Market Report.
🏦 The Fed cartel comes to the rescue when Wall Street is feeling nervous: On 1 December 2025, the Federal Reserve conducted an overnight repurchase (repo) operation of about 13.5 billion dollars, adding short‑term liquidity to the banking system and the markets seem to be calm after last week’s falls.
💰 Bitcoin reclaimed the $90,000 level, while Nasdaq and S&P 500 futures rose 0.1% each. The dollar has weakened against other major currencies, including the euro and sterling.
📉 Investors have also been pricing in a more dovish Fed outlook, on the view that White House economic adviser Kevin Hassett, the reported frontrunner to become the next Fed chair, would deliver further rate cuts.
🇪🇺 Eurozone inflation unexpectedly ticked up to 2.2% in November, up from 2.1% the previous month, hovering near the European Central Bank’s (ECB) 2% goal. Underlying inflation, which excludes volatile food and fuel prices, held steady at 2.4%, indicating continued robust domestic price pressures, particularly in services. The unemployment rate inching up to 6.4% in October and industrial production contracted once more to -0.5%.
💴 The BOJ seems to be laying the groundwork for a potential rate hike later this month: Bank of Japan (BOJ) Governor Kazuo Ueda said the central bank will consider the “pros and cons” of raising interest rates at its next policy meeting on December 18-19. Ueda’s remarks pushed up the yen and Japanese government bond yields, as markets priced in the likelihood of a rate hike later this month. He said a rate hike would still keep borrowing costs low and would be more akin to “easing off the accelerator” rather than “applying the brakes” on the economy.
📈 Ueda signaled the BOJ’s conviction that conditions for raising rates are falling into place, citing receding uncertainties on the impact of U.S. tariffs and the likelihood of the BOJ’s economic and price projections being met.
🏘️ The Chinese housing market is flashing fresh warning signs as the property downturn runs into its fifth year: Sales of the top 100 developers plunged 36% in November from a year earlier, despite a modest pickup from October. Home sales shrank 19% in the first 11 months of the year compared to the same period a year ago. Secondary home prices in 100 Chinese cities surveyed dropped 7.95% in November, with high listing volumes and weak homebuyer sentiment driving the deepening price slump.
🏚️ Real estate giant China Vanke’s decision to seek a bond deferral has sparked fresh fears about liquidity in the sector, though a broader wave of defaults is seen as unlikely. The government has previously provided 300 billion yuan to help state-owned enterprises buy unsold apartments, but this has not been enough to meaningfully lift the sector from its slump.
🏦 The government could implement policy easing measures to stem the housing market slump, such as an “interest-rate subsidy” to lower homebuyers’ mortgage costs.
🏭 Germany’s industrial “engine” is nearing a breaking point, according to the president of the Federation of German Industries (BDI). Speaking to DPA, he warned that Germany’s industrial sector is undergoing a dramatic decline, with the government failing to respond decisively. A new report projects industrial production will fall 2% in 2025, marking the fourth straight year of contraction. BDI president Peter Leibinger described the situation as the worst crisis for German industry since the founding of the Federal Republic, highlighting a rapidly deteriorating business environment.
🚗 Saving the planet from climate change is fine, but don’t expect the state to give up your money.
🇬🇧 The UK has announced it will start taxing electric vehicle (EV) driving with a self-reported per-mile system starting in 2028. The new EV per-mile tax, set at 3p per mile for pure battery cars and 1.5p for plug-in hybrids, is intended to replace the declining fuel duty revenue as more drivers switch to EVs.
💷 The UK Treasury estimates fuel duty revenue could halve by the mid-2030s and plunge to less than £5 billion by 2050, posing a “substantial risk to the sustainability of public finances.” The per-mile tax system poses several challenges, including the complexity of monitoring and collecting the tax.
🌍 Other governments will likely follow this initiative. EV taxes will need to rise significantly over the next two decades to offset the decline in fuel duty revenue.
💻 The most serious signs of a bubble in the US technology sector are here: Oracle has issued tens of billions of dollars in bonds recently, both directly and through projects it supports. The cost of five‑year credit default swaps (CDS) on Oracle’s debt closed at about 1.281 percentage points per year. This was the highest level since March 2009, based on ICE Data Services.
📉 The spread rose almost 0.03 percentage point from the prior day and had more than tripled from a low around 0.36 percentage point in June. The move is framed in the context of heavy bond issuance by big tech to fund AI infrastructure and mounting worries about an AI‑fueled bubble.
🪙 Digital Asset Treasury (DAT) companies have continued to be a major trend in the digital currency industry this year, providing investors with exposure to cryptocurrencies like Bitcoin and Ether. The number of publicly-listed DATs has grown significantly, from fewer than 10 in 2021 to around 190 as today, collectively holding $100 billion in crypto assets.
⚠️ If DATs need to sell crypto to raise liquidity, this could put further downward pressure on crypto prices and create a self-reinforcing cycle of falling prices and eroding mNAV premiums. Experts suggest the DAT space is currently in a “bubble” that has already “burst”, with many DATs now trading at mNAVs below 1, signaling market fears about their ability to weather the crypto downturn.
📅 Today features key economic signals: ECB President Lagarde and Chief Economist Lane speak, the U.S. releases its November ADP employment report, an important indicator of labor market strength ahead of next Friday’s nonfarm payrolls on 16 Dec, and France, Germany, and the UK publish their services PMI data.
Geopolitics.
🇷🇺 The Kremlin said Vladimir Putin held “very useful” talks with U.S. envoys Steve Witkoff and Jared Kushner, but the meeting ended without an agreement on a Ukraine peace plan. A Kremlin foreign policy aide said no compromise has been reached on the key issue of territorial control, which remains the main obstacle.
🇺🇸 President Trump announced that he is prepared to launch strikes against countries beyond Venezuela, signaling a broader and more aggressive foreign‑policy posture.
Market View.
📊 US markets remain positive. S&P 500 futures are trading above 6,850 points, while Nasdaq 100 futures are above 25,650 points, both showing a more bullish tone after last week’s declines.
💵 The US Dollar Index (DXY) continues to hold the 99 level as a key support. This is keeping pairs such as EUR/USD capped below 1.1650, currently trading around 1.1642.
🇪🇺 In Europe, sentiment also appears optimistic. DAX 40 futures have reached 23,800 points, while Euro Stoxx 50 futures have broken above 5,700 points and are pushing towards 5,720.
🛢️ Crude oil remains broadly unchanged from previous sessions, with spot Brent trading near $62.75, likely awaiting developments in negotiations between Russia and Ukraine.
🥇 Gold futures have pulled back from Monday’s highs but remain within the broader upward trend, currently trading around $4,235 per ounce.
🟧 Finally, Bitcoin has managed to break above $92,000, moving closer to $94,000 and currently trading near $93,150.
