Taproom Takes (23/11/25): This Week in Markets

Week Ending Today

What drove markets lower, what it means, and what comes next — poured clean.

MACRO — WHAT DROVE MARKETS DOWN THIS WEEK?

1. Interest Rates Repriced — Again

After weeks of easing yield pressure, the market got a reminder that the Fed isn’t done jawboning. Front-end bond yields moved higher, the “early cuts” narrative cooled, and risk assets lost momentum.

Rising yields = lower equity multiples (e.g., Price/Earnings). Simple mechanics, big impact.

2. The Rally Lost Fuel

The early-November rally was built on flows:

• Short covering (market participants buying back stock they sold in the hopes it would move further down).

• CTA buying (algos buying stuff)

• Sentiment relief

• Peak-rate confidence

Those flows slowed. And when flows stall, markets settle back down.

3. Macro Data Soft — But Not Soft Enough

The data this week sent a dull message:

• PMIs weak but stable

• Consumption slowing at the edges

• Labour cooling modestly

• Inflation sticky in services

The worst mix for markets: Not strong enough for confidence, not weak enough for cuts.

4. China Dragged on Sentiment

No meaningful stimulus follow-through. Manufacturing, property activity, and credit impulse remain weak.

Risk assets → cautious AUD → capped Global cyclicals → lagging

5. Liquidity Soft Patch

The biggest but quietest driver:

• Treasury issuance absorbing liquidity

• No major easing flows

• RRP flattening

• BOJ volatility spiking global rate sensitivity

This week: liquidity tightened → markets went red.

HOW TO INTERPRET IT — THE REAL MESSAGE

A pullback after a flow-driven rally is normal. This isn’t:

• A breakdown

• A regime shift

• A liquidity collapse

• “The big one”

It’s a standard correction inside a late-cycle market.

Emotionally → stay level. Rationally → watch yields, liquidity tone, and PMIs next week.

The regime is intact. The mood just cooled.

FORWARD LOOKING VIEW

RATES

• Market still too dovish on cuts

• Real yields stay sticky short-term

• Curve steepening continues gradually

• Pullbacks in risk assets remain yield-dependent

EQUITIES

• Tech leadership intact

• Breadth weak but not deteriorating

• Cyclicals lack catalysts until PMIs bottom

• Small caps remain rate-sensitive

• Vol stays muted unless jobs/CPI cracks

LIQUIDITY

4–6 weeks = sideways grind

• TGA flows neutral

• RRP changes muted

• Central banks still restrictive (less dovish than Market)

• Liquidity improvement = Q1 story, not now

CRYPTO

• BTC consolidation = healthy

• Structural demand still present (ETF flows)

• ETH rotation starting gradually

• Alt-beta remains selective

• No signs of blow-off or distribution

FX

• USD firm until real cuts materialise

• AUD needs China improvement or a US curve steepener

• JPY risk skewed to strength if BOJ tightens

RISK

Downside → labour cracks Upside → inflation step-down + falling real yields

SO IF YOU’RE…

🍺 If you're investing through the noise, corrections are part of the process. Consistency beats prediction.

🍺 If you're mostly in cash waiting for the recession, this isn’t it - don’t wait for perfection.

🍺 If you're anxious markets are rolling over, this is a yield-driven pullback, not a cycle break.

🍺 If you're heavy tech, expect volatility, but fundamentals still favour quality.

🍺 If you're primarily Aussie dollar exposed, AUD limited until China improves. Diversification remains key. USD is King.

🍺 If you're accumulating crypto, BTC consolidation is constructive. ETH rotation early but positive. Patience wins more than timing, Others/BTC is showing strength.

CLOSING SIP

Markets didn’t break - they breathed. Flow-led rallies end before the fundamental story improves. This was a reset, not a reversal.

Slow pours. Smart positioning. No forced bets. 🍺

Not Financial Advice