​EBC Markets Briefing | Euro higher on peace talk; Nvidia lost footing

The euro strengthened on Wednesday as investors continued to draw optimism from prospects of a ceasefire in Ukraine and expectations of interest rate cuts in the world's largest economy.

Ukraine on Tuesday signalled support for the framework of a peace deal with Russia but stressed that sensitive issues needed to be fixed at a meeting between Zelenskiy and Trump.

The European Parliament approved a €1.5 billion scheme to fund defence investments across the EU and support Ukraine, while Britain separately pledged to deliver more air defence missiles to Kyiv in the coming weeks.

Europe's economy has fared better than expected this year amid US tariffs. The European Commission predicted a 0.9% increase for GDP in the euro area, and it's likely to raise that estimate later.

Hopes of a mild pickup to the 1.4% for 2026 predicted in May are looking unlikely though, with the ECB having anticipated 1% growth in its last forecasting round in September.

The bloc's business activity grew steadily this month as services expanded at the quickest pace in more than 2 years, while weak demand sent manufacturing back into contraction territory.

The bearish pennant signalled that the single currency would unlikely breach the 50 SMA resistance. Thus it seems reasonable to build short positions at around $1.1600.

Asset recap

As of market close on 25 November, among EBC products, Merck & Co shares led gains. Wells Fargo upgrades the stock to Overweight from Equal-Weight and raised price target from $90.00 to $125.00.

US gas price extended its losses from mid-November. Demand for gas has fallen as the busy summer traveling season has given way to an autumn slowdown, putting additional downward pressure on prices.

A report that Meta may shift billions in AI spending towards Google's custom chips sent Nvidia shares lower, signalling early signs of a potential shake-up in the company's near-monopoly of the market.

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