A 60-day ceasefire between Israel and Hezbollah moderated geopolitics tensions in the Middle East, while the added prospect of increased supply of oil under a Trump administration saw the oil price decline by 0,3% over the month, down 5,3% year to date. Gas prices increased more than 20% over the month after a large Australian plant closure, cold weather in Europe and a further reduction of Russian gas supplies to the region. 

US headline inflation increased to 2,6% y-o-y in October, broadly in line with expectations, while core inflation remained steady at 3,3%. Producer prices printed at 2,4% from 1,9% the prior month, coming in ahead of expectations. Data for the US personal consumption expenditure price index (PCE) was recorded at 2,3% from a multi-year low of 2,1% the prior month, printing in line with expectations. The annual rate for core PCE (the Fed’s preferred measure of inflation) increased to 2,8%. Disinflation appears to be slowing, ahead of reaching the inflation target. The US Federal Reserve (US Fed) cut the policy rate by 25bps with a unanimous decision, in line with market expectations. Federal Reserve Chair, Jerome Powell, resisted being drawn into comments about the impact of the new administration on inflation and the path of interest rates, rather focusing on data dependence. Markets, nonetheless, pulled back expectations for the interest rate cutting cycle.

Chinese inflation printed at 0,3% over the year from 0,4% the prior month, suggesting ongoing weakness in domestic demand. In early November, the National People’s Congress (NPC) Standing Committee meeting unveiled a multi-year local government debt swap programme. While welcome, the announcement still underwhelmed the market and was light on details for direct support for consumers and the property market.

The Bloomberg Global Aggregate Bond index delivered a modest 0,3%, bringing the return year to date to a marginal 0,5%. Despite upward pressure throughout the month the US 10-year bond yield ended the month at a broadly similar level of 4,2%. Gold consolidated after a period of strength, weakening by 3,3% in November and bringing the returns since the start of the year to 28,7%. The US dollar gained 1,7% in November, helping the greenback appreciate by 4,3% year to date on a trade weighted basis.
 

Want to know more?
Here's what to do:  

• Contact your wealth manager or stockbroker.
• To find out more about our investment offering, click here.
• If you're interested in what we can offer you, we would love to hear from you. You can contact us on 0800 111 263, or complete an online contact form.