Global Macro Trends
The partial suspension of operations by the US government ended on 12 November; however, a full return to normality in the release of economic indicators is expected to be delayed
November 2025
A notably positive development in international trade is the agreement reached between the presidents of the United States and China during their meeting in South Korea on 30 October. This accord extends the existing truce for one year and significantly reduces the additional tariffs and administrative restrictions previously imposed by both nations. As a result, trade-related uncertainty has been greatly diminished, and there is now a well-founded perception of a willingness for dialogue rather than escalation between the world’s two largest economies. Meanwhile, the active involvement of the United States and countries from the broader Middle East is helping to preserve the fragile ceasefire between Israel and Hamas. In contrast, there has been no visible progress regarding the situation in Ukraine.
In the US, a lack of consensus between the two major political parties over expenditure structures and, more broadly, the federal budget, resulted in a suspension of operations for non-essential federal services from 1 October to 12 November—the longest shutdown in history. However, the subsequent bipartisan agreement has secured federal government funding until 30 January 2026, though the risk of another crisis in the near term cannot be entirely dismissed. Based on the limited economic data and leading indicators released since 1 October, aside from a temporary slowdown during this period, overall economic growth does not appear to have been materially impacted. Furthermore, inflationary pressures stemming from tariffs have remained unexpectedly subdued. Nevertheless, labour market conditions have shown signs of deterioration in recent months, prompting the Federal Reserve to reduce its policy rate by 25 basis points at its most recent meeting on 30 October.
Within the Eurozone, economic growth in the third quarter registered at 0.2% quarter-on-quarter and 1.4% year-on-year (compared to 0.1% and 1.5% in Q2 2025, respectively). The notably robust conditions in the labour market continue to support private consumption, whilst inflation remains close to 2%, aligning with the EBC’s target. Consequently, the ECB opted to keep its key interest rates unchanged at its most recent meeting. Nonetheless, the euro-area economy is confronted by considerable challenges. Notably, substantial investment is essential to keep pace with technological developments, enhance productivity, and significantly reduce energy costs to ensure businesses remain globally competitive. Simultaneously, increased defence expenditure and a rapidly ageing population are placing greater strain on public finances, necessitating spending cuts—often unpopular—thus exacerbating political instability.
Recent economic data from China reveals a marked deceleration in the pace of growth; however, it remains likely that the overall target of “around 5%” for 2025 will still be met. Based on the information currently available, it is not yet possible to ascertain whether this slowdown is of a temporary nature. A pivotal element for sustaining strong growth momentum will be a substantial increase in domestic demand, which, thus far, has yet to emerge.