December brought with it the gift that market participants had been waiting for all year – a Federal Reserve (Fed) policy pivot. With the continuation of the disinflation story, the Fed striking a more dovish tone and strong economic data published throughout the month; both equity and bonds markets showed that the festive period was not lost on them as they rallied into the end of the year. Economic data released in December painted a mixed picture for the global economy. Uneasy geopolitical factors provided a concerning backdrop in the month with a financial aid package for Ukraine vetoed at the EU summit and the Middle Eastern conflict affecting trade in the Red Sea. Despite these developments, markets continued unruffled. COP28 concluded with an agreement that signalled the “beginning of the end” for fossil fuel usage.
