Monthly Market Monitor
November 2025
Every idle week is bound to shave a good 0.1 percentage point off US economic growth in the final quarter of this year.
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In a Nutshell
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A shutdown with risks and side effects
Big is often better in the eyes of the US president. The current government shutdown in the USA too belongs in the record annals now. The standing record from Donald Trump’s first term in office, when the US administration was idle for 35 days in 2018 / 2019, has been surpassed. This is not inconsequential for the US economy. Every idle week is bound to shave a good 0.1 percentage point off US economic growth in the final quarter of this year, which is likely to be only partially recouped next year. Meanwhile, the collection, interpretation and publishing of data have been more or less suspended by federal agencies, so economists, analysts and, not least, the US Federal Reserve are all flying blind at the moment.
Equity markets in overheating mode
The global stock-market rally continued unabated in October – seasonal patterns that usually cause temporary dips in autumn appear to have been rendered inoperative this year. The lone minor share-price setback in recent weeks, which amounted to just a 3 % decline in the case of the S&P 500 index, was instinctively used by investors to buy the dip, which has become a
habitual drill by now. In the wake of this latest stockprice episode, which subsequently led to new all-time highs in the span of just a few trading sessions, many investors are likely to have become inflicted with FOMO –the fear of missing out – if they didn’t already have it. A variety of sentiment indicators are at least signaling the existence of pronounced FOMO.
Disruptive stability
There is hardly any other industry that nurtures its buzzwords as fervently as the world of finance does. First there was “blockchain,” then “NFTs,” and today “stablecoins” are being talked about, even by US Treasury Secretary Scott Bessent. What sounds like just another buzzword by now denotes a trend that, with a market volume north of USD 200 billion and a transaction volume surpassing USD 27 trillion annually, has long ceased being merely a side note. While superstar Bitcoin makes headlines with new all-time highs, stablecoins look inconspicuous at first glance. But precisely therein lies their explosive disruptive power: stablecoins are not the dazzling fireworks of the cryptoverse, but are rather the foundation onto which the monetary system of the future may shift.
Financial analysts like to think in historical parallels. Observing the current equity bull market and particularly the ongoing rally in US tech stocks, many of them right now are looking back at the year 1998. Then as now, the equity market plummeted by almost 20 %, only to resurge all the more strongly afterwards. The US Federal Reserve delivered (“risk management”) rate cuts despite robust economic growth, and spending on technological infrastructure increased at a similarly meteoric pace. There was also an analogous catalyst: the release of ChatGPT in November 2022 is comparable to the rollout of Windows 95 and Internet Explorer in August 1995. If we superimpose the stock-market charts from those two points in time onward, the price curves follow a similar trajectory. If the markets were to continue to follow the historical template in the near future, the actual mania stage would still lie ahead of us. The increasingly arising talk lately about a “bubble” would be premature. But even optimists should stay realistic: since stock valuations are already elevated, another quadrupling is very improbable from today’s level.
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A shutdown with risks and side effects
Big is often better in the eyes of the US president. The current government shutdown in the USA too belongs in the record annals now. The standing record from Donald Trump’s first term in office, when the US administration was idle for 35 days in 2018 / 2019, has been surpassed. This is not inconsequential for the US economy. Every idle week is bound to shave a good 0.1 percentage point off US economic growth in the final quarter of this year, which is likely to be only partially recouped next year. The collection, interpretation and publishing of data have been more or less suspended by federal agencies, so economists, analysts and, not least, the US Federal Reserve are all flying blind at the moment. The September inflation data points, which were released after a long delay, came in lower than the consensus expected, but should be taken with a grain of salt and may be revised shortly. It is too soon to sound a general all-clear signal that Trump’s tariffs will remain harmless.
Self-defeating immigration policy
Given the current data vacuum, the Fed had practically no other choice but to lower its policy rate again in October as a precautionary measure. The employment market – not inflation – is the US central bank’s bigger concern right now, not just due to the absence of data, but also because the USA’s new ultra-restrictive immigration policy is causing distortions. If 100,000 US dollars remains the new price tag for H-1B work visas (up from USD 1,000 previously), that would have serious adverse effects on productivity and innovation prowess in the USA in the longer run. While it is now very expensive for businesses to recruit skilled foreign labor, it is becoming practically impossible for foreign students to find jobs. This presents an opportunity for the rest of the world to woo talent away from the USA if Donald Trump does not make another of his notorious U-turns in view of next year’s midterm elections – his public approval ratings have dropped in recent months, particularly on immigration policy.
Little to do for the ECB
On the heels of its October policy meeting, the Bank of Japan, too, now has to entertain questions about its independence. Given the persistent inflation pressure in Japan, the right answer would have been another
interest-rate hike. However, an “election gift” of that kind arguably would have been construed as an affront to new Prime Minister Sanae Takaichi, who was voted into office just days ago. In the past she had vehemently advocated for low interest rates. European Central Bank officials, in contrast to their colleagues overseas, are facing mild challenges at the moment. Eurozone inflation is very close to the target level, and economic activity indicators have recently been pointing to a pickup in momentum in the fourth quarter. The ECB’s October policy meeting was accordingly unspectacular – the central bank left its benchmark lending rate unchanged at 2 %.
Who will lose his nerve in the trade war?
Donald Trump appears to have recently found his ultimate opponent in China’s President Xi. The trade-war ceasefire agreed upon last spring has quickly been broken in one instance after another ever since then, with the tactical maneuvering to reach a deal being eclipsed by the overarching strategic rivalry between the two economic titans. China actually had the upper hand at last look thanks to its monopoly in rare-earth metals. The USA thus settled for little in the late October trade talks held on the periphery of Trump’s Asia tour. While the US president refrained from further raising punitive tariffs and actually even lowered fentanyl-related tariffs by 10 percentage points, China will resume buying American soybeans and will suspend export controls on rare-earth metals for one year.
Immigration ban… | …with consequences Net immigration to the USA (in millions)
Source: Congressional Budget Office
China actually had the upper hand at last look thanks to its monopoly in rare-earth metals.
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Equities: In overheating mode
• The global stock-market rally continued unabated in October – seasonal patterns that usually cause temporary dips in autumn appear to have been rendered inoperative this year. The lone minor shareprice setback in recent weeks, which amounted to just a 3 % decline in the case of the S&P 500 index, was instinctively used by investors to buy the dip, which has become a habitual drill by now. In the wake of this latest stock-price episode, which subsequently led to new all-time highs in the span of just a few trading sessions, many investors are likely to have become inflicted with FOMO – the fear of missing out – if they didn’t already have it. A variety of sentiment indicators are at least signaling the existence of pronounced FOMO. For instance, the put-to-call ratio on the US equity market dropped in late October to its lowest level since the end of 2020 as few investors have seen a need lately to hedge against falling stock prices. The bulls took over the torch also among US individual private investors in the last week of October and are now in the majority. And finally, the sharp price fluctuations of individual stocks speak for themselves, pointing more than not to an approaching final stage of the current boom: regularly observable double-digit price swings in the largest tech stocks are equally as anomalous as the erratic movements of some
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10/2025
meme stocks are unsustainable. The share price of Beyond Meat, for example, spiked from USD 0.50 to over USD 7.50 in the space of a few days, only to implode shortly afterwards.
• Meanwhile, there were positive signals in October from the European equity market, which had more or less treaded in place over the last half-year, lagging behind US stocks. The Euro Stoxx 50 index broke out to a new all-time high – that was followed by a successful technical retest of that level and a subsequent climb to new index highs. A path to even higher record levels appears to have been cleared now and is supported by the fundamentals. While inflation in Europe looks set to continue edging downward, the trend arrows for the money supply, the credit impulse, and economic growth prospects are pointed upward for the year ahead. China might also resume generating positive impetus for economic activity in Europe in the coming quarters.
A path to even higher record levels appears to have been cleared now and is supported by the fundamentals.
The
Fed, in fact, is still a long way away from pushing inflation back toward the 2 % target.
Moreover, in the wake of a prolonged share-price consolidation since March, earnings expectations for 2026 have been corrected and investors have rectified their positioning. Last but not least, the market has likely priced in “France risk” by now. So, the prospects look solid. However, when picking specific stocks, investors shouldn’t bet solely on the winners from the last 12 months. The air may soon go out of defense and banking stocks. Non-cyclical sectors and exporters have catch-up potential. A possible rotation could also benefit the European GRANOLAS, the counterpart of the USA’s Magnificent Seven.
Fixed income: Short-term trend reversal for US Treasurys
• The yield on 10-year US Treasury notes continued to head downward at first in October, but the trend arrow pivoted back upward at mid-month at a level near the year-to-date low of around 3.9% hit in April. From a technical analysis perspective, a double bottom may now be forming in the bigger picture. From this foundation, Treasury bond yields could rise further in the near future (while their prices would fall). At its last FOMC meeting, the US Federal Reserve gave notice that it would halt the runoff of its balance sheet (quantitative tightening) sooner than expected starting in December, which actually would be indicative of downward drifting yields. However, the even bigger realization (or surprise) for market participants was Fed Chairman Jerome Powell’s warning at the subsequent press conference that further rate cuts at forthcoming FOMC meetings cannot be taken for granted. The Fed, in fact, is still a long way away from pushing inflation back toward the 2 % target. If US Treasurys break through the resistance at the 4.2 % yield level in the wake of the recent trend reversal, the price correction for US government bonds could gain momentum.
Alternative assets: An inevitable correction
• Precious-metal prices continued to rise at first in October. While gold, which had already been trading at record prices for quite some time, climbed above the USD 4,000-per-ounce mark, silver also notched new all-time highs at prices above USD 50 per ounce. The price advances ultimately took on an almost parabolic shape, signaling an inevitable need for a correction. Mid-October, in fact, saw the first noteworthy price declines since last April. They may mark the start of a new, lengthy, and ultimately healthy consolidation stage. A case for a breather is made in no small part by the fact that mainstream investors have long since caught on to this year’s gold bull market. Mass media outlets have exhibited stepped-up interest in the yellow metal lately, and meanwhile there is also anecdotal evidence of taxi drivers asking for tips on gold-mining stocks.
• The private credit asset class has also been making headlines lately, albeit rather negative ones. In the wake of a series of bankruptcies in the US automotive industry (by companies including First Brands Group and Tricolor), there are growing question marks about transparency, rating quality, and liquidity in the private credit market, which has expanded enormously in recent years. More cautious tones could be heard lately even from Blackstone, one of the biggest players in the private-market assets space, which said that the era of excess returns in private credit is over. Lower short-term interest rates and more intense competition between banks and private credit funds mean that investors will indeed have to content themselves with a reversion to single-digit returns in the future. However, there is no reason to overreact, at least not for investors who are widely diversified and have only a small part of their assets invested in private credit.
Currencies: Rangebound trends predominate
• EUR / USD: The EUR / USD exchange rate has been oscillating in a rangebound channel between 1.14 and 1.19 since summer. Impetus for a breakout from this established trading range or for a resumption of the pronounced dollar weakness seen in the first half of this year is missing at the moment. In the wake of the latest interest-rate cut by the US Federal Reserve, which adjusted its federal funds target range to 3.75 %–4.00 %, further reductions in the future are not a foregone conclusion. Market participants’ expectations anticipating three to four more quarter-point rate cuts during the course of 2026 could end up getting disappointed. That would facilitate a sustained stabilization of the US dollar at the present level.
• GBP / USD: The British pound has glaringly underperformed in recent weeks due to a perceptible slowdown in UK economic activity. Inflation as well as wage and economic growth have recently come in lower on the right edge of the respective time series than the Bank of England had been expecting while the UK unemployment rate threatens to overshoot the BoE’s forecast issued in the third quarter. In light of the data, there are no arguments for further postponing another policy rate cut. Interestrate differentials are no longer a buttress for the British pound at the moment.
• EUR / CHF: The force of gravity exerted a pull on the EUR / CHF exchange rate once more in October. The currency pair set a new all-time low just a hairbreadth above the 92-centimes level. The sustained substantial interest-rate differential between Switzerland and the Eurozone, which causes the fair value of the exchange rate to continually fall over time, remains a constant driver of the EUR / CHF cross’s performance. Intermittent rebounds by the euro are possible at any time. From a technical analysis perspective, they would encounter their first resistance at the 94.5-centimes level.
Bitcoin ETFs have been a smashing success thus far for the financial industry. The volume of assets under management in Bitcoin ETFs has continually risen over the last two years just like the price of the cryptocurrency has. Of the more than 40 different Bitcoin vehicles on the market by now, one fund toweringly stands out: the one from BlackRock bearing the ticker symbol IBIT. Not only is it larger than all of the other Bitcoin ETFs combined, it has also grown at record speed since its launch on January 20, 2024, and reached the “sound barrier” of USD 100 billion of assets under management faster than any other ETF in history. The world’s largest ETF by far – the Vanguard S&P 500 ETF (VOO), which manages more than USD 750 billion today – took more than five years to reach the USD 100 billion mark. But IBIT isn’t just big, is it also highly profitable for BlackRock, earning the company an annual management fee of 25 basis points. A certain irony is unmistakable here – an invention devised to revolutionize and rearrange the global financial system is actually benefiting one of its biggest players. At least one age-old maxim, though, still seems to hold: competition lowers prices. Case in point: State Street’s popular gold ETF (GLD), which faces less competition, is much more expensive, with a management fee of 40 basis points.
Chart in the Spotlight
To the moon | One hundred billion reached in record time Assets under management in US ETFs, in USD billion
Source: Bloomberg
Unlike volatile cryptocurrencies like Bitcoin or Ether, stablecoins are designed not to fluctuate significantly in value, but to hold steady.
Theme in Focus Stablecoins: Disruptive stability
There is hardly any other industry that nurtures its buzzwords as fervently as the world of finance does. First there was “blockchain,” then “NFTs,” and today “stablecoins” are being talked about, even by US Treasury Secretary Scott Bessent. What sounds like just another buzzword by now denotes a trend that, with a market volume north of USD 200 billion and a transaction volume surpassing USD 27 trillion annually – more than that of Visa and Mastercard combined –, has long ceased being merely a side note. While superstar Bitcoin makes headlines with new all-time highs, stablecoins look inconspicuous at first glance. But precisely therein lies their explosive disruptive power: stablecoins are not the dazzling fireworks of the cryptoverse, but are rather the foundation onto which the monetary system of the future may shift.
What’s the concept behind stablecoins…
Stablecoins are digital tokens that replicate the value of traditional currencies, most commonly the US dollar. Unlike volatile cryptocurrencies like Bitcoin or Ether, stablecoins are designed not to fluctuate significantly in value, but to hold steady. This is achieved in a number of different ways. The most common variant is the fiat-collateralized stablecoin, where each issued token is backed by cash or short-term government bonds. Tether (USDT) and the USD Coin (USDC) from Circle are examples of fiat-collateralized stablecoins. There are also crypto-collateralized stablecoins like DAI that aim to maintain stability through overcollateralization with other cryptocurrencies. Another category is commodity-backed stablecoins, which – like PAXG, for example – are pegged to assets like gold and thus additionally act as a store of value. And finally, there are
the moon? | Not all cryptocurrencies live on volatility
performance of stablecoins, Bitcoin, and Ethereum, indexed
algorithmic models that employ supply-and-demand adjustment mechanisms to keep a stablecoin pegged to a target without any backing by actual asset reserves. These models are widely regarded as being very risky and failures, by and large, at the latest ever since the spectacular crash of TerraUSD in the year 2022.
The promise, though, is always the same: stability coupled with the benefits of blockchain technology – payments around the clock, worldwide, within seconds, and at minimal expense. In addition, stablecoins are programmable – contracts directly written into code can trigger payments, automatically transfer collateral, or freeze money until specified conditions have been met. The idea is to create a financial instrument that combines stability and innovation in equal measure.
…and how stable are they really?
The stability of the two dominant stablecoins – USDC and Tether – stems from their peg to the US dollar. USDC makes a convincing impression by virtue of its transparent reserve management practices and its independent audits at regular intervals, which have earned it an industry-wide reputation as the “safest stablecoin.” Compliance with international rules (MiCA in Europe, GENIUS Act in the USA) creates regulatory clarity and trust, particularly for institutional users. However, a critical look at the stability of USDC and Tether reveals that the promised 1:1 parity with the US dollar is by no means guaranteed. This became particularly evident in March 2023, when the insolvency of Silicon Valley Bank (SVB) caused the price of USDC to drop to USD 0.87 for a time and it took days for the stablecoin to return to its original value. Tether likewise underwent phases in the past during which its price plunged to as low as USD 0.96, for instance during periods of regulatory uncertainty or market turbulence surrounding crypto exchanges. Although the peg was quickly restored in most cases, events of that kind nonetheless clearly show that the purported stability hinges on trust in stablecoin issuers, on the transparency of the backing reserves, and on the robustness of the traditional banking system. Stress situations in particular expose the vulnerability of stablecoins. So, despite the promise of stable prices, trust in stablecoins isn’t self-sustaining yet, but must constantly be earned anew through transparency and sound governance.
Disruptiveness lies in the eye of the beholder
The GENIUS Act passed in the summer of 2025 in the USA marks the start of a new era for stablecoins. It creates a comprehensive set of federal regulations for the first time, mandating 100 % reserve backing, monthly audits, and strict anti-money laundering controls. To some, this is a liberating coup that solidifies trust in digital dollars. To others, it’s the start of a dangerous liberalization of private currencies. One thing is clear, though: the enshrinement in law in the world’s largest national economy has definitively moved stablecoins to the center of today’s global finance discourse.
However, the new act is causing banks to break out in a sweat. They are allowed to issue digital tokens, but are prohibited from paying interest on them. Crypto platforms, in contrast, can continue to offer interest rewards to their savers. This is reminiscent of a trend from the 1980s, when money market funds dangled higher returns to lure savers away from banks and thereby changed the financial system forever. If stablecoins reprise this displacement now in digital form, the repercussions could be just as immense.
Duopoly | Tether and USDC dominate the market Transaction volume per stablecoin
Sources: Visa Onchain Analytics Dashboard, Allium
The crypto bro… “Listen, that’s precisely the point. We’re experiencing a déjà-vu moment right now in the history of finance. Stablecoins today will change the rules of the game just like money market funds did back then, but they will do it faster, more globally, and technologically much more powerfully. Stablecoins are not merely a digital medium of exchange, they’re the next evolutionary step for money. In countries like Argentina, Nigeria, and Turkey, it has long been observable that people there are no longer seeking refuge in dollar bills, but are instead fleeing directly into digital dollars because their domestic currencies are crumbling in value and inflation is devouring everything. For those people, stablecoins are not a toy; they’re the only way to rescue their savings. Now, picture what that means for remittances. Every year, migrants send hundreds of billions in remittances back home, traditional financial service providers pocket 7 % in fees to execute the transfers, and it takes days for the money to arrive. With stablecoins? It takes seconds and costs next to nothing. That’s not a promise; it’s already happening today. Anyone who doesn’t perceive that as a genuine breakthrough hasn’t comprehended what stablecoins are all about. But this is just the first wave. Programmable tokens open up worlds that we can hardly imagine. Artificial intelligences that make financial decisions autonomously. Businesses that allow their total liquidity to be managed automatically. Systems that regulate themselves without a bank butting in. And with a clear legislative framework in place today, the stage is now set: the big players can finally join in the action.
It’s obvious to me that we’re in the dawn of a new monetary era. People who don’t see that today will look back a few years from now and ask themselves why they didn’t take part in it.”
…and the conventional investor “We’ve seen it all before. Private forms of money not backed by a central bank are not a new phenomenon. In the 19th century in the USA, people spoke of a free-banking era. The outcome was instability, runs on banks, and ultimately a loss of trust in the unit of money. Whoever believes it will turn out differently this time misunderstands history. The problem back then is the same one today: a plethora of private issuers whose bills or tokens bear the same nominal value, but which are valued differently in real-world practice depending on the stability of the issuing entity. Stablecoins mirror that pattern exactly. A dollar is no longer a dollar, but
is only worth as much as the value of the asset credibly backing a given token. Moreover, the facts today speak for themselves. The vast bulk of transactions do not take place in people’s everyday lives, but rather in cryptocurrency trading and arbitrage. The benefits in the real economy remain meager. Even 100 % reserve backing doesn’t guarantee safety.
That’s why stablecoins aren’t progress to me, but rather regression. They’re a fragile construct that promises stability and, in the end, only creates new insecurity.”
The benefits in the real economy remain meager. Even 100 % reserve backing doesn’t guarantee safety.
In emerging-market countries, where traditional payment channels are costly and unreliable, stablecoins create genuine alternatives.
Golden mean
The truth lies, as it so often does, midway between the extremes. Today it is evident that stablecoins are neither a panacea nor just a gimmick. They supplement cash or bank deposits without completely replacing them. Their greatest value, though, lies in niches that harbor huge potential. In emerging-market countries, where traditional payment channels are costly and unreliable, stablecoins create genuine alternatives. For businesses, they open up new ways to route cross-border payments more efficiently and to manage liquidity across national boundaries. Stablecoins are already being used in the wealth management industry to settle tokenized asset transactions, a sector that is just getting underway.
At the same time, however, integrating stablecoins into the existing system remains a challenge. Banks fear for their deposit base if customers move money into stablecoins. Regulators are struggling to establish international standards while national governments are asking themselves whether stablecoins endanger their monetary policy sovereignty. And it’s still an open question whether private issuers like Circle or Tether will dominate in the long run or if commercial banks and central banks will introduce their own tokens that rearrange the playing field.
A look in the crystal ball
A look into the future also indicates that stablecoins could prove to be much more than a passing trend. They could give a billion people without bank accounts access to monetary stability for the first time. They make international payments faster, cheaper, and more transparent. They extend the reach of the US dollar, further solidifying its status as the world’s reserve currency. And they generate new demand for US Treasury bonds because every newly created stablecoin must be backed by high-quality collateral.
What role stablecoins will play in the long run will be decided on this terrain of tension between inclusion and instability and between innovation and risk. It is likely that stablecoins will become the lubricant of a new financial infrastructure, functioning quietly and inconspicuously, but wielding a potentially powerful impact.
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