The firm estimates non-farm payrolls to clock in at 75k in December, beating estimates with private payrolls hitting 80k. That being said, they estimate the unemployment rate to jump up to 4.7% after having risen to 4.6% (4.56% unrounded) in November."Just as with the last few months, we would caution that seemingly stronger job growth may be more a result of seasonal adjustment issues in a low hiring environment rather than a sustained pick-up in demand for workers. Seasonal factors imply a boost from typically low hiring in many months in Q4/Q1."Building on the case that payrolls would stay supported due to seasonal factors, Citi notes that:"Looking through extreme seasonal adjustment issues around the Thanksgiving holiday, continuing jobless claims have been following a similar pattern as last year, declining more clearly by the end of November. This could suggest upside risk to our forecast, possibly with seasonally adjusted strength in sectors like transportation and retail trade."They also pointed to the fact that December 2024 saw a "very strong" payrolls print of 323k.As for the unemployment rate, the firm argues that:"There has been substantial residual seasonality in the participation rate this year that would imply it rises again in December, although usual seasonal factor updates incorporated into December data are a risk to this assumption."Adding that a key driver in their estimate stems from the anticipation that the labour force participation rate rising a bit further again from 62.47% to a rounded 62.6%.Besides that, Citi estimates average hourly earnings to be on the softer side this time around (+0.1% m/m) in saying that:"Calendar effects that imply softer wage growth could also be one temporary factor leading to softer wage growth in December. But forward-looking wage plans of businesses, which tend to lead actual wage growth trends by a few months, suggest this slowing will continue into 2026." This article was written by Justin Low at investinglive.com.

Rate cuts by year-endFed: 54 bps (86% probability of no change at the upcoming meeting)BoE: 43 bps (87% probability of no change at the upcoming meeting)ECB: 1 bps (99% probability of no change at the upcoming meeting)Rate hikes by year-endBoC: 13 bps (88% probability of no change at the upcoming meeting)BoJ: 35 bps (97% probability of no change at the upcoming meeting)RBA: 32 bps (76% probability of no change at the upcoming meeting)RBNZ: 33 bps (98% probability of no change at the upcoming meeting)SNB: 4 bps (100% probability of no change at the upcoming meeting)We started the year with some slightly dovish changes in terms of market pricing. For the ECB, the market was pricing 10 bps of tightening in 2026 in December, but that turned into 1 bps of easing following the soft inflation data. The expectations remain pretty much unchanged for the Fed and the BoE, which stand on the most dovish side of the spectrum in terms of market pricing.For the BoJ, we saw a bit of a dovish repricing following soft Tokyo CPI, weak wage growth data and some geopolitical tensions between China and Japan. The same goes for the BoC as the softer than expected Canadian inflation report in December took the pricing from 25 bps of tightening to 13 bps now.Lastly, we had a slightly dovish repricing for the RBA following the recent softer Australia's monthly inflation, although the core inflation figures remained firm. This article was written by Giuseppe Dellamotta at investinglive.com.

The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market's reaction is the distribution of forecasts.In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.Non-Farm Payrolls19K-155K range of estimates40K-75K range most clustered60K-70K consensusUnemployment Rate4.7% (2%)4.6% (30%)4.5% (58%) - consensus4.4% (8%)4.3% (2%)Average Hourly Earnings Y/Y3.7% (14%) 3.6% (67%) - consensus3.5% (10%)3.4% (10%)Average Hourly Earnings M/M0.4% (7%) 0.3% (70%) - consensus0.2% (18%)0.1% (5%)Average Weekly Hours34.3 (74%) - consensus34.2 (26%)The December jobs data so far has been good as Adam noted in his post here. As noted by Fed Chair Powell and other Fed members, the unemployment rate should be the most important indicator at the moment, although a notable deviation in the headline payrolls won't be ignored.Looking at the distribution of forecasts, we can notice that the expectations are skewed to the upside for the unemployment rate. So, a 4.4% rate or lower will be taken as a hawkish surprise, while we need a 4.7% rate or higher for a dovish surprise.Having said that, I have a feeling that CPI will be more important because inflation worry is what is constraining the Fed from acting more quickly and with more conviction on rate cuts. Nonetheless, notable deviations in the NFP report will still trigger big market moves and influence the market pricing. This article was written by Giuseppe Dellamotta at investinglive.com.

Prior +1.8%; revised to +2.0%At the same time, we also have German trade balance data for November out as per below:Trade balance €13.1 billion vs €16.5 billion expectedPrior €16.9 billion This article was written by Justin Low at investinglive.com.

There aren't any major expiries to take note of on the day, with the full list seen below.As such, that will keep market players focused on the main event later today. That being the US labour market report. It's the first one for the new year and one that will be watched carefully as this is supposed to be a report that is more "normal" after the November one was hampered by the longest US government shutdown in history.From earlier: It's the first NFP day for the year 2026But as mentioned, it's not the only game in town though. The US Supreme Court ruling on tariffs could also be on the cards, so there's that. The court is expected to issue rulings on Friday but, as is customary, has not said what case or cases will be acted upon. However, Trump's tariffs will be one thing to watch in case it does come up.For more information on how to use this data, you may refer to this post here.Head on over to investingLive (formerly ForexLive) to get in on the know! This article was written by Justin Low at investinglive.com.

Key Takeaways for AMD Stock Investors (watch my video)Advanced Micro Devices (AMD) is trading below a broken multi-month channel, keeping the medium-term technical bias bearish.A confirmed bear flag breakdown from December remains active after a clean retest failure.AMD is showing relative weakness versus major indices, despite occasional short-term bounces.With earnings approaching in early February, event risk is elevated and price reaction will be critical. Oh, and, of course, investors, traders and some algos have stops just below the $200 round psychological number, and the current price $204.68 (close of 08 Jan, 2026) is getting close...Bear Flag Breakdown and Retest: Why the Signal MattersAfter the December breakdown, AMD formed a classic bear flag pattern. These patterns often resolve lower after a temporary consolidation, especially when they occur after an extended uptrend.In early January, AMD delivered a near-textbook retest of the former channel and bear flag resistance. Sellers defended that area convincingly, and price rolled over again. This failed retest is a critical confirmation signal. If buyers were regaining control, AMD would likely have reclaimed the channel quickly or avoided the sharp pullback that followed.Instead, the stock declined roughly 13% from that retest area, a meaningful move for a large-cap semiconductor name, particularly while broader equity indices held up relatively better.Regression Channel Analysis: Mapping the Current AMD TrendA regression channel using three standard deviations further reinforces the bearish technical structure. Price remains encapsulated within a downward-sloping regression path, with the mid-channel acting as dynamic resistance.Short-term scenarios still exist. AMD could see tactical bounces toward the mid-regression line or attempt another touch of the smaller declining channel overhead. However, unless price can sustain acceptance above those levels, such moves are best viewed as corrective rather than the start of a new bullish trend.Key AMD Stock Price Support and Resistance Levels Investors Should WatchFrom a technical investor perspective, several levels stand out:$218 area: A reclaim and sustained hold above this zone would help stabilize the structure and prevent further technical deterioration.$240 and above the November 20 high: This zone marks the threshold required to invalidate the broader bearish thesis and re-enter the prior rising channel.$165 zone: This level corresponds to the base of a sharp upside spike driven by AI-related news. A full retracement of that move would imply an additional ~20% downside from current levels. While bearish in the short term, this area could later become a high-interest zone for longer-term investors, pending confirmation.AMD Stock Earnings Risk: Why Price Reaction Matters More Than HeadlinesAMD’s upcoming earnings report in early February adds an important layer of uncertainty. Revenue, EPS, AI exposure, and forward guidance will matter, but the market’s reaction to those results matters more than the numbers themselves.Strong earnings followed by weak price action would reinforce the bearish technical message. Conversely, a sustained reclaim of major resistance levels after earnings would be the first meaningful signal that sentiment and structure are shifting.AMD Stock Technical Outlook Summary for Stock InvestorsAs long as AMD remains below the broken channel, bear flag resistance, and key reclaim levels, the technical outlook remains more bearish than bullish on a medium-term basis. Short-term rallies may occur, but without structural follow-through, they do not alter the broader risk profile.This analysis represents one technical perspective, not a prediction. Markets are dynamic, and investors should combine technical signals with fundamental research, earnings context, and disciplined risk management when evaluating AMD stock. This article was written by Itai Levitan at investinglive.com.

The inflation story might have stolen the spotlight for quite a while in the past two years but come what may, there's nothing quite like the US non-farm payrolls data. And now with the focus on the Fed outlook shifting back to the labour market, the report today will once again draw plenty of eyes and attention from markets across the globe.The November report was marred by data quality concerns following the longest US government shutdown in history. And it also came after the final FOMC meeting for 2025, so market players could easily brush that aside.But today, this will be the first "normal" jobs report after the whole shutdown debacle. As such, expect there to be heavier scrutiny as market players will look to dissect the numbers to tie that to the Fed's next move.As a reminder, the next FOMC meeting will take place on 28 January. As things stand, traders are pricing in ~86% odds of there being no change to the Fed funds rate. The next full 25 bps rate cut is only pried in for June currently.Circling back to the labour market report today, the Reuters estimate points to a 60k print for the headline non-farm payrolls. The unemployment rate is expected to marginally ease to 4.5% while average hourly earnings is estimated to be up 0.3% month-on-month.So, those are some of the more important numbers to watch out for.That being said, just be mindful that there could still be some distortions to the report. I highlighted the potential for that yesterday here and I'll put up more previews in the session ahead as we gear towards the main event for the day.Earlier today, Eamonn posted this one from Goldman Sachs. So, you can just take a read first as we settle into European morning trade.Besides the non-farm payrolls, there's also the US Supreme Court ruling on tariffs potentially coming up later in the day. The court is expected to issue rulings on Friday but, as is customary, has not said what case or cases will be acted upon. However, Trump's tariffs will be one thing to watch in case it does draw mention. This article was written by Justin Low at investinglive.com.

China avoids deflation in 2025 as inflation edges higher, easing still likelyECB vice-presidential hopeful Centeno flags “structural uncertainty” facing EuropeGoldman says NFP unlikely to shift April Fed cut unless data sharply surprisesChina curbs rare-earth exports to Japan, Tokyo raises concerns with G7 and USChina inflation hits near three-year high, but producer deflation signals weak demandChina December 2025 CPI +0.8% y/y (vs. 0.9% expected, prior of 0.7%)PBOC sets USD/ CNY reference rate for today at 7.0128 (vs. estimate at 6.9832)Sterling gains look premature as banks warn on UK-EU reset and weak UK growthGoldman sees lower but attractive 2026 equity returns: AI shift to adoption, credit cappedJapan household spending rebounds while real wages still lag, complicates BOJ outlookDATA: Japan Household Spending November 2025: +2.9% y/y (vs expected -0.9%, prior -3.0%)Musk says China to dominate AI compute as Beijing plays down chips, touts power advantageGoldman survey shows investors turn sharply bearish on oil as supply glut buildsHSBC lifts long-term gold forecasts but trims 2026 average, sees $5,000 upside riskinvestingLive Americas market wrap: Big US trade balance surprise boosts GDP estimatesTrump proposes $200bn mortgage-bond buying plan to cut US home loan ratesUS equity close: Energy leads the way while memory chip names give back the big rallyAt a glance:Trump floated direct MBS purchases, blurring fiscal and monetary linesUSD firm near-term, USD/JPY pushed above 157.25Japan data strong on spending but real wages still fallingChina CPI improved, but deflation risks persistMarkets cautious ahead of US NFP and tariff rulingLate in the US afternoon, Donald Trump delivered a headline-grabbing moment, announcing he had instructed representatives to buy $200bn in mortgage-backed securities, effectively proposing a form of QE-by-presidential directive. Trump framed the move as an effort to narrow mortgage spreads and reduce borrowing costs in order to restore housing affordability.While labelled as “QE” in market shorthand, buying MBS via government channels is more accurately fiscal policy, and the announcement reinforces expectations that policy will skew increasingly populist as the US moves deeper into the 2026 election cycle. With Trump’s approval ratings under pressure, further fiscally expansive initiatives look likely in coming months, a dynamic that should ultimately weigh on the US dollar.But not today.The USD remained firm, particularly against the yen, with USD/JPY pushing above 157.25. That move came despite stronger Japanese data showing household spending rose 2.9% y/y in November, far exceeding expectations, and surged 6.2% m/m. The data points to near-term resilience in consumption, though the broader picture remains fragile, with real wages still falling 2.8% y/y, continuing to erode purchasing power.What appeared to weigh more heavily on the yen was renewed concern over China’s restriction of rare-earth and magnet exports to Japan, escalating a dispute linked to Taiwan-related comments. Japanese officials voiced strong concern and said the issue would be raised with G7 partners and US counterparts, adding a geopolitical risk premium to JPY trading.Elsewhere, major FX pairs were relatively subdued as markets positioned cautiously ahead of US non-farm payrolls, due Friday at 13:30 GMT / 08:30 ET.In China, inflation data showed CPI rose 0.8% y/y in December, the fastest pace since early 2023, lifting full-year (2025) inflation to 0.0% and allowing Beijing to avoid outright deflation. However, PPI fell 1.9% y/y, extending factory-gate deflation and reinforcing the view that underlying domestic demand remains weak, keeping expectations for further policy support alive.On geopolitics, Trump told the New York Times that Taiwan is “up to” Xi Jinping, while adding he would be “very unhappy” if Beijing moved against the island, comments unlikely to calm regional nerves.Asia-Pacific equities are mostly higher, though gains are capped as investors await US payrolls data and a looming US Supreme Court ruling on tariffs. Asia-Pac stocks:Japan (Nikkei 225) +1.3%Hong Kong (Hang Seng) +0.03% Shanghai Composite +0.3%Australia (S&P/ASX 200) -0.13% This article was written by Eamonn Sheridan at investinglive.com.

Summary:China CPI rose 0.8% y/y in December, a 34-month highFull-year CPI at 0.0%, avoiding outright deflationFood prices driving gains; pork drag easingCore inflation steady, property prices still deflationaryFurther monetary easing seen as likelyChina narrowly avoided outright deflation in 2025, with consumer inflation ending the year at its highest level in nearly three years, though, analysts at ING caution that price pressures remain subdued and well below levels seen in other major economies.China’s consumer price index (CPI) rose 0.8% year-on-year in December, the strongest reading since February 2023 and in line with market expectations. That brought full-year CPI inflation to 0.0%, allowing China to sidestep an annual deflation print, following several years of near-zero inflation.The pickup in headline inflation continues to be driven largely by food prices, which rose 1.1% year-on-year, a 14-month high. Fresh vegetable and fruit prices recorded the sharpest gains, while pork prices — still deeply negative — have become less of a drag, with the year-on-year decline narrowing for a third consecutive month. Analysts expect the pork cycle to turn later this year, potentially adding modest upward pressure to food inflation.By contrast, non-food inflation remained unchanged at 0.8%, reflecting a mixed underlying picture. Household appliance prices rose sharply as the effects of earlier trade-in incentives fed through, while services inflation — particularly tourism and healthcare — continued to outpace goods prices. However, deflation persisted in housing-related categories, with rents and residence costs still falling amid ongoing property-sector weakness.Core inflation, which strips out food and energy, was steady at 1.2% for a third straight month, suggesting underlying price momentum remains limited.At the producer level, PPI deflation eased to –1.9% year-on-year, marking a 16-month high but extending a deflationary streak now approaching three and a half years. The ING note argues that while the worst of China’s deflationary pressure may be behind it, any recovery in inflation is likely to be gradual.Looking ahead, analysts forecast CPI inflation of around 0.9% in 2026, a modest improvement but still low by global standards. With inflation contained, they see scope for further monetary easing, including the possibility of a 10-basis-point rate cut in the first half of 2026. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Centeno highlights Europe’s structural uncertaintyECB seen as stabilising institutional anchorRisks shifting outside traditional banking systemEmphasis on discipline, independence and consensusInterview avoids near-term policy guidanceMario Centeno, governor of Banco de Portugal (the country's central bank) said Europe has entered a period of “structural uncertainty” marked by trade tensions, elevated sovereign debt and rapid economic change, arguing that the European Central Bank must act as a stabilising institutional anchor as these pressures intensify.In an interview (may be gated) following his nomination to succeed ECB Vice President Luis de Guindos, whose term ends in May 2026, Centeno avoided commenting on current monetary policy but outlined a framework that carries implications for markets. He pointed to abrupt shifts in labour markets, competing fiscal demands and geopolitical fragmentation as sources of uncertainty that require discipline, independence and decisiveness from Europe’s institutions.Centeno said the ECB leadership must combine political judgement with consensus-building, particularly as risks in the financial system evolve. He highlighted growing valuation pressures, rising asset-class concentration and the migration of risk outside the traditional banking sector, dynamics that investors increasingly see as sources of latent volatility rather than immediate stress.While the selection process will be decided by the European Council following consultations with the European Parliament and the ECB, Centeno said broad consensus would benefit Europe. He noted that feedback from euro-area counterparts has been encouraging, citing his experience as a former finance minister, central bank governor and Eurogroup president who helped steer Europe through the euro-area crisis, the pandemic and the Ukraine shock.Centeno also addressed questions about regional balance within the ECB’s Executive Board, arguing that while representation should not be framed as an issue of fairness, a balanced view of Europe is important for institutional credibility. Portugal, he noted, is currently absent from the executive leadership of Europe’s major financial institutions.For markets, Centeno’s remarks reinforce a narrative of institutional continuity rather than policy pivot, emphasising resilience, risk anticipation and coordination at a time when macro uncertainty, rather than inflation alone, is shaping the European outlook. This article was written by Eamonn Sheridan at investinglive.com.

At a glance:Goldman expects ~70k payrolls, in line with consensusTwo Fed cuts priced; first expected around late April70k–100k seen as equity-friendly outcomeSub-50k risks growth scare; >125k may delay easingVolatility expectations remain subduedGoldman Sachs said the upcoming US non-farm payrolls (NFP) report is unlikely to materially shift market expectations for Federal Reserve policy unless the data delivers a significant surprise, with current pricing already well anchored around a mid-year easing path.In a note to clients, Goldman said it expects headline payroll growth of around 70,000 jobs, broadly in line with prevailing consensus. While informal market “whispers” point to a modest upside risk, the bank argued that an outcome close to expectations would reinforce the existing macro narrative rather than disrupt it.Markets are currently pricing two full Fed rate cuts this year, with the first 25 basis-point reduction expected around late April. Goldman said it would take a “somewhat dramatic” upside or downside surprise in the labour data to meaningfully pull that timing forward or push it back.From a market perspective, Goldman described a payrolls print in the 70,000–100,000 range as the most constructive outcome for equities, consistent with continued economic expansion without reigniting inflation concerns or threatening the easing cycle. Such a result would support the view that the US economy is slowing gradually rather than stalling abruptly.By contrast, a sub-50,000 payrolls print would be interpreted as falling below the economy’s estimated break-even employment growth rate, potentially unsettling investors by raising concerns over a sharper growth slowdown. At the other extreme, Goldman said a result above 125,000 jobs could prompt markets to reassess the timing of the first Fed cut, pushing expectations back toward June.Overall, the bank said it does not expect “fireworks” from the release, with positioning and volatility pricing suggesting limited appetite for large moves. Reflecting this, Goldman noted that the S&P 500 is implying a move of roughly 68 basis points through the session, pointing to relatively muted expectations around the data. This article was written by Eamonn Sheridan at investinglive.com.

Summary:China restricts rare-earth and magnet exports to JapanMove linked to Japan PM’s Taiwan-related remarksRestrictions extend beyond defence sectorNomura estimates $17bn potential annual impactJapan raises issue with G7, Washington meetings plannedFlagged this earlier in the weeKChina escalated tensions with Japan, bans exports of goods with potential military usesUpdating now. China tightens rare-earth exports to JapanChina has begun restricting exports of rare earths and rare-earth magnets to Japan, escalating a diplomatic and economic dispute and again demonstrating its willingness to use critical minerals as geopolitical leverage, according to reporting by the Wall Street Journal (gated).The measures are expected to weigh on Japanese firms supplying components to global chipmakers, automakers and defence contractors. The restrictions target so-called “heavy” rare earths and the high-performance magnets that contain them — materials that are scarce, costly and difficult to substitute.The Journal reported that the move is retaliation for remarks made late last year by Japanese Prime Minister Sanae Takaichi, who suggested Japan could become involved in a potential conflict over Taiwan. Beijing has repeatedly pledged to bring Taiwan under its control, by force if necessary.According to people familiar with the matter, China has effectively halted the review of export licence applications to Japan, with the restrictions extending across multiple industries rather than being limited to defence-related firms. Earlier this week, Beijing also announced a broader ban on exports of “dual-use” goods with potential military applications to Japan.If maintained, the rare-earth curbs could inflict around $17 billion in economic losses over a year, according to estimates from the Nomura Research Institute. The action follows a similar move against US companies last year, underscoring China’s dominance in critical minerals and its readiness to weaponise supply chains in response to geopolitical disputes.Japan responds, seeks coordinationJapanese officials responded by urging China to ensure smooth trade flows and signalling that the issue will be raised with international partners. Finance Minister Minoru Katayama said Tokyo is “very concerned” about China’s export controls and plans to explain Japan’s position during meetings in Washington next week.Katayama said G7 finance ministers have been sharing strong concerns about China’s practices around rare earths and confirmed he will discuss supply-chain resilience with counterparts during talks scheduled for January 11–14. He declined to comment on the full details of the meetings, noting the host has yet to announce participating countries. This article was written by Eamonn Sheridan at investinglive.com.

Summary:China CPI rose 0.8% y/y, fastest since Feb 2023Monthly CPI beat expectations at +0.2%PPI fell 1.9% y/y, easing but still deflationaryCore inflation steady at 1.2%Weak demand and property stress remain key dragsChina’s consumer inflation accelerated in December to its fastest pace in nearly three years, while factory-gate prices remained in deflation, underscoring the persistent imbalance between improving headline prices and still-weak underlying demand.Data from the National Bureau of Statistics showed consumer prices rose 0.8% year-on-year, the strongest increase since February 2023 and slightly faster than November’s 0.7% gain. The result matched market expectations. On a month-on-month basis, CPI rose 0.2%, beating forecasts for a 0.1% increase and marking a clear rebound from November’s monthly decline.Core inflation, which strips out food and energy, rose 1.2% year-on-year, unchanged from the prior month, suggesting that underlying price pressures remain modest despite the pickup in headline inflation. Food prices rose 1.1% from a year earlier, while non-food prices increased 0.8%.By contrast, producer prices fell 1.9% year-on-year, slightly better than the expected 2.0% decline and easing from November’s 2.2% fall. The data extend China’s factory-gate deflationary streak beyond three years, highlighting continued excess capacity and weak pricing power across the industrial sector. More via CNBC round up:Economists say the data point to fragile domestic demand, even as growth remains broadly on track. Macquarie expects China’s consumer inflation to remain flat through 2025, while producer-price deflation is forecast to deepen, potentially marking the longest deflationary stretch on record. The bank warns that additional policy easing, including lower mortgage rates and relaxed home-purchase rules, may still fall short of reversing the property downturn.Meanwhile, Bank of America Global Research estimates China’s GDP growth softened to around 4.5% in the fourth quarter, from 4.8% previously, with fixed-asset investment contracting further even as industrial production benefited from a year-end manufacturing pickup.Despite a recent rebound in factory activity, policymakers face mounting pressure to support consumption and stabilise the property sector, as falling corporate profits and renewed price competition continue to weigh on confidence. This article was written by Eamonn Sheridan at investinglive.com.

Just a post noting this data release.I'll be back with detail in a separate post. Link here (added).China December 2025:CPI 0.8% y/y, close to a 3-year highexpected 0.9%, prior 0.7%+0.2% m/m vs. expected 0%, prior -0.1%PPI -1.9% y/yexpected -2.0%, prior -2.2%+0.2% m/m vs. expected +0.1%, prior 0.1% This article was written by Eamonn Sheridan at investinglive.com.

The People's Bank of China (PBOC), China's central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a "band," around a central reference rate, or "midpoint." It's currently at +/- 2%.The previous close was 6.9835PBOC injects 34bn yuan through 7-day reverse repos at an unchanged rate of 1.4%. Over the course of this week the People's Bank of China has drained 1.655tln yuan via OMOs. That's the largest weekly cash withdrawal in two years. Earlier:PBOC is expected to set the USD/CNY reference rate at 6.9832 – Reuters estimateAnd, as a reminder/heads up, there is inflation data from China in just a few minutes time, bottom of the hour: 0130 GMT, 2030 US Eastern time As I posted earlier:The backdrop entering today’s release is one of persistently low inflation but slight upward momentum in consumer prices. November’s CPI logged a 0.7% y/y rise, its fastest pace in nearly two years, driven largely by rebounding food prices (especially fresh produce) and modest gains in other categories, while core inflation held around 1.2%. Meanwhile, PPI has remained deeply negative, reflecting ongoing factory-gate deflation as industrial prices continue to lag, although some stabilization was seen on a m/m basis late in 2025.Market participants will parse today’s figures for evidence that domestic demand is firming and whether price pressures are broadening beyond volatile food items. The data will also feed into assessments of China’s growth trajectory and implications for global reflation narratives in early 2026. A firm tipping a lower than consensus forecast, Zhe Shang Securities at 0.7% y/y, seeing no change from the November result. Zhe Shang expect 0% m/m, i.e. no change. You'll note in the scrfeenshot below there is no consensus forecast for the m/m.The firm's PPI forecast has it remaining in negative territory at around -1.9% y/y, 'up' from November but still deeply negative. This article was written by Eamonn Sheridan at investinglive.com.

At a glance:Commerzbank says UK-EU rapprochement optimism is prematureSingle-market access would require slow, conditional concessionsDanske Bank sees sterling’s recent gains as overdoneWeak UK growth may prompt further BoE easingRelative UK-eurozone outlook favours EUR over GBPSterling’s recent gains may be running ahead of fundamentals, with analysts warning that optimism around both UK-EU relations and the domestic macro outlook is likely premature.Commerzbank cautioned that investors should avoid being too quick to price in an improvement in relations between the UK and the European Union. While a rapprochement could ultimately be supportive for the pound, the bank argued that any move toward improved access to the EU single market would be slow, conditional and politically costly, requiring concessions from the UK.Commerzbank noted that some of the UK’s core economic challenges, including weak productivity growth, predate Brexit, limiting the extent to which improved EU ties alone could transform the outlook. Although sterling would likely benefit if access to the single market were meaningfully enhanced, the bank said it is “simply too early” for markets to factor in such positive outcomes. The UK government’s preparation of legislation to align parts of domestic law with EU standards was described as a step toward engagement rather than a guarantee of economic gains.Meanwhile, Danske Bank said sterling’s recent strengthening looks overdone, driven largely by improved global risk sentiment and easing concerns over UK fiscal credibility. Danske argued that the UK economy remains on a weak footing, increasing the likelihood of further policy easing from the Bank of England.Danske highlighted domestic headwinds, including subdued growth and tighter fiscal policy, which contrast with the eurozone’s more supportive fiscal stance. The bank added that relative growth dynamics between the UK and the euro area remain a negative for sterling, reinforcing the case for a weaker pound versus the euro.Taken together, the two views suggest sterling faces structural and cyclical headwinds, with near-term optimism vulnerable to reversal unless there is tangible progress on growth, productivity and policy support. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

At a glance:Goldman stays modestly pro-risk for 2026, but expects lower returns than recent yearsTailwinds shift: less monetary impulse, more fiscal/regulatory supportAI seen moving from capex to adoption/monetisation phaseValuations/risk premia look late-cycle, so earnings matter mostPrefers equities over credit; OW Asia ex-Japan, UW EuropeGoldman Sachs says global equities should still deliver “lower but attractive returns” in 2026, underpinned by a baseline of resilient growth, easing inflation and ongoing policy support, but with a clear warning that some of the biggest tailwinds from recent years are fading.In its latest GOAL (Global Opportunity Asset Locator) note, Goldman strategist Christian Mueller-Glissmann says the bank remains modestly pro-risk into 2026, arguing that the mix of improving macro momentum and supportive policy settings is typically constructive for stocks. Goldman’s core message is that while the cycle is maturing, the usual late-cycle mistake is being too defensively positioned for too long, the note warns that being underinvested late cycle “can be costly.”That said, Goldman flags a regime shift in what drives returns. It argues monetary policy tailwinds are diminishing, meaning the next leg of support is more likely to come from fiscal/regulatory easing rather than ever-looser financial conditions. It also expects AI tailwinds to evolve, shifting from a capex-heavy buildout phase toward broader adoption and monetisation, which could help widen market leadership beyond the biggest tech names.Valuations are the other constraint. Goldman describes elevated valuations and compressed risk premia as “typical late cycle,” implying less room for easy multiple expansion and a bigger role for earnings delivery. It still sees potential for some valuation expansion if optimism holds, but expects earnings growth to do most of the heavy lifting, helped by strong corporate balance sheets that can support buybacks and capital markets activity.On relative preference, Goldman leans equities over credit, arguing credit spreads are already tight and may cap returns, while equities can still compound via earnings. Regionally, it’s overweight Asia ex-Japan, neutral the US and Japan, and underweight Europe. This article was written by Eamonn Sheridan at investinglive.com.

At a glance:Japan household spending rose 2.9% y/y in NovemberFar above expectations for a declineMonthly spending jumped 6.2% m/mBOJ recently lifted rates to 30-year highReal wages still falling sharplyJapanese household spending unexpectedly rebounded in November, offering a tentative sign of resilience in domestic demand even as real income pressures persist and the central bank tightens policy.Data from Japan’s Ministry of Internal Affairs and Communications showed household spending rose 2.9% year-on-year, sharply beating market expectations for a 0.9% decline and reversing October’s steep contraction. On a seasonally adjusted month-on-month basis, spending surged 6.2%, more than double the consensus forecast of a 2.7% increase, pointing to a strong sequential recovery.The upside surprise comes shortly after the Bank of Japan raised its policy rate last month to 0.75% from 0.5%, the highest level in three decades. The move reflected confidence that wage growth would remain sufficiently firm to support consumption and sustain progress toward stable inflation. BOJ Governor Kazuo Ueda has reiterated that the central bank is prepared to continue lifting borrowing costs if economic activity and price developments evolve broadly in line with its projections, underscoring the bank’s gradual shift away from ultra-easy monetary policy.However, beneath the headline strength in spending, real income dynamics remain a constraint. Separate data released by the labour ministry showed inflation-adjusted real wages fell 2.8% year-on-year in November, extending a run of declines and highlighting the continued erosion of household purchasing power.The divergence between nominal spending gains and falling real wages suggests households may be drawing on savings or adjusting consumption timing, rather than benefiting from a sustained improvement in income growth. As a result, economists remain cautious about extrapolating November’s rebound into a durable consumption trend.For policymakers, the data complicates the outlook. Stronger spending supports the case that the economy can withstand higher interest rates, but persistent real wage weakness underscores the risk that consumption momentum could fade if inflation continues to outpace pay growth in early 2026. This article was written by Eamonn Sheridan at investinglive.com.

Just a post noting this data release. Japanese Household Spending +6.2% m/mexpected +2.7%, prior -3.5%I'll be back with detail in a separate post.ADDED, here it is to check out:Japan household spending rebounds while real wages still lag, complicates BOJ outlook This article was written by Eamonn Sheridan at investinglive.com.