Dec 3, 2025
November felt like a pause for breath rather than a turning point. Global equities eked out a 0.3% gain, leaving year-to-date returns at a robust 20.1%, but the intra-month story was a nervous drawdown as investors flirted with the idea that the Fed might skip a December cut before swinging back to pricing one move. Bond markets were steadier, with the hedged Global Aggregate index up 0.2%, while gold continued its remarkable run, rising 5.9% on the month and over 60% year-on-year. Volatility rose but stayed well short of crisis territory. Due to politics the US data calendar was unusually light, leaving markets trading more on Fed rhetoric than hard numbers. Asia’s growth narrative remained intact but headlines of late-month softness tempered enthusiasm. Overall, November felt like a consolidation phase after a very strong year, with investors reluctant to chase risk but equally unwilling to step away.
Chart 1: Global Economic Surprise Indices – Inflation and Growth
Index
Source: Bloomberg
United States
US macro signals were oddly muffled in November. With relatively few top-tier releases, investors were left squinting at survey data and Fed commentary. The broad picture remains one of moderate growth and maybe fading inflation risk. Labour market data hinted at gradual cooling rather than sudden weakness, while business surveys stayed consistent around 4% growth in Q3 slowing to 1.5% in Q4. The lack of decisive evidence allowed both hawks and doves to claim support, which explains the mid-month wobble in rate-cut expectations. Markets briefly entertained the prospect of “no cut in December”, only to revert towards expecting a December 25bps cut, with more to follow in 2026. In effect, the US economy is still doing “just enough” to keep recession talk at bay, but also not enough to convince the Fed that its inflation battle is definitively won.
Europe
The European economy spent November edging away from stagnation risk rather than escaping it. The euro area continues to oscillate around zero real growth, with Germany still a key link that struggles to impress and southern Europe providing what little momentum there is. German growth stagnated in Q3 and has struggled to regain momentum. Eurozone inflation progress remains the one clear positive: headline rates moved closer to target, giving the ECB the opportunity to sound less hawkish even if it refuses to pre-commit to cuts. Surveys of manufacturing stayed subdued but no longer point to outright contraction, while services activity is cooling from elevated post-pandemic levels. Fiscal policy is still constrained by deficit concerns, particularly in France and Italy, which limits the region’s ability to generate its own demand. As a result, Europe remains highly sensitive to external trade and energy prices (here at least good news). November did not deliver a macro breakthrough, but it did further reduce the risk of a deep recession, nudging the debate towards when, rather than if, the ECB eases.
Chart 2: Japan economic surprises see sharp improvement
(CESI Index – the degree to which economic growth and inflation data is above or below expectations)
Source: Bloomberg
Japan
Japan’s macro narrative took an important turn in November as the new administration unveiled a sizeable pro-growth budget package aimed at reinforcing the recovery and easing the transition away from ultra-easy monetary policy. The measures focused on supporting household incomes, incentivising corporate investment and accelerating digital and green upgrades—an agenda designed to lift Japan’s long-term potential growth rate rather than simply provide short-term stimulus. Economists have been quick to upgrade growth rates by 20-40bps for the next twelve months. The policy backdrop is therefore shifting: fiscal authorities are leaning harder into growth while the Bank of Japan weighs how quickly to adjust its yield-curve framework in response to gradually normalising inflation. Markets spent much of the month calibrating the interaction between the budget’s growth impulse and the BoJ’s cautious signalling. November marked a step-change: Japan is no longer relying solely on monetary accommodation but is beginning a coordinated fiscal–monetary transition that could, if sustained, anchor a more durable expansion.
Asia ex-Japan
Asia ex-Japan remained the bright spot of global growth, but the gloss dulled slightly towards the end of November. Early-month data from India and much of ASEAN continued to show solid domestic demand and resilient investment, consistent with the region’s role as a beneficiary of supply-chain diversification. However, later releases hinted at some softening in export orders and manufacturing output, particularly in the more trade-dependent economies. The global electronics cycle is still supportive, but the pace of improvement looks to be moderating. Inflation is generally well-behaved, giving most central banks the luxury of staying on hold or contemplating modest easing in early 2026.
China – more effort to stimulate domestic demand evident
China’s November dataflow reinforced the sense of an economy stabilising, though still operating well below pre-pandemic trend. Industrial production surprised modestly to the upside, supported by autos, electronics and green-tech exports, while retail sales softened after a strong October, reflecting still-fragile household confidence.The manufacturing PMI hovered around the contraction/expansion threshold, signalling that the recovery remains uneven across sectors. Property indicators were again weak —new starts, sales and developer financing all pointed to an ongoing deleveraging cycle that continues to drag on growth. Credit expansion improved slightly as policy banks stepped up lending, but private-sector appetite stayed muted.
November also brought a meaningful intensification of policy support. Beijing expanded its Rmb1tn sovereign bond issuance programme, accelerating funding for infrastructure, disaster prevention and strategic industries. Several large cities rolled out additional property-market easing measures, including lower down-payment ratios and looser home-purchase restrictions. The PBoC injected liquidity through targeted operations, and regulators signalled greater tolerance for bank support of “high-quality” developers to prevent disorderly failures. The month closed with renewed emphasis on boosting domestic demand in 2026 through fiscal stimulus and industrial upgrading. None of these steps constitutes a “big bang”, but collectively they mark a deliberate shift towards stabilisation and a clearer policy floor under growth heading into next year.
Chart 3: Emerging Market Surprise Indices Consolidates
Source: Bloomberg
Asset Markets
Chart 4: Asset Market Returns (since Jan 22)
Rebased Jan 2022 =100
Source: Bloomberg
Global Equities
Across regions, the dominant equity theme was consolidation after an exceptionally strong year-to-date performance. Tech leadership narrowed, and markets displayed a greater appetite for balance between growth and quality factors. November neither reversed 2025’s gains nor extended them—it simply marked a pause as investors waited for clearer signals on global growth and the path of monetary easing.
Equity markets made little net progress in November, reflecting a tug-of-war between resilient earnings and shifting expectations for the timing of Fed rate cuts. The US market ended flat on the month , with the NASDAQ down 1.5% as investors briefly questioned how much AI-driven growth is already priced in. Europe ex-UK gained 1.5% and remains one of the standout performers of 2025, helped by valuations and global exposure rather than domestic economic dynamism. Japan slipped 0.7% in US-dollar terms, largely reflecting profit-taking after a strong run, though sentiment steadied later in the month as the government unveiled a sizeable pro-growth fiscal package. Emerging markets were the laggard, down 2.4%, with China and Asia ex-Japan facing late-month signs of softer activity, while Brazil once again outperformed thanks to policy credibility and commodity exposure.
Table 1: Equity Market total returns in November 2025
Source: Bloomberg
Emerging-market equities
Emerging-market equities had a more difficult month, falling 2.4% in November. Performance dispersion stayed wide. Brazil led the pack with a 7.7% monthly rise in dollar terms and a striking 51.7% year-to-date return, helped by improving policy credibility and exposure to commodities. India managed a modest 0.9% gain but remains only marginally positive over 12 months, reflecting earlier valuation concerns. China’s 2.5% decline weighed on regional indices despite still-impressive 12-month performance numbers. In short, the structural EM story of higher growth and favourable demographics is intact, but November reminded investors that entry point and country selection matter.
Global Equity Sectors
Sector leadership shifted meaningfully in November as investors reassessed the durability of the tech rally. Information technology fell 4.7% on the month—its sharpest setback in several quarters—as NVIDIA’s results, while strong, failed to deliver the runaway upside that markets had grown accustomed to. The reaction was telling: investors began openly debating whether parts of the AI complex had entered bubble territory, with valuations stretched and expectations uncomfortably high. The sell-off was less about fundamentals and more about positioning; markets had assumed an uninterrupted earnings glide path, and November challenged that complacency.
Table 2: Global equity sector total returns in November 2025
Source: Bloomberg
Away from tech, the sector picture was almost the mirror image. Healthcare led global performance with an 8.1% gain, benefiting from its steady earnings profile and renewed interest in defensive growth. Banks rose 2.8% as credit conditions remained stable and concerns around funding costs eased. Consumer staples delivered another solid month (+3.9%), reinforcing the appetite for more predictable cash flows in an uncertain policy environment. Energy gained 2.6%, supported by still-firm commodity prices. Conversely, consumer discretionary underperformed (–1.7%), reflecting pressure on high-valuation names and a degree of macro fatigue.
What emerged in November was not a wholesale style reversal but a subtle rebalancing. Investors have not abandoned the AI theme, but they are now asking harder questions about the trajectory of earnings, the sustainability of capex cycles and how much good news is already embedded in prices. The sector landscape is shifting from a one-way tech trade to a more discriminating environment—still growth-friendly, but far less forgiving.
Bond markets
High-quality fixed income played its traditional role as a modest ballast in November The hedged Global Aggregate index returned 0.2% on the month and 5.1% year-to-date. Yields drifted within relatively tight ranges as markets recalibrated the timing of future rate cuts. With inflation continuing to trend lower and growth cooling but not collapsing, duration was rewarded cautiously. Credit spreads in investment-grade markets tightened slightly, reflecting ongoing demand from liability-driven investors and a limited new-issue calendar.
US high-yield credit delivered a solid, if unspectacular, 0.6% return in November, taking year-to-date gains to 8.0%. Spreads moved marginally tighter as default rates remained contained and issuance stayed disciplined. The asset class continues to benefit from the absence of a near-term recession and from companies having termed out much of their debt at lower coupons in prior years. That said, the market is increasingly discriminating between stronger and weaker balance sheets; lower-quality borrowers are facing meaningfully higher funding costs. November illustrated the “carry grind” phase of the cycle: investors are being compensated for credit risk, but price appreciation is limited by the lingering possibility that growth could slow more sharply if central banks misjudge the timing of policy easing.
Table 3: Bond Market Total Returns for November 2025
Source: Bloomberg
Chart 5: US 10-year yield back to the low end of the recent range
Source: Bloomberg
FX and Precious metals
Commodity markets quietly underpinned the broader inflation narrative. Gold’s performance: a 5.9% monthly rise, 23.0% over three months and an extraordinary 61.5% year-to-date gain. The metal continues to behave as a hedge against both financial repression and geopolitical uncertainty, with central-bank buying and retail demand complementing ETF flows. Other real assets broadly tracked these themes, benefiting from the combination of still-positive nominal growth and investors’ desire for diversification away from pure financial claims. In historical terms, gold’s surge looks more like the gradual repricing episodes of the 1970s and early 2000s than a short-lived speculative spike—though, as ever, the narrative will only be clear with hindsight.
Table 4: Performance of Precious Metals and Currencies for November 2025
Source: Bloomberg
Bitcoin sell-off
Digital assets had a very different month. Bitcoin fell 16.7% in November and is now down 16.4% over three months, leaving 12-month and year-to-date returns slightly negative at –5.8% and –2.7% respectively. The drawdown followed a period of elevated speculative positioning and coincided with a rise in real yields and renewed regulatory noise, reminding investors that crypto remains highly sensitive to shifts in liquidity and sentiment. Unlike gold, which enjoyed safe-haven inflows, Bitcoin behaved more like a high-beta risk asset, selling off alongside profit-taking in technology and growth stocks. Institutional adoption continues to inch forward, but November underlined that the asset class has yet to establish a stable role in diversified portfolios. For now, it remains a vehicle for those willing to tolerate equity-like downside with volatility that belongs more to the commodities of legend than the currencies of record.
Chart 6: Bitcoin sell off
Source: Bloomberg
