Morning wrap (20.11.2025)

U.S. indices continue their rebound driven by Nvidia’s strong results. The US100 index has already gained a total of 2.00%, and the US500 is up 1.25%. Today, the indices are rising by 0.75% and 0.70%, respectively.

Nvidia delivered one of the strongest earnings reports in its history: USD 57 billion in Q3 revenue and ~USD 65 billion guidance for Q4. Management emphasized that demand for Blackwell chips and cloud GPUs is “huge,” and the company sees potential for USD 500 billion in next-generation chip revenue by 2026. Nvidia shares are up more than 5.00% to USD 196 per share.

BoJ board member Koeda stated that interest rates need to continue rising. Her comments increase the likelihood of a potential December hike.

JPY, however, remains the weakest G10 currency. Markets are focusing more on the structural selloff in JGBs than on BoJ signals.

JGB yields have surged to levels not seen in two decades: 30-year at 3.40%, 20-year at 2.84%, 10-year at 1.81%. Fiscal concerns and expectations of heavy debt issuance are pushing yields higher.

Sarah Hunter of the RBA said the latest upside inflation surprise invalidated earlier projections. She warned that above-trend economic growth could reignite inflation — suggesting the Bank may not cut rates as much as the market expects.

Bloomberg reports that the U.S. administration is pressuring Congress to reject newly proposed restrictions on the export of Nvidia’s advanced AI chips. The White House warns that overly strict limits would harm U.S. tech leadership and push customers toward foreign suppliers.

Loan Prime Rates were kept unchanged for the sixth month in a row (1-year: 3.0%, 5-year: 3.5%). This reflects weak loan demand and Beijing’s preference for more targeted stimulus.

Beijing is considering mortgage subsidies, tax relief and lower transaction costs to stabilize the weakened property market. Developer stocks are gaining slightly on the news.

The BoJ is likely to raise rates in December: 53% of economists expect a hike to 0.75%, and all survey respondents foresee such a level by Q1 2026. A weaker yen increases the risk of imported inflation, strengthening the case for action.

Barclays expects megacap strength and a more accommodative monetary policy to lift the index to 7,400 points in 2026. The bank raised its earnings forecasts but warned of risks to non-tech sectors (inflation, weaker labor market). It also noted typical midterm-year volatility as a potential risk factor.