Risk-on mood builds as Fed cut odds hit 85%; futures and oil climb while Bitcoin reclaims $90,000
Traders leaned back into risk after soft U.S. spending and hiring data boosted the probability of a near-term Fed rate cut to 85%, lifting S&P 500 futures and pushing oil higher. Crypto rebounded with Bitcoin vaulting back above $90,000, even as stablecoin risks stayed in focus.
Market snapshot
- Fed pivot bets firm: Weak consumer spending and hiring sharpen rate-cut expectations to 85%, setting the tone for FX and global equities.
- Futures higher: December 2025 S&P 500 futures settled up 25.20 points; oil futures for December 2025 advanced by 1,951 points.
- Bitcoin bounce: BTC climbed more than 2% in 24 hours, back above $90,000 after a 30% retreat from its peak.
- Crypto flow points: XRP hits 4 billion transactions; Grayscale launches a new ETF product.
- Stablecoin scrutiny: S&P flagged undercollateralization risks for USDT in sharp crypto drawdowns.
- Energy under the microscope: AI data centers and new mandates are lifting U.S. power prices by 10%+; solar growth offers only a partial offset.
- Geopolitics and gas: Cyprus–Lebanon maritime deal opens new Mediterranean exploration routes; ExxonMobil eyes additional reserves.
- Trade policy watch: Canada boosts support for steel and lumber as tariffs bite, with a domestic-demand push and 50% freight-rate cuts.
Fed cut bets reshape FX and rates narrative
A duo of softer U.S. data points—cooling consumer spending and sagging hiring—has traders re-pricing the policy path, with market-implied odds now signaling an 85% chance of a rate cut. For FX, that tilt tends to favor higher-beta and commodity-linked currencies while narrowing the perceived carry appeal of the U.S. dollar. Volatility may cluster around incoming labor prints and inflation updates as positioning adjusts to a lower-rate glide path.
In rates, a more dovish Fed profile generally compresses real yields and underpins risk assets. However, lingering inflation pressures—particularly from energy and electricity costs—could complicate the final leg of disinflation, keeping term premiums sensitive to energy headlines.
Equities and commodities: futures firm; oil bid on supply and geopolitics
Risk appetite improved with December 2025 S&P 500 futures higher by 25.20 points. Crude futures for December 2025 gained 1,951 points, supported by a broader risk-on tone and fresh geopolitical catalysts.
Energy prices and AI demand stoke inflation watch
U.S. electricity prices are rising more than 10% amid a surge of AI data-center demand and regulatory mandates, a dynamic that could filter through to core services inflation and keep central banks cautious. Solar capacity growth is offsetting some of the pressure, but utilities and energy-intensive sectors face higher input costs, a factor that traders are embedding into valuations and earnings risk premia.
Mediterranean gas opens another supply valve
A maritime accord between Cyprus and Lebanon paves the way for new gas exploration across the eastern Mediterranean. With ExxonMobil eyeing additional prospects, investors are weighing potential reserve additions and medium-term impacts on European energy security and LNG flows. For FX, additional regional supply prospects can matter at the margin for European inflation expectations and rate differentials.
Crypto complex: rebound meets resilience test
Bitcoin climbed more than 2% in the past day to trade above $90,000, paring a portion of its 30% pullback from all-time highs. XRP recorded its 4 billionth on-chain transaction, while Grayscale rolled out a new ETF product—tailwinds for liquidity and institutional access.
Still, systemic questions linger. S&P flagged that sharp Bitcoin drawdowns could stress USDT reserves, raising undercollateralization risk. That leaves traders focused on transparency, reserve composition and redemption mechanics across stablecoins—key plumbing for crypto-dollar liquidity.
Trade and tariffs: Canada cushions steel and lumber
Canada announced support measures for its steel and lumber industries to counter tariff headwinds, including a pivot toward the domestic market and freight-rate cuts of around 50%. The policy mix aims to safeguard margins and employment in trade-exposed sectors. For commodity markets, the measures could temper price volatility, while CAD sensitivities hinge on broader risk sentiment and U.S. policy path.
What traders are watching
- Incoming U.S. labor and inflation prints to validate (or challenge) 85% Fed cut odds.
- FX positioning in dollar pairs as rate differentials compress and volatility re-prices.
- Oil’s response to geopolitical flows and any fresh supply signals from OPEC+ and the Mediterranean basin.
- Electricity price pass-through to corporate margins, especially in data-center, utilities and energy-intensive industries.
- Crypto market microstructure—stablecoin reserve disclosures, ETF flows, and liquidity conditions.
FAQ
How do rising Fed cut odds affect the US dollar?
When markets price a higher probability of Fed cuts, interest-rate differentials tend to narrow against the US dollar. That can reduce the dollar’s carry advantage and support higher-beta and commodity-linked currencies, though the effect depends on global risk appetite and incoming data.
Why did oil futures rise alongside equity futures?
Improved risk sentiment and geopolitical developments can lift oil, especially when new exploration prospects emerge or supply risks come into view. A softer policy outlook can also support demand expectations, helping crude futures.
What does Bitcoin back above $90,000 mean for risk assets?
Crypto often trades as a high-beta asset class. A rebound in Bitcoin can reflect improved risk tolerance, though correlations with equities and FX vary over time. Traders also monitor stablecoin health, as it underpins crypto liquidity.
Do higher US electricity prices threaten the disinflation trend?
Elevated power prices can seep into services and industrial costs, complicating the final leg of disinflation. If sustained, that may limit how quickly central banks pivot, keeping rates-sensitive assets and long-duration trades volatile.
What’s the significance of the Cyprus–Lebanon maritime deal?
The accord opens new gas exploration avenues in the eastern Mediterranean. Potential reserve additions could influence European energy security and medium-term gas pricing, with knock-on effects for inflation expectations and European FX.
How might Canada’s support for steel and lumber affect markets?
By cutting freight rates and refocusing on domestic demand, Canada aims to soften tariff impacts on margins and employment. The measures can stabilize output and pricing in those sectors, with modest implications for commodity flows and the Canadian dollar.
This report was produced by BPayNews for informational purposes and should not be considered investment advice.
Last updated on November 26th, 2025 at 08:51 pm
