Economic Insights for November 26, 2025
⚠️ Disclaimer: This content represents a personal view based on publicly available economic indicators. All investment decisions should be made based on your own judgment and responsibility.
https://www.cnbc.com/2025/11/25/european-markets-on-nov-25-2025-stoxx-600-ftse-dax-cac.html
Global Market Status: Spreading Monetary Policy Expectations Amid the AI Frenzy
On November 26, 2025, global financial markets mostly showed an upward trend, buoyed by the growth prospects of Artificial Intelligence (AI) related companies and the increasing likelihood of major central banks cutting interest rates. Specifically, investor sentiment improved as the probability of the U.S. Federal Reserve (Fed) cutting rates in December was assessed at over 80%. However, weak U.S. retail sales and deteriorating employment figures simultaneously raised concerns about an economic slowdown, leading the market to seek a balance between stability and uncertainty. News of progress in Ukraine-Russia peace talks also influenced the energy market, attracting investor attention.
1. Stock Market Trends
United States (S&P 500): The S&P 500 index surged 0.9%, and the Dow Jones Industrial Average soared over 700 points. The Communication Services, Health Care, and Materials sectors led the gains. Meta jumped 3.8% after reports that it was considering a multi-billion dollar AI chip deal with Google, and Alphabet rose 1.6%. Conversely, Nvidia fell 2.6% and is potentially on track for its worst monthly performance since September 2022, down about 15% for November. Oracle and AMD also dropped 1.6% and 4.2%, respectively. The market is pricing in an approximately 85% chance of a 25 basis point (bp) Fed rate cut in December.
Japan (Nikkei 225): The Nikkei 225 index closed slightly up 0.07% at 48,659, but the Topix index fell 0.21%. The market, which resumed after a holiday, was mixed, struggling to find direction. Technology stocks showed mixed movement: Advantest rose 4.2% and Tokyo Electron gained 3.1%, while SoftBank Group plunged 10% and Disco fell 2.7%. Following the news of Novo Nordisk's failure in Alzheimer's drug trials, Eisai, which co-developed Leqembi, surged 7.4%.
China (Shanghai Composite): The Shanghai Composite index closed up 0.87% at 3,870, and the Shenzhen Composite index surged 1.53% to 12,777. Tech and AI-related stocks drove the market higher. A positive signal was sent by improving U.S.-China relations after President Xi Jinping and President Trump held their first phone call since last month's trade agreement. Key tech stocks like Zhongji Innolight (5%), E-Oplink (4%), Foxconn (1.2%), Victory Giant (5.3%), and Zhejiang Sanhua (1.9%) rose. Suzhou Novosense surged 5% after announcing a plan to repurchase 200–400 million yuan worth of shares.
South Korea (KOSPI): The KOSPI index closed up 0.30% at 3,858, recovering the previous day's losses. U.S. rate cut expectations improved investor sentiment, and renewed optimism about AI bolstered tech stock strength. Samsung Electronics rose 2.69%, and KB Financial Group (1.50%) and Shinhan Financial Group (1.97%) also showed strength. LG Energy Solution (0.36%), Kia (0.53%), and Celltrion (0.38%) posted slight gains. The improvement in domestic confidence, with South Korea's consumer sentiment index hitting an eight-year high, was also a positive factor.
United Kingdom (FTSE 100): The FTSE 100 index closed up 0.8% at 9,609. Fed rate cut expectations and anticipation ahead of Chancellor of the Exchequer Rachel Reeves' budget statement supported the market. Banks led the gains, with Lloyds (3.8%), NatWest (3.6%), and Barclays (2.3%) rising on reports that the budget would avoid tax hikes. Kingfisher jumped nearly 7% after raising its profit forecast, and Next climbed 1.8% after increasing its special dividend following the sale of Essex property. Conversely, Beazley fell 9% as third-quarter premium growth missed expectations.
Germany (DAX): The DAX index closed up about 1% at 23,460. Weaker-than-expected U.S. retail sales and employment figures reinforced expectations for a December Fed rate cut. News that Ukraine had agreed on a framework for a U.S.-brokered peace plan also garnered investor interest. Final data confirmed that German Q3 GDP recorded zero growth compared to the previous quarter. Heidelberg Materials led the gains, rising 6.6%, while Continental (3%) and Daimler Truck (3%) also rose strongly. Defense stocks Renk (7.4%) and Rheinmetall (1.4%) maintained a solid performance.
Brazil (Bovespa): The Bovespa index held above the 156,000 level, rising about 0.5%. Positive company news acted as support. Major bank stocks like Itaú (0.7%) and Banco do Brasil (1.9%) rose, and Americanas climbed 2.5% on accepting a takeover offer from Fanstore for Unico. Central Bank Governor Gallipolo reiterated his dissatisfaction with high inflation, explaining the reason for keeping interest rates at a restrictive level. Raízen rose 1.2% on the news of the appointment of new directors nominated by Shell and Cosan. Conversely, Petrobras fell 0.8% due to lower oil prices.
India (BSE SENSEX): The BSE Sensex index closed down about 0.4% at 84,587. Profit-taking continued for the third consecutive trading day after hitting recent record highs. Foreign fund outflows resumed, and investors are monitoring the prospect of a Fed rate cut and progress in India-U.S. trade negotiations. The IT and Oil & Gas sectors led the decline. Trent, Tata Motors, HCLTech, and Infosys fell 1–1.6%, while BEL, SBI, Tata Steel, and Eternal rose up to 1.5%.
2. Commodity Trends
Oil Prices: WTI crude oil futures fell about 2% to $57.7 per barrel, marking a five-week low. Reports that Ukraine had agreed to the terms of a revised peace plan triggered the drop. President Zelensky stated that negotiations with the U.S. were ongoing. With Russia's refined fuel supply disrupted by drone attacks on Ukrainian refineries, the potential increase in Russian production upon the conflict's end could place additional pressure on an already oversupplied market. Oil prices are trending lower this year and are set to fall for the fourth consecutive month.
Gold: Gold prices held steady at around $4,140 per ounce, maintaining their highest level since mid-November. Weaker-than-expected U.S. economic data reinforced expectations for a December Fed rate cut. Retail sales in September rose by only 0.2%, and the ADP report showed private employers cut an average of 13,500 jobs per week in the four weeks leading up to November 8. Gold prices had surged nearly 2% on Monday after Fed Governor Christopher Waller supported a December rate cut, citing labor market weakness. The market is pricing in an over 80% chance of a 25bp rate cut next month.
Copper: Copper futures rose above $5 per pound, hitting a two-week high. Investors built positions ahead of a major industry conference in Shanghai this week, where miners are expected to push for tighter supply terms in 2026. Annual treatment and refining charges in the copper processing sector have hit record lows over the past year as China's metal processing capacity exceeds mining output. Chile's state-owned Codelco offered a record premium of $330 per ton for metal sold to South Korea. Optimism about a potential Fed rate cut in December also supported copper prices.
Soybeans: Soybean futures held around $11.2 per bushel, retreating from the 16-month high of $11.6 recorded on November 18. Doubts are growing over whether China can meet its target of 12 million tons. Although the USDA reported sales of 1.584 million tons to China last week, further purchases must accelerate to meet the target. China's ample stocks, low crushing margins, and reduced competitiveness against Brazilian soybeans add to the uncertainty. As of November 16, 95% of the U.S. soybean crop was harvested, and Safras lowered its production forecast due to drought concerns in some parts of Brazil.
Steel: Chinese rebar futures rose above 3,100 yuan per ton, reaching their highest level for November. China's crude steel output in October fell 12% year-on-year, the lowest for that month since 2021. Steel exports in October also fell 12.5% year-on-year to 978.2 million tons, marking the first decline this year. However, futures are still expected to fall 7% this year due to low demand. China's property and infrastructure development remains subdued due to macroeconomic headwinds and a prolonged real estate crisis.
Wheat: Wheat futures fell to around $5.20 per bushel, reaching a one-month low. The November WASDE report noted record levels for global production and ending stocks. Ukraine stated it would not reintroduce export restrictions for 2025/26 due to a larger harvest and slow initial shipments, while Argentina upgraded its crop forecast to a record level. Russian shipments also remain competitive and stable, increasing supply to major buying regions.
3. Bond Market Trends
US 10-Year Treasury Yield: The U.S. 10-year Treasury yield fell to around 4.0%, its lowest level in nearly a month, ahead of the Thanksgiving holiday. This reflects expectations that the Fed will enact a 25bp rate cut in December. Retail sales in September increased less than expected, and the ADP weekly employment figures showed a sharp contraction. Both Fed Governor Christopher Waller and New York Fed President John Williams made comments supporting a rate cut at the last meeting of the year. The dovish remarks led the interest rate market to reflect a loose consensus for a rate cut by the end of the month.
Japan 10-Year Government Bond Yield: The Japanese 10-year government bond yield fell to about 1.78%, retreating from the 17-month high of 1.84% reached last week. The recent cabinet approval of a ¥21.3 trillion stimulus package, the largest since the COVID-19 pandemic and significantly exceeding last year's ¥13.9 trillion, fueled concerns about Japan's fiscal health. The scale of the spending amplified "sell Japan" tendencies, pressuring both the yen and domestic bonds. A prime ministerial advisor, Sanae Takaichi, stated on Sunday that Tokyo is ready to actively intervene in the foreign exchange market to offset the negative economic effects of the weak yen.
China 10-Year Government Bond Yield: The Chinese 10-year government bond yield traded around 1.81%, hovering near a six-week high. This suggests the People's Bank of China (PBOC) is in no hurry for further monetary easing amid persistent domestic and external headwinds. The one-year Loan Prime Rate (LPR) was kept at 3%, and the five-year LPR remained at 3.5%. Signs of improving U.S.-China relations following the phone call between President Xi Jinping and President Trump also supported market sentiment. Investors are looking ahead to next week's PMI release, the December Politburo meeting, and the Central Economic Work Conference for further hints on next year's policy.
South Korea 10-Year Government Bond Yield: The South Korean 10-year government bond yield fell slightly to 3.27% on November 25. It had risen by 0.34 percentage points over the past month and is 0.37 percentage points higher than a year ago.
Germany 10-Year Government Bond Yield: The German 10-year government bond yield fell to 2.67%, its lowest since November 12. It followed the drop in U.S. Treasury yields, as weaker-than-expected U.S. economic data reinforced expectations for a December Fed rate cut. U.S. retail sales in September rose by only 0.2%, and the ADP figures showed an acceleration in job losses in the four weeks up to November 8. German Q3 GDP recorded zero growth due to falling exports and weak private consumption. The market is pricing in an over 80% chance of a December Fed rate cut.
UK 10-Year Government Bond Yield: The UK 10-year government bond yield fell to 4.53%. Investors are awaiting the UK budget statement, due on November 26. Chancellor Rachel Reeves is expected to have to raise tens of billions of pounds to meet fiscal rules, as the OBR is projected to downgrade growth and productivity forecasts, creating a £20–30 billion gap in public finances. Expectations for the Bank of England to resume rate cuts have grown after October inflation eased to 3.6%. The market is pricing in an 80% chance of a 25bp rate cut in December.
Brazil 10-Year Government Bond Yield: The Brazilian 10-year government bond yield fell slightly to about 13.65%. Investors are balancing the possibility of a dovish central bank pivot against persistent fiscal concerns. The Treasury recently downgraded its 2025 growth forecast to 2.2% and its inflation forecast to 4.6%. October headline inflation slowed to 4.68%, opening up market expectations for a rate cut in early 2026. The central bank kept the benchmark rate at its historic high of 15% at its recent meeting.
India 10-Year Government Bond Yield: The Indian 10-year government bond yield hovered around 6.5%, consolidating near its highest level since early April. Investors are assessing the government's planned reform push. The winter session of parliament, starting on December 1, is set to discuss a wide-ranging package of bills covering key sectors like insurance and nuclear energy. Prime Minister Narendra Modi has set a goal of making India a "developed nation" by 2047. Q3 GDP, due this week, is expected to show 7.3% growth.
4. Currency Trends
US Dollar: The Dollar Index fell below 100 on Tuesday, driven by increased expectations that the Fed will cut interest rates in December. Confidence was boosted after Fed Governor Christopher Waller signaled support for a rate cut. With a U.S. government shutdown delaying key economic reports, the market is relying on past data, and money markets are pricing in an over 80% chance of a December rate cut. Recent figures show a slowdown in consumer activity: September retail sales rose by only 0.2%, and the Producer Price Index climbed 0.3% due to higher energy and food costs.
Japanese Yen: The Yen strengthened to about ¥156.6 per dollar, recovering previous day's losses amid speculation that authorities might intervene to curb the currency's slide. A prime ministerial advisor, Sanae Takaichi, stated on Sunday that Tokyo is ready to actively intervene in the foreign exchange market to offset the negative economic effects of the weak yen. The market is eyeing the U.S. holiday period this week as a potential time for Japanese intervention. The Yen has been weakening since Prime Minister Takaichi's election in early October.
Chinese Yuan: The offshore Yuan strengthened to about 7.09 per dollar, reaching its highest level since early October last year, influenced by signs of improving U.S.-China relations. President Trump and President Xi Jinping held a phone call earlier this week, with both administrations highlighting progress on trade and tariff commitments agreed upon in last month's meeting in South Korea. The PBOC also continued to guide the Yuan stronger by setting its daily reference rate at 7.0826. The central bank's sixth consecutive rate freeze in November suggested less urgency for further stimulus.
South Korean Won: The Won strengthened to about ₩1,471 per dollar, bouncing back from multi-month lows, driven by growing Fed rate cut expectations. The Bank of Korea is due for its rate decision meeting on Thursday, where policymakers are expected to consider financial stability risks stemming from rising apartment prices and strong growth, including Q3 GDP growth of 1.2%. The IMF maintained its 2025 growth forecast for South Korea at 0.9%, stating the economy entered a recovery phase in the second half of the year.
British Pound: The Pound traded just below $1.31. Traders are awaiting the UK budget statement on November 26. Chancellor Rachel Reeves is expected to have to raise tens of billions of pounds to meet fiscal rules. The OBR is projected to downgrade growth forecasts beyond 2026, creating a £20–30 billion gap in public finances. Expectations for the Bank of England to cut rates next month have grown after October inflation eased to 3.6%. The market is pricing in an 80% chance of a 25bp rate cut in December.
Euro: The Euro strengthened towards $1.16 on Tuesday, its strongest since November 18, as investors sold the dollar following weaker-than-expected U.S. economic data. U.S. retail sales in September increased less than anticipated, and ADP data showed an intensification of job losses in the four weeks up to November 8. The combination of soft data and dovish comments from several Fed officials reinforced expectations that the Fed will enact its third rate cut of the year in December. The European Central Bank is expected to keep rates on hold throughout 2026 due to a resilient economy and inflation near its target.
Brazilian Real: The Brazilian Real strengthened to about 5.36 per dollar, recovering from the one-month low of 5.40 recorded on November 21. A more dovish U.S. Fed outlook offset local policy expectations. The dollar's weakness, following Fed comments that saw the probability of a December rate cut surge to about 80%, alleviated pressure on the Real. Brazil's wide interest rate differential, with the Selic at 15%, continues to attract carry-focused capital. Central Bank Governor Gallipolo emphasized that policy remains restrictive and that easing would be gradual.
Indian Rupee: The Indian Rupee traded near an all-time low, crossing 89 per dollar, amid signs that steep U.S. tariffs are starting to weigh on the economy. Economic activity slowed in November, with manufacturing growth hitting its lowest since May, and service expansion also easing. This follows a record trade deficit in October, as exports to India's largest trading partner, the U.S., slumped due to the 50% tariffs imposed by President Trump. Importer demand for dollars increased as the Reserve Bank of India appeared to ease its strong currency defense.
Future Outlook: Investment Strategy in a Monetary Policy Transition
1. The Onset of the Fed Rate Cut Cycle
With the probability of the Federal Reserve implementing a rate cut in December assessed at over 80%, global monetary policy is entering a new phase. Signs of an economic slowdown, such as the 0.2% rise in September retail sales and the average 13,500 weekly job cuts reported by ADP, are accelerating the Fed's dovish pivot. This is short-term positive for the stock market, but corporate earnings could deteriorate if recession fears materialize. Investors should consider increasing their allocation to defensive sectors like Health Care and Consumer Staples, and also look at rate-cut beneficiaries such as Real Estate and Utilities.
2. Polarization in AI Technology Stocks
The 3.8% surge in Meta and the 2.6% drop in Nvidia indicate ongoing differentiation within the AI sector. While Nvidia is potentially heading for its worst monthly performance since September 2022, down 15% in November, the news of Meta and Google exploring an AI chip deal suggests that tech giants are seeking to diversify their semiconductor supply chains. Investors might find more stable returns in AI services and applications rather than in AI hardware. The strength in Chinese tech stocks (Shanghai Composite up 0.87%, Shenzhen Composite up 1.53%) highlights the global expansion of the AI technology competition.
3. Easing Geopolitical Risk and the Commodity Market
Progress in the Ukraine-Russia peace negotiations has pushed WTI crude oil to a five-week low of $57.7. An increase in Russian oil production upon the conflict's end could exert further downward pressure on the already oversupplied energy market. Conversely, the price of gold maintaining its highest level since mid-November at $4,140 per ounce suggests that the preference for safe-haven assets remains strong. Copper's breakthrough above $5 per pound indicates that China's AI infrastructure investment and global electric vehicle demand are still robust. The energy portfolio requires a defensive approach in the short term, but industrial metals maintain long-term growth momentum.
4. Relative Strength in Asian Markets
Major Asian indices, including South Korea's KOSPI (0.30%), Japan's Nikkei (0.07%), and China's Shanghai (0.87%), all trended upwards, tracking the U.S. market's strength. Particularly positive factors include South Korea's consumer sentiment index hitting an eight-year high and the IMF maintaining its 2025 growth forecast for South Korea at 0.9%. With signs of improving U.S.-China relations following the Xi-Trump phone call, investor sentiment towards Chinese assets is also expected to improve. In contrast, India's Rupee is trading near an all-time low due to a record trade deficit in October caused by 50% U.S. tariffs, warranting caution in the short term.
5. Investment Opportunities in the Bond Market
The U.S. 10-year Treasury yield's drop to 4.0%, its lowest level in nearly a month, suggests the bond market is shifting towards a full-fledged bull market. Declines in German 10-year (2.67%) and UK 10-year (4.53%) yields create buying opportunities across developed market bonds. Emerging market bonds, such as Brazil's 13.65% and India's 6.5%, still offer high yields but require consideration of currency and fiscal instability risks. In the early stages of a rate cut cycle, short- to medium-term bonds are more favorable than long-term bonds, and investment-grade corporate bonds are expected to offer stable returns.
Conclusion
On November 26, 2025, global financial markets saw a general upswing, driven by expectations of a Fed rate cut and optimism about AI technological advancements. However, weak U.S. retail sales and job losses fueled economic slowdown concerns, and the weakness in some tech stocks, including Nvidia, raised fears of an AI bubble. Progress in the Ukraine-Russia peace talks put downward pressure on the energy market, while the strength in gold prices suggests that investors' need to hedge against uncertainty remains strong.
Investors should capitalize on the opportunities presented by the monetary policy transition, while diversifying their portfolios to prepare for the risk of an economic slowdown. A balanced strategy is advisable: maintaining an appropriate allocation to defensive assets such as high-dividend stocks, gold, and investment-grade bonds, while selectively investing in long-term growth themes like AI services and copper. The relative strength of Asian markets and signs of improving U.S.-China relations may particularly offer mid- to long-term investment opportunities.
Keywords: Fed Rate Cut, AI Tech Stocks, Nvidia Drop, Meta Rise, Ukraine Peace Talks, WTI Crude Oil, Gold Price, US Retail Sales, Employment Figures, Dollar Weakness, Yen Intervention, Yuan Strength, South Korea Consumer Sentiment, US-China Relations, Treasury Yields, Copper Price, Monetary Policy, Economic Slowdown, Asia Market, Investment Strategy
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