Investment environment overview 11/2025

Global equity markets were choppy during the month, leading to mixed performance across major indexes. Even with the earnings season ending exceptionally well, the S&P 500 was flat, while the Nasdaq Composite broke its seven-month winning streak and fell 1.5%. Investors became cautious over lofty tech valuations and ambitious AI CAPEX spending all while fixing profits and rotating to more defensive sectors. Nvidia’s blowout Q3 results briefly lifted sentiment, but enthusiasm faded quickly as underlying jitters returned. Meanwhile U.S. rate-cut expectations intensified, as futures showed an ~85% probability of a 25bp Fed rate cut in December.

In Europe, the STOXX 600 was higher 0.8% for the month thus extending its multi-month winning streak. Financial stocks led the advance, with the STOXX 600 Banks index jumping 4% after the new UK budget spared lenders new levies. Defensive sectors broadly outperformed, whereas technology and defense stocks lagged amid the global tech pullback and the resumption of Ukraine peace talks. Meanwhile, cryptocurrencies plunged as BTC/USD slid to around 90,000 by month-end, erasing all yearly gains amid ongoing risk-off sentiment fueled by elevated retail leverage and liquidation pressure.

Japanese yields rise to threaten capital exodus

The 10-year Japanese government bond yield surged to a 17-year high of 1.84% at the end of November, changing incentives for the world’s second largest creditor to invest abroad. The spike was driven by Prime Minister Takaichi’s 21.9t yen stimulus package, prompting investors to anticipate heavy new debt issuance and a BoJ rate hike to 0.5% in December to curb inflation.

With domestic yields finally competitive after decades of near-zero returns, Japanese institutional investors, holding roughly USD 4.4t in overseas assets, may increasingly repatriate funds. Even a modest return of these holdings could drain hundreds of billions from Wall Street, threatening US equity and debt markets.

UK budget focuses on domestic agenda

The UK’s Autumn budget delivered a sharp fiscal correction, introducing GBP 27b in tax hikes and freezing income tax thresholds to stabilize public finances. A central pillar of Chancellor Reeves’ plan is a controversial ISA (Individual Savings Account) reform, cutting the tax-free Cash ISA allowance for people under 65 from GBP 20k to GBP 12k and reserving the remaining GBP 8k for domestic stock market investments. To further boost equities, the government scrapped the 0.5% stamp duty on shares of newly listed companies for their first three years, a move expected

to accelerate 2026 IPOs for firms such as Monzo, Starling Bank, and Visma. The policy targets roughly GBP 450b in low-return cash, with analysts projecting GBP 16b in annual inflows into UK equities. Internationally, the UK’s fiscal position remains relatively stable; while taxes are high, Britain avoids the political turmoil seen in France, where bond spreads over Germany have surged to 80bps, while Germany has suspended its “debt brake” amid industrial stagnation.

Is AI coming for your job?

In 2025, U.S. corporations have initiated a sweeping reduction of corporate workforce headcount. Amazon and UPS have announced substantial cuts, totaling approximately 18,000, of which more than 10,000 are corporate or management roles, while tech corporations such as Meta, Salesforce and Google have together eliminated more than 50,000 white collar positions.

According to a report by Challenger published on November 6, employers in the U.S. announced 153,074 job cuts in October alone, the worst October for layoffs in more than 20 years, representing a 175% YoY increase and a 183% MoM rise. YTD through October 2025 total announced layoffs have surpassed 1.09m, a 65% rise compared to the same period in 2024, and the highest level since 2020.

While firms frequently cite broad cost‑cutting and operational restructuring as the chief motives, accelerated adoption of AI and automation emerges as a key factor, especially within the tech and warehousing sectors. In October alone, AI or automation‑related job cuts accounted for 31 thousand, making AI the second‑most‑cited driver after general cost reductions.

FX stalls as precious metal fever remains

FX markets continue to trade in a low-volatility environment. We still see potential for a renewed USD uptrend, but that case has weakened after the Dollar Index failed to break above 100. For upside momentum to return, EUR/USD must remain below 1.2000 and ideally fall through the 1.1400 support level.

Precious metals have corrected only modestly following their euphoric rally, with strong retail interest keeping prices elevated. Our view remains that gold is expensive, and we prefer to stay out while waiting for better entry levels. Silver continues to outperform, with the next key level for profit-taking now near XAG/USD 63.