PANAMA CITY, Dec. 3, 2025 -- As we enter December, both macro and crypto markets are stepping into a key window characterized by dense data releases and policy-path uncertainty. In this edition of DeepThink, HTX Research analyst Chloe (@ChloeTalk1) analyzes how the upcoming macro releases could heavily influence expectations for the Federal Reserve's December meeting, and become the defining catalyst for risk sentiment across equities and digital assets.
A Dense Cluster That Will Anchor Rate-Cut Expectations
Although markets broadly expect the Federal Reserve to cut rates again in December, Powell emphasized last week that due to the government shutdown and resulting gaps in official data, policymakers may not have access to complete labor-market and inflation indicators before the meeting. Therefore, this week's cluster of high-frequency data will directly determine whether the probability of a December cut falls back toward 50% or surges close to 100%.
The first major release is the November ISM Manufacturing PMI. Manufacturing has been in contraction since March, with last month's reading at just 48.7. Both new orders and employment sub-indices remained below 50, reflecting ongoing uncertainty from tariffs and weakening global demand.
By contrast, the Services PMI held at a moderate 52.4 expansion, though its price sub-index stayed elevated near 70, showing that inflation pressure now comes more from domestic services rather than imports. If November services remain resilient, hawkish voices inside the Fed will be reinforced; if the index slips back to 50 or below, a December cut becomes almost assured.
The labor market is the biggest swing factor. With October's nonfarm payrolls cancelled and November NFP postponed until December 16 (after the FOMC meeting), this week's ADP private-sector employment data becomes crucial. October ADP added 42,000 jobs, beating expectations. A stronger-than-expected November print would weaken the case for immediate easing; a softer reading would strengthen the argument for faster policy accommodation. Closely following is the Challenger layoffs report, which saw October layoffs surge to 153,074—the highest in 22 years. If November layoffs continue rising, markets will quickly reprice the risk of a U.S. labor-market downturn.
On Friday, the spotlight shifts to PCE inflation and personal spending, the week's most important macro event. Markets expect headline PCE for September to edge up from 2.7% to 2.8%, with core PCE holding at 2.9%. If the data continue to show inflation stuck near 3%, the Fed's rate-cut pace will remain constrained; if PCE unexpectedly softens, markets will gain short-term relief.
Risk Appetite Remains Compressed
In U.S. equities, Goldman's trading desk highlights that as volatility receded and market breadth rebounded from –150 to +150, systemic selling pressure was largely flushed out by mid-November. Institutional positioning models now expect a shift from net selling to roughly $4.7 billion in net buying in December. This means the traditional "Santa Rally" is not dead—the ignition simply depends on whether this week's data support the rate-cut trajectory.
In crypto, Bitcoin has bounced back above $85K, according to HTX data, after a nearly 30% drawdown from its October peak, but overall sentiment remains fragile amid thin liquidity. ETFs continue to see mild outflows, while the Coinbase premium stays weak, signaling institutional caution. Options markets display a classic risk-averse posture: near-term IV significantly higher than long-dated IV, and 25-delta put skew negative across maturities. Investors remain willing to pay for downside protection, reflecting expectations of short-term volatility spikes.
Key Macro Data to Determine Whether a Reversal Takes Shape
Overall, the crypto market is in a sensitive phase where the fundamental outlook is unclear, but bottom-forming characteristics are gradually emerging.
- If this week's U.S. data show a combination of slowing growth without recession and softening inflation, Bitcoin and major assets may see a natural recovery, with IV compressing quickly and short-vol strategies regaining effectiveness.
- Conversely, if manufacturing, employment, or PCE surprise to the upside and suppress rate-cut expectations, thin holiday liquidity could trigger another sharp downward move.
In the current environment, taking heavy one-sided bets carries elevated risk. Market structure tends to show gradual accumulation behavior near lower ranges, while elevated short-term IV provides room for hedging. The $80K–$82K zone remains a notable support, but a genuine trend reversal will depend on clearer signals from this week's macro releases.
*The above content is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.
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