Key Points

• China’s Factory Setback: Manufacturing PMI dipped back into contraction, while services turned negative, highlighting weak domestic demand despite stronger export orders.
• Black Friday Fatigue: Spending over the “Turkey 5” weekend declined, foot traffic stagnated, and widespread discounts pressured retail margins.
• Asian Markets Retreat: Stronger yen and 17-year-high Japanese bond yields hint at a potential BOJ rate hike, dampening risk appetite despite U.S. Fed cut hopes.
• Oil Rebounds on Supply Risks: Crude gained ~2% as pipeline disruptions and U.S.–Venezuela tensions countered the broader oversupply narrative.

China PMIs Flag Renewed Factory Slowdown Despite Export Uptick

China’s private RatingDog manufacturing PMI slipped to 49.9 in November, unexpectedly dipping into contraction and missing forecasts of 50.5, as new orders and production stalled despite the fastest rise in export orders in eight months. The survey reinforces the official PMI, which showed an eighth straight month of factory contraction and the first decline in non-manufacturing activity since 2022, underscoring how weak domestic demand, a deep property slump and falling investment are dragging growth toward sub-4.5% in Q4. While a recent U.S.–China trade truce has eased external uncertainty, equities’ modest gains suggest investors remain cautious about a durable demand recovery.

Black Friday Loses Its Punch as Promotions Stretch and Shoppers Pull Back

Black Friday is increasingly a muted, drawn-out promotion rather than a single, high-impact retail event, as U.S. consumers spend less over the Thanksgiving “Turkey 5” and foot traffic stagnates despite resilient online sales. Retailers such as Walmart, Target and Kohl’s now spread discounts across November, diluting the urgency of one-day “doorbusters” and easing staffing and inventory pressures. Yet weaker real spending, “rampant discounting” and overlapping promotions have eroded trust in deals, with millennials and Gen X less likely to concentrate purchases on Black Friday. The result is steadier but softer holiday demand, pressuring margins and favouring scale players with strong e-commerce and pricing analytics.

Asian Stocks Slip as Yen Strengthens on BOJ Hints and Risk Appetite Cools

Asian equities started December on the back foot, with the Nikkei down about 2% and regional indices softer as a firmer yen and rising Japanese government bond yields signaled growing expectations of a Bank of Japan rate hike. Governor Kazuo Ueda’s comments pushed the yen to around 155.55 per dollar and drove 2- and 10-year JGB yields to their highest levels since 2008, reinforcing a risk-off tone that also saw S&P 500 and Nasdaq futures fall 0.7%–0.8% and bitcoin and ether drop more than 5%. While Hang Seng gains reflected hopes for more China stimulus after weak PMIs, global sentiment remains tied to upcoming U.S. data and Fed Chair Powell’s comments, even as traders still price an 87% chance of a December rate cut and oil edges higher after OPEC+ kept output unchanged.

Oil Climbs as Supply Risks Challenge Glut Narrative

Oil prices rebounded around 2%, with Brent at $63.64 and WTI at $59.82, as investors shifted focus from oversupply fears to mounting geopolitical risks. Exports via the Caspian Pipeline Consortium, which handles about 1% of global supply, were disrupted after a Ukrainian drone strike damaged infrastructure at Russia’s Black Sea terminal, while fresh U.S.–Venezuela tensions added another layer of uncertainty. OPEC+’s decision to keep output unchanged for Q1 2026 provided additional support, temporarily reversing a four-month losing streak and signaling that perceived supply risks can still outweigh demand and surplus concerns in shaping oil sentiment.

Conclusion

Monday signals point to a market still searching for balance between weaker demand and evolving policy and supply dynamics. China’s unexpected manufacturing contraction and soft services data reinforce a slower domestic growth profile, even as exports offer a modest offset. In developed markets, a diluted Black Friday and softer Turkey 5 spending highlight a more cautious consumer, pressuring retail margins. In Asia, a firmer yen and higher JGB yields suggest the BOJ may finally shift policy, tempering risk appetite. Meanwhile, oil’s rebound on fresh supply risks shows geopolitics can still quickly override the prevailing glut narrative.

Investment Insights

• China Growth: Focus on Quality, Not Just Beta: Slowing PMIs and weak domestic demand point to a more selective China allocation.
• Retail: Margin Discipline Over Headline Sales: With Black Friday stretched into a “discount season” and Turkey 5 spending falling, the winners are likely retailers that use data to target promotions, protect margins and lean on omnichannel scale rather than chasing volume at any price.
• Japan: BOJ Shift as a Potential Regime Change: A stronger yen and higher JGB yields suggest Japan is edging toward more conventional monetary policy.
• Energy: Supply Shocks Still Matter: Oil’s rebound on pipeline damage and geopolitical tension shows supply risks can quickly reprice crude even in a “glut” narrative. Energy exposure should consider both downside from slower global growth and upside optionality from sudden disruptions.

Economic Calendar

Date	Event	Why It Matters
December 5, 2025	U.S. Employment Situation (Nonfarm Payrolls)	Key read on U.S. labor-market strength, wage trends and recession risk; can shift expectations for Fed policy and bond yields.
December 10, 2025	U.S. CPI & Federal Reserve Rate Decision (FOMC)	Combined inflation print and Fed decision set the tone for global risk appetite, dollar direction and rate expectations into 2026.
December 11, 2025	U.S. Producer Price Index (PPI)	Tracks pipeline price pressures from companies; an upside surprise could challenge Fed-dovish market pricing after the CPI/FOMC day.
December 18, 2025	European Central Bank Monetary Policy Meeting	Crucial update on eurozone rates and new ECB projections, with implications for EUR moves, European bond yields and global equity rotation.