Market Wrap 2025-11-30

Market Wrap 2025-11-30

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Today's US Market Wrap — Key Points

• Equities rise amid dovish Fed speculation and potential Ukraine/Russia peace talks.
• US data mixed: PPI cooler, retail sales weak, consumer confidence down.
• Dollar weakens; GBP, JPY, EUR gain. RBNZ rate cut expected.
• Crude oil declines on peace talk hopes.
• Hassett Fed Chair speculation steepens yield curve.

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MARKET OVERVIEW

• SNAPSHOT: Equities increased, Treasuries increased, Crude decreased, Dollar decreased, Gold was flat.
• REAR VIEW: US core PPI was cooler than anticipated, while the headline figure was in line with expectations. US retail sales fell short of forecasts. A report indicated Hassett is considered a leading candidate in Trump's search for a Fed Chair. The weekly ADP employment figure was negative. The Richmond Fed index declined in November. US pending home sales exceeded expectations. A weak US 5yr note auction occurred. Ukraine reportedly agreed to a 19-point peace deal, but Russia is likely to reject it. META is reportedly considering using Google’s TPUs in its data centers in 2027.
• COMING UP: Data releases include Australian CPI (Oct), US Dallas Fed (Oct), and Jobless Claims (w/e 22 Nov). Events scheduled are the RBNZ Announcement, UK Autumn Budget, and Fed Beige Book. Speakers include RBNZ's Hawkesby and ECB’s Vujcic, Lane, and Lagarde. Supply events are planned for Australia, Japan, Germany, and the US.

MARKET WRAP

US indices experienced gains on Tuesday. The Nasdaq 100, while initially lagging, managed to recover, supported by NVIDIA, following reports that Meta is considering using Google’s TPUs in its data centers in 2027. NVIDIA (-2.6%) closed lower, but the broader index rebounded. Most sectors were positive, with Health and Consumer Discretionary leading. Utilities and Energy were the only sectors in the red, the latter impacted by crude oil weakness amid developments regarding a potential Ukraine/Russia peace deal. There was a significant amount of US data released, but it had limited market impact as PPI and retail sales data were from September, although Consumer Confidence (Nov) was weak. Regarding the Federal Reserve, Miran maintained a dovish stance, but the US yield curve steepened following reports that Hassett is a leading candidate for Fed Chair under Trump. The Dollar was sold, and money markets became more dovish for December 2026. Powell's term as Fed Chair concludes in May 2026. The Dollar weakened, with JPY, GBP, and EUR gaining, with focus on the UK budget on Wednesday. Antipodean currencies saw slight gains as attention shifted to the RBNZ, which is widely expected to reduce rates by 25bps.

US DATA

PPI:

Headline PPI for September increased by 0.3%, matching estimates and accelerating from August’s -0.1%. The Y/Y rate rose to 2.7%, also matching forecasts and up from 2.6%. Core PPI (excluding food and energy) rose 0.1%, below the 0.2% forecast but above the previous -0.1%. The Y/Y rate was 2.6%, lower than both the 2.7% forecast and the 2.8% prior. The super-core measure, excluding food, energy, and trade, rose 0.1% M/M from 0.3%, with the Y/Y rate at 2.9% from 2.8%. According to Pantheon Macroeconomics, the PPI data suggests a modest inflation impulse from tariffs and a slowing underlying services inflation. Components feeding into the PCE report were mixed: air fares rose 4.0% (prev. 0.7%), portfolio management fell 1.2% (prev. 1.6%), home health and hospice care jumped 1.2% (prev. 0.1%), outpatient hospital care fell 0.4% (prev. +0.2%), and nursing home care rose 0.7% (prev. -0.1%). Pantheon Macroeconomics estimates that September’s PPI and CPI data are consistent with a 0.22% increase in the core PCE deflator, maintaining the inflation rate at 2.9%. They added that the average core PCE inflation rate in Q4 2025 is likely to undershoot the median FOMC participants’ September forecast of 3.1% by one to two tenths, giving policymakers confidence to ease policy next month to support the labour market.

RETAIL SALES:

The September retail sales report was below expectations, with the headline rising 0.2%, less than the expected 0.4% and the prior 0.6%. Retail Control (ex-bldg material, motor vehicle & parts, gasoline station & food svs, SA), a better gauge of core retail spending, unexpectedly declined 0.1% (exp. 0.3%, prev. 0.7%, rev. 0.6%). Ex-Autos rose 0.3% in line with expectations (prev. 0.7%, rev. 0.6%), while ex-gas/autos rose 0.1% (prev. 0.7%, rev. 0.6%). Growth in the headline was supported by growth in miscellaneous store retailers (2.9%) and gasoline stations (2%), while declines were seen in sporting goods, hobby, musical instrument, & book stores (-2.5%), clothing (-0.7%) and nonstore retailers (-0.7%). Oxford Economics suggests the slowdown in retail sales growth was largely due to a decline in non-store sales, likely a seasonal adjustment issue. Given the report, the firm estimates personal spending is on track for a 0.44% gain in September.

CONSUMER CONFIDENCE:

Consumer confidence for November fell to 88.7 from 94.6, below the expected 93.4, reaching its lowest level since April. All five components of the overall index flagged or remained weak. The Present Situation Index dipped 4.3 points to 126.9, while the Expectations Index tumbled to 63.2 from 71.8. The Conference Board noted that the Present Situation Index dipped as consumers were less sanguine about current business and labour market conditions, while all three components of Expectations deteriorated in Nov. Consumers' assessments of current business conditions worsened, as 20.1% said "good" (prev. 20.7% M/M) and 16.9% said "bad" (prev. 14.5%), while views of the labour market also weakened; 27.6% said jobs were "plentiful" (prev. 28.6%), however 17.9% said jobs were "hard to get" (prev. 18.3%). Consumers were more pessimistic about future business conditions, more worried about the labour market, and income prospects were less positive.

RICHMOND FED:

The composite Index dropped to -15 from -4 in October, weighed by declines in the shipments (-14 from +4) and new orders (-22 from -6) indices. On the contrary, employment improved to -7 from -10. Local business conditions slumped to -20 (prev. -1), and expectations for local business conditions improved as the index for future local business conditions increased to 1 (prev. -5). The future index for shipments rose to 26 from 12, while the expectations index for employment moved down to -1 from +2. On prices, the average growth rates of prices paid increased modestly after an October dip, while the growth in prices received was almost flat M/M. Firms expect growth in prices paid to moderate somewhat, and expect growth in prices received to increase slightly over the next 12 months.

ADP:

The weekly ADP preliminary estimate for the four weeks to Nov. 8, 2025, showed US private employers cut an average 13,500 jobs per week, compared with a four-week average decline of 2,500 in the period ending Nov. 1. ADP said “consumer strength remains in question as we enter the holiday hiring season, which might be playing into delayed or curtailed job creation”. The report also referenced the September NFP data, noting that self-employed workers in the gig economy lost 114,000 jobs that month. However, a new ADP report indicates structural demographic shifts are expected to reverse this short-term decline.

PENDING HOME SALES:

Pending home sales for October rose 1.9% M/M, above the expected +0.5%, and the prior +0.1%; inventory/sales ratio was unchanged at 1.37 months’ worth. NE, S, and MW all saw gains M/M, with the latter surging 5.3%, while the W decreased 1.5%. According to the NAR, the Mid-West outperformed due to better affordability, while contract signings declined in the more expensive West. Days on the market typically lengthen from Nov. through Feb., providing better negotiating power to buyers during the holiday season. Job gains in Sept. suggest the economy is not slipping into a recession, which may boost confidence in future homebuying.

FIXED INCOME

T-NOTE FUTURES (Z5) SETTLED 8+ TICKS HIGHER AT 113-20+

T-Notes steepened on reports Hassett is Fed Chair frontrunner. At settlement, 2-year -3.0bps at 3.459%, 3-year -3.7bps at 3.454%, 5-year -4.0bps at 3.565%, 7-year -3.9bps at 3.754%, 10-year -3.4bps at 4.002%, 20-year -2.3bps at 4.616%, 30-year -1.9bps at 4.658%.

INFLATION BREAKEVENS: 1-year BEI -6.4bps at 2.552%, 3-year BEI -1.9bps at 2.363%, 5-year BEI -0.8bps at 2.213%, 10-year BEI -0.5bps at 2.203%, 30-year BEI +0.1bps at 2.184%.

THE DAY:

T-notes firmed across the curve on Tuesday, driven by US data and Fed speculation. ADP showed employers shed an average 13.5k jobs per week versus the prior week’s -2.5k, though this had little impact on Treasuries. September PPI was broadly in line, and Pantheon expects PCE to print at 0.22%. Soft retail sales initially triggered a spike higher in T-notes, but the move was quickly unwound. Buying resumed and the curve steepened after Bloomberg reported Hassett as the front-runner for the Fed Chair role. The 2s30s spread widened from about 115bps to 119bps at the peak. The view is that if Hassett is nominated as Fed Chair, another uber-dove like Miran would be at the helm, raising concerns over Fed independence. Hassett, as Chair, would likely reinforce near-term Fed rate cuts on expectations of a more dovish stance, but markets may demand more term premium further out due to credibility concerns, steepening the curve. Despite the Hassett reports, interviews are ongoing, and a final list will be sent to Trump once they conclude, though the curve stayed steeper. Chair Powell’s term expires in May, meaning a successor would shape policy more in H2 2026. Separately, the 5-year auction was relatively soft, tailing by 0.5bps, but had little market effect. The move lower in oil prices may have helped with the underlying bid in T-notes in response to potential Russia/Ukraine peace. Reports suggest Ukraine is set to accept the talks, but Russia will likely reject them.

SUPPLY:

Notes

• US Treasury sold 70bln of 5-year notes at a high yield of 3.562%, a lower yield vs the prior 3.625%, and tailed the when issued by 0.5bps. The tail was worse than the prior 0.1bps stop through and six auction average of a 0.3bps tail. The bid-to-cover of 2.41x rose from 2.38x prior and remained above the recent average of 2.36x. The breakdown saw direct demand rise to 27.6% from 23.9%, above the 24.9% average. Indirect demand fell to 61.4% from 66.8%, below the 64.7% average. The weak indirect demand was somewhat offset by the uptake in direct demand but dealers still took home an above-average 11% of the auction, up from the prior 9.3%. Overall, a relatively soft auction with soft indirect demand and a 0.5bps tail. US Treasury sold USD 28bln of 2-year FRN's at a high discount margin of 0.168% (prev. 0.17%). US Treasury to sell USD 44bln of 7yr notes on November 26th; to settle December 1st.

Bills

• US sold 6-week bills at high rate of 3.850%, B/C 2.71x; Sold 1-year bills at high rate of 3.460%, B/C 3.08x
• US to sell USD 69bln of 17-week bills on November 26th, USD 100bln in 4-week bills (prev. 110bln) and USD 85bln of 8-week bills (prev. 95bln) on November 26th; all to settle December 2nd. Wrightson ICAP analysts write that the bill reductions were expected, although the magnitude of cuts was not as clear, following the Treasury's lowering of the 6-week bill size by USD 10bln to USD 85bln last week. The desk expected a USD 10bln cut to the 4-week, but were torn between a USD 5bln or USD 10bln reduction in the 8-week.

STIRS/OPERATIONS

• Market Implied Fed Rate Cut Pricing: Dec 19bps (prev. 19bps), January 28bps (prev. 27bps), March 36bps (prev. 33bps).
• NY Fed RRP op demand at USD 2.3bln (prev. 1.1bln) across 8 counterparties (prev. 7)
• NY Fed Repo Op demand at USD 10.6bln across two operations today (prev. 0.001bln).
• EFFR at 3.88% (prev. 3.88%), volumes at USD 73bln (prev. 81bln) on November 24th
• SOFR at 3.96% (prev. 3.93%), volumes at USD 3.232tln (prev. 3.203tln) on November 24th.

CRUDE

WTI (F6) SETTLED USD 0.89 LOWER AT USD 57.95/BBL; BRENT (F6) SETTLED USD 0.89 LOWER AT USD 62.48/BBL

The crude complex was lower amid positive Russia/Ukraine peace deal updates. As US players entered for the day, WTI and Brent saw immediate weakness amid reports that Ukraine agrees to the terms of the peace deal, though there are still some details to be sorted out. Benchmarks fell to intraday lows before extending to new troughs of USD 57.10/bbl and 60.96 as the session progressed. Following the initial report, there were several more readouts, with one stating Russia is expected to reject the new 19-point cease-fire deal drafted by the US and Ukraine. From the Ukrainian side, it was reported that Zelensky is ready to move forward with a peace deal framework with Trump and Europe, and that he wants to meet Trump "as soon as possible", possibly over Thanksgiving, to finalise a joint US-Ukrainian agreement. WTI and Brent pared some of the losses through the US session, before still settling notably in the red, ahead of private inventory metrics after-hours, whereby current expectations are (bbls): Crude +0.055mln, Distillate +0.6mln, Gasoline +0.7mln.

EQUITIES

CLOSES:

SPX +0.91% at 6,766, NDX +0.58% at 25,018, DJI +1.43% at 47,112, RUT +2.14% at 2,466

SECTORS:

Energy -0.68%, Utilities -0.35%, Technology -0.03%, Real Estate +0.74%, Financials +1.19%, Materials +1.22%, Industrials +1.25%, Consumer Staples +1.49%, Communication Services +1.63%, Consumer Discretionary +1.92%, Health +2.16%.

EUROPEAN CLOSES:

Euro Stoxx 50 +1.17% at 5,793, Dax 40 +1.22% at 24,381, FTSE 100 +0.12% at 9,911, CAC 40 +1.04% at 8,241, FTSE MIB +0.80% at 44,793, IBEX 35 +1.39% at 16,616, PSI +1.21% at 8,294, SMI +0.80% at 12,803, AEX -0.21% at 969

STOCK SPECIFICS:

• Agilent (A): Next quarter & FY profit view light
• Alibaba (BABA): Revenue, net income, & cloud revenue topped, driven by China’s AI development boom.
• Analog Devices (ADI): Top & bottom line beats with better-than-expected next quarter guidance.
• Keysight Tech (KEYS): EPS, revenue topped, authorised new USD 1.5bln share repurchase programme with strong next quarter guidance.
• Kohl's (KSS): Revenue beat, surprise profit per share & raised FY profit forecast.
• Meta (META) is considering using Google’s (GOOGL) TPUs in its data centres in 2027, according to reports; of note for NVIDIA (NVDA).
• Nio (NIO): Shallower loss per shr. than expected.
• Sandisk (SNDK) will join S&P 500 on 28th Nov., replacing Interpublic Group (IPG).
• Spotify (SPOT) will raise US prices in early 2026 to support profitability after increases in the UK, Switzerland & Australia.
• Warner Bros (WBD) is said to ask bidders to submit sweetened offers, reports indicate; wants improved bids by 1st December. Also of note for Comcast (CMCSA), Netflix (NFLX), Paramount Skydance (PSKY) .
• Zeta Global Holdings (ZETA): Lifted FY revenue guidance
• Zoom (ZM): Earnings impressed, as did next quarter & FY outlook.

FX

The Dollar was broadly sold against peers due to lower-than-expected Retail Sales growth and Core PPI figures in combination with optimistic headlines on Ukraine-Russia. Geopolitical developments came first, with reports that Ukraine has agreed to the terms of the peace deal, resulting in USD weakness. Later, other news outlets reported that Russia is likely to reject the proposal, which has omitted beneficial prospects for Russia. Thereafter, US data followed, with existing weakness extending after Retail Sales growth eased more than expected, with Core PPI also shy of expectations. Elsewhere, consumer confidence was poor, ADP was negative once again on the new weekly print, and Richmond Fed proved disappointing for November. Also weighing on the Dollar was a report that Hassett, a close ally of Trump, is the frontrunner for the Fed Chair Role. The update saw Treasuries move higher alongside steeper spreads, albeit, sources later rejected the claim.

GBP, JPY, and EUR were the top G10FX performers, benefiting from the USD weakness. For GBP, more budget leaks were announced ahead of Wednesday, including rises to the minimum wage and no cuts on VAT applied to energy bills. Cable rose to ~1.3214 from earlier 1.3096 lows.

Antipodes' typical strength risk-on trade was absent today. Overnight, the RBNZ is expected to cut the OCR by 25bps to 2.25% as job market concerns remain at the forefront of decision-making at the RBNZ. ING believes the terminal rate is 2.25% as disinflation may prove slower than previously expected and growth more resilient. The bank remains bullish on NZD/USD and expects a return above 0.570 by year-end (currently ~0.5620).

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