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

Stella Qiu

2024 is almost over. Several central banks have concluded

their final policy meetings of the year - some held steady and

others cut, but all of them were noting a more uncertain 2025

when the global economy and trade could look sharply different

with Donald Trump back in the White House.

That leaves the U.S. Core Personal Consumption Expenditures

- the Fed's preferred gauge of inflation - as the one last

hurdle before the usually quiet Christmas time. With upside

risks to inflation back on the Fed's radar, the outcome could

have an outsized impact on markets.

Hence the caution in Asia. MSCI's broadest index of

Asia-Pacific shares outside Japan hit a fresh

three-month low on Friday. Nasdaq futures fell 0.7%,

while EUROSTOXX 50 futures were 1% lower.

Investors are also alarmed a little that even Republicans

are not a fan of Trump's big spending plans, with the U.S.

government facing a potential shutdown on Saturday if no action

is taken.

For the core PCE, forecasts are centred on a monthly rise of

0.2% in November. It will probably take a flat number to calm

things a bit while an increase of 0.3% or more could cast doubt

on any policy easing from the Fed next year.

Futures imply just 37 basis points of U.S. rate cuts in

2025, equivalent to less than two cuts, to a terminal rate of

3.9%, much higher than just a few months ago.

That outlook took a heavy toll on the Treasury market, which

is headed for the fourth straight year of losses. The benchmark

10-year yields jumped 40 bps over the past two weeks to cross a

key level of 4.5% for the first time since May.

Looking back, it has been a good year for equities, bitcoin,

and the U.S. dollar, but nothing much else.

Japan's Nikkei jumped 16% to test record highs,

finally being able to shake off the spectre of decades of

deflation. Even the flailing Chinese blue chips rose

15% on hopes of more stimulus from Beijing to steady the local

economy.

The U.S. dollar is up 7% for the year against its major

peers to stand at a two-year peak. The relentless surge

has pushed every other currency to fight for survival,

especially those in emerging markets where authorities have had

to intervene to keep their currencies afloat.

The Japanese yen is another major loser, down a staggering

12% this year.

Bitcoin made a stunning comeback, up 130% this year to hit

all-time highs, thanks to Trump's friendly policies.

Key developments that could influence markets on Friday:

- UK retail sales for Nov

- U.S. PCE data for Nov

- Irish central bank Governor Gabriel Makhlouf gives remarks

- Speech by Norway Central Bank Deputy Governor Pal Longva

(Editing by Muralikumar Anantharaman)