Investment Commentary - November 2025

After several months of strong and broadly consistent gains for risk assets, November brought a notable shift in tone, with markets experiencing a period of heightened volatility before stabilising into month‑end. Investor sentiment swung sharply as incoming data and shifting interest rate expectations reshaped the outlook for monetary policy into the final weeks of the year.

 

Despite the turbulence, global equities still managed to post a modest +0.2% return, continuing the trend of monthly gains. Markets oscillated as investors first priced out, and later reinstated expectations for a December rate cut in the US. Early in the month, firmer inflation components and hawkish communication from the Fed reduced the probability of a cut. But a softer labour‑market backdrop, weaker consumer confidence, and more dovish commentary from key policymakers saw expectations turn once again by month‑end. This was a similar story for the UK, with a December rate cut also heavily priced in by the market.
 

Concerns around a potential AI‑driven bubble resurfaced as the Magnificent Seven fell -1.1%, ending a seven‑month winning streak. Even exceptionally strong earnings from Nvidia did not reassure investors, with valuations and the competitive threat from new AI models - particularly Google’s Gemini 3 - adding to the sector’s pressure. Defensive sectors meaningfully outperformed, reversing the pro‑cyclical trend that has dominated since May. Emerging markets lagged developed markets by around 2.7 percentage points, driven by weakness in tech‑heavy Korea and Taiwan.
 

European equities outperformed modestly as hopes for progress in Ukraine peace discussions buoyed sentiment. European ex‑UK equities rose +1.1%, supported by ongoing strength in financials and IT earnings. UK equities gained +0.4%, with industrials seeing profit‑taking and the consumer sector staying subdued. Japanese equities struggled, with the Nikkei falling -4.1%, pressured by rising domestic yields following a large fiscal stimulus package and a weaker yen.
 

Global bond markets were broadly stable, returning +0.2%. US Treasuries led with a +0.6% gain as softer employment data and shifting Fed expectations lowered yields. UK Gilts returned +0.1% following a smoother‑than‑anticipated Budget announcement, while Eurozone government bonds underperformed due to increased borrowing projections in Germany. Japanese government bonds were among the weakest, falling -1.3% amid growing questions over the sustainability of accommodative policy.
 

Commodities delivered mixed results. Precious metals extended their strong run - gold rose +5.9% to $4,239/oz and silver surged +16.0%, marking its seventh consecutive positive month and the longest streak since 1980. Oil prices declined for the fourth month, with Brent falling -2.9% to $63.20 a barrel as expectations of a supply surplus deepened.

 

For currencies, November was a weak month for the Japanese Yen, which fell by -1.4% versus the US Dollar. The Dollar itself was relatively weak, falling by approximately -0.5% against Sterling and Euro.
 

Overall, November represented a pause after the strong momentum seen earlier in the year. The month also highlighted important rotation beneath the surface: growth and technology struggled despite solid fundamentals, while defensive equities and high‑quality bonds gained ground.