IC Markets – Europe Fundamental Forecast | 17 November 2025

Next 24 Hours Bias
Weak Bearish

Empire State Manufacturing Index (1:30 pm GMT)

FOMC Member Waller Speaks (8:35 pm GMT)

Gold stabilized near $4,100 on November 17 after two days of losses driven by collapsing expectations for a December Fed rate cut, now viewed as essentially a coin toss at 44-50% probability. The metal remains up 55-57% year-to-date despite retreating from October’s record high above $4,380.

The recently concluded 43-day U.S. government shutdown created significant volatility, initially boosting gold above $4,240 on safe-haven demand before triggering profit-taking on resolution. Delayed economic data and hawkish Fed commentary have introduced genuine uncertainty for the December 10 FOMC meeting.

Next 24 Hours Bias
Weak Bullish

No major news event

The euro opened Monday’s trading session on a firm footing at 1.1621, supported by a combination of US dollar weakness, stable ECB policy, and resilient eurozone services sector performance. While the ECB maintains its “good place” with rates on hold and only a 40% chance of cuts by September 2026, the Federal Reserve faces growing pressure to ease further, with December rate cut odds now a coin toss at approximately 50%.

- The Governing Council of the ECB kept the three key interest rates unchanged at its 30 October 2025 meeting. The main refinancing rate remains at 2.15%, the marginal lending facility at 2.40%, and the deposit facility at 2.00%. This decision reflects policymakers’ assessment that the current monetary stance remains consistent with medium-term price stability, while incoming data confirm a gradual return of inflation towards the target.
- Recent indicators point to stable price dynamics. Headline inflation remains near the 2% mark, with energy prices contained and food inflation easing slightly after earlier supply bottlenecks. Wage growth continues to moderate, contributing to the slowdown in domestic cost pressures. The ECB reiterated its commitment to a data-driven, meeting-by-meeting approach and emphasized flexibility amid uncertain global financial conditions.
- Eurosystem staff projections have not been materially altered since September. Headline inflation averages remain at 2.0% for 2025, 1.8% for 2026, and 2.0% for 2027. Recent softening in producer prices and subdued pipeline pressures suggest limited upside risks to inflation, though geopolitical tensions and potential commodity shocks continue to pose uncertainties to the outlook.
- Euro area GDP growth remains on track with earlier forecasts, projected at 1.1% for 2025, 1.1% for 2026, and 1.4% for 2027. Forward-looking indicators, including PMIs and industrial sentiment surveys, signal some stabilization in activity following weakness in the third quarter. Public investment and recovering export activity are expected to offset softer private sector demand in the near term.
- The labor market remains resilient, with unemployment rates at multi-decade lows and participation rates strong. Real income growth continues to support household spending, even as consumption growth normalizes from earlier highs. Financing conditions remain favorable, aided by stable banking sector liquidity and improved credit demand among small and medium-sized firms.
- Business sentiment remains mixed, reflecting lingering uncertainty over global trade policy and the path of US tariffs. However, easing supply chain costs and improved export competitiveness due to softer exchange rates are providing some relief to manufacturing and external-oriented sectors.
- The Governing Council reaffirmed that future decisions will depend on an integrated assessment of incoming data—covering inflation trends, financial conditions, and the state of policy transmission. The Council emphasized that no pre-set path for rates exists; keeping all options open should the economic outlook shift markedly.
- Balance sheet reduction continues smoothly, with holdings under the APP and PEPP declining as reinvestments have ceased. The ECB confirmed that the pace of portfolio runoff remains in line with its previously communicated normalization plan, supporting a gradual withdrawal of monetary accommodation in a predictable manner.
- The next meeting is on 17 to 18 December 2025

Next 24 Hours Bias
Weak Bearish

No major news event

The Swiss Franc enters the week at multi-year highs, supported by three key pillars: the confirmed US tariff reduction from 39% to 15%, ongoing safe-haven demand driven by global uncertainty, and SNB policy stability at 0% with negative rates ruled out. The USD/CHF pair is trading near 0.79, its strongest level since 2011, while EUR/CHF has reached levels not seen since 2015. With Switzerland’s Q3 GDP flash estimate due today and the December 11 SNB meeting on the horizon, the franc’s trajectory will depend on economic data releases and any shifts in the SNB’s confident inflation outlook.

- The SNB maintained its key policy rate at 0% during its meeting on 25 September 2025, pausing a sequence of six consecutive rate cuts as inflation stabilized and the Swiss franc remained firm.
- Recent data showed a modest rebound in inflation, with Swiss consumer prices rising 0.2% year-on-year in August after staying above zero for three consecutive months; this helped alleviate fears of deflation that were mounting earlier in the year.
- The conditional inflation forecast remains broadly unchanged from June: headline inflation is expected to average 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027. The risk of a negative rate move has diminished for now, but the SNB retains flexibility should inflationary pressures weaken again.
- The global economic outlook has deteriorated further, weighed down by heightened trade tensions—especially with the U.S.—and ongoing uncertainty in key Swiss export markets.
- Swiss GDP growth moderated in Q2 after a strong Q1 boosted by front-loaded U.S. exports. The SNB expects growth to slow and remain subdued, with forecasted GDP expansion between 1% and 1.5% in both 2025 and 2026.
- Labor market sentiment in the Swiss industrial sector has softened on concerns over export competitiveness and potential adjustments to production, but the overall growth outlook stays broadly unchanged
- The SNB reiterated its readiness to respond as needed if deflation risks re-emerge, emphasizing its commitment to medium-term price stability and a robust, transparent communication policy, with the introduction of more detailed monetary policy minutes beginning in October.
- The next meeting is on 11 December 2025.

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Medium Bullish

No major news event

The British Pound faces significant headwinds as Monday’s Asian session begins. The government’s fiscal U-turn has raised questions about the UK’s fiscal credibility, while persistently weak economic data has cemented expectations for a December rate cut. With markets pricing in a 75-80% probability of a 25 basis point cut on 18 December, and technical indicators pointing to further downside risk, Sterling is likely to remain under pressure unless upcoming data surprises to the upside or Catherine Mann’s comments signal resistance to near-term easing. Traders should watch the 1.3150-1.3185 support zone closely, as a break below could accelerate losses toward 1.2875 or lower.

Central Bank Notes:

- The Bank of England’s Monetary Policy Committee (MPC) met on 6 November 2025 and voted by a majority of 7–2 to keep the Bank Rate unchanged at 4.00 percent for a second consecutive meeting. The decision reflects the Committee’s cautious approach as inflation remains above target, but underlying economic momentum continues to weaken. Two members maintained their votes for a 25-basis-point cut, citing further signs of labor-market softening and weak business sentiment.
- The BOE adjusted its guidance on quantitative tightening (QT), maintaining the reduced pace established in September. The planned reduction of UK government bond holdings remains at £67.5 billion over the next 12 months, leaving the current gilt balance near £550 billion. Policymakers described the recalibrated QT path as “appropriate for current market conditions,” emphasizing the importance of liquidity management amid heightened volatility.
- Headline inflation moderated slightly to 3.6 percent in October from 3.8 percent previously, driven by easing food and transport prices. However, core inflation has shown only gradual progress, holding near 3.9 percent. The MPC noted that services inflation and administered energy costs continue to exert pressure, highlighting the challenge of achieving the 2 percent target sustainably. The Committee’s latest projections see inflation falling toward 3 percent by mid-2026, with further downside expected if energy and wage dynamics continue to normalize.
- Economic activity remains subdued. Estimates place Q3 GDP growth close to zero, with both business output and consumer spending restrained. The unemployment rate has edged up to 4.8 percent, while pay growth cooled to just under 5 percent year-on-year. MPC members acknowledged that pay settlements are weakening further, signaling an easing in labor cost pressures as demand softens. Surveys from the manufacturing and services sectors suggest muted hiring intentions through year-end.
- International factors continue to complicate the policy outlook. Fluctuating oil prices—partly linked to renewed Middle East tensions—alongside fragile global demand have contributed to higher market volatility. The MPC reiterated that external shocks, including global food and energy disruptions, could temporarily slow the disinflation path but remain unlikely to derail the medium-term moderation in prices.
- The Committee assessed risks around inflation as balanced. Downside risks arise from sluggish domestic growth and declining real income momentum, while upside risks remain tied to elevated inflation expectations and stubborn services inflation. Policymakers emphasized the need for patience, maintaining that any rate cuts ahead of clear inflation progress could undermine confidence in policy credibility.
- The MPC’s overall stance remains restrictive but increasingly balanced, with future moves expected to follow a cautious, data-driven trajectory. The Committee reaffirmed that monetary policy will stay tight until there is compelling evidence that inflation is returning to the 2 percent target on a durable basis.
- The next meeting is on 18 December 2025.

Next 24 Hours Bias
Medium Bearish

CPI m/m (1:30 pm GMT)

Median CPI y/y (1:30 pm GMT)

Trimmed CPI y/y (1:30 pm GMT)

Common CPI y/y (1:30 pm GMT)

Today marks a pivotal moment for Canadian Dollar traders with the October CPI release. Inflation data coming in line with expectations would likely reinforce the market consensus that the Bank of Canada has paused rate cuts, providing technical support for the loonie around current levels near 1.40. However, the broader outlook remains subdued with rate differentials and trade uncertainty weighing on medium-term CAD performance. The market will closely watch both the headline and core inflation figures alongside any forward guidance cues for the December 10 BoC decision.

Central Bank Notes:

- The Council noted that U.S. tariff tensions have eased slightly following early progress in bilateral discussions, though the external trade environment remains fragile. Businesses continue to hold back on long-term investment, with the Bank highlighting that sustained clarity on U.S. trade policy is needed to restore confidence.
- The Bank acknowledged that uncertainty persists despite the softer U.S. tone, as incoming data show limited improvement in export orders. The manufacturing sector has stabilized but remains below pre-2024 output levels, reflecting weak global demand and cautious corporate spending.
- Canada’s economy showed tentative signs of recovery in early Q4, with GDP estimated to expand by 0.3% in October after two quarters of contraction. Mining and energy activity strengthened modestly, aided by steady crude demand, while goods exports posted a fractional gain.
- Service sector growth remained uneven, supported mainly by tourism-related and technology services. However, retail spending and household consumption were subdued, constrained by slower job creation and lingering consumer caution. The Bank judged overall momentum as fragile but improving marginally.
- Housing activity showed modest reacceleration in major urban markets as mortgage rates stabilized near record lows. Nonetheless, affordability pressures and stricter lending standards continue to cap overall resale volumes, leading to only a gradual recovery in the housing sector.
- Headline CPI inflation rose to 2.1% in October, reaching the Bank’s target for the first time in six months. Higher energy prices and a modest uptick in food and shelter costs drove the increase. Core inflation measures remained stable, suggesting underlying price pressures are contained.
- The Governing Council reiterated its data-dependent stance, indicating that the current policy rate remains appropriate amid tentative growth and balanced inflation risks. Officials noted that while additional stimulus is not ruled out, the emphasis has shifted toward monitoring the sustainability of the recovery rather than immediate rate adjustments.
- The next meeting is on 17 to 18 December 2025.

Next 24 Hours Bias
WeaK Bullish

No major news event

Oil prices declined on Monday, November 17, as Russian export operations resumed at Novorossiysk following Ukrainian strikes. The market faces significant bearish pressure from a growing supply glut, with the IEA warning of surpluses reaching 4 million bpd in 2026. Despite geopolitical risks from intensifying Ukrainian attacks on Russian energy infrastructure, US sanctions on Rosneft and Lukoil taking effect on November 21, and Iran’s tanker seizure in the Strait of Hormuz, these supply risks have proven insufficient to offset fundamental oversupply concerns.

Next 24 Hours Bias
Weak Bearish