JPM Dec-cut call sparks risk-on rally

Fed Funds Rate and Asian markets rally after J.P. Morgan's December rate cut call

Key Points

01J.P. Morgan's shift to expect a December 25bp Fed cut increased market pricing for earlier easing, which pressured short-dated Treasury yields and supported risk assets and dollar softness.
02ECB meeting accounts signalled reluctance to rush into rate cuts, which reduced near-term easing odds and lent support to the euro.
03Thin U.S. liquidity around Thanksgiving amplified policy-driven price moves and, together with JPM's call, helped lift Asian markets and coincided with bitcoin's rebound above $90,000.
04Presto Engineering Group announced the acquisition of Garfield Microelectronics Ltd, aiming to create a Europe-focused ASIC design-to-production one-stop shop.

Global Market Summary

Asian equities led gains as the Nikkei 225 (NKY) rose 1.23%, the Shanghai Composite (000001.SS) gained 0.29% and the Hang Seng (HSI) ticked up 0.07% as markets increasingly priced a December Fed cut. European benchmarks were flat to modestly higher with the CAC 40 (FRA40) up 0.04%, the FTSE 100 (UKX) up 0.02% and the DAX (DAX) up 0.18%. U.S. trading was limited around the Thanksgiving holiday, leaving liquidity thin and amplifying the influence of policy commentary on price moves.

Top Movers

Top gainers: ARWR (23.34%), CLSK (13.79%) and URBN (13.54%) led advances, with VERA (13.25%) and FLNC (13.24%) also strong. Top losers: AMBA (-18.78%), NTNX (-17.75%) and ZS (-13.03%) led declines; WDAY (-7.85%) and HSAI (-7.37%) also slipped.

Macro highlights

J.P. Morgan shifted to expect a 25bp Fed cut in December, increasing market pricing for earlier easing and pressuring short-dated Treasury yields while supporting risk assets and dollar softness. The ECB's meeting accounts signalled reluctance to rush into rate cuts, reducing near-term easing odds and supporting the euro, and German GfK consumer confidence for December printed -23.2, underscoring weak consumer sentiment in Europe.

News that moved markets

J.P. Morgan's note moving to a December 25bp cut tightened rate expectations and moved positioning in short-dated futures and policy-sensitive instruments. That call, together with thin U.S. liquidity around Thanksgiving, helped lift Asian markets and coincided with bitcoin's rebound above $90,000, reinforcing a risk-on tone. Presto Engineering Group announced the acquisition of Garfield Microelectronics Ltd, aiming to create a comprehensive Europe-focused ASIC design-to-production one-stop shop.

What to Watch Tomorrow

01FR Inflation Rate YoY Prel (NOV) — forecast 1.1% vs 0.9% prior, Nov 28, 07:45 AM | Tracks November year-over-year price changes, indicating inflation momentum and underlying trend.
02IT Inflation Rate YoY Prel (NOV) — forecast 1.4% vs 1.2% prior, Nov 28, 10:00 AM | Tracks November year-over-year price changes, indicating inflation momentum and underlying trend.
03IN GDP Growth Rate YoY (Q3) — consensus 7.3% vs 7.8% prior, Nov 28, 12:00 PM | Indicates year-over-year growth in Q3, signaling overall economic momentum versus prior year.
04DE Inflation Rate YoY Prel (NOV) — consensus 2.4% vs 2.3% prior, Nov 28, 01:00 PM | Tracks November year-over-year price changes, indicating inflation momentum and underlying trend.
05CA GDP Growth Rate Annualized (Q3) — consensus 0.5% vs -1.6% prior, Nov 28, 01:30 PM | Gauges Q3 growth momentum in annualized terms, indicating the pace of activity.
06CA GDP Growth Rate QoQ (Q3) — forecast 0.3% vs -0.4% prior, Nov 28, 01:30 PM | Measures Q3 quarter-over-quarter growth, signaling near-term activity momentum and overall growth pace.

Key Takeaways

01Asian equities led gains as markets increasingly priced a December Fed cut, with the Nikkei, Shanghai Composite and Hang Seng all advancing.
02European benchmarks were flat to modestly higher while U.S. trading was constrained by Thanksgiving, leaving liquidity thin and amplifying policy-driven moves.
03Top movers were concentrated: ARWR, CLSK and URBN led gains while AMBA, NTNX and ZS were among the largest decliners, showing idiosyncratic stock swings.

References