Global markets opened the week higher on Monday, lifted by growing expectations that the US Federal Reserve could cut interest rates in December—even as policymakers remain split on the timing of any easing.
Investors are bracing for a busy few days ahead, with key US economic indicators—including retail sales and producer price data—set for release. In the UK, Chancellor Rachel Reeves is preparing to unveil her closely watched budget, which could further influence global sentiment.
Geopolitics also shaped trading conditions. Hopes for a potential boost in oil supply rose after the US and Ukraine said they had agreed on an “updated and refined peace framework” aimed at ending the war with Russia, adding pressure to crude prices.
After a choppy week dominated by concerns over stretched tech valuations, Monday brought some relief for Asia-Pacific markets. With Japan closed for a public holiday, trading volumes were lighter, but MSCI’s broad index of Asia-Pacific shares outside Japan still edged up 0.4%. South Korea’s Kospi gained 0.7%.
US futures also pointed higher. Nasdaq futures rose 0.64%, S&P 500 futures gained 0.45%, and EUROSTOXX 50 futures advanced 0.78%.
Much of the optimism followed comments from Federal Reserve official John Williams, who signaled that interest rates could start to fall “in the near term.” Markets now expect further easing in December—expectations echoed by Goldman Sachs chief economist Jan Hatzius, who anticipates a December rate cut followed by two more in early 2026.
Futures markets now show a 57% chance of a 25-basis-point cut next month, up sharply from less than 30% a week earlier. US Treasury cash trading was closed in Asia due to the Japanese holiday, though futures remained stable.
A recent US government shutdown continues to cloud the economic picture, with data gaps making it harder for policymakers to assess inflation and employment trends. The Bureau of Labor Statistics has already cancelled the October consumer price report due to incomplete data collection.
Currency Markets on Edge Over Yen Weakness
In currency trade, the Japanese yen remained under heavy pressure, falling 0.2% to 156.72 per dollar—near a 10-month low—as traders watched closely for potential government intervention.
Japan’s finance officials have stepped up verbal warnings in recent days, but analysts say any intervention would likely only slow, not reverse, the currency’s decline. Concerns over Japan’s fiscal health and persistently low domestic rates continue to weigh on the yen.
Elsewhere, the US dollar held firm despite rising expectations for Fed easing. The euro hovered near a two-week low at $1.1506, while the British pound slipped to $1.3091 ahead of Wednesday’s UK budget.
Oil, Gold Slip as Markets Stabilize
In commodities, Brent crude dipped 0.16% to $62.46 a barrel, while US crude eased 0.17% to $57.96. Spot gold fell 0.3% to $4,054.19 an ounce as risk appetite improved.