Morning Macro

Copper rallies another +2.3% to new all-time highs as the markets new favourite trade. Silver and Japanese yields continue trending higher too. Global yields starting to grind higher too with the U.S. 2s/10s curve steepening to 58bp. While the dollar finally has a positive day after its 9-day decline – matching the longest slide in 30 years.
US PLANS MORE STAKES IN MINERALS COMPANIES, TRUMP OFFICIAL SAYS
First Google, now Amazon – *AMAZON SAYS NEW CHIPS ARE MORE COST EFFECTIVE THAN NVIDIA’S
UK NOV. CONSTRUCTION PMI FALLS TO 39.4; FORECAST 44.6
India cuts rates to 5.25% as expected as central bank flags ‘weakness in some key economic indicators.
Mixed signals from secondary U.S. employment data:
U.S. small businesses shed 120,000 jobs in November, the steepest decline since May 2020, per ADP.
US Layoffs are running at crisis pace. U.S. companies announced 153,074 job cuts in October, nearly TRIPLING from 2024. It was the WORST October in 22 years. YTD, layoffs have reached 1,099,500, up +65% YoY, nearing GREAT FINANCIAL CRISIS levels
Jobless claims fall to 191k, estimated 220k, much stronger than expected.
U.S. temporary hiring has re-accelerated, perhaps an early signal we may be coming out of the slowdown. (Chart 1, Steno Research, Macrobond, Bloomberg)
Russell 2000 Index +15% ytd, Profitable Russell: +9.7%, Unprofitable Russell: +45% ….hhmmm!
Pay more, get less: “US sales on Black Friday hit $18 billion, up 3% compared with a year earlier…. But US shoppers purchased 2% fewer items at checkout, and with average prices up 7%, shoppers made 1% fewer online orders.” (Chart 2, Census Bureau, Bianco Research)

ANTHROPIC’S CEO WARNS THAT SOME AI GIANTS ARE TAKING RECKLESS, HUNDREDS-OF-BILLIONS SPENDING RISKS ON DATA CENTERS AND CHIPS, SAYING THE INDUSTRY IS GAMBLING ON UNCERTAIN ECONOMIC PAYOFFS.
Oklo, is now up +24% this week after Jensen Huang said the future of AI will be powered by “small nuclear reactors.”
Data today – US PCE deflator (inflation), UniMich consumer confidence

Copper makes another new all-time high as the dollar trends lower (unable to break the magic 100 level Chart 1, Bloomberg) on news ultra dove, Trump puppet Hassett is the likely new Fed chair and ADP payrolls come in significantly weaker than expected. In Japan 10-year JGB’s rise another 4bp, highest since 2008.
The ADP report for November shows the largest monthly job losses (32,000) since early 2023, undershooting the consensus forecast gain of +10,000 jobs. Notable distribution: Small firms are the ones shedding workers, according to the latest ADP. Over the last three months, small businesses have cut 178,000 off their payroll ranks. By contrast, large firms have added 143,000. (Chart 2, @RenMacLLC)

The ISM Services PMI rose 0.2 points to 52.6, beating expectations by 0.5 points and marking the ninth consecutive month of sector expansion in 2025. The index now sits 0.9 points above its 12-month average of 51.7, indicating steady, modest growth. Business Activity (54.5%) and New Orders (52.9%) remained firmly in expansion territory, while Employment (48.9%) continued to contract for a sixth straight month. The Prices Index eased to 65.4%, down 4.6 points from October, signalling ongoing but moderating inflationary pressure.
TRUMP: “I guess a potential Fed Chair is here too…I don’t know, are we allowed to say that? Thank you, Kevin.” Kevin Hassett has consistently called for lower interest rates to stimulate economic growth and criticized the Federal Reserve for being too slow to ease monetary policy.
The S&P 500’s 5-day historical range is now 1.2%, the lowest level of the year. Markets are quiet after Thanksgiving but plenty of event risk ahead with Fed, BOE and BOJ rate meetings all pricing moves (cut, cut, hike) plus a resumption of key US payroll data, and the expected Santa Claus rally. All in low volume.
$IBM CEO says that at today’s costs it takes about $80B to build & fill a 1 GW AI data centre, so the ~100 GW of announced capacity implies roughly $8T of capex & “no way you’re going to get a return on that,” since you’d need “about $800B of profit just to pay for the interest” (Charles-Henry Monchau)
Gold is a mere 2.8% of investors AUM (Chart 3, The Market Ear, Charles-Henry Manchau)
Commodities are breaking out slowly (Chart 4, Bloomberg)
The Australian OIS is pricing one full HIKE over the next 12 months. AUDUSD up 2.5% over the last 2 weeks.
Here’s the cumulative real GDP growth for Europe’s four biggest economies since Q1 2020: 9%, 7.5%, 6.2%, 2.1%…. trending!
Another shocking stat of the day: Interest costs on US debt are now equal to 24% of every $1 in government tax revenue. The interest expense as % of collected taxes has nearly DOUBLED over the last 4 years.
Data today – EZ retail sales, US weekly jobless claims

Copper & Silver continue their trend higher, making new all-time closing highs, While UK 2-year yields break support and close in on new cycle lows based on concerns around the economy, with the OIS pricing 65bp cuts over the next 12 months.
While silver surged, gold pulled back on news of Russian central bank selling, its reserves falling 57%, a clear sign of financial stress within the economy due to the war. Meanwhile …. PUTIN: IF EUROPE WANTS TO FIGHT WAR, WE ARE READY NOW
The US yield curve is starting to steepen, 2’s/10’s now at 57bp, no doubt being led by the huge move in Japanese long end yields, with the Japanese 30-year grinding up another 3bp today.
Bitcoin fell 4.5% on Monday and has since rallied 7.8%. Anyone who trades this is braver than me, I don’t see any clear fundamentals and price action is clearly manipulated by the whales. Good luck!
Manufacturing PMI’s (Purchasing Managers Index) continue to show contraction, with the U.S. falling the most in 4 months to 48.2 (last 48.7) with employment a woeful 44 and new orders 47.4. (Chart 1, Bloomberg)

U.S. foreclosures have risen 20% as more homeowners fall behind on their mortgage payments, according to ATTOM.
TRUMP: WE ARE GOING TO GIVE REFUNDS OUT OF THE TARIFFS. I BELIEVE IN THE NEAR FUTURE YOU WON’T HAVE INCOME TAX TO PAY. (Chart 2, Eliant Capital)

Germany, what went wrong? The Left and the Green party. Industrial production collapses. (Chart, TheBoomBustReport)
Switzerland November CPI 0.0% vs +0.1% y/y expected
Data today – Global services PMIs, US ADP employment

Post-Thanksgiving trading saw selloff in Treasuries, with long end up most. 10-year yield rose to 4.1% this morning, up from 3.99% at the close before the holiday. Japanese bonds are also continuing to sell off, as 10-year yield hit its highest since 2008.
Today’s JGB 10-year auction brought some relief to the market after jitters regarding Japan mounting debt concerns. The auction saw a bid-to-cover ratio of 3.59, higher than the previous offering in November, as elevated yields lured buyers despite rising expectations for a near-term BOJ rate hike. The yield on the 10-year JGB is now trading to its highest in 17 years! USD/JPY and interest rate differentials remain stubbornly deanchored (Figure 1).

In the UK, OBR chair Richard Hughes quit after the “inadvertent” leak of November 26 Budget forecasts. London struck a deal with Washington to keep US pharma tariffs at 0% for three years, though the UK will pay more for medicines via the NHS. Shop-price inflation cooled to 0.6% YoY in November (from 1%) thanks to early Black Friday discounting. Starmer says the UK will be more pro-business toward China but won’t trade security for market access.
Europe remains Ukraine-focused: the EU says Belgium’s concerns over the €140bn Ukraine loan can be managed, while Zelensky reiterated that sovereignty and security guarantees are non-negotiable and territorial concessions off the table. Macron says a peace deal is still “far off”. The EU may also delay its review of the 2035 combustion-engine ban.
US manufacturing is stuck in contraction, with ISM warning trade uncertainty “kills us”, while Washington approved up to $150mn subsidy for chip start-up xLight. Canada is set to join the EU’s €150bn defence procurement fund.
China’s Vanke rattled markets again with fresh debt-delay details, while the PBOC drained CNY145.8bn net via OMO and fixed the yuan at 7.0794. China’s onshore yuan reaches its strongest close since 11 October.
Precious metals pull back from their highs, with silver down 1.5% this morning, now below $58/oz. Gold down less, trading just above $4.2k/oz. Crypto keeps crashing, as Bitcoin dropped to under $84k yesterday (figure 2) and Ethereum is now below $3k. As a whole, the crypto market saw nearly $1bn in leveraged longs liquidated on Monday, Korea CPI stayed at 2.4% YoY, and Japanese markets priced an 80% chance of a December BoJ hike.
Data today: Euro inflation

Last week saw one of the strongest weekly cross asset rallies of the year, but this week has started more abruptly to the downside. The catalyst is the surge in Japanese yields 2yr up 5.5bp (that’s 5.5%, a huge rates move) and above 1% for the first time since 2008. Also, the 10-yr yield rose +7bp (4% move), Nikkei is off 2%, Nasdaq futures -0.9%, and Bitcoin -4.4%.
The impact of tariffs can be seen in the Black Friday data, according to Salesforce. Average selling prices were up 7% y/y, while order volumes were down 1% y/y.
Japan’s Finance Minister says it is “clear” the yen swings aren’t “moving based on fundamentals” Bloomberg.
Silver breaks to new all-time highs. YTD Silver +97%, Bitcoin -6.5%.
French PPI -0.8% YoY (prior +0.1%)
German unemployment 6.3% (prior 6.3%)
Intel jumps 10% on Friday on NO new news. Rumour has it Google will produce its TPU’s in US in partnership with Intel. (a huge blow to Nvidia).
October 2025: The Cass Freight Shipments Index falls 7.8% year over year. The lowest October reading since the depths of the 2009 financial crisis.
Data this week
Monday – EZ, UK, US mfg PMI,
Tuesday – EZ CPI & unemployment
Wednesday EZ, UK, US services PMI, US ADP, Aussie GDP
Thursday – EZ Retail sales, US jobless claims
Friday
EZ GDP< Canada employment, US PCE deflator and UMich sentiment

Morning Macro 27th November
No key global news sees risk rally on positive flows, S&P500 now just 1.5% below all-time highs, Bitcoin at $91.4 has rallied 13% from the lows, bonds rally both sides of the Atlantic, most shorted stocks rise (Beyond Meat +19% on the day), precious metals rally with silver close to ATH 54.46., and nicely correlated, margin debt makes new record highs!
The market reacts favourably to the UK budget, ‘better than expected’! Bonds and the Pound rallied. A mix of 88 different fiscal policies. GDP growth forecast down, inflation forecast up, tax burden the highest on record, and only a marginal rise in the fiscal buffer. From a macroeconomic standpoint, the government and the Office for Budget Responsibility (OBR) forecast that the new measures — combined with public spending discipline will bring debt down as a share of GDP by 2030–31, aiming to restore long-term fiscal stability. The pound rallied 0.5% against the dollar, with the 10-year bond yield falling 10bp, a big sigh of relief. The market now focuses back on employment with 10 yr yield creeping down towards key 4.38% support (Chart 1, Bloomberg), with a Dec 18th BOE 25bp cut fully priced and 66 bp of cuts priced over the next 12 months.

JP Morgan Chairman & CEO Jamie Dimon backs Rachel Reeves after the budget with an announcement to build a new HQ in London: “The UK government’s priority of economic growth has been a critical factor in helping us make this decision.”
Chicago PMI falls to 36.3 (est. 45.5), deepening what is now a two-year contraction in Midwest business activity. It starkly illustrates the continued dominance of services growth over a struggling manufacturing sector, and it points to the growing importance of AI-related spending in driving economic activity. Positive news was a fall in weekly jobless claims to 216k (est 225k)…… U.S. 10-year falls to below 4.00%.
YoY % Change in Home Prices in U.S. (via Zillow)… Miami: -3.1% Jacksonville: -4.4% Orlando: -4.5% Port Saint Lucie: -4.7% Tampa: -5.1% Fort Lauderdale: -5.3% West Palm Beach: -5.9% Key West: -6.9% Naples: -7.8% Sarasota: -9.7% St Petersburg: -9.9% Cape Coral: -10.4% Fort Myers: -12.1%…… this directly hits consumer confidence and retail spending.
Precious metals continue their rally. Silver targets 54.46 breakout level. (Chart 2, Bloomberg)
The stable coin Tether bought more gold than every central bank last quarter (Chart 3, FT, World Gold Council)
Berkshire Hathaway’s cash position is now almost 30% of their total assets, highest on record.
It’s not an AI scare. It’s an OpenAI scare. (Chart 4, Steno Research, Bloomberg, Macrobond)

The US Treasury posted a $284.4 billion deficit in October, the worst opening month to any fiscal year in history.(Chart 5, ZeroHedge)

US margin debt jumped +$57.2 billion in October, to a record $1.2 trillion. This marks the 6th consecutive monthly increase. Margin debt for trading has risen +$285 billion, or +32%, year-to-date. Over the last 6 months, margin debt has surged +39%, the biggest jump since 2000. This has been an even larger increase than during the 2021 meme stock mania…. What could possibly go wrong? (Chart 6, FINRA)
U.S. Thanksgiving holiday today.

More weak US data was ‘good’ news for equities as the OIS now prices 84% chance the Fed cut rates on Dec 10th. The S&P500 closes just 2.1% of all-time highs, while bonds edge lower to critical support, with the OIS pricing 91bp cuts over the next 12 months.
Retail sales we flat MoM (estimated +0.5%). ADP employment -13.5k (weaker than expected), Core PPI fell from 2.9% YoY to 2.6% (while PPI came in as expected), while Conference Board consumer confidence collapsed. The overall index landed at 88.7, well short of the 93.3 consensus forecast. Current Struggles: The current conditions component sank to its lowest level since 2021.Future Doubts: The forward-looking index slid back to its April 2025 low. The one bright spot, consumers remain EXTREMEELY confident about the stock market (of course!!) ….. The Santa Claus seasonal rally historically starts on 24th December!

The new long/short equity trade is Google/Nvidia. Google’s AI chips (TPUs, tensor processing units) are having a moment. These semiconductors were used to train its latest genAI model, Gemini 3, which has received rave reviews, and are cheaper to use than Nvidia’s offerings. Meta is looking at large scale purchases. Google rallied +1.5% on the day, Nvidia fell -4.7%. (Chart 1, Charles-Henry Monchau)

UK budget day but the economy is already struggling. Retailers were hit by Budget worries in November, with sentiment about the business situation recording its steepest fall in 17 years – according to the CBI’s latest quarterly Distributive Trades Survey.
GDP growth in Germany was confirmed yesterday at 0% in the third quarter, continuing the long stagnation since 2018

More than half of the 1.6% US GDP growth in the first 6 months of this year came from AI-related spending, according to Barclays. (Chart 2, Barclays)

The Oracle concerns grow, now approaching its largest drawdown in a decade, off 39% from the highs.
Bitcoin and credit spreads correlation (Chart 3, Bloomberg) amazing that S&P500 is so strong with the underlying AI sentiment.

China’s property market is bracing for a worsening crisis at state-backed Vanke, as the builder struggles to convince investors it can avoid default in the months ahead without clearer signs of government support. Vanke saw its bonds plunge over 20% on Wednesday, triggering trading suspensions on five exchange-traded bonds.
Tom Lee said live on CNCB that bitcoin is still going to $200,000 in the next 35 days….. I’m amazed he still gets airtime!
Data today – UK Autumn Budget, US jobless claims, Fed Beige book.

As the Thanksgiving holiday approaches, the American Petroleum Institute (API) has reported a notable decrease in U.S. crude oil inventories, with a draw of 1.9 million barrels for the week ending November 21. This decline follows a significant increase of

In a remarkable display of resilience amid a tumultuous geopolitical landscape, Nayara Energy has significantly ramped up its intake of Russian crude oil, defying the pressures of international sanctions. The Rosneft-backed refiner, which operates the 400,000 barrels per day (b/d)

Oil prices experienced a modest rebound in early Asian trading on Wednesday, following a significant decline that saw them reach one-month lows in the previous session. The recent downturn in prices has been attributed to a prevailing bearish sentiment in

Oil prices experienced a notable decline on Tuesday following the announcement that Ukraine has largely reached a peace agreement, with only a few minor details remaining to be finalised. This development has prompted a bearish sentiment in the market, as

Equities continued their bounce (Nasdaq +2.64%, S&P500 +1.5%) as the market now prices 81% chance the Fed cut by 25bp on 10th December. Despite all the volatility the S&P500 sits just 3.4% from its all-time high. But having said that the buying is still retail, professional investors continue dumping U.S. equities, with institutional investors offloading $766 million of stocks last week, (4-week average now at $695 million).
Secondary data remains weak:
1. Dallas Fed mfg. bus. index actual -10.40 (est. -2, last -5.00)
2. U.S. foreclosure rates surge 32% YoY.
3. Apple cuts jobs across its sales organization in rare layoff
Jump Trading just started market making on Kalshi. Prediction markets have something most established venues don’t anymore: structural inefficiency. CME, Nasdaq, and others are building their own products.
Google’s new quantum chip (The Willow Chip) has just cracked a problem scientists have been working on for more than a century, and it did it in two hours. That is around thirteen thousand times faster than one of the most powerful supercomputers on the planet…. Google is now worth more than Amazon & Tesla combined… also news that Meta is now considering Google TPUs for their data centres in a deal worth billions. Google stock jumped 6.3% to new all-time highs while Nvidia sits 14% below its peak.
SoftBank (Japan, one of the most leveraged plays on OpenAI) is down 10.5% today, adding to the -10.9% decline seen on Friday. This takes the drawdown from the October highs to -44%
U.S. Q3 advanced GDP report has been cancelled.
With Oracle and CoreWeave CDS surging, other AI CDS are also nudging higher, nothing concerning for now, especially if the Fed cut 25bp and with seasonal year end buying, but the risks are there, and the market remains (very) concerned about how all this planned AI CAPEX will be funded. (Chart 1, Bloomberg)

There are two types of forecast: bad ones and lucky ones. Anyway, here we go:
DEUTSCHE BANK SETS 2026 S&P 500 TARGET AT 8,000……….
Morgan Stanley is now calling for a +1,000 POINT rally in the S&P 500 over the next 12 months, to 7,800.
Goldman forecast Brent/WTI to $56/$52 averages for 2026, JPMorgan sees $58/$54 but says a global oil surplus COULD push Brent into the $30s by late 2027 if supply isn’t cut.

As Bitcoin falls the whales are buying (Chart 2, Glassnode, Bitwise Europe)

Gold and silver bounce off perfect support line. Silver here targets $54.48 double top breakout level (Chart 3, Bloomberg)
France November consumer confidence 89 vs 90 expected
Data today – U.S. PPI inflation, retail sales, house price index, pending home sales, Richmond Fed manufacturing index

Friday’s markets were driven by the ‘will they – wont they’ focus on the Fed at the 10th Dec meeting. FEDs Williams comment ‘still sees room for a near-term rate cut’ threw the market solidly into a rate cut expectations, with the overnight index swap (OIS) market jumping from 33% to 77% chance they cut. Equities rallied on that news into the weekend and have started this week stronger. Meanwhile US consumer sentiment, has fallen to one of the lowest levels on record. The final November sentiment index dropped to 51 from 53.6 in October, according to the University of Michigan. Views of personal finances were the dimmest since 2009.
Friday’s flash UK PMI for November signalled a renewed acceleration in job losses in the private sector, largely due to rising labour costs and additional pre-Budget uncertainty (Chart 1, S&P global, ONS, HMRC)

Is Oracle the outlier or the canary in the coalmine? Here is Oracle CDS versus IG spreads (Chart 2, @MichaelMOTTCM)
Investors are DUMPING Bitcoin funds at a RECORD pace. Bitcoin ETF $IBIT saw -$523 MILLION in net outflows on Tuesday, the highest EVER. In 5 days, investors withdrew over $1 BILLION from $IBIT. Over the last 3 weeks, crypto funds have seen $3.2 BILLION in net outflows.
Chart 3, Global Markets Investor, Bloomberg, Charles Henry Monchau)

Key data this week
Monday – German IFO business confidence
Tuesday – US PPI, retail sales, ADP employment
Wednesday – UK budget, US jobless claims, PCE inflation, jobless claims, new home sales, Aussies inflation
Thursday – US holiday, UK budget
Friday – Japan CPI, unemployment & retail sales

A crushing day for equities which collapsed after the huge Nvidia earning report. The S&P500 lost $2 trillion in 5 hours while Nvidia opened +6% and closed -3.15% on the day. In fact, S&P500 gapping up over 1.4% and closing lower down more than -1.5% has only happened twice in history (April 2020, and April 2025). Note also liquidity has collapsed, top-of-book S&P liquidity yesterday was $5mm vs $11mm YTD average. Bitcoin falls again, down -8.9% in 2 days and even gold sells off, unable to rally in ‘risk-off’ environment implies hedge funds are liquidating ALL position across asset markets. And of course, the UK doesn’t want to miss out on the bad news. Softening retail sales and higher-than-expected public borrowing data this morning.
Both S&P 500 and the Nasdaq close below key support, S&P 6,552. (Chart 1, Bloomberg) Let’s, see how today plays out, but remember retail traders have record long positions while hedge funds have been short and will add to shorts here. If equities can’t rally on good news ……..
Also note the next key US data, November payrolls, come out on 16th Dec, AFTER the Fed meeting. With the OIS pricing just 33% chance of a Fed cut on 10th, equites will likely direct the OIS market in the short term.
September jobs report beat on the headline +119k jobs created (+51k expected) but it’s old news and usually revised. Jobless claims also rose to 232,000, above estimated number of 223,000. The key for the Fed is the unemployment rate which rose to 4.4% from 4.3%. Even Powell has said the unemployment rate is now more important than payroll numbers. From a trading perspective the U.S. unemployment rate trends very well! (Chart 2, MacroEdge Research)
Private Equity stocks are imploding. (Chart 3, Topdown Charts, LSEG)

UK retail sales fall -1.1% MoM (est 0%), +0.2% YoY (est +1.5%). UK government current budget deficit tracking £15bn more than projected in March at £84bn ytd.
Bitcoin -23.8% so far in November, worst month since June 2022. Third-worst month this decade. As a “Store of Value” lets look at drawdowns from their recent peak, Gold -7.8%, Bitcoin -34% MicroStrategy -68%. Bitcoin has 0.0% return since March 2024 with the gold +96%. And it’s supposed to be defending investors from fiat currency debasement. Despite regular 70% drawdowns!
SoftBank stock falls over -10% as Asian markets open.
Why are stocks falling? Because if you take the numbers in this chart seriously, the hyperscalers will hold at least $2.5 trillion in AI assets by the end of this decade. Assuming a depreciation rate of 20%, that would generate $500 billion in annual depreciation expense. This is more than their combined profits for 2025. (Chart 4, @PeterBerezinBCA)
Trump talking to Try Sec Bessent about Fed Chair Powell (this rhetoric will only increase as equities fall). “I mean, Scott, you got to work on this guy. He’s got some real mental problems. No, there’s something wrong with him. It’s just, sweetheart. I’ll be honest, I’d love to fire his ass. He should be fine. Guy’s grossly incompetent. And he should be sued for spending $4 billion to build a little building…” “..the rates are too high, Scott. And if you don’t get it fixed fast, I’m going to fire your ass, okay?”……. words from a ‘respectable’ President!
This is where the “debasement trade” comes from. Japan’s debt at 240% of GDP leaves no good options. If Japan stabilizes the Yen by allowing yields to rise, there’s a fiscal crisis. If it keeps rates low, the Yen goes back into a devaluation spiral. Too much debt is a killer. (@robin_j_brooks)
Fearing renewed Israeli strikes, Iran asks Saudi Arabia to mediate US nuclear talks revival. Pezeshkian wrote letter to Crown Prince bin Salman before his White House visit, seeking ‘diplomatic solution’
France November business confidence 98 vs 100 expected
Scary chart of the day, which will presumably get worse as AI replaces low-income jobs. (Chart 5, YouGov Poll)

Data today – Global flash PMIs, UniMich consumer & inflation expectations.

U.S. equities jump overnight (Nasdaq futures +1.9&) as Nvidia Q3 earnings destroy expectations, revenue +22% QoQ, sells out of cloud GPUs, will exceed USD200bn in full year earnings (and not a dime earned from China), while The Federal Reserve minutes moved down the markets’ expectations of a December rate cut to just 30%, driven largely by multiple references to inflation by a deeply divided FOMC. Meanwhile another day of Japanese debt fears, yields continue going vertical with 20Y & 40Y JGB yields both just printing record highs, and yet the currency falls another 1.1%.
Nvidia reports record Q3 FY26 results with $57B revenue (+22% QoQ, +62% YoY).
[RTRS] – WHITE HOUSE ASKS CONGRESS TO REJECT BILL CURBING NVIDIA EXPORTS-BLOOMBERG NEWS…… Huge!!!
If there’s any reason to stay bullish on the AI infrastructure buildout, it’s this chart of planned capacity that still needs to be built. An ‘AI Winter’ will be because of power constraints limit the volume of GPUs purchased as future generations require 2-3x the KW per rack. (Chart 1, Aterio, Goldman Sachs Global Investment Research)
BofA says a small percentage of data centres are AI ready. Power needs will only grow as future generations of GPUs are released. (Chart 2, BofA Global Research)

Data today – U.S. September jobs report, Philly Fed manufacturing data, Japan inflation

U.S. equities wobbled again yesterday but both S&P500 & Nasdaq bounced from the 10th October closing lows. We’ll see how the market reacts to Nvidia earning tonight with the options market pricing a 7.5% share price move. Note the employment data yesterday also came out weaker than expected, and crypto assets continue their downtrend (don’t HODL with laser eyes and diamond hands, instead manage risk!).
Also note the Fear and Greed index is pointing to extreme fear, with the S&P500 off just 4.6% from its peak! 😊 (Chart 1, CNN Business) Note we typically see year end buying of equities particularly the last 2 weeks of December.

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U.S. jobless claims rise 232,000; est. 223,000; prev. 219,000
Japan’s 40Y Government Bond Yield surges to 3.697%, its highest level in history, as markets prepare for more stimulus. This will awaken growing debt fears but also start to attract Japanese investment in US back to the mainland.
FED’S WALLER JUST SAID: – DECEMBER RATE CUT WOULD PROVIDE EXTRA LABOR-MARKET INSURANCE….. OIS pricing for December 10th meeting is back at 50% chance of a 25bp cut.
Bank of America fund manager survey perfectly captures the mood. Net 20% of respondents think companies are spending too much money on investment. Not just highest ever, but also the first time this number has ever been positive in the history of the survey. (Chart 2, BofA Global Fund Manager Survey)

Billionaire investor Peter Thiel fully exited Nvidia $NVD in Q3, selling all ~537k shares that were nearly 40% of his fund, per his latest 13F. Thiel Macro has cut US equity holdings from about $212m to $74m and is now basically parked in Tesla, Microsoft and Apple. Source: Wall Street Engine

This is quite the statement from a FTSE 250 CEO at Sirius… “We will not invest a penny in the UK in any meaningful form until June after the May elections.” Political doubts make UK property uninvestible,
The Financial Times has reported that Oracle’s $300 billion OpenAI deal is already underwater, now worth MINUS 74 billion, and stock down 36% from the highs. (Chart , @_investinq)

14 days since Burry publicly went bearish on AI… PLTR: -17.4% NVDA: -9.8%
FWIW (Chart 4, @_Investinq)
Data today – UK & EZ inflation, Fed minutes, Nvidia earnings

Risk assets are getting a hammering across the board: Bitcoin dropped below $90k for the first time since April, S&P 500 dropped 0.9% yesterday and futures down another 0.2% this morning, Nikkei down almost 2% today. MicroStrategy market cap is now lower than the sum of its Bitcoin holdings!
Kalshi pricing a 54% chance of December FOMC maintaining rates and 44% chance of a 25 bp cut. Contrast with OIS pricing a 49.6% chance of a 25 bp cut. Committee rhetoric is split, with Waller one concerned over weak job data opening door to another cut. Delayed September NFPs due for release Thursday will be key
Dollar/yen continues uptrend since April; has risen from low of under 140 to 155.15 this morning. Concerns over Japan-China relations and Japanese inflation weakening yen. Japan PM Takaichi meets BoJ Governor Ueda today.
Bigger picture, dollar showing mixed signals: DXY continues rangebound since April, trading just below 100 points. GBP/USD has found some support above 1.31.
Data today: ADP employment change, Japan trade data

The OIS continues to reduce the chance of a FED rate cut on Dec 10th, now just 43% (with 14 Fed speakers this week). After opening weakly equities rallied into the close and open the week higher but crypto continues to struggle. Bitcoin down -24.6% from October highs and Ethereum -35.4%.
Data continues to show middle- and lower-income Americans are struggling:
1. U.S. foreclosures are up 20% from last year as Americans’ struggle with mortgage payments and rising costs
2. U.S. subprime auto loan delinquencies are at their worst level in more than 30 years
3. 875,000 U.S. homeowners are now underwater on their mortgages — the most in 3 years, per intercontinental exchange
4. 401k hardship withdrawals hit highest ever great leading indicator heading into 2026
5. Most Americans now live in areas already in recession: 88% of the U.S. population is in states facing economic downturn, per fed beige book analysis
Japan’s 10Y Government Bond yield surges to its highest level since June 2008, and 20-year bond rises to the highest yield since 1999 on talks of a $110 billion stimulus package (while the central bank is about to hike rates). Behind door A you have a bond market crisis, behind door B you have a currency crisis!
*JAPAN 3Q GDP -1.8% ON ANNUALIZED BASIS; EST. -2.4% (Chart 1, Bloomberg)
On Wednesday, Nvidia will report earnings with an implied move of +/- 7.5% in the stock. With a $4.6 trillion market cap, this implies a $345 BILLION swing in market cap. That’s more than the entire market cap of all but 33 public companies in the world.

A new rare earth crisis is brewing as yttrium shortages spread, and China hasn’t shipped yttrium to U.S. since April. (Chart 2, Argus)

The week ahead:
Monday → U.S. government reopening
Tuesday → Fed liquidity injection ($10–20b), ADP employment
Wednesday →Nvidia earnings, FED minutes, UK & EZ inflation,
Thursday → September jobs report, Philly Fed manufacturing data, Japan inflation
Friday → UK retail sales, Global flash PMIs, UniMich consumer & inflation expectations
Total of 14 Fed Speaker Events This Week

Weaker Chinese economic data overnight after U.S. equities fall (Nasdaq -2%, S&P500 -1.7%) as chances of Fed rate cuts recede. Dec 10th meeting now prices exactly 50:50 after 3 Fed Presidents say they are more concerned about inflation. With equities falling Japan’s 10-year government bond yield rises to highest since 2008. This is NOT a good sign.
However, U.S. equity earnings are still strong, margins continue to increase, and the data centre build out continues. But the market is clearly getting nervous the AI trade and rotating out. Percentage below 52-week high – Google: -5% Amazon: -8% Microsoft: -9% Nvidia: -12% Tesla: -16% Palantir: -17% Bitcoin: -22% Ethereum: -35% Coinbase: -36% MicroStrategy: -62%
Chinese Oct industrial growth 4.9% y/y [Est.5.5%] (Chart 1, @C_Barraud, National Bureau of Statistics)
Chinese Jan-Oct fixed asset investment -1.7% y/y [Est.-0.8%] largest y/y drop since June 2020. (Chart 2, @C_Barraud, National Bureau of Statistics)

Chinese Oct retail sales 2.9% y/y [Est.2.7%]
Chinese Oct Unemployment 5.1% [Prev. 5.2%]

Kevin Hassett, National Economic Council Director, says the shutdown caused about 60,000 non-federal job losses, cost the economy $15 billion per week (around $92 billion total), and may cut Q4 GDP by 1.5 points.
CDS MARKET FLASHING WARNING SIGNS: CDS spreads continue to surge for AI companies. Oracle, CoreWeave 10Y CDS spreads are up over 30% in the past month alone, with other major players also up double digits. We are seeing a ton of heavy, upfront “capex” spending by these companies. Not only that, but these hyperscalers are tapping the credit market for this capital at a scale we haven’t truly seen before. The ultimate return on these investments is becoming more uncertain; hence investors are bidding up protection against the credit. (Chart 3, Bloomberg, @Coffee__Capital)
And with that their bonds are obviously falling too; Oracle’s $3.5 billion of 30-year debt issued in September has cratered by 8% from the October peak. (Chart 4, Bloomberg)
The unemployment rate for US college graduates is now 9.3%, higher than a peak of 8.7% during the 2008 Great Financial Crisis.
401(K) hardship withdrawals hit the highest level since record keeping began
The Cass Freight Shipments index has hit yet another new low for the current cycle. (Chart 5, @AvidCommentator, Cass Freight Index)

The Cass Freight Shipments index has hit yet another new low for the current cycle. Excluding a few brief months at the start of the pandemic, it is at its lowest level since the GFC era. CHINA FOREIGN MINISTRY, ON US APPROVED ARMS SALES TO TAIWAN: US ARMS SALES TO TAIWAN GROSSLY VIOLATE ONE CHINA PRINCIPLE……Never a dull day in geopolitics.!
Legendary investor Howard Marks puts it bluntly: “When you buy the S&P 500 at a 23x P/E, your 10-yr annualized return has always fallen between +2% and –2%, in every case, every case.” Today the market sits at a 25x P/E. Add inflation… and your “returns” are negative.
The White House announces that the October jobs report will be released WITHOUT an unemployment rate.

Silver hits a new all-time high, gold and equities rally with S&P500 now within 1% of an all-time high as Trump signs legislation to end the longest government shutdown in US history. Brent falls 3.7% while UK bond yields remain on the cycle lows on more weaker than expected data, GDP this time. And some relief in Australia with stronger employment data, with the unemployment rate falling to 4.3%.
Slowing trend in UK GDP growth since H1 2024. Just +0.1% QoQ in Q3, and flat on a per capita basis. GDP deflator at +3.8% YoY undermining relatively strong nominal GDP growth. The UK is in a private sector recession due to disastrous interventionist policies. (Chart 1, @Frencheconomics)

US Card Spending Rises Most Since Early 2024, BofA Data Show – Bloomberg ….. meanwhile regarding credit card debt, over 12% of balances are now 90+ days delinquent — the highest in 14 years. with interest rates above 21%
U.S. 71% believe that unemployment will go higher over the next 12 months, the highest level in 45 years

FED ’s Perli Says Won’t Be Long Before Fed Starts Buying Assets – Bloomberg …..
*FED’S COLLINS FAVORS HOLDING RATES STEADY ‘FOR SOME TIME’
*COLLINS: SEE RELATIVELY HIGH BAR FOR FURTHER EASING NEAR TERM

GOLDMAN SACHS: GLOBAL STOCKS TO RETURN 7.7% ANNUALLY OVER THE NEXT DECADE
GOLDMAN: U.S. STOCKS TO TRAIL GLOBAL PEERS OVER NEXT DECADE: Goldman Sachs strategist Peter Oppenheimer expects U.S. equities to post the weakest returns among major regions over the next 10 years, projecting 6.5% annual gains for the S&P 500.

*DEPT OF ENERGY: BUYING ROUGHLY 1 MILLION BARRELS OF CRUDE OIL

While S+P500 sits just 1% below all-time high we continue to see a wobble in the AI power generation theme. Uranium sits 15.7% from it’s high (having rallied 279% since April) and CoreWeave falls again (cloud computing company purpose-built for artificial intelligence workloads) now down 53.3% from its June high……
Meanwhile MORGAN STANLEY WARNS OF U.S. POWER SHORTAGE FOR DATA CENTERS BY 2028 Morgan Stanley says surging AI demand could create a power shortfall of up to 20% — about 13–44 GW — for U.S. data centres through 2028.

A staggering statistic. Americans aged 70 and above now own 39% of all stocks and mutual funds (which mostly invest in equities), almost twice as much as was common from 1989 to 2009.(Chart 2, Federal Reserve)
White House: There will be NO U.S. CPI and Payrolls data for October.

US Equities continue their rally back towards all-time highs but under the hood AI stocks are seeing increased volatility (Oracle -25.6% in the last month, and CoreWeave -36.8% in the ten days). Meanwhile secondary employment data continues to deteriorate but the OIS only prices 64% chance of a 25bp cut at the next FOMC meeting on 10th December.

ADP data indicates jobs declined by an average of 11,250/week over the four weeks through Oct 25.
“Official Nonfarm Payrolls Will Show a Decline of 50k in October Due to a Large Hit from the Government Deferred Resignation Program” – Goldman
Young adult unemployment at an all-time high going back to 1947. (Chart 1, Bloomberg)

CONTAINER SHIPPING VOLUMES FROM ASIA TO THE US ARE COLLAPSING CARGO SHIPMENTS FROM CHINA TO THE UNITED STATES HAVE DROPPED TO THEIR LOWEST LEVEL IN AT LEAST TWO YEARS
Lumber futures fall to lowest level in over a year. Obviously correlated with home building.
Q3 Revenue Growth, YoY % Change… Palantir +63%, AMD +36%, Meta +26%, Microsoft +18%, Netflix +17%, Google +16%, Amazon +13%, Tesla +12%, Apple +8%, S&P 500 +6%………..
Meanwhile Oracle falls 25.6% in the last month, and CoreWeave (cloud computing company purpose-built for artificial intelligence workloads) falls -36.8% in the last ten days.
Corporate CDS market is saying AI ‘bubble’ watch out. (Chart 2, @gherkinit)

JPMorgan says the next five years could require $5T to $7T in total investment. About $1.5T may come from investment-grade bonds, plus $150B from leveraged finance and up to $40B a year in data-centre securitizations. Even then, there’s still roughly a $1.4T funding gap likely filled by private credit and governments. (Chart 2, Bloomberg)

BESSENT: DON’T BELIEVE TARIFFS ARE A TAX ON CONSUMERS
BESSENT: ‘WE ALREADY HAVE A PROFIT’ ON ARGENTINA SWAP LINE
Data today – German inflation, OPEC monthly report.

Nasdaq closes +2.2% higher, S&P500 +1.5% higher, gold +2.9% higher, but UK bond yields open the day 5bp lower on another set of weak employment data. The headline UK unemployment rate has continued to increase steadily since Labour took power, from 4.2% in the three months to June 2024 to 5.0% in the 3m to September 2025 (highest since 2021), and since July 2024, the number of payroll jobs has fallen by 178,000. This is what happens to unemployment if you pay people more not to work, pay people less to work and tax people more for employing other people to work? (Chart 1, @julianHjessop)
FED’S MIRAN said: – 0.50% cut appropriate for December, 0.25% at a minimum….. Meanwhile the OIS prices 16bp cuts for December. More credit market losses slowly emerging (Chart 2, Bloomberg)
The critical issue of power is gaining traction in the US. Microsoft CEO admitted in an interview on Monday that thousands of GPUs were sitting idle in data centres because there isn’t enough energy to run them. The real constraint isn’t computer capacity, but electricity and space…… Now two state of the art Nvidia data centres stand empty and idle, awaiting electricity availability. (Chart 3, Bloomberg). 10 yr JGB yield closed at highest since June 2008. This is a concern for global bond yields as the debt sustainability story comes back to the forefront (Chart 4, Bloomberg). The US freight recession is deepening: the US truckloads index has fallen to its lowest level since 2014, as fewer goods are being moved across the country.
Data today – German ZEW, US ADP & NFIB Small Business Index data

A breakthrough as progress is made towards ending the government shutdown, while Trump proposes US $2,000 ‘tariff dividend’ for up to 85% of the population. A reopening would resume key data releases and return focus to the deteriorating US fiscal outlook, with rising spending increasingly funded by additional borrowing. With last week’s dismal election performance and his disastrous ratings the $2,000 dividend would clearly help Trump’s ratings temporarily and the weakening economy but $400 billion in stimulus payments will also support inflation, support equities, support gold, weaken long end bonds on debt concerns and reduce expected Fed cuts.
Unsurprisingly gold is up 2% today, Nasdaq +1.2%, US 30-year yields up 5basis points and the dollar lower. Chart 1, Gold resumes its uptrend, Bloomberg). Paul Tudor Jones “all roads lead to inflation”.
Chart 2, US National debt, US Tsy Dept, @Kobeissi Letter, WolfStreet.com))

Borrowing for AI data centre building (Chart 3, BofAGlobal research) and we wonder how OpenAI will fund its $1.4 trillion spending commitments. Hartnett: The AI Bubble “Watch Out” Metric Just Snapped
Financial Times “US companies’ earnings are growing at the fastest pace in four years…
Median earnings growth year-on-year across the Russell 3000 index — a benchmark for the entire US stock market — hit 11 per cent in the third quarter, up from 6 per cent in the previous three months, according to Morgan Stanley. That is the fastest growth rate since the third quarter of 2021.”

US layoffs are spiking. US-based employers announced 153,074 job cuts in October, the highest for any October since 2003. This even exceeds the pace seen during the Financial Crisis. Year to date, over 1 MILLION layoffs have been announced. (Chart 4, Challenger, Gray & Christmas)
US consumer sentiment fell to 50.3 points in October, the 2nd-lowest EVER. It’s now ~10 points BELOW the Great Financial Crisis low and below all recessions. (Chart 5, Uni of Michigan Consumer Sentiment, @GlobalMktObserv)
COMMERCIAL MORTGAGE-BACKED SECURITIES JUST HIT THE HIGHEST DELINQUENCY RATE IN HISTORY.
Data this week
Tuesday – UK BRC retail sales and employment data, German ZEW, US ADP & NFIB Small Business Index data
Wednesday – German inflation, OPEC Monthly Report
Thursday – UK GDP & IP, Aussie employment, Federal Budget Balance data
Friday – French inflation, US PPI
9 Fed Speaker Events This Week

Breaking: The US is set to ban Nvidia’s scaled-down AI chips from being sold to China! Washington’s move targets B30A chips – used to train large language models when efficiently arranged in large clusters – designed to bypass earlier sanctions. But this would create a big opportunity for China to build its own chips domestically, as Nvidia CEO Jensen Huang warned: “China is going to win the AI race.”

Equities are having a rough time. The S&P 500 dropped more than 1.1% and Nasdaq 1.7% yesterday, with futures consolidating this morning. Big tech stocks suffered with Amazon down 2.8%, Nvidia down 3.6% , Microsoft down 2%, Palantir tumbled 6.8%! Meta is now down over 22% from its August high!
China’s exports unexpectedly fell 1.1% y/y in October, the first drop in eight months, as a sharp 25% slump in shipments to the US outweighed gains elsewhere. The decline, driven by weakening global demand and fading export resilience, signals mounting pressure on China’s slowing economy amid weak consumption and a prolonged property slump – a triple whammy to growth. Meanwhile, modest tariff relief from the US may offer only limited support. Exports still exceeded $3 trillion year-to-date, though momentum is fading.
The Bank of England held rates stable at 4% – as expected – before the Nov 26 budget announcement; however the committee was split 5-4. The OIS market is now pricing over 70% chance for a cut in the December meeting, while its fully expecting a cut in the Early February meeting.

US travel stocks are in focus after upbeat updates from Expedia and Airbnb. Expedia lifted its full-year outlook on resilient holiday demand, with shares up 18%, while Airbnb forecast strong Q4 bookings, rising 5.5%. UK-listed IAG reported Q3 revenue and profit slightly below estimates but noted solid travel demand and strong Q4 bookings despite some North American softness.

European peers didn’t face the same fate with Air France down almost 15% on the day, even despite good earnings!
Japanese household spending rose 1.8% y/y in September, missing expectations of 2.5% and slowing from August’s 2.3%. The data point to a steady yet fragile recovery in consumer demand, with weaker spending on essentials like food, housing, and utilities offset by gains in medical care and household items. On a monthly basis, personal spending fell by 0.7% – marking the first fall since June.

Data today – US Michigan Consumer Expectations, Canada Employment

Morning Macro 6th November:
We are officially in the longest US shutdown in history – consensus estimates are that shutdown would cost the economy around $15 billion each week; we have now entered the 6th week of the shutdown! Meanwhile, the US Department of Transportation announces mandatory flight cuts at major airports from Friday. The US may cut air traffic by 10% if no deal is reached to end the shutdown.
The US Supreme Court heard arguments this week on the legality of Trump’s sweeping tariffs, and many justices looked sceptical. Polymarket is now pricing only a 30% chance of the Court ruling in favour of Trump! If the tariffs are ruled out, this would cost the US around $30 billion per month in lost revenue!
But elsewhere the party is still going – the question is how long until the music stops? Globally the proportion of stock indexes at an all-time high is the highest since 1999! (Graph 1, Macrobond)
Now with lacking data in the US, everyone’s attention was on the ADP employment data, which showed that in October, private sector employment rose by 42k, marking the first monthly gain since July and surpassing expectations of 25k. Despite the positive data, US treasury yields didn’t even flinch, showing the little importance ADP data have in the market.
In the Eurozone, PMI data were positive for Spain (56) and Italy (53.1), recording their strongest expansions in over a year, driven by resilient services, new orders, and easing cost pressures. Germany (53.9) showed its fastest growth since mid-2023, supported by a rebound in services despite softer sentiment. Meanwhile France (47.7) remained mired in contraction, reflecting weak domestic demand. Overall, Europe’s private sector recovery is being powered by services strength amid lingering manufacturing weakness. Outside continental Europe, the UK (52.2) also regained momentum, but the expansion was driven by the services sector as the manufacturing side remains in contraction!
And the US showed steady growth on the PMI front too; the S&P Composite PMI rose to 54.6, driven by solid gains in both manufacturing and services activity. New business strengthened and employment edged higher, though confidence slipped to a six-month low. Inflation pressures continued to ease, with costs and prices rising at their slowest pace since April. Meanwhile, the ISM Services PMI climbed to 52.4, signalling the strongest expansion since February. Business activity and new orders rebounded sharply, though employment remained weak amid uncertainty linked to the shutdown.

Data today – Bank of England interest rate decision

Bitcoin is now down 20% since October 6th (Chart 1, TradingView) – yesterday’s selloff, saw it reaching the lowest point since June! The move was driven by an almost $1.3 billion liquidation in leveraged crypto positions.

In the stock market, global equities slumped yesterday and have continued this morning in Asia, as investors are unwinding positions in overheated AI and tech stocks. The Nasdaq fell sharply, with Nvidia, Palantir, and other chipmakers leading declines amid fears that valuations had run far ahead of earnings and both S&P and Nasdaq e-mine futures even traded lower post New York’s close (Chart 2, Bloomberg). Meanwhile, the Nikkei closed 2.5% lower on the day.
China’s private RatingDog General Services PMI declined to 52.6 in Oct 2025 though still above expectations. This is the softest reading in the services PMI since July, pressured by a slight decline in foreign sales and a decline in employment. Input cost inflation rose to a year high due to higher wages and increasing prices of raw materials, while selling prices fell slightly amid higher competition. Taking this with the reported decline in manufacturing PMI earlier this week, the RatingDog Composite PMI stood at 51.8.

But China’s 10-year yields dropped near its lowest level in three months at 1.73%. The PBoC announced it will resume its government bond purchases after a 9-month hiatus, net injecting 20 billion yuan ($2.8 billion) of liquidity via buying government bonds.

What Fed rate cut? When a central bank cuts short-term borrowing rates but interbank lending remains at the same levels, something already screams in the money markets. SOFR was seen yesterday trading at a 32bps above the IOER set by the Fed (Chart 3, Bloomberg) – banks are screaming for cash, hence no surprise the Fed is restarting the printers at a current balance sheet of $6.6 trillion! Last week, the spike was attributed to fiscal year ends etc, but when a $4-5 trillion market in daily flow experiences these widening rates, something is about to crack.
Gold prices remain pressured around the $4,000/oz marker, with the 10-day MA now presenting near-term resistance (Chart 5, TradingView). A wave of persistent ETF withdrawals has driven gold’s pullback. Short-term support now sits around $3,940/oz, with more significant support at the $3,900/oz handle.

2025 has now been the year with the most job cuts since COVID! YTD approximately 950k jobs have been cut (Chart 4, Challenger, Gray & Christmas) – although the US government has contributed to nearly a third of those cuts. “We’re not just in a low hire, low fire environment anymore. We’re firing.” – Dan North, Allianz Trade. Amazon, Target, Starbucks and Paramount have all announced recently that they are cutting jobs!
Meanwhile, German factory orders rose 1.1% m/m in September, marking the first increase in orders since April. This rise was driven by increases in the manufacture of electrical equipment (9.5%), aircraft, ships, trains, military vehicles (7.5%), and the automotive sector (3.2%). Orders for metal products fell 19% following large orders in August. Still, on a Q/Q basis, factory orders declined 3.3% in Q3 2025.

And French industrial production surprised to the upside, as it came at 0.8% higher m/m in September, driven by strong recoveries in transport equipment and electronics manufacturing.

Data releases today – Euro Area PMI, GB Services PMI, ADP Employment, US ISM PMI

Morning Macro 4th November
UK long-end yields extended their rally, with the 30-year gilt dropping 6bps to 5.144% – the lowest since April – as Chancellor Rachel Reeves reaffirmed her “iron-clad” commitment to fiscal discipline ahead of what’s expected to be a tough, tax-heavy budget later this month. Her three priorities are lofty – cutting NHS waiting lists, reducing the national debt and improving the cost of living.
It’s not going to be cheap – UK Chancellor Rachel Reeves should boost her fiscal buffer to £20 billion by implementing around £26 billion in tax increases in the November 26 budget, the Resolution Foundation said Tuesday. (Figure 1)
The pound weakened further, down 0.3% to hover near $1.31. Meanwhile, the FTSE 100 slipped 0.7%, though its heavy weighting of global exporters provided some cushion, leaving it faring better than most European peers as sterling’s slide helped offset domestic market weakness.

Amazon continues its surge, up another 4% (Figure 2) yesterday on $38 billion deal with OpenAI for access to AWS cloud infrastructure and Nvidia graphics processors (Nvidia climbed 3%), as the circle of AI investment continues. S&P 500 is beginning to move sideways, just below 6,900 points and its all-time high of last week and Emini futures are down 1% this morning.

Palantir earnings saw it gain 7% beating expectations, but profit taking immediately meant it dropped and is now 5% lower than before the report. (Figure 3)
Bitcoin has fallen to $104,430, its lowest since 17 October – if it falls another $1k it will be at a new low since 23 June!
RBA kept rates in line at 3.6%. The board anticipates one additional rate cut in 2026, projecting underlying inflation to climb above 3% in the near term before easing back to around 2.6% by 2027.
Data today: France budget balance, Lagarde speech, Bowman speech, Redbook.

In central banking, following the Fed, the BoJ and the ECB held their policy rates steady at 0.5% and 2%, respectively.
The Euro Area expanded just 0.2% q/q. The third largest economic area is struggling to make meaningful progress! Germany and Italy stagnated, Ireland, Finland and Lithuania contracted, while the growth was led by Spain (0.6%) and, surprisingly France (0.5%) due to a sharp rise in exports. Unemployment held steady at 6.3%, consumer confidence and services sentiment were up, while inflation expectations edged down. Inflation is due to be out today and if the deflation worries continue the ECB will have to cut sooner than expected. The OIS over the next year is pricing below 12 bps – so it shouldn’t come as a surprise if the euro weakens form its current levels (Chart 1, Bloomberg).
The 31st day of the US government shutdown! Earlier estimates had shown that every week could shave off 0.1% from the GDP, so now we are talking about at least 0.4% less for Q4 2025. Speaking of GDP, yesterday’s Q3 GDP wasn’t released, something that makes the job for the Fed even harder.
In Japan unemployment rate picked up to 2.6% and the labour force participation continued declining! Inflation came really hot at 2.8% – above expectations – the markets are slowly ramping up their bets for another hike by the BoJ. Expect the gap on Chart 2, Bloomberg to tighten as the interest rate differential (white line) remains well below historical levels, while the USD/JPY should weaken with monetary tightening. But housing starts and construction orders in Japan remain an issue!
Meanwhile, Chinese PMIs surprised to the downside – with the manufacturing sector contracting (49), while non-manufacturing edged up to 50.1.
Gold demand hit a record 1,313 t in Q3 (+3% y/y), worth $146 bn (+44%), as investors added 222t and central banks holdings were up 28% q/q, while jewellery slumped. Supply also hit records, with mine output up 2%, as gold averaged $3,456/oz (Chart 3, World Gold Council).
The Fed cut rates by 25 bps, but the front end didn’t get the memo – the SOFR rate fixed at 4.27%. Heavy T-bill settlements ($83B this week), month-end balance sheet constraints, and Canada’s fiscal year-end squeezed liquidity. Interest on Reserve Balances – the rate at which banks deposit at the Fed – was at 3.9%, when the spread between the IORB and SOFR is that wide, it screams cash demand is high!
France’s CAC 40 fell 1% as markets soured over a provisional 33% tax on share buybacks passed in a parliamentary vote – a move investors fear will hammer large French firms. SocGen dropped over 5% as traders cut buyback expectations. If the tax is upheld in the final budget, it could undermine Paris as a financial hub and push companies to list abroad. The proposal effectively kills the appeal of buybacks, wiping out a key shareholder-return tool.
Data today – Euro Area inflation, Canada GDP, Fed Governors speeches

US Treasury yields still grinding higher this morning while Asian equities extended gains on a burst of trade optimism. The 10-year Treasury yield ticked up to 4.08% (Figure 1, Bloomberg) and the 30-year to 4.63%, as investors digested the Federal Reserve’s muddled message – a 25-basis-point rate cut paired with a hawkish tone that muddied the outlook for December.
Risk appetite faded as Powell’s “no preset path” comment unnerved traders. Stocks erased early gains despite Nvidia’s historic $5 trillion valuation, while the dollar strengthened. The Fed’s divided stance (with Miran calling for 50 bps and Schmid calling for no cut) has added another layer of uncertainty for investors already juggling diverging central bank paths. OIS pricing implies the lower bound of the fed funds rate at 3.706% after the December meeting up from 3.64% pre FOMC, with only 17.5 bps of cuts priced for December.
The Fed’s quarter point cut comes at a time when the SP500 is at all-time highs, the 5th time this has happened (figure 2, JP Morgan). In all prior instances the index was up a year on, with the worst one year return 15% and the average return 20%. To add fuel to the fire, the Fed will also be halting QT in December. In fact, they will reinvest all mortgage backed securities principals into treasury bills. If in doubt, print your way out.
Over in Asia, Beijing will pause countermeasures and export controls for one year, while Washington removes the 10% “fentanyl tariff.” Both sides pledged cooperation on fentanyl and agriculture, extended tariff exemptions, and committed to properly address TikTok-related issues.
Also the KOSPI rose another 0.23%, setting a new all-time high and extending a 19% rally this month, as South Korea announced a blockbuster $350 billion trade package with the US (Figure 3, Bloomberg). The deal includes major Korean investment in U.S. shipbuilding and energy purchases, aimed at deepening industrial ties and securing long-term supply chains. The agreement follows an upbeat meeting between Presidents Trump and Xi in Korea, where the two leaders pledged to ease trade tensions and halve certain tariffs on Chinese goods – a move investors saw as supportive for global growth.

The renewed optimism across Asia came as Japan’s bond markets stayed subdued after the Bank of Japan held policy steady. The board voted 7–2 to keep rates unchanged, with limited changes to inflation forecasts – a clear sign that a December hike remains unlikely. JGB yields drifted slightly lower post-meeting, underperforming recent U.S. moves. The US–Japan 10-year yield spread widened to about +242 basis points, up from recent lows around 230, reinforcing yen weakness and boosting export-heavy Japanese equities (Figure 4, Bloomberg).
Data today: Euro Area GDP, Italy unemployment, ECB decision, initial jobless claims

Happy FOMC day! The Federal Open Market Committee is set to lower the US federal funds rate target by 25 bps to 3.75% – 4%, focusing instead on any changes to the Fed’s post-meeting statement and comments from Chairman Jerome Powell. The FOMC’s statement is due to be released at 14:00 ET (18:00 GMT) with Chair Powell’s press conference scheduled for 2:30 ET. Currently, there is an 88.2% chance being priced in for a further 25 bps reduction at the 9-10 Dec meeting.

In other important news this week, US President Donald Trump and Chinese President Xi Jinping will meet in Busan, South Korea on 30 Oct. President Trump has hinted at a partial reduction in tariffs on China. Meanwhile, China has bought at least two cargoes of US soybeans, its first known purchase this season. Chicago soybean futures significantly climbed this week, crossing $11/bushel (a 15-month high) on trade optimism, but have eased since, reportedly on profit-taking and farmer hedging.
LME Copper also climbed above $11,000 amid the trade optimism.

In equities, technology stocks continue to drive global equities higher amid the trade optimism, with President Trump saying he will discuss Nvidia’s Blackwell AI processors (“it’s the super duper chip”) with President Xi Jinping. Nvidia’s share price soared above $200 on 28 Oct, and the company is set to open above the $5 trillion market value on Wednesday, becoming the first company to reach the milestone. The technology sector will also await earnings reports from Microsoft Corp., Alphabet Inc., Meta Platforms on 29 Oct and Apple Inc. and Amazon on 30 Oct.

The Reserve Bank of India has intensified its efforts to repatriate its gold reserves held abroad, buying back nearly 64 tonnes of gold in the first six months of the financial year (beginning in April), as per a report on foreign exchange reserves on 28 Oct. The RBI now holds more than 65% of its gold reserves at home, nearly double the share from four years ago,

Data releases today – US EIA oil inventories, Fed Interest Rate Decision

Gold drops convincingly below $4k/oz, now trading near $3.9k/oz. Other precious metals are also struggling with silver falling towards $45/oz and palladium and platinum down hard. But copper is performing better, continuing its recovery from its late-July tariff driven volatility. It has recovered to over $5/lb. (Figure 1) Anglo American reported a 9% drop in copper output in Jan-Sep this year.

Equities cool from their post-weekend record highs, as the Hang Seng and Nikkei each fall around 0.33% and S&P 500 Emini futures are down 0.1% this morning. Concerns over concentration of the equity market continue but the long-term trend shows only 3.44% of companies have driven all net wealth in the US stock market in a century. (Figure 2)

Dollar/yen continues long term up trend but finding significant resistance at 153 (Figure 3). Markets expect Bank of Japan to continue hiking cycle, with OIS pricing 47.4 bps of hikes over the next 12 months, up from 35.8 bps in mid-October.

Amazon is reportedly preparing massive job cuts of up to 30,000 corporate employees. This would be the company’s biggest ever layoff at nearly 10% of total corporate employees and shares rose 1.2% yesterday and are higher in pre-market trading this morning.

There are mixed signals coming from Germany, as Ifo Business Climate was stronger than expected at 88.4 and Expectations were up at 91.6. Yet, this morning’s GfK Consumer confidence was much weaker than hoped, down at -24.1, even below expectations for -22. The measure has been negative since December 2021!
South Korea is performing better, as GDP grew 1.7% y/y in Q3, far ahead of expectations for 0.9%. That was the strongest quarter of growth since Q2 2024. China’s Ministry of Commerce said it signed an upgraded free trade agreement with ASEAN nations today, focussing on supply chains and trade facilitation. Meanwhile, Trump says he’s open to meeting Kim Jong Un in his Asia visit. The US government shutdown reaches 28 days – one more week and it will be a record!

Data today – India industrial and manufacturing production, Redbook

Equities began the week on a constructive note following productive US-China trade talks over the weekend. The discussions covered a broad range of topics, including export controls, shipping, fentanyl, and agriculture. China may resume “substantial” soybean purchases and defer its rare earths export controls for a year, while the extra 100% tariffs on Chinese goods threatened by Trump are likely off the table. The upbeat tone has raised hopes of an extended trade truce, creating a positive framework ahead of Thursday’s high-stakes summit between Trump and Xi. The sanguine tone weighed on gold as prices extended its decline, retreating by 1% on Monday morning (Chart 1, Bloomberg)

Argentine President Javier Milei’s libertarian party won a landslide victory in Sunday’s midterm elections. His gains will help him accelerate structural reforms, including deregulation and reducing spending. Before the vote, the US had pledged up to $40bn of support for Argentina, including a $20bn central bank swap line and plans for a $20bn loan facility to purchase Argentine debt, which was contingent on the election outcome. Following this, Argentine assets are expected to recover, led by dollar bonds, and the peso, which saw increasing volatility and weakness ahead of the vote (Chart 2, Bloomberg).

US inflation has hit 3% for the first time since January last month; however, this was less than the expected 3.1%. The inflation figures resulted in a ‘dovish cut’ tone, driving the S&P 500, Nasdaq, and Dow Jones to new all-time highs. A 25bps cut is all but priced in for this week’s Fed meeting, to bring the rates down to a 3.75% to 4% range (Chart 3, Bloomberg). The odds of a December rate cut have been raised from 91% to 98.5%, according to the CME FedWatch tool. Nonetheless, the US 2-year and 10-year Treasury yields remained sticky at the 3.5% and 4% levels, respectively. A University of Michigan survey showed consumer sentiment cooled in October at 53.6, the lowest reading in five months.
Data today: German IFO business conditions, US Durable Goods Orders, South Korea GDP.
Big week for earnings – Microsoft, Google, Meta, Apple, Amazon. Oil majors: Exxon, Chevron, Shell.

Equities and precious metals both fell again (S&P500 -0.5%, Nasdaq -0.9%) as subprime bankruptcies emerge, banks warn about private credit risks, US imposes new sanctions on Russia and Trump threatens new export restrictions on China. I’m trying not to get too bearish but I’m struggling to find any good news, S&P500 and Nasdaq could be forming double tops here, but bonds are clearly telling a bearish market story, the OIS prices 116bp of cuts over the next year.
Gold and silver are now in a short term down trend, don’t listen to me, look at the charts and short-term moving averages. Leveraged positions have taken heavy losses over the last 2 days. ‘When a speculative bubble pops. The really bad losses are taken in the next two months as those who missed it buy the dip’ (Andy Constan @dampedspring)

A growing number of states are struggling, some already in recession, others right on the edge. Together, they account for nearly a third of U.S. GDP. The national economy isn’t there yet, but it’s clearly losing steam. (Chart 1, Mark Zandi, Moody’s Analytics)

Volatility in the AI Revolution is heating up. Quantum stock fell 20% on news of Google’s Willow Chip solving problems 13,000x faster than the best supercomputer using a new algorithm called Quantum Echoes. Then the quantum stocks rallied back 20% after hours on news that the Trump Administration is preparing equity stakes in quantum stocks. It would be unprofessional of me to suggest that they may be trying to prop up another corner of the equity market for another week…… *IONQ, RIGETTI, D-WAVE IN TALKS FOR GOVT. TAKING STAKES: WSJ …. NOTE: These companies trade at 200–900× forward sales — far above dot-com bubble levels. Analysts warn the sector is “disconnected from fundamentals.”
17 years after the financial crisis another subprime lender has gone under. PrimaLend Capital Partners filed for bankruptcy after months of negotiations with creditors, a sign of stress in a sector catering to low-income consumers
IT’S `PARTY LIKE IT’S 1999′ IN CREDIT MARKETS: JIM CHANOS

*US TARGETS ROSNEFT, LUKOIL IN LATEST ROUND OF RUSSIA SANCTIONS
*OIL JUMPS AS MUCH AS 2.5% AT OPEN AS US SANCTIONS RUSSIAN FIRMS

TRUMP ADMINISTRATION CONSIDERING PLAN TO RESTRICT GLOBALLY PRODUCED EXPORTS TO CHINA MADE WITH OR CONTAINING U.S. SOFTWARE; NEW EXPORTS CONTROLS COULD CURB EXPORTS ON WIDE RANGE OF GOODS TO CHINA
*CHINA’S HE LIFENG, BESSENT TO MEET IN MALAYSIA OCT. 24-27

Beyond Meat erased a 112% gain yesterday to close down -1%, after a week where its price spiked 1300%. Previously some 64% of the shares available for trading had been sold short as of the end of last month, then on Monday, Roundhill Investments said it added Beyond Meat to its Roundhill Meme Stock ETF, a big sign that meme-stocks had returned. Matt Maley, chief market strategist at Miller Tabak, said it all shows ‘froth in the market is still extremely high’. Retail traders are still pumping meme stocks, oblivious to the growing risks.
*BESSENT: MIGHT SEE CPI COMING DOWN NEXT MONTH, MONTH AFTER
If you are a believer in seasonality, then today is historically the best day to own $SPX for the next 3-months! (@RenMacLLC)………….. however Bank of America Securities said clients resumed selling U.S. stocks last week after briefly “buying the dip,” led by institutional and hedge fund outflows.
Banks warning about private credit quality while funding its growth….
Bank of America warns of forced stocks selling if credit problems persist
WELLS FARGO CEO CHARLIE SCHARF: CREDIT WILL DETERIORATE
*WAL 3Q PROVISION FOR CREDIT LOSSES $80.0M, EST. $42.4M (Chart 2, Bloomberg)

Despite mortgage rates being the lowest level in over a year, mortgage purchase applications FELL to the lowest level since the beginning of August.

OpenAI is now the world’s most valuable private company, valued at $500 billion. This is 3.5 times higher than Spotify’s, market value of $144 billion, and almost equal to Netflix’s.

Bonds continue to tell us risks are rising (Chart 3, @PPGMacro).
Current Drawdowns Bitcoin: -14.3% Gold: -8.4%
Largest Drawdowns Last 10 Years Bitcoin: -84%, -71% and -75% Gold: -21% (Bloomberg data).
Hhhmmmmm….. (Chart 4, LSEG Datastream, Nasdaq, MSCI, S&P, Schroders)
No key data today

Equities and precious metals both fell again (S&P500 -0.5%, Nasdaq -0.9%) as subprime bankruptcies emerge, banks warn about private credit risks, US imposes new sanctions on Russia and Trump threatens new export restrictions on China. I’m trying not to get too bearish but I’m struggling to find any good news, S&P500 and Nasdaq could be forming double tops here, but bonds are clearly telling a bearish market story, the OIS prices 116bp of cuts over the next year.
Gold and silver are now in a short term down trend, don’t listen to me, look at the charts and short-term moving averages. Leveraged positions have taken heavy losses over the last 2 days. ‘When a speculative bubble pops. The really bad losses are taken in the next two months as those who missed it buy the dip’ (Andy Constan @dampedspring)

A growing number of states are struggling, some already in recession, others right on the edge. Together, they account for nearly a third of U.S. GDP. The national economy isn’t there yet, but it’s clearly losing steam. (Chart 1, Mark Zandi, Moody’s Analytics)

Volatility in the AI Revolution is heating up. Quantum stock fell 20% on news of Google’s Willow Chip solving problems 13,000x faster than the best supercomputer using a new algorithm called Quantum Echoes. Then the quantum stocks rallied back 20% after hours on news that the Trump Administration is preparing equity stakes in quantum stocks. It would be unprofessional of me to suggest that they may be trying to prop up another corner of the equity market for another week…… *IONQ, RIGETTI, D-WAVE IN TALKS FOR GOVT. TAKING STAKES: WSJ …. NOTE: These companies trade at 200–900× forward sales — far above dot-com bubble levels. Analysts warn the sector is “disconnected from fundamentals.”
17 years after the financial crisis another subprime lender has gone under. PrimaLend Capital Partners filed for bankruptcy after months of negotiations with creditors, a sign of stress in a sector catering to low-income consumers
IT’S `PARTY LIKE IT’S 1999′ IN CREDIT MARKETS: JIM CHANOS

*US TARGETS ROSNEFT, LUKOIL IN LATEST ROUND OF RUSSIA SANCTIONS
*OIL JUMPS AS MUCH AS 2.5% AT OPEN AS US SANCTIONS RUSSIAN FIRMS

TRUMP ADMINISTRATION CONSIDERING PLAN TO RESTRICT GLOBALLY PRODUCED EXPORTS TO CHINA MADE WITH OR CONTAINING U.S. SOFTWARE; NEW EXPORTS CONTROLS COULD CURB EXPORTS ON WIDE RANGE OF GOODS TO CHINA
*CHINA’S HE LIFENG, BESSENT TO MEET IN MALAYSIA OCT. 24-27

Beyond Meat erased a 112% gain yesterday to close down -1%, after a week where its price spiked 1300%. Previously some 64% of the shares available for trading had been sold short as of the end of last month, then on Monday, Roundhill Investments said it added Beyond Meat to its Roundhill Meme Stock ETF, a big sign that meme-stocks had returned. Matt Maley, chief market strategist at Miller Tabak, said it all shows ‘froth in the market is still extremely high’. Retail traders are still pumping meme stocks, oblivious to the growing risks.
*BESSENT: MIGHT SEE CPI COMING DOWN NEXT MONTH, MONTH AFTER
If you are a believer in seasonality, then today is historically the best day to own $SPX for the next 3-months! (@RenMacLLC)………….. however Bank of America Securities said clients resumed selling U.S. stocks last week after briefly “buying the dip,” led by institutional and hedge fund outflows.
Banks warning about private credit quality while funding its growth….
Bank of America warns of forced stocks selling if credit problems persist
WELLS FARGO CEO CHARLIE SCHARF: CREDIT WILL DETERIORATE
*WAL 3Q PROVISION FOR CREDIT LOSSES $80.0M, EST. $42.4M (Chart 2, Bloomberg)

Despite mortgage rates being the lowest level in over a year, mortgage purchase applications FELL to the lowest level since the beginning of August.

OpenAI is now the world’s most valuable private company, valued at $500 billion. This is 3.5 times higher than Spotify’s, market value of $144 billion, and almost equal to Netflix’s.

Bonds continue to tell us risks are rising (Chart 3, @PPGMacro).
Current Drawdowns Bitcoin: -14.3% Gold: -8.4%
Largest Drawdowns Last 10 Years Bitcoin: -84%, -71% and -75% Gold: -21% (Bloomberg data).
Hhhmmmmm….. (Chart 4, LSEG Datastream, Nasdaq, MSCI, S&P, Schroders)
No key data today

Financial market headlines may look healthy with S&P500 and Nasdaq back right to all-time highs but below the headlines liquidity is straining. Regional banks are down 20-30% in the last few weeks, buy-now-pay-later companies down 30-40% and tertiary crypto names also down -30-40%. This is why US 2’s, 10’s and 30-year bond yields are all trending lower, and on medium term cycle lows. In fact, the 30-year yield is now 60bp below May’s ‘sell US debt’ panic.
Other big news of course was the precious metal sell off, gold and silver down yesterday -5.3% and 7.3% respectively, golds biggest fall since 2013. Gold even fell to dead on $4,000 over night before bouncing (yesterday’s high $4,375). But the other key price everyone seems to be missing is the rally in the US dollar. (Chart 1, Bloomberg) The first nine months of 2025 was ‘SELL DOLLAR’ headlines, but now we’ve seen a clear double bottom, and are witnessing another squeeze of a crowded trade.
Bank of England Governor Andrew Bailey warned that the collapses of US firms First Brands and Tricolor could be “canaries in the coal mine” potentially signalling systemic risks…… but central banks have no Liquidity tools for private credit markets.

*TRUMP: AS OF NOV. 1, TARIFFS ON CHINA WILL BE ABOUT 155%
*TRUMP: HIGHER TARIFFS ON CHINA WON’T BE SUSTAINABLE FOR THEM
17:33 – *TRUMP: WILL SEE PRESIDENT XI IN TWO WEEKS IN SOUTH KOREA
17:52 – *TRUMP: MAYBE MEETING WON’T HAPPEN WITH XI

UBS WARNS: RECESSION PROBABILITY NOW AT A STAGGERING 93%
U.S. SERIOUS CREDIT CARD DELINQUENCIES (90+ DAYS UNPAID) SURGE TO HIGHEST LEVEL IN 14 YEARS
WAL 3Q PROVISION FOR CREDIT LOSSES $80.0M, EST. $42.4M

UK CPI unexpectedly stays at 3.8% (est 4.0%), OIS increases chance of a rate cuts with 60bp cuts now priced for the next 12 months.
More debt concerns, this time China whose debt continues to grow. Total debt-to-GDP has soared to a record 336% in Q2 2025 – the highest in its history.
To put things in perspective. Magnificent 7 market capitalization is bigger than the GDP of China. (Chart 2, @MichaelAArouet)

OpenAI is now the world’s most valuable private company, valued at $500 billion.
Prediction Markets Boom as Volumes Surpass 2024 Election – Bloomberg (Chart 3, @C_Barraud, Dune Analytics)
No key data today