All insights

Thanksgiving week is usually a lighter one when it comes to data releases in the US. Apart from a PCE and core PCE inflation numbers that came in line with expectations at 2.3% and 2.8% respectively, there has not been much data to move the dial. In Europe, on the other hand, there have been a few data releases and central banker interviews that are worth commenting on.

Real estate, and in particular real estate investment trusts (REITs), was one of the first sectors to come under market scrutiny as interest rates rose, but a strong return to market from Swedish real estate company Heimstaden on Tuesday was the latest sign that expected rate cuts in Europe are easing pressure on the industry.

The European Central Bank (ECB) on Wednesday published its quarterly negotiated wages indicator for Q3, and while this is only one indicator the ECB uses to determine wage inflation across the Eurozone, the growth rate of 5.4% was the highest since the early 1990s.

With most European banks having now delivered their Q3 2024 results, we believe the sector is firmly on the front foot moving into 2025.

The collapse of Germany’s ruling coalition just after the US election has left the Eurozone’s largest economy in political limbo at a difficult time.

In this month's Flash Fixed Income, we look at how bond markets are reacting to Donald Trump's victory in the US election. With Trump's stated policies widely regarded as being inflationary, we expect a bigger divergence in the path for interest rate cuts between the US and Europe that might favour higher quality European credit.