Crypto-Related Stocks Under Pressure; Hawkish BOJ Expectations Stall Asia

The euro advanced on Monday, holding above the 1.1600 level as the Greenback weakened following hawkish comments from Bank of Japan Governor Kazuo Ueda, while a light data calendar on both sides of the Atlantic lent additional support to the single currency.

US data offered little momentum for the Dollar, with November’s ISM Manufacturing PMI showing a further contraction in activity. The ISM noted that layoffs in the transportation equipment sector were partly attributed to tariff-related pressures under the Trump administration.

Adding to the Dollar’s headwinds, market chatter continued to circulate around potential future Fed leadership, including speculation that White House National Economic Advisor Kevin Hassett could be considered as a successor to Federal Reserve Chair Jerome Powell when his term expires in May 2026.

In Europe, HCOB Manufacturing PMIs presented a mixed picture. Germany and the broader Eurozone undershot expectations, France aligned with forecasts, and both Spain and Italy delivered stronger-than-expected readings.

The Eurozone agenda this week highlights the release of the Harmonized Index of Consumer Prices (HICP), a key gauge for the European Central Bank’s inflation trajectory. In the US, markets will parse several top-tier indicators, including the ADP Employment Report, ISM Services PMI, weekly Initial Jobless Claims, and the Fed’s preferred inflation measure, the Core PCE Index.

Bitcoin edged higher on Tuesday, partially recovering from a steep decline in the previous session that briefly pushed the world’s largest cryptocurrency below $84,000 as risk aversion swept through digital asset markets at the start of December.

Monday’s decline extended a broader downtrend that dominated November, when Bitcoin logged its weakest monthly performance in more than four years and spot Bitcoin ETFs saw sustained outflows. Market sentiment remained fragile on Tuesday, with concerns growing over the resilience of institutional demand.

Although Bitcoin regained some ground on Tuesday, it did little to ease worries about broader market softness.

Traders cited profit-taking, thin liquidity, and caution ahead of key macroeconomic events as catalysts for the risk-off shift. Expectations for a Federal Reserve rate cut at next week’s meeting have climbed to nearly 90%, raising hopes for looser financial conditions. However, uncertainty around the pace and scale of future policy easing continues to fuel volatility in crypto markets.

Market participants are also monitoring developments in Washington, where President Donald Trump is expected to make a decision regarding a potential successor to Federal Reserve Chair Jerome Powell.

Oil prices were little changed in Asian trading on Tuesday, consolidating the previous session’s gains after OPEC+ reaffirmed that it will pause production increases in the first quarter. Traders also continued to weigh the impact of mounting geopolitical risks on global supply.

Crude benchmarks climbed more than 1% on Monday after OPEC+ ministers confirmed on Sunday that the alliance will hold output steady through the first quarter of 2026. The decision follows nearly 3 million barrels per day in cumulative production increases since April.

Delegates said the pause reflects the group’s aim to stabilize market conditions amid uneven demand trends and heightened supply-risk concerns. OPEC+ also approved a new framework to evaluate members’ maximum production capacities between January and September next year, paving the way for more transparent quotas in 2027.

Traders continued to monitor the fallout from recent attacks on Russian energy infrastructure and escalating tensions between the United States and Venezuela.

Oil prices also found support from growing expectations that the Federal Reserve will deliver a rate cut next week—an outcome that typically boosts economic activity prospects and strengthens speculative interest in commodities.

According to the CME FedWatch Tool, traders now assign more than an 85% probability to a rate cut, a sharp rise from around 40% just one month ago.

U.S. stocks closed lower on Monday, as a cautious tone marked the start of December trading just weeks before a widely anticipated interest rate cut from the Federal Reserve.

The losses came after a strong Thanksgiving-shortened week in which all three major indexes gained more than 3%.

Market sentiment continued to be shaped by growing conviction that the Fed will deliver a quarter-point cut at its Dec. 9–10 meeting. Rate-cut odds have climbed above 85%, up sharply from the mid-40% range just over a week earlier.

Dovish remarks from several Fed policymakers have helped fuel those expectations, though uncertainty remains as recent federal government shutdown disruptions have limited the flow of fresh economic data.

This week will bring new readings on U.S. manufacturing and services activity, consumer sentiment, and private-sector job creation. Retailers are also in focus after early numbers showed strong online spending during last week’s Black Friday sales.

Investors are also monitoring developments in Washington after President Donald Trump said he had decided on his nominee for the next Federal Reserve Chair, though he did not reveal a name.

Reports suggest the shortlist includes White House economic adviser Kevin Hassett, former Fed Governor Kevin Warsh, and current Governor Christopher Waller. Hassett is widely considered a leading candidate, though he has played down speculation, saying only that he would be “happy to serve.”

Fed Chair Jerome Powell is due to speak later Monday, but the central bank’s pre-meeting blackout rules mean he is not expected to address the interest-rate outlook.