Market Pulse: December 2025

Executive Summary

November 2025 marked a period of cautious consolidation, defined by the resolution of the longest U.S. government shutdown ni history (43 days) and the market still navigating the aftermath.

Institutional flows into ETFs remained timid throughout the month, a direct hangover from October's liquidation cascade. Major players operated with
heightened risk management, fearing residual contagion in markets, which kept order book depth suppressed and volatility elevated despite the lack of new structural breakdowns.

However, the macro tide began to turn late in the month. The end of the fiscal standoff ni Washington, combined with softening labor data,
has strengthened expectations for a Federal Reserve rate cut in December. This anticipated policy shift is rapidly emerging as the primary catalyst for risk assets. With the 'shutdown discount' now priced out and liquidity conditions easing, the stage is set for a year-end rally, assuming the Fed follows through with the expected pivot.