Stocks and the technology sector will be under the spotlight again this week with volatility measures still high. The VIX, Wall Street’s ‘fear gauge’, briefly spiked above 28 on an intraday level last week, before settling above 26, which was the highest level since April. That was the Liberation Day chaos which hit all markets, yet we note the recent major uncertainty has only really been seen within equity markets.

In contrast, bond market volatility actually remains relatively steady and the VIX/MOVE-dynamics have decoupled. The MOVE is the bond market equivalent of the VIX, so a volatility gauge of upcoming price action in fixed income markets. Speculation continues whether the recent moves we have witnessed are due to ongoing AI capex concerns or profit taking amid hot expectations and highly concentrated positioning.

Nvidia’s client base also remains highly concentrated with 60% of sales from the four hyperscalers, while the AI circular fly wheel issues and rising number of interrelated deals in the tech sector continue. More broadly, investment growth in the US largely rests upon AI-related and hi-tech investments, and at the same time, there is still a great level of uncertainty regarding AI-driven productivity gains. That said, late news on Friday that the Trump Administration is considering allowing Nvidia to sell its advanced H200 chip to China would be a major boon.

Of course, we are nearing the end of the year and there will be rising hopes of a ‘Santa rally’ into 2026. Strictly, that is not until the final days of 2025 and the first ones of the new year. Fortunately, we will start getting US data released though much of it in the next week or so will be September’s figures which means it is seen as slightly stale. Fed rate cut bets ramped up towards the end of last week a leading Fed official, who was seen as more hawkish, shifted his potential on a December rate reduction. We got mixed messages from last week’s September NFP figures, with the next releases of the monthly US jobs reports not due until December 16, six days after the Fed meeting.

In Brief: major data releases of the week

Tuesday, 25 November 2025

– US Retail Sales: This is the delayed September data so slightly stale. Consensus expects the headline to rise 0.4% versus the prior 0.6% and the control group at 0.3%, previously 0.7%. Lower and higher income groups appear to be diverging, in a tale of two consumers with the latter benefiting from wealth effects. The dollar was king last week, but has come into key resistance at the early August and November highs.  

Wednesday, 26 November 2025

– Australia CPI: October inflation is expected to remain unchanged at 3.5%. Economists say that October is traditionally a softer month while falling electricity and rents should limit the monthly increase. The aussie is trying to cling onto the 200-day SMA at 0.6459.

– RBNZ Meeting: Money markets expect the bank to cut the OCR by 25bps to 2.25%. A data dependent stance is likely in 2026 with recent mixed data. Inflation picked up but unemployment edged higher with no job growth in Q3. An updated statement with economic projections will be published at this meeting. NZD/USD fell to levels last seen in April and remains in a bear channel from the September highs.

– UK Budget: After all the speculation, gossip and policy U-turns, Chancellor Reeves finally gets to reveal her Autumn Budget. The fiscal hole to fill is roughly £30bn. Markets will focus on whether tax hikes are front loaded, as this will be key for bond issuance and more BoE rate cuts. GBP could be volatile as gilt markets watch on with some trepidation.

Thursday, 27 November 2025

– Tokyo CPI: This data is the forerunner to nationwide inflation and is forecast to rise 2.7% y/y in November. Solid wage gains and the weaker JPY likely added upward pressure. There’s only around a 16% chance of a December BoJ rate hike.