The Davy Digest - 1st December 2025

Global equities rebounded last week, boosted by comments from Fed Vice Chair John Williams and Governor Christopher Waller, who indicated support for easing monetary policy in the near term. Investor sentiment towards tech stocks improved amid excitement about Alphabet’s upgraded AI model, Gemini 3. On the US macro front, the producer price index for September increased 0.3% as expected, while the Conference Board’s consumer confidence index fell to its lowest point since April due to concerns about the labour market. In Europe, an IFO survey showed that German business morale unexpectedly fell in November. In the UK, the bond market responded positively to Rachel Reeves’ budget, which included tax increases and expanded fiscal headroom to help achieve deficit targets. Elsewhere, Brazil's annual inflation rate declined to 4.5%, within the central bank's target range for the first time since January.

Last week's highlights

	September Producer Price Index (25/11) -  Increased 0.3% as expected. Conference Board Consumer Confidence (25/11) – Fell to lowest point since April due to concerns about the labour market. Jobless Claims – Fell to 216k, a 7-month low, layoffs remained low.
	German IFO Surveys (24/11) - German business morale unexpectedly fell in November with Ifo business climate index falling to 88.1 from 88.4 in October.
	UK Budget (26/11) – UK Bond market reacted positively as Reeves raised taxes and increased fiscal headroom to meet deficit targets. Sterling showed strength following the announcements.
	Tokyo Inflation (27/11) – Core inflation came in at 2.8%, above 2.7% forecast, boosting the case for a near-term interest rate hike.  Brazil November Preliminary Inflation (26/11) - Brazil's annual inflation declined to 4.5%, within the central bank's target range for the first time since January.

This week, investors will receive a slew of data points in the US. The ISM manufacturing & services PMIs, core PCE inflation and the ADP Nonfarm Employment report are all set to be released. Investors in the Eurozone will receive inflation figures on Tuesday and the HCOB Eurozone Composite PMI on Wednesday. After last week’s highly anticipated budget, the UK faces a relatively quieter week, with only the S&P Global Manufacturing PMI and the Halifax house price index set for release. In Japan, Tokyo’s core inflation came in at 2.8%, above the 2.7% forecast, boosting the case for a near-term interest rate hike. In emerging markets, China’s Caixin Services PMI and Brazil’s Q3 GDP will be released.

What's on the radar

	ISM Manufacturing & Services PMIs (01/12 & 03/12) ADP Nonfarm Employment (03/12) US inflation (Core PCE) (05/12)
	Eurozone Inflation (02/12) HCOB Eurozone Composite PMI (03/12)
	S&P Global Manufacturing PMI (01/12) UK Halifax House Price Index (05/12)
	China Caixin Services PMI (02/12) Brazil Q3 GDP (04/12) Japan Household Spending (04/12)

Chart of the moment - The Fed gets festive

Source: Bloomberg as of 27/11/2025

• Markets are anticipating another rate cut at the Federal Reserve’s December meeting, following dovish comments from New York Fed President John Williams.
• Williams stated that interest rates could be cut further without putting the Fed's inflation goal at risk, while helping guard against labour market weakness. 
• Before these comments, investors were unsure about a December rate cut as the government shutdown created a data vacuum and delayed labour market reports sent mixed signals – decent job growth despite rising unemployment.

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