Core Viewpoint - The US dollar experienced its largest annual decline in eight years in 2025, with a 9% drop, and remains down about 1% from the start of the year despite a recent rally [1][2]. Group 1: Dollar's Performance and Market Sentiment - The dollar index has not recovered from the significant losses incurred after President Trump's tariff announcements, which caused a more than 5% drop in the dollar [2]. - Investors are skeptical about the US administration's commitment to a "strong dollar," as policy uncertainty continues to affect market confidence [1][2]. Group 2: Reserve Currency Status - The US dollar has long been regarded as the world's reserve currency, providing the US with an "exorbitant privilege" and serving as a safe haven during market instability [3]. - There are concerns that the dollar's reserve status may be threatened due to the US's changing role in global security and order, leading to potential reallocations away from the dollar [4]. Group 3: Monetary Policy Implications - The nomination of Kevin Warsh as Fed Chair has raised expectations of aggressive rate cuts, which briefly supported the dollar but ultimately contributed to ongoing uncertainty [5][6]. - President Trump's comments indicate a strong likelihood of rate cuts under Warsh's leadership, further complicating the dollar's outlook [6]. Group 4: Alternative Hedging Strategies - As geopolitical risks and policy uncertainties rise, traders are increasingly seeking alternative hedges, such as the euro, Swiss franc, and gold, indicating a shift in market sentiment away from the dollar [7].

Group 1 - EU retaliation tariffs are back in focus, reviving trade risk and raising concerns about second-order effects on supply chains and margins, particularly for globally exposed companies [1][3] - Industrials and multinationals with European exposure are likely to feel the pressure first when tariff narratives resurface [3] Group 2 - The introduction of credit card APR caps starting January 20 poses a risk for financials, raising questions about margin compression and reduced credit availability [4] - Stocks related to consumer lending and payments, such as SOFI, AXP, COF, SYF, and NU, are reacting to headline risks ahead of any finalized policy [4] Group 3 - The software sector is experiencing a risk-off rotation, with investors selling high-multiple growth names to de-risk portfolios amid policy uncertainty [5] - High-multiple software and data platforms like Snowflake, MongoDB, Salesforce, Adobe, and Datadog are under pressure as investors seek perceived safety and liquidity [5]

Market Reaction - Gold and silver prices surged to all-time highs due to U.S. President Donald Trump's tariff threats against European countries, prompting a shift towards safe-haven assets [1][2] - Gold reached a record price of $4,688 per ounce, with a 2% increase, while silver spiked 4% to $94.02 per ounce before settling around $93 [2] Geopolitical and Policy Risks - The rally in precious metals reflects a rapid repricing of geopolitical and policy risks rather than changes in physical supply [2] - Institutional and policy risks are driving markets towards safe-haven assets, with gold being favored as confidence in fiat currencies wanes [3] Tariff Implications - Trump announced a 10% tariff on imports from several European countries, which could rise to 25% if no agreement on Greenland is reached [4] - The European Union warned of a potential €93 billion ($108.2 billion) counter-tariff package that could be activated if U.S. tariffs proceed [5] Market Trends - The precious metals rally is compounded by existing pressures in currency and gold markets due to Trump's confrontations with the Federal Reserve [6] - Gold typically performs well during geopolitical stress, policy uncertainty, and low real interest rates, having surged 64% last year and up about 8% this year [7] Silver Market Dynamics - Silver has seen a more aggressive rally, gaining 147% in 2025 and over 30% this year, driven by its role as a safe-haven asset and its importance in industrial applications [8]

The S&P 500 dipped 0.3% at midday on Tuesday as investors digested JPMorgan Chase's mixed earnings report and grappled with ongoing policy uncertainty tied to President Trump's recent proposals. ...

Photo by BeInCrypto Bitcoin slid to the $85,000 level on December 15, extending its recent decline as global macro risks, leverage unwinding, and thin liquidity collided. The drop erased more than $100 billion from the total crypto market cap in just days, raising questions about whether the sell-off has finished. While no single catalyst caused the move, five overlapping forces pushed Bitcoin lower and could keep pressure on prices in the near term. Bank of Japan Rate Hike Fears Triggered Global De-Ris ...

Core Insights - A recent UBS report reveals that billionaires are shifting their investment focus towards Western Europe and China, showing increased optimism compared to previous years [2][7]. Investment Sentiment - 40% of billionaire respondents see investment opportunities in Western Europe over the next 12 months, a significant increase from 18% in 2024 [3]. - In China, 34% of respondents identify opportunities, up from 11% last year [3]. - The Asia Pacific region, excluding China, also saw a rise in interest, with 33% of respondents expressing bullish sentiment, an increase of eight percentage points [4]. Regional Shifts - North America has experienced a decline in popularity among billionaire investors, with only 63% favoring the region in 2025, down from 80% in 2024 [4]. - Concerns regarding tariffs, geopolitical conflicts, policy uncertainty, and inflation are influencing these shifts in sentiment [5]. Investment Preferences - 66% of respondents cited tariffs as a major concern likely to negatively impact the market environment in the next 12 months [5]. - The report indicates a preference for private equity investments, with 49% of billionaires planning to allocate funds to direct private equity over the next year [8].

Bloomberg Treasuries closed out their worst week in eight months as conflicting economic data challenged expectations for how much the Federal Reserve might cut interest rates next year. US 10- and 30-year yields rose four basis points on Friday to finish a week in which they spiked the most since April, when havoc erupted in global financial markets after the US administration rolled out its tariffs agenda. Most Read from Bloomberg While traders widely expect the Fed to cut interest rates next week, j ...

Group 1: Immigration Policy Impact - Trump's announcement of a "permanent pause" on migration from "Third World Countries" and a review of green card holders could significantly impact the labor market, potentially reducing U.S. workers by 6.8 million by 2028 and 15.7 million by 2035, which may slash annual economic growth by nearly a third [4][3] - Analysts are divided on the implications of these immigration policies, with some predicting a "pro-growth" agenda while others warn of labor shortages and a potential "wage-price spiral" [3][4] Group 2: Tariff Threats and Economic Implications - Trump is threatening a 60% tariff on Chinese goods and a 10-20% tariff on other imports, which could lead to increased inflation and slower investment growth, as noted by Nomura [5] - The market has previously reacted to tariff announcements with volatility, as seen in the EU-US trade deal where a 15% tariff was imposed, initially causing a rise in European markets before reversing [5] Group 3: Market Reactions and Stock Performance - On November 28, 2025, major U.S. indices saw modest gains, with the S&P 500 up 0.5%, Dow Jones up 0.6%, and Nasdaq up 0.7%, attributed to Trump's pro-growth rhetoric and the performance of tech stocks [4][7] - Despite the overall market gains, individual tech stocks like Nvidia and Oracle faced significant losses, indicating that even leading companies are not immune to valuation concerns [7][8] Group 4: Geopolitical Tensions and Commodity Markets - Trump's threats of military action against Venezuelan drug networks have contributed to increased geopolitical tensions, which typically benefit commodity markets, as evidenced by a rise in WTI crude oil and precious metals [9] Group 5: Analyst Sentiment and Economic Forecasts - Analysts express a mix of cautious optimism and frustration, with J.P. Morgan anticipating a mostly market-friendly agenda but highlighting risks from labor supply shocks, while Goldman Sachs projects a 2.5% U.S. economic growth in 2025, tempered by potential tariff impacts [10]

Core Viewpoint - The current economic environment is characterized by a midcycle slowdown, which is seen as an opportunity for the Federal Reserve to lower interest rates, potentially benefiting risk assets [2][3][5]. Economic Indicators - Inflation expectations remain stable at 2.5%, while real yields are approximately 1.5% with a 4% Treasury rate, indicating weaker growth [2]. - Global leading indicators have been stable but below trend, suggesting a mega cap growth environment, with expectations for lower rates and fiscal support to boost global activity [5]. Market Dynamics - There is a shift in focus towards neglected market sectors, particularly value sectors compared to technology, which may require a catalyst such as policy easing and increased activity [6][7]. - The market is experiencing volatility, often linked to policy uncertainty, but a better risk environment with less volatility is anticipated as rate cuts and fiscal policies are expected to improve economic outcomes [9]. Future Outlook - The expectation is for a reacceleration towards trend-like growth rather than a new higher growth level, which should be conducive for risk assets [3]. - The potential for rate cuts and fiscal policy support globally is seen as a positive signal for the market, particularly towards the end of the year and into the next [8][10].

Market Overview - Global markets ended the week higher, with Wall Street overcoming the U.S. government shutdown and the S&P 500 surpassing 6,700 for the first time, marking a five-month winning streak with a rise of approximately 3.5% for the week and over 14% year-to-date [1] Currency Market Dynamics - The dollar experienced its worst week since July, declining 0.1% on the DXY index to 97.69, influenced by shutdown uncertainty [2] - The euro strengthened by 0.2% to $1.1743, and sterling rose 0.3% to $1.3479, benefiting from softer U.S. data and diminishing dollar momentum [2] - The Swiss franc gained with USD/CHF down 0.4% for the week, while the yen remained volatile amid speculation regarding the Bank of Japan's next moves [2] Economic Data and Government Shutdown - The U.S. government shutdown, which began at midnight Wednesday, halted operations at the Bureau of Labor Statistics and canceled the nonfarm payrolls report, leaving traders to rely on alternative indicators like ADP employment and job-cut figures [3] - Treasury Secretary Scott Bessent indicated that GDP growth could face a temporary setback, but investors remained largely unfazed [4] Federal Reserve Outlook - The absence of official data complicates the Federal Reserve's decision-making ahead of its meeting on October 28-29, where markets anticipate two more rate cuts by year-end [4] - Federal Reserve Chair Jerome Powell's upcoming remarks at a banking conference may provide insights into the central bank's next steps, especially in light of the lack of data [11] Upcoming Events - The week ahead includes the release of the Federal Reserve's latest Meeting Minutes and a vote by the Reserve Bank of New Zealand on a 25bps interest rate cut, potentially lowering the rate to 2.75% [10]