Weekly Analysis

Global markets faced a volatile week as investors balanced softening US economic data against tightening signals from other major central banks.

Global markets wrapped the week with notable moves across currencies, commodities, and bond markets amid fresh central‑bank signals and key economic releases. The Federal Reserve delivered its third consecutive 25 bps rate cut, while signaling only one more cut in 2026, tempering easing expectations. That, coupled with hawkish leanings from other major central banks, pressured the dollar yet again.

Traders adjusted positioning before the Federal Reserve’s December decision and evaluated fresh signals from the ECB, BoE and BOJ.

Global financial markets closed the first week of December with renewed confidence in an imminent Federal Reserve rate cut, as soft U.S. data and dovish Fed commentary lifted risk assets and precious metals. The dollar remained steady, Treasury yields eased, and commodities diverged on geopolitical headlines. European inflation surprised slightly higher, while Japan’s economic strength added pressure on bond yields amid aggressive fiscal stimulus.

Markets rebounded this week with rising expectations of a Fed rate cut in December, following dovish remarks from New York Fed President Williams and mixed labor data.

The global financial markets kicked off the week on a cautious yet anticipatory note, with investors bracing for a wave of delayed US economic data following the end of the 43-day government shutdown.

The U.S. dollar index stabilized near 99.6, ending a three-day decline as signs of a deal to end the record-long government shutdown emerged. While the dollar weakened earlier in the week on soft consumer sentiment and rising job cuts, support returned as Senate leaders signaled progress toward a temporary budget. The market remains split on the Fed’s December decision, with 67% odds for a 25bps cut.

The dollar index climbed for a third consecutive session on Friday to near 99.8, its highest since early August, closing October with a 1.8% monthly gain. Despite delivering a 25bps rate cut, the Federal Reserve struck a cautious tone, with Chair Powell signaling that a December cut isn’t guaranteed, cutting market odds to 63% from 90%.