Market moves

Bonds

US Treasury yields for 10-year notes pushed past the 4.1% threshold as markets digested the conclusion of Washington’s budget impasse, which resulted in the longest US government shutdown in history. Attention shifted toward forthcoming statistics, though Kevin Hassett from the National Economic Council warned some October measurements might permanently vanish due to collection disruptions. Private indicators suggest employment weakness and cautious consumers, while rate reduction odds for the upcoming US Federal Reserve (Fed) decision dropped to approximately 54%, down from nearly 65% on Monday. The latest note auction revealed softer appetite.

British gilts maintained yields near 4.4%, matching December 2024 lows, following disappointing expansion figures. The United Kingdom’s (UK) third quarter growth came in at a mere 0.1% against expectations of 0.2%, while September saw a contraction of 0.1%. UK unemployment reached a four-year peak and wage growth hit its slowest pace since early 2022. A reported attempt to unseat British Prime Minister Keir Starmer failed and raised concerns about market volatility ahead of the 26 November UK Budget announcement.

German Bunds hovered around 2.65% as economists trimmed 2026 German GDP growth projections to 0.9%, down from 1%. Markets anticipate roughly 40% likelihood of European Central Bank (ECB) easing by September 2026.

Equities

US equity futures found stability following Thursday’s sharp retreat, where indices suffered their steepest losses since 10 October – the Dow surrendering 1.65%, the S&P 500 giving up 1.66%, and the Nasdaq tumbling 2.29%. Technology behemoths bore the brunt, with names like Tesla, Nvidia, AMD, Palantir, Broadcom, and Oracle shedding between 3.6% and 6.6% amid valuation anxieties and massive capital expenditure plans.

London’s FTSE 100 retreated 1.1% as energy majors BP and Shell declined over 1.5%. Private equity group 3i crashed 17% on concerns around the performance of discount retailer Action, its largest investment, while composite insurer Aviva surrendered more than 6% despite improved targets. Aerospace and power systems company Rolls-Royce dipped 2.8% after citing supply constraints.

European indices, STOXX 50 and 600 fell 0.6% and 0.8% respectively as industrial technology company Siemens plunged 9.3% on subdued forecasts.

Commodities

Bullion climbed past $4,200/ounce, tracking toward its strongest weekly performance in over a month, benefiting from dollar weakness and statistical ambiguity following Washington’s budget resolution. Yet appreciation remained limited as Fed policymakers displayed reluctance toward cutting rates.

Brent futures advanced over 2% toward $64/barrel, poised to break a fortnight’s decline, as looming American sanctions on Russian oil beginning 21 November, may create supply disruption. Global oil and gas company Lukoil commenced workforce reductions in trading divisions ahead of these restrictions, while analysts estimate roughly one-third of Moscow’s seaborne shipments remain trapped in vessels due to logistical delays, compounded by Indian and Chinese purchasing suspensions. However, the International Energy Agency cautioned about surplus conditions, forecasting demand shortfalls of 2.4 million barrels daily this year and 4 million next, despite projecting consumption expansion through 2050. Third-quarter oversupply from the expanded Organisation of Petroleum Exporting Countries, OPEC+, American production increases, and inventory accumulation reinforced downside pressure.

Currencies

The US Dollar Index lingered near 99.2, heading for its second straight weekly setback amid speculation that delayed US government statistics could expose economic deceleration. Trump’s signature on temporary financing legislation concluded America’s most extended federal closure, though authorities warned certain October measurements might permanently vanish. The odds of the Fed easing in December slipped to roughly 50%, despite 2026 reduction expectations still remaining.

The euro pushed past $1.16/€, approaching late October peaks, following Washington’s 43-day impasse resolution on Wednesday. ECB policymakers appear set to maintain current interest rate policy, with markets pricing a 40% likelihood of September 2026 adjustment. ECB Vice President Luis de Guindos stressed that existing rates must remain suitable and advocated for prudent positioning.

Sterling retreated toward $1.31/£, nearing seven-month lows after Keir Starmer and Rachel Reeves apparently abandoned income tax increases preceding the 26 November Budget announcement, where the UK faces a £30 billion shortfall. Third-quarter UK growth came in below expectations, with the UK economy contracting in September. Four-year unemployment highs and the weakest wage acceleration since early 2022 are fuelling expectations that the Bank of England will cut rates.

*Please note that all information is at the time of writing.

Key indicators:

GBP/USD: 1.3187
GBP/EUR: 1.1331
GBP/ZAR: 22.44

BRENT CRUDE: $63.82
GOLD: $4,171

Sources: Bloomberg, Investing.com, LSEG Workspace and Trading Economics.

Written by Citadel Advisory Partner and Citadel Global Director, Bianca Botes.

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