Market Overview - Futures on the S&P 500 and Nasdaq 100 gained about 0.5% as the new week began, following a turbulent stretch marked by a selloff in riskier market segments [1][12] - Bitcoin edged lower on Monday, giving up some gains from a weekend rally [1][12] - Shares in Australia and South Korea opened higher, while Japan was closed for a holiday [1][12] Oil Market - Oil prices extended their slump after the biggest weekly loss since early October, as traders considered the potential for a Ukraine-Russia peace deal that could increase crude flows into an already well-supplied market [2][12] Risk Sentiment - Risk sentiment improved on Wall Street amid reports of early talks by US officials regarding Nvidia's potential sale of H200 AI chips to China [3][12] - The market received a boost from comments by Fed Bank of New York President John Williams, suggesting a near-term rate cut remains a possibility [3][12] Volatility and Market Dynamics - Markets experienced a resurgence in volatility last week, driven by doubts over the Fed's ability to cut rates, unsettling investors [6][12] - Retail momentum traders favored assets such as cryptocurrencies and AI-related stocks, which experienced sharp swings [6][12] - The MSCI Asia Pacific Index saw its steepest weekly drop since April due to a selloff in Asian tech shares [6][12] US Debt and Interest Rates - US debt climbed on Friday after Williams indicated room for easing policy in the near term, citing increased downside risks to employment and eased upside risks to inflation [8][12] - Traders increased bets on a December rate cut, although officials remained divided on the decision [8][12] European Fiscal Pressures - The euro and pound remained steady as fiscal pressures in Europe gained attention, particularly after France's National Assembly rejected part of the 2026 budget [8][12] - The UK government announced a freeze on rail fares in the upcoming budget, part of measures to offset the political impact of raising up to £25 billion ($33 billion) in taxes and spending restraint [9][12] - Analysts noted that the credibility of spending cuts and revenue-raising measures would be crucial for market perception [10][12] Geopolitical Developments - Tensions between China and Japan continued, with China writing a letter to the UN and Japan's defense minister discussing missile deployment plans near Taiwan [10][12] - US Secretary of State Marco Rubio indicated that the proposed November 27 deadline for securing Ukraine's support for a US-backed peace plan could be flexible [11][12]

Core Insights - U.S. stocks reached all-time highs following September's consumer-price index data, which showed inflation rising slower than expected, supporting potential Federal Reserve interest-rate cuts [1][3] - Despite positive short-term indicators, concerns remain about inflation's trajectory beyond the immediate future, with predictions of a possible rise in the 10-year Treasury yield to 6% or higher [2][5] Economic Indicators - The Dow Jones Industrial Average closed above 47,000, marking its 13th record close of the year, while the S&P 500 and Nasdaq achieved their 34th and 33rd record closes respectively for 2025 [3] - Treasury yields exhibited mixed results, with the 3-year yield falling to 3.49%, contrasting with an overnight fed-funds rate around 4.11% [4] Inflation Trends - Disinflationary trends are observed in various components of inflation, particularly in shelter, although inflation is expected to remain "sticky," delaying the Federal Reserve's return to a 2% inflation target [4] - The economic outlook suggests that the economy may be weaker than market perceptions, leading to anticipated rate cuts by the Federal Reserve [5] Lending and Yield Curve - A potential surge in bank lending may occur once the 3-year Treasury yield surpasses the shorter overnight rate, indicating a shift in market sentiment regarding U.S. growth and inflation [6]

Market Trends - Indonesian bonds are likely to be the biggest beneficiary in Asia as growing expectations of Federal Reserve interest-rate cuts [1] Investment Opportunities - Expectation of gains across the Asian region due to potential Federal Reserve interest-rate cuts [1]