The headlines say the Federal Reserve is almost certain to trim rates at its December 10th meeting. Money markets now see close to a full 25-basis-point cut priced in, up from roughly half that only a few weeks ago. One estimate puts the probability at 87.6%. Traders have seized on dovish hints from a few key Fed officials and on the prospect that Kevin Hassett, the White House economic adviser and current head of the National Economic Council, is the frontrunner to replace Jerome Powell when his term ends next year. Donald Trump says he has picked his next Fed chair and will announce the choice soon, while refusing to confirm whether it is Mr Hassett.

Yet the data do not fully back the market's optimism. Recent figures still suggest that prices are likely to keep rising. Societe Generale expects upcoming numbers to show a "resilient" economy, "sticky" inflation and a modest weakening in the jobs market. That is not the stuff of aggressive easing. The Fed's favourite inflation gauge - the Personal Consumption Expenditures index for September - has been delayed by the recent government shutdown and is only due on Friday. Other jobs and inflation reports will emerge only after the Fed has taken its December decision. Until the numbers catch up with the narrative, volatility is likely.

Jerome Powell is due to speak later today. Investors will comb every phrase for clues about how fast the Fed might move next year. 

The S&P 500 and the Dow managed modest gains in November, as expectations of a December cut outweighed worries about a bubble in artificial-intelligence-related stocks. The tech-heavy Nasdaq, however, suffered its biggest monthly fall since March, a reminder that investors are not wholly convinced that the large sums being poured into AI will pay off. U.S. stock-index futures are softer as December begins, with Dow E-minis down about 0.5%, S&P 500 contracts off roughly 0.7% and Nasdaq 100 futures nearly 0.9% lower as traders wait for fresh manufacturing data from S&P Global and the Institute for Supply Management.

The Fed is not the only central bank complicating life for traders. In Japan, Kazuo Ueda, governor of the Bank of Japan, has signalled that officials will "thoroughly discuss" the possibility of another rate increase at their coming meeting. He argues that modest rate hikes would not derail Japan's economy. With a trade deal with the Trump administration now in place, the central bank can focus on domestic factors such as next year's wage settlements. Markets expect a December move aimed at taming inflation and shoring up a frail yen.

The consequences extend well beyond Tokyo. Japanese rates have been so low for so long that global investors borrowed cheaply in yen and invested the proceeds in higher-yielding assets elsewhere - a "carry trade" that has underpinned everything from emerging-market debt to crypto. Higher Japanese rates would strengthen the yen and could force those trades into reverse. The prospect has already spooked some investors: bitcoin has fallen back below $90,000, suffering its steepest monthly drop since the 2021 crypto crash. Shares of U.S.-listed crypto firms have tumbled, with Strategy down about 4.4%, and Coinbase nearly 4% lower. Gold has risen on the back of the softer dollar and renewed expectations of more Fed cuts this year. 

In corporate news, Wall Street enters the final month of the year with a packed earnings slate. Cloud-software pioneer Salesforce is on the docket, as are MongoDB, a database firm, and Credo Technology, a high-speed connectivity specialist. The market's underlying nervousness is visible in pockets of sharp moves: Leggett & Platt, a maker of engineered parts, has jumped 8.5% after Somnigroup offered to buy it for $12 a share.

In retail, shoppers spent a record $11.8bn online on Black Friday, up 9.1% from 2024, making it the biggest digital shopping day of the year. Cyber Monday is now under way, putting big-box retailers firmly in the spotlight. 

The war in Ukraine, meanwhile, is entering a new diplomatic phase. In Hallandale Beach, Florida, U.S. and Ukrainian negotiators met for more than four hours on Sunday to discuss ways to end the conflict with Russia. The talks covered possible elections in Ukraine, land swaps and security guarantees. Mr Rubio described the session as "productive", while warning that the issues are complex. From Florida, top U.S. envoys are heading to Moscow today for further discussions.

In other news, in China, official PMI indicators for both services and manufacturing remain in contraction territory. The privately compiled RatingDog manufacturing PMI also fell below the 50-point threshold, indicating economic shrinkage. OPEC+ continues its pause on production increases and has introduced a new mechanism for assessing member quotas. The aim is to curb cheating on output levels, restore the cartel's credibility, and better manage global supply to support oil prices. 

On the US macroeconomic calendar: Monday sees the release of October construction spending data delayed by the recent government shutdown. Tuesday brings August job openings, followed by Wednesday's import-export prices. Thursday will reveal Q3 wage data and the October trade balance. On Friday, markets will digest September personal income and spending figures along with the University of Michigan's consumer sentiment index. In Europe, attention turns on Tuesday to November inflation figures for the eurozone.

In Asia-Pacific, the first trading session of December feels like a decompression chamber after the late-November rally. Japan shed 1.9%, Taiwan 1.2%, Australia 0.6%, and South Korea 0.3%. Mainland China, Hong Kong, and India managed to eke out modest gains. European indices are in the red, with the Stoxx Europe 600 down 0.4%.

Today's economic highlights:

On today's agenda: the PMIs from Japan, China, Switzerland, France, Germany, the Eurozone, and the United Kingdom; In the United States, the PMIs will be accompanied by construction spending and the ISM manufacturing index. See the full calendar here.

  • Dollar index: 99,069
  • Gold: $4,258
  • Crude Oil (BRENT): $62.90 (WTI): $59.04
  • United States 10 years: 4.02%
  • BITCOIN: $85,825

In corporate news:

  • Ukraine is developing its own AI system using Google's Gemma framework to reduce reliance on foreign tech and support military and civil applications amid ongoing war with Russia.
  • Apple is trying to block Indian antitrust proceedings by challenging a law that allows fines based on global revenue, which could lead to a penalty of up to $38 billion.
  • Tesla broke Norway's all-time annual car sales record with over 28,600 vehicles sold in 2025, driven by a surge ahead of EV tax hikes despite broader European market struggles.
  • UK manufacturing returned to slight growth in November, ending over a year of contraction, though job losses and weak export demand persist.
  • Poland and the Czech Republic showed signs of industrial recovery in November with rising export orders, while Hungary's manufacturing PMI continued to rise above the growth threshold.
  • France's manufacturing sector continued contracting in November with faster output declines and falling employment, marking ongoing weakness despite an export rebound.
  • Australia is expanding grain-fed beef exports, overtaking U.S. producers weakened by drought, as its feedlot industry grows to meet Asian demand.
  • India has ordered smartphone makers including Apple to preload a non-removable government cyber safety app on all new devices, raising privacy concerns.
  • ByteDance launched an AI voice assistant based on its Doubao LLM, debuting on ZTE smartphones and aiming to compete with other Chinese tech firms in consumer AI.
  • TotalEnergies signed a deal with Chevron to sell a 40% stake in Nigerian offshore licenses while remaining the operator, deepening their collaboration in West Africa.
  • GE Aerospace will invest £19 million to modernize its Wales facility, enhancing its maintenance and manufacturing capabilities.
  • Amazon and Google have jointly launched a multicloud network service that enables customers to link cloud platforms in minutes, enhancing reliability after recent outages.
  • Walt Disney's Zootopia 2 shattered records in China with a $275 million six-day opening, becoming the highest-grossing animated foreign film in the country's history.
  • UnitedHealth Group has sold its final South American business, Banmedica, to Patria for $1 billion.
  • CyrusOne restored stable operations at their Chicago 1 data center after a cooling outage.
  • Treasury Wine Estates announced an impairment of its U.S. assets.

Analyst Recommendations:

  • American Tower Corporation: Barclays downgrades to market weight from overweight and reduces the target price from USD 203 to USD 200.
  • Chevron Corporation: HSBC upgrades to buy from hold and raises the target price from USD 166 to USD 169.
  • Crown Castle Inc.: Barclays downgrades to market weight from overweight and reduces the target price from USD 104 to USD 101.
  • Kratos Defense & Security Solutions, Inc.: B Riley Securities Inc. upgrades to buy from neutral with a target price of USD 105.
  • Old Dominion Freight Line, Inc.: BMO Capital Markets upgrades to outperform from market perform and reduces the target price from USD 172 to USD 170.
  • Take-Two Interactive Software, Inc.: Arete Research upgrades to buy from neutral with a price target raised from USD 280 to USD 284.
  • Thermo Fisher Scientific, Inc.: HSBC upgrades to buy from hold and raises the target price from USD 550 to USD 670.
  • Toast, Inc.: BNP Paribas upgrades to outperform from neutral and raises the target price from USD 38 to USD 40.
  • Unity Software Inc.: Arete Research upgrades to buy from neutral and raises the target price from USD 36 to USD 48.
  • Zscaler, Inc.: Bernstein downgrades to market perform from outperform with a target price of USD 264.
  • Amd (Advanced Micro Devices): CLSA maintains its hold recommendation and raises the target price from USD 180 to USD 230.
  • Draftkings Inc.: BNP Paribas maintains its neutral recommendation and reduces the target price from USD 40 to USD 30.