Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia – giving you clear insights to support client conversations.
This week's headlines
- Budget about-turn – reports suggest Chancellor Rachel Reeves has stepped back from the heavily hinted manifesto-breaking – rise in income tax. A brighter outlook from the Office of Budget Responsibility (OBR) appears to have given her room to rethink. Tax rises are still expected to fill the remaining hole in public finances, but the scale may be smaller than feared.
- US government shutdown ends – America’s record-long 43-day federal government shutdown ended on Wednesday after a bipartisan funding deal. But the bill didn’t settle the Affordable Care Act (ACA) subsidy issue, with Congress committed to a separate vote in December, setting the stage for another potential showdown.
- UK unemployment hits 5% – unemployment rose to a four-year high, with 2.5 unemployed people for every job vacancy. Private sector regular pay growth slowed to 3.8%, nearly a five-year low.
- UK economy stalls – UK GDP grew by just 0.1% in the third quarter of 2025 – falling short of the 0.2% forecast and down from 0.3% in Q2. September GDP fell 0.1% after flat growth in August, with weakness across services and construction. Manufacturing also contracted sharply, partly due to a five-week production halt at Jaguar Land Rover following a major cyberattack.
- US data delays – the shutdown’s timing means key October data – jobs, CPI and retail sales - couldn’t be published. The Bureau of Labor Statistics (BLS) and other agencies are still working to reschedule the delayed reports, but economists warn that some October data may never be released, and the November figures could be delayed by a week, adding further uncertainty to the outlook.
What this means for financial advisers and clients
Markets responded negatively to this morning’s UK Budget news. Sterling fell against major currencies and gilt yields rose. While the updated fiscal forecasts show improvement – typically a supportive signal – the reaction suggests investors remain unsettled by recent policy uncertainty and reversals. That said, once the Budget is formally delivered on 26 November, we may see a period of relative calm in UK government bond markets, as speculation gives way to clarity.
Recent data paints a picture of a softening UK economy, which will increase pressure on the Bank of England to consider a rate cut at their December Monetary Policy Committee (MPC) meeting. Market pricing now reflects a 60% chance of a rate cut in December, up from just 10% a month ago. The Bank’s 5–4 vote split at its November meeting revealed deep divisions within the MPC, with four members already backing a cut to 3.75%. Significant tax rises are still expected in the Budget, which could dampen growth and strengthen the case for monetary easing. If upcoming inflation and jobs data continue to show disinflation, a rate cut becomes more likely.
Meanwhile, the extended US government shutdown has left a gap in key economic data releases, leaving investors to navigate without the usual indicators that guide market and policy expectations. This lack of visibility increases uncertainty around the Federal Reserve’s (Fed) December rate decision, and may drive short-term volatility, particularly in rates, foreign exchange, and equity positioning, as investors reassess risk without a clear macroeconomic picture.
Chart of the week - US Bitcoin ETFs see outflows
Source: Bloomberg
Why this matters
US Bitcoin ETFs saw their second highest daily outflows after traders slashed the odds of a December Fed rate cut to below 50%. In the absence of fresh economic data, several Fed officials expressed caution about further easing, prompting a pullback in stocks heading into the weekend.
Bitcoin has increasingly become a leading indicator of global liquidity conditions, offering investors a real-time gauge of risk appetite and monetary dynamics. Unlike traditional assets, Bitcoin trades 24/7, across borders, and is highly sensitive to shifts in interest rates, central bank balance sheets, and dollar liquidity.
The recent dip in Bitcoin, alongside rising real yields and delayed US data releases, suggests investors are bracing for less accommodative conditions, even as central banks weigh rate cuts.
The Markets
Rate cut hopes boost FTSE
After hitting multiple record closes earlier in the week, the FTSE 100 slipped on Thursday, as investors digested a mix of corporate earnings and soft UK data. A weaker pound benefitted exporters, with AstraZeneca reaching an all-time high and Vodafone rallying on strong European performance.
AI sell-off
US stocks ended the week on a volatile note, with major indexes posting their worst single-day losses since October on Thursday. The S&P 500 and Dow Jones both fell 1.7%, while the Nasdaq dropped 2.3%, breaking a seven-week winning streak. The sell-off was led by AI mega-cap stocks, including Nvidia, Broadcom, and Alphabet, which declined sharply amid growing concerns over elevated valuations, cloud infrastructure spending, and debt-fuelled growth.
Europe outperforms
European equities kicked off the week with strong momentum, as the STOXX 50 and STOXX 600 indices hit record highs. Investor sentiment was lifted by speculation of fiscal stimulus in Germany, and upbeat broker notes on names like Novo Nordisk, Siemens Energy, and Commerzbank. Gains faded later in the week due to the tech sell-off and signs of slowing growth in China.
Japan shines
Japanese stocks enjoyed another strong week, with the Topix index closing at a record high. A weaker yen boosted export competitiveness, while Prime Minister Sanae Takaichi’s economic agenda and corporate reforms supported investor confidence. US investors have also increased exposure to Japanese equities, viewing them as a relatively undervalued alternative to stretched U.S. tech stocks.
Gold surges
Gold prices rallied to multi-week highs this week, fuelled by bets of further interest rate cuts after the US government reopening. Gold rose for a fifth straight session on Thursday to hit its highest level in more than three weeks, underscoring its dual role as both a monetary hedge and a risk-off asset.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 1.45% | 24.01% |
| FTSE 250 | 1.15% | 10.19% |
| S&P 500 | -0.19% | 9.53% |
| NASDAQ | -0.58% | 13.41% |
| FTSE Developed Europe Ex-UK | 3.63% | 25.74% |
| FTSE Emerging Markets | 1.40% | 20.91% |
| FTSE Japan | 1.49% | 20.00% |
| Brent Crude | -0.81% | -20.02% |
| Gold Spot | 5.19% | 53.69% |
| UK 10yr Gilt yield | -3bps | -13bps |
| US 10yr Treasury yield | +2bps | -46bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 14th November 2025.
Stay tuned for next week’s market insights
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This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
