The surge in US dollar yields triggers global asset volatility, putting pressure on both Crypto and stock markets.

Global financial markets experienced intense volatility in early December, with the rapid rise in US Treasury yields becoming a key factor stirring various asset classes. Bank of Japan Governor Ueda Kazuo signaled a potential rate hike, triggering a comprehensive sell-off in Japanese bonds and subsequently causing a chain reaction in global bond markets. Risk aversion quickly intensified, with the VIX fear index surging by 5.45%.

US Treasury Yields Rise to Center Stage, Bonds in Multiple Countries Decline Simultaneously

The US 10-year benchmark Treasury yield rose to 4.09%, making the increase in US Treasury yields the core focus for global investors. Japan’s 2-year bond yield hit a new high since 2008, breaking above 1% for the first time, while the 10-year yield reached 1.88%. Germany’s 10-year government bond yield also climbed to 2.75%. This wave of yield increases triggered a chain reaction across markets, becoming the dominant force driving global asset price movements.

Against this backdrop, the cryptocurrency market came under significant pressure. Bitcoin once plunged nearly 8%, hitting a low of (83814) USD, before rebounding. The 24-hour decline narrowed to 4.53%, currently trading at (86263) USD. Ethereum’s 24-hour drop reached 6.43%, trading at $2800. According to the latest data, Bitcoin’s current price is (87.67K) USD, up 0.22%; Ethereum is at 2.95K USD, with a 24-hour decline of 0.34%.

Stock Markets All Adjust, Safe-Haven Assets Rise Against the Trend

The US stock market ended its five-day winning streak, with all three major indices falling. The Dow Jones dropped 0.9%, the S&P 500 declined 0.53%, and the Nasdaq fell 0.38%. European stocks also weakened, with Germany’s DAX 30 down 1.04%, France’s CAC 40 down 0.32%, and the UK’s FTSE 100 down 0.18%.

Notably, safe-haven assets like gold rose against the trend. Spot gold increased by 0.28%, trading at 4232.12 USD/oz, approaching the $4300 level. International silver prices continued their fifth consecutive day of gains, hitting a new all-time high, with year-to-date gains exceeding 100%.

Manufacturing Weakness Intensifies, US November ISM Data Hits New Low

The US November ISM Manufacturing Purchasing Managers’ Index PMI fell further from 48.7 in September to 48.2, marking the lowest in four months. It was below the expected 48.6 and signaled that manufacturing has contracted for the ninth consecutive month. The supplier delivery index registered 49.3, new orders at 47.4, and employment index dropped to 44, reflecting widespread signs of economic slowdown.

Survey results show that 67% of surveyed companies mainly aim to control employment levels rather than expand recruitment. Price pressures intensified, reaching 58.5, with a larger decrease in backlog orders, recorded at 44. The only bright spot was a rebound in the production index to 51.4, with inventory levels decreasing relatively less, at 48.9.

Federal Reserve Policy Shift Expected to Warm Up in December Rate Cut Expectations

Bank of America’s global research team revised their forecast for Federal Reserve policy. Due to ongoing weakness in the labor market, they now expect the Fed to cut interest rates by 25 bps at the December meeting, contrasting with their previous stance of holding rates steady. BofA predicts that the Fed will further cut rates by 25 bps in June and July 2026, with the ultimate target rate moving down to the 3.00%-3.25% range.

Analysts note that the expectation of further rate cuts next year is more based on leadership change expectations rather than economic fundamentals. Most major global investment banks forecast a 25 bps rate cut next week, with only Morgan Stanley and Standard Chartered Bank expecting rates to remain unchanged.

Corporate Developments and Policy News

Nvidia Acquires Synopsys to Advance Chip Design Collaboration

Nvidia announced the purchase of common stock in chip design software company Synopsys for $2 billion, at a per-share price of $414.79. The two companies announced a strategic partnership aimed at innovating in engineering and design fields.

DeepSeek Releases V3.2 Series Models, Nearing GPT-5 Inference Capabilities

DeepSeek simultaneously launched the official V3.2 and V3.2-Speciale AI models. V3.2 achieves the highest open-source tool call capability, with a 93.1% pass rate on the AIME 2025 math benchmark, close to GPT-5’s 94.6%.

Airbus Addresses Software Failures and Quality Issues

Airbus has had to suspend a significant number of A320 series aircraft due to software issues in the flight control systems that are vulnerable to intense solar radiation. About 6,000 aircraft worldwide are affected, most of which have completed technical repairs, with fewer than 100 aircraft still in operation. Airbus also confirmed the discovery of industrial quality issues with some metal panels on A320 aircraft, but the root cause has been identified and is under control.

Microsoft CEO Emphasizes Europe’s Central Role in AI Strategy

Microsoft CEO Satya Nadella stated that as Europe seeks to strengthen digital independence, the company increasingly views Europe as a key region in its AI strategy. Nadella emphasized that digital sovereignty is a critical consideration for any country, and nations want to ensure supply chain continuity and resilience.

Trade Policy Adjustments

The Office of the US Trade Representative USTR announced that the US and UK reached a principled agreement on drug pricing. The agreement requires the UK’s NHS to increase the net price of new drugs by 25% and guarantees continued investment by UK pharmaceutical companies in the US. The US has agreed to exempt drugs, raw materials, and medical technologies originating from the UK from Section 232 tariffs and will not initiate a Section 301 investigation during Trump’s presidency.

Bank of England Perspective: Rate Cuts Require Further Weakening of the Labor Market

Bank of England Monetary Policy Committee member Gertjan Vlieghe stated that the UK labor market needs to weaken further before he would support another rate cut, and the deterioration must be reflected in employment data rather than just unemployment rates. Vlieghe emphasized that current employment and vacancy data appear stable, and he will continue to oppose further easing of monetary policy.