Markets Today: RBNZ Cut Rates, Gold Hits Two-Week Highs, FTSE 100 Trades Above 200-day MA Ahead of UK Budget

Most Read: US Dollar takes a hit as Dovish Fed U-turn boosts AUD, EUR, and JPY outlook

The MSCI All Country World Index continued its recovery for the fourth day in a row, which helped cut its losses from the stock sell-off this month down to only 1.3%. Asian stocks rose significantly by 1.4% following a strong rally on Wall Street.

This positive energy seems likely to continue, as futures for both the S&P 500 and European shares suggest further gains are coming. Japan's Nikkei stock index added 1.9%. However, Japanese government bonds (JGBs) fell, causing short-term interest rates (yields) to reach their highest points in 17 years. This happened because investors are worried about the cost of a huge government spending plan and are also considering the possibility that Japan's central bank might raise interest rates soon.

Specifically, the rate on the benchmark 10-year JGB rose slightly to 1.805%, while the two-year rate hit 0.975% and the five-year rate reached 1.34% both the highest they have been since June 2008.

The Reserve Bank of New Zealand (RBNZ) cut its main interest rate (the official cash rate) by a small amount (25 basis points) to 2.25% at its last meeting of the year.

This move was widely anticipated and brought borrowing costs down to their lowest level since mid-2022. The RBNZ explained that this decision was necessary because the economy had a lot of room to grow (spare capacity) and price increases (inflation) were slowing down. Although the overall annual inflation rate hit the top of their 1-3% target range in the third quarter, the prices for core items and services that aren't easily traded internationally are easing. This supports the expectation that inflation will return to the 2% target by the middle of 2026.

The RBNZ stated that any future rate changes will depend on how the economy and inflation look going forward.

Meanwhile, in Australia, the annual inflation rate increased to 3.8% in October 2025, up from 3.6% in September, meaning it remains above the Reserve Bank of Australia's (RBA) 2-3% target range.

This was the first full monthly inflation report, and it showed that electricity prices jumped (up 37.1%) after government discounts ended, and food prices remained high (3.2%). Monthly inflation, however, was flat after rising 0.5% in September. This report marked Australia's official shift to using a complete monthly inflation report, instead of the quarterly report, as the main way to measure price changes.

European stock markets saw a small increase on Wednesday. This rise was supported by two main factors: growing anticipation of US interest rate cuts and encouraging signs of progress in peace talks for Ukraine.

Investors were also waiting for the UK's budget announcement later in the day. The main European stock index, the STOXX 600, rose by 0.4%, building on the strong gains it made on Tuesday. Major regional indexes were also up, with both Germany's and France's markets gaining 0.5%.

London's FTSE 100 was up 0.2% as the UK prepared for the budget speech, where the Finance Minister is expected to announce billions of pounds in tax increases. The positive mood in Europe was linked to global investor optimism, which was boosted by weaker US economic data on Tuesday, increasing the likelihood of another Federal Reserve rate cut in December.

Hopes for a Russia-Ukraine peace deal also helped improve investor confidence after the Ukrainian President indicated he was ready to move forward with a U.S.-supported framework to end the conflict. Despite the positive news on peace, defence stocks still saw gains, with their index rising 0.8%. In individual company news, Germany's athletic wear maker Puma gained 1.9% after its US competitor, Urban Outfitters, reported better-than-expected sales for the third quarter.

On the FX front, the Japanese yen was stronger on Wednesday because of hopes that the Bank of Japan (BOJ) might raise interest rates as early as December.

The New Zealand dollar jumped after its central bank suggested it was likely finished cutting rates. Similarly, the Australian dollar also increased by 0.57% to 0.6506 after its October inflation report was higher than expected, which makes it unlikely the central bank will cut rates further. The euro moved closer to 1.16, reaching 1.1590, partly helped by signs of progress toward a peace agreement between Russia and Ukraine.

Overall, the U.S. dollar was weaker against other major currencies, falling 0.2% to 99.65.

Currency Power Balance

Oil prices increased slightly on Wednesday, recovering after falling to their lowest point in a month during the previous session.

However, the gains were limited by ongoing concerns about a predicted oversupply of oil next year and the possibility of a peace deal between Russia and Ukraine, which could bring more supply to the market.

Specifically, Brent crude futures rose by 28 cents (0.45%) to 62.76 a barrel, and US West Texas Intermediate (WTI) crude futures gained 26 cents (0.45%) to 58.27 a barrel.

The price of gold reached its highest point in nearly two weeks on Wednesday. This increase was driven by recent US economic information, which supported the idea that the Federal Reserve will cut interest rates in December.

This expectation made the US dollar weaker, which is generally good for gold prices. The price of spot gold rose by 0.7% to $4,156.89/oz, hitting its highest level since November 14th. Similarly, US gold futures for December delivery also increased by 0.4% to $4,154.10/oz.

Read More:

• UK Budget 2025 Preview: Fiscal Drag, Wealth Tax, and Market Impact on GBP & Gilts
• Silver (XAG/USD) Price Outlook: Failed Breakout and Double-Top hints at Rangebound action
• Oil falls below $58 as Ukraine agrees to 19-point Peace Plan

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

Today is a significant day for the UK and its currency, the pound. The UK Finance Minister, Chancellor Rachel Reeves, is scheduled to give her budget speech at 12:30 GMT. It's worth remembering that during last year's budget announcement, bond yields actually dropped while the speech was happening, only to rise later once the official economic forecasts (from the OBR) were released and showed a clearer picture of future inflation. This pattern could repeat itself today.

Meanwhile, in the US, the Federal Reserve's Beige Book report being released today might be even more important than usual. This report collects informal information and stories about the health of the economy, effectively taking the place of the delayed report on the third quarter's economic growth (GDP).

If this report mentions any increasing worries about the job market, it would likely help the US dollar align with expectations for lower short-term interest rates.

Support

• 9616
• 9550
• 9500

Resistance

• 9661
• 9691
• 9800

FTSE 100 Index Daily Chart, November 26. 2025

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