Global financial markets ended the final week of November on firmer footing. Softer US economic data, easing bond yields, and a rebound in technology shares helped restore confidence after a turbulent month. Although risk appetite improved, underlying fragilities remain, especially in credit markets and currencies.
Equities: A Broad-Based Recovery
Equities staged a notable recovery. The S&P 500 rose as investors gained conviction that the Federal Reserve may cut rates in December. The Nasdaq 100 outperformed thanks to a rebound in AI and cloud-infrastructure leaders. Small-cap stocks, represented by the Russell 2000, also delivered solid gains as falling yields favoured broader participation.
Across the regions, Japan’s Nikkei 225 surged nearly 2 per cent mid-week, mirroring the global risk-on tone. Hong Kong’s Hang Seng Index steadied after early losses, and European markets posted modest gains despite subdued regional data.
Fixed Income: Yields Ease as Caution Builds
Bond markets reacted quickly to shifts in macro expectations. US Treasury yields fell early in the week before edging higher again on Friday. Weak US data reinforced the narrative that interest rates may soon decline.
Meanwhile, credit investors are watching the surge in AI-related bond issuance with growing caution. The rapid funding cycle behind data centres and infrastructure has prompted questions about whether credit spreads could widen if supply continues to build.
Currencies: A Softer Dollar and a Volatile Yen
The US dollar weakened against major currencies as markets priced in a greater likelihood of a December rate cut. The Japanese yen remained volatile amid speculation over potential intervention. The euro and sterling firmed slightly, driven more by movements in the dollar than by domestic economic strength.
Commodities: Gold Extends Gains
Oil prices were subdued, held back by stable OPEC+ production expectations and fading geopolitical pressures. Gold extended its fourth straight monthly gain as investors sought safety in a lower-yield environment. Industrial metals traded sideways, balancing soft manufacturing data against long-term optimism for AI-driven investment.
Crypto: Quiet Strength in Digital Assets
Bitcoin and other major cryptocurrencies edged higher, reflecting improving risk sentiment. However, trading volumes remained light, suggesting that investors remain selective despite the rebound.
Top Five Market-Moving Events This Week
Growing expectations of a December Federal Reserve rate cut boosted global equities and pushed yields lower. AI-driven technology stocks rebounded, lifting the Nasdaq and improving overall market sentiment. Asian equities rallied, with Japan’s Nikkei leading the region. US indices posted both weekly and monthly gains despite the shortened trading week. Rising concerns around heavy AI-related corporate debt issuance kept credit markets on alert.
Five Smaller but Significant Developments
Crypto prices improved in line with broader risk appetite. FX volatility stayed elevated, particularly for the US dollar and Japanese yen. Gold held firm, continuing its multi-month upward trend. Small-cap US equities outperformed, enhancing market breadth. Persistent uncertainty around US economic data left markets sensitive to surprises.