A look at the day ahead in European and global markets from Rae

Wee

Market movement over the past week or so since Donald Trump won

the U.S. presidential election have been characterised by a

turbo-charged rally in bitcoin, higher Treasury yields and a

relentless U.S. dollar. And Thursday was no different.

Never mind that traders are now pricing in an over 80%

chance of a Federal Reserve interest rate cut next month after

Wednesday's inflation report. The prospect of a cut would

usually send the dollar down but it rose to a one-year high

anyway, riding a wave of bullish momentum from Trump's victory.

The President-elect's promise of tax cuts could juice the

economy, widen budget deficits and increase government borrowing

- all of which have already pushed long-end Treasury yields

higher.

His plans for hefty import tariffs are also expected to

stoke inflation and reduce the Fed's scope to ease policy.

With projections the Republican Party is likely to control

both houses of Congress when Trump takes office in January, he's

set for sweeping power to push his agenda.

In Europe, markets will wake up to the release of the euro

zone's second estimate for gross domestic product growth and

third-quarter flash employment data.

Preliminary figures in October showed the bloc grew faster

than market watchers expected in the third quarter from the

previous three months, though stayed fragile as industry

remained in recession and household consumption barely grew.

Later in the day, Fed Chair Jerome Powell will speak in

Dallas after having had time to digest the U.S. October producer

prices report that will be released just beforehand.

PPI figures feed more directly into the Fed's preferred

inflation indicator, the personal consumption expenditures price

index, which arrives later in the month.

Still, there is only so much Powell can say for 2025 and

beyond given much depends on what Trump does when he takes

office.

Trump has already made a flurry of picks for his cabinet and

other high-ranking administration positions, spanning posts

overseeing defence, intelligence, diplomacy, trade, immigration

and economic policymaking.

Sources told Reuters that billionaire banker Howard Lutnick

has emerged as a contender alongside investor Scott Bessent for

the top Treasury job.

Key developments that could influence markets on Thursday:

- Second estimate of Q3 euro zone GDP

- Euro zone Q3 flash employment

- U.S. weekly jobless claims

- U.S. October PPI

- Fed's Powell speaks