Daily Market Outlook, December 3, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Asian markets saw limited action on Wednesday, mirroring the range trading witnessed on Wall Street, as investors exercised caution ahead of a wave of US economic reports. The MSCI's regional share index increased only marginally, even as Chinese companies listed in Hong Kong lagged behind. Futures for the S&P 500 and Nasdaq 100 rose by 0.2% each after the US benchmark achieved its sixth rise in seven trading days on Tuesday. Bitcoin has bounced back to the 94K level as renewed market stability returned on Wednesday following a rough start to the week, as rising concerns about an impending rate increase in Japan led to a worldwide bond selloff and worsened the decline in cryptocurrencies. The muted overnight movements in equities reflected a fragile sentiment ahead of this month's interest rate announcements from the Fed and BoJ. On Wednesday, the US is set to release ADP's November private-sector employment figures, along with the import price index and September's industrial production data. The September PCE index, which is the Fed's preferred gauge for inflation, is expected to be published on Friday after a lengthy wait. According to a private poll, China's services sector grew at its slowest pace in five months in November, highlighting signs of weakening consumer demand. Additionally, silver reached a new peak as traders anticipated ongoing supply constraints and lower borrowing costs in the US. Gold also saw an increase. Meanwhile, WTI oil remained relatively stable as traders evaluated the potential for a resolution to the Ukraine conflict following discussions between the US and Russia, although attacks on Moscow's energy infrastructure continued.

The latest BoE financial stability report highlights the resilience of the UK banking sector, capable of supporting economic growth despite rising global risks. Domestic banks maintain strong funding and liquidity positions, aided by ringfencing, resolution regimes, and declining household and business debt levels. The BoE’s Financial Policy Committee reduced the Tier 1 capital requirement to 13% of risk-weighted assets (CET1 ratio ~11%), aligning with Basel 3.1 standards effective January 2027, while maintaining the countercyclical capital buffer at 2%. Major banks already exceed these requirements, with Tier 1 capital at 14.4% in Q3, rising to 18.1% for smaller institutions. Despite nominal loan growth, credit demand remains subdued, and debt-to-deposit and GDP ratios continue to decline, reflecting fragile UK economic confidence.

Disinflation in the Eurozone has slowed, as the November flash estimate shows. Headline CPI rose slightly to 2.2% y/y from 2.1%, with core prices steady at 2.4% y/y and services inflation up to 3.5% y/y. This aligns with expectations and isn’t likely to concern the ECB Governing Council. Inflation is expected to decelerate next year, aligning with mid-term targets. However, rising services prices, supported by strong labor conditions, may prompt hawkish scrutiny, potentially raising the bar for further easing. Any additional rate cuts would require a significant downturn, likely from an external shock, as current policies are already supporting the economy. Policymakers may now favor euro appreciation for its dampening effect on input costs, which could be seen as the optimal approach in Frankfurt.

Overnight Headlines

  • Trump Says Former President Joe Biden’s Pardons Are Invalid

  • Trump Sees Fed Chair Pick ‘Early Next Year,’ Praises Hassett

  • Brussels Pushes For 70% Of Critical Goods To Be ‘Made In Europe’

  • China Services Activity Slows Again In Sign Of Frail Economy

  • China’s Finance Minister Calls For More Fiscal Firepower

  • Australia’s Economic Growth Disappoints, Cooling Rate Bets

  • Australia's Econ. Likely At Potential Growth Limit, Bullock Says

  • EU Reached Deal On Phasing Out Russian Gas Imports By 2027

  • US API Inventory Shows Unexpected Draw In Crude Stocks

  • SEC Head Wants To Ease Rules For Small-Firm Public Offerings

  • Amazon Rushes Out Latest AI Chip To Take On Nvidia, Google

  • Anthropic Taps IPO Lawyers As It Races OpenAI To Go Public

  • OpenAI’s CEO Urges ‘Code Red’ ChatGPT Push As Rivals Move In

  • Marvell To Buy Chip Startup Celestial AI For $3.25 Billion

  • Comcast’s Bid Seeks To Merge NBCUniversal With Warner Bros.

  • Several Vanke Bondholders Signal They’ll Oppose Extension Plan

  • P&G Warns Of US Weakness In Some Consumer Goods Categories

  • Russia To Consider Measures Against Ships Helping Ukraine

  • Russia Says No Compromise Plan On Ukraine Yet After Talks

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1450 (1.3B), 1.1530 (1.2B), 1.1535 (835M), 1.1540 (585M), 1.1575 (640M), 1.1600 (735M)

  • EUR/USD: 1.1625 (730M), 1.1650 (675M), 1.1750 (955M), 1.1800 (660M)

  • USD/JPY: 154.50 (585M), 155.00 (910M), 155.50 (750M), 155.85 (400M), 156.00 (405M), 156.25 (400M)

  • USD/JPY: 157.00 (840M), 158.00 (930M), 159.75 (1.0B), 160.00 (615M)

  • GBP/USD: 1.2730-35 (440M), 1.3550 (910M)

  • EUR/GBP: 0.8725-30 (320M), 0.8750 (475M), 0.8830 (400M), 0.8850 (350M), 0.8885 (505M), 0.9190 (320M)

  • USD/CHF: 0.7950 (600M), 0.8075-80 (400M), 0.8145 (635M).

  • USD/CAD: 1.3750 (660M). AUD/USD: 0.6075 (515M), 0.7075 (825M)

  • NZD/USD: 0.5575 (555M), 0.5730-35 (415M)

CFTC Positions as of the Week Ending 7/10/25 

  • CFTC FX positioning data backlog clears January 20. Upcoming data on December 2, 5, 9, 12, 16, 19, 23, 30, followed by January 6, 9, 13, 16, 20. Normal service resumes January 23.

  • CFTC Positions as of October 14th

  • Equity fund speculators reduced their net short position in S&P 500 CME by 44,609 contracts, now standing at 413,789 contracts. Equity fund managers decreased their net long position in S&P 500 CME by 31,392 contracts, bringing the total to 913,041 contracts. 

  • Speculators cut their net short position in CBOT US 5-year Treasury futures by 5,994 contracts, which now totals 2,261,744 contracts. Conversely, they raised their net short position in CBOT US 10-year Treasury futures by 42,839 contracts, reaching 830,797 contracts. Speculators reduced their net short position in CBOT US 2-year Treasury futures by 34,111 contracts, leaving it at 1,185,847 contracts. They also increased their net short position in CBOT US UltraBond Treasury futures by 29,953 contracts, now at 296,811 contracts. Speculators lowered their net short position in CBOT US Treasury bonds futures by 3,988 contracts, resulting in a total of 58,364 contracts. 

  • The net short position for Bitcoin stands at –452 contracts. The Swiss franc has a net short position of –28,206 contracts, while the British pound's net short position is –11,629 contracts. The Euro's net long position is 108,325 contracts, and the Japanese yen's net long position is 37,166 contracts.

Technical & Trade Views

SP500

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 6820 Target 6897

  • Below 6718 Target 6628

EURUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 1.1612 Target 1.1688

  • Below 1.1605 Target 1.1482

GBPUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 1.3275 Target 1.3337

  • Below 1.3227 Target 1.3159

USDJPY 

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 156.14 Target 157.96

  • Below 155.35 Target 154.16

XAUUSD

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 4244 Target 4319

  • Below 4173 Target 4094

BTCUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bearish

  • Above 90k Target 95k

  • Below 89k Target 86k