Investor confidence in Germany weakened in November as the ZEW index fell to 38.5, reflecting doubts about the country’s recovery despite slight improvements in current conditions. While government spending on defense and infrastructure is supporting modest growth, industrial data shows an uneven rebound. External pressures—such as U.S. tariffs and competition with China—pose risks, though Germany still expects growth around 1.3–1.4%, with potential spillover benefits for Europe. The ECB has paused rate cuts as inflation nears target, and officials like Martin Kocher warn of uncertainty beyond 2027 despite signs of stability. Meanwhile, some economists suggest U.S. institutional decline could open a chance for Europe to elevate the euro’s global role through stronger economic union and a potential eurobond market.

Weakness in the yen persists amid PM Takaichi’s shift toward looser fiscal goals (yen to a nine month low), raising concerns over Japan’s long-term debt and dampening demand for government bonds. Meanwhile, the BOJ’s October meeting notes and recent remarks from board member Junko Nakagawa suggest conditions are aligning for a gradual rate hike once inflation and wage growth targets are met. However, any BOJ move in December or January is expected to be modest, with markets viewing it as a “one-off” unless the Fed eases policy more sharply. On a brighter note, Japan’s October Economy Watchers Survey showed continued improvement, with sentiment rising to multi-month highs as front line workers observed a mild recovery despite ongoing price pressures.

Australia’s strong November consumer confidence and solid business sentiment suggest the RBA is unlikely to cut interest rates soon. Deputy Governor Hauser highlighted limited spare capacity and the need for productivity gains to curb inflation risks. With rates held at 3.6% and no easing expected until mid-2026, yield dynamics favor AUD strength, supported by higher GDP forecasts and firm domestic demand. Rising home and investor loans, fueled by lower borrowing costs and tight rental markets, point to robust housing activity. Combined with stable labor conditions and steady commodity prices, these trends reinforce the RBA’s cautious stance and outlook for continued AUD resilience.