Markets pulled back on Monday as investors positioned cautiously ahead of the Federal Reserve’s final policy meeting of 2025, with U.S. stocks halting a four-day rally and global bonds extending their recent selloff.

The session saw divergent performance across asset classes, with bitcoin continuing its rebound while equities, gold, and oil all closed lower. Treasury yields climbed higher as traders reassessed the pace of Fed easing in 2026.

Check out the forex news and economic updates you may have missed in the latest trading session!

Forex News Headlines & Data:

• During his state visit to China, French President Emmanuel Macron threatened Beijing with tariffs
• Japan Average Cash Earnings for October 2025: 2.6% y/y (2.1% y/y forecast; 1.9% y/y previous)
• Japan GDP Growth Final for September 30, 2025: -2.3% y/y (-1.8% y/y forecast; 2.2% y/y previous); -0.6% q/q (-0.4% q/q forecast; 0.5% q/q previous)
  • Japan GDP Price Index Final for September 30, 2025: 3.4% (2.8% forecast; 3.0% y/y previous)
• China Balance of Trade for November 2025: 111.68B (92.0B forecast; 90.07B previous)
• Japan Eco Watchers Survey Outlook for November 2025: 50.3 (49.3 forecast; 53.1 previous)
• Germany Industrial Production for October 2025: 1.8% m/m (0.4% m/m forecast; 1.3% m/m previous)
• Swiss Consumer Confidence for November 2025: -34.0 (-35.0 forecast; -37.0 previous)
• U.S. Consumer Inflation Expectations for November 2025: 3.2% (3.1% forecast; 3.2% previous)
• ECB Executive Board member Isabel Schnabel expressed comfort with market expectations that the ECB’s next rate move will be a hike, becoming the first senior official to suggest with certainty that European rates have reached a floor

Broad Market Price Action:

Monday’s session reflected growing investor caution ahead of the Federal Reserve’s December policy meeting, with most risk assets retreating as traders reassessed the outlook for monetary policy in 2026.

The S&P 500 declined 0.24% after closing within striking distance of an all-time high on Friday, with the pullback attributed to uncertainty over the pace of rate cuts next year and concerns about the sustainability of the AI-driven rally. President Trump’s comments raising potential antitrust concerns about Netflix’s planned takeover of Warner Bros. Discovery’s Hollywood studios and streaming business likely added to the cautious mood during a busy merger Monday.

Bitcoin emerged as the session’s clear outperformer, gaining 2.21% to trade around 91,180 as the cryptocurrency extended its recent strength. The digital asset continued to attract demand during the Asian and London sessions before consolidating through the U.S. afternoon. There is no notable crypto news to directly point to this strength, so this is arguably a mix of a continued technical rebound from its October and November drop, and potentially some capital flight from other assets as traders grow uncertain on the pace of cuts from the Federal Reserve in the year to come.

Gold slipped 0.22% to close near 4,189, retreating modestly after its strong performance in recent sessions. The precious metal showed early strength during Asian trading but turned lower as the U.S. session progressed. Given that bonds and equities were also on the downswing, and the US Dollar Index and yields was higher, this was most likely a dollar driven story for gold than anything else.

WTI crude oil declined 1.91% to settle around 58.60, extending its recent weakness. The energy commodity traded positively during the Asian session but reversed lower during London and U.S. hours. There didn’t seem to be any direct catalysts for this move lower oil, so it was likely a risk-driven move and arguably a little bit of profit-taking from its rally over the past two weeks.

The 10-year Treasury yield rose approximately three basis points to 4.17%, continuing the upward pressure on bonds that has characterized recent trading. Yields climbed across the curve as traders adjusted expectations for the pace of future Fed rate cuts, with markets now leaning toward two additional moves by the end of 2026, down from three expected just a week earlier.

FX Market Behavior: U.S. Dollar vs. Majors

The U.S. dollar exhibited strength on Monday, recovering from early Asian session weakness to finish among the day’s best-performing major currencies.

During the Asian session, the greenback traded net lower against the major currencies as markets digested the weekend’s developments and positioned ahead of key central bank meetings. The selling pressure likely reflected continued uncertainty about the Federal Reserve’s policy trajectory and lingering concerns about global growth dynamics.

The dollar’s fortunes shifted decisively just ahead of the London morning open, when the greenback bottomed out and began a sustained rally through the London session. There were no major catalysts to point to, so the reversal higher appeared to be driven by a combination of positioning adjustments. The Dollar seemed to be unfazed by central bank policy divergence, particularly following ECB Executive Board member Isabel Schnabel’s hawkish comments suggesting European rates have reached a floor.

After a brief dip following the U.S. session open, the dollar resumed its advance with a strong rally against the major currencies. However, the greenback’s momentum capped quickly just ahead of the London close, with some profit-taking emerging as the dollar pulled back slightly from its highs.

The dollar’s strength came along with weaker risk sentiment in equities and continued bond market pressure, suggesting that traders may be positioning for a more hawkish Fed stance at Wednesday’s policy meeting.

Upcoming Potential Catalysts on the Economic Calendar

• Japan Reuters Tankan Index for December 2025 at 11:00 pm GMT
• U.K. BRC Retail Sales Monitor for November 2025 at 12:01 am GMT
• Australia Business Confidence for November 2025 at 12:30 am GMT
• Australia Building Permits Final for October 2025 at 12:30 am GMT
• Australia RBA Interest Rate Decision for December 9, 2025 at 3:30 am GMT
  • Australia RBA Press Conference at 4:30 am GMT
• Japan Machine Tool Orders for November 2025 at 6:00 am GMT
• Germany Balance of Trade for October 2025 at 7:00 am GMT
• BOJ Gov Ueda Speech at 9:00 am GMT
• BOE Gov Bailey Speech at 10:45 am GMT
• U.S. NFIB Business Optimism Index for November 2025 at 11:00 am GMT
• U.S. ADP Employment Change Weekly for November 22, 2025 at 1:15 pm GMT
• U.S. JOLTs Job Openings for October 2025 at 3:00 pm GMT
• U.S. API Crude Oil Stock Change for December 5, 2025 at 9:30 pm GMT

Tuesday’s calendar features a potentially active overnight session with the main focus on the Reserve Bank of Australia’s policy decision and press conference in the early Asian morning.

Activity could pick up further during European hours with BOJ Governor Ueda and BOE Governor Bailey both scheduled to speak, potentially providing insights into their respective policy outlooks.

The U.S. session brings key labor market indicators including the weekly ADP Employment Change and JOLTs Job Openings data, which could influence expectations ahead of Wednesday’s Federal Reserve meeting.

Stay frosty out there, forex friends, and don’t forget to check out our Forex Correlation Calculator when planning to take on risk!