Renewed Calm: Markets Find Their Footing as Rate-Cut Hopes Rise

Ahmad Mortazavi
Nov 29, 2025
5 min read

🌍Big Picture

Global markets ended November on a steadier footing as confidence improved around the outlook for interest rates, the strength of U.S. holiday spending and a broad weakening of the U.S. dollar. Despite lingering concerns about AI-driven volatility and uneven performance across Asia, investor sentiment turned noticeably more constructive during Thanksgiving week. U.S. equities posted a strong rebound, supported by expectations of a mid-December rate cut and solid retail activity that reassured markets about consumer resilience.

Europe also contributed to the brighter tone, with the STOXX 600 delivering another monthly gain as inflation drifted lower, bond yields eased, and economic indicators suggested that the region might be entering a more stable phase. Meanwhile, Asia lagged, but pockets of strength were visible in India and Southeast Asia, offsetting ongoing softness in China and Japan.

Across asset classes, the macro backdrop is gradually improving. Treasury yields remained anchored around 4 percent, the dollar weakened further, and emerging markets attracted meaningful inflows as investors rotated toward undervalued regions with stronger growth prospects. Commodities were mixed but broadly stable, gold advanced on lower real yields, and crypto markets found support after a period of sharp volatility. Overall, markets appear to be transitioning from a defensive posture to one anchored in selective optimism, where opportunities are emerging in areas supported by both attractive valuations and improving fundamentals.

📊 Assets at a Glance

Equities

U.S. equities regained momentum during the Thanksgiving-shortened week. The S&P 500 and Dow posted modest monthly gains despite earlier volatility, while the Nasdaq recovered from a deeper trough earlier in November as confidence grew around holiday spending. Early data for Black Friday online sales pointed to growth of around 5.3 percent year-on-year, reinforcing expectations that U.S. consumption remains resilient.

In Europe, the STOXX 600 ended November slightly higher. Easier financial conditions and a softer dollar supported sentiment, although tech and defence stocks faced renewed pressure toward the end of the month. Indices such as the DAX, CAC 40 and FTSE 100 all posted modest gains.

Asia underperformed relative to Western markets. The Nikkei slipped roughly 3.5 percent, the CSI 300 fell around 2.4 percent, and the Hang Seng declined more than 5 percent, reflecting ongoing concerns about property markets, tech valuations and weak industrial data. India remained an outlier, trading near record highs.

Emerging markets were notably stronger. The MSCI EM index firmed, supported by approximately $3.34 billion of equity inflows — the largest since July — as investors took advantage of lower valuations and a softer dollar backdrop. Latin America led gains, with Brazil’s Bovespa hitting a 12-month high.

Fixed Income

U.S. Treasury yields drifted lower, with the 10-year settling near 4.0 percent and the 2-year easing to around 3.51 percent, reflecting growing conviction that the Federal Reserve could begin easing policy in December. Bond demand remained firm even after a brief CME outage earlier in the week.

European government bonds also saw a positive tone. German Bunds held in the mid-2 percent range, while UK gilts rallied with the 10-year yield dipping below 3.7 percent following a cautious Autumn Statement. Short-duration bond funds attracted inflows as investors positioned for a friendlier rate environment.

Emerging-market debt benefited from easing global yields and strengthening EM currencies. Hard-currency spreads tightened slightly, and local yields in countries such as Brazil and South Africa moved lower as inflation ebbed and central banks signalled further policy stabilisation.

Commodities

Oil prices traded firmly in a narrow band ahead of the OPEC+ meeting. WTI hovered around $59, while Brent traded near $63.3, as markets balanced ceasefire expectations in Ukraine against supply discipline. Natural gas markets were more volatile due to weather-driven fluctuations.

Gold extended its advance, climbing more than 1.5 percent on the week to around $4,220/oz, supported by a weaker dollar, lower real yields and continued demand from central banks and long-term allocators. Industrial metals held broadly stable, supported by structural demand themes despite softer Chinese data.

Currencies

The U.S. dollar index fell below 100, marking its weakest weekly performance since July. The euro held near $1.16, and the yen stabilised around ¥156 after earlier lows. The pound strengthened to approximately $1.32, buoyed by market-friendly UK fiscal developments.

Emerging-market currencies broadly appreciated. The Brazilian real strengthened below 5.0 per dollar, the Mexican peso held near 17, and Central European currencies advanced as policy normalisation improved investor appetite. Asian currencies such as the rupee and rupiah found support from lower oil prices and improving sentiment.

Crypto

After a period of sharp volatility, crypto markets stabilised. Bitcoin traded around $90,000–$92,800, well above earlier panic lows near $80,000 in mid-November. Ether held near $2,800, while crypto-linked equities remained firm as sentiment steadied. Market capitalisation hovered around $3.2 trillion, with volatility easing compared with earlier in the month.

Spot Bitcoin ETFs in the U.S. and Europe continued to see modest outflows, reflecting profit-taking rather than capitulation. Correlations with equities and gold remained high, showing that crypto continues to behave as a macro-sensitive asset in the current regime.

Real Estate

U.S. housing continued to stabilise. The average 30-year mortgage rate fell to 6.23 percent, its lowest in more than a year, while pending home sales reached their highest reading since last November. These shifts are gradually improving affordability and unlocking pent-up demand. Commercial property conditions remain mixed but are showing signs of stabilisation.

In Europe, falling mortgage rates and clearer policy signals are helping housing markets find a bottom after a challenging period. House prices across the EU rose about 5.7 percent earlier in 2025 and continued to expand slowly into year-end, supported by chronic supply shortages and easing financing costs.

📅 Key Events Next Week

Mon 1 Dec — Global Manufacturing PMIs (U.S., Eurozone, China, Japan)

Soft readings: Reinforce slowdown concerns; yields fall; defensive assets outperform.
Stronger data: Signal resilience in global demand; lift equities and EM currencies.

Tue 2 Dec — U.K. Retail Sales (Oct) & Eurozone Money Supply (M3)

Weak retail sales or slowing M3: Strengthen expectations for BoE and ECB rate cuts; support gilts and Bunds.
Stronger data: Reduce cut expectations; GBP and EUR firm.

Wed 3 Dec — U.S. Durable Goods Orders (Oct)

Soft print: Confirms capex caution; tech and cyclicals remain under pressure.
Strong print: Indicates business stability; may revive inflation concerns; USD firms.

Thu 4 Dec — Japan Services PMI & China Services PMI (Nov)

Downbeat PMIs: Raise concerns about Asia’s growth and weigh on commodities and EM assets.
Stronger PMIs: Improve Asia sentiment and support EM currencies.

Fri 5 Dec — U.S. Employment Report (Nov)

Weak jobs data: Boost expectations for a December rate cut; bonds rally; defensives gain.
Strong jobs data: Delay rate-cut expectations; yields rise; USD strengthens; growth stocks may lag.

💡 Investment Idea: NatWest Group (LSE: NWG)

NatWest Group stands out as an attractive blend of value, income and improving fundamentals at a time when UK financials are gaining stability. With UK inflation declining, gilt yields easing and expectations rising for BoE rate cuts in early 2026, the backdrop is turning supportive for banks with strong capital positions and prudent risk management. NatWest trades at a compelling valuation discount, including a price-to-book ratio below 1.0 and a mid-single-digit forward P/E, indicating that much of the macro uncertainty is already reflected in the price.

Operational performance has remained resilient. NatWest continues to deliver solid net interest income, disciplined cost control and robust capital returns through dividends and share buybacks. Its strong CET1 ratio provides room for further shareholder distributions while maintaining a conservative balance sheet. As UK consumer pressures ease and mortgage markets stabilise, NatWest is well positioned to benefit from a gradual uptick in loan demand and lower impairments.

Risks include regulatory scrutiny, competitive mortgage pricing and the pace of economic recovery. However, with attractive valuation metrics and improving macro tailwinds, NatWest offers a compelling combination of yield and long-term value, making it a strong candidate for retail investors seeking income-oriented positions with re-rating potential.

Prepared by the Scientia Capital Management Team. This publication is based on verified market data and analysis. The views expressed are for informational purposes only and do not constitute investment advice. Scientia Capital Management combines market expertise with AI-driven intelligence to empower investors worldwide.