Finance
Morning Bid: Markets tumble as Fed cut hangs in the balance
Published by Global Banking & Finance Review®
Posted on November 14, 2025
3 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 14, 2025
3 min readLast updated: January 21, 2026
Markets are volatile as uncertainty over a Federal Reserve rate cut grows. Stocks, bonds, and currencies are affected, with geopolitical events impacting oil prices.
SINGAPORE (Reuters) -A look at the day ahead in European and global markets from Gregor Stuart Hunter
It has been a wrenching 24 hours for markets as traders reined in expectations that the U.S. Federal Reserve will ease policy at its December meeting, with a cut now viewed as a coin toss. Stocks, Treasury bonds and the U.S. dollar all fell.
Adding to the gloom, data released on Friday showed China's factory output and retail sales grew at their weakest pace in over a year in October.
Comments from Fed officials have increased the prospects of a hold at the central bank's final meeting of the year. Alberto Musalem, president of the St. Louis Fed, said there was limited room to ease further without becoming overly accommodative, while Cleveland Fed President Beth Hammack said the interest rate policy should remain restrictive in order to put downward pressure on inflation.
Minneapolis Fed President Neel Kashkari told Bloomberg that he opposed a rate cut last month and is on the fence about December as well.
Fed funds futures are now pricing an implied 50.7% probability of a quarter-point cut at the central bank's next meeting on December 10, according to the CME Group's FedWatch tool, down from a 63% chance on Thursday.
The yield on the benchmark 10-year Treasury note rose to 4.1211% compared with its U.S. close of 4.111% on Thursday, while the two-year yield, which rises with traders' expectations of a higher Fed funds rate, reached 3.593%, compared with a U.S. close of 3.589%.
The greenback found little reprieve from higher bond yields, however, with the U.S. dollar index sliding 0.1% to 99.13, nearing its lowest point of the month.
Asian markets fell after Wall Street stocks snapped a four-day winning streak on Thursday, pushing MSCI's broadest index of Asia-Pacific shares excluding Japan down 1.5% on Friday.
Dip-buying during Asian trading hours had petered out by the afternoon, with S&P 500 e-mini futures paring gains to last trade down 0.1%.
In early European trading, Euro Stoxx 50 futures were down 0.4%, German DAX futures rose 0.1% and FTSE futures slid 0.5%.
Sterling was last down 0.4% at $1.3145 after the Financial Times, citing officials briefed on the decision, reported that British Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves have abandoned plans to raise income tax rates, changing course just weeks before the November 26 release of the government's budget.
Oil prices rose after a Ukrainian drone attack damaged a Russian oil depot, sending Brent crude prices up 1.5% to $63.96.
Key developments that could influence markets on Friday:
Earnings:
Allianz, Swiss Re, Rolls-Royce Holdings
Economic data:
France: CPI for October
Eurozone: Employment flash for Q3, trade balance for September, GDP flash estimate for Q3
Debt auctions:
U.K.: 1-month, 3-month and 6-month government debt
(Reporting by Gregor Stuart Hunter; Editing by Thomas Derpinghaus)
Monetary policy refers to the actions undertaken by a nation's central bank to control money supply and interest rates to achieve macroeconomic goals such as controlling inflation and stabilizing currency.
Economic indicators are statistical metrics that provide insights into the economic performance of a country. Common indicators include GDP, unemployment rates, and inflation rates.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal. They are influenced by central bank policies and economic conditions.
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