We're seeing a more cautious mood ahead of European trading, with Asian stocks and US futures holding lower today. The Nikkei is down 1.3% after a more sluggish showing by tech shares in Wall Street yesterday. Nvidia might've ended up 0.7% higher but AI stocks in general continue to wobble in the early stages this week.So far today, S&P 500 futures are down 0.5% after the 0.2% decline yesterday. It's a bit of a setback after holding somewhat steadier last week, keeping on the verge of fresh record highs. However, a push to test that seems to be a step too far for now amid the caution up in the air on the AI bubble.For the day ahead, the big focus turns to US data. Not only will we be getting the non-farm payrolls report but retail sales data will also be on the cards later. So, that will keep market players interested in search of trading the headlines based on the latest update and snapshot that we will get on the US economy - one that is feeling long overdue, even if it might be a messy one. This article was written by Justin Low at investinglive.com.

So, what'd I miss during the break? ;)There was no shortage of action in markets in the past week, not least with the Fed delivering one final 25 bps rate cut to wrap up the year. Now, the race for Fed chair is also reportedly heating up with Kevin Warsh pipped to be the favourite - ousting Hassett. A battle between the two Kevins is what's left now.But for today, the drama will center on the release of the much delayed US labour market report. That's right. The non-farm payrolls data for November was not released on the first week of December but instead pushed to today. And to make things more complicated, it will be combined with the October job numbers as well.If that is already not messy enough for you, the BLS also announced that there will be "higher-than-usual variances" in the jobs data for this month and following months as well.This comes as they implement statistical weighting changes to account for the missing October panel and also as November saw some data collection issues.All of this just means it won't be easy and it might take some time - not necessarily this week or this month - to read into the numbers and make sense of the labour market outlook. The existing narrative is that we should continue to see signs of weakening in the landscape, and it will make more sense for market players to judge that in early next year and not on this mess of a release.Still, it doesn't mean traders and investors will not react to the data and brush it aside. There will be volatility and reactions to it for sure. But if you're expecting any firm conclusions from the numbers today, you might not want to hold your breath on that one.In any case, headline non-farm payrolls for November is estimated at 50k with the jobless rate at 4.4%. So, those will remain key benchmark figures to be mindful of ahead of the release later. This article was written by Justin Low at investinglive.com.

U.S. lawmakers have delayed progress on a long-awaited crypto market structure bill, pushing any formal legislative action into next year and dealing a setback to an industry seeking clearer federal oversight.The Senate Banking Committee confirmed it will not hold a markup hearing on market structure legislation before the end of the year, deferring debate on how U.S. regulators should supervise digital asset markets. While the delay was widely anticipated, it extinguishes hopes that Congress could deliver even incremental momentum toward a comprehensive crypto framework before year-end.Committee officials said negotiations between Republicans and Democrats are ongoing, with bipartisan agreement remaining the stated objective. However, lawmakers now face a crowded legislative calendar in early 2026, including the need to address government funding before a January deadline and the looming constraints of the midterm election cycle, which historically compress the window for complex regulatory reforms.The proposed market structure bill aims to clarify the division of responsibility between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Under current drafts, the CFTC would assume a primary role in regulating spot crypto markets, while securities laws would be more clearly delineated for digital assets that resemble traditional financial instruments. Both the Senate Banking Committee, which oversees the SEC, and the Senate Agriculture Committee, which oversees the CFTC, would need to advance legislation independently before a final bill could move forward.Democratic lawmakers have raised concerns around financial stability, market integrity and ethics, particularly in light of the expanding crypto-related business interests linked to President Donald Trump and his family. These issues have emerged as key sticking points in negotiations, complicating efforts to reach bipartisan consensus.Despite the legislative delay, regulatory momentum has continued outside Congress. The SEC has stepped up engagement with the industry through staff guidance and public roundtables exploring how existing securities laws apply to crypto activities. The CFTC has also taken a more accommodative stance, moving to permit licensed institutions to participate in spot crypto trading and granting limited regulatory relief to certain market operators.While these steps offer some near-term clarity, the absence of legislation leaves the industry reliant on regulator-by-regulator interpretation, reinforcing uncertainty around compliance, enforcement and long-term investment decisions. --- The legislative delay is mildly negative for near-term crypto sentiment, as it extends regulatory uncertainty around market structure, custody and exchange oversight in the U.S. While recent steps by the SEC and CFTC provide incremental clarity, the absence of a statutory framework may limit institutional risk-taking and cap upside momentum for Bitcoin and major tokens. That said, the market impact is likely to be contained, with price action continuing to be driven more by macro liquidity conditions, ETF flows and U.S. rate expectations than by legislative timelines This article was written by Eamonn Sheridan at investinglive.com.

US suspends UK tech deal amid wider trade tensions (earlier Financial Times report)Indian rupee fresh record lows on flow pressureCBA sees February RBA rate hike as growth runs hot. Citi & NAB also expect February hike.NAB sees RBA hiking twice in 2026, clashing with market expectations for extended holdChina eyes pragmatic 2026 growth target near 5% (while onshore yuan surges higher!)ICYMI - Ford takes US$19.5bn EV charge as strategy pivots to hybridsNew Zealand fiscal outlook darkens as finance minister Willis sticks to disciplinePBOC sets USD/ CNY reference rate for today at 7.0602 (vs. estimate at 7.0444)Japan preliminary December PMI shows modest growth as services offset factory weaknessNew Zealand bonds - NZDMO cuts near-term bond issuance but lifts medium-term outlookAustralian consumer sentiment falls sharply in December: WestpacECB/NFP preview - Morgan Stanley sees euro gain if ECB avoids rate pushback, 1.30 longtermNasdaq moves toward 24/5 stock trading amid global demandGoldman Sachs raises its 2026 copper forecast as tariff odds easeAustralia preliminary December PMI: Manufacturing 52.2 (prior 51.6) services 51.0 (52.8)New Zealand data: November Food Price Index -0.4% m/m (prior -0.3%)Tech stocks slide as Broadcom tumbles amid market turbulenceWe saw a raft of lower-tier economic data released during the Asia session.New Zealand kicked things off with data showing food price inflation falling on the month while remaining elevated year on year. The monthly decline in the Food Price Index will be welcomed by the Reserve Bank of New Zealand, offering tentative evidence that one of the stickier components of inflation may be starting to ease. With food prices accounting for nearly a fifth of the CPI basket, even modest monthly declines can have a meaningful impact on headline inflation outcomes.Later from New Zealand, fresh fiscal projections showed no return to a budget surplus over the next five years, as weak growth and higher debt continue to delay fiscal repair. Net debt is now seen peaking at 46.9% of GDP, despite tentative signs of economic recovery. Separately, the New Zealand Debt Management Office trimmed its near-term bond issuance plans. The NZD was heavy for most of the session.The AUD also softened before recovering modestly. Australian data showed the headline S&P Global Flash Composite PMI eased to 51.1 in December from 52.6 in November — a seven-month low, but still comfortably above the 50 expansion threshold, extending the growth run to fifteen consecutive months.The moderation reflected slower momentum across both sectors. Services activity eased, with the Business Activity Index falling to 51.0 from 52.8 as heightened competition and softer export growth weighed. Manufacturing, by contrast, showed relative resilience, with the PMI rising to 52.2 from 51.6 on firmer goods demand and improved export orders.We also heard from Commonwealth Bank of Australia and National Australia Bank, with analysts at both now expecting a Reserve Bank of Australia cash rate hike at the 2–3 February 2026 meeting. NAB further expects an additional hike in May '26. AUD/USD dipped to just below 0.6620 before rebounding modestly toward 0.6635, with NZD/USD also ticking higher.USD/JPY drifted lower, briefly testing below 154.75. Japan’s preliminary December PMI showed modest growth as services offset ongoing manufacturing weakness, with little else of note from the data.In China, the PBOC once again set USD/CNY above model estimates at the daily fixing, though the market pushed the pair lower regardless, with USD/CNY hitting levels last seen in late September 2024. Meanwhile, China Securities Times reported policymakers are debating whether to set next year’s growth target at around 5% or adopt a more flexible 4.5%–5.0% range, underscoring a pragmatic approach amid a tougher external backdrop. Asia-Pac stocks were heavy, following a weak Wall Street:Japan (Nikkei 225) -1.28%Hong Kong (Hang Seng) -1.88% Shanghai Composite -1.29%Australia (S&P/ASX 200) -0.41% This article was written by Eamonn Sheridan at investinglive.com.

The United States has suspended a recently agreed technology partnership with Britain, injecting fresh uncertainty into the transatlantic relationship as Washington presses London for broader trade concessions beyond the tech sector.According to reporting by the Financial Times, the U.S. administration halted progress on the so-called Tech Prosperity Deal last week, despite the agreement having been unveiled earlier this year as a flagship framework to deepen cooperation in artificial intelligence, quantum computing and civil nuclear energy. British officials have since confirmed the suspension, though neither government has formally commented. The Financial Times is gated, but Reuters summarised the report. The move appears to reflect growing frustration in Washington over what it views as the UK’s reluctance to address a range of non-tariff barriers, including regulatory and standards-based restrictions affecting food products and industrial goods. U.S. officials are said to be seeking concessions in these areas, signalling that the technology partnership has become entangled in wider trade negotiations.The suspension underscores the increasingly transactional nature of U.S. trade policy under President Donald Trump, with sector-specific agreements now more tightly linked to broader market-access objectives. While the tech deal was framed as a strategic collaboration aimed at strengthening Western leadership in advanced technologies, it has become leverage in talks over trade frictions unrelated to digital policy.The setback is notable given the scale of existing U.S.–UK economic ties. The United States is Britain’s largest trading partner, and major U.S. technology firms have already invested billions of dollars in UK operations across cloud computing, artificial intelligence research and data infrastructure. The UK has positioned itself as a key hub for emerging technologies, particularly as it seeks to differentiate its regulatory framework post-Brexit.Although the suspension does not amount to a cancellation, it raises questions over the durability of bilateral tech cooperation if progress on trade issues stalls. Analysts note that prolonged delays could complicate investment decisions and slow joint initiatives in strategically sensitive areas such as AI governance and quantum research.For now, the episode highlights how geopolitical considerations and trade disputes are increasingly intersecting with technology policy, turning once-standalone innovation partnerships into bargaining chips in broader economic negotiations. This article was written by Eamonn Sheridan at investinglive.com.

The Indian rupee is set to open at fresh record lows, as a deteriorating global risk backdrop compounds persistent flow imbalances that continue to weigh heavily on the currency. Info via Reuters. One-month non-deliverable forward pricing suggests USD/INR will open in the 90.80–90.85 range, extending losses after the rupee closed at 90.73 on Monday. The currency slipped to a new all-time low of 90.7875 during the previous session, marking a third consecutive day of record weakness.Market participants say the latest leg lower is being driven less by panic and more by entrenched flow dynamics. Bankers point to a sustained mismatch between dollar demand and supply, with fixing-related dollar buying, potentially linked to NDF maturities and portfolio outflows, emerging as a recurring source of pressure. Additional demand from state-owned enterprises has further strained onshore liquidity.At the same time, importer hedging demand has remained consistently strong, reflecting concerns about further rupee depreciation. Exporter selling, by contrast, has been subdued, as many exporters remain reluctant to hedge at current levels, preferring to wait in anticipation of better rates. This imbalance has left the rupee exposed to even modest increases in dollar demand.Portfolio flows have also played a central role. Ongoing foreign outflows from local equity and debt markets have outweighed India’s longer-term structural positives, including solid growth prospects and improving macro fundamentals. In the near term, these strengths have offered limited protection against global risk aversion and a firm U.S. dollar.Crucially, traders note that the current phase of weakness appears orderly and flow-led rather than driven by speculative capitulation. Volatility remains contained, suggesting that while pressure is intense, markets are adjusting incrementally rather than disorderly repricing risk.Until there is a meaningful turnaround in portfolio flows, a shift in global risk sentiment, or a clear positive catalyst on the trade front, the rupee is likely to remain under pressure. In the absence of such triggers, fresh record lows cannot be ruled out in the near term. This article was written by Eamonn Sheridan at investinglive.com.

Australia’s economy is increasingly exhibiting conditions consistent with further monetary tightening, leading Commonwealth Bank economists to forecast a 25 basis point Reserve Bank of Australia rate hike in February, despite market scepticism around near-term action. I posted earlier on another two calls for a February rate hike:Citi forecasts 2 RBA rate hikes in 2026, February followed by May, as inflation risks riseNAB sees RBA hiking twice in 2026, clashing with market expectations for extended holdThe core of CBA’s argument is that economic momentum is proving stronger and more persistent than the RBA anticipated. Growth has rebounded faster than expected, with GDP accelerating through the second half of 2025 and activity now assessed as running around potential rather than below it. The pickup has been broad-based, led by household consumption as real disposable incomes recover and savings buffers are drawn down.Labour market conditions remain a key driver of the tightening call. Employment growth has stayed resilient, spare capacity indicators point to limited slack, and unemployment is forecast to remain low even as population growth eases. With wages growth still elevated relative to productivity, CBA argues that domestic cost pressures remain inconsistent with inflation returning smoothly to target without further policy restraint.Inflation dynamics are another critical factor. While headline inflation has moderated, underlying measures are proving sticky, with services inflation and trimmed-mean CPI easing only gradually. Inflation expectations have also edged higher across consumer and market-based measures, raising concerns that inflation persistence could become more entrenched if policy settings are not tightened further.CBA also points to evidence that financial conditions have loosened unintentionally. Equity markets have rallied, the Australian dollar has depreciated at times, and household spending has surprised to the upside, all of which risk undermining the disinflation process. Against this backdrop, holding rates steady for too long could allow demand to re-accelerate faster than supply, especially given ongoing capacity constraints.While acknowledging that timing is finely balanced, CBA believes the RBA will judge that acting earlier — rather than waiting for clearer inflation deterioration — is the lower-risk strategy. A February hike would reinforce the Bank’s inflation-fighting credibility and help ensure inflation returns sustainably to target, even if it means running policy more restrictive for longer. This article was written by Eamonn Sheridan at investinglive.com.

National Australia Bank has struck a more hawkish tone on the Reserve Bank of Australia’s outlook, forecasting two 25 basis point rate hikes in 2026, beginning in February and followed by a second increase in May, diverging sharply from current market pricing.Persistent inflation risks and resilience in parts of the domestic economy is seen as forcing the RBA to resume tightening, despite widespread expectations that policy has already peaked. NAB's call echoes a similar view expressed by Citi earlier this week, which also warned that markets may be underestimating the risk of further RBA action if inflation proves sticky.Money markets, by contrast, remain sceptical. Current pricing implies a 74% probability that the RBA leaves rates unchanged at its February meeting, with a full 25bp hike not priced in until August. This disconnect highlights a growing divide between bank economists and market participants over the trajectory of Australian monetary policy.In favour of a hike are inflation dynamics that remain incompatible with an extended pause. While headline inflation has moderated, underlying price pressures, particularly across services, remain elevated, and the Bank has repeatedly emphasised that it will not tolerate a prolonged deviation from target. Its expected that that evidence of ongoing domestic cost pressures will prompt the RBA to act earlier than markets anticipate.The February timing is particularly notable, given the RBA’s preference to move only when confident inflation is tracking sustainably lower. NAB’s forecast suggests policymakers may judge that the balance of risks has shifted back toward inflation control rather than growth protection, especially if labour market conditions remain firm.A follow-up hike in May would represent a clear signal that the RBA views policy as still insufficiently restrictive. Such an outcome would force a rapid repricing across interest rate markets, particularly at the front end of the curve, where expectations remain anchored around a prolonged hold.Overall, NAB’s outlook reinforces the risk that markets are complacent on Australian rates, leaving investors exposed to upside surprises if inflation persistence challenges the prevailing consensus. ---The news of the NAB switched to a hike view has lent a bid to the AUD. This article was written by Eamonn Sheridan at investinglive.com.

China is likely to set a pragmatic and flexible GDP growth target for 2026, with policymakers seeking to balance stabilisation objectives against mounting external and domestic pressures, according to commentary and analyst assessments following the Central Economic Work Conference. This follows lacklustre data yesterday, but a still solid yuan:China yuan hits 14-month high even as weak consumer demand clouds economic growth outlookChina signals more policy support (same old?) as economy 'stabilises' in NovemberCommentary published by China Securities Times suggests policymakers are divided over whether to anchor next year’s growth target at around 5%, or adopt a slightly wider 4.5%–5.0% range that would allow greater policy leeway. Analysts argue that flexibility will be critical given a more challenging global backdrop, slowing external demand and persistent domestic supply-demand imbalances.The Central Economic Work Conference underscored this cautious tone, reaffirming the guiding principle of “seeking progress while maintaining stability.” Policymakers emphasised the need to stabilise employment, businesses, markets and expectations, while delivering “reasonable quantitative growth” alongside qualitative improvements as China embarks on the 15th Five-Year Plan. Importantly, the meeting reiterated continuity in macro policy, maintaining a more proactive fiscal stance and a moderately loose monetary policy, alongside stronger counter-cyclical and cross-cyclical adjustments.Most analysts expect the 2026 growth target to remain close to 5%, with policy support front-loaded to ensure a solid start to the year. Measures are likely to focus on expanding domestic demand, unlocking consumption potential, lifting effective investment and offsetting the drag from weaker exports, while continuing efforts to stabilise the property sector.Economists anticipate further monetary easing, with interest rate cuts of 10–20 basis points and reserve requirement ratio reductions of 50–100 basis points pencilled in for 2026. Some analysts expect the People’s Bank of China could move as early as January, ahead of the Lunar New Year, to shore up confidence and liquidity.On the fiscal side, projections point to a deficit ratio of around 4%, unchanged from 2025, alongside an expanded issuance of ultra-long-term special treasury bonds and steady or slightly higher quotas for local government special bonds. Authorities are also expected to deploy targeted tools, including relending facilities and subsidies, to support consumption, infrastructure, technological innovation and small businesses. ---A pragmatic and flexible 2026 growth target reduces near-term downside risks for the yuan by signalling policy responsiveness rather than hard growth constraints. While further rate and RRR cuts may cap CNY upside, front-loaded stimulus and a clearer demand-support narrative should help limit depreciation pressure, keeping USD/CNY anchored within managed ranges rather than prompting a disorderly weakening. This article was written by Eamonn Sheridan at investinglive.com.

Ford Motor is taking a major step back from its electric-vehicle ambitions, announcing roughly US$19.5 billion in charges largely tied to its loss-making EV operations, as the automaker pivots toward hybrids, extended-range vehicles and conventional gasoline models amid weakening EV demand. The Wall Street Journal with the info. In brief:The impairment is among the largest ever recorded by a U.S. industrial company and represents the clearest acknowledgment yet from Detroit that the transition to fully electric vehicles will take longer and be less profitable than previously expected. Ford has lost around US$13 billion on its EV business since 2023, underscoring the scale of the challenge.In response, the company said it will redeploy capital away from unprofitable EV assets and refocus investment on gas-powered vehicles, hybrids and extended-range electric models that combine battery power with onboard gasoline engines. These powertrains are seen as more commercially viable given current consumer preferences, infrastructure constraints and regulatory uncertainty.Ford’s revised strategy includes discontinuing the fully electric version of its F-150 Lightning pickup in favour of an extended-range variant, reflecting softer-than-expected demand for large EV trucks. While the company is pulling back from high-cost EV bets, it reiterated plans to launch a US$30,000 electric pickup by 2027, positioning low-cost EVs as the core of its future electric offering in the U.S.By 2030, Ford expects hybrids, extended-range vehicles and EVs to account for around 50% of its global sales volume, up from roughly 17% today, highlighting a shift toward a more gradual, diversified electrification path rather than a rapid transition to pure EVs.Beyond vehicles, Ford will repurpose its Kentucky EV battery facility into a battery-storage business, targeting customers such as utilities, renewable energy developers and data centres supporting artificial intelligence workloads. While the move will result in layoffs for about 1,600 workers at the site, the company said it plans to hire thousands of new employees across its broader U.S. operations.Overall, Ford’s retrenchment reflects a broader recalibration across the auto industry, as manufacturers confront the economic realities of EV adoption and seek profitability over speed in the energy transition. ---Ford’s retrenchment is likely to reinforce investor rotation toward automakers with flexible powertrain strategies and nearer-term profitability. Legacy OEMs with strong hybrid line-ups and pricing power may be favoured over pure-play EV manufacturers facing margin pressure, subsidy risk and slower demand growth. The move also supports selective opportunities across auto suppliers tied to internal combustion, hybrid systems and battery-storage infrastructure, while tempering enthusiasm for capital-intensive EV capacity expansion. This article was written by Eamonn Sheridan at investinglive.com.

New Zealand’s government has signalled a prolonged period of fiscal strain, with updated forecasts showing no return to a budget surplus over the next five years, as Finance Minister Nicola Willis doubled down on spending restraint while acknowledging the economy’s fragile recovery.Speaking alongside the release of the half-year economic and fiscal update, Willis struck a cautiously optimistic tone on growth while reinforcing the government’s commitment to tight fiscal discipline. She argued that recent data point to an economy beginning to stabilise after a prolonged downturn, even as the broader outlook remains clouded by weak domestic demand and external uncertainty. The updated forecasts follow earlier guidance on government funding plans (see earlier bond issuance update), reinforcing the picture of near-term restraint alongside elevated medium-term borrowing needs.The government now expects the economy to grow modestly in the third quarter, following contractions in three of the past five quarters. Treasury forecasts suggest momentum should gradually improve over the next 18 months, though the near-term recovery remains uneven and vulnerable to global risks, including shifting U.S. trade policy and softer international growth.Despite signs of stabilisation, the fiscal outlook has deteriorated. The government now expects a wider deficit in the current financial year than projected at the May Budget, and does not anticipate returning to surplus within the five-year forecast horizon once the costs of the national accident insurance scheme are included. While the deficit narrows significantly toward the end of the forecast period, the outlook underscores the challenge of restoring balance while supporting growth.Willis emphasised that restraint will remain central to fiscal strategy. Any new spending at the May Budget will be tightly targeted, with health, education, defence and law and order identified as priority areas. The government’s approach reflects a view that credibility and discipline are essential to rebuilding confidence, even as critics argue that spending cuts risk weighing further on activity.The updated forecasts also show a slightly weaker growth profile than previously assumed and a marginally higher inflation outlook over the next year, complicating the policy mix. Net government debt is now expected to peak at just under 47% of GDP later in the decade, modestly higher than earlier projections, reinforcing the case for ongoing fiscal restraint.Overall, the update highlights a government attempting to balance an emerging economic recovery with a determination to keep a firm grip on the public finances, even as the path back to surplus remains distant. ---A weaker fiscal outlook combined with continued spending restraint reinforces a cautious growth backdrop, supporting expectations of limited upward pressure on yields and keeping focus on RBNZ policy settings. The fiscal update is broadly neutral to mildly negative for the New Zealand dollar (see attached screenshot). While improved near-term GDP expectations offer some support, the absence of a surplus over the forecast horizon and a higher projected debt peak reinforce perceptions of constrained policy flexibility. With fiscal settings tight and growth still fragile, NZD is likely to remain driven by global rate differentials and risk sentiment rather than domestic fiscal signals, leaving the currency sensitive to shifts in U.S. yields and broader risk appetite. 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%. I noted the strength of the RMB yesterday:China yuan hits 14-month high even as weak consumer demand clouds economic growth outlookIndustrial output grew 4.8% year-on-year in November, slowing slightly from October and undershooting market expectations. Retail sales, a key gauge of household demand, decelerated more sharply, rising just 1.3%, down from 2.9% the previous month and well below forecasts. The figures reinforce signs that China’s recovery remains uneven and heavily reliant on the supply side: Evidence of fragile consumption continues to mount. Passenger car sales slumped 8.5% in November, the steepest decline in ten months, while the extended Singles’ Day online shopping festival failed to generate the usual boost in spending.Yesterday's close at 7.0482 was reflective of the sustained RMB bid. Today's mid-rate, at 7.0602, is the strongest setting (for CNY) since October 9 last year. PBOC injected 135.3bn yuan via 7-day reverse repos at an unchanged rate of 1.40%---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. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s private sector ended 2025 on a firmer footing, with business activity continuing to expand despite softer momentum and persistent weakness in manufacturing, according to the latest flash PMI data from S&P Global.The headline Flash Japan Composite PMI Output Index eased to 51.5 in December from 52.0 in November, remaining above the 50 threshold that separates expansion from contraction for a ninth consecutive month. While the pace of growth slowed from a three-month high, the reading still pointed to a modest expansion in overall activity at a rate stronger than the post-pandemic average.At the sector level, services remained the primary driver of growth. The Services PMI Business Activity Index slipped to 52.5 from 53.2, signalling continued but slower expansion. Manufacturing conditions remained under pressure, though signs of stabilisation emerged. The Manufacturing PMI rose to 49.7 from 48.7, indicating contraction persisted but eased to its mildest pace in around 18 months.New business returned to growth at the composite level following two months of decline, marking the strongest increase since August. Services demand improved modestly, while the downturn in manufacturing sales softened significantly, suggesting goods demand may be approaching a turning point. In contrast, new export orders declined again, reflecting continued weakness in overseas demand for manufactured goods, partially offset by marginal improvements in services exports.Improving domestic demand conditions supported a stronger increase in employment. Overall staffing levels rose at the fastest pace since May 2024, with job creation accelerating across both manufacturing and services. Despite higher headcounts, outstanding business increased at the fastest rate in two-and-a-half years, driven largely by rising backlogs in the services sector, highlighting capacity constraints.Business confidence remained positive but softened into year-end. Firms continued to expect output growth in 2026, though optimism fell from November, particularly among manufacturers. Survey respondents cited global economic uncertainty, demographic challenges and rising costs as key risks to the outlook.Cost pressures intensified further, with input price inflation reaching its highest level in eight months across both sectors. Companies responded by lifting selling prices at solid rates, underscoring persistent inflationary pressures in Japan’s private sector.---The PMI data reinforce the Bank of Japan’s cautious but increasingly hawkish policy bias. Services-led growth, accelerating employment and intensifying cost pressures support the case that underlying inflation dynamics remain firm enough to justify gradual policy normalisation. However, the continued contraction in manufacturing, weak export demand and softer business confidence argue against an aggressive tightening path. For the BOJ, the survey aligns with a strategy of incremental adjustment rather than abrupt moves, reinforcing expectations that any further policy steps will be carefully calibrated and data-dependent.The BoJ meet on Thursday and Friday this week (18 and 19 December), a 25bp interest rate rise is widely expected. For the yen, the PMI report offers a mixed signal. Rising domestic price pressures and stronger job growth are marginally supportive for JPY via the policy channel, but ongoing manufacturing weakness and subdued external demand limit upside. As a result, yen performance is likely to remain dominated by global rate differentials, particularly U.S. yields, rather than domestic activity data alone. Absent a clear shift in BOJ communication, PMI trends are unlikely to trigger a sustained JPY move, leaving the currency sensitive to swings in global risk sentiment and U.S. monetary policy expectations. 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.

New Zealand’s Debt Management Office (NZDMO) has trimmed its near-term bond issuance plans, offering modest relief to the government bond market even as borrowing needs remain elevated over the medium term.In an update released Tuesday, the NZDMO said it will issue NZ$35 billion of government bonds in the 2025/26 fiscal year, down NZ$3 billion from the NZ$38 billion projected in the May Budget. The reduction reflects improved cash flows and a reassessment of near-term funding requirements, easing immediate supply pressures in the domestic bond market.The adjustment is likely to be viewed positively by investors, particularly following a period of heavy issuance that has weighed on demand and contributed to elevated yields across the curve. A smaller funding task in the coming fiscal year reduces rollover risk and may help stabilise longer-dated government bond yields, especially if demand from offshore investors remains supportive.However, the NZDMO also lifted its four-year gross bond issuance forecast through June 2029 to NZ$135 billion, up from NZ$132 billion previously outlined. The upward revision underscores that while near-term borrowing needs have eased, the government’s longer-term funding requirements remain substantial, reflecting ongoing fiscal pressures, infrastructure spending and higher debt-servicing costs.From a policy perspective, the updated issuance profile arrives at a sensitive juncture for financial markets, with investors closely assessing the interaction between fiscal settings and the Reserve Bank of New Zealand’s monetary policy outlook. Reduced bond supply in 2025/26 could marginally ease financial conditions, complementing any future easing bias from the RBNZ should inflation continue to moderate.Nevertheless, the higher medium-term issuance outlook suggests supply will remain a structural feature of the New Zealand government bond market. Investors are likely to remain selective, focusing on yield compensation and curve dynamics as fiscal consolidation progresses only gradually.Overall, the NZDMO’s update signals short-term relief for bond supply, but reinforces the reality of sustained borrowing needs in the years ahead. This article was written by Eamonn Sheridan at investinglive.com.

Australian consumer confidence fell sharply in December, reversing the tentative improvement seen the previous month, as renewed concerns over inflation and interest rates weighed on household sentiment, according to the latest Westpac-Melbourne Institute survey.The headline Consumer Sentiment Index fell 9.0% to 94.5, unwinding much of November’s 12.8% surge and pushing the index back below the neutral 100 level, signalling that pessimists once again outnumber optimists. While confidence has improved materially from the deep troughs of 2024, the latest reading underscores the fragility of sentiment and the difficulty in sustaining a move into outright optimism.The December pullback was broad-based. Views on the economic outlook and family finances deteriorated, while expectations around mortgage rates turned sharply more negative, highlighting the sensitivity of households to inflation and monetary policy developments. Homebuyer sentiment also weakened, with expectations for house price gains pared back, suggesting higher borrowing costs continue to constrain housing-related confidence.The survey’s quarterly news recall questions shed further light on the drivers behind the decline. Inflation remained the most frequently recalled topic, with the tone decisively negative. Around 78% of respondents viewed inflation-related news as unfavourable, following upside surprises in Q3 inflation data and a strong initial read from the full monthly CPI in October.Interest rate news also weighed more heavily on sentiment. 64% of respondents assessed coverage as unfavourable, a marked increase from September and June, reflecting growing concern that rates may remain higher for longer. News related to domestic economic conditions and employment was similarly viewed more negatively than three months earlier.In contrast, international developments played a smaller role. Recall of global news fell to its lowest level this year, while the tone improved to its least unfavourable since June, partly reflecting easing trade tensions among Australia’s major trading partners.Despite the overall deterioration, consumers remained broadly unfazed about labour market prospects, suggesting that employment stability continues to provide a partial buffer against cost-of-living pressures. Overall, the survey points to an Australian consumer that is no longer deeply pessimistic, but still cautious and highly sensitive to inflation and interest rate risks heading into 2026.---The sharp pullback in consumer sentiment is mildly negative for the Australian dollar at the margin, reinforcing expectations that domestic demand will remain constrained into 2026. For rates, the survey supports a cautious RBA stance, with weaker household confidence playing off against offsetting inflation risks, limiting the urgency for further tightening. As a result, AUD is likely to remain more sensitive to global drivers, particularly U.S. rates, risk sentiment and China-related news, than to domestic data in the near term, while front-end rate pricing should stay anchored around a prolonged hold scenario. The Reserve Bank of Australia does not meet again until 2-3 February next year, with expectations for rate hikes next year firming up somewhat:Citi forecasts 2 RBA rate hikes in 2026, February followed by May, as inflation risks rise This article was written by Eamonn Sheridan at investinglive.com.

This Silver technical analysis combines price action, VWAP behavior, and proprietary orderFlow Intel decision support to assess whether the recent consolidation is a pause before continuation or a warning sign of trend exhaustion.While many traders focus only on candles and indicators, orderFlow Intel looks beneath the surface, helping identify whether buying and selling pressure is actually effective. In silver’s case, the underlying dynamics point to buyer control rather than distribution.Silver price action shows acceptance, not rejectionSilver futures built an important base earlier this month near $59.20 to $59.30, which coincided with a prior value area low. Once price moved higher from that zone, it never returned to test it again. That behavior often signals strong demand and early accumulation.As silver pushed into the low $60s, the market began forming value above $60.90, a prior point of control. During the sharp selloff on December 12, price dropped quickly but stalled near $61.00 to $61.05, printing a higher value area low rather than breaking into older value zones. The rebound from that area was fast and decisive.This pattern is typical of long liquidation rather than the start of a sustained bearish trend.Silver futures VWAP analysis highlights institutional reference levelsVWAP behavior adds another important layer to this Silver technical analysis.Key observations include:VWAPs from December 11 and December 12 converged near $63.20, creating a strong reference zone.Recent pullbacks respected VWAP or the first lower VWAP deviation around $62.90 to $63.00.The current session value area low is near $63.25, which sits above the prior VWAP cluster.When price holds above overlapping VWAPs from multiple sessions, it often reflects institutional positioning rather than short-term speculation. This is especially relevant when pullbacks are shallow and quickly defended.What orderFlow Intel reveals beneath the chartTraditional charts show where price moved. OrderFlow Intel helps explain why it moved and whether that move is likely to persist.Recent data shows several important dynamics:Selling pressure increased during the December 12 drop, but it failed to generate sustained downside follow-through.As price stabilized, buyer participation became more efficient, meaning silver moved higher without requiring outsized volume.During the latest session, activity increased near $63.80 to $64.00, yet sellers were unable to force acceptance below VWAP support.This combination suggests absorption of selling rather than distribution. In many market tops, volume rises while progress slows. Here, price continues to make progress with relatively controlled participation, which is a constructive signal.Key resistance and support levels for Silver futuresSilver is currently consolidating just below a notable prior value area high near $64.15. This level represents a natural decision zone where profit-taking and new positioning often occur.Levels to monitor:Resistance: $64.15. Sustained acceptance above this level would favor further value expansion.Support: $63.20 to $63.25. This VWAP and value area cluster is critical for maintaining the bullish structure.How silver behaves around these zones matters more than short-term intraday fluctuations.OrderFlow Intel prediction scoreBullish bias score: +7 (max bullish score is 10)This score reflects a constructive outlook supported by:Higher value area lows following liquidationConsistent defense of VWAP and deviation levelsImproving efficiency of buying pressure on pullbacksThe score is not extreme, as silver has not yet confirmed a clean breakout above $64.15, but it indicates a favorable risk environment for the bullish case.What would change the Silver outlookThe bullish Silver technical analysis would need reassessment if:Price sustains below the $63.20 VWAP clusterDownside momentum expands rather than stabilizing quicklyPullbacks begin to show deeper acceptance into prior value areasUntil then, the underlying structure remains supportive.Silver technical analysis takeawaySilver is not behaving like a market rolling over. Price action, VWAP structure, and orderFlow Intel all point to buyers defending higher value and managing pullbacks with discipline. This is the type of environment where breakouts tend to emerge from consolidation rather than sharp reversals.OrderFlow Intel does not predict markets. It provides decision support by highlighting whether buying and selling pressure is effective or being absorbed. In silver’s case, the evidence currently favors continuation rather than exhaustion.This analysis is for educational and informational purposes only. Traders and investors should conduct their own research and manage risk according to their strategy. This article was written by Itai Levitan at investinglive.com.

The tone around the ceasefire talks in Ukraine genuinely appears to be improving.We've been here before so it's tough to say whether this is real progress on yet-another headfake. Only time will tell but Trump's comments today are encouraging:Good conversation with European leadersLong discussion, and things are seemingly going wellHad a long talk with ZelenskyWe had numerous conversations with President PutinEuropean leaders want to get it endedGermany's Merz also sounded unusually upbeat today. This article was written by Adam Button at investinglive.com.

Early downside move tests key supportThe USDJPY moved lower during the Asia-Pacific session, briefly breaking below the 200-bar moving average on the 4-hour chart at 155.29. That downside probe echoed last Thursday’s price action, when the pair also slipped below the same moving average, only to quickly rotate higher. In that prior move, upside momentum stalled near the falling 100-bar moving average on the 4-hour chart, showing that buyers had their chance above resistance and couldn’t follow through—just as sellers failed to extend below support.Yields contribute to the dip, but momentum fadesToday’s early weakness was helped by a pullback in U.S. Treasury yields, with the 10-year yield initially down close to 5 basis points before retracing much of that move. It is now down around 1.4 basis points, reducing the downward pressure on USDJPY. As yields stabilized, the currency pair found buyers at lower levels.Swing area holds as price snaps back above the 200-bar MAFrom a technical standpoint, the session low pushed into a familiar swing area between 154.78 and 155.04, where buyers have previously shown interest. That support held, prompting a rebound that lifted USDJPY back above the 200-bar moving average on the 4-hour chart (155.29). With price now trapped between the 100-bar and 200-bar moving averages, the pair has returned to neutral territory, reflecting indecision rather than trend conviction.Neutral range sets the stage for the next breakWith a new trading day approaching, the opportunity for a directional break remains open—either higher through resistance or lower through support. What tips the balance is likely to be macro catalysts rather than pure technicals, given the tight range and failed breaks on both sides over the past several sessions.Heavy data calendar raises volatility riskThe economic calendar is packed this week, increasing the odds of a decisive move. In the U.S., markets will digest the November jobs report (expected +50K), along with retail sales and CPI, all of which could either lift the dollar or push it lower depending on the outcomes. In Japan, attention turns to the Bank of Japan policy decision on Friday, where expectations are leaning more toward a 25-basis-point hike—a potential volatility trigger for JPY pairs.Watch the video analysisIn the video above, Greg Michalowski, author of Attacking Currency Trends, walks through the real-time technical setup driving USDJPY. He highlights where risk is defined, explains how to interpret the repeated moving-average failures, and maps out the next targets that matter most as the pair waits for its next shove. This article was written by Greg Michalowski at investinglive.com.

If you followed the Barron's playbook last year, you’re probably sitting pretty right now.The publication has just released their scorecard for their 2025 stock picks, and the results are good. In a market environment that had plenty of chop, their basket of 10 stocks delivered a total return of 27.9%, nearly doubling the S&P 500’s respectable 15.3% return over the same period.Here is the breakdown of how their 10 picks in 2025 performed and, more importantly, where they are betting for 2026.Big Tech and China led the way in 2025The outperformance was driven by massive moves in heavy hitters. The standout winner was Alibaba (BABA), which ripped 81.0% higher, followed closely by Alphabet (GOOGL) at 67.5%.It wasn't all tech as financials played a big role, with Citigroup (C) rallying almost 60%.The winners:Alibaba (BABA): +81.0%Alphabet (GOOG): +67.5%Citigroup (C): +59.8%ASML Holding (ASML): +58.5%UBER +37.0%It certainly wasn't a perfect strike rate. Moderna (MRNA) shed 32.2%, while Everest Group (EG) dipped roughly 11%. But when your winners win this big, you can afford a few duds.The 2026 Picks: Betting on "Laggards Leading"For the year ahead, Barron's is pivoting hard. If 2025 was about growth and recovery, 2026 looks like a deep value, contrarian play. Is that a warning to be defensive?The theme for the new list is explicitly "Laggards Leading," with a distinct value bent. A glance at the list shows they are fishing in beaten-down waters—several of these names are sitting on significant negative YTD returns.The Top 10 Picks for 2026:Amazon (AMZN): The odd one out in a value list? Maybe, but it’s the anchor here.Bristol Myers Squibb (BMY): Down 9.5% recently, but paying a hefty 4.9% dividend.Comcast (CMCSA): A true contrarian pick. Down 26.5% YTD with a 4.8% yield and trading at 6.7x 2026 earnings.Exxon Mobil (XOM): Energy remains a staple. It's curiously rallied lately despite falling oil prices.Fairfax Financial (FRFHF): The Canadian holding company is actually up 27.3% YTD, bucking the "laggard" trend of the list. Still at only 10.2x earningsFlutter Entertainment (FLUT): Betting on the gambler? The stock is down 15.5%.Madison Square Garden Sports (MSGS): Flat performance recently, pure asset play.SL Green Realty (SLG): The scariest chart on the list? Down nearly 35% YTD, but yielding a massive 7.0%. This is a direct bet on a commercial real estate turnaround.Visa (V): A defensive growth play trading at roughly 25x earnings. Long a hedge fund favorite.Walt Disney (DIS): The Mouse House is down slightly YTD, trading at a reasonable 16.5x forward earnings.The Bottom LineThis is a defensive, high-yield pivot compared to the 2025 list. Barron's is betting that the high-flyers will cool off and capital will rotate into the dogs of the market—specifically real estate (SLG), media (CMCSA, DIS), and pharma (BMY).With yields on some of these names pushing 5-7%, they are clearly positioning for a market where total return comes from income rather than just multiple expansion. This article was written by Adam Button at investinglive.com.