Global equities broadly recovered as expectations for Fed rate cuts intensified and the sell-off triggered by concerns over an AI bubble subsided. Major indices are nearing a full recovery of November's losses, while the U.S. dollar index weakened accordingly.

On November 27, U.S. stocks and bonds were closed for Thanksgiving, while European indices were mixed, and Asian markets rallied. The dollar and yen faced pressure, while the pound retreated. Commodity prices diverged, with silver rising, while gold and crude oil remained sluggish. Cryptocurrencies rebounded.

The British pound became a market focus after the UK budget announcement. On Wednesday, the UK Chancellor unveiled the Autumn Budget, increasing fiscal buffers to £22 billion and sharply downgrading 2026 GDP growth to 1.4%. The unexpected leak of details triggered volatile market reactions, initially lifting the pound, though it later pared some gains.

Morgan Stanley abandoned its bullish stance on the pound, suggesting it may have already priced in negative factors. Strategist David Adams and his team noted in a Thursday report that while the budget could spark a technical rebound, sustained gains are unlikely. They highlighted diminishing appeal for the GBP/USD pair due to near-zero correlation with equities and a lack of positive local economic catalysts.

Key asset movements:

- The Nikkei 225 rose 1.2% to close at 50,167.10, while Japan's TOPIX gained 0.4%. South Korea's KOSPI advanced 0.7%. - European indices opened mixed: Euro Stoxx 50 fell 0.14%, UK FTSE 100 dipped 0.12%, France's CAC 40 edged up 0.03%, and Germany's DAX rose 0.16%. - GBP/USD was flat at 1.3245; the dollar index held steady at 99.596. - Japan's 10-year bond yield remained unchanged at 1.795%. - Spot silver rose 0.7% to $53.69/oz, while gold dipped 0.05% to $4,151.69/oz. Brent crude slipped 0.2% to $62.42/barrel. - Bitcoin climbed 1.1% to $91,208.20.

The dollar index weakened amid growing Fed rate cut expectations. Wednesday's U.S. data showed durable goods orders met forecasts, while initial jobless claims declined. The Fed's Beige Book noted simultaneous labor market softness and inflationary pressures.

Westpac strategist Caitlin Bhurawala warned: "The dollar faces dual risks from potential labor market deterioration and renewed challenges to Fed independence." Markets are closely watching Fed leadership developments.

The pound retreated slightly to 1.3238. The yen remained weak at 156.22 against the dollar despite verbal intervention by Japanese officials.

Oil prices dipped modestly as traders monitored Russia-Ukraine developments and awaited the upcoming OPEC+ meeting.