MARKET WRAPS Stocks:
European stocks were higher, as rising expectations of a December Federal Reserve rate cut continued to support the stock market.
Soft U.S. economic data reinforced Fed rate-cut expectations, which were also boosted by a Bloomberg report that White House National Economic Council Director Kevin Hassett was the frontrunner to become the next Fed chair.
"The prospect of a policy shift gained additional traction as Kevin Hassett, widely viewed as the frontrunner to become the next Fed chair, is seen as aligned with President Trump's support for lower borrowing costs," MUFG said.
Focus Wednesday will be on the U.K.'s much-anticipated budget for 2026 at 1230 GMT, as well as the Fed's Beige Book.
U.K. Treasury Chief Rachel Reeves is likely to focus on tax increases and less on spending cuts,
Commerzbank said, adding that attention will be on whether the measures reduce inflation pressures-to allow for more rate cuts-and how complicated the combination of measures turn out to be.
"If there are too many measures and/or it is unclear how helpful these measures are, the market is likely to react with disappointment."
Ebury said tax increases were already priced in by markets, but any considerable increases in government spending and borrowing plans would likely cause a selloff in gilts and sterling.
"What investors will be really interested in is whether these tax measures will be both sufficient enough to achieve fiscal sustainability, while also limiting the hit to Britain's economy."
Stocks to Watch
Salzgitter would strongly benefit from improving steel prices and a rebound in the German economy, Deutsche Bank said as it upgraded the stock to buy from hold.
Company assets, including its stake in copper producer Aurubis and its Technologies division-were likely worth more than 3.5 billion euros-implying its steel operations were undervalued.
Siemens Energy is benefiting from elevated demand which is driving margins higher, Berenberg said as it raised its price target to 130 euros from 122 euros.
U.S. Markets:
Momentum continued, with futures for the three main gauges rising modestly early Wednesday.
Ahead of the Thanksgiving holiday, weekly jobless claims and delayed durable-goods orders for September are due along with the Fed's Beige Book.
Earnings are also slated from and farm-equipment manufacturer Deere.
Forex:
Sterling rose against a weaker dollar but traded flat versus the euro as investors awaited the U.K. autumn budget, where fiscal tightening is expected.
Convera said Sterling's gains ahead of the budget were less about conviction and more about positioning .
Ebury said any considerable increases in government spending and borrowing plans in the U.K. budget would likely cause a selloff in gilts and sterling .
ING said Sterling could depreciate modestly as the budget is likely to deliver fiscal tightening measures that would lower inflation.
A much worse scenario for sterling would be a budget that doesn't convince markets that the fiscal path is sustainable.
The dollar was near a one-week low after Tuesday's softer-than-expected data.
The coming weeks will test the yen and Japanese government bond yields, LPL Financial said.
"Plus, effects could spill overseas, as an extension of the rise in JGB yields could add upward pressure on U.S. Treasurys, for example."
Last week's developments don't indicate the start of a dire situation, but when equity markets, bonds, and currencies fall in concert, "it's rarely a good mix."
Bonds:
Treasury yields edged higher .
Treasury yields declined across the curve on Tuesday and there is room for more declines as the Fed continues to cut interest rates, UBS said. It forecasts the 10-year Treasury yield to decline to 3.75% by June 2026, implying the potential for capital gains.
J.P.Morgan forecasts two-year Treasury yields to remain at around current levels through midyear, while 10-year yields were expected to retrace to 4.25% in the second quarter of 2026 and 4.35% by the fourth quarter.
Eurozone government bond yields could take some cues from the impact of Wednesday's U.K. budget on gilts.
deVere Group said gilts were vulnerable as investors await the economic projections by the U.K. Office for Budget Responsibility during the budget statement.
"If traders decide the projections lean too far toward optimistic revenue expectations or an ambitious GDP path, the premium demanded on gilts will rise."
The tailwinds for further eurozone periphery-core government bond yield spread compression persist , but they have likely weakened in intensity going into 2026, Barclays said.
OATs were expected to continue underperforming next year relative to the broader eurozone government bond yield spread complex, Barclays said.
The Investment Institute by UniCredit maintained the view that the five-year area of the BTP curve remained a good compromise between improving carry and rolldown and containing duration risk.
Nuveen prefers municipal bonds and said the surge in supply has caused municipal bond returns to lag the broader fixed income market this year, creating good-value opportunities.
Japan is unlikely to head into a major financial crisis but higher volatility in the country's assets was possible , according to the Investment Institute by UniCredit.
Energy:
Oil prices were little changed after Ukraine told the Trump administration it would sign a U.S.-drafted peace deal.
"Positive signals from both the U.S. and Ukraine regarding a Russia-Ukraine peace deal continue to put pressure on energy markets," ING said.
"However, there's little clarity on where Russia stands on the current plan."
A peace deal would likely lead to the lifting of U.S. sanctions on Russian crude, opening the door to more barrels just as the market heads into a heavy surplus.
Gas
European natural-gas prices fell, pressured by signs of progress in Ukraine-Russia negotiations and weather forecasts pointing to milder-than-usual temperatures in early December.
EU storage levels remain below the 90% target set for Dec. 1, though milder temperatures would allow the region to refill inventories despite the start of the heating season.
However, ING analysts said weakness in the European gas market has widened the difference between gas prices in Europe and Asia and if this trend continues, it will be less profitable for suppliers to send LNG to Europe.
Metals:
Gold prices rose .
Copper
Copper prices rose, supported by growing expectations of further U.S. rate cuts this year and reports that Chilean producer Codelco is pushing to increase premiums to Chinese buyers.
"This move highlights a potential shift to prioritize U.S. customers over global ones, especially given this year's tariffs and tightening material supply," Sucden said.
"It supports our long-term bullish outlook for copper, as a fragile balance is set to tip into deeper deficits by the end of the decade as availability declines."
EMEA HEADLINES
The U.K. just hiked its minimum wage again. Now it's more than double the U.S.'s hourly pay floor.
U.K. Chancellor of the Exchequer Rachel Reeves faces some tough choices on Wednesday when she sets out a budget that strives to narrow the country's fiscal gap without damaging growth.
But before that, she's announced a move not directly related to the government finances that at least should prove popular with workers: an increase of 4.1% to GBP12.71 an hour for what's called the national living wage.
U.S. Negotiates Lower Prices for Ozempic and 14 Other Drugs
The U.S. government negotiated lower prices in the federal Medicare program for 15 high-selling medicines including Ozempic, widening an effort to rein in drug costs.
The new prices, which will take effect in 2027, shave 38% to 85% off the list prices for drugs for diseases including asthma, cancer and diabetes. The reductions are estimated to save Medicare, the health-insurance program for the elderly, $12 billion.
Ukrainians Resist Pressure From Russia-and Trump
KYIV, Ukraine-Nataliia Melnychenko stood outside a residential building hit by a Russian drone early Tuesday, with dark circles under her eyes. She hadn't slept since the drone struck her building at 2:30 a.m.
"I've learned over these years that Russian missile strikes usually follow every attempt at peace initiatives," said Melnychenko. "On top of Russian attacks, we now also have pressure from our allies," she added.
White House Defends Witkoff After Leak of Conversation With Russian Official
The White House is defending special envoy Steve Witkoff over a reportedly leaked conversation in which he told a Russian official that praising President Trump would help smooth over a call with Russian President Vladimir Putin regarding the war in Ukraine.
Witkoff also suggested that Putin call Trump ahead of a White House visit by Ukrainian President Volodymyr Zelensky, a conversation that gave the Kremlin an opportunity to press the case against giving Kyiv Tomahawk cruise missiles.
GLOBAL NEWS
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November 26, 2025 05:08 ET (10:08 GMT)
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