Weekly Market Pulse - Week ending December 5, 2025
Market developments
Equities: Global equities finished the week modestly higher, led by the U.S., where major indices hovered near record territory and the S&P 500 gained 0.3% for the week. Risk appetite was supported by expectations of a Federal Reserve rate cut next week and subdued volatility.
Fixed Income: In the U.S., the 10‑year Treasury yield hovered near 4.14% as markets continued to price a high probability of a Fed rate cut next week. Canada’s benchmark 10‑year traded around 3.41%, while the Bank of Canada is widely expected to hold rates at its upcoming meeting.
Commodities: Precious metals were steady, with gold consolidating near $4,200/oz after touching higher levels earlier in the week, while silver hovered around $58/oz. Both remain supported by expectations of Fed easing and a softer dollar, though momentum has cooled.
Performance (price return)
SECURITY |
PRICE |
WEEK |
1 MONTH |
3 MONTH |
YTD |
Equities ($Local) |
|
|
|
|
|
S&P/TSX Composite |
31,311.41 |
-0.23% |
4.01% |
7.78% |
26.62% |
S&P 500 |
6,870.40 |
0.31% |
1.09% |
6.00% |
16.81% |
NASDAQ |
23,578.13 |
0.91% |
0.33% |
8.65% |
22.10% |
DAX |
24,028.14 |
0.80% |
-0.09% |
1.83% |
20.69% |
NIKKEI 225 |
50,491.87 |
0.47% |
0.56% |
17.37% |
26.56% |
Shanghai Composite |
3,902.81 |
0.37% |
-1.67% |
2.37% |
16.44% |
Fixed Income (Performance in %) |
|
|
|
|
|
Canada Aggregate Bond |
242.06 |
-0.86% |
-0.42% |
1.22% |
2.84% |
US Aggregate Bond |
2344.57 |
-0.33% |
0.61% |
1.08% |
7.11% |
Europe Aggregate Bond |
246.88 |
-0.46% |
-0.36% |
0.32% |
1.28% |
US High Yield Bond |
29.01 |
0.11% |
0.94% |
1.34% |
8.13% |
Commodities ($USD) |
|
|
|
|
|
Oil |
60.08 |
2.61% |
0.81% |
-2.89% |
-16.23% |
Gold |
4200.89 |
-0.91% |
5.56% |
17.12% |
60.06% |
Copper |
537.10 |
3.58% |
7.72% |
19.82% |
33.39% |
Currencies ($USD) |
|
|
|
|
|
US Dollar Index |
98.99 |
-0.47% |
-1.21% |
1.25% |
-8.75% |
Loonie |
1.3829 |
1.07% |
2.02% |
0.01% |
4.01% |
Euro |
0.8587 |
0.41% |
1.33% |
-0.62% |
12.48% |
Yen |
155.31 |
0.56% |
-0.77% |
-5.07% |
1.22% |
Source: Bloomberg, as of December 05, 2025
Central Bank Interest Rates
Central Bank |
Current Rate |
March 2026 |
Bank of Canada |
2.25% |
2.27% |
U.S. Federal Reserve |
4.00% |
3.51% |
European Central Bank |
2.00% |
1.91% |
Bank of England |
4.00% |
3.60% |
Bank of Japan |
0.50% |
0.75% |
Source: Bloomberg, as of December 05, 2025
*Expected rates are based on bond futures pricing
Macro developments
Canada – Business Activity Weakens, Jobs Show Resilience
Canada’s Manufacturing activity weakened again in November as the PMI slipped to 48.4. Production and new orders fell more sharply, reflecting fragile demand and persistent trade uncertainty. Export sales continued to decline, while firms scaled back purchases. Cost pressures eased to their lowest level in over a year.
The services sector contracted steeply, with the PMI dropping to 44.3, its weakest since June. New business and exports fell, and confidence hit a five-month low. Companies cited rising costs and wage pressures, though selling prices barely moved. Overall sentiment remained cautious amid tariff-related disruptions.
Labor conditions told a different story. Canada added 54,000 jobs in November, far surpassing expectations, while the unemployment rate fell to 6.5 percent, its lowest in 16 months. Gains were driven by part-time roles and concentrated in health care, food services, and natural resources, offsetting losses in retail trade.
U.S. – Manufacturing Weakens Further, Services Hold Firm, Inflation Steady
U.S. manufacturing activity weakened further in November as the ISM index dropped to 48.2, its lowest in four months. The sector contracted for the ninth straight month, driven by declines in new orders, employment, and supplier deliveries.
The services sector continued to expand, with the ISM index rising to 52.6, the strongest pace in nine months. Business activity and new orders remained solid, and backlogs reached their highest level since February.
The Federal Reserve’s preferred inflation gauge, the core PCE price index, increased 0.2 percent in September, matching the previous two months. On an annual basis, prices rose 2.8 percent, signaling steady underlying inflation and reinforcing expectations for a cautious monetary stance.
International – EU Inflation Edges Higher, EU Job Market Holds Steady
Consumer prices in the Euro area picked up slightly in November, rising to 2.2 percent from 2.1 percent in October. Services costs climbed to their highest level since April, while energy prices continued to decline but at a slower pace. Core inflation stayed at 2.4 percent, signaling persistent underlying price pressures despite seasonal softness.
Labor conditions across the Euro area were largely unchanged. The unemployment rate held at 6.4 percent in October. Compared with a year ago, joblessness has inched higher, reflecting uneven growth across member states, even as monthly changes were minimal.
Quick look ahead
DATE |
COUNTRY / REGION |
EVENT |
SURVEY |
PRIOR |
|
07-Dec-25 |
Japan |
GDP Annualized SA QoQ |
3Q F |
-2 |
-1.8 |
08-Dec-25 |
United States |
PCE Price Index YoY |
Oct |
2.8 |
|
08-Dec-25 |
United States |
Core PCE Price Index YoY |
Oct |
2.8 |
|
08-Dec-25 |
China |
Exports YoY |
Nov |
4.00 |
-1.1 |
08-Dec-25 |
China |
Imports YoY |
Nov |
2.90 |
1 |
09-Dec-25 |
United States |
JOLTS Job Openings |
Oct |
7150 |
|
09-Dec-25 |
Japan |
PPI YoY |
Nov |
2.70 |
2.7 |
09-Dec-25 |
China |
PPI YoY |
Nov |
-2.00 |
-2.1 |
09-Dec-25 |
China |
CPI YoY |
Nov |
0.70 |
0.2 |
10-Dec-25 |
Canada |
Bank of Canada Rate Decision |
2.25 |
2.25 |
|
10-Dec-25 |
United States |
FOMC Rate Decision (Upper Bound) |
3.75 |
4 |
|
12-Dec-25 |
United Kingdom |
Monthly GDP (MoM) |
Oct |
0.10 |
-0.1 |
F = Final
The Asset Allocation Team at NEI Investments
Judith Chan, CFA – Vice President, Head of Asset Allocation
Mateo Marks, CFA – Director, Asset Allocation
Adam Ludwick, CFA – Director, Asset Allocation
Anthony Rago, B.A.Sc. – Senior Asset Allocation Analyst
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This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters. This document is published by AFI and unless indicated otherwise, all views expressed in this document are those of AFI. The views expressed herein are subject to change without notice as markets change over time.