MARKET WRAPS
European shares were mostly up led by gains in energy and financial stocks ahead of central banks decisions later this week.
President Trump on Tuesday ordered a "total and complete blockade" of all sanctioned oil tankers entering and leaving Venezuela. Oil prices rose as his order reimposed some of the commodity's geopolitical premium.
Following the Federal Reserve's interest rate cut last week, investors are now turning their attention to the European Central Bank's last monetary policy meeting of the year on Thursday. Money markets price in unchanged ECB rates both tomorrow and throughout 2026, according to LSEG.
The ECB's interest-rate cutting cycle is probably over, but with inflation risks still tilted to the downside in the first half of 2026, "the door remains open to additional easing during the first half of the year," Santander CIB said.
An interest-rate hike by the ECB in the second half of 2026 is unlikely, but the probability rises in 2027, as activity and inflation pressures will grow in the second half of next year and particularly in 2027, it added.
Meanwhile, the Bank of England is on course for the fourth interest-rate cut of the year on Thursday after a notable fall in U.K. inflation in November, ICAEW said. Softer services and core inflation make price pressures appear less sticky, while a loosening labor market and struggling economy will likely keep inflation on a downward path.
"These figures, alongside the recent deluge of downbeat data , mean that an interest-rate cut tomorrow looks certain," it added.
Shares on the Move
London's miners got a boost from rising gold and silver prices as traders await U.S. inflation data and geopolitical tensions rise.
U.S. Markets:
Stock futures were up on Wednesday after data on employment came in tepid, giving investors insight into the underwhelming state of the labor market.
November's CPI inflation data report due Thursday could provide more cues on the Fed's next moves.
Forex:
The dollar recovered after hitting a 10-week low in the previous session after the delayed U.S. nonfarm payrolls report.
Sterling fell after the U.K. inflation data .
Bonds:
Eurozone government bond yields fell slightly in early trade. As the macro calendar thins out into the end-of-year holidays, markets could switch into a wait-and-see mode on Wednesday ahead of the last two sessions of the week, Commerzbank said.
Eurozone government bonds with maturities of five to 10 years were attractive, especially compared to money-market rates , Neuberger Berman said.
Treasury yields rose, reversing Tuesday's falls prompted by U.S. data. Trump's directive to blockade Venezuelan oil tankers has also lifted yields somewhat overnight, with both Treasury yields and Bund futures back at levels seen before Tuesday's payrolls numbers, Danske Bank said.
The latest U.S. jobs data didn't impact the steepening bias in the U.S. yield curve in recent months, said First Abu Dhabi Bank.
Yields on U.K. government bonds fell after weaker-than-expected U.K. inflation data increased prospects of interest-rate cuts by the BOE , with a reduction on Thursday looking all but certain.
Energy:
Oil prices rose more than 1% on increasing geopolitical risks .
Metals:
Gold prices rose on expectations of further interest- rate cuts by the Fed next year after the U.S. unemployment rate rose to its highest in more than four years.
Gold Chart
Comex gold futures' bullish setup remained intact, based on the daily chart, RHB Retail Research said. The futures may now stage a fresh attempt to rise beyond resistance at the $4,400/oz level.
Copper
Copper rose. ANZ Research analysts expect copper's outlook to remain bright, as demand has been relatively strong.
Iron
Iron ore rose in early trading. Traders are refocusing on market fundamentals after a series of macroeconomic events, Nanhua Futures said.
EMEA HEADLINES
German Business Sentiment Unexpectedly Retreats as 2026 Outlook Weakens
Confidence among German firms unexpectedly deteriorated this month, amid growing pessimism about the business outlook for early months of next year.
The Munich-based Ifo Institute said Wednesday that its business-climate index, based on around 9,000 monthly responses from businesses, fell to 87.6 in December from 88.0 in November. Economists polled by The Wall Street Journal expected a small uptick to 88.3.
Diageo to Sell Kenyan Drinks Stakes to Japan's Asahi for $2.3 Billion
Diageo is to sell its majority stakes in two Kenyan drinks businesses to Japanese brewer Asahi for proceeds of around $2.3 billion.
The U.K. drinks group, which makes Guinness beer, Smirnoff vodka and Gordon's gin, said it would sell its 65% shareholding in East African Breweries, or EABL, and its roughly 54% stake in distiller UDVK to Asahi. The remaining shares of UDVK are held by EABL.
U.K. Inflation Slows to Eight-Month Low as BOE Prepares Rate Decision
Consumer prices in Britain cooled more than expected in November, keeping the Bank of England on course for the fourth interest-rate cut of the year this week, amid signs of weakness in the labor market and a slowing economy.
The U.K's Office for National Statistics said Wednesday that the annual rate of inflation was 3.2% last month, the lowest since March and down from 3.6% in October. Economists polled by The Wall Street Journal expected 3.5%.
Bunzl Shares Fall on Lower Operating Margins Outlook
Shares in Bunzl fell in early European trade after the company said it expected operating margins to be slightly down next year.
Shares in early trade were down 128 pence, or 5.8%, at 2,092 pence.
GLOBAL NEWS
Trump Orders Blockade of Sanctioned Oil Tankers In and Out of Venezuela
President Trump on Tuesday ordered a "total and complete blockade" of all sanctioned oil tankers entering and leaving Venezuela, in a major escalation of his pressure campaign against the country's leader, Nicolás Maduro.
"Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America," Trump posted on Truth Social, referring to U.S. warships, planes and thousands of troops deployed to the region.
Oil Prices Climb as Trump's Venezuela Blockade Raises Supply Risks
Oil prices rose more than 1.5% on Wednesday after President Trump ordered a total blockade of all sanctioned tankers entering and leaving Venezuela, raising risks of prolonged supply disruptions in the region.
In early European trade, Brent crude was up 1.6% to $59.86 a barrel after briefly rising above $60, while West Texas Intermediate gained 1.7% to $56.05 a barrel. European energy stocks also climbed, with BP up 1.6% and Shell gaining 2.2%. TotalEnergies rose 1.5%, while Italy's Eni and Spain's Repsol were up 1.3% and 1.1%, respectively.
U.K. Inflation Slows to Eight-Month Low as BOE Prepares Rate Decision
Consumer prices in Britain cooled more than expected in November, keeping the Bank of England on course for the fourth interest-rate cut of the year this week, amid signs of weakness in the labor market and a slowing economy.
The U.K's Office for National Statistics said Wednesday that the annual rate of inflation was 3.2% last month, the lowest since March and down from 3.6% in October. Economists polled by The Wall Street Journal expected 3.5%.
New Video Shows Suspected Brown Gunman's Movements Before and After Attack
Police released new videos of the suspected gunman responsible for Saturday's shooting at Brown University as the investigation entered a fourth day.
The videos show a light-skinned man wearing dark clothing, a medical mask, beanie, and at times gloves and a cross-body bag. The man is seen pacing, walking and running through residential streets near Brown in the two hours before the attack.
GOP Leaders See No Chance of ACA Deal by Deadline
WASHINGTON-Senate Majority Leader John Thune (R., S.D.) said Congress won't be able to extend federal health-insurance subsidies before leaving for the holidays, ending hopes for a last-minute deal and punting any possible fix into the new year.
"We're not going to pass anything by the end of this week, but I do think there's a potential pathway in January," Thune said at a press conference Tuesday. Lawmakers are expected to depart Washington before the weekend and won't return until Jan. 5.
For Ukraine's Allies in Europe, a Bad Deal With Russia Is Worse Than No Deal
BRUSSELS-European leaders rallying support for Kyiv say they are working to defend a democratic country, safeguard international law and counter Russian aggression.
But there is another motivation rooted in self-interest: Europe believes a deal that favors Moscow risks a wider war that could engulf the whole continent.
Write to priscila.barrera@wsj.com
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(END) Dow Jones Newswires
December 17, 2025 05:02 ET (10:02 GMT)
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