Wall Street Looks Past Potential BoJ Moves for Now, : Dec. 2, 2025

Risk appetites are rebounding on Wall Street today as stocks and bitcoin recover from Monday’s selloff while fixed income and the greenback trade indecisively between gains and losses. A quiet day on the economic calendar and news fronts has investors trying to look past the potential for the BoJ to disrupt markets with an interest rate hike against the backdrop of favorable seasonals for markets. Indeed, the pressure on global long-end yields has receded following yesterday’s spike that was motivated by the perception that BoJ head Kazuo Ueda’s supports a benchmark increase subsequent to his hawkish remarks alluding to the institution’s accommodative stance. Additionally, participants are looking forward to a heavy slate of fresh data from the private sector and stale figures from the government covering employment, inflation and consumer spending for insights into the 2026 outlook for the Fed considering that next Wednesday’s central bank decision is strongly expected to feature a third consecutive 25-bp reduction. Elsewhere, the commodity complex is depreciating broadly, relaxed nerves are lowering the premiums for volatility protection instruments are experiencing increased engagement, especially as it relates to the US central bank’s December verdict, and volumes are poised to finish 2025 on a high note.

Rate Expectations Could Shift This Week

Fed rate cut enthusiasm could shift this week as participants analyze a buffet of data due in the next three days. Indeed, ADP’s employment report, unemployment claims and the delayed Personal Income & Outlays print from September, which includes the US central bank’s preferred inflation gauge, are likely to carry the most weight. But UMich’s consumer sentiment, ISM-services, used car prices and industrial production may also influence investor psyche, especially if results deviate meaningfully from forecasts. Overall, though, markets continue to be supported by a robust shopper showing on Black Friday and Cyber Monday, subdued joblessness, buoyant earnings estimates, lightening global tensions and expectations of heavy stimulus from both monetary and fiscal authorities in 2026.

International Roundup

South Korea Prices Sank During Past Month

Consumer prices in South Korea declined 0.2% month over month (m/m) in November but were 2.4% higher than in the year-ago period, according to the Consumer Price Index. The economic consensus estimate anticipated prices would sink 0.3% m/m after climbing 0.3% in October.  The year-over-year (y/y) metric, meanwhile, was unchanged from October and matched the consensus forecast.

For the y/y result, a weak South Korean won contributed to higher import expenses and the end of government subsidies for automobile fuel increased pain at the pump. Higher home prices and apartment rental fees also pushed the metric higher.  After releasing the data this morning, the central bank maintained that weather conditions caused agriculture stickers to increase.

Prices Fall in Europe

Prices in the euro area slipped 0.3% m/m although energy costs climbed 0.9%, according to a preliminary release of the Consumer Price Index from Eurostat. In October, the gauge was up 0.2% m/m.

Relative to the same period in 2024, however, the index was 2.2% higher, exceeding the economist estimate of 2.1%, which would have matched October’s result. For the m/m decline, gasoline had the largest price increase followed by the unprocessed food group and the food, alcohol and tobacco category, which were up 0.4% and up 0.2%, respectively. Conversely, the services component experienced a 0.8% decline.

UK Inflation Eases

Prices at UK retail establishments climbed 0.6% y/y in November, easing from the 1% jump in October and cooler than the economist consensus estimate of 0.9%, according to the British Retail Consortium (BRC) Shop Price Index. The result was also below the three-month average of 1%. Non-food prices, which sank 0.6% after a 0.4% drop in October, helped contain the headline result while food inflation slowed from 3.7% to 3%. Within that category, fresh food prices were up 3.6%, easing from the 4.3% October gain. The lower headline result was driven, in part, by retailers getting an early start on Black Friday promotions. BRC Chief Executive Helen Dickinson, in a statement, opined that future increases in labor costs are likely to be passed through to shoppers through higher prices, which could harm already weak consumer confidence.