CME outage rattles a thin market as Fed cut odds surge, dollar wobbles, and Asia digests BOJ and China headlines

Podcast by Ahura Chalki

Content created with AI assistance and edited by a human

Daily Market Update – Friday, November 28, 2025 | Key Takeaways

• CME outage hits FX, commodities, and futures in already thin post-Thanksgiving markets, complicating month-end positioning.
• Fed cut bets jump to ~85–87% for December, keeping the dollar under pressure and global risk sentiment generally supported.
• Asia FX and equities trade mixed: BOJ hike expectations firm on strong Tokyo CPI, while China property stress around Vanke weighs on sentiment.
• Oil prices steady to firmer, supported by hopes of a Fed cut and ahead of a key OPEC+ meeting and a U.S.-led Russia–Ukraine peace push.
• Japan approves an additional $117 billion in budget spending, deepening its fiscal push, while China Vanke suffers another downgrade amid its debt crisis intensifying.

1. Quiet Day, Big Glitch: CME Outage in a Thin Market

On what is likely one of the slowest trading days of the year, already dampened by the U.S. Thanksgiving holiday, markets were jolted by a major outage at CME Group.

• Trading on key CME currency, commodities, Treasuries, and equity futures platforms was halted due to a cooling issue at CyrusOne data centers.
• CME’s EBS FX platform also stopped updating, freezing prices in key pairs such as EUR/USD and USD/JPY.
• Spot FX traders were able to migrate to other venues, but futures brokers were effectively flying blind, with several firms pulling products or relying on internal pricing models.

Traders described the situation as everything from a “nightmare” to “just calm down,” but the disruption adds an unwelcome layer of uncertainty to month-end and year-end positioning, especially if the issue persists into the European session.

Recent history hasn’t been reassuring either: outages at LSEG and Switzerland’s exchange operator earlier in 2024, and a prior CME glitch in 2014, are fresh in institutional memory.

2. Fed Cut Bets Build, Dollar Still on the Back Foot

Despite the technical noise, the macro story remains centered on the Fed.

• Fed funds futures now imply roughly an 85–87% probability of a 25 bps rate cut at the December 9–10 FOMC meeting, up from around 40% a week ago.
• The shift has been driven by benign U.S. data and a more dovish tone from some policymakers, even as others push back, underscoring internal Fed debate.

The U.S. dollar index (DXY):

• Trades around 99.6, slightly higher on the day but still weaker over the week after five consecutive daily declines.
• Lower yields along the curve, including the 10-year U.S. Treasury at just under 4.0%, underline that the market is leaning toward easier policy.

With U.S. markets closed Thursday and set for a short session today, few are willing to put on large new positions—something the CME outage may reinforce.

3. FX: Dollar Softer, Yen in Focus, Europe and Antipodes Mixed

3.1 Dollar, Euro, and Sterling

• The dollar is weaker on the week but slightly firmer intraday as some traders lock in profits on the move.
• The euro is around $1.1582, marginally lower, as investors watch diplomatic efforts to build a Russia–Ukraine peace formula that could reshape the European risk backdrop.
• Sterling is around $1.3232, a touch softer on the day but heading for its strongest weekly performance in months, supported by UK fiscal plans that include £26 billion in tax increases under Finance Minister Rachel Reeves.

3.2 Yen: BOJ and Politics Collide

The Japanese yen remains choppy and directionless around JPY 156.3 per dollar, caught between:

• Ongoing currency weakness keeps the threat of Ministry of Finance intervention alive.
• A large ¥21.3 trillion (~$135 billion) stimulus package from Prime Minister Sanae Takaichi, which leans dovish on the fiscal side.
• Stronger-than-expected Tokyo CPI, with headline inflation around 2.8% in November, and core inflation expected to remain above 3%, bolstering the case for BOJ tightening.

Analysts at Capital Economics note that with a tight labor market and inflation above target, the “case for tighter monetary policy remains intact”, and they expect the BOJ to resume its hiking cycle in the coming months.

As one Tokyo dealer put it, “dollar-yen is really tricky right now”, with policy signals, geopolitics with China, and data all pointing in different directions.

3.3 Antipodeans and Asia FX

• The Australian dollar trades near $0.6536, slightly weaker, as earlier gains from RBA repricing consolidate.
• The New Zealand dollar (kiwi) is around $0.5725, easing after posting its biggest weekly rally since late April following a hawkish hold from the RBNZ that virtually closed the door to further cuts.
• The offshore yuan sits near 7.07 per dollar, stable and on track for its best month since August.
• Across Asia, USD/KRW is modestly lower, USD/SGD and USD/MYR are broadly flat, and USD/INR is slightly softer, reflecting a gentle dollar drift lower rather than aggressive trend moves.

4. Oil: Steady Ahead of OPEC+ and Ukraine Peace Talks

Oil prices are broadly steady to modestly higher in Asia as markets balance macro optimism with geopolitics:

• Brent January futures trade around $63.35/bbl, little changed,
• WTI is up around 0.6% to $59.02/bbl, and both benchmarks are set for weekly gains above 1%.

Supporting factors:

• Rising odds of a Fed cut in December which improve the outlook for global demand and risk appetite.
• A U.S.-led push for a Russia–Ukraine peace framework, discussed in Geneva, which aims to define phased security guarantees and territorial arrangements.

Any meaningful progress on peace could, over time, ease sanctions-related constraints on Russian oil exports, gradually reducing the geopolitical premium in crude. Russian President Vladimir Putin has signaled that the text could form the basis of a future deal, while warning that no final draft exists and that Moscow will not offer major concessions quickly.

The weekend OPEC+ meeting is the other key driver:

• The alliance is widely expected to keep output steady, with talk focused on a capacity review mechanism to manage rising non-OPEC supply against still uneven demand.
• ING notes that the fundamental picture looks broadly similar to the last meeting, suggesting no dramatic shift in policy.

5. Asia: Equities Softer as Tech Rally Fades, China Property Worries Deepen

Asian equity markets are weaker overall, with tech fatigue and China property stress offsetting the support from Fed cut hopes.

5.1 Regional Snapshot

• Japan’s Nikkei 225 is down about 0.2%, while TOPIX is flat, as investors digest strong data and rising BOJ hike expectations.
• South Korea’s KOSPI falls nearly 1% as the earlier tech rebound loses steam.
• Australia’s ASX 200 is flat but down roughly 2.9% for November, pressured by the view that the RBA is done cutting amid sticky inflation and a tight labor market.
• India’s Nifty 50 futures trade flat ahead of closely watched Q3 GDP data, with the Nifty up about 1.9% this month, helped by lower tech exposure and very low inflation that keeps RBI cut hopes alive.
• Singapore’s Straits Times index is up about 0.4%, and roughly 2.2% higher in November, also benefiting from a smaller weight in high-beta tech.

5.2 China: Vanke at the Center of Property Fears

Mainland Chinese and Hong Kong markets are under pressure again:

• The CSI 300 and Shanghai Composite are down about 0.3% each.
• Hong Kong’s Hang Seng also slips around 0.1%.

The main drag remains property stocks, centered on China Vanke:

• Vanke’s shares fall a further 1.5% in Shenzhen, as investors continue to dump the company’s bonds.
• Reports that Vanke is seeking to extend some bond redemptions have heightened fears it could be the next major casualty of China’s property downturn.

S&P Global has cut Vanke’s onshore and offshore ratings to CCC- from CCC, maintaining a negative outlook, and marking the second downgrade this month. The move reflects:

• Ongoing liquidity pressure,
• A weak property sales environment, and
• Rising concern that even state-backed developers are not immune.

A default by Vanke would be larger in scale than prior collapses at Evergrande or Country Garden, raising the risk of broader contagion in an already fragile sector that still accounts for a significant share of China’s GDP.

Despite some support measures from Beijing—including looser rules on capital raises and speculation—the broader property complex remains under heavy strain.

6. Japan: Extra ¥18.3 Trillion Budget Deepens Fiscal Push

In Japan, the Takaichi administration has approved an extra budget worth about ¥18.3 trillion (~$117 billion) for this fiscal year to finance a large stimulus package.

Key elements:

• Total package: ¥21.3 trillion (~$137 billion), the largest since the COVID-19 era, aimed at cushioning households from high inflation and supporting growth.
• Funding mix:
• Higher-than-expected tax revenue and non-tax income, with receipts projected ¥2.88 trillion above initial estimates, taking total tax revenue above ¥80 trillion for the first time.
• ¥11.7 trillion in new government bonds, well above last year’s ~¥6.7 trillion additional issuance.

Spending priorities:

• ¥2.7 trillion in tax cuts.
• ¥8.9 trillion in cost-of-living support, including cash handouts of ¥20,000 per child and energy subsidies.
• About ¥6.4 trillion in strategic investments for shipbuilding, semiconductors, and AI.

To address concerns over rising yields at the long end, the government plans to increase issuance of short- and medium-term bonds, while keeping long and super-long issuance unchanged.

Analysts at Mizuho Securities note that, as a minority government in both houses, Takaichi has had to accommodate demands across the ruling coalition, opposition parties, local governments, and business groups to secure support for the package.

Despite the sizable funding needs, the government aims to pass the extra budget by the end of next month, while signaling commitment to gradually lowering the debt-to-GDP ratio, which remains the highest among advanced economies.

7. What to Watch Today

Markets will be watching for:

• Euro Area & UK
• France and Germany's November inflation data.
• Germany October trade (imports/exports).
• United States
• Any Fed commentary that could confirm or challenge current rate cut pricing.
• Ongoing fallout and timing of resolution for the CME outage.

Japan & Asia

• Market reaction to Tokyo CPI, industrial production, and retail sales data.
• Further details on Japan’s supplementary budget and any hints from BOJ officials.

Commodities & Geopolitics

• Headlines around Russia–Ukraine peace efforts and U.S. special envoy Steve Witkoff’s planned visit to Moscow.
• Weekend OPEC+ meeting outcomes and supply guidance for early 2026.

China & Property

• Any new official response to Vanke’s downgrade and bond stress.
• Broader policy hints at managing the property downturn and its macro impact.