Daily Market Outlook, December 1, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

U.S. stock futures and cryptocurrencies saw a decline, signalling a risk-averse sentiment ahead of economic reports set to be released this week, while expectations for a Federal Reserve interest rate cut in December remain robust. S&P 500 futures dropped as much as 0.8%, with Nasdaq 100 futures declining by 1%. Japanese stocks experienced the most significant losses in Asia, attributed to a surge in the Yen following Bank of Japan Governor Ueda's indication of a possible rate hike this month. Prior to his remarks, the two-year bond yield hit its highest mark since 2008. Bitcoin plummeted more than 6%, trading below $86,000, contributing to a broader selloff that many believed had subsided. The MSCI All Country World Index decreased by 0.1% in November after seven consecutive months of growth. This upward trend was interrupted, as confidence in high-flying AI stocks faded amid increasing worries about inflated valuations and excessive expenditures. Historically, the global equities index has averaged a rise of 0.5% in December over the past ten years. A boost in metal stocks allowed Chinese markets to commence December positively, despite Sunday’s report indicating that factory activity rose but remained in negative territory during November, marking a record extended period of decline amid the ongoing economic recession in the country. On Monday, Ueda addressed local business representatives, stating that the BoJ would "evaluate the advantages and disadvantages of adjusting the policy interest rate and make appropriate decisions" after reviewing the economy, inflation, and domestic and international financial markets. As per the overnight swap index, traders foresee a 64% likelihood of a rate increase following the central bank's upcoming policy meeting concluding on December 19th.

Domestically, the fallout from the UK Budget continues as the Office for Budget Responsibility (OBR) prepares to release its report today on the early publication of the Economic and Fiscal Outlook. Labour leader Keir Starmer is scheduled to deliver a speech addressing the government’s long-term economic strategy following the Budget announcement. Meanwhile, OBR head Richard Hughes and his team are set to appear before the Treasury Select Committee tomorrow, amid ongoing scrutiny. Newspapers remain focused on whether ministers were ‘misled’ regarding the public finance gap, with outlets like The Times keeping the issue in the spotlight. Both gilts and the British pound remain highly sensitive to political developments, while broader economic concerns persist. The OBR’s forecast managed to avoid presenting worse figures by revising its assessment of the GDP composition to be more ‘tax-rich,’ despite nominal GDP growth of just 1.6% projected for 2025-26 with minimal adjustments to tax receipts. If similar revisions are applied for 2029-30, £20 billion of the £21.7 billion fiscal headroom could disappear, casting doubt on the reliance on overly optimistic assumptions.

The Fed’s quiet period ahead of the December 10 rate decision means no commentary, leaving markets to focus on data releases. In a relatively sparse calendar, the monthly ADP employment report (Wednesday) stands out as the highlight, alongside key ISM reports for manufacturing (Monday) and services (Wednesday), as well as the University of Michigan sentiment index (Friday). 

In the euro area, attention will center on the flash November CPI (Tuesday), expected to align with consensus at 2.2% y/y, which likely keeps the ECB outlook subdued. ECB President Lagarde will address the European Parliament in her quarterly appearance (Wednesday), and the region’s final Q3 GDP figures will be released on Friday.

In the UK, the Treasury Select Committee’s hearing on the Bank of England’s November Monetary Policy Report appears delayed, as focus shifts to the Budget, with OBR Chief Richard Hughes testifying on Tuesday. Key UK data includes the BoE Decision Maker Panel survey (Thursday), which some MPC members view as significant. Additionally, MPC hawks are scheduled to speak twice (Wednesday/Thursday), while October’s BoE money and credit data kicks off the week (Monday). The BoE’s Financial Stability Report will also be published on Tuesday.

Globally, final November manufacturing PMIs (Monday) and services PMIs (Wednesday) will be released, but overall, it’s a relatively light week for major economic data.

Overnight Headlines

  • Trump Says He Has Made His Choice To Lead The Federal Reserve

  • WH's Hassett Says 'Happy To Serve' If Chosen As Chair

  • Norway Budget Talks Fall Short, Raising Risk Of Cabinet Crisis

  • Swiss Reject Millionaire Inheritance Tax Fearing Exodus Of Rich

  • Keir Starmer Will Move To Rescue Budget After Rachel Reeves Row

  • BOJ’s Ueda Sends Clear Hint At Chance Of December Rate Hike

  • Japan’s Finance Minister Says FX Moves Not Based On Fundamentals

  • China Private Gauge Signals Weaker Manufacturing Activity

  • Japan’s Two-Year Yield Hits Highest Since 2008 On Rate-Hike Bets

  • OPEC+ Holds Oil Output Steady, Agrees Capacity Mechanism

  • OPEC+ Turns To Dallas Based Consultant For Capacity Review

  • CPC Reports Halts In Black Sea Oil Loading After New Attack

  • Black Friday Sales Rise, Signalling US Consumers’ Resilience

  • US Options Market Grapples With ‘Concentration Risk’ In Clearing

  • Micron To Invest $9.6Bn In Western Japan To Make Ai Memory Chips

  • Airbus Issues Major A320 Recall After Mid-Air Incident Grounds Planes

  • Work Needed To Reach Peace Deal After 'Productive' Talks, Rubio Says

  • Trump Declares Venezuelan Airspace Closed Amid Attack Fears

  • Post-War Borders Dominated "Intense" US-Ukraine Talks

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1500-10 (961M), 1.1525 (3.4BLN), 1.1550 (286M)

  • 1.1570-80 (1.61BLN), 1.1585-95 (951M), 1.1600-05 (2.4BLN)

  • 1.1620-30 (748M), 1.1640-50 (567M), 1.1700-10 (791M)

  • USD/JPY: 155.00 (931M), 155.15 (207M), 156.00 (1.0BLN)

  • USD/CHF: 0.7950 (386M), 0.8025 (375M), 0.8055 (349M)

  • GBP/USD: 1.3075-80 (257M)

  • AUD/USD: 0.6445-55 (686M), 0.6500 (315M), 0.6550-55 (1.15BLN)

  • 0.6570-80 (318M), 0.6585-95 (551M), 0.6620 (418M)

  • NZD/USD: 0.5665 (323M), 0.5745-50 (642M),

  • USD/CAD: 1.4000-05 (260M), 1.4015 (240M), 1.4025-30 (1.2BLN)

  • 1.4050 (642M), 1.4100 (585M)

  • USD/ZAR: 17.0285 (300M), 17.1350 (300M)

CFTC Positions as of the Week Ending 7/10/25 

  • CFTC FX positioning data backlog clears January 20. Upcoming data on December 2, 5, 9, 12, 16, 19, 23, 30, followed by January 6, 9, 13, 16, 20. Normal service resumes January 23.

  • CFTC Positions as of October 14th

  • Equity fund speculators reduced their net short position in S&P 500 CME by 44,609 contracts, now standing at 413,789 contracts. Equity fund managers decreased their net long position in S&P 500 CME by 31,392 contracts, bringing the total to 913,041 contracts. 

  • Speculators cut their net short position in CBOT US 5-year Treasury futures by 5,994 contracts, which now totals 2,261,744 contracts. Conversely, they raised their net short position in CBOT US 10-year Treasury futures by 42,839 contracts, reaching 830,797 contracts. Speculators reduced their net short position in CBOT US 2-year Treasury futures by 34,111 contracts, leaving it at 1,185,847 contracts. They also increased their net short position in CBOT US UltraBond Treasury futures by 29,953 contracts, now at 296,811 contracts. Speculators lowered their net short position in CBOT US Treasury bonds futures by 3,988 contracts, resulting in a total of 58,364 contracts. 

  • The net short position for Bitcoin stands at –452 contracts. The Swiss franc has a net short position of –28,206 contracts, while the British pound's net short position is –11,629 contracts. The Euro's net long position is 108,325 contracts, and the Japanese yen's net long position is 37,166 contracts.

Technical & Trade Views

SP500

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 6800 Target 6897

  • Below 6718 Target 6628

EURUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 1.1591 Target 1.1688

  • Below 1.1565 Target 1.1482

GBPUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 1.3275 Target 1.3337

  • Below 1.3219 Target 1.3151

USDJPY 

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 156.14 Target 157.96

  • Below 155.35 Target 154.16

XAUUSD

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 4244 Target 4319

  • Below 4173 Target 4094

BTCUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Above 90k Target 95k

  • Below 86.2k Target 81.8k