Markets stabilized ahead of central bank decisions.

Global equities showed a cautious recovery ahead of critical central bank decisions and a busy data calendar. In Europe, the STOXX 600 index rose 0.6% on Monday, while Wall Street futures signaled a rebound after last week’s sell-off. S&P 500 e-mini futures rose 0.4%. However, concerns about an AI bubble and persistent inflation expectations in the US limited gains.

The picture was weaker in Asia. Renewed concerns about the Chinese real estate market dragged the Asia-Pacific (excluding Japan) index down 1.2%. South Korean stocks fell as much as 2.7%.

The US 10-year Treasury yield fell 3 basis points to 4.1645%, as investors awaited upcoming data releases and central bank decisions.

China Real Estate Crisis Deepens
New home prices extended their decline in November as factory production and retail sales continued to slow. China Vanke’s inability to postpone its bond payment has renewed concerns about the sector, increasing the risk of default. Central Banks Take the Stage: This week, the Bank of Japan is expected to raise interest rates by 25 basis points to 0.75%, while the Bank of England is expected to cut rates by the same amount. The ECB is expected to keep rates unchanged, along with the Swedish Riksbank and the Norwegian Norges Bank. Delayed US employment and inflation data will also be closely watched. The BOJ’s “tankan” survey in Japan indicated a four-year high for major manufacturers; Topix rose 0.2%, while the yen strengthened 0.6% against the dollar. The New Zealand dollar fell 0.4% following warnings of tightening financial conditions.

Commodities and Crypto
Brent crude oil rose 0.5% to $61.44 a barrel on geopolitical tensions and supply concerns. Gold continued its rise for the fifth day, approaching a record high, with spot prices rising 1.1% to $4,348.83. Cryptocurrencies saw a recovery; Bitcoin rose 1.5% to $89,845, and Ether rose 2% to $3,145.