Mid Week News Summary: 17-19 Nov 2025

Global markets were dominated by shifting interest-rate expectations as U.S. Federal Reserve officials sent mixed signals on whether a December rate cut was still justified. The U.S. dollar fluctuated with incoming labor data, tech stocks corrected on AI-valuation fears, and tariff policy took center stage as President Trump slashed duties on agricultural imports. Europe faced fresh political and fiscal uncertainty, with the U.K. roiled by a surprise tax reversal and Switzerland’s franc surging on haven demand. Japan posted a sharp 1.8% GDP contraction, while Australia and New Zealand faced currency weakness tied to deteriorating China-Japan relations. Across markets, jobs data softened, inflation indicators were uneven, and AI investment accelerated — with Microsoft, Nvidia, and Anthropic announcing major funding moves that underscored the structural tech cycle even amid valuation concerns.

United States (USD)

Key themes: tariffs, Fed uncertainty, tech valuation concerns, labor softness

• Tariffs:
  President Trump cut import tariffs on a wide list of agricultural goods — oranges, tomatoes, bananas, cocoa, coffee, tea, etc.
  → Aim: reduce food-price inflation ahead of weak polling numbers.

• Trade Tensions:
  U.S. negotiators warned the EU that trade relations remain a “flashpoint” due to slow EU tariff reductions.

• Fed Policy:
  17 Nov: Markets scaled back expectations of a third consecutive rate cut as Fed hawks warned inflation remained too high.
  18 Nov: Fed Governor Christopher Waller openly supported a December rate cut, calling the labor market “weak and near stall speed,” highlighting policy splits.
  19 Nov: Dollar weakened as ADP data showed U.S. labor momentum slowed sharply in mid-October.

• Markets:
  U.S. equities were mixed to soft: tech led declines as investors reassessed AI valuations ahead of Nvidia earnings.

United Kingdom (GBP)

Key themes: fiscal credibility risks, labor cooling, BOE caution

• Budget Shock:
  Gilt yields jumped after Chancellor Reeves unexpectedly abandoned a planned income-tax rise, shaking confidence in the fiscal plan.

• Bond Market Reaction:
  Spreads widened sharply on 17 Nov but stabilized on 18 Nov as markets processed the fallout.

• BOE Commentary:

• Governor Bailey earlier noted long-term benefits of QE may offset its costs.

• BOE’s Catherine Mann warned that U.K. companies are still adjusting to high inflation — a warning against early rate cuts.

• Labor Market:
  Unemployment recently rose to 5%, wage growth slowed → suggests a cooling economy.

Eurozone (EUR)

Key themes: haven flows, fiscal strain, inflation risks

• Swiss Franc Surge:
  CHF hit a 10-year high vs EUR, as expectations of persistent inflation and lower U.S. tariffs drove haven demand.

• ECB Caution:

• Isabel Schnabel earlier warned inflation risks tilt upward.

• ECB’s Sleijpen signaled the ECB may need to act if stablecoin instability spills into financial markets.

• Fiscal Strains:
  Germany warned that Chancellor Merz’s defense/infrastructure push lacks structure and risks substituting core budget items with one-off funds.

Japan (JPY)

Key themes: recession shock, FX pressure, fiscal uncertainty, China tensions

• GDP:
  Q3 GDP –1.8% (annualized), dragged by:

• U.S. tariffs hurting exports

• Housing investment slump
  → Reinforces the case for an upcoming large stimulus package.

• FX & Risk Premium:
  USDJPY ~ 155, as Goldman Sachs noted rising risk premium due to expectations of large fiscal spending.

• Central Bank:

• 17 Nov: BOJ minutes showed hesitation about immediate rate hikes given deflation history.

• 18 Nov: BOJ seen likely to hold until at least March 2026, per government advisory panel.

• Geopolitical Shock:
  China escalated confrontation over PM Takaichi’s remarks on Taiwan, adding pressure to JPY and Japanese equities.

• Markets:
  Japanese stocks opened lower on 18 Nov ahead of Nvidia earnings and U.S. job data.

Australia (AUD) & New Zealand (NZD)

Key themes: labor tightness, inflation concerns, China geopolitical drag

• Currencies:
  AUD and NZD fell as geopolitical tensions rose between China and Japan, hurting regional risk sentiment.

• Labor:

• Australia wages +3.4% YoY in Q3 → signals tight labor market and lingering inflation.

• Productivity remains weak, complicating RBA policy.

• RBA Commentary:

• Deputy Governor Hauser noted Australia lacks spare capacity.

• Minutes confirmed policymakers debated whether policy is still restrictive.

• Policy Clarifications:
  Board member Renee Fry-McKibbin defended RBA’s balanced approach, pushing back on public criticism.

China (CNY)

Key themes: weak consumption, rising tensions with Japan

• Consumption:
  China likely heading for its longest consumption slowdown in 4+ years.

• Expected retail sales for October: +2.8% YoY, indicating stagnant domestic demand.

• Inflation:
  Consumer prices +0.2% YoY, reversing September’s –0.3% decline.

• Geopolitics:
  Sharp escalation in rhetoric against Japan, including threats of “major countermeasures.”

Economic Growth (Global)

• Japan GDP: –1.8% in Q3 (one of the worst readings since 2020).

• China retail growth: expected 2.8% YoY (weakest multi-year trend).

• U.S.: tech-sector drag + labor softening → increased recession chatter.

• U.K.: fiscal credibility concerns → higher borrowing costs → growth headwinds.

Jobs & Labor

• U.S.:
  ADP signals labor “lost momentum” mid-Oct; Fed Waller says labor is “near stall speed.”

• U.K.:
  Unemployment rose to 5%, wage growth slowing — signals softening market.

• Australia:
  Wages +3.4% YoY, tight labor but poor productivity.

Debt Securities / Bonds

• U.S. Treasuries:
  Pricing out third rate cut pushed yields higher.

• U.K. Gilts:
  Sharp sell-off after tax reversal → yields surged.

• Japan:
  Risk premium rises on fears of large fiscal stimulus.

• Switzerland:
  Haven flows boosted CHF and Swiss bond demand.

AI Sector

Huge moves globally:

• Microsoft + Nvidia: $15 billion investment into Anthropic (19 Nov).

• Anthropic: planning $50 billion future AI infrastructure buildout.

• SoftBank: sold entire Nvidia position for $5.8B to fund new AI bets.

• Nvidia: uncertainty over valuation causing global tech selloff.

• Microsoft: using OpenAI’s custom semiconductor work to fuel own chip strategy.

Theme:

Despite valuation concerns, the AI-capex wave is accelerating, not slowing.

ESG

Minimal direct ESG news in this period aside from:

• EU and Japan concerns over inflation and fiscal discipline influencing climate/energy spending.

• No major sustainability-specific policy changes mentioned.

Inflation

• U.S.: still “too high” for some Fed hawks; tariff cuts aimed at grocery prices.

• China: CPI +0.2% YoY after prior –0.3%, but demand remains weak.

• U.K.: businesses still reacting to high inflation (BOE Mann).

• Eurozone: CHF surge reflects inflation uncertainty.

• Australia: high wage growth (3.4%) → inflation persistence risk.

Recession Risks

Moderate & rising in several regions:

• U.S.: soft labor + tech valuation stress → risk elevated.

• Japan: –1.8% GDP + geopolitical shocks → recession probability high.

• China: consumption stagnation → slowdown risk rising.

• U.K.: fiscal instability → growth risk rising.