The year starts with a sharp rise in geopolitical uncertainty.
Multiple new flashpoints are in focus: Venezuela, Iran, Greenland, the Middle East (Gaza), the ongoing Russia–Ukraine war, and China’s stance toward Taiwan.

Today, US President Donald Trump hinted at imposing tariffs on countries that “don’t go along with Greenland,” reiterating that Greenland is “needed for national security.”
At the same time, the US Supreme Court is expected to rule on the legality of Trump’s reciprocal and fentanyl-related tariffs — a decision already postponed twice.

Meanwhile, Canada’s Prime Minister Mark Carney has reset relations with China, calling it a “strategic partnership,” marking a clear break from the diplomatic chill of recent years, turning away from the close partnership with the US.

Markets: Despite rising geopolitical stress, markets remain strikingly calm. Equities are supported as the AI trade received fresh fuel from strong earnings reported by TSMC (Taiwan Semiconductor Manufacturing Company). Volatility remains compressed, and risk premia for any potential geopolitical escalation are largely absent.

My View: We are seeing real actions, not just words. Geopolitics in early 2026 is no longer background noise — it is actively shaping the framework for trade, security, and economic decision-making.

The US move against Venezuela in the first days of the year, combined with renewed and very real pressure around Greenland, highlights a more assertive and unpredictable geopolitical environment. Venezuela alone could be dismissed as an isolated event. But taken together, global tensions are mounting and intensifying. And Europe? Largely sidelined, reactive, and without strategic weight.

Meanwhile, markets are trading at or near all-time highs across Europe, the US, and Asia. Markets appear increasingly decoupled from reality. First, the AI narrative pushed valuations to clearly stretched levels. Now, geopolitical escalation risk is being almost entirely ignored. Volatility remains low, even as economic momentum shows early signs of fatigue.

This uncertainty is already weighing on the real economy. Companies delay investment decisions, capex plans are postponed, and confidence erodes quietly beneath the surface.

And to remember, the key court ruling on tariffs is still pending — and already postponed twice.

While markets are currently calm, the growing disconnect between risk fundamentals and asset pricing is turning into a certain red flag for investors. Navigating this environment requires readiness for action, scenario planning, and disciplined portfolio protection.
The ETFMandate portfolio therefore maintains an elevated cash position. I am waiting for better entry points, with a meaningful dip that could arrive sooner than many expect.

Lately, major announcements have increasingly been released after Friday’s market close or over the weekend. Headline risk remains elevated.

Let’s see what this weekend brings. At these elevated market levels, headlines can trigger outsized moves.

The fourth-quarter earnings season has started with the major US banks, delivering solid headline results. JPMorgan and Bank of New York Mellon reported yesterday, both posting earnings above expectations. Today, Wells Fargo, Bank of America, and Citigroup followed with broadly stronger results, while Goldman Sachs, BlackRock, and Morgan Stanley will report tomorrow.

Markets: US bank stocks declined

My View: Banks often provide the first meaningful signal on both corporate earnings momentum and the underlying state of the economy, giving investors another look at credit quality and consumer health. While reported earnings were mostly stronger than expected, forward guidance matters far more than backward-looking numbers at this stage of the cycle.

Several financial institutions flagged rising risks — including geopolitical tensions, sticky inflation, and elevated asset prices.

US bank stocks had already seen a strong rally in recent weeks, leaving limited upside and increasing the likelihood of consolidation or a shift in momentum. President Trump’s announcement to cap credit card interest rates also weighed on sentiment, raising concerns about potential margin pressure.

I left the financials party earlier. With clouds gathering on the horizon, the risk-reward balance had already turned less attractive. When banks themselves highlight that asset prices are elevated, this should clearly not be ignored.

Looking ahead, technology earnings will be decisive for broader market direction. Taiwan Semiconductor Manufacturing Company (TSMC) is among the first to report tomorrow, with the major US tech names following in the coming weeks.

The widely followed December US inflation data delivered a mixed but important message for markets.

• Headline CPI rose 0.3% month-on-month and 2.7% year-on-year, exactly in line with expectations.

• Core CPI (ex food & energy) increased only 0.2% MoM and 2.6% YoY, undershooting the consensus forecast of 2.8%.

At first glance, investors interpreted the data as confirmation that inflation pressures are easing. A closer look suggests the picture remains incomplete.

Markets:

• Equities: US equity Futures, flat overnight, briefly moved into positive territory after the release before slipping into the red shortly after the opening bell.

• Bonds: Yields declined across the curve, both at the short and long end, after the US 10-year yield had briefly exceeded 4.2%ahead of the data.

• USD: strengthened

• Commodities: Gold, silver, and other metals continued their rally.

My View: Prices are cooling—but not enough to justify another rate cut anytime soon as job market does not seem to deteriorate.

Nothing new, the White House sees room for interest-rate cuts. The Federal Reserve may not, at least not yet. Today’s data strengthens the Fed’s position: inflation is easing, but not decisively enough to warrant policy action, especially with the 2% inflation target still clearly out of reach.

The Fed will remain in focus—not only because of rate decisions, but also due to renewed debate around its independence and the expected announcement of a new Fed chair in the coming days or weeks.

Central-bank independence is a cornerstone of market stability. As such, it should not, by itself, trigger major market disruptions.

That said, political pressure is rising. Donald Trump has increasingly sought to influence monetary policy and push for lower rates. Yesterday’s developments marked another chapter in this ongoing tension. The session opened under a cloud following reports that the Department of Justice was considering actions involving Jerome Powell, linked to developments at the Fed’s headquarters.

This should be interpreted less as a narrow legal matter and more as part of the broader tug-of-war between central-bank independence and political impatience.

For investors, the takeaway is clear: inflation is moving in the right direction, but the path toward easier monetary policy remains uncertain— and more rate cuts could be seen rather later than sooner. Which could lead to some disappointments followed by investors repositioning their assets, reducing risk assets in case they adapt to this scenario.

Today, Bank of Japan (BoJ) raises interest rates. The central bank expectedly hiked its benchmark rate by 25 basis points to 0.75%, the highest level since 1995.

Fresh inflation data underpins the move: a key consumer price gauge rose 3% year-on-year in November, extending the run of inflation at or above the BOJ’s 2% target to 44 consecutive months.

Markets:

• Equities: The Nikkei 225 held most of its earlier gains, indicating no immediate shock to risk sentiment.

• Bonds: Japanese government bond yields moved higher, with the 10-year yield climbing above 2%, a level not seen since 2006.

• JPY: The yen weakened by more than 1% to 157.10 versus the US dollar

My View: Japan is no longer the anchor of global zero-interest-rate liquidity it once was. While markets appear calm for now, the shift in Japanese monetary policy has the potential to ripple across currencies, bond markets, and leveraged risk positions globally.

This policy shift matters less for today’s market reaction and more for what comes next.

• Rising borrowing costs in yen terms change the global funding landscape. For years, Japan has been a key source of cheap leverage. As rates rise, that assumption starts to break.

• The yen remains structurally weak, which is a growing risk for Japan itself. A falling yen keeps import prices elevated and sustains inflation — potentially forcing the BOJ into a more aggressive tightening path than markets currently expect.

• Deleveraging risk: Many global investors have borrowed in yen to fund positions elsewhere. Higher Japanese rates increase funding costs and raise the risk of sudden, disorderly deleveraging, similar to episodes already seen earlier this year.

• Swiss franc back in focus: In a world where yen funding is no longer “free,” currencies associated with stability and low rates, such as the Swiss franc, could regain importance as alternative funding or safe-haven currencies.

The long-awaited US CPI (Consumer Price Index) report delivered a clear upside surprise for markets.
Headline inflation eased to 2.7%, while core inflation fell to 2.6%, both well below expectations of 3.1% and 3.0%, respectively.

This release was the first consumer price report from the Bureau of Labor Statistics since the U.S. government shutdown ended. October’s CPI figures were never published, as the agency was “unable to retroactively collect these data.”

Importantly, the shutdown appears to have impaired the calculation of key housing components, particularly rents. As a result, rental inflation came in surprisingly and abnormally low, raising questions about data quality rather than signalling a sudden structural disinflation in housing costs.

On the labour side, weekly jobless claims were in line with expectations, steady and uneventful — neither flashing warning signs nor signalling renewed strength.

Markets: US equities rebounded, led by the Tech sector, with investors welcoming the softer inflation print and reading it as supportive for a more dovish Federal Reserve.
US yields moved slightly lower with the 10-year yield down to 4.13%.

My View: November’s data suggests that the widely feared tariff-driven inflation shock has not yet arrived. That said, caution is warranted. Tariff inflation is the most awkward kind of inflation. Historically, it tends to build slowly — then arrive all at once. The fact that it has not yet shown up meaningfully does not mean it will not.

The labour market tells a similar story. Employment is cooling, but not collapsing. This matters because the Fed has made its priorities clear. With inflation easing and jobs still holding up, policymakers can afford to wait, rather than rush into aggressive easing. However, the data set off excitement, hope and spreadsheets full of rate-cut fantasies.

Crucially, November CPI should not be over-celebrated. Missing October data and distortions in housing calculations mean this print may not fully reflect underlying inflation dynamics. In other words, this report likely paints a cleaner picture than reality currently deserves.

In short: the direction of travel is encouraging, but the data quality is questionable. One soft CPI print — especially a distorted one — does not make a trend.

Yesterday, the latest released Bank of America Fund Manager Survey (FMS) shows cash allocations dropping to 3.3% in December, the lowest level on record. This signals extremely high risk appetite and heavy positioning in equities.

Markets: Markets appear largely unbothered by this data point. Equity indices continue to trade near record highs, volatility remains compressed, and risk assets are priced for near-perfect conditions. Positioning suggests investors are already fully invested, leaving little room for incremental buying power.

My View: This is a data point markets should not ignore:

• Such low reported cash levels are usually a good selling signal (contrarian)

• With cash levels at record lows, there is very little fresh money left to chase equities.

• Any disappointment, unexpected macro data, or exogenous shock could trigger a sharp and disorderly sell-off, as positioning is stretched and crowded.

• Incoming data does not point to a booming economy. Growth signals are mixed, and the Fed remains in a “wait-and-see” mode, notably lacking the dovish tone that would normally justify such aggressive risk allocation.

In short: valuations and positioning are running far ahead of fundamentals.

ETFMandate Portfolio Positioning

ETFMandate continues to run a contrarian stance, focused on capital preservation and optionality:

• Equity exposure steadily reduced during recent months

• Cash levels increased to maintain flexibility

• Short positions added or increased in some of the most crowded trades, particularly:

  • AI-related stocks

  • The broader technology sector

  • The defense sector

  where expectations have become increasingly one-sided

• Long volatility exposure added, as volatility remains artificially suppressed and is likely to rise sharply in the event of a macro, policy, or geopolitical shock.

I am waiting for better entry points, which could arrive sooner than expected. History shows that when cash levels are depleted and positioning is stretched, corrections often come out of the blue — and tend to be faster and deeper than anticipated.

ETFMandate remains focused on asymmetric risk-reward setups, prioritizing protection and optionality over chasing late-cycle momentum.

US economic data released do not show a picture of an economy running at full speed, more showing some signs of fatigue:

• US Nonfarm Payrolls:
  US job growth modestly beat expectations in November. Nonfarm payrolls rose by 64,000, above the 45,000 consensus forecast, but followed a sharp –105’000 decline in October.

• Unemployment Rate:
  The unemployment rate unexpectedly climbed to 4.6%, the highest level since September 2021, highlighting a continued deterioration in the labor market despite the headline payroll beat.

• Public Sector Distortion:
  October’s steep payroll decline was largely driven by a plunge in federal employment, as workers who accepted deferred resignation offers under the Trump administration officially dropped off payrolls.

• Consumption Signals:
  A separate report showed US retail sales were broadly flat in October, with weaker auto sales and lower gasoline receipts offsetting gains elsewhere.

• Business Activity & Inflation Pressure:
  According to S&P Global, US business activity in December expanded at its slowest pace in six months, while input prices jumped to the highest level in over three years, signaling renewed cost pressures.

Markets: no big market reaction

• Equities: slightly lower

• Bonds: yields remain in a slow upward trend

• Gold: up close to record highs - silver with new record level above USD 66/oz

• USD: losing ground

• Cryptos: sings of fatigue with Bitcoin remaining clearly below USD 90k

• Volatility: VIX sideways on lower levels

My View: This report reinforces a late-cycle labor market narrative rather than a healthy reacceleration. While payroll growth modestly exceeded expectations, the trend is clearly weakening, and the rise in unemployment to 4.6% is a meaningful signal that cracks are forming beneath the surface.

At the same time, inflation pressures are not disappearing, as shown by rising input costs. This combination, slowing growth with sticky inflation, leaves the Federal Reserve in a difficult position and increases the risk of policy missteps.
Odds of a Fed rate cut next month didn’t change following the latest jobs figures. Fed funds futures traders are currently pricing in a 24% chance of a rate cut next month, the same as the day before.

In short, headline data may look “better than expected,” but the underlying picture continues to slowly darken. The labor market is no longer a reliable pillar of strength. Markets will increasingly have to price that in.

China’s economic data for November confirmed a further loss of momentum. Overall, consumption, investment and industrial output all undershot expectations:

• Retail sales rose just 1.3% year-on-year, easing sharply from October and missing market expectations of 2.9%. This marks the slowest annual increase since December 2022, despite ongoing consumer subsidy programs from Beijing.

• Industrial production increased 4.8% YoY, below expectations for a 5.0% rise and the weakest growth since August 2024.

• Fixed-asset investment contracted 2.6% over the January–November period, highlighting continued weakness in private investment and confidence.

Markets: Lately, the rally in China and Hong Kong struggled to gain traction amid disappointing macro data.

My View: China has significant policy capacity if stimulus becomes necessary, and Beijing clearly understands the need to rebalance growth, strengthen household consumption and lift productivity. Structurally, China remains the second-largest economy globally and a leader across multiple sectors, including technology and industrial manufacturing.

In a broader global market correction, China is unlikely to decouple and would probably act as a drag rather than a safe haven.

Against this backdrop, I have trimmed exposure to China-related equities, particularly taking profit in larger positions such as Alibaba, Baidu, PDD and Prosus. For now, I prefer to hold a higher cash level and wait for more attractive entry points and clearer policy signals before reallocating capital into this region.

Doubts around the AI trade intensified this week after earnings from two key players.

Oracle shares plunged nearly 11% after reporting weaker-than-expected quarterly revenue, weighing on the broader AI complex and dragging down names such as Nvidia and Micron.
Yesterday, in extended trading, Broadcom fell around 4.5%. While results beat expectations, investors focused on CEO Hock Tan’s failure to convincingly address concerns that Google, its largest customer, could increasingly design chips in-house.
Additional pressure stems from rising memory prices, which may squeeze margins, and uncertainty around whether Broadcom’s reported chip deal with OpenAI is binding.

Markets: AI related stocks under pressure

• Equities: mixed with tech stocks sharply lower

• Bonds: Reflation trade moves yields higher, US 10-year substantially higher back close to 4.20%

• Gold: keeps rising touching with mounting uncertainties, touching briefly USD 4’350/oz

• USD: without big moves today

• Cryptos: slip broadly with Bitcoin falling back below 90k after a short intraday recovery rally

• Volatility: VIX edges higher

My View: The AI narrative is shifting from unlimited growth expectations toward more scrutiny on revenues, margins and customer concentration. Valuations in parts of the AI space remain more than stretched, leaving almost no room for disappointment.
As a result, I maintain short positions in selected AI stocks with high valuations and crowded allocation, viewing current developments as a confirmation that the AI trade is entering a more volatile and differentiated phase.

Disclosure: no allocation in Broadcom and Oracle

The US Federal Reserve (Fed) eased its monetary policy once again, lowering the federal funds rate by 25 basis points to a target range of 3.50–3.75%, the lowest level in three years. In addition, the Fed resumed purchasing government bonds, marking a notable shift toward renewed liquidity support.

However, despite this easing step, the central bank signaled little appetite for further rate cuts in the near term. The vote within the FOMC underscored a divergence of the committee members to continue.
Fed Chair Jerome Powell consistently framed the policy stance as one of strategic patience, repeating variations of “we are well-positioned to wait and see how the economy evolves.”

Markets: mixed picture

• Bonds: yields turning lower, US 10-year substantial lower at 4.12%

• Equities: mixed with tech leading to the downside after disappointing Oracle earnings

• Gold: back in focus with monetary policy uncertainties, above USD 4’250/oz

• USD: substantial lower

• Cryptos: slip with Bitcoin falling towards 89k

• Volatility: VIX edges higher for a fourth consecutive day

My View: Investors were hoping for a clearer signal that the rate-cut cycle would continue. Powell refused to offer it, therefore disappointed the short-term traders

The consensus narrative now leans heavily on the idea that the incoming Fed Chair will be more dovish, in line with political expectations from the new administration. But this raises a deeper, more uncomfortable question: How independent is the Federal Reserve? A scenario where markets assume political influence over monetary policy is fundamentally dangerous. Expectations can shift quickly and sharply if credibility becomes part of the debate.

On the positive side, the US economy continues to show resilience. Beneath the noise, activity appears firmer than many assume at first glance.

But the risk landscape is far from empty.
Tariffs could re-emerge as a major market driver at any moment in case the courts will announce their decision.

Investors and market watchers await curiously the Federal Reserve’s final monetary policy decision of the year, due later today. The Fed is now widely expected to deliver a third consecutive 25bp rate cut, bringing the policy rate to 3.75%.

While the cut itself appears largely priced in, the real uncertainty lies in what comes next in 2026. Persistent inflation pressures have deepened divisions within the Federal Open Market Committee, making it difficult for Chair Jerome Powell to clearly signal the future rate path. With Powell’s term ending in May and Kevin Hassett, former director of Donald Trump’s National Economic Council, seen as a frontrunner to succeed him, markets are increasingly aware that policy continuity is no longer guaranteed.

Adding to the uncertainty: missing or lagged inflation data has left the Fed operating with limited visibility, effectively flying blind into year-end.

Markets: wider nervousness

• Bonds: yields rising — US 10-year at touching 4.21%

• Equities: broadly lower led by big techs

• Gold: profit taking slipping below USD 4’200/oz

• USD: down

• Cryptos: stabilizing after recent gains — Bitcoin over USD 92k

• Volatility: VIX edges higher for a thir consecutive day

My View: It is rather unusual to see such wide fluctuations in market expectations around an imminent rate decision. Within a matter of days, markets moved from firmly pricing a rate cut, to discounting no cut after stronger job-market data, only to swing back again toward a cut later in the week.

This volatility reflects deeper uncertainty in combination with short-term view rather than conviction.

Over the past several sessions, an important divergence emerged. Bond investors began to express doubt about the sustainability of rate cuts, pushing yields meaningfully higher. At the same time, equity investors remained optimistic, positioning for both today’s cut and additional easing ahead.

That disconnect matters.

If Chair Powell fails tonight to clearly acknowledge the possibility of further rate cuts, or adopts a more cautious, wait-and-see tone, markets could react sharply. In this environment, reassurance is more important than the cut itself.

The risk is not what the Fed does today, but what it refuses to promise tomorrow.

Over the past trading days, global bond yields have been rising steadily, even as investors continue to price in a Federal Reserve (Fed) rate cut expected this Wednesday.

The move started in Japan, where the 10-year government bond yield is moving closer to the 2% level, a threshold last seen decades ago. From there, pressure spilled into global bond markets.

In the US, the 10-year Treasury yield today nearly touched 4.20%, now hovering around 4.18%. Europe and the UK are showing a similar pattern, with yields moving higher across the curve.

Markets: bond yields rising globally

• Bonds: Global yields rising — US 10-year at 4.18%

• Equities: Giving up earlier gains

• Gold: above USD 4’250/oz on Friday, later slipping back below USD 4’200/oz

• USD: Largely unchanged

• Cryptos: Volatile and lower — Bitcoin fluctuating between USD 89k to 91k

• Volatility: VIX ticking slightly higher

My View: This divergence is drawing increasing attention and raising the question of whether markets are underestimating a growing risk.

Despite widespread expectations of a Fed rate cut on Wednesday, bond yields are rising globally, while equity markets continued to grind higher—at least until the final trading hours.

This creates a clear disconnect.

Under normal circumstances, falling yields support higher equity valuations as discount rates decline and liquidity conditions ease. What we are witnessing now since few days is the opposite: yields rising alongside risk assets, until very recently.

Either bond traders or equity traders are on the wrong side of the trade. Among investors, it is often said that bond markets tend to be ahead of the curve. If that holds true, the current move in yields could be flashing an early warning signal.

One potential catalyst lies in Japan. Years of ultra-low yields encouraged investors to borrow cheaply in yen and deploy capital abroad, a major pillar of global liquidity. As Japanese yields rise meaningfully, and with the Bank of Japan expected to hike rates, that trade becomes significantly more expensive very quickly.

If borrowing costs continue to rise, investors may be forced to reduce leverage at speed, leading to: rapid loan unwinds, reduced global liquidity, pressure on risk assets such as equities and cryptocurrencies.

Liquidity has been the primary fuel behind elevated valuations across markets. Any forced deleveraging, particularly from traditionally stable funding sources like Japan, could lead to sharper, headline-driven market moves.

Volatility could also resurface in bond markets. For that reason, it is crucial to watch yields closely in the coming days. History shows that the bond market often reacts first, posing uncomfortable questions long before equities are ready to answer them.

The September inflation figures, the Fed’s preferred gauge, were finally released.
Core PCE inflation and PCE inflation came in at 2.8% YoY, slightly below expectations of 2.9% resp. in-line with 2.8%, offering a modest sign of cooling. On a monthly basis core PCE inflation was 0.2% while PCE inflation remained at 0.3%, both in-line with analysts expectations.

Markets: a brief jump after the release

• Equities giving up earlier gains

• Bonds: yields move higher — 10-year yield at 4.13%

• Gold: remains above USD 4’250/oz level

• USD: almost unchanged

• Cryptos: falling broadly with Bitcoin below USD 89k

My View: Today’s PCE release doesn’t materially shift the picture for the Fed. Inflation is cooling slightly, however remains above the level needed to justify an immediate rate cut.

Markets were hoping for a clearer disinflation signal, but instead received another “not good enough, not bad enough” print.

The bigger story remains the ongoing fragility beneath the surface. Positioning is still stretched in several areas, and liquidity pockets are thinning. Any disappointment, whether on data or policy, could trigger outsized reactions. This is not a market trading on conviction, but on hopes and fears.
Until there is a decisive shift in inflation or labour data, volatility could see spikes and the risk of sharp swings persists.

Japan’s 10-year government bond yield climbed above 1.94% today, the highest level since 2007. The move reflects increasingly firm expectations that the Bank of Japan (BoJ) may raise interest rates this month, moving away from decades with ultra-loose policy.

Expectations intensified after BoJ Governor Kazuo Ueda voiced confidence in Japan’s economic momentum and reiterated that the central bank will carefully evaluate the costs and benefits of a rate hike and act when appropriate.

A key driver remains the ongoing weakness of the yen, with USD/JPY trading above 155, a level that has historically triggered discomfort among policymakers.
Persistent currency depreciation increases import costs, fuels domestic inflation pressures, and raises the likelihood of monetary tightening.

Markets: increasing nervousness from leveraged investors with yen-loans

• JPY started to stabilize this week after long weakening cycle

• Japan Bond yields: higher with the 10-year yield above 1.94%

• Japan Stock Market: larger swings during last trading sessions

My View: The weak yen is becoming a structural issue for Japan and for global markets.

For years, investors tapped ultra-cheap yen loans to finance higher-yielding assets worldwide. If the BoJ now raises rates, these borrowers face rising funding costs, creating pressure to unwind positions. This can trigger forced selling, reduce liquidity, and amplify volatility across asset classes — not only in Japan but globally.

We have witnessed parts of this dynamic earlier this year: April’s sudden volatility and this week’s sharp intraday moves serve as reminders of how sensitive markets are to shifts in Japan’s monetary stance.

A rate hike would mark a fundamental shift:

• the end of an era of nearly cost-free yen borrowing,

• the re-pricing of the global carry trade,

• and renewed pressure on risk assets that benefited from abundant leverage.

In general, higher interest rates in Japan could lead to a stronger Yen which is usually negatively correlated to Japanese stocks.

The next BoJ monetary-policy meeting is scheduled for the 16-18 December and the announcement for Friday December 19 with the potential to rise rates by 25bps from currently 0.5% to 0.75%.

The BoJ sits at a critical juncture. Any move to tighten policy risks unleashing broader market adjustments, and the current backdrop of weak yen, rising yields, and leveraged positioning increases that risk.

The private payroll processor ADP released a weak employment report.

Private-sector employers shed in November. ADP private payrolls had been expected to show a 10,000–40,000 job gain. Instead, the report delivered a 32,000 job decline, compared with forecasts for a modest gain. According to ADP, the decline was driven primarily by a sharp pullback among small businesses, which are typically the first to feel tightening financial conditions.

The next official look at November’s job date will be on December 16 when the Bureau of Labor Statistics releases its delayed employment report for the month.

Markets: try to digest data

• Equities trading sideways to partly loweer

• Bonds: yields mainly lower — 10-year yield at 4.08%

• Gold: higher approaching the USD 4’250/oz

• USD: falls

• Cryptos: sideways after regaining last weeks level with Bitcoin back to USD 92k

• Volatility: VIX unchanged around 16

My View: The narrative is shifting quickly, and not in the way markets hoped. The labour market is no longer just “cooling”. It is flashing some early stress signals, with small businesses showing cracks first. This is typically where broader weakness begins.
Rate cuts driven by economic deterioration are not bullish.

Fed may cut next week, but the motivation matters. Markets still assign an 85–87% probability to a 25-basis-point cut. If the economy is slowing more abruptly than anticipated, the market’s soft-landing conviction becomes fragile.
Markets may not be pricing the “why” behind a December cut. That gap could lead to renewed swings across asset classes.

Attention now turns to privately sourced data on services activity in November for insight into inflation, offering earlier clues on price dynamics. The next official update on consumer prices, the PCE print due Friday, is still catching up on September data and is therefore lagging real-time market conditions.

Forced selling sends new shockwaves through global markets
A new wave of selling pressure hit global markets overnight, triggered by forced deleveraging in the crypto space. The move began during the Asian trading session, where fears of a potential rate hike by the Bank of Japan (BoJ) intensified with yen continuing to weaken. Investors were pushed to reduce leveraged positions once again, a dynamic reminiscent of earlier stress episodes this year in April.

Adding to the pressure, early macro indicators out of Japan and China released in morning and later in the US showed renewed softness, reinforcing concerns that economy remains fragile. The combination of forced selling, macro uncertainty and shifting rate expectations set the tone for a risk-off day globally.

Markets: red across the board

• Equities fall globally

• Bonds: losing ground globally — 10-year yield climbs to 4.09%

• Gold: climbing and approaches latest record highs, now at USD 4’250/oz while silver price reaches record highs with USD 58

• USD: sees continued pressure

• Cryptos: brand sell-off, Bitcoin falling below USD 84k

• Volatility: VIX higher with renewed uncertainties

My View: the latest market move is less about fundamentals today and more about forced mechanics. With yen dropping to record lows, rate-hike fears emerge in Japan, pushing leveraged investors — especially those using JPY as a funding currency — to unwind positions quickly. Crypto is often the first area where liquidations accelerate, but the spillover into equities and commodities is becoming increasingly visible.

This environment is defined by fragile liquidity, elevated leverage, and the field where speculators conviction fading quickly. A single spark can trigger broad selling. Today’s trigger was in Asia, but the underlying vulnerability is global.

The last days demonstrate how sensitive investors are to any shift in rate expectations, whether from the Fed or, increasingly, the BOJ. With inflation concerns resurfacing and macro indicators from Asia disappointing, volatility is likely to stay elevated.

For now, staying disciplined remains key. Forced selling episodes often create noise, but they also reveal where the real cracks in positioning lie. More waves could follow.

The market is once again shifting its narrative. Today’s economic data boosted hopes for an early Federal Reserve rate cut, pushing the probability of a 25bps cut in December to 85%, up from below 30% just one week ago.

Weekly initial jobless claims came in at 216,000 for the week ending November 22 — lower than the expected 225,000.
This is hardly a sign of a weakening labor market. In fact, it's uncomfortably resilient for a market betting on imminent rate cuts.

Markets: FOMO before the holiday

• Equities higher

• US 10-year yield unchanged at 4.0%

• Gold: pushing above USD 4’150/oz

• USD: continued pressure

• Cryptos: lifted by the same momentum, Bitcoin rising towards USD 90k

• Volatility: VIX slipping further to 17

My View: The current optimism on Wall Street is built more on hope than on evidence.

America’s economy is providing just the right amount of disappointment to fuel dovish dreams — softening retail sales, moderating inflation prints, and now a mixed bag of labor indicators. Markets welcome every negative surprise as a positive for policy.
It’s a remarkable turnaround, and a clear sign of how quickly sentiment can flip when investors are desperate for good news.

This optimism was sparked by softer-than-expected data, reinforcing the idea that the U.S. economy is cooling just enough to justify easier monetary policy. But beneath the surface, not everything aligns with that story.
The jobless claims do hardly give a sign of a weakening labor market. In fact, it's uncomfortably resilient for a market betting on imminent rate cuts. Today’s number may give the Fed a reason to pause and reassess, especially as policymakers remain focused on labor-market softness as a key precondition for easing.

Add the political rumor mill, including the potential appointment of Kevin Hassett, a Trump-aligned economist known for dovish tendencies, to lead the Fed, and investors are pricing in a kind of early Christmas present.

But today’s jobless claims number is a reminder: The labor market is not breaking.
And without clearer signs of weakness, the Fed may still decide to wait.

For now, markets are ignoring that nuance. FOMO is running the show, and that always increases the risk of exaggerated moves in both directions.

Producer prices released this afternoon added fuel to the market’s regained “Fed-cut-in-December” narrative.
The PPI rose 0.3% in September, in line with expectations, after a -0.1% decline the month before.
The Core PPI (ex Food & Energy) showed a much softer picture, increasing only 0.2% versus the estimated 0.4%, and down sharply from 0.6% in August.

On the consumer side, the cooling trend became more visible: Retail sales in September rose just 0.2% MoM, half the expected 0.4% and well below August’s 0.6%.
Consumer confidence continues to fall, tanking in November to 88.7 from 95.5 level in October.

This combination, softer consumer momentum and benign producer prices, gave traders additional confidence that the Fed may pivot sooner rather than later.

Markets: Volatility inside the equity market increased, with indices showing larger intraday swings, but the second half of the session stayed comfortably in the green.

• Equities higher, led by consumer names

• US 10-year yield lower, trading briefly below 4.0%

• Gold: firmly above USD 4’100/oz

• USD: under pressure

• Cryptos: continued broad swings, Bitcoin at USD 87k

• Volatility: VIX slipped back below 20

My View: Yesterday’s rebound extended modestly, supported by lower volumes and a renewed belief that the Fed may cut rates in December.
But this narrative selectively ignores the emerging weakness of the US consumer, the true backbone of the economy, accounting for nearly 70% of GDP.

The trend is clear: Spending is slowing, delinquencies are rising, debt levels remain stretched, more households are struggling to cover monthly bills.
At some point, markets will be forced to refocus on this reality. And when they do, the adjustment could be sharp and sudden, potentially triggered by a credit event, similar to what we saw only a few weeks ago.

For now, regained optimism prevails on the traders front. But beneath the surface, the consumer is flashing warning signs that should not be ignored.

The holiday-shortened week puts the spotlight firmly on the U.S. consumer. With Thanksgiving ahead and Black Friday sales underway, this is the key test of real-world spending appetite. Early indicators are not encouraging: consumer sentiment remained around its lowest level in Friday’s report, highlighting fatigue at a time when households typically accelerate purchases.

Markets briefly rallied on Friday after the odds for a December rate cut jumped from below 30% to 70%. This move was triggered by remarks from New York Federal Reserve President John Williams who hinted at room for near-term monetary easing. Investors immediately translated this into hopes for a December rate cut, lifting risk appetite away from the lowest levels.

Markets: higher market swings continue amid investors nervousness

• US futures higher with Nasdaq +1% driven by Googles share price

• Bonds: yields slightly lower with US 10-year yield below 4.05%

• Gold: trades higher trying to reclaim USD 4’100/oz level

• USD: unchanged

• Cryptos: give up latest gains over weekend with Bitcoin falling from USD 88k below 86k

• Volatility: VIX remains well above 20, however lower from Thursday spike

My View: Investors are ignoring the real backbone. Recent market focus has been dominated by AI, valuations, and earnings narratives. But the reality check is the consumer: nearly 70% of US GDP depends on household spending. And the signals are weakening:

• Delinquencies on leasing and auto loans continue to rise, a classic warning sign of household stress.

• Tariffs are slowly feeding into higher prices, making durable goods more expensive just as budgets tighten.

• Savings buffers are thin, and credit card APRs are near historic highs.

All this comes at a moment when the market is highly sensitive to data and speculation. Expectations for a rate cut may provide short-term relief rallies, but the underlying consumer picture is far more important, and far more fragile.

A continued deleveraging process remains likely, with markets reacting in outsized fashion to every piece of data or Fed communication. Volatility should remain elevated. Big swings on both sides are possible as positioning remains thin and macro uncertainty high.

The AI story is still capturing the headlines. Google caught the attention by its AI model launch Gemini 3.0. But the consumer could decide the next market leg. If Black Friday fails to impress, it may confirm what sentiment and rising delinquencies are already telling us: the backbone of the US economy is showing early signs of strain.

In such an environment, elevated volatility, sharp intraday reversals, and continued deleveraging should not come as a surprise.

The market is entering its first meaningful stress test of this cycle, driven by a broad deleveraging wave. The initial trigger came from the crypto space, where prices have fallen sharply in recent days. With highly leveraged positions under pressure, the forced unwinding is now spilling over into equities. Speculators and leveraged investors are being pushed to cut exposure quickly to meet tightening margin requirements.

Yesterday’s market reversal was sparked by a shift in rate expectations. With the US Bureau of Labor Statistics unable to publish the October and November jobs data before the December FOMC meeting due to the government shutdown, the Fed is flying partially blind. The assumption now is that the Fed will not cut rates in December. Investors had priced in a 25 bps cut. This is now being erased, prompting a swift market re-pricing.

Markets: global unwinding process

• US futures lower in early trading

• Bonds: yields fall globally with the US 10-year yield dropping to 4.06% as safe haven demand accelerates

• Gold: down almost 1% trading at USD 4’040/oz - together with falling commodity prices

• USD: unchanged

• CHF: slightly stronger

• Cryptos: tumble with Bitcoin close to USD 81k

• Volatility: VIX rises over 27, signaling some fear

My View: Forced deleveraging is now the dominant driver and it can accelerate quickly.

This is exactly the type of environment I anticipated and positioned the portfolio for over the past months. You can never predict the exact day when the unwind begins, only that it will happen once, and most of the time, the leverage reaches stretched levels and catalysts emerge.

The next phase depends on how aggressively leveraged positions are liquidated. This process can intensify into a wash-out scenario, where selling becomes indiscriminate across assets. If such a phase unfolds, it would open the window to start acting on the opportunity list: gradually covering short positions and selectively buying equities that have moved onto attractive valuation levels.

For now, this requires close monitoring on an hourly and daily basis. The unwind has started, its magnitude and duration will define the next major setup.