{"id":7474,"date":"2025-12-03T18:55:38","date_gmt":"2025-12-03T18:55:38","guid":{"rendered":"https:\/\/abingdonwealth.com.au\/?p=7474"},"modified":"2025-12-03T18:55:39","modified_gmt":"2025-12-03T18:55:39","slug":"bassanese-bites-rate-cut-hopes-1-december-2025","status":"publish","type":"post","link":"https:\/\/abingdonwealth.com.au\/index.php\/2025\/12\/03\/bassanese-bites-rate-cut-hopes-1-december-2025\/","title":{"rendered":"Bassanese Bites: Rate cut hopes &#8211; 1 December 2025"},"content":{"rendered":"<p>Global stocks rebounded last week, buoyed by the growing prospect of a US rate cut this month.\u00a0<\/p>\n<div class=\"v2-image-container relative inline-block cursor-zoom-in overflow-hidden rounded-md group\" data-enlarge=\"true\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-82157\" src=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart1.webp\" sizes=\"auto, (max-width: 1216px) 100vw, 1216px\" srcset=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart1.webp 1216w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart1-300x266.webp 300w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart1-768x682.webp 768w\" alt=\"\" width=\"1216\" height=\"1080\" \/>\n<div class=\"absolute bottom-2.5 right-2.5 bg-darkestGray bg-opacity-80 rounded-full p-1.5 transition-transform transform group-hover:scale-125\">\u00a0<\/div>\n<\/div>\n<div class=\"v2-image-container relative inline-block cursor-zoom-in overflow-hidden rounded-md group\" data-enlarge=\"true\">\n<p>\u00a0<\/p>\n<div class=\"absolute bottom-2.5 right-2.5 bg-darkestGray bg-opacity-80 rounded-full p-1.5 transition-transform transform group-hover:scale-125\">\u00a0<\/div>\n<\/div>\n<p>\u00a0<\/p>\n<div class=\"v2-image-container relative inline-block cursor-zoom-in overflow-hidden rounded-md group\" data-enlarge=\"true\">\u00a0<\/div>\n<h2>Global week in review: Rate cut hopes<\/h2>\n<p>There was little in the way of major US economic data last week, but what was released tended to be on the soft side. The Conference Board measure of consumer confidence suggested households were quite despondent, with growing concerns over the economic outlook and job availability. If confidence drops much further, it would be clearly moving into previous recessionary levels.\u00a0<\/p>\n<p>Retail spending was not much better, rising a mere 0.2% in September. All up, the data suggests that outside of the booming AI infrastructure build, other parts of the US economy are pretty soggy \u2013 likely not helped by erratic policymaking out of Washington.<\/p>\n<p>All that said, Wall Street saw reason to rally, with another key Fed speaker \u2013 Governor Christopher Waller \u2013 supporting a rate cut this month. Waller\u2019s comments early in the week followed on from New York Fed President\u00a0 Williams\u2019 equally dovish comments the previous Friday and helped underpin equities through the week. Markets are pricing a rate cut this month with near-90% certainty.\u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/p>\n<h2>Global week ahead: US inflation<\/h2>\n<p>There\u2019s a smattering of key US data this week, including the ISM manufacturing and service sector surveys, job openings and the private consumption expenditure deflator (PCED).<\/p>\n<p>The data will provide important updates on both the health of economic activity and any lingering inflation impetus from the tariffs. At this stage, markets still see the inflation outlook as fairly benign, with a 0.2% gain in core PCED prices expected on Friday. One risk this week could be a surprise slump in job openings given all the anecdotal talk of a weakening labour market.\u00a0\u00a0<\/p>\n<p>Of course, should activity data turn out to be weak, markets could take it as \u2018bad news is good news\u2019 to the extent that it strengthens the case for a rate cut at next week\u2019s Fed meeting.\u00a0\u00a0<\/p>\n<h2>Global equity trends<\/h2>\n<p>As might be expected, it was the US\/growth\/technology segment that led global equity markets higher last week. The NASDAQ-100 lifted a lazy 4.9% after a drop of 3.0% the previous week.\u00a0 \u00a0 \u00a0\u00a0<\/p>\n<p>As I noted last week, it\u2019s still a bit premature to suggest the outperforming bias of US\/growth\/technology is shifting in favour of non-US and value. To my mind, such a shift remains directional. If equities sink further, US\/growth\/technology will be hit hardest, but if the recent market pullback is short-lived (my working assumption), they will likely bounce back the strongest.<\/p>\n<p>That said, the good relative performance of Japan and emerging markets, even before the recent market correction, suggests these could be new themes with legs and a useful source of diversification beyond US tech.\u00a0<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-82158\" src=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart2.webp\" sizes=\"auto, (max-width: 1360px) 100vw, 1360px\" srcset=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart2.webp 1360w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart2-300x210.webp 300w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart2-768x538.webp 768w\" alt=\"\" width=\"1360\" height=\"953\" \/><\/p>\n<h2>Australian week in review: Firm October CPI<\/h2>\n<p>Local stocks rode the global equity rebound last week, despite a firm October inflation report which further lessened markets\u2019 hopes of a rate cut next year.\u00a0<\/p>\n<p><a href=\"https:\/\/www.betashares.com.au\/insights\/nvidia-to-report\/?utm_source=bs_email&amp;utm_medium=email&amp;utm_campaign=251201_mkt_etf_newsletter_all_bb&amp;utm_content=&amp;utm_term=direct#_ftnref1\" name=\"_ftn1\"><\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-82159\" src=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart3.webp\" sizes=\"auto, (max-width: 1216px) 100vw, 1216px\" srcset=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart3.webp 1216w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart3-300x269.webp 300w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart3-768x689.webp 768w\" alt=\"\" width=\"1216\" height=\"1091\" \/><\/p>\n<p>The major local highlight last week was the first of the fully detailed monthly CPI reports. The\u00a0<a href=\"https:\/\/www.betashares.com.au\/insights\/disappointing-inflation-leaves-the-rbas-rate-outlook-in-the-balance\/?utm_source=bs_email&amp;utm_medium=email&amp;utm_campaign=251201_mkt_etf_newsletter_all_bb&amp;utm_content=&amp;utm_term=direct\">key takeaway<\/a>\u00a0was that the seasonally adjusted trimmed mean measure of underlying inflation lifted 0.3% in October, implying an annualised rate of inflation still above the RBA\u2019s 2-3% inflation target.<\/p>\n<p>For there to be any hope of rate cuts next year, the annualised pace of underlying monthly inflation gains will need to slow to below 3% \u2013 and, if it does not, we face the prospect of higher rates. Indeed, markets are now pricing a 30-40% chance of one rate hike by end-2026.\u00a0 \u00a0<\/p>\n<p>Other data last week were also firm. Aside from a quirky drop in mining investment, construction work done in Q3 was solid, with good gains in both residential (+4.2%) and non-residential (+3.7%) construction. Capital spending was also solid last quarter, rising 6.4%, with the business investment outlook for FY26 upgraded. After dropping back in Q2, even public infrastructure investment rebounded last quarter, rising 3.9%.<\/p>\n<p>All up, business investment and construction appear to be strengthening, broadening the recovery in private activity which has so far been consumer-led. Investment and construction activity is being underpinned by the residential housing upswing, green energy projects and Australia\u2019s own mini AI-related data centre boom.<\/p>\n<p>At least mining investment remains fairly flat and public infrastructure spending appears to be plateauing. Either way, the strengthening outlook for investment will likely add to the RBA\u2019s concerns over limited spare economic capacity.\u00a0 \u00a0 \u00a0 \u00a0<\/p>\n<h2>Australian week ahead: Q3 GDP<\/h2>\n<p>The major local highlight this week will be Wednesday\u2019s release of the Q3 GDP report, which is shaping up to be quite solid.<\/p>\n<p>Although trade, inventory and profit data yet to be released could change the story, the data released so far suggests broad-based strength across consumer spending, public demand, housing construction and business investment. The market currently expects quarterly economic growth of 0.7%, after a gain of 0.6% in Q2. If borne out, it would lift annual economic growth from 1.8% to 2.2%.\u00a0<\/p>\n<h2>Australian equity trends<\/h2>\n<p>Dampened rate cut hopes have generally hurt high-beta local equity themes of late such as technology and small caps. Last week, however,\u00a0 technology and small caps both snapped around back 6.0%.\u00a0<\/p>\n<p>Materials also continued to perform well, rising 5.0%.\u00a0This continued the outperformance trend of resources over financials.\u00a0\u00a0<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-82160\" src=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart4.webp\" sizes=\"auto, (max-width: 1360px) 100vw, 1360px\" srcset=\"https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart4.webp 1360w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart4-300x211.webp 300w, https:\/\/www.betashares.com.au\/wp-content\/uploads\/2025\/12\/chart4-768x541.webp 768w\" alt=\"\" width=\"1360\" height=\"958\" \/><\/p>\n<h2><strong>Have a great week!<\/strong><\/h2>\n<p><strong><a style=\"font-size: inherit;\" href=\"https:\/\/l.mail.betashares.com.au\/ls\/click?upn=u001.tNBRgBKzgu8PBYzxpXaBkquG5GbXplWX57Egg1DiQMxSf1tjG3aDkqwoXG-2BB7EcX-2FV-2F9-2Bdi0SruR6W-2FOlG1i5vcZ5M8Rpzhdm-2FSM8f3Nn6JJSt12zrH0xZ2MFx5yvVoh-2Fg2LdTPacUO2MpUqvo06NCvlUzT7LMjjcz5Skr3cNHSK-2BZAL1TCQZU3-2BPwFImfTYXpz7T8xKx-2BQgyOHvqDwAOBsxLn1i4-2F0g26hgAe2E03CPWzkGVHdmB-2FtvsRIPFJ5FfqbT49-2BXbq5-2FxA4wfcta76crecom7aMdpot72h-2Fi3rMaFeUVH3ouJaedu5N7qZmQZBQuICIMF0AotpBtByamNobtQ-2FDFLQw5poX-2FM-2FV9Bcg-3DXf4-_OHU2wPP6rhOenvGhcT-2FWNqvcmpj2NAj9XGEaN-2BkXAccr5-2FQ-2FAU4YzL4-2FXD14HvlqoiNJaoVMW60KtT5io3aQC5c-2BKrLC35Q8QZ32I2k-2BkJg26jaoIMmDPgEgqLe38BYk1wks1UsOVGEqjn8CAKaH3Rv4bShit-2B3v1A-2BhGYUc0lADlQzSa8nT7vev4sb1UJB3s4fQnTpcYhnMqiy-2BwMJ5xovP0XG-2Fn2nYOnix-2FccGUzaf9pdkr3tmVeS-2FjNsvbl14D1RWJk30XjPDqfFYVCa5dXjI1v-2Bok1efO6eWgp6vw8Qk-2Fs2jwPFCbXxBjoTdlWyYj0xeYG-2Fx9-2Bfki3YGa308-2BxT-2BtZUksVQgYoYi-2FBie4au0HR-2FNn62mqJxswt3FBnCysK7MTX7rBWjSiz60xEH8xGSnjQ-2F6l7uMBP-2B3JhilH4Yc9qaa-2B9NOytvJAIXqMAWt1sid0go1LhZYyuYa-2FvyKhAsRT5qOgEvYkK-2FJR42537xu4uHdtaYhkfSp3gQBOlwVN-2BBOY0TqkiklZ5vMwp-2Bwk4rI3Lfjm4A59B-2BTzRY2sD1jWZGJYGOY7BRR-2FckDcPmtuv9KoLiBSUNqxSm38x2ziEN8qD2KbRCDY-2F-2B4HXl5e2Qa-2F-2F2-2BYLdVRGcAYzYUk5SQcQflOAnHQtDiPQqFeqFvSVdmKZZKaABFnRIsQJ2Mu0631Ok3apssWsm2QN41CrsKWHpo-2BE0rs8PdzuRd0-2FV5AQ-3D-3D\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to read my full post<\/a><\/strong><\/p>\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Global week in review<\/p>\n<p>Global equities pushed higher last week, helped by solid US earnings reports and the completion of more major US trade deals.\u00a0<\/p>\n<p>Trump causes Japan and Europe to blink\u00a0<\/p>\n<p>Say what you like about US President Donald Trump but he does appear to have secured some fairly good trade deals with both Japan and the European Union \u2013 at least from his perspective. Both major US trading partners have agreed to a 15% tariff on most of their goods imported into the US, along with a commitment to invest billions into the US economy \u2013 and without trade retaliation!<\/p>\n<p>While this still amounts to a tax on US corporations and\/or households, markets will likely construe these deals as a win for Trump \u2013 major economies are rolling over just to get a deal done so we can all move on with our lives. As I noted last week, to the extent that most trading partners will face similarly stiff tariffs, they should not lose much competitiveness (at least against each other) with regard to selling into the US market.\u00a0<\/p>\n<p>Reports suggest an updated deal with China is also in the wings.\u00a0<\/p>\n<p>Is this good news?<\/p>\n<p>From a markets perspective, all this is great news \u2013 there are good grounds to think that tariff uncertainty will soon be behind us and the overall level of tariffs won\u2019t be enough to tip the US economy into recession.\u00a0<\/p>\n<p>That said, we do likely face a few months of higher-than-usual US monthly inflation gains (as some of the tariffs are passed through to prices) but markets seem well prepared for this. Provided this remains a one-off hit to the price\u00a0level\u00a0\u2013 and is not entrenched into higher\u00a0inflation\u00a0through a wage-price spiral \u2013 it\u2019s an acceptable outcome for markets.\u00a0<\/p>\n<p>There will also likely be some hit to US profits and household real incomes, which could temporarily slow economic growth. But the tariff hit is coming at a time of still-resilient US economic growth and easing underlying inflation pressures. Offsetting the tariff hit (to an extent) will be reduced trade uncertainty and the Fed waiting in the wings to cut interest rates further as required.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[60],"tags":[10],"class_list":["post-7474","post","type-post","status-publish","format-standard","hentry","category-bassanese-bites","tag-format","post-no-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bassanese Bites: Rate cut hopes - 1 December 2025 - Abingdon Wealth<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/abingdonwealth.com.au\/index.php\/2025\/12\/03\/bassanese-bites-rate-cut-hopes-1-december-2025\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bassanese Bites: Rate cut hopes - 1 December 2025 - Abingdon Wealth\" \/>\n<meta property=\"og:description\" content=\"Global week in review Global equities pushed higher last week, helped by solid US earnings reports and the completion of more major US trade deals.\u00a0 Trump causes Japan and Europe to blink\u00a0 Say what you like about US President Donald Trump but he does appear to have secured some fairly good trade deals with both Japan and the European Union \u2013 at least from his perspective. Both major US trading partners have agreed to a 15% tariff on most of their goods imported into the US, along with a commitment to invest billions into the US economy \u2013 and without trade retaliation! While this still amounts to a tax on US corporations and\/or households, markets will likely construe these deals as a win for Trump \u2013 major economies are rolling over just to get a deal done so we can all move on with our lives. As I noted last week, to the extent that most trading partners will face similarly stiff tariffs, they should not lose much competitiveness (at least against each other) with regard to selling into the US market.\u00a0 Reports suggest an updated deal with China is also in the wings.\u00a0 Is this good news? From a markets perspective, all this is great news \u2013 there are good grounds to think that tariff uncertainty will soon be behind us and the overall level of tariffs won\u2019t be enough to tip the US economy into recession.\u00a0 That said, we do likely face a few months of higher-than-usual US monthly inflation gains (as some of the tariffs are passed through to prices) but markets seem well prepared for this. Provided this remains a one-off hit to the price\u00a0level\u00a0\u2013 and is not entrenched into higher\u00a0inflation\u00a0through a wage-price spiral \u2013 it\u2019s an acceptable outcome for markets.\u00a0 There will also likely be some hit to US profits and household real incomes, which could temporarily slow economic growth. But the tariff hit is coming at a time of still-resilient US economic growth and easing underlying inflation pressures. Offsetting the tariff hit (to an extent) will be reduced trade uncertainty and the Fed waiting in the wings to cut interest rates further as required.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/abingdonwealth.com.au\/index.php\/2025\/12\/03\/bassanese-bites-rate-cut-hopes-1-december-2025\/\" \/>\n<meta property=\"og:site_name\" content=\"Abingdon Wealth\" \/>\n<meta property=\"article:published_time\" content=\"2025-12-03T18:55:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-12-03T18:55:39+00:00\" \/>\n<meta name=\"author\" content=\"Mike Avey\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mike Avey\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/abingdonwealth.com.au\\\/index.php\\\/2025\\\/12\\\/03\\\/bassanese-bites-rate-cut-hopes-1-december-2025\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/abingdonwealth.com.au\\\/index.php\\\/2025\\\/12\\\/03\\\/bassanese-bites-rate-cut-hopes-1-december-2025\\\/\"},\"author\":{\"name\":\"Mike Avey\",\"@id\":\"https:\\\/\\\/abingdonwealth.com.au\\\/#\\\/schema\\\/person\\\/8da42c906cebd4d6b6f6134563a3a92c\"},\"headline\":\"Bassanese Bites: Rate cut hopes &#8211; 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Both major US trading partners have agreed to a 15% tariff on most of their goods imported into the US, along with a commitment to invest billions into the US economy \u2013 and without trade retaliation! While this still amounts to a tax on US corporations and\/or households, markets will likely construe these deals as a win for Trump \u2013 major economies are rolling over just to get a deal done so we can all move on with our lives. As I noted last week, to the extent that most trading partners will face similarly stiff tariffs, they should not lose much competitiveness (at least against each other) with regard to selling into the US market.\u00a0 Reports suggest an updated deal with China is also in the wings.\u00a0 Is this good news? From a markets perspective, all this is great news \u2013 there are good grounds to think that tariff uncertainty will soon be behind us and the overall level of tariffs won\u2019t be enough to tip the US economy into recession.\u00a0 That said, we do likely face a few months of higher-than-usual US monthly inflation gains (as some of the tariffs are passed through to prices) but markets seem well prepared for this. Provided this remains a one-off hit to the price\u00a0level\u00a0\u2013 and is not entrenched into higher\u00a0inflation\u00a0through a wage-price spiral \u2013 it\u2019s an acceptable outcome for markets.\u00a0 There will also likely be some hit to US profits and household real incomes, which could temporarily slow economic growth. But the tariff hit is coming at a time of still-resilient US economic growth and easing underlying inflation pressures. Offsetting the tariff hit (to an extent) will be reduced trade uncertainty and the Fed waiting in the wings to cut interest rates further as required.","og_url":"https:\/\/abingdonwealth.com.au\/index.php\/2025\/12\/03\/bassanese-bites-rate-cut-hopes-1-december-2025\/","og_site_name":"Abingdon Wealth","article_published_time":"2025-12-03T18:55:38+00:00","article_modified_time":"2025-12-03T18:55:39+00:00","author":"Mike Avey","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Mike Avey","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/abingdonwealth.com.au\/index.php\/2025\/12\/03\/bassanese-bites-rate-cut-hopes-1-december-2025\/#article","isPartOf":{"@id":"https:\/\/abingdonwealth.com.au\/index.php\/2025\/12\/03\/bassanese-bites-rate-cut-hopes-1-december-2025\/"},"author":{"name":"Mike Avey","@id":"https:\/\/abingdonwealth.com.au\/#\/schema\/person\/8da42c906cebd4d6b6f6134563a3a92c"},"headline":"Bassanese Bites: Rate cut hopes &#8211; 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