Negative week for the main European stock exchanges, with central banks once again becoming protagonists. In particular, the Bank of England left interest rates unchanged at 4%, as expected by analysts. In the meantime, the quarterly reporting season continues unabated, while the government shutdown, still not concluded in the USA, is starting to make the Stars and Stripes economy suffer. The blockade of federal activities prevented the publication of the October labor market report. The latest updates came from the ADP report, which showed a modest increase in hiring in the private sector, and from the Challenger report, which reported over 153,000 layoffs, a 22-year record for the period, mainly due to artificial intelligence.
BoE cautious on rates
The BoE’s Monetary Policy Committee (MPC), with a very narrow vote, left the reference rate unchanged at 4.0%. Only five out of nine members opted to keep it unchanged, while four were in favor of a 25 basis point cut. The MPC has acknowledged progress in underlying disinflation and expects it to continue, believing that headline inflation has peaked. Furthermore, he believes the risks are now more balanced, but stressed that more evidence is needed. The orientation, explains Martin Wolburg, senior economist at Generali Investments, remains towards lower rates, but the extent of future reductions “will depend on the evolution of the inflation outlook”. The updated forecasts indicate that inflation will fall to 2% within two years, assuming a reduction in the key rate to 3.5%. Meanwhile, the finance minister is considering drastic measures to contain public spending and reduce Britain’s debt at the same time.
Fed divided on cut in December
Last week’s Fed meeting was pretty hawkish overall, with the acknowledgment that the job market is slowing, but not alarmingly so, largely due to a dramatic decline in labor supply due to immigration restrictions.
Overall, says Stephanie de Torquat, chief economist at Axiom Alternative Investments, the Fed continues to face risks on two fronts – inflation under pressure from tariffs and a slowing labor market – and must take a balanced approach to promoting both aspects of the dual mandate. Within the Committee there are strongly conflicting opinions for December, when a cut is far from a given.
Impact of the shutdown: the absence of data increases uncertainty
Powell admitted that it is not possible to have an accurate picture of the economic situation at the moment, but, if there was a significant change in the economy, the Fed would be able to grasp it. But Powell, de Torquat points out, also made a significant comparison, which indicates the growing probability that there will be no rate cut in December: “if you drive in the fog, you slow down”. In other words, the absence of macro data does not prevent the Fed from picking up on obvious negative economic news, but it could make it more cautious in its moves. So, in the absence of a clear negative signal, the shutdown is likely making the Fed more hawkish, which is somewhat counterintuitive given the theoretically negative economic impact of the shutdown.
Eurozone: manufacturing restarts, but France slows down
The Eurozone manufacturing PMI index for the month of November has recovered to 50 points, recovering the key threshold of 50 points which denotes expansion of activity. The indicator of the health of the manufacturing sector stood at 50 points, in line with the preliminary estimate which had exceeded analysts’ expectations (49.8), and compares with the 49.8 points of October. “Extending the current expansion phase for the eighth consecutive month, in October, eurozone manufacturing production grew once again. The pace of growth, however, remained slight due to the stagnation of new orders and the decline in employment”, explains S&P Global which publishes the survey of purchasing managers in the Eurozone every month. “Looking ahead, euro area manufacturing companies expressed optimism about increasing production levels over the next 12 months. However, expectations fell slightly over the month and were weak by historical standards.” At a national level, two countries did better than expected: France saw the manufacturing PMI rise to 48.8 points from 48.3 and Italy to 49.9 points from 49 (49.3 was expected). Germany, on the other hand, saw a manufacturing PMI of 49.6 confirmed, in line with expectations. “The situation of political tension in France is not only clearly favoring the relative new decline in production, but is also reflected in a notable contraction of the index regarding future production, underlines Cyrus de la Rubia, Chief Economist at the Hamburg Commercial Bank, adding that France, which is one of the main trading partners, is significantly slowing down the demand for industrial goods in other eurozone countries.”
Oil, OPEC+ announces new production increases
OPEC+ continues with a strategy of production increases which aims to reabsorb the previous production cuts of 1.65 million barrels decided in March 2023 (reaching up to 2.2 million barrels in November 2023). This latest increase of 137 thousand barrels, the third consecutive, is in line with the changes decided in recent months and with the expectations of analysts and confirms the strategy of cautious and progressive production adjustment decided by eight members of the cartel, including Russia. In light of the stable global economic outlook and current solid market fundamentals, reflecting low oil inventories, the eight participating countries (Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman) have decided to implement a production adjustment, in line with expectations, which will be implemented starting from 1 December 2025.
Gold can reach $4,500 in 2026
According to Morgan Stanley, gold can reach 4,500 dollars by the end of the first half of 2026. “The recent price dynamics pushed gold into overbought territory based on the relative strength index, but the subsequent correction brought it to a healthier level, probably clearing up the positioning”, we read in a report from the American institute which however warned that downside risks remain. The prices of the metal have risen by more than 54% in 2025, updating the historical highs several times.
The weekly performance of the stock markets
The worst performance of the week was recorded by the Paris stock market, down by 2.5%. The Frankfurt stock exchange also fell by more than 2 percentage points, while the Milan stock exchange limited the decline to 0.6%. London and Madrid lost around 0.8%. The outcome is also expected to be a decline for the Wall Street stock market, with investors’ fears of a bubble for stocks linked to AI and the effects on the labor market.
The best and worst in Piazza Affari
On Piazza Affari, the worst performance was recorded by Nexi, down 13%, thanks to the guidance on the EBITDA margin revised downwards on the occasion of the publication, during the eighth quarter, of the accounts for the first nine months. Among the worst performers were also Fincantieri, Lottomatica and Technoprobe, all down 9%. The best performer, however, is Moncler which gains 5.8%, followed by Fineco (+5.7%). Furthermore, A2A (+4.6%) performed well, promoted by analysts and supported by expectations of new consolidation operations in the European telecommunications sector.
