The week that was …
Economic round-up
OECD’s UK verdict
Tax rises and constraints on government spending will weigh on growth in the UK’s economy but it should still be “steady” – at 1.4% this year – according to the OECD. UK inflation will remain among the highest of the G7 advanced economies, the organisation added, but is expected to fall. Read more from the BBC here
UK business sentiment
November’s flash purchasing managers index (PMI) survey for the UK showed economic growth has stalled, job losses have accelerated and business confidence has deteriorated. Economists have suggested some of this weakness is attributable to speculation ahead of the Autumn Budget. Read more from S&P here
Eurozone inflation
Eurozone inflation was 2.2% in November, according to data agency Eurostat – a slight increase on the previous month. Economists polled by Reuters had expected a reading of 2.1% for the 12 months to November. Read more from CNBC here
Eurozone business sentiment
The Eurozone saw a solid rise in output in November, building on an improved performance in October. Together, the two months represented the best back-to-back monthly expansion for eurozone businesses since the spring of 2023. The index hit 52.4 in November, down only fractionally from 52.5 in October. Read more from S&P here
US consumer spending
After three months of solid gains, US consumer spending increased moderately in September. The loss of momentum may be a sign a weaker labour market and rising cost of living are curbing demand. A report from the Commerce Department also showed annual inflation rose at its fastest pace in almost 18 months in September. Read more from Reuters here
US consumer sentiment
US consumer sentiment improved in early December, but was held back by fears over higher prices and labour market weakness, according to the latest findings of the University of Michigan’s Surveys of Consumers. Read more from Reuters here
US employment
US private payrolls unexpectedly declined in November, dropping by 32,000 jobs after an upwardly revised 47,000 increase in October. Consensus forecasts by economists had been for a gain of 10,000 jobs. Read more from the Guardian here
US jobless claims
For the week ending 29 November, US initial jobless claims were 191,000 – a decrease of 27,000 from the previous week’s revised level and the lowest level for initial claims since 24 September 2022. Read more from the Department of Labour here
US manufacturing sentiment
US manufacturing contracted for the ninth straight month in November as the drag from import tariffs persisted. The Institute for Supply Management survey showed some manufacturers in the transportation equipment industry were linking layoffs to tariffs. Read more from Reuters here
US business sentiment
US business activity growth accelerated for a second successive month in November, according to flash PMI data. Confidence in the outlook for the year ahead also notably improved. This optimism was led by the service sector, accompanied by a robust rise in manufacturing output. Read more from S&P here
Markets round-up
Japanese bond yields move higher
Yields on Japan’s 10-year government bonds climbed to their highest level since 2007 as investors digested prime minister Sanae Takaichi’s spending plans and braced themselves for an interest rate increase. Read more in ‘In Focus’ below and from the FT here
Sterling enjoys gains
The pound rose against the dollar as stronger economic activity triggered an unwinding of negative bets against sterling. The pound rose 1.1% on Wednesday – its biggest daily gain since April. Read more from the FT here
Argentina trails return to bond markets
Argentina has announced the tender of a four-year dollar bond, testing the water for an eventual return to international capital markets. The tender for the ‘Bonar’, which offers a 6.50% coupon, will take place on 10 December. Read more from Reuters here
US stocks post small gains
US stocks posted slight gains over the week, after delayed economic data kept alive expectations of a Federal Reserve interest rate cut. The backlog of data is now dwindling, giving investors more clues on the health of the global economy. Read more from Reuters here
MSCI launches public/private benchmark
MSCI has launched a global benchmark incorporating both public and private equities, the MSCI All Country Public + Private Equity index. It will allocate 15% of the market weighting to private equity, alongside the MSCI’s All Country World Investable Equity index. Read more from the FT here
Chinese chipmaker has stellar debut
Chinese chipmaker Moore Threads surged more than 425% in its stockmarket debut last week as investors bet on the government’s drive to reduce the country’s reliance on US companies to deliver its artificial intelligence needs. Read more from the FT here
“As 2025 began, precious metals fund managers were bemoaning the fact mining companies had not kept pace with commodities prices and looked cheap compared with the rest of the market and their own history.
Selected equity and bond markets: 28/11/25 to 05/12/25
| Market | 28/11/25 (Close) |
05/12/25 (Close) |
Gain/loss |
|---|---|---|---|
| FTSE All-Share | 5241 | 5214 | -0.5% |
| S&P500 | 6849 | 6870 | +0.3% |
| MSCI World | 4398 | 4419 | +0.5% |
| CNBC Magnificent Seven | 422 | 427 | +1.2% |
| US 10-year treasury (yield) | 4.02% | 4.14% | |
| UK 10-year gilt (yield) | 4.45% | 4.48% |
Investment round-up
Open-ended funds see £4.5bn of net outflows
Net retail sales outflows reached £4.5bn in October, according to the latest data from the Investment Association – the weakest level for 12 months and a significant increase on September’s £526m outflows. Equity funds were hit hardest, with £5bn in withdrawals, led by the UK and Global sectors.
HL appoints Abbott
Hargreaves Lansdown has appointed Doug Abbott as its new chief product officer and tasked him with strengthening the group’s platform offering. Abbott, who will report directly to chief executive Richard Flint, joins from Vanguard, where he is currently head of the UK client group.
Schroders launches blended MPS
Schroder Investment Solutions has launched a blended model portfolio service (MPS), which will sit alongside seven portfolios within its Active Model Portfolio range. Each of the seven funds will invest across a range of third-party managers, diversified across regional equities and global bonds and employing active asset allocation.
Premier Miton names chair designate
Premier Miton has named Christopher Williams as its chair designate, with the incumbent Robert Colthorpe due to step down from the board next February. The group said “inorganic initiatives” remain part of its growth plan.
Net-zero tweaks hit renewables sector
The Association of Investment Companies has asked the government to reconsider its proposed tweaks to its net zero agenda, after weakness in the renewable energy trust sector. The government ran a consultation where it proposed shifting the clean energy subsidy from the Retail Prices Index to the Consumer Price Index.
… and the week that will be
US rates decision
The Federal Reserve’s Federal Open Market Committee meets this week, with a third successive rate cut widely anticipated as the result of it deliberations. The meeting takes place alongside a number of important statistical releases, including monthly GDP numbers and job openings and employment-cost data. Last month’s meeting revealed divisions among US policymakers, as Fed chair Jerome Powell stated “a further reduction in the policy rate is not a foregone conclusion – far from it”, but markets will be disappointed if one does not materialise. Read more from S&P here
Bellwether earnings
Markets await a number of bellwether corporate earnings announcements this week – including Adobe, AutoZone, Broadcom, Costco, GameStop and Oracle. Oracle, in particular, will be watched by investors nervous over the level of AI spending and, indeed, the group’s stock price has already dropped over fears it is spending too much. Read more from Investopedia here
The week in numbers
US interest rates: Consensus expectations are that, following its Federal Open Market Committee meeting on Tuesday and Wednesday, the Federal Reserve will cut US interest rates by 25 basis points to a target band of 3.5%-3.75%.
UK GDP: Consensus forecasts have the October reading of UK gross domestic product growth (GDP) flat month-on-month, compared with -0.1% in September, while the three-month average dropping to 0% from 0.1%.
China inflation: Consensus expectations for November price inflation in China, as reflected by the Consumer Price Index, are for a 0.5% year-on-year rise, compared with a 0.2% rise in October, and a month-on-month fall of 0.3%. from a 0.2% rise the previous month.
In focus: The precious
With market attention fully occupied by the risks of a potential bubble in AI, another one may be quietly expanding elsewhere. Precious metals have enjoyed an astonishing run in 2025, with all of the top 10 funds for the year so far focused on this part of the market. Yet, as the US dollar stabilises and geopolitical tensions – potentially – fade, investors need to be asking how much further this great run has left to go.
The top funds include SVS Baker Steel Gold & Precious Metals, Ninety One Global Growth and WS Ruffer Gold, which have respectively risen 159%, 145% and 142% over the year to 5 December 2025, according to Trustnet data.
Amati Strategic Metals, BlackRock Gold & General and Jupiter Gold and Silver are also among the top 10 while the AIC reports Commodities is the top-performing closed-ended sector over 2025, with the average fund up 44% for the year to date. The Golden Prospect Precious Metals fund is topping the tables here, with a return of 156% over the year to date.
With the benefit of 20/20 hindsight, this strength seems obvious. Gold, silver and other precious metals have enjoyed healthy gains over the year: gold is up 60%, silver is up 102% and platinum is up 84%. Yet, as 2025 began, precious metals fund managers were bemoaning the fact that mining companies had not kept pace with commodities prices and looked cheap compared with the rest of the market and their own history.
As investors weigh up the future for precious metals, a range of considerations should be borne in mind. According to Georges Lequime, manager on the Amati Strategic Metals fund, more broad-based investors are not yet participating in the rally.
“Generalists are speaking to us,” he notes. “We are going to conferences where they appear interested but they are still not buying into the sector. When I speak to my peers, it is clear the number of units in their funds have not moved. It has been capital appreciation that has driven performance, rather than new money coming into the sector.”
The gold price has moved up very quickly and we need some stability for some time before we see the market chasing it.”
If these generalist fund managers enter the sector, Lequime believes, it could see further appreciation – but they would need to have confidence in the rises in precious metal prices seen so far. “The gold price has moved up very quickly and we need some stability for some time before we see the market chasing it,” he adds.
At first glance, the mining companies do not necessarily look the bargain they did a year ago. The MSCI ACWI Select Gold Miners IMI index has a price/earnings ratio of 22x, for example – however, the forward price/earnings measure drops to just 10.8x. This compares with 23x and 18.9x respectively for the wider MSCI ACWI World index.
The average dividend yield in the Gold Miners index has meanwhile dropped to just 1%, compared with 1.7% for the broader index. These companies still have a pathway of strong earnings from higher commodities prices, though, so much will depend on the price of the underlying commodities and whether the various precious metals can sustain their current bull run.
Those prices took a pause in October but were back to the races in November. According to Ned Naylor-Leyland, investment manager on the Jupiter Gold and Silver fund, gold’s current bull run has been supported by falling real rates and a weaker dollar – as well as market concern about the implications of rising US government debt levels, the interest cost on that debt and the resulting impact on US treasuries.
Most of these factors remain in place. The interest rate policy on the part of central banks will be important – in particular, the direction of real interest rates – says Naylor-Leyland, adding: “The price of gold tends to move inversely to the direction of real interest rates, or the yield on a bond after adjusting for inflation. If the US Federal Reserve, the most important central bank for financial markets, were to cut interest rates, as it is expected to do in 2026, that would be positive for gold because it would tend to bring down real rates.”
Precious metals tend to benefit from a lower US dollar and lower policy rates, but fading geopolitical risks may take some of the steam out of the recent rally.”
For his part, Lequime highlights a structural shift among global central banks towards holding more gold. The World Gold Council’s survey of central banks cites gold’s protective and diversification qualities, plus inflation hedging, as attractions. Geopolitical tensions are also playing a role and Tether stablecoin is now holding gold as well. Lequime says he remains “suspicious” of the strength of the gold price, before adding: “We have to ask why it would pull back.”
After significant weakness at the start of 2025, the US dollar has stabilised since the middle of the year. “Talk of a wholesale and sudden loss of confidence in the US dollar seems overblown,” says Macquarie Group chief economist Ric Deverell. “The gold rally has been driven primarily by private-sector investment demand. Only pockets of the reserve management community have participated – notably China and Russia – and, even then, China’s holdings of US treasury securities are falling only very slowly.”
In its 2026 outlook, Invesco notes: “Precious metals tend to benefit from a lower US dollar and lower policy rates, but fading geopolitical risks may take some of the steam out of the recent rally. Central banks are likely to continue building gold stocks. ETF positions are not elevated by historical standards, so they could continue to be a source of demand. However, lower geopolitical risk and stable inflation may mean gains are likely to be more limited than in 2025.”
For many precious metals, argues Lequime, supply continues to lag demand. Companies are not yet sufficiently confident in higher commodities prices to bring new supply on-stream and this imbalance could continue to support precious metals prices from here.
A second year of triple-digit gains seems unlikely but there are certainly reasons the rally could be extended. Mining companies had become very cheap and still look relatively inexpensive on a forward-earnings view. The price for the underlying commodities looks stable, with support from central bank buying, debt fears and interest rate policy. Limited supply should also keep prices elevated in the near term.
Read more on this from the World Bank here and from Yahoo Finance here
In focus: JGB fault-line?
Japanese bond yields jumped to their highest level since 2007 last week, following a speech by Bank of Japan governor Kazuo Ueda. The market now puts the probability of a December interest rate hike at 92% – up from 60% in just a week – and this shift may have implications for financial markets beyond Japan.
Ueda said: “At the monetary policy meeting, the bank will examine and discuss economic activity and prices at home and abroad as well as developments in financial and capital markets, including the point I just mentioned, based on various data and information, and will consider the pros and cons of raising the policy interest rate and make decisions as appropriate.”
Anthony Willis, fund manager at Columbia Threadneedle, said this was seen as implying the central bank would not be waiting for the spring wage round before beginning to hike rates. It may also imply the unwinding of the long running ‘carry trade’, which has allowed investors to borrow cheaply in yen to buy higher-yielding foreign assets.
Short-term bond yields spiked higher after Ueda’s speech, with the yield on the two-year Japanese bond hitting a 17-year high of 1.94%. This pushed German and US bond yields higher. Japanese investors increasingly have an incentive to repatriate their bond holdings from overseas and invest in their domestic market, which could have repercussions for wider bond markets. Japan is the largest holder of US treasuries, for example, surpassing even China.
There may implications for equity markets too. As the Financial Times points out, the Bank of Japan’s rate rise in July 2024 was followed by the equity market’s second-worst one-day crash in history. At the time, traders said this may have been linked to the unwinding of the carry trade.
There have been concerns all year about the fragility of bond markets and the unwillingness of countries – particularly the US – to address their vast deficits. Furthermore, there has already been pressure at the long end of bond markets, with excess supply and a dwindling range of buyers.
If Japanese investors withdraw to their own market, then, it could create problems. Yet, while this remains a major risk for the year ahead, it is one not widely flagged by investors. Could this be the mechanism by which some of the fears around global bond markets are realised?
