Markets Today: Rate Cut Bets Surge, FTSE 100 Eyes Retest of 200-day MA, Geopolitics and US Retail Sales in Focus

Most Read: How fast the tides turn – Market wrap for the North American session - November 24

Global stock markets grew for the third consecutive day, largely thanks to technology stocks and the increasing chance that the Federal Reserve (Fed) will cut interest rates in December.

The overall MSCI All Country World Index increased by 0.1% after more Fed officials voiced support for a rate reduction, making investors more optimistic. Asian stocks rose by 0.4%, with tech giants like TSMC performing well. After being closed for a holiday on Monday, Japan's Nikkei index finished the day up just 0.1%, despite a strong start; it had dropped sharply by 3.5% last week as investors avoided taking risks.

Meanwhile, Hong Kong's Hang Seng Index was up nearly 0.6%, and China's CSI300 Index gained 1.1%.

European stock markets were relatively quiet on Tuesday as investors held back, waiting for key economic data from the US. There are growing expectations that the US Federal Reserve will soon cut interest rates.

The main European stock index, the STOXX 600, rose slightly by 0.1%. Major regional markets were mixed: Germany's DAX fell 0.1%, while France's index gained 0.1%. Markets are specifically looking forward to the US reports on producer inflation and retail sales, which will provide fresh information on the health of the US economy.

These reports are among the first to be released after the longest-ever US government shutdown caused a lack of data for both investors and the Fed.

Within Europe, banks provided the biggest lift to the index, rising 0.4%, and stocks tied to natural resources, such as oil companies and miners, also gained 0.7% and 0.6%, respectively. Separately, the home improvement retailer Kingfisher was a top performer, jumping 4.3% after raising its profit forecast for the full year.

Finally, investors are also watching for developments in the Russia-Ukraine conflict, after the US and Ukraine discussed a revised plan for peace on Monday, leading to hopes that an end to the war might be near.

On the FX front, the US dollar remained stable on Tuesday. This stability is notable because investors are trying to figure out if the Federal Reserve will cut interest rates next month, especially after some officials made comments that suggest they support a cut. Meanwhile, people are keeping a close eye on the Japanese yen, watching for possible government action to influence its value.

The US dollar index, which tracks the dollar against other major currencies, was steady at 100.13, keeping the nearly 1% gain it made last week. So far, the rising possibility of an interest rate cut hasn't significantly hurt the dollar's value. The euro was trading at 1.1530 after a small overnight gain, and the British pound was slightly up (0.2%) at 1.3115.

Among other currencies, the New Zealand dollar dropped to $0.5595; it has fallen more than 2% this month because a rate cut from the Reserve Bank of New Zealand is expected on Wednesday. The Australian dollar was slightly down (0.15%) at $0.6453.

In the cryptocurrency market, bitcoin continued to struggle, falling 1.4% to $87,519.91. Its value has dropped almost 20% this month alone.

Currency Power Balance

Oil prices dropped on Tuesday. The main reason was a worry that there will be too much oil supply next year compared to the demand. This concern was greater than the worry about ongoing sanctions on Russian oil shipments, which are still in place because the peace talks for the Ukraine war haven't resolved anything.

Specifically, Brent crude oil futures fell by 33 cents (0.5%) to 63.04/barrel, and West Texas Intermediate (WTI) crude oil futures dropped by 28 cents (0.5%) to 58.56.

The price of gold went up on Tuesday, reaching its highest level in over a week. This rise happened despite a strong US dollar. Gold's increase was driven by recent comments from officials at the Federal Reserve that were considered "dovish" (meaning they favored lower interest rates), which increased the possibility of the US cutting interest rates in December.

The price of spot gold rose by 0.1% to reach $4,141.49 per ounce by 0631 GMT, continuing the 1.8% gain it made on Monday.

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The European session will be quiet one with geopolitical events dominating the agenda.

The US has become less strict about its Thursday deadline for Ukraine to agree to a peace deal with Russia. A new 19-point deal will be discussed soon. German Chancellor Merz doesn't think a quick agreement will happen this week, but Russia seems somewhat hopeful.

In terms of economic news, US data could cause a market change, but probably not today. Retail sales are expected to be strong, and I think consumer confidence will drop slightly to about 93, which is close to what experts expect. The producer price index (PPI) for September will likely match expectations, rising by 0.3% month-over-month.

These economic figures are not expected to change the outlook for interest rates much. Rate expectations are currently being influenced by comments from Federal Reserve officials who favor lower rates. Following Chris Waller, Mary Daly also suggested an interest rate cut in December. Even though she doesn't vote on rates this year, her position adds to the pressure for the Federal Reserve to consider a cut, making the final decision a close call.

From a technical standpoint, the FTSE 100 is in a period of consolidation.

A change in structure has taken place with a four-hour candle close above the previous swing high setting up the index for a fresh higher high and potential retest of the 200-day MA resting at 9614.

A failure to move higher from higher may find support at 9450 before the 9400 handle comes into focus.

FTSE 100 Index Daily Chart, October 20. 2025

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