US Economy: Weekly Commentary – November 17, 2025

US Market Review

Treasury bonds fell as yields rose. Fed cut probability dropped. Bitcoin underperformed Treasuries. Yellen warns U.S. risk. U.S. stocks mixed. Healthcare led gains. USD weakened. WTI rose. Gold and Bitcoin fell.

Treasury bonds experienced a volatile week, with yields rising across the curve, reflecting declining bond prices. Market expectations for a Federal Reserve rate cut have shifted significantly: at the beginning of October, the odds were 100%, whereas they currently stand at 43% for the next meeting. Bitcoin’s recent decline has resulted in underperformance relative to U.S. Treasuries over the past year. In a striking remark, former U.S. Treasury Secretary Janet Yellen warned that the United States risks becoming a “banana republic,” highlighting concerns about fiscal and economic stability.

U.S. equity markets closed the week with mixed results. Micro- and small-cap stocks declined 0.55% and 1.70%, respectively, while large-cap stocks edged up 0.08%. The Magnificent 7 technology stocks fell 1.15%. Sector performance was uneven: consumer staples led the declines with a drop of over 2%, whereas healthcare posted the strongest gains, up nearly 4%. The sector attracted $1.9 billion in capital inflows—the largest since January 2021—highlighting a rotation into undervalued areas with attractive opportunities.

In currency markets, the U.S. dollar depreciated 0.50% versus the euro. WTI crude rose 0.20%, driven by supply disruptions following the Ukrainian attack on the Sheskharis oil terminal in Novorossiysk, operated by Transneft, which temporarily halted exports of approximately 2.2 million barrels per day—roughly 2% of global supply. These disruptions, combined with higher demand projections from the IEA and logistical constraints on sanctioned oil from Russia, Iran, and Venezuela, tightened effective supply and supported higher prices. Gold fell 1.91%, while Bitcoin declined more than 8%.

US Market Views Synopsis

U.S. labour market shows weakening momentum. ADP data reveal 45,000 private-sector job losses in late October. Oil market faces 2026 supply surplus, keeping prices under pressure.

U.S. labour-market indicators signal a clear loss of momentum, with ADP’s weekly data showing private employers cut 45,000 jobs in late October—an average of 11,250 per week and the largest monthly decline since early 2023. This contrasts with ADP’s modest monthly gain and reflects broader weakness across industries, prompting closer Federal Reserve scrutiny as official data remain delayed due to the government shutdown. Policymakers are increasingly relying on these real-time indicators, and further rate cuts remain possible as labour-market softness persists. Meanwhile, in the oil market, OPEC maintained its demand-growth forecasts for 2025–26 but now anticipates a small supply surplus in 2026 as non-OPEC+ production, particularly from the U.S., Canada, Brazil, and Argentina, rises. OPEC output increased slightly in October but remained below planned levels, while U.S. inventory data were mixed and crude-production forecasts were revised higher. With consumption steady at about 20.5 million b/d, Brent and WTI prices are expected to remain under pressure, averaging $60 and $50 per barrel in 2026.

Labour Market

ADP’s weekly data show U.S. private employers cut 45,000 jobs in late October, signalling weakening labour momentum and heightening Fed scrutiny as official data remain delayed.

ADP’s latest weekly payroll data indicate a pronounced weakening in U.S. labour-market conditions through late October, with private employers shedding an average of 11,250 jobs per week over the four weeks ending October 25—roughly 45,000 positions in total and the largest monthly decline since early 2023. ADP noted that the labour market “struggled to produce jobs consistently during the second half of the month,” highlighting a clear loss of momentum that contrasts sharply with the firm’s separate monthly report showing a modest 42,000-job increase in October. The new weekly estimates underscore how hiring trends have evolved in real time, offering policymakers a more granular view as they assess emerging labour-market softness. The Federal Reserve is monitoring these developments closely, with some officials arguing that signs of weakening employment conditions could warrant further rate reductions following consecutive quarter-point cuts at the past two meetings and with markets expecting another at the December 9–10 gathering. These private-sector indicators have taken on added importance during the prolonged U.S. government shutdown, which has delayed the release of official labour statistics; however, if the shutdown ends under the temporary funding measure advanced by the Senate, the Bureau of Labor Statistics may resume publishing key data in time for the Fed’s next policy meeting.

We expect further weakening in the U.S. labour market, with layoffs broadening across multiple industries and signalling a more pronounced slowdown in hiring and economic momentum.

Oil Market

OPEC kept 2025–26 demand growth steady. It expects a 2026 surplus. US production rises. Inventories are mixed. OPEC output increased slightly but missed quotas. Consumption remains 20.5 m b/d.

In its latest monthly report, OPEC kept global oil demand growth forecasts at 1.3 million barrels per day (b/d) for 2025 and 1.4 million b/d for 2026. Supply from non-OPEC+ producers is expected to rise by 920,000 b/d this year and 630,000 b/d in 2026, mainly due to higher output from the US, Canada, Brazil, and Argentina. OPEC now expects a small supply surplus in 2026, following OPEC+ production increases and stronger output from other producers, compared with earlier expectations of a balanced market. OPEC’s own production rose slightly by 33,000 b/d to 28.5 million b/d in October, below the 450,000 b/d planned increase, as gains from Saudi Arabia, Kuwait, Iraq, and Nigeria were partly offset by declines in Iran and Libya. In the US, API data showed crude inventories increased by 1.3 million barrels, while Cushing stocks fell slightly by 43,000 barrels. Refined product stocks were mixed, with gasoline down 1.4 million barrels and distillates up 944,000 and 2.5 million barrels, respectively. The EIA’s Short Term Energy Outlook also raised US crude production forecasts to 13.59 million b/d in 2025 and 13.58 million b/d in 2026, while petroleum consumption is expected to stay around 20.5 million b/d in both years.

We expect oil prices to remain under pressure, with Brent and WTI projected to average $60 and $50 per barrel in 2026. We anticipate no demand overhang and foresee a modest supply surplus.