The Day Ueda Ruined The Mood

Swissquote

Forex

Economic

Commodity

Summary:

Last month ended on a positive note – with a solid reversal of the early-November losses on one single bet: that the Federal Reserve (Fed) would cut interest rates in December.

December is finally here. Last month ended on a positive note – with a solid reversal of the early-November losses on one single bet: that the Federal Reserve (Fed) would cut interest rates in December. US traders came back from their Thanksgiving break to a market paralysed by a tech issue on Friday, but the problem was quickly resolved, trading resumed and the S&P 500 closed both the week – and the month – just a few points below an ATH.

The November dip only shaved about 5% off the index, and those losses have almost been fully recovered. European stocks outperformed thanks to their lower exposure to tech – the major driver of the recent rallies, but also a potential major driver of any future meltdown. Gold, Bitcoin, US Treasuries – everything rallied last week.

But worries persist that the Fed may be rushing toward a rate cut without solid data in hand, and that valuations have run ahead of themselves. Those concerns will only grow if the Fed cuts and the rally continues into year-end. The Q ratio, which measures the market value of a company or the overall stock market relative to the replacement cost of its assets, hit an ATH last month, as well. In plain English: we are living incredibly exciting times with AI – but also facing very expensive stock prices compared with the real, physical value of companies' assets.

This week starts on a rather miserable note – perhaps the return from Thanksgiving is less cheerful than expected. Shoppers in the US spent almost $12bn during the shopping festival, up around 4%, but once you strip out the roughly 3% inflation rate, the real growth is modest – which is actually good news. It suggests that consumers are spending more carefully, price pressures may ease and the Fed could cut rates more confidently.

But risk appetite – judging from the price action in the Nikkei and Bitcoin – doesn't look great. And one man is largely responsible for that: Kazuo Ueda, the head of the Bank of Japan (BoJ), who said today that the bank "will consider the pros and cons of raising the policy interest rate and make decisions as appropriate" and that "any hike would merely be an adjustment in the degree of easing." In other words, they remain far behind the curve, and normalization is calling – even more loudly as Takaichi's policy measures risk pushing Japan's inflation even higher.

The result is a bloodbath in Japanese assets. The Nikkei is down nearly 2% this morning on rising bets that the BoJ will hike at the next meeting – despite soft PMI data. The Japanese 10-year yield is at a fresh multi-decade high near 1.87% this morning, which is very high relative to the 1.71% level often referenced as the point at which Japan's era of "free liquidity" effectively ends. Around $3.4 trillion circulates in global markets from Japanese investors seeking higher returns abroad – capital that could simply be repatriated as domestic yields rise.

From an economist's perspective, hiking interest rates – and counterbalancing Takaichi's fiscal push – is exactly what the BoJ should be doing. This is why central banks exist: to offset politically motivated, growth-at-all-costs fiscal impulses. BUT if the BoJ hikes, Japanese yields will rise, and Japanese capital could leave a significant hole in the global financial system at a time when everyone is wondering whether we haven't pushed the AI-driven rally too far.

This is why US 10-year yields jumped at the weekly open – that, and of course the ballooning US debt, which should theoretically push the Fed toward the same kind of thinking as their Japanese counterparts.

So, December could prove more challenging than many expected – especially for those who thought last month's 5% dip was the long-awaited correction. With Fed funds futures pricing nearly a 90% chance of a 25bp cut, there isn't much room left for additional dovish fuel.

On the contrary, incoming data could warn that a premature Fed rate cut that ignores inflation risks won't be the answer. So pray: pray for this week's PCE and inflation-expectations data to look soft enough to keep dovish expectations alive. Traders are also watching gold and the Swiss franc – both potential beneficiaries if the selloff deepens.

Potentially not helping sentiment: US crude is up more than 2% this morning as OPEC reiterated yesterday that they want to stabilise oil prices into next year, implying tighter control of output to address the supply glut that has weighed on prices – except during brief periods of geopolitical tension. And even those tensions haven't been enough lately to bring buyers back, which shows how much oil is currently sloshing around the planet. As discussed in previous reports, OPEC alone can't reverse the broader negative price dynamic, but it can help put a floor under the latest selloff. WTI is testing $60pb this morning, but prices need to climb above $65pb for the technicals to confirm an end to the bearish trend.

Source: Swissquote Bank SA

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Daniel Carter

Economic

Third-quarter annual growth came in at 3.7%, against the 4.2% expected by economists surveyed by Bloomberg. Still, the economy performed better than anticipated on a quarterly basis, growing 1.1% in the three months through September, compared with 1.6% in the previous quarter, according to data announced by the national statistics agency on Monday. Analysts were expecting the economy to grow 0.5% quarter-on-quarter, per a separate Bloomberg poll.

The central bank resumed interest-rate cuts in July, after a two-month pause. In September, the bank slowed the pace of easing in response to higher inflation, though some analysts expect it to return to more sizable reductions based on price data for November scheduled for release on Wednesday.

Annual inflation slowed to 32.9% in October and is seen ending the year at between 31% and 33% — above the central bank's target — according to the monetary policymakers.

Central bank Governor Fatih Karahan said last week he expects an improvement in inflation readings from prior months. The monetary policy committee last lowered official borrowing costs in October to 39.5%.

The International Monetary Fund said in a statement after an official staff visit last month that falling policy rates and a less contractionary fiscal stance will support demand in 2026.

Still, it said "an economy operating close to full capacity" will prolong slowing prices and "unfavorable recent inflation readings could indicate that policies may not be tight enough to support further disinflation".

Source: Bloomberg Europe

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Gerik

Economic

A Tale of Two Economies: India Soars as China Stalls

China’s factory activity edged up slightly in November, with the official manufacturing PMI ticking up to 49.2, from 49.0 in October. While this slight improvement met expectations, it marked the eighth straight month of contraction, reinforcing a narrative of sluggish industrial recovery weighed down by soft domestic demand and persistent deflationary forces. The reading remains below the expansion threshold of 50, signaling that China’s manufacturing sector still lacks strong forward momentum.

In stark contrast, India's GDP grew 8.2% year-on-year in Q3 2025, surpassing forecasts. The acceleration was driven by a surge in manufacturing, construction, and domestic consumption clear indicators of internal economic strength and structural resilience. India’s outperformance reinforces its role as a bright spot among emerging markets and suggests a decoupling from China’s industrial drag.

Markets Anticipate Fed Rate Cut to Spark ‘Santa Claus Rally’

Investor optimism is building as the U.S. Federal Reserve prepares to meet on December 10, with traders pricing in an 87.4% chance of a 25-basis-point rate cut. This anticipated policy easing is expected to catalyze a year-end ‘Santa Claus rally’, a seasonal trend where markets rise in the final trading days of the year.

U.S. equities ended the previous week on a high note:

Nasdaq Composite rose 0.65%, marking its fifth consecutive gain

S&P 500 climbed 0.54%

Dow Jones advanced 0.61%

However, the bullish tone may face resistance from mounting macro risks that threaten to counteract dovish monetary policy tailwinds.

Venezuela and AI Hype: Two Headwinds for December

President Donald Trump’s escalating rhetoric on Venezuela has raised the possibility of U.S. military involvement, adding geopolitical risk to an already cautious market backdrop. Coupled with ongoing volatility in AI-related stocks, which some analysts now fear may resemble a speculative bubble, investor sentiment could easily swing toward defensiveness.

These two factors represent non-economic triggers with real implications for capital flows, risk appetite, and market volatility. While not directly causal in current asset pricing, they introduce headline risk that may suppress upside momentum.

Wingtech-Nexperia Dispute Underscores Global Supply Chain Fragility

Another unexpected development comes from the semiconductor sector. Dutch chipmaker Nexperia’s public clash with its China-based parent company Wingtech over operational control has escalated, with Nexperia warning of "imminent production outages" due to unresolved internal tensions. This internal conflict adds fresh uncertainty to a chip market already grappling with geopolitical stress, export controls, and fluctuating demand.

In a rare and sweeping safety directive, Airbus grounded 6,000 A320-series jets worldwide after identifying software malfunctions linked to solar flare interference. The issue, which caused an uncommanded pitch-down event on a JetBlue flight in October, triggered emergency software patches and disrupted one of the busiest travel weekends globally.

This unexpected disruption underscores the vulnerability of modern aviation to environmental anomalies and will likely lead to logistical challenges for airlines and increased scrutiny from regulators in the weeks ahead.

Silver’s Silent Surge Signals Investor Hedging

While gold remains in the spotlight, silver has reached new record highs, gaining traction as a dual-purpose asset both a precious metal and an industrial input. Analysts suggest silver could double in value over the coming years as green energy investments and risk-averse investors converge around its utility and safe-haven status.

As December unfolds, markets sit at a delicate intersection of rate-cut anticipation, economic divergence, and external shocks. While optimism over Fed easing and India’s growth provide fuel for a potential rally, persistent headwinds from China’s manufacturing malaise, Venezuela tensions, AI sector instability, and aviation disruptions may limit enthusiasm.

The month’s opening reflects 2025’s broader theme: accelerated change with layered volatility. Whether markets end the year with cheer or caution will depend not only on policy moves but on how investors navigate the mounting noise that’s closing out a turbulent year.

Source: CNBC

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Gerik

Economic

Stocks

Weaker China Manufacturing Data Dampens Sentiment

Markets across the Asia-Pacific region began December mostly in decline as investors reacted to disappointing economic signals from China. The private-sector RatingDog China General Manufacturing PMI, compiled by S&P Global, fell to 49.9 in November unexpectedly slipping into contraction territory and missing the 50.5 forecast in a Reuters poll.

This marks a continued struggle for China's manufacturing sector, despite recent hopes for stabilization. It follows official PMI data released a day earlier showing the manufacturing gauge rising slightly to 49.2, still below the 50 benchmark for the eighth straight month, signaling ongoing economic fragility.

The subdued data has raised fresh doubts about the sustainability of China's recovery amid tepid domestic demand and fading consumption momentum post-holidays. A contraction in services activity added to the concern, reinforcing a correlation between weak consumer confidence and slow industrial recovery.

Hong Kong Crypto-Exposed Stocks Plunge on PBoC Warning

Further weighing on sentiment in Hong Kong were new warnings from the People’s Bank of China (PBoC) about illegal activities tied to digital currencies and the re-emergence of speculative trading behaviors. The announcement, released over the weekend, prompted sharp declines in several crypto-linked financial firms:

Yunfeng Financial, backed by Jack Ma, fell more than 7%

Bright Smart Securities & Commodities Group also dropped over 7%

Guotai Junan lost up to 3%

This regulatory pushback highlights Beijing’s renewed focus on clamping down on crypto activity and introduces a direct cause for investor retreat from fintech and digital-asset-linked equities.

Diverging Performances Across Regional Markets

In Japan, the Nikkei 225 slumped 1.68% to 49,407.31, with Fujikura, Sumitomo Pharma, and Advantest among the steepest decliners, down over 4–8%. The Topix index also lost 0.72%, reflecting broader weakness across sectors.

Australia’s S&P/ASX 200 index declined 0.47% as cautious sentiment spread, while South Korea's Kospi fell 0.19%. However, the Kosdaq which typically features smaller tech and growth firms rose 1.29%, signaling investor appetite for speculative plays amid expectations of rate cuts.

U.S. Rate Cut Bets Lend Underlying Support

Despite weak Asian market openings, U.S. equity futures remained steady, buoyed by growing conviction that the Federal Reserve may cut rates at its December 10 meeting. According to CME FedWatch, markets are pricing in an 87.4% probability of a 25 basis point cut.

U.S. indices closed last week with gains in a holiday-shortened session. The Nasdaq Composite extended its winning streak to five days, closing up 0.65% at 23,365.69. The S&P 500 gained 0.54% to 6,849.09, while the Dow Jones added 289.30 points to settle at 47,716.42.

Mixed Macro Signals Set Uncertain Tone for Asia

The opening day of December has revealed a bifurcated regional performance. While China's disappointing PMI data and crypto clampdown in Hong Kong pulled down risk sentiment, U.S. rate-cut hopes and selective tech gains in South Korea provided some cushioning.

The divergence illustrates a market landscape where geopolitical risk, domestic policy shifts, and macroeconomic indicators are creating fragmented outcomes across Asia. Investors will be closely monitoring whether China rolls out further stimulus or regulatory adjustments to stabilize sentiment in the weeks ahead.

Source: CNBC

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Samantha Luan

Forex

Economic

Vietnam's manufacturing sector maintained growth in November despite severe storms disrupting supply chains, according to the latest S&P Global Vietnam Manufacturing PMI data.

The PMI posted 53.8 in November, slightly down from 54.5 in October, but still indicating solid improvement in business conditions. This marks the fifth consecutive month of strengthening operating conditions.

New orders increased for the third straight month, helping drive production growth, though both metrics expanded at a slower pace than in October. New export orders grew at a faster rate, reaching a 15-month high, with manufacturers noting improved demand from mainland China and India.

Severe weather conditions in November significantly impacted supply chains, with suppliers' delivery times lengthening markedly to the largest extent since May 2022. The storms also hampered manufacturers' ability to complete work on time, leading to the sharpest accumulation of backlogs since March 2022.

Despite these challenges, employment increased for the second consecutive month as firms responded to higher output requirements. The modest rise in staffing levels was the largest in almost a year-and-a-half, with respondents indicating new staff were often hired on a full-time basis.

Manufacturers increased purchasing activity for the fifth straight month, with the rate of expansion quickening to a four-month high. Stocks of inputs also rose slightly for the second month in a row.

The storms contributed to higher raw material costs as supply was restricted. Input prices increased sharply, marking the second-fastest pace since July 2024, though inflation eased from October. Output price inflation also softened but remained solid as firms passed higher costs to customers.

Looking ahead, manufacturers expressed optimism about the year-ahead outlook for output, with sentiment reaching a 17-month high. Nearly half of respondents predicted increased production, citing expected improvements in new orders and hopes for calmer weather conditions.

Andrew Harker, Economics Director at S&P Global Market Intelligence, noted: "The pick-up in growth seen in October was largely sustained through to November as the Vietnamese manufacturing sector looks to be enjoying a positive end to the year. While rates of expansion in output and new orders eased, firms took on extra staff at a stronger pace in order to deal with workloads."

Source: Investing

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Pepperstone

Forex

Commodity

Over the past week, precious metals broadly advanced, with gold bulls standing out. The rally is mainly driven by a sharp repricing of U.S. interest rate expectations: Fed officials have delivered consecutive dovish signals, December rate cut odds surged, and markets anticipate the next Fed chair may lean even more toward easing, all boosting bullish sentiment.

With the Thanksgiving holiday behind us, the market will return to a "data-driven" rhythm this week. Traders will focus on key U.S. economic releases, including ISM Services PMI, ADP employment data, and core PCE inflation. With the Fed entering a blackout period, even marginal data changes could trigger outsized market reactions.

Technical Outlook: Bulls Back in Control, $4,250 Key

Looking at the XAUUSD daily chart, gold buying regained momentum last week, with a nearly 3.8% weekly gain. While markets expected thin holiday trading, Friday's strong push broke that assumption, allowing gold to comfortably surpass $4,200.

With the holiday over and CME's earlier technical issues resolved, price discovery should be more robust this week. Gold is currently challenging its mid-November high of $4,250. A close above this level would open the door for a push toward $4,300 and potentially revisit the all-time high of $4,381.

On the downside, profit-taking at elevated levels could find support around $4,200 and further down at $4,130. Overall, technicals remain bullish, though the strength of the breakout and market sentiment will need confirmation from this week's data.

Fed Rate Cut Odds Surge, Supporting Gold Bulls

The recent acceleration in gold is mainly fueled by a shift in Fed policy expectations. Dovish tones are now clear—both Fed Governor Waller and NY Fed President Williams have publicly backed a December rate cut, altering the market's baseline expectations.

Economic data also support this trend. U.S. retail sales slowed in September, consumer confidence fell to 88.7 in November—the lowest since April—and the Fed's Beige Book showed cooling hiring, reduced hours, and even some layoffs, with consumer spending easing. Overall, U.S. economic momentum is weakening, while inflation, though moderating, remains sticky.

Against this backdrop, bets on a December Fed rate cut have surged, currently priced near 90%. Stronger rate cut expectations imply lower real rates, the key logic supporting a rise in non-yielding assets like gold.

Dollar performance reflects this shift. As the U.S. interest rate advantage fades, the dollar index has come under pressure. Meanwhile, policy shifts in Japan add to dollar weakness.

Sanae Takahashi's aggressive fiscal stance has raised concerns over the continuation of Abenomics, while Ueda hinted at a possible December rate hike (current odds above 60%), increasing the potential for a yen rebound. If realized, this would further weaken the dollar and provide additional support for gold.

Hassett Poised to Lead, Dovish Tilt Boosts Gold

Treasury Secretary Janet Yellen indicated that President Trump may announce the next Fed chair before Christmas. Current NEC Director Hassett, a long-time proponent of Trump-style monetary easing, is the frontrunner, with betting markets pricing his nomination at roughly 64%.

Markets expect that if Hassett takes the helm, his stance will be more dovish, likely keeping rates lower than under Powell. This expectation has pushed traders to increase bets on future rate cuts and raises questions about Fed independence, naturally benefiting non-yielding, safe-haven gold.

Moreover, concerns over aggressive rate cuts heighten attention to U.S. debt expansion, while central bank gold buying provides a solid floor. Together, these factors make it difficult to break gold's upward path in the near term.

Final Week Before the Rate Decision: Can Gold Keep Rising?

In short, gold bulls have surged recently, driven by higher December rate cut bets, a softer dollar, and expectations of a more dovish next Fed chair. Central banks continue to accumulate gold, and geopolitical risks remain, offering additional support.

In a low-rate, uncertain U.S. economic environment, gold's path of least resistance remains upward, with dip buying still the prevailing strategy. Any short-term pullbacks are likely to be limited.

This week marks the final week before the December Fed meeting. Fed officials will enter a blackout period, amplifying the market impact of economic data. Key releases include Wednesday's November ADP private payrolls and ISM Services PMI, and Friday's delayed September core PCE.

Consensus is for ADP jobs to rise 10k, below 42k previously, while core PCE is expected to fall from 2.9% YoY to 2.8%. If results align, showing a soft labor market with controlled inflation, they could reinforce December rate cut bets, pressuring the dollar and modestly lifting gold. Even if employment improves slightly and inflation remains sticky, it's unlikely to change market pricing for cuts, leaving gold in a narrow trading range.

Additionally, as major central banks diverge in policy paths—especially the RBA, NZD central bank, and BoJ returning to a rate hike trajectory—traders should monitor yield differentials for both risk and opportunity when trading gold.

Source: Pepperstone

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Gerik

Economic

Surging Online Deals Propel Cyber Monday Spending

Amid an uncertain economic climate, U.S. shoppers are on track to set a new record this Cyber Monday, with Adobe Analytics forecasting $14.2 billion in online sales up 6.3% from 2024. This follows a strong Black Friday showing with $11.8 billion in online purchases and $6.4 billion on Thanksgiving Day, indicating a robust start to the peak of the holiday shopping season.

Consumers are taking advantage of elevated discounts, particularly on electronics and apparel, where average markdowns hit 30% and 26%, respectively. The strong momentum supports the view that shoppers are frontloading purchases to capitalize on the best prices, turning Cyber Monday into a high-stakes “last call” for significant holiday savings.

Mobile Commerce and AI Fueling Sales Growth

Mobile devices have overtaken desktops as the dominant shopping platform, with 56.1% of online holiday spending equivalent to $142.7 billion expected to be conducted via smartphones and other handheld electronics. Adobe predicts mobile transactions will hit a new milestone on Cyber Monday, as convenience and AI-powered shopping assistants guide consumers through personalized deals.

AI’s growing role in shaping e-commerce behavior is evident. Salesforce estimates AI contributed to $14.2 billion of the $79 billion spent globally on Black Friday, showing a direct relationship between personalized product recommendations and consumer decision-making at scale.

Economic Pressures Shift Consumer Payment Behavior

Despite high sales figures, underlying economic concerns persist. Inflation, layoffs, and the residual impact of the 43-day government shutdown have dampened confidence. Rising tariffs under President Donald Trump’s trade policies have further elevated import prices, tightening household budgets.

In response, more shoppers are relying on deferred payment options. Adobe estimates that “buy now, pay later” (BNPL) plans will account for $20.2 billion in online holiday purchases, up 11% year-over-year. Cyber Monday alone is expected to see BNPL purchases surpass $1 billion, much of it via mobile platforms. This shift indicates a behavioral change in how consumers manage cash flow under financial stress a correlation that highlights the increasing normalization of short-term credit tools in retail.

Growth Slowing, But Spending Still Strong

The National Retail Federation expects U.S. holiday sales to exceed $1 trillion for the first time, though growth will moderate to between 3.7% and 4.2%, compared to 4.3% in 2024. Credit card delinquencies are rising, suggesting a fragile foundation beneath the record-setting spending.

Still, the psychology of urgency around Cyber Monday deals, combined with newer digital shopping tools and flexible payment models, is helping push volumes higher even as the economic backdrop remains turbulent. Popular items like the Nintendo Switch 2, Labubu Dolls, and flagship smartphones such as the iPhone 17 and Galaxy S25 are expected to be among the top sellers.

A Record-Breaking Cyber Monday With Caveats

Cyber Monday 2025 is shaping up to be the biggest yet, powered by strategic discounting, mobile access, AI-enhanced shopping, and consumer willingness to spend despite cautionary economic signals. However, the record figures mask underlying vulnerabilities: a reliance on credit, trade-related price pressures, and the fragility of household financial stability.

This year’s performance reflects not just the success of digital commerce infrastructure but also the precarious balance between consumer desire and economic reality a trend likely to persist through the rest of the holiday season and into 2026.