Wall Street indexes rally after Fed cuts interest rates

Wall Street ended higher on Wednesday, after the Federal Reserve cut interest rates by a quarter percentage point as expected and investors bet on further easing down the road, even as the central bank signaled that it will put further cuts on pause for now.

The central bank said that before its next policy change, it would look ahead for clearer signals about the direction of the job market and inflation that “remains somewhat elevated.”

But projections after the Fed’s two-day meeting showed median expectations for another quarter-point cut in 2026, in line with expectations at the September meeting. And policymakers raised estimates for 2026 GDP growth to 2.3% from 1.8% and maintained expectations for a 4.4% unemployment rate at the end of next year.

In his press conference, Fed Chair Jerome Powell declined to provide guidance on whether there will be another rate cut in the near future. However, investors garnered some hope for easing from his comments that the labor market has significant downside risks and that the central bank doesn’t want its policy to push down on job creation.

“The market may have found some solace in Powell’s downbeat labor market discussion – a bad news is good news situation, to support more cuts next year,” said Lindsey Bell, chief investment strategist at 248 Ventures in Charlotte, North Carolina, adding that US Treasury yields “lost some steam as Powell spoke, which helps support stock upside.”

The market had been muted ahead of the statement as investors, while widely expecting a cut, were concerned the Fed would take a more hawkish tone on the policy outlook. And even before Powell’s comments, some investors were eyeing more potential for rate cuts due to labor market concerns.

“The statement emphasized weakness in the labor market as the principal rationale for the 25 basis point cut, and this detail is what the market has picked up on, suggesting the Fed could continue easing policy, even though the expectations for easing in 2026 haven’t changed with one 25 basis point priced in,” said Michael Rosen, chief investment officer, Angeles Investments.

The S&P 500 closed up 46.17 points, or 0.67%, at 6,886.68, eyeing a return to its October 28 record closing high but ultimately falling short at the end of trading.

The Dow Jones Industrial Average rose 497.46 points, or 1.05%, to 48,057.75 while the Nasdaq Composite gained 77.67 points, or 0.33%, to 23,654.16.

The rate-sensitive small-cap Russell 2000 index outperformed large caps with a 1.3% gain for a record closing high.

Among the S&P 500’s 11 major industry sectors, all but two showed gains. Industrials made the biggest advance, ending up 1.8%. Its biggest boost was from energy equipment manufacturer GE Vernova, which surged 15.6% after forecasting higher revenue in 2026, signaling strong demand for its AI-related infrastructure.

On the other side of the spectrum, defensive utilities were the biggest laggard, falling just 0.1% while consumer staples was barely lower.

Advancing issues outnumbered decliners by a 2.86-to-1 ratio on the NYSE, where there were 496 new highs and 51 new lows. On the Nasdaq, 3,164 stocks rose and 1,642 fell as advancing issues outnumbered decliners by a 1.93-to-1 ratio.

The S&P 500 posted 45 new 52-week highs and seven new lows while the Nasdaq Composite recorded 185 new highs and 77 new lows.

On US exchanges, 16.91 billion shares changed hands compared with the 17.41 billion moving average for the last 20 sessions.

(Reporting by Sinéad Carew, Laura Matthews, Caroline Valetkevitch in New York, Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Tasim Zahid, Shinjini Ganguli and David Gregorio)

US yields drop after Fed rate cut, Powell signals hike unlikely

NEW YORK – US Treasury yields fell on Wednesday, after the Federal Reserve cut interest rates but signaled it will likely hold off on further reductions, in a move that was largely anticipated by market participants.

The Fed reduced rates by 25 basis points, and its new economic projections showed the median policymaker sees just one quarter-percentage-point cut in 2026, the same outlook as in September. The decision to cut by 25 basis points drew three dissents.

Yields were choppy following the announcement, paring declines as Fed Chair Jerome Powell spoke before reversing course and turning lower after he said the central bank’s next move was unlikely to be a rate hike, as it was not the base case in the new projections from the policymakers.

Yields around the globe have been climbing in recent weeks, as many central banks have signaled they are either at or near the end of their own easing cycles, while the Bank of Japan is widely anticipated to hike rates at its policy meeting next week.

The yield on the benchmark US 10-year Treasury note fell 4.3 basis points to 4.143% after swinging between a session low of 4.137% and a three-month high of 4.209%. The 10-year yield was poised to snap a four-session streak of gains, its longest run of gains in five weeks.

Earlier in the session, US economic data showed the Employment Cost Index (ECI), the broadest measure of labor costs, rose 0.8% in the last quarter, versus expectations of economists polled by Reuters for a 0.9% advance, after gaining 0.9% in the second quarter.

The yield on the 30-year bond shed 2.1 basis points to 4.788%.

Several major brokerages had recently forecast a cut by the Fed for Wednesday’s meeting, and expectations for a 25 basis point reduction were nearly 90% heading into the meeting, according to CME’s FedWatch Tool.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 60.1 basis points, after rising to 60.7, its highest since September 3.

After solid auctions of 3-year and 10-year notes earlier this week, more supply will come to the market on Thursday in the form of USD 22 billion in 30-year bonds.

The two-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, slumped 7.3 basis points to 3.54% and was on track for its biggest one-day drop since October 16.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.326% after closing at 2.332% on Tuesday.

The 10-year TIPS breakeven rate was last at 2.268%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Chuck Mikolajczak; Additional reporting by Stephen Culp and Laura Matthews; Editing by Philippa Fletcher and Andrea Ricci )

Gold rises ahead of Fed rate cut decision, silver hits $60/oz milestone

Gold gained on Tuesday as traders remained optimistic ahead of the US Federal Reserve’s interest rate decision, while silver rose to hit an unprecedented USD 60 per ounce milestone amid supply constraints.

Spot gold rose 0.6% to USD 4,211.77 per ounce by 03:21 p.m. ET (2021 GMT). US gold futures for February delivery settled 0.4% higher at USD 4,236.2 per ounce.

Spot silver climbed 4.3% to USD 60.74 per ounce, hitting an all-time high.

“People are anticipating that there’s going to be strong industrial demand for silver for years to come, which is why it’s been bid up, the silver price,” said Fawad Razaqzada, market analyst at City Index and FOREX.com, adding that the buying momentum is strong at the moment.

Sectors including solar energy, electric vehicles and their infrastructure, and data centers and artificial intelligence will drive industrial demand higher through 2030, the Silver Institute industry association said in a research report.

Silver prices have also been supported by persistently low supplies and dwindling global inventories, expectations of the Fed easing interest rates, as well as its recent addition to the US critical minerals list.

“Metals are volatile by nature, but unless we fix the deficit, silver only has one way to go, and that is up,” said Maria Smirnova, senior portfolio manager and chief investment officer at Sprott Asset Management.

On the US policy front, the Fed’s two-day meeting ends with a decision on Wednesday. Traders now see an 87.4% chance of a 25-basis-point cut this week.

“The move in gold right now is attributed to the big spike in silver and the high expectations for another quarter-point cut,” said RJO Futures senior market strategist Bob Haberkorn.

Meanwhile, the US Labor Department’s JOLTS report showed job openings rose to 7.67 million in October, beating forecasts of 7.15 million, indicating a strong labor market.

Gold has shrugged off the jobs report, Haberkorn said, adding “we could see silver trade over USD 70 an ounce in the first half of 2026, and gold is on a path towards USD 5,000 an ounce.”

Platinum gained 2.8% to USD 1,688.39/oz, while palladium rose 2.6% to USD 1,503.74/oz.

(Reporting by Sarah Qureshi, Anjana Anil, Anushree Mukherjee, and Anmol Choubey in Bengaluru; Editing by Vijay Kishore, Leroy Leo, Maju Samuel and Krishna Chandra Eluri)

Mature markets push global debt to record near USD 346 trillion, says IIF

NEW YORK – Developed markets led a borrowing push that lifted global debt to near USD 346 trillion at the end of the third quarter, while a pending ruling on the legality of US tariffs could force even more US issuance, a banking trade group said.

The Institute of International Finance said total debt reached USD 345.7 trillion by the end of September, equivalent to about 310% of global GDP, a relatively steady ratio since mid-2022. A softer US greenback helped inflate the value of most local-currency liabilities when translated into dollar terms.

“Most of the overall rise came from mature markets, where debt accumulation has accelerated rapidly this year as key central banks ease policy,” said the report co-authored by Emre Tiftik, director of sustainability research at the IIF.

CHINA AND US DELIVER LARGEST INCREASES

Through September, debt increased by USD 26.4 trillion this year, some USD 675 billion per week. Last quarter, China and the United States again delivered the largest increases in government debt, followed by France, Italy and Brazil, according to the IIF.

Mature markets’ outstanding debt rose to a record USD 230.6 trillion, while emerging markets also hit a record above USD 115 trillion. Russia, Korea, Poland and Mexico posted some of the largest increases.

A newly highlighted risk comes from the pending US Supreme Court decision on the legality of tariffs imposed by the Trump administration earlier this year. The IIF warned that an adverse ruling could materially increase fiscal pressure on the US, likely pushing the Treasury to borrow even more.

Government borrowing remained the primary driver of the global increase.

“With budget deficits still elevated – and the impact of large fiscal stimulus packages set to kick off in 2026 in Japan, the US, Germany, and China – sovereigns are likely to continue adding to their debt burdens and interest expenses,” according to the IIF.

EM EUROBOND ISSUANCE REACHED RECORD HIGH

On the market side, emerging market sovereigns have leaned more heavily on international markets this year. EM eurobond issuance has reached a record high in 2025, aided by the weaker dollar and continued policy easing by major central banks.

EM sovereign issuance this year stood at USD 255.7 billion at the start of December, according to a JPMorgan tally, making 2025 the highest annual gross issuance, with EM investment grade taking USD 182.1 billion of the total. The Wall Street bank considers this year a “one-off”, however, and expects next year to show a dip in issuance.

Despite the large issuance, access remains sharply limited, especially for countries emerging from debt restructurings, the report noted.

Corporate debt is also rising. Non-financial corporate liabilities are now approaching USD 100 trillion, the report said, with borrowing accelerating in AI-linked and clean energy sectors. US AI-related bond issuance hit a record in 2025, and new debt has continued to flow, prompting some concerns in the US corporate bond market.

Global household debt rose to nearly USD 64 trillion, but its debt-to-GDP ratio fell to 57%, its lowest since 2015, as households slowed borrowing amid heightened uncertainty and persistent cost-of-living pressures.

Looking ahead, emerging markets face nearly USD 8 trillion in bond and loan redemptions in 2026, while mature markets are set to refinance over USD 16 trillion, raising the risk of funding strains if global conditions tighten, said the IIF.

(Reporting by Rodrigo Campos in New York; Editing by Alison Williams)

Markets anxious over Japan’s risk of ‘negative spiral,’ top bank MUFG exec says

TOKYO – Markets are increasingly worried about Japan’s “tail risk” of slipping into a negative spiral, where monetary tightening lags inflation and a weak yen pushes prices higher, the markets chief at top lender Mitsubishi UFJ Financial Group 8306.T said.

Markets have priced in a 90% chance of a rate hike by the Bank of Japan this month, shifting attention to how the central bank signals its longer-term policy path.

MUFG is among the top Japanese players in the foreign exchange market and the largest owner of Japanese government bonds among major banks.

“If the BOJ fails to anchor expectations for further rate hikes beyond the next and the government boosts spending to appease voters frustrated with inflation, the yen could weaken further,” Hiroyuki Seki, the head of MUFG’s Global Markets Business Group, told Reuters in an interview.

“That could re-accelerate import costs, creating a negative spiral of inflation and currency depreciation,” he said.

Despite narrowing interest rate differentials with the United States, the yen has remained weak around 155 per dollar, partly reflecting market expectations that Prime Minister Sanae Takaichi’s reflationary stance could limit further BOJ tightening.

Seki stressed that eliminating Japan’s extremely low real interest rates was essential.

“The BOJ needs to move early and steadily toward monetary normalization to preempt a vicious cycle where insufficient tightening allows yen depreciation to push inflation even higher,” he said.

Beyond the potential December hike, Seki expects the BOJ to follow a gradual normalization path, raising rates by 25 basis points roughly every six months, provided economic and price trends evolve in line with the central bank’s projections.

The so-called terminal rate – the level at which the tightening cycle is expected to end – is projected at 1.25%-1.5% by mid-2027, though risks are skewed higher if inflation proves sticky, he said.

The BOJ has released estimates suggesting Japan’s nominal neutral interest rate – one that neither cools nor overheats the economy – lies somewhere between 1% and 2.5%.

On MUFG’s Japanese government bond strategy, Seki said the bank has been cautiously rebuilding positions since the benchmark 10-year yield rose above 1.65%.

“If the yield exceeds 2%, we plan to accelerate the pace of rebuilding, mainly on 10-year bonds, in line with higher interest rates,” he said. MUFG has substantial capacity for purchases given its currently restrained risk exposure, he added.

(Reporting by Makiko Yamazaki, Miho Uranaka and Tomo Uetake; Additional reporting by Takaya Yamaguchi; Editing by Tomasz Janowski)

Stocks rise, bonds and bitcoin regain some footing

NEW YORK/LONDON – Global shares rose on Tuesday and both cryptocurrencies and global government bonds stabilized after the previous day’s selloff, which was triggered by a looming interest rate hike in Japan.

Investors are also gearing up for an expected interest rate cut by the US Federal Reserve.

Wall Street stocks finished higher after losing ground in the prior session. Technology and industrial shares drove the gains, while energy and materials led losses.

The Dow Jones Industrial Average rose 0.39%, the S&P 500 rose 0.25% and the Nasdaq Composite rose 0.59%.

The broad stock indexes in Europe ended marginally higher by 0.07% while Asia-ex Japan gained 0.47%.

“A simple way to think about this is from the lens of inflation, monetary policy, and fundamentals,” said Talley Leger, chief market strategist at The Wealth Consulting Group.

“On the inflation side, I’m not so concerned because it’s below average back to the early 1900s and I think that in turn gives the Fed scope to keep cutting rates, which is the market expectation being priced in now. You can add to that strong fundamentals in the form of record holiday shopping and strong (corporate) earnings,” Leger added.

Data on Monday supported expectations for a December rate cut by the Fed, with manufacturing contracting for a ninth straight month in November, although consumers beat analyst expectations with a USD 23.6 billion online shopping spree to kick off the holiday season.

The MSCI World index of stocks across the globe rose 0.21%.

Markets are pricing in an 87.2% probability of a 25 basis-point interest rate cut at the Fed’s meeting next week, according to CME’s FedWatch tool.

“There’s a little bit of momentum behind a cut, but I think it’s what they say in the press conference about the neutral rate that a lot of people will be focused on,” said James St Aubin, chief investment officer at Ocean Park Asset Management.

JAPAN BOND SELLOFF

Jitters in the Japanese government bond market were soothed by a strong auction result, boosting the global mood. Bond yields move inversely to prices, and a weeks-long tumble in JGB prices on concerns about the nation’s finances and expected rate hikes by the Bank of Japan had sent Japan’s 10-year yields to a 17-year peak and 30-year yields to an all-time high.

On Tuesday, global bonds again took their cue from JGBs, but this time echoed their calm: The US 10-year Treasury yield was at 4.087% and the benchmark 10-year German yield was at 2.752%, both down marginally on the day.

In currency markets, the Japanese yen softened, with the dollar up 0.29% at 155.87 yen.

The dollar was also steady more broadly on Tuesday, after softness on Monday helped to hoist the euro briefly above USD 1.165. The common currency last traded down 0.1% at USD 1.1622.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.08% to 99.36, on track for an eighth straight session of losses.

Gold retreated 0.57% to USD 4,208.53 an ounce. Spot silver was last up 0.94% at USD 58.50, trading just below its record high of USD 58.83 hit on Monday

Oil prices fell slightly as traders weighed up risks from Ukrainian drone strikes on Russian energy sites and concerns about oversupply. Brent crude futures settled down 1.14% at USD 62.45 a barrel. US crude futures fell 1.15% to settle at USD 58.64 a barrel.

Bitcoin, which some investors see as a possible leading indicator for risk assets, inched higher on Tuesday after slumping on Monday. It gained 5.55% to USD 91,256.76.

(Reporting by Chibuike Oguh in New York; Editing by Shri Navaratnam, Alex Richardson, Aidan Lewis, Deepa Babington, and Edmund Klamann)

Gold falls on profit booking, investors eye Fed rate cut signals

Gold prices fell over 1% on Tuesday as investors took profits following a six-week high in the previous session, while they awaited key US economic data ahead of the Federal Reserve’s policy meeting next week.

Spot gold lost 1.1% to USD 4,186.89 per ounce by 1:43 p.m. ET (1843 GMT).

US gold futures for February delivery settled 1.3% lower at USD 4,220.80 per ounce.

“It’s probably just a little bit of profit taking … the market’s biggest focus of late has been rate cut expectations and those remain pretty steady,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

“We are in a continuation pattern that will eventually lead to an upside breakout and I still like USD 5,000 gold early in the new year.”

Recent data pointing to a gradual cooling of the US economy, coupled with dovish signals from Fed policymakers, has bolstered market expectations for a 25-basis-point rate cut at the US central bank’s meeting next week, with traders pricing in an 89% probability of the move.

Investors are also eyeing November ADP employment report on Wednesday and the delayed September Personal Consumption Expenditures (PCE) Index, due Friday, which is the Fed’s preferred inflation gauge. Lower interest rates typically benefit non-yielding gold.

Central banks bought 53 tons of gold in October, up 36% month-on-month and the largest monthly net demand since the start of 2025, according to the World Gold Council.

Silver retreated from its record high of USD 58.83 hit on Monday, easing 0.1% to USD 57.90 per ounce. It has risen over 100% year-to-date.

“There were no new reasons for the recent price jump (in silver). However, the known reasons still apply, namely tight supply, which is reflected in low inventories on the Shanghai exchanges,” Commerzbank said in a note, adding it expects a further, albeit moderate, price increase to USD 59 in the coming year.

Platinum slipped 2% to USD 1,624.90 and palladium gained 2.3% to USD 1,456.86.

(Reporting by Anmol Choubey in Bengaluru, additional reporting by Polina Devitt; Editing by Shailesh Kuber and Maju Samuel)

Dollar rebounds vs yen; euro firmer after inflation data

NEW YORK – The dollar regained ground against the yen on Tuesday, recovering from Monday’s selloff, even as expectations for a December rate hike by the Bank of Japan lingered, while the euro edged up after data showed euro zone inflation was slightly hotter than expected.

The US currency came under pressure late in the session after US President Donald Trump said a potential Federal Reserve chair was present as he introduced White House economic adviser Kevin Hassett at a White House meeting.

Earlier in the day, Trump said he would be announcing his choice to succeed Jerome Powell as head of the Federal Reserve early next year.

Hassett would be viewed by many investors as a dovish pick to replace Powell, and as such his nomination could weigh on the dollar.

The greenback was 0.2% higher against the yen at 155.845, after hitting a two-week low on Monday, following a sale of 10-year Japanese government bonds that drew the strongest demand since September.

“We’re basically back to where we started before (Bank of Japan Governor Kazuo) Ueda’s remarks yesterday, which is maybe a bit perplexing considering that swaps still price about an 80% chance of a Dec hike,” said Michael Brown, senior research strategist at Pepperstone.

Stocks, bonds, cryptocurrencies, and the dollar all tumbled on Monday after Ueda said the Japanese central bank would consider the “pros and cons” of raising interest rates at its next policy meeting, sending Japanese two-year yields above 1% for the first time since 2008 and prompting a spillover into global bond markets.

“To me, it speaks to everything still being very much USD-driven, with the pressure on the buck seen yesterday amid increasing expectations that Hassett will get the Fed Chair gig having given way to slightly more rational conditions today, as participants refocus on what remains a solid US growth outlook, even with a 25-basis-point Fed cut next week very much on the cards,” Brown said.

“It still seems that, in the absence of an obvious narrative, the greenback goes back to being the ‘cleanest dirty shirt’ and finds some healthy demand,” he said.

Data on Monday showed weaker-than-expected manufacturing in the US, heaping pressure on the Federal Reserve to cut interest rates this month.

Fed funds futures are pricing an 87% probability of a 25-basis-point cut at the Fed’s next meeting on December 10, compared with a 63% chance a month ago, according to the CME Group’s FedWatch tool.

INFLATION WATCH

The euro was 0.1% higher at USD 1.1624 after data showed inflation in the 20 nations sharing the euro accelerated to 2.2% last month from 2.1% in October, a small rise that is unlikely to be too concerning for the European Central Bank.

Inflation in the euro zone is practically at the ECB’s 2% target, ECB policymaker Joachim Nagel said in an interview published on Tuesday.

“This (inflation data) comes at a time where some had claimed we could yet see another cut from the ECB, although the likelihood is that their easing cycle is over,” said Joshua Mahony, chief market analyst at Scope Markets.

Sterling was about flat on the day at USD 1.3211, having touched its highest level in a month on Monday.

The Bank of England cut the amount of capital it estimates lenders need to hold, in a bid to boost lending and stimulate the economy. It was the first reduction to bank capital requirements since the financial crisis.

Leading cryptocurrency Bitcoin rose 7% to USD 92,321, pulling away from the 10-day low touched in the previous session.

(Reporting by Saqib Iqbal Ahmed in New York and Joice Alves in London; Additional reporting by Gregor Stuart Hunter in Singapore; Editing by Andrea Ricci, Nick Zieminski, and Edmund Klamann)

Gold edges lower as investors book profits

Gold edged lower in early Asian trading on Tuesday after it touched a six-week peak in the previous session, as investors booked profits even as they awaited remarks by the Federal Reserve Chair and key economic data for interest rate cut cues.

FUNDAMENTALS

* Spot gold fell 0.2% to USD 4,222.93 per ounce, as of 0024 GMT, after hitting its highest level since October 21 on Monday.

* US gold futures for December delivery were down 0.4% at USD 4,256.30 per ounce.

* US rate futures are pricing in an 88% chance of a rate cut in December, according to the CME’s FedWatch tool.

* White House economic adviser Kevin Hassett said on Sunday that, if chosen, he would be happy to serve as the next Fed chairman. Treasury Secretary Scott Bessent indicated a new chair could be named before Christmas.

* Like US President Donald Trump, Hassett believes rates should be lower.

* Non-yielding gold tends to perform well in low-interest-rate environments.

* Investors are also focusing on key data this week, including November ADP employment figures on Wednesday and the delayed September Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, due Friday.

* Fed Chair Jerome Powell’s remarks later in the day are also expected to offer further policy clues.

* US stocks closed modestly lower on Monday, weighed down by a jump in Treasury yields and economic data that showed tariffs remained a drag on the manufacturing sector, as investors looked toward the Fed’s policy announcement next week.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.44% to 1,050.01 metric tons on Monday from 1,045.43 tons on Friday.

* Elsewhere, silver fell 1% to USD 57.40 per ounce, platinum lost 0.3% to USD 1,652.05, while palladium gained 0.22% to USD 1,427.22.

DATA/EVENTS (GMT)
0700	UK Nationwide house price mm, yy Nov
1000	EU HICP Flash YY Nov
1000	EU HICP-X, F, E, A, T Flash MM, YY Nov
1000	EU Unemployment Rate Oct

(Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich)

Dollar on the defensive as PMI data boosts case for rate cut

SINGAPORE – The US dollar remained under pressure on Tuesday as weaker-than-expected manufacturing activity data from the world’s biggest economy heaped pressure on the Federal Reserve to cut interest rates at its policy meeting later this month.

The US dollar index, which measures the greenback’s strength against a basket of six major peers, edged lower to 99.408 at the start of the Asian trading session after falling for a seventh consecutive session to hit a two-week low during US trading hours on Monday as stocks and bonds pulled back.

Data released on Monday showed US manufacturing contracted for the ninth straight month in November, as the Institute for Supply Management’s manufacturing PMI dropped to 48.2 in November from 48.7 a month earlier.

Gauges of new orders and employment also deteriorated, while input prices rose as the drag from import tariffs persisted.

“It all suggests to me that demand in the economy has decelerated,” said Brian Martin, head of G3 economics at ANZ in London.

“I really do think the Fed needs to cut interest rates, and not just cut rates in December, but follow through with further cuts next year,” he said on a podcast, adding he forecasts an additional 50 basis points of cuts in 2026.

Fed funds futures are pricing in an implied 88% probability of a 25-basis-point cut at the US central bank’s next meeting on December 10, compared to a 63% chance a month ago, according to the CME Group’s FedWatch tool.

The yield on the US 10-year Treasury bond was last up at 4.086% after a selloff in global bond markets on Monday.

Against the yen, the dollar traded at 155.51 yen, unchanged from late US levels, after Bank of Japan Governor Kazuo Ueda said on Monday that the central bank would consider the “pros and cons” of raising interest rates at its next policy meeting, sending Japanese two-year yields above 1% for the first time since 2008.

The euro stood at USD 1.1610, holding steady so far in Asia, as talks to end the war in Ukraine continued, with European leaders rallying around Ukrainian President Volodymyr Zelenskiy after an earlier US-backed peace proposal that favored Russia, while the US special envoy headed to Moscow for more talks with the Kremlin.

Sterling traded at USD 1.3216, near its highest levels in a month but little changed so far on the day. The head of Britain’s fiscal watchdog resigned on Monday after the agency inadvertently released key details of the government’s annual tax and spending budget last week before finance minister Rachel Reeves announced them in parliament.

The Australian dollar fetched USD 0.6544, while the kiwi dollar traded at USD 0.5727 3, both little changed at the start of the Asian trading session.

(Reporting by Gregor Stuart Hunter; Editing by Muralikumar Anantharaman)

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