Omnis Weekly Market Update – 08 December 2025

Global equities advanced as expectations for a December interest rate cut supported risk assets. Chinese equities were the best performer, as investors shrugged off concerns surrounding slowing economic activity in the region and focused on the attractive outlook for domestic technology and AI.

 

Last week’s performance – major stock markets 

 

S&P 500	0.31%
Nikkei 225	0.47%
CSI 300	1.28%
Euro Stoxx 50	0.98%
FTSE 100	-0.55%

 

Commentary

 

US: Stocks rise in anticipation of 0.25% interest rate cut this week
U.S. stock markets finished the week higher, as investors price an increasing likelihood of an interest rate cut at this week’s Federal Reserve meeting. The technology-heavy Nasdaq Composite led major indexes higher, advancing 0.91%, followed by the small-cap Russell 2000 Index, which rose 0.84%. From a macro perspective, manufacturing activity contracted for the ninth straight month according to data from the Institute for Supply Management (ISM). Meanwhile, services activity expanded at the fastest pace since February. On Wednesday, payroll processing firm ADP reported that private sector payrolls decreased by 32,000 in November, a sharp reversal from October’s revised gain of 47,000. November’s reading marked the largest monthly drop since March 2023. The Bureau of Economic Analysis (BEA) reported on Friday that the Fed’s preferred inflation measure (the personal consumption expenditures (PCE) index) rose 0.3% month over month in September, in line with August’s reading. This implies a 2.8% climb year-over-year.

Japan: December interest rate hike in Japan on the agenda
Japanese stocks delivered mixed returns for the week, as perceived hawkish commentary from Bank of Japan governor Kazuo Ueda saw increased expectations of a December interest rate hike. Japanese bond yields subsequently rose to 1.93%, the highest level since 2007. In economic data developments, Japan’s household spending shrunk in October by the most since January 2024. Spending contracted 3.0% year over year, more than consensus forecasts of a 1.0% increase and compared with September’s 1.8% gain.

China: Stocks rally despite worsening economic data
Mainland Chinese stock markets advanced as enthusiasm for domestic technology and artificial intelligence trades eclipsed data pointing to an economic slowdown. On the economics front, China’s official manufacturing PMI improved to 49.2 in November from 49.0 in October. But November’s reading marked the eighth straight month that the factory gauge stayed below 50, the level that separates growth from contraction, a record-long stretch of declines, according to Bloomberg. The official non-manufacturing measure of construction and services activity fell to 49.5 in November from 50.1 in October, its first contraction in nearly three years, due to weakness in the real estate and residential services sectors.

Europe: European equities advance on expectation of US and UK interest rate cuts

Major European equity indices were mixed for the week. Germany’s DAX added 0.80%, while Italy’s FTSE MIB ticked up 0.17%. France’s CAC 40 Index was down modestly. From a macro perspective, eurozone inflation increased to 2.2% in November, which was above economists forecasts, but not substantially above the European Central Bank’s 2% target. According to the latest data, Euro area GDP increased by 0.3% in the third quarter, as a rebound in fixed investment contributed to an upward revision from the previous estimate of 0.2%. France and Spain drove the expansion, while Germany’s economy stagnated. The seasonally adjusted unemployment rate in the euro area remained at 6.4% in November.

UK: Pound rises to highest level since October on stronger economic activity
UK equities finished the week lower, giving back gains from the previous week. The pound rallied against the US dollar on Wednesday, as stronger economic activity triggered an unwinding of negative bets against the sterling. This was the largest daily gain since April. House prices remained relatively stable in November despite stamp duty changes, worries about possible taxes in the fall budget, and record real estate prices. The Nationwide Building Society’s house price index rose 0.3% sequentially, beating forecasts for no growth and up from 0.2% in October. Bank of England data showed underlying mortgage demand remained solid. Net mortgage approvals for house purchases fell slightly to 65,018 in October from a revised 65,647 in September.