Central bank moves, a controversial CPI print and blockbuster deals to set the tone
Markets head into the final full trading session of 2025 with central bank divergence, a disputed U.S. inflation print and heavy dealmaking driving short term flows and risk sentiment. Micron Technology (NASDAQ:MU) led a late surge on a strong profit guide, while core U.S. CPI slowed to 2.6 percent year on year, the weakest since March 2021. These headlines matter now because they reshape near term rate cut odds, prompt active re-pricing across equities and currencies, and could alter commodity demand forecasts. Globally, market reactions will differ between the United States, Europe and Asia because central banks are not moving in sync. Historically low readings and unusually altered data collection make the immediate reaction fragile, while underlying trends will take longer to confirm.
Market snapshot and what moved stocks
Wall Street closed higher after an eventful week. The biggest single equity mover was Micron Technology (NASDAQ:MU), which jumped 16 percent on a bullish profit forecast. That rally helped lift broader indexes on Thursday. The U.S. core consumer price index for November rose 2.6 percent year on year, the slowest pace since March 2021. Traders interpreted the soft inflation figure as opening the door to earlier Federal Reserve rate cuts. However, economists widely questioned the accuracy of the CPI report because the 43 day government shutdown forced changes to data collection. That uncertainty makes the market reaction more reactive than durable. Meanwhile the November payrolls report showed 64,000 jobs added and unemployment at 4.6 percent. Those numbers pointed to continued labor market resilience, but they also carried caveats tied to the shutdown induced methodology changes.
Central bank divergence and currency moves
Policy moves this week highlighted how different central banks will shape markets. The Bank of Japan raised rates by 25 basis points to 0.75 percent, its highest level in thirty years, and signalled a hawkish stance through the Governor. The yen weakened despite the tightening, suggesting that modest moves may not be enough to remove intervention risk. By contrast the Bank of England cut its policy rate to 3.75 percent from 4 percent, marking the sixth cut since August 2024. The BoE also faces a surprise drop in UK inflation and signs of stagnating growth. The European Central Bank kept rates steady at 2.0 percent and signalled a likely end to easing. This divergence creates two clear effects for traders. First, short term rate expectations will push sovereign yields and front end money markets in different directions across regions. Second, currency pairs will remain volatile as investors weigh policy differentials, with potential spillover to commodities priced in dollars.
Energy, commodities and the supply story
Brent crude futures plunged nearly 3 percent on Tuesday to below 59 dollars a barrel, the lowest level since early 2021. Prices briefly rebounded after President Donald Trump said he had ordered a blockade of sanctioned oil tankers entering and leaving Venezuela. Crude traded lower again early on Friday. Beyond geopolitics, the newsletter pointed to what is likely to be the more prosaic driver in the months ahead. A spike in global oil supplies, both on land and at sea, appears poised to weigh on prices. That assessment matters for producers and for energy sector earnings, and it will influence inflation paths in importing economies. Asia’s imports of U.S. crude oil, coal and liquefied natural gas are on track to decline this year despite policy efforts to boost shipments. Meanwhile Japan reduced fossil fuel electricity generation to the lowest levels in more than a decade in 2025, driven by a recovery in nuclear output. Those shifts will reshape regional demand patterns for fossil fuels even as supply increases pressure prices downward.
Deals, corporate moves and market implications
Dealmaking kept markets alert. Warner Bros. Discovery (NASDAQ:WBD) rejected Paramount Global’s (NASDAQ:PARA) $108.4 billion hostile takeover bid. The breakdown between two major media groups could keep merger and acquisition activity squarely in focus. In another notable transaction, an all stock deal worth about 6 billion dollars was announced for a merger between Trump Media and Google backed TAE Technologies. The newsletter also reported that ByteDance signed binding agreements to transfer control of TikTok U.S. operations to a group of investors that includes Oracle (NYSE:ORCL). These corporate developments produce immediate effects. They reallocate risk appetite within media and tech sectors, prompt rethinking of strategic ownership structures, and may trigger regulatory scrutiny that feeds volatility in related equities. Separately, BP (LON:BP) surprised investors by naming Meg O’Neill to replace Murray Auchincloss as chief executive. The appointment gives the company three clear strategic choices mentioned in the note: build, buy or be bought. That framing will shape market assumptions about capital allocation and potential further consolidation in the energy sector.
How to read the near term and what to watch in this session
The coming session will be shaped by how traders parse the soft CPI reading against noisy data. Because the CPI and payrolls prints both carried methodological caveats, market moves may prove short lived unless follow up data confirm trends. Expect volatility in rate sensitive assets and currencies as investors weigh the timing of Fed cuts against real world economic momentum. Equity moves will remain concentrated around standout corporate news such as Micron Technology’s (NASDAQ:MU) guidance and the unfolding M&A headlines. Oil will trade on a mix of supply signals and geopolitical statements, with any fresh developments about shipments to or from Venezuela likely to spur intraday swings. Finally, central bank communications in the coming days will matter more than single data releases. The divergence between the Bank of Japan, the Bank of England and the European Central Bank highlights that policy is now a regional story as much as a global one. Traders should watch for confirmations of the CPI trend, any clarifying statements on data collection from agencies, and updates on the major corporate deals mentioned in the note.
