Nomura's global 2025 outlook: from boom to gloom
U.S. equity index futures green
Dec NY Fed Mfg index 0.2 vs 10.00 estimate
Euro STOXX 600 index off ~0.3%
Dollar edges up; gold, bitcoin gain; crude declines
U.S. 10-Year Treasury yield dips to ~4.38%
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NOMURA'S GLOBAL 2025 OUTLOOK: FROM BOOM TO GLOOM
Nomura's spotlight for the new year is on the U.S. economy, expecting it to outperform other developed markets, with solid growth and rising inflation likely leading the Federal Reserve to pause its easing cycle next year.
Earlier this month, Fed Chair Jerome Powell emphasized a cautious approach to ending the inflation fight, with analysts predicting a pause in monetary policy easing after a December rate cut.
Across the Atlantic, Nomura believes "inflation is no longer a concern" for the euro area, but economic growth will be likely "anaemic", shifting the ECB's focus to low growth. Consequently, the brokerage expects the ECB to lower rates below neutral, widening the eurozone-U.S. interest rate differential.
Last week, the European Central Bank shifted away from its hawkish stance by cutting rates but has not committed to a specific path for future cuts, leaving markets uncertain about the pace and timing of further reductions in 2025.
In Asia, despite China's significant stimulus efforts, economic growth is expected to slow to 4.0% in 2025, indicating the measures may not be as effective as anticipated, Nomura says.
Brokerage also adds that in 2025, Malaysia and the Philippines are expected to perform well economically, while India, South Korea, and Thailand may underperform, with sharply slowing growth.
"We expect global cooperation to take a backseat to economic nationalism at a time when many governments are running low on fiscal space," Nomura adds.
(Joel Jose)
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FOR MONDAY'S EARLIER LIVE MARKETS POSTS:
S&P 500 INDEX: HITTING A WALL? - CLICK HERE
SIX KEY CATALYSTS FOR GLP-1s IN 2025 - BARCLAYS - CLICK HERE
JEFFERIES STILL POSITIVE ON EUROPE'S GAMING SECTOR - CLICK HERE
THE ECB IS WIDE OPEN TO CUTTING RATES BELOW NEUTRAL - BOFA - CLICK HERE
EUROPE BEFORE THE BELL: FUTURES SOFT AT START OF CENTRAL BANK HEAVY WEEK - CLICK HERE
CHINESE CONSUMERS SHUT UP SHOP - CLICK HERE
SPX12162024 https://tmsnrt.rs/3Djml82
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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