Silver prices fell to an 11-week low. The Mexican peso strengthened after diplomatic talksTrump and Sheinbaum

The US stock indices were not traded yesterday due to the Thanksgiving holiday. The US stock market has a short trading session today due to Black Friday.

The Mexican peso (MXN) strengthened to 20.4 per US dollar. The risk of a trade war with the US has diminished after diplomatic talks between US President-elect Donald Trump and Mexican President Claudia Sheinbaum. The peso initially fell after Trump threatened 25% tariffs on Mexican imports if Mexico did not take stronger action on illegal immigration and drug trafficking. However, a subsequent conversation between Trump and Sheinbaum calmed markets, with Trump praising her commitment to addressing these issues, signaling that tensions are easing. Despite the recovery, the peso remains around 20% weaker this year, pressured by concerns over increased government spending, rising debt, and Central Bank easing measures.

Equity markets in Europe rallied yesterday. Germany’s DAX (DE40) rose by 0.85%, France’s CAC 40 (FR40) closed up 0.51%, Spain’s IBEX 35 (ES35) added 0.34%, and the UK’s FTSE 100 (UK100) closed up 0.08%. Preliminary German inflation data came in below expectations, with the national annualized rate rising to 2.2%, while the EU harmonized rate unexpectedly remained at 2.4%. Spanish data matched expectations: both the national and harmonized annual rate rose to 2.4% thanks to the low base effect of last year. In addition, Airbus added 4.2% on reports that it will receive jet engines from CFM to meet its annual targets.

At a rescheduled meeting on Dec. 5, the OPEC+ producer group is due to discuss whether to start restoring supplies or extend production cuts until 2025 to prevent global markets from becoming oversupplied. Meanwhile, oil is down more than 3% on the week, helped by reports of a ceasefire between Israel and Iran-backed Hezbollah, reducing the geopolitical risk premium. At the same time, yesterday, President Vladimir Putin warned of a possible new strike on Ukraine using a nuclear-tipped ballistic missile following Moscow’s recent large-scale attack on critical energy infrastructure.

Silver (XAG/USD) prices fell below $30 an ounce on Thursday, hitting 11-week lows amid weaker demand for the safe-haven metal and weakening prospects for its industrial use. Economic uncertainty in China, the world’s largest silver consumer, and concerns over the potential negative impact of US President-elect Trump’s policies on the renewable energy sector also contributed to the bearish sentiment.

Asian markets were mostly up on Thursday. Japan’s Nikkei 225 (JP225) rose by 0.56%, China’s FTSE China A50 (CHA50) gained 0.39%, Hong Kong’s Hang Seng (HK50) fell by 1.20% and Australia’s ASX 200 (AU200) was positive 0.45%.

Chinese Commerce Ministry spokesman He Yadong said on Thursday that the country would take “necessary actions” to protect Chinese businesses if the US imposes tougher restrictions. His remarks came in response to reports that the US is considering adding up to 200 Chinese chip companies to its blacklist.

New Zealand’s ANZ-Roy Morgan Consumer Confidence Index for November 2024 jumped to 99.8 from 91.2 in October, marking a significant rebound and the highest level since September 2021. Both current and future conditions improved sharply, with perceptions of personal financial situation and economic prospects improving despite continuing challenges such as rising unemployment.

The Australian dollar exchange rate topped $0.65 on Friday, rising for a third consecutive session after Reserve Bank of Australia (RBA) Governor Michele Bullock said Australia’s core inflation remains “too high” to consider cutting interest rates in the near term. She emphasized that policy will remain restrictive until there is more confidence in the inflation outlook.