This outlook contains information correct as at 1400hr on 02 Dec 2025
Early 2025 saw US President Trump upending the global decades-old trading, geopolitical and financial systems. Next up, we saw the relationship between risk and safe-haven assets become more significant. Safe-haven Gold, risk assets, stocks, and cryptocurrencies, as represented by Bitcoin, all reached new record highs. As of the end of November, investors who bet on a widely anticipated tech bubble blowout in stocks were the biggest losers. Bonds and commodities also rallied in one of the strongest cross-asset rallies of the year as more money flowed into risk assets.
The usual safe-haven currencies, CHF and JPY, were not spared. With the Fed cutting rates and with more rate cuts expected, the USD has appreciated against the JPY from April and held its own against the CHF since July.
Energy prices, as measured by West Texas Intermediate (WTI), dropped from almost USD80 in mid-January to below USD60 this week. This is against the backdrop of wars in Ukraine and the Middle East and sanctions on Russian and Iranian oil.
These events should in some ways, affect financial markets in 2026 and beyond. Investors will need to strategise, considering the co-relations between safe haven and risk assets.
Economic figures this week might provide a clue as to how the markets will end the year :
2 Dec
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The US Federal Reserve Bank will hold its last meeting for 2025 on 9 Dec -10 Dec. The current Fed Funds rate is at 3.75% to 4.00%. Early comments from some Federal Reserve officials are signalling a rate cut at this meeting. Markets are pricing an 81% probability of a 0.25% rate cut.
Stock markets are likely to pull back on profit taking after a Fed December rate cut by “buying the rumour and selling the fact”, ending the year off its highs. In related news, White House economic adviser Kevin Hassett, an advocate for rate cuts, is rumoured to be appointed as the next Federal Reserve Bank chairman.
US consumption, on the whole, might see some decline, which should have a knock-on effect on GDP.
China’s economy remains moribund, with the official PMIs coming in below expectations in Nov, as both the Manufacturing and Non-Manufacturing activities reported contractions (a reading <50). The Manufacturing PMI rose by a smaller than expected 0.2pt to 49.2 (Bloomberg estimate 49.4, Oct 49.0). The Non-Manufacturing PMI slumped 0.6pt to 49.5 (Bloomberg est: 50.0, Oct: 50.1), its first contraction since 2023. The contraction in the China Federation of Logistics and Purchasing (CFLP) Purchasing Managers' Index, a monthly survey that gauges the health of China's manufacturing sector, has stretched into a record eight consecutive months.
To date, cryptocurrency investors have been among the biggest losers in 2025. Bitcoin went from a historic high above USD126,000 to a low around USD80,500. On 1 Dec, Bitcoin tumbled 7% to below USD84,000 before recovering to trade this morning around USD86,500. Overnight, almost USD1.0 billion of leveraged crypto positions were liquidated.
Oil prices are again on the defensive, after a brief spike in late October above USD62; prices are down again. WTI trades this morning around USD59.25 (4 Nov USD60.80). This is likely due to a surge in renewable energy. Germany’s electricity system is reaching its capacity limits in several regions, and grid operators have had to pay compensation to curtail wind and solar plants.
Overnight, US 10-Year Treasuries closed unchanged at 4.09% (4 Nov 4.11%), Australian 10-Year Govt Bonds were up 0.05% at 4.61% (4 Nov 4.36%), and Euro 10-Year Bonds closed up 0.06% at 2.75% (4 Nov 2.67%).
The latest figures from the Australian Bureau of Statistics showed a broad-based October rise in inflation to 3.8% YoY (Sep: 3.6%). The trimmed mean underlying inflation rose to 3.3%, from 3.2%. With inflation running above the RBA’s 2% - 3% target, the Central Bank will likely keep interest rates on hold into 2026. Several economists and major banks are even considering a possible rate hike in 2026 as economic growth probably accelerated at the fastest pace in three years in Q3, with GDP estimated at 0.7%.
Even with a 0.5% interest rate differential advantage over the USD, AUDUSD remains trapped in the 61.8% Fibonacci Resistance Zone at 0.6460 – 0.6600. We can expect the situation to stay until the end of the year and into 2026. However, we maintain our view for the next move to be down to around the 0.6400 area.
EURUSD
EURUSD remains under pressure amid weak economic fundamentals and geopolitical concerns. ECB kept interest rates unchanged at 2% in November and offered no hints about future moves.
EURUSD continues to find Support at the 1.1500 area, but the technical picture is looking weaker.
We maintain our view for a correction lower to around 1.1150 Support.
Image Source: Bloomberg 02 Dec 2025
GBPUSD
Chancellor Rachel Reeves’ Budget last week focused on fiscal discipline amid a weak economy with high inflation. It prioritised tax measures and structural reforms but left out a planned income tax rate hike. Key forecasts indicated UK growth at 1.5% in 2025 and ±1.5% through 2030. Inflation is expected to ease to 2% by 2027. The Pound and Gilts remained relatively stable. Neil Wilson, an investor strategist at Saxo UK, said: “There’s no great stinging surprise that has upset markets. That has allowed it to be a bit of a relief.”
In line with expectations, GBPUSD has broken below the 1.3200 – 1.3400 Support Zone and found support at 1.3000. GBPUSD is now trying to break back above 1.3200. We expect the rally to fail and maintain our bearish view for a stronger down move to break through the 1.3000 Support.
Image Source: Bloomberg 02 Dec 2025
USDJPY
Since April, the USD has been appreciating against the JPY, which is puzzling given that US interest rates have eased and the BoJ is expected to raise rates. This is likely due to "mom and pop" investors buying more than a quarter-trillion USD in baskets of bonds through fixed-maturity funds. This massive amount of money has triggered unanticipated complications in Bond markets, including the suppression of volatility and the distortion of credit spreads and long-term interest rates.
In line with our previous outlook, USDJPY has moved higher to test and break above the broad Uptrend Channel but faced strong rejection below 158.00. In the coming weeks, we can expect USDJPY to have a more substantial, deeper pullback, but should eventually see it hit the round-figure target at 160.00.
Image Source: Bloomberg 02 Dec 2025
USDSGD
Singapore’s economy and manufacturing sectors continue to hold up against 2025’s headwinds. October’s Factory Output growth was the strongest since 2010, jumping 29.1% driven by pharmaceuticals and biomedical manufacturing.
Safe-haven inflows kept the SGD strong while depressing domestic interest rates. The 3-Month Singapore Overnight Rate Average (SORA) has eased from 3.2% at the beginning of December 2024 to 1.25% in Dec 2025.
As expected, USDSGD headed towards 1.3100 in November but could not maintain above 1.3000, forming a Double Top Resistance pattern. USDSGD should head lower towards 1.2800 heading into the year-end.
Image Source: Bloomberg 02 Dec 2025
AUDSGD
The Resistance Zone at 0.8400–0.8500 remains a formidable barrier. We maintain our bearish view for a drop back to 0.8400 and lower.
Image Source: Bloomberg 02 Dec 2025
XAUUSD
In the precious metals market, all eyes have been on Gold this year as it hit successive historic highs. But it has not been the best precious metal investment. Its poorer cousin Silver has outperformed by a much larger margin. Silver went from USD29.50 on 2 Jan to USD57.11, a 93% gain. During this same time frame, Gold went from USD2,658 to USD4,220, a 37% gain. Have investors been betting on the wrong horse?
XAUUSD’s technical wave pattern indicates we are likely to see a pullback to the 50-Day Moving Average and USD4,000 Support area in the next few weeks.
Image Source: Bloomberg 02 Dec 2025
Note: In Candlesticks Chart, Green bars mean the Close is higher than the Open price and Brown bars mean the Close is lower than the Open price