What Drove the Markets
The week of November 11–17 saw financial markets navigating a complex landscape shaped by several significant factors. The delayed release of US economic data, a consequence of the government shutdown, created information gaps that left investors searching for direction. Adding to the uncertainty, the Federal Reserve delivered hawkish signals that effectively quashed market expectations for a potential December rate cut, sending ripples through asset classes.
Mega-cap technology stocks experienced renewed volatility, raising questions about the sustainability of recent valuations. Meanwhile, concerns about global economic growth intensified, particularly as European banking sector weakness came into sharper focus. Mixed corporate earnings results and increasingly cautious commentary surrounding artificial intelligence investments further contributed to shifting market sentiment throughout the week.
Market Reactions – FX Market Major Changes
US Dollar
The greenback staged a notable recovery from earlier lows as Federal Reserve officials pushed back firmly against expectations of imminent monetary easing. Rising Treasury yields provided additional support for the dollar, while heightened uncertainty across markets prompted defensive positioning among investors. This combination of factors helped the dollar gain meaningful ground as the week drew to a close, reinforcing its status as a safe-haven currency during periods of market stress.
Euro & Sterling
The euro came under sustained pressure, sliding toward the 1.16 level against the dollar as disappointing economic data from both Germany and France weighed on sentiment. European Central Bank officials maintained their cautious messaging, offering little support for the single currency. Sterling remained subdued throughout the week, pressured by ongoing fiscal concerns and softer-than-expected UK jobs data. Despite these headwinds, market pricing increasingly reflected higher odds of a December rate cut from the Bank of England, though this failed to provide any meaningful lift to the pound.
Japanese Yen
The yen exhibited mixed performance, initially remaining weak as risk appetite stabilised during the early part of the week. However, Friday brought a shift in dynamics as equity markets wobbled, and investors sought safe-haven assets. This renewed demand for defensive positioning helped the yen gather strength heading into the weekend, demonstrating the currency's continued sensitivity to global risk sentiment.
Market Reactions – Commodities Market Major Changes
Gold
The precious metal experienced a sharp correction from its record highs, pulling back more than 10% from the October peak to trade near $4,000 per ounce. Rising real yields diminished gold's relative attractiveness as a non-yielding asset, while widespread profit-taking accelerated the decline. The pullback served as a reminder that even traditional safe havens are not immune to technical corrections following extended rallies.
Oil
Crude oil prices drifted lower, slipping below the $80 per barrel threshold as a bearish global growth outlook weighed on demand expectations. The resumption of Russian exports added to downward pressure, though disciplined production management from OPEC+ members helped prevent a more dramatic selloff. The energy complex reflected broader concerns about economic momentum heading into the final weeks of the year.
Agriculture
US grain markets faced headwinds following a soft USDA report that highlighted ample supply conditions. Wheat and corn prices came under particular pressure as stock levels exceeded expectations. Soybeans showed brief signs of support on speculation about increased Chinese demand, but this optimism faded late in the week as prices retreated alongside other agricultural commodities. The sector reflected the delicate balance between supply abundance and uncertain demand prospects.
Market Reactions – Indices Market Major Changes
US Equities
Technology and artificial intelligence-related stocks led equity market declines as the momentum that had driven indices higher began to stall. The S&P 500 and Dow Jones Industrial Average both closed below key technical support levels following a three-day losing streak. The Dow suffered a particularly notable setback on Monday, falling 557 points to settle at 46,590. The weakness reflected a combination of valuation concerns, profit-taking, and growing caution about near-term growth prospects.
Europe
European equity indices declined for the second consecutive week as rising bond yields and weak banking sector performance weighed heavily on sentiment. The FTSE 100 and STOXX 600 both registered losses of approximately 1% over the week. Cyclical sectors and financial stocks particularly lagged, reflecting concerns about both economic growth and the health of the region's banking system. The persistent weakness suggested investors remain cautious about European exposure despite relatively attractive valuations.
Asia-Pacific
Asian equity markets came under broad-based pressure throughout the week. Japan's Nikkei index was buffeted by yen volatility, which created uncertainty for the country's export-oriented companies. Chinese markets slipped on lacklustre growth indicators and cautious action from the central bank, which disappointed investors hoping for more aggressive policy support. The regional weakness underscored ongoing concerns about Asia's economic trajectory and the potential for further policy interventions.
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