DUBLIN (Reuters) – European Central Bank policymaker Gabriel Makhlouf said it would be premature to start making decisions on what a new U.S. administration might do when asked if Donald Trump’s election moves the dial on his thinking on inflation.

“I do think it would be premature to come to conclusions as to exactly what it is that the new U.S. administration is going to do, and to start making decisions based on that assumption,” Makhlouf told reporters on Monday.

Makhlouf added that it would be going a bit far to say an ECB interest rate cut next month is “in the bag” and that the evidence would need to be “pretty overwhelming” to consider a 50-basis-point cut at the Dec. 12 meeting.

(Reuters) – UK’s main stock indexes traded in a tight range on Monday, as caution prevailed ahead of an inflation report due later in the week, while conglomerate Melrose (LON:MRON) jumped following an upbeat trading update.

In a quiet start to the week, the FTSE 100 index inched up 0.2%, buttressed by gains in precious metal miners as bullion prices rebounded. [GOL/]

Melrose Industries rose 6.4% to levels seen more than three months ago, after the owner of aerospace parts maker GKN (LON:GKN) Aerospace reported a jump in revenue over the past four months and said it expects to deliver a surge in free cash flow in 2025.

“Historically Melrose bought up industrial businesses and executed a buy, improve, sell model – investors will hope the ‘improve’ bit has been retained,” said Russ Mould, investment director at AJ Bell.

The midcap FTSE 250 that houses more domestically exposed companies dipped 0.1%, ahead of October inflation data expected on Wednesday.

A majority of market participants, as per data compiled by LSEG, have priced in that the Bank of England could leave interest rates unchanged at its last meeting for the year in December, despite signs of the economy in contraction.

The main indexes logged losses in the previous week, with the FTSE 100 clocking its fourth straight week in declines.

Meanwhile, Cerillion added 2.7% after the billing, charging and customer relationship management software solutions provider reported strong annual results.

IQE pared early losses and was last down 3.7% after the British semiconductor wafer maker said it would start a strategic review of its assets and warned that revenue would not grow this year due to a slower-than-expected recovery and weak consumer demand in end markets.

The construction and materials index was among the top sectoral decliners. A monthly report from online property portal Rightmove (OTC:RTMVY) said asking prices for homes fell over the last month by more than is usual for the time of year.

Also on tap this week are October retail sales figures and November business activity data.

By Rahul Trivedi

BENGALURU (Reuters) – Bank Indonesia will leave interest rates unchanged on Wednesday, aiming to protect the rupiah from further depreciation amid concerns U.S. President-elect Donald Trump’s policies could spur dollar strength, a Reuters poll of economists found.

With inflation having stayed within BI’s target range of 1.5-3.5% for over a year, the central bank can focus on the rupiah which despite regular interventions has dropped nearly 5% from a September peak, arguing for fewer rate cuts from the bank whose mandate is to maintain currency stability.

Some economists in the latest survey revised their expectations from a rate cut in an October poll to a hold at the Nov. 20 meeting.

Over 70% of respondents, 25 of 34 in the Nov. 11-18 Reuters poll, predicted the central bank would keep its benchmark seven-day reverse repurchase rate at 6.00% this week.

Median forecasts showed BI cutting rates by 25 basis points to 5.75% in December, a quarter percentage point less than the previous poll predicted.

“I think it’s likely to be a close call. They’re a little bit concerned about the currency. It has fallen back since the election in the U.S. so they’d like a bit more clarity on what the outlook is,” said Gareth Leather, senior Asia economist at Capital Economics.

“I suspect they’ll keep rates on hold this month.”

Among those who expected BI to pause in November, two-thirds or 16 of 25 economists expected a 25 basis point cut to 5.75% in December.

Median forecasts showed rates falling to 5.00% in the fourth quarter next year compared to the second quarter in the last two polls.

The expected delay partly reflects diminishing bets on rate cuts from the U.S. Federal Reserve as Trump’s policies – broad-based tariffs and tax cuts – are seen as inflationary, keeping the U.S. dollar stronger for longer.

“BI will likely struggle to find more opportunities to keep easing monetary policy in a stronger U.S. dollar environment,” said Brian Tan, senior regional economist at Barclays (LON:BARC).

“We believe the risks have tilted towards a delayed resumption of BI rate cuts, as well as a higher terminal rate than would otherwise have been the case.”

(Other stories from the Reuters global economic poll)

SAO PAULO (Reuters) – The Brazilian government’s package of spending cuts is practically done and will be released soon, pending only a response from the defense ministry, Finance Minister Fernando Haddad said in an interview with Times Brasil/CNBC on Sunday.

“The package is agreed with the president (Luiz Inácio Lula da Silva). We’re going to announce it soon, because we’re missing a response from one ministry … the Ministry of Defense,” said Haddad.

“We had good meetings with the minister (José Múcio) and the commanders of the forces.”

Haddad did not comment on the total amount of spending that the new fiscal measures will reduce, stating only that “the package is the size of our needs to maintain balanced growth.”

Haddad also said he believed that a fiscal adjustment could eventually lead to interest rate cuts by helping to slow inflation, after market expectations recently led the central bank to accelerate its monetary tightening pace.

The government has been promising to announce measures to contain spending in order to guarantee the sustainability of its fiscal framework, having previously said that the package would be announced after the second round of municipal elections in late October.

The delay in the announcement has caused stress in the markets, putting pressure on Brazilian assets.

By Siddarth S

(Reuters) – The U.S. Federal Reserve is no longer expected to cut interest rates at its December policy meeting, Nomura has said, making it the first global brokerage to signal a pause in the central bank’s rate-cutting cycle in the wake of Donald Trump’s election win.

Nomura now expects the Fed to deliver only two 25-basis-point (bp) rate reductions at its March and June meetings in 2025, leaving the brokerage’s Fed funds rate projection unchanged at 4.125% through next year.

The Fed’s benchmark overnight interest rate is currently in the 4.50%-4.75% range. It has cut rates by 75 bps in 2024.

Other global brokerages, including Goldman Sachs and J.P.Morgan, anticipate a 25-bp cut from the central bank next month.

Nomura expects the Fed to halt its tightening cycle next month after recent hawkish remarks from policymakers amid ongoing economic growth and the likelihood of further elevated inflation, adding to the central bank’s indication that it is not in a hurry to lower rates.

This follows the Fed’s increasing hesitancy to cut rates as a major political shift is underway after Trump’s presidential victory.

Wall Street is trying to reconcile what it sees as further inflationary pressures in the coming year as the President-elect pushes for tax cuts, higher tariffs and a crackdown on immigration.

“We currently expect tariffs will drive realized inflation higher by the summer, and risks are skewed towards an earlier and more prolonged pause,” Nomura said in a note dated Friday.

Last week, data showed that U.S. consumer prices rose 2.6% in the 12 months through October, above the Fed’s 2% goal but in-line with economists’ expectations.

Traders now see a 34.7% chance of the central bank pausing rate cuts in December, according to CME Group’s (NASDAQ:CME) FedWatch Tool.

Nomura expects a long pause in U.S. rate cuts until March 2026 after the potential reduction in June.

(Reuters) – Spain’s public debt-to-GDP ratio fell to 104.4% at the end of September, the Bank of Spain said on Monday.

The debt-to-GDP ratio at the end of September was lower than the 108.2% registered in June and also lower than the 109.9% in September 2023, the central bank said.

FRANKFURT (Reuters) – Two top European Central Bank policymakers signalled on Monday they were more worried about the damage that expected new U.S. trade tariffs would do to economic growth in the euro zone than any impact on inflation.

Investors and policymakers around the world are awaiting the details of U.S. President-elect Donald Trump’s new trade policy after he made protectionism a key element of his pitch to voters during the campaign.

ECB Vice-President Luis de Guindos and Bundesbank President Joachim Nagel put the emphasis on the hit that new trade restrictions would have on output while they appeared more sanguine on the outlook for inflation, which has been easing after a two-year surge.

“The balance of macro-risks has shifted from concerns about high inflation to fears over economic growth,” de Guindos told an event in Frankfurt.

“The growth outlook is clouded by uncertainty about economic policies and the geopolitical landscape, both in the euro area and globally. Trade tensions could rise further, increasing the risk of tail events materialising.”

Some analysts fear Trump’s second term could bring a much worse rerun of the Republican former president’s 2018-2019 trade war with China, with ramifications for Europe and possible retaliation.

Nagel, speaking in Tokyo, said the tariffs promised by Trump would upend international trade but he was “not overly” worried about their impact on inflation.

“Global integration would have to decrease substantially to cause a noticeable rise in inflationary pressures,” he said. “And, so far, we have not seen this.”

He said that if geoeconomic fragmentation did lead to greater inflationary pressures, the ECB and other central banks would could keep it at bay via higher interest rates.

But he also argued that the ECB could not “completely neglect output” and would not overreact to moves in inflation.

“We operationalise our mandate by aiming for inflation of 2% over the medium term,” he said. “This allows us to respond flexibly and avoid overreactions that could lead to destabilisation.”

Similarly, de Guindos said he was confident that inflation would stabilise at 2% next year and monetary policy would follow suit.

The ECB has cut interest rates three times since June as inflation in the euro area neared its 2% target, while also downgrading its growth projections twice as a recovery in the 20 countries that share the euro proved elusive.

FRANKFURT (Reuters) – The tariffs promised by U.S. President-elect Donald Trump would upend international trade but may ultimately have a “minor impact” on inflation, European Central Bank policymaker Joachim Nagel said.

Trump made tariffs a key element of his pitch to voters, in what some analysts fear could be a much worse rerun of the Republican former president’s 2018-2019 trade war with China.

Nagel, the Bundesbank’s President, cited empirical studies showing that the effect of global integration on domestic prices is “economically small”.

“While we can be quite sure about the direction of this impact, its magnitude seems minor,” he told a conference in Tokyo. “Accordingly, global integration would have to decrease substantially to cause a noticeable rise in inflationary pressures. And, so far, we have not seen this.”

He added that, if geoeconomic fragmentation did lead to greater inflationary pressures, the ECB and other central banks would could keep it at bay via higher interest rates.

Investing.com — Wall Street is seen trading in a mixed fashion Monday, as investors await the release of earnings from Nvidia, one of the main beneficiaries of this year’s artificial intelligence craze. Bitcoin continued to be in demand, while the Japanese yen slipped lower on increased uncertainty over when the Bank of Japan will next hike interest rates.

1. Nvidia’s Q3 earnings in focus

The main corporate release this week comes from chipmaker Nvidia (NASDAQ:NVDA), a bellwether for this year’s AI craze, which is due to report third quarter earnings after the close on Wednesday.

The results could well be a gauge for investors’ appetite for tech stocks, the AI trade and sentiment for equities broadly, after a post-election market rally stalled.

Nvidia’s chips are seen as the gold standard in the AI-space and its shares have risen around 200% this year, overtaking Apple (NASDAQ:AAPL) to become the world’s largest company by market capitalization.

Analysts see Nvidia increasing third-quarter revenue by more than 80%, to $32.9 billion, but The Information reported on Sunday that the company’s new Blackwell AI chip is said to be having issues with overheating when connected in customized server racks.

The company is working with suppliers to change the design of the racks to alleviate the overheating issue. The AI chip giant has already delayed Blackwell by a quarter due to design flaws that have since been fixed.

2. Futures mixed; key corporate results in spotlight

US stock futures traded in a mixed fashion Monday, at the start of a week that includes several major corporate earnings as well as comments from a series of Fed officials.

By 03:50 ET (08:50 GMT), the Dow futures contract was down 135 points, or 0.3%, while S&P 500 futures gained 8 points, or 0.1%, and Nasdaq 100 futures rose by 145 points, or 0.7%.

The three main indices retreated last week, falling back from the recent highs seen in the wake of Donald Trump’s election win after Fed chief Jerome Powell warned that the US central bank was not “in a hurry” to cut interest rates further.

Nvidia’s earnings will be in the spotlight this week [see above], but there are also results due from the likes of Walmart (NYSE:WMT) and Lowe’s Companies (NYSE:LOW), which will give fresh insights into the strength of consumer spending.

So far, with 93% of S&P 500 companies reporting results, three-quarters of them have reported a positive EPS surprise and 61% have reported a positive revenue surprise, according to data from FactSet.

Investors will also get the chance to hear from several Federal Reserve officials, including Chicago Fed President Austan Goolsbee, Kansas Fed President Jeffrey Schmid and Cleveland Fed President Beth Hammack.

3. BoJ remains vague over rate hike timing

The Japanese yen weakened against the US dollar Monday, after Bank of Japan Governor Kazuo Ueda declined to offer specific guidance on the timing of rate hikes.

By 03:50 ET, USD/JPY traded 0.4% higher at 154.88, pulling away from Friday’s low of 153.86 after Japanese Finance Minister Katsunobu Kato warned of possible intervention.

Ueda, speaking directly on monetary policy for the first time since Donald Trump’s victory in the US presidential election, reiterated that interest rates would continue to rise gradually should the economy develop in line with the central bank’s outlook.

However, he made no mention of whether a hike would come in December, disappointing those who thought his speech had been arranged for him to make a policy point.

4. Bitcoin has “a long way to go”

Bitcoin, the world’s most popular digital currency, continued to trade above $90,000 Monday, benefiting from Donald Trump’s election victory and the prospect of an easier regulatory environment.

By 03:50 ET, Bitcoin traded 1.2% higher at $91,996.

The world’s biggest cryptocurrency has become one of the most eye-catching movers in the week since the election, gaining over 30% since Nov. 5, having climbed as high as a record of $93,480.

A one-time crypto skeptic, President-elect Donald Trump has pledged to set up a national Bitcoin reserve and make the U.S. a global hub for the industry.

The cryptocurrency still has “a long way to go”, according to ARK Invest’s Cathie Wood, in an CNBC interview on Nov. 15, who pointed out that Ark was the first public asset manager to gain exposure to Bitcoin in 2015 at $250.

Wood said the continued momentum would be driven by “regulatory relief,” one of the most important things expected from the new United States administration.

“We have a 2030 target in our base case, it’s around $650,000, in our bull case, it’s between $1 million and $1.5 million,” Wood said, reiterating her price prediction over the next five years.

5. Crude hands back earlier gains

Crude prices edged lower Monday, handing back earlier gains after fighting between Russia and Ukraine intensified over the weekend amid continued concerns of a supply glut next year.

By 03:50 ET, the U.S. crude futures (WTI) dropped 0.2% to $66.81 a barrel, while the Brent contract fell 0.1% to $71.03 a barrel.

President Joe Biden’s administration has allowed Ukraine to use US-made weapons to strike deep into Russia, according to reports Sunday, in response to Russia’s deployment of North Korean ground troops to supplement its own forces.

There has been little impact on Russian oil exports from the war so far, but if Ukraine were to target more oil infrastructure that could see oil markets add more of a geopolitical bid.

The benchmark contracts slid more than 3% last week on weak data from China and after the International Energy Agency forecast global oil supply will easily exceed demand in 2025 even if cuts remain in place from a group of top producers.

TAIPEI (Reuters) – Taiwan President Lai Ching-te called on Monday for the signing of an economic partnership agreement with the European Union, saying it would boost cooperation in semiconductors and that as democracies the two sides should be working together.

Taiwan has pushed for the signing of investment and trade deals with the EU, in what would be politically significant for Taiwan given its diplomatic isolation and general exclusion from most global bodies and agreements.

For its part, the EU has been courting Taiwan as a “like-minded” partner under the European Chips Act to encourage more semiconductor production in Europe and lessen dependence on Asia, despite the lack of formal ties with the Chinese-claimed island.

Speaking at a Taiwan-EU investment forum in Taipei, Lai said that facing the threat of expanding authoritarianism, Taiwan and the EU must form a “strong democratic umbrella” and build secure supply chains for global democracies.

“Looking to the future, Taiwan hopes to take an innovative approach towards the signing of an economic partnership agreement with the EU,” he said.

Such an agreement would set a sound institutional basis for further cooperation in fields such as semiconductors and AI, Lai added.

“This would not only make both our economies more resilient and secure, but also ensure the stable operation of global supply chains.”

Taiwanese investment in EU has been anchored by Taiwan Semiconductor Manufacturing Co (TSMC), which in August launched a major new chip plant in Dresden, Germany, expected to be a key supplier to European industry and automakers.

Maria Martin-Prat, deputy head of the European Commission’s directorate general for trade, made no mention of signing such a deal with Taiwan in a video message to the investment event, though she did praise bilateral relations.

“Taiwan, a vibrant democracy with an open economy, is a trusted partner for us to promote our economic security,” she said.

Taiwan has few free trade agreements, though last year it signed an Enhanced Trade Partnership with Britain and has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

($1 = 0.9483 euros)