECB, BoE and BoJ meetings on Thursday. We are still looking forward to the German funding requirement on Thursday and more details on France during the week.
See also our in-depth FI and FX morning comment *
China Flash – Even more weakness in domestic demand , 15 December
Reading the Markets Norway – We expect Norges Bank to stay on hold , 15 December
Reading the Markets EUR – A natural rise in interest rates; buy 10Y EIB versus Belgium , 12 December
Reading the Markets Sweden , 12 December
ECB Preview – Hold on, we’re not hiking , 11 December
Reading the Markets Denmark Top-trade 2026: Buy 4% 2056 , 11 December
Spending Monitor – Black Friday boosts retail momentum, 11 December.
Report completed: 16 December 2025, 07:00 CEST
Report first disseminated: 16 December 2025, 07:30 CEST
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