BofA warns of building stock bubble risk but sees more upside in AIBank of England (BoE) set to cut rates as inflation slows, but easing seen as limitedUS approves $10bn-plus arms sales to Taiwan, China defence stocks index hits 2 mth highJapan signals FX vigilance, leans against yen weakness with verbal interventionTrump pre-Christmas $1776 check for US service members. Fiscal stimulus, at the margin.Honda to suspend Japan and China output as supply and demand pressures persistChina to manage CNH liquidity, PBoC to issue CNY 40bln of 6-month bills in Hong KongPBOC sets USD/ CNY mid-point today at 7.0583 (vs. prior close at 7.0450)South Korea flag FX volatility risks as policy divergence bites (they should call the RBI)Morgan Stanley sees US CPI confirming persistent inflation pressuresBoJ is set to keep markets guessing on the terminal rate, signalling patience - previewCoinbase launches stock trading and prediction markets in major platform updatePreview of the European Central Bank meeting - set to hold rates as euro zone growth firmBank of Japan hike priced, forward guidance in focus - preview for Friday, December 19WSJ report on advice to Trump from his lawyers regarding serving a third presidential termNew Zealand’s economy recorded a stronger-than-expected rebound in the September quarterinvestingLive Americas FX news wrap 17 Dec: Stocks continue to fall. USD ends higherMajor FX rates traded in subdued ranges through the Asian session, with markets largely marking time ahead of a heavy 24-hour run of central-bank decisions and key data releases. Volatility was limited, reflecting caution rather than conviction, as investors await clarity from multiple policy fronts.The yen was a modest underperformer. USD/JPY ticked a little higher to around 150.80, despite, or arguably because of, only mild verbal intervention from Japan’s Chief Cabinet Secretary Minoru Kihara, who said authorities were closely watching market moves, including long-term interest rates. The lack of any concrete warning or escalation was taken as a signal that Tokyo remains uncomfortable with yen weakness but is not yet prepared to act, allowing the currency to drift softer.Regional equities were mostly lower, tracking the soft tone on Wall Street on Wednesday, where weak price action weighed on sentiment and reinforced a defensive bias across risk assets.Early data flow came from New Zealand, where third-quarter economic growth surprised to the upside and exceeded Reserve Bank of New Zealand forecasts. The expansion was broad-based, with investment spending showing particular strength, although household consumption lagged somewhat. While the data suggest the economy is beginning to lift itself off the canvas, markets were unconvinced. New Zealand rates edged lower and the kiwi dollar drifted modestly, reflecting lingering caution around the durability of the recovery and the near-term policy outlook.In Washington, President Trump delivered a televised address from the White House that included several economy-related announcements. Trump said every U.S. service member will receive a one-off “warrior dividend” payment of $1,776 before Christmas, a fiscal transfer worth roughly $2.5 billion. While modest in macro terms, the move reinforces expectations of targeted fiscal support and the renewed use of direct cash payments. Trump also said he would soon name a new Federal Reserve chair who favours significantly lower interest rates, remarks likely to keep markets alert to policy-credibility risks.The rest of Thursday brings a packed agenda. The Bank of England is expected to cut rates by 25bp to 3.75%, the ECB is seen holding policy steady, and U.S. November CPI is due. Attention then turns to Friday, when the Bank of Japan is expected to deliver a historic rate hike, to 0.75%, its highest level in three decades. Asia-Pac stocks:Japan (Nikkei 225) -1.07%Hong Kong (Hang Seng) -0.44% Shanghai Composite +0.16%Australia (S&P/ASX 200) -0.07%Bank of Japan Governor Ueda will make history tomorrow. This article was written by Eamonn Sheridan at investinglive.com.

Global equity markets are showing growing signs of bubble-like behaviour, but the core artificial intelligence trade still appears to have further upside, according to Bank of America Global Research.In its latest Global Equity Volatility Insights report, the bank argues that while pockets of the market are already displaying instability consistent with late-cycle excess, the main AI-linked segments of U.S. equities remain well short of conditions typically associated with an imminent bubble peak. Bank of America’s Bubble Risk Indicator (BRI) suggests that speculative pressure has intensified in select areas, including nuclear- and quantum-themed stocks and some Asian equity markets, notably South Korea’s Kospi.By contrast, the central AI trade — spanning the S&P 500, Nasdaq Composite and the so-called Magnificent Seven — continues to show relatively subdued bubble signals. That divergence underpins the bank’s view that AI-related stocks may still have room to extend gains into 2026, even as broader market risks rise.At the same time, Bank of America cautions that the overall trajectory of U.S. equities is increasingly reminiscent of past technology-led boom cycles. Analysts draw a parallel between the Nasdaq’s rally following the launch of ChatGPT in late 2022 and its climb after the release of Netscape in the mid-1990s — a period that ultimately culminated in the dot-com bubble.The bank argues that dismissing bubble risks entirely would be complacent. While AI stocks have not yet reached extremes, the broader market is steadily moving toward a more fragile state as valuations stretch and volatility dynamics shift. In that context, AI is seen not as an exception to bubble dynamics, but as a potential catalyst for a larger, more prolonged asset-price boom.In Bank of America’s assessment, the relative restraint in AI-related volatility measures does not signal safety, but rather suggests the trade may still be in an earlier phase. As enthusiasm spreads more widely across markets, the risk of excess is likely to rise — even if the AI core continues to lag the froth seen elsewhere. This article was written by Eamonn Sheridan at investinglive.com.

BoE expected to cut rates 25bp to 3.75% Inflation fell to 3.2% in November Growth and labour market weakening Services inflation remains sticky Further cuts likely limitedThe Bank of England is widely expected to cut interest rates at its final policy meeting of the year today, following a sharper-than-anticipated slowdown in inflation and mounting evidence that economic momentum is weakening. Markets are pricing a 25 basis point reduction in Bank Rate to 3.75% from 4%, which would take borrowing costs to their lowest level since early 2023. The case for easing has strengthened after headline CPI inflation fell to 3.2% in November from 3.6% in October, an eight-month low and a larger drop than economists had forecast. The decline was driven mainly by easing food and drink inflation, alongside softer price pressures in alcohol and tobacco.The inflation data come on the heels of other signs of cooling activity. Labour-market indicators have softened, with unemployment at its highest level since 2021, while economic growth contracted slightly in the three months to October as businesses delayed investment decisions ahead of November’s budget. Together, these developments have bolstered the argument that restrictive policy settings are weighing on demand.Even so, policymakers are expected to strike a cautious tone. Inflation remains well above the Bank’s 2% target, and services-sector price growth continues to show signs of persistence. Business surveys also point to renewed inflation pressures in parts of the economy, suggesting the disinflation process may not be linear.As a result, while a December cut appears likely, expectations for a sustained easing cycle remain limited. Investors are currently pricing only one further rate cut in 2026, with uncertainty over whether a second move will materialise. Any reduction this week is likely to be framed as a measured adjustment rather than the start of aggressive loosening.Attention will also be on the voting split and guidance. The Monetary Policy Committee has been narrowly divided in recent meetings, and even with softer inflation data, policymakers are expected to maintain language emphasising a gradual and risk-managed path lower in rates. With global peers nearing the end of their own easing cycles, the BoE appears keen to retain flexibility rather than commit to a clearly defined trajectory. This article was written by Eamonn Sheridan at investinglive.com.

U.S. approves $10bn+ arms sales to Taiwan Package includes HIMARS, ATACMS, howitzers and drones Likely to inflame U.S.–China tensions China defence stocks jump on news Raises regional security risksThe Trump administration has approved a sweeping package of arms sales to Taiwan valued at more than $10 billion, sharply escalating military support for the island and injecting fresh tension into already strained U.S.–China relations.The U.S. State Department announced the sales late Wednesday, coinciding with a nationally televised address by President Donald Trump, although the president did not reference China or Taiwan in his remarks. The package comprises eight separate agreements and represents one of the largest single tranches of U.S. military assistance approved for Taiwan.At the core of the deal are 82 High Mobility Artillery Rocket Systems (HIMARS) and 420 Army Tactical Missile Systems (ATACMS), together valued at more than $4 billion. The systems mirror weaponry supplied by Washington to Ukraine during its conflict with Russia and are designed to enhance Taiwan’s long-range strike and deterrence capabilities. The package also includes around $4 billion worth of self-propelled howitzer systems and associated equipment, along with drones valued at more than $1 billion.The announcement is likely to provoke a sharp response from Beijing, which considers Taiwan a breakaway province and has consistently opposed U.S. arms sales to the island. Such moves are typically met with diplomatic protests, military signalling and, at times, retaliatory measures targeting U.S. interests or companies.Markets in China appeared to anticipate heightened regional tensions. China’s CSI Defence Index rose more than 2% to a two-month high following news of the approvals, reflecting investor expectations of increased domestic defence spending and procurement in response to rising geopolitical risks.For Washington, the package reinforces a strategy of bolstering Taiwan’s defensive capabilities without formally altering long-standing policy frameworks. For Taiwan, the systems enhance deterrence but also raise the stakes in cross-strait relations at a time of elevated military activity in the region.While the arms sales are unlikely to trigger immediate market dislocation beyond the defence sector, they add to a broader backdrop of strategic rivalry that continues to shape regional security, trade flows and investor sentiment across Asia. This article was written by Eamonn Sheridan at investinglive.com.

Japan signals increased vigilance on FX moves Yen weakness remains a key concern Verbal intervention used to temper speculation Long-term rates also under scrutiny No immediate policy action signalledJapan’s top government spokesman has stepped up verbal warnings on market conditions, signalling heightened official sensitivity to yen moves and rising long-term interest rates as authorities seek to lean against renewed currency weakness.Chief Cabinet Secretary Minoru Kihara said the government is closely watching market developments, including movements in long-term rates, comments that were widely interpreted as a warning to currency markets. While Kihara did not refer directly to the yen, the emphasis on monitoring financial conditions underscores concern that recent depreciation risks becoming destabilising.The remarks come as the yen remains under pressure amid persistent yield differentials between Japan and other major economies, even as expectations grow that the Bank of Japan will continue to normalise policy gradually. With markets already pricing a December rate hike, officials appear keen to avoid excessive or disorderly yen moves that could undermine confidence or complicate policy messaging.Verbal intervention remains a preferred first line of defence for Japanese authorities. By signalling vigilance without committing to concrete action, officials can temper speculative positioning and reinforce two-way risk in the currency without triggering volatility associated with direct intervention. There is also broader concern about tightening financial conditions, particularly given the sensitivity of Japan’s highly indebted economy to higher borrowing costs.The government has repeatedly stressed that it does not target specific exchange-rate levels, but rather seeks to prevent sharp, one-sided moves driven by speculation. Kihara’s comments are consistent with that stance, reinforcing the message that authorities stand ready to respond if market behaviour becomes excessive.For markets, the signalling suggests a desire to stabilise the yen and perhaps even engineer a reversal (good luck with that!). With the Bank of Japan expected to proceed cautiously on further tightening, officials appear focused on buying time and containing volatility rather than forcing a rapid currency adjustment.The comments underline Japan’s coordinated approach to currency management, with fiscal authorities setting the tone through verbal guidance while the central bank maintains flexibility over the pace of policy normalisation. This article was written by Eamonn Sheridan at investinglive.com.

Trump announces “warrior dividend” for service members:$1,776 payment per person before Christmas Roughly $1.8bn targeted fiscal injection Likely short-term boost to consumption Limited macro impact but strong political signalU.S. President Donald Trump said more than one million (I think the number is around 1.4mn) U.S. service members will receive a special one-off payment before Christmas, announcing what he described as a “warrior dividend” worth $1,776 per person.Speaking at a campaign event, Trump said the payment would be made to every active-duty service member, framing the move as both recognition of military service and direct financial support. The amount, a reference to the year of American independence, was presented as symbolic as well as practical, delivering cash support ahead of the holiday period.While details around funding and implementation were not immediately provided, the proposal carries clear fiscal and economic implications. A payment of this scale would amount to a stimulus injection of roughly $1.8 billion into household incomes, concentrated among a group with a high propensity to spend. Delivered before year-end, the payments would likely provide a short-term boost to consumer spending, particularly in retail and services sectors tied to holiday demand.The announcement also fits within a broader pattern of using targeted fiscal transfers as an economic and political tool. Direct payments have proven effective in quickly supporting consumption, even when modest in size, and can help cushion households against cost-of-living pressures without requiring broader structural policy changes.From a policy perspective, the proposal may raise questions about fiscal discipline and precedent, particularly if similar payments are extended to other groups. However, supporters may argue that the targeted nature of the dividend limits its inflationary impact compared with broader stimulus measures, while reinforcing support for military personnel.Markets are unlikely to view the proposal as macro-significant in isolation, given its relatively small scale relative to the U.S. economy. Nonetheless, it adds to the broader narrative of renewed fiscal activism and the willingness of policymakers to deploy direct cash transfers as both an economic lever and a political signal.Further clarity on timing, funding mechanisms and legislative backing will be required before the proposal can be fully assessed.---Trump has added more, promising to announce the next chair of the Federal Reserve 'soon'. Trump says the new Fed Chair will believe in lower interest rates 'by a lot'. Bad grammar, but a clear message of what Trump wants regardless. This article was written by Eamonn Sheridan at investinglive.com.

Honda to suspend production in Japan and China Company cites ongoing chip shortages Demand conditions may also be a factor Shares fall on renewed uncertainty Output recovery risks persistHonda Motor Co. is set to suspend vehicle production across parts of Japan and China in the coming weeks, underscoring continued fragility in global automotive supply chains and raising fresh questions about demand conditions in key markets.The Japanese automaker said it will halt output at domestic plants on January 5 and 6, while production at all three Guangqi Honda joint-venture facilities in China will be suspended from December 29 through January 2. Honda cited ongoing semiconductor shortages as the primary reason for the stoppages, a reminder that chip supply disruptions continue to weigh on manufacturing schedules despite earlier signs of improvement.The move comes as a setback after Honda had indicated production was expected to normalise from late November. Instead, the latest suspensions suggest that supply constraints remain unresolved, complicating efforts to restore output volumes and stabilise inventories.However, the interruptions may also prompt scrutiny of underlying demand conditions. Auto demand in parts of Asia has softened amid higher borrowing costs, cautious consumer spending and uneven economic momentum. In that context, temporary production halts can serve a dual purpose, helping manufacturers manage inventories and align output more closely with sales trends. While Honda has not explicitly pointed to weaker demand, the overlap between lingering supply issues and a more challenging demand backdrop suggests the stoppages may reflect a broader recalibration rather than purely logistical disruption.The announcement weighed on investor sentiment, with Honda shares falling around 1.5% in Tokyo trading following media reports. The market reaction reflects concern that prolonged supply constraints — combined with softer demand — could continue to cap earnings momentum into the new year.China remains a critical market for Honda, both in terms of sales volumes and manufacturing scale, making the suspension of its joint-venture plants particularly notable. More broadly, the episode highlights how global automakers remain exposed to both supply-side bottlenecks and cyclical demand risks, even as the industry adapts by prioritising higher-margin models and adjusting production mixes. I'm just gonna stick to their bikes ;-) This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China’s decision to issue 40 billion yuan of 182-day central bank bills in Hong Kong on December 22 should be viewed as part of a broader effort to manage the pace of recent CNY strength.Unlike earlier episodes where offshore bill issuance was used to counter depreciation pressure, the yuan is currently on a firm footing. The PBoC has been consistently setting the daily USD/CNY fixing higher than market models imply (i.e. weaker for CNY), a clear signal that authorities are seeking to slow the currency’s ascent rather than resist downside risks. Against that backdrop, the Hong Kong bill issuance appears designed to fine-tune offshore liquidity conditions and less so about dampening one-way appreciation dynamics.The choice of a 182-day tenor is telling. A longer maturity allows the PBoC to lock in conditions through the first half of next year, smoothing funding dynamics across the year-end and early-2026 period.The bank added liquidity today for 14 days, spanning the period to January 1. I suspect they'll do more of this in the days ahead:PBOC injected 100bn yuan via 14-day reverse reposIt reinforces the message that authorities prefer gradual, sustained calibration rather than reactive short-term operations.Importantly, the move does not signal a shift toward broader monetary tightening. Onshore liquidity is still managed separately through reverse repos and medium-term facilities, and domestic policy remains focused on supporting growth while safeguarding financial stability. The offshore bill programme instead reflects China’s preference for targeted tools that address specific market imbalances.For markets, the takeaway is that the PBoC is actively managing both sides of currency risk. While it remains unwilling to tolerate disorderly weakness, it is equally cautious about excessive or rapid appreciation that could undermine export competitiveness and financial conditions. The Hong Kong bill issuance, combined with carefully calibrated fixings, underscores a clear policy objective: stability over direction. 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%.Earlier:PBOC is expected to set the USD/CNY reference rate at 7.0403 – Reuters estimateThe daily fixing of this mid-rate is often interpreted as a policy signal rather than just a technical reference point. A higher-than-expected USD/CNY midpoint is typically read as a sign the PBOC is leaning against CNY appreciation pressure, like today.PBOC injected 88.3bn yuan via 7-day reverse repos at an unchanged rate of 1.40%.and, the PBOC injected 100bn yuan via 14-day reverse repos at an unchanged rate of 1.40%.The People's Bank of China had earlier consulted traders on demand for 14-day reverse repos. There are several practical and signalling reasons why the PBoC would consult traders about demand for 14-day reverse repos rather than relying solely on its standard 7-day operations. 1. Managing liquidity across calendar stress points The PBoC often adjusts the tenor of its open-market operations when it anticipates temporary liquidity pressures linked to tax payments, bond issuance, regulatory assessments, or holidays. A 14-day repo allows the central bank to bridge a known funding gap without having to roll liquidity every week, reducing operational friction and funding uncertainty for banks. 2. Smoothing volatility without changing the policy stance Extending the maturity of liquidity injections is a technical adjustment, not a policy shift. By offering 14-day funds, the PBoC can stabilise money-market rates and prevent short-term funding stress without cutting policy rates or changing the 7-day repo rate, which remains its primary policy signal. 3. Targeting duration rather than size Sometimes the issue isn’t how much liquidity the system has, but how long it stays there. If banks are reluctant to lend beyond very short tenors, overnight and 7-day rates can become jumpy. A 14-day operation lengthens the effective liquidity duration, anchoring expectations for funding conditions over a longer window. 4. Testing market appetite and balance-sheet demand Consulting traders before shifting tenor helps the PBoC gauge true demand, ensuring liquidity is absorbed efficiently rather than sitting idle. It also avoids crowding out interbank activity or sending unintended easing signals. 5. Signalling caution rather than stimulus The choice of 14-day repos can be read as preventive maintenance, not stimulus. It suggests the PBoC wants to stay ahead of potential stress while avoiding broader easing at a time when it remains sensitive to currency stability, capital flows, and financial-stability risks. Bottom line By consulting on 14-day reverse repos, the PBoC is likely aiming to smooth liquidity over a longer horizon, reduce short-term funding volatility, and pre-empt stress — all without altering its core policy stance. It’s a classic example of China’s preference for fine-tuning liquidity tools rather than headline policy moves. This article was written by Eamonn Sheridan at investinglive.com.

South Korea flags concern over widening FX volatility Authorities monitoring markets closely Global policy divergence cited as key risk FX intervention remains an option RBI action highlights regional playbookSouth Korea’s finance minister has stepped up warnings over rising foreign-exchange volatility, signalling a heightened state of alert as global monetary policy divergence continues to weigh on local markets.Speaking after a meeting with Bank of Korea Governor Rhee Chang-yong and senior financial regulators, Finance Minister Koo Yoon-cheol said authorities are increasingly concerned about widening FX swings and their potential spillover into broader financial conditions. He added that the government is monitoring markets around the clock and stands ready to deploy policy measures if volatility becomes excessive.The comments come as currency markets across Asia face renewed pressure from diverging global interest-rate paths, particularly the contrast between still-restrictive U.S. policy and more cautious stances elsewhere. For South Korea, the risk is that sharp moves in the won could amplify imported inflation pressures or undermine investor confidence at a sensitive point in the domestic cycle.While Koo did not spell out specific actions, the language leaves the door open to stepped-up coordination with the Bank of Korea, including the possibility of direct or indirect intervention. The approach would mirror recent developments in India, where the Reserve Bank of India moved swiftly this week to smooth rupee volatility amid global FX pressures, reinforcing the region’s preference for disorderly-move prevention rather than tolerance of sharp currency swings.The Reserve Bank of India intervention yesterday sent USD/INR into a tailspin, but a 50% or so recovery ensued:In South Korea’s case, the finance ministry has historically taken the lead in FX policy, with the central bank playing a supporting operational role. That framework suggests any sustained bout of won weakness could prompt official action at the behest of the finance ministry, particularly if moves are seen as speculative or disconnected from fundamentals.For now, officials appear focused on signalling vigilance rather than immediate action. However, the emphasis on global policy divergence underscores the sensitivity to external shocks, especially as markets reassess the timing and scale of future U.S. rate cuts. As seen elsewhere in Asia, authorities are increasingly unwilling to allow sharp currency moves to feed volatility across asset classes, making FX stability a key near-term policy priority. This article was written by Eamonn Sheridan at investinglive.com.

The TL;DR:Morgan Stanley expects CPI to confirm firm inflation pressures Core CPI seen near 3.0% y/y in November Shelter and goods prices remain resilient Data limitations reduce monthly detail Supports cautious Fed policy outlookU.S. consumer price data due on Thursday, December 18, is expected to confirm that underlying inflation pressures remain firm, according to Morgan Stanley, even as data limitations complicate interpretation of the latest release.In a note previewing the report, Morgan Stanley said it expects core inflation to show continued resilience, driven by a rebound in shelter costs and ongoing firmness in goods prices. The bank estimates that core CPI inflation averaged around 0.28% month-on-month across October and November, a pace that would lift core inflation to roughly 3.0% year-on-year in November.Headline inflation is also expected to remain elevated, averaging around 0.26% m/m over the same two-month period, reflecting similar underlying strength. Morgan Stanley said these readings point to persistent inflation momentum that remains inconsistent with a rapid return to the Federal Reserve’s 2% target.However, the November CPI release comes with an important caveat. Due to the government shutdown, individual monthly prints for October and November will not be published. Instead, markets will receive only a November price level, significantly reducing transparency around month-to-month inflation dynamics. While this limits granularity, Morgan Stanley said the broader signal still points to firm underlying pressures.Shelter inflation is expected to rebound after a period of moderation, reflecting the well-known lag between market rents and official inflation measures. Goods prices, which had previously contributed to disinflation, are also expected to remain resilient, suggesting that inflation pressures are not confined solely to services.Morgan Stanley cautioned that the lack of detail may temper market reactions at the margin, but said the overall message should reinforce the Federal Reserve’s cautious approach to policy easing. With core inflation tracking around 3%, the data are unlikely to provide policymakers with the confidence needed to signal an imminent shift toward rate cuts.In Morgan Stanley’s view, even a technically constrained CPI release is likely to validate the narrative that inflation remains sticky, keeping pressure on the Fed to maintain a restrictive stance into early 2026. -Meanwhile, the Wall Street Journal have published their survey of expectations:The Journal's noted Fed watcher, Nick Timiraos with his summation: 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.Update look at CNY: This article was written by Eamonn Sheridan at investinglive.com.

The Bank of Japan is expected to disappoint markets looking for clear guidance on the terminal rate when it concludes its two-day policy meeting on Friday, reinforcing the view that policy normalisation will remain cautious, conditional and highly data-dependent. Thats the view from Bank of America on the BoJ meeting today and tomorrow.While a December rate hike is now broadly anticipated, attention will quickly turn to how Governor Kazuo Ueda frames the outlook. Markets are keen for clarity on how far the BoJ ultimately intends to lift rates, but officials are widely expected to resist providing explicit signals on the terminal level. Instead, the central bank is likely to reiterate its long-standing position that future moves will depend on how the economy and inflation respond to previous hikes.This reluctance reflects both uncertainty around Japan’s underlying inflation dynamics and growing sensitivity to financial market conditions. Recent increases in Japanese government bond yields have sharpened concerns about tightening financial conditions too quickly, particularly given Japan’s still-fragile domestic demand recovery. Even after the expected hike, real interest rates are set to remain negative, underscoring the BoJ’s preference for gradualism rather than a predefined hiking path.Currency dynamics remain a key risk factor. While the BoJ has downplayed the yen’s role as a direct policy target, officials are acutely aware that sharp exchange-rate moves can feed into inflation expectations and public confidence. Should the yen weaken rapidly following the meeting or early in the new year, pressure could build for policymakers to accelerate the pace of tightening. I posted on this earlier:Bank of Japan hike priced, forward guidance in focus - preview for Friday, December 19In that scenario, expectations for the next rate increase could be pulled forward. While the current baseline among many investors centres on a mid-to-late 2026 follow-up move, renewed yen depreciation could shift the timing toward April 2026, particularly if inflation proves resilient and wage growth remains firm.For now, the BoJ is expected to stick to a deliberately vague framework: emphasising patience, monitoring incoming data, and avoiding any commitment to a terminal rate. That approach may frustrate markets seeking certainty, but it preserves flexibility at a time when both domestic and global conditions remain fluid. This article was written by Eamonn Sheridan at investinglive.com.

Coinbase has announced its taken a significant stride toward realising its vision of becoming an “Everything Exchange,” unveiling major product expansions that embed traditional financial instruments and event-prediction markets directly into its core app. This marks a pivotal shift for the U.S.-listed crypto exchange, moving beyond solely digital assets to offer users a unified platform for trading stocks, predicting real-world event outcomes, futures, perpetuals, and more, all alongside crypto holdings. The rollout, announced on December 17, begins in the United States with commission-free stock trading, opening up access to leading equities and ETFs inside the familiar Coinbase interface. Users can manage stock positions alongside crypto without switching apps, and trade outside traditional market hours, a feature designed to appeal to both retail and active traders. Coinbase is also laying the groundwork for tokenised stocks that could ultimately enable 24/7 global trading and use of equities onchain, edging closer to fully digitalised financial markets. In parallel, Coinbase has launched prediction markets, enabling users to trade contracts tied to the outcomes of real-world events, from elections and economic data to sports and cultural moments. Powered at launch by Kalshi-linked market flow, this introduces a new way for users to express views and hedge around future developments within the same app environment.This expansion positions Coinbase to challenge traditional brokers and growing retail platforms offering multi-asset services, while diversifying revenue beyond its core crypto business. The move comes amid broader industry competition, with peers like Robinhood also embracing prediction markets and tokenised securities. Despite regulatory headwinds around event contracts in the U.S., Coinbase’s integrated strategy aims to deepen user engagement, enhance cross-asset liquidity, and redefine retail trading experiences. I'll be curious to see how this widening of the appeal of trading in all sorts of markets plays out. Recent history has shown that neophyte traders don't necessarily find they can easily make positive returns despite the glittering promises made by these 'new and improved' 'exchanges'. This article was written by Eamonn Sheridan at investinglive.com.

The European Central Bank is expected to leave interest rates unchanged at Thursday’s policy meeting, reinforcing the view that the easing phase has ended as the euro zone economy shows greater resilience and inflation remains anchored near target. the statement is due at 1315 GMT / 0815 US Eastern timeEuropean Central Bank President Lagarde will follow up with her press conference a half hour later Recent economic data have outperformed the ECB’s own projections, easing concerns that global trade disruptions would significantly undermine growth. Exporters have adjusted more effectively than expected to U.S. tariff pressures, while stronger domestic demand in Germany has helped offset lingering weakness in manufacturing activity across the bloc. Together, these dynamics have allowed the euro zone economy to grow close to its estimated potential rate.Inflation developments support the case for policy stability. Headline inflation has hovered around the ECB’s 2% objective, driven primarily by firm services-sector price growth, while underlying price pressures appear contained. With inflation expected to remain close to target over the medium term, policymakers are seen as having little urgency to adjust rates in either direction.Against this backdrop, the ECB is likely to revise its growth and inflation forecasts modestly higher, effectively drawing a line under the rate-cutting cycle that halved policy rates from their peak over the past year. While some speculation has emerged around the possibility of a future rate hike, this debate is widely viewed as premature given persistent spare capacity in manufacturing and only tentative signs of an industrial recovery.ECB President Christine Lagarde is expected to avoid offering guidance on the direction of the next policy move, instead emphasising data dependence and the need to assess how current conditions evolve. Markets broadly expect rates to remain on hold well into 2026 and 2027, reinforcing the perception that the ECB is comfortable with its current stance. This article was written by Eamonn Sheridan at investinglive.com.

The Bank of Japan is widely expected to deliver a 25bp rate hike at the conclusion of its policy meeting on Friday, December 19, a move that is now almost fully priced by markets. With the outcome largely anticipated, investor attention will shift squarely to Governor Kazuo Ueda’s press conference, scheduled for 06:30 GMT (0130 US Eastern time) for guidance on the pace and limits of further policy normalisation.Despite the near-certainty of a hike, expectations are low that Ueda will strike a hawkish tone. Policymakers remain acutely aware of the sharp rise in Japanese government bond yields and the sensitivity of domestic financial conditions to higher rates. Even after the expected increase, the BoJ assesses real interest rates as remaining firmly negative, reinforcing the view that policy will stay accommodative in real terms and that tightening will proceed cautiously.Market pricing currently points to another rate hike as early as June or July next year. However, some analysts argue this timeline is too aggressive. A growing view is that October 2026 represents a more realistic window, allowing the BoJ time to assess how higher borrowing costs filter through to corporate financing, bank lending, household consumption and capital expenditure. Spring wage negotiations and the yen’s exchange rate will be particularly important inputs into that assessment.The debate around Japan’s neutral rate has also resurfaced. While recent remarks from Governor Ueda about reassessing neutral policy settings triggered outsized market reactions, policymakers continue to stress that the neutral rate is a conceptual range rather than a precise target. The BoJ is expected to maintain its current estimate of 1–2.5% for the foreseeable future, suggesting no urgency to accelerate tightening beyond gradual steps.From a market perspective, the fully priced nature of this week’s hike reduces the risk of volatility. Unlike the August 2024 move, which triggered sharp yen-funded carry unwinds and ripples across emerging market currencies, this decision is unlikely to generate such dramatic spillovers. With little surprise factor, the yen’s reaction should depend more on forward guidance than the hike itself.Looking further ahead, some strategists have turned more hawkish than consensus, now pencilling in an additional 25bp hike in Q3 2026. With markets leaning toward a later move, this divergence implies potential upside risks for the yen in the second half of 2026 as BoJ and Federal Reserve policy paths increasingly diverge. This article was written by Eamonn Sheridan at investinglive.com.

Key Technical & Fundamental TakeawaysRecord-Breaking Run: Silver has surged another 4.25% today, hitting a fresh all-time high of $66.88.The Fundamental Driver: A "perfect storm" of falling real rates, structural supply deficits, and booming industrial demand (EVs/Solar) is fueling the rally.The Trend: Silver is now up a staggering 130% year-to-date in 2025.The "Line in the Sand": The bullish trend remains intact as long as price holds above the 100-hour moving average at $63.84.Reversal Risk: A break below the $62.70 trendline would signal a technical shift in favor of the sellers.Unstoppable Momentum: Silver Hits $66.42Silver is continuing its relentless run to the upside, with the price currently trading up roughly 4.25% on the day at $66.42. Earlier in the session, the buying pressure extended the price to a new intraday record of $66.88.This move is not an isolated event; it is the continuation of a powerful trend that has seen the white metal rise 130% in 2025. As the old trading adage goes, "trends are fast, directional, and tend to go farther than traders think." Right now, this is the definition of a runaway trend.The "Why": 4 Pillars Driving the Silver RallyFundamentally, Silver has been moving higher on a rare combination of macro tailwinds and metal-specific tightness. Here is what is powering the move:Monetary Policy & Rates: Easing real interest rates and expectations for looser monetary policy have improved the appeal of non-yielding assets like precious metals.Hard Asset Demand: Persistent central bank buying and investor demand for "hard assets" have supported the entire complex.Industrial Super-Cycle: Unlike Gold, Silver has massive industrial utility. Demand is soaring due to its critical role in solar panels, electrification, EVs, and advanced electronics.Structural Deficit: Mine supply growth has lagged behind this exploding demand, creating a structural deficit that amplifies price moves when investment flows increase.The Gold Sympathy Play: Gold’s own rally has pulled Silver higher via the gold-silver ratio. Once momentum builds, Silver often outperforms Gold due to its smaller, more volatile market cap.Technical Analysis: When Does the Trend End?All good things eventually come to an end. For this parabolic trend to reverse, we would need to see either a fundamental shift (a reversal of the drivers listed above) or, more immediately, price action that tilts the technical bias to the downside.While markets can remain overbought for long periods, traders must watch specific "risk-defining" levels to know when the tide is turning.The Bearish Trigger: Watch $63.84Looking at the hourly chart, the immediate line in the sand is the rising 100-hour moving average, currently located at $63.84.The Rule: For the bearish bias to increase, the price must break—and stay—below this moving average.Secondary Support: The Trendline TestBelow the 100-hour MA lies a critical upward-sloping trendline that has been tested multiple times. This trendline support currently comes in near $62.70 and is rising.If sellers can push the price below both the $63.84 moving average and the $62.70 trendline, it would mark a significant technical victory for the bears. In that scenario, the focus would shift to the rising 200-hour moving average, currently at $61.72, as the next downside target.Bottom Line: Until those levels are broken, the sellers are not in control, and the path of least resistance remains to the upside.Watch the video analysisIn the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving the price of silver in real time, outlining the bias, the risk-defining levels, and the next upside and downside targets that matter most.Be aware. Be prepared. This article was written by Greg Michalowski at investinglive.com.

The broader stock indices are continuing their tumble with the: S&P index -70 points or -1.03%.NASDAQ index -350 points or -1.52%.Dow industrial average is down -200 points at -0.41%.Russell 2000 is down 1% on the dayShares of Broadcom are continuing their run to the downside since announcing earnings on Thursday of last week. Key Technical TakeawaysMajor Breakdown: Broadcom shares have plunged -4.92% to $324.49, breaking key support levels.Bear Market Confirmed: The stock is now down 21.7% from its pre-earnings peak of $414.61, officially entering correction territory.Moving Average Failure: The price has sliced through the critical 100-day moving average at $340.98, which now turns into resistance.Next Support Target: Sellers are eyeing the 38.2% Fibonacci retracement level at $308.98 as the next major downside objective.Selling Pressure Accelerates: Lowest Levels Since SeptemberBroadcom shares continue to come under intense selling pressure, with the stock shedding -$16.80 (-4.92%) today to trade at $324.49.This move marks a significant deterioration in the technical picture, as the price has fallen to its lowest level since the earnings report in September. During that earnings event, the price had gapped higher from $306 per share. Today’s decline has nearly filled that gap, wiping out months of gains.The selling intensity is highlighted by the breach of the October 10 swing low at $324.05, with today's intraday price stretching as low as $321.42.The Trend: From Peak to CorrectionThe reversal has been sharp. Since hitting a peak of $414.61 the day before its last earnings announcement, Broadcom has tumbled 21.7% to current levels.From a technical standpoint, the damage was compounded today when the price ran straight through the 100-day moving average, located at $340.98. A close below this moving average is a bearish signal, suggesting that momentum has firmly shifted to the sellers.What’s Next? The Fibonacci TargetWith the 100-day moving average now in the rearview mirror, traders are looking lower for support.The next major technical floor comes in at the 38.2% Fibonacci retracement of the major move up from the April low ($138.10) to the recent highs. That calculation yields a key support target at $308.98.The Bullish RequirementFor buyers to regain any confidence that a bottom is in place, they have significant work to do. The first step would be reclaiming the broken 100-day moving average at $340.98. Until price can get back—and stay—above that level, the path of least resistance remains to the downside. The 200 day moving average comes in at $282.12. There is also near swing low levels from the month of August. TheDespite the sharp decline, the price is still up close to 40% for the year.-----------------------------------------------------------------------------------------------------------------------------------------------------------Oracle shares are now down close to 50% from its peakKey Technical TakeawaysMassive Correction: Oracle shares have collapsed roughly 48% from the all-time high of $345.72 reached in September.The Catalyst: The sell-off began after the September 9/10 infrastructure deal announcements, which investors now fear carry an unsustainable debt burden.Lowest Level in Months: At $178.79, the stock is trading at its lowest valuation since mid-June.Critical Support: The price is fast approaching the June 11 closing level of $166.64, which serves as the next major downside reference.YTD Context: Despite the crash, the stock remains up 7.4% on the year, highlighting the extreme "overbought" nature of the prior rally.From Boom to Bust: The Debt HangoverOracle shares are undergoing a severe repricing, with the stock currently down approximately 48% from its all-time high.The aggressive sell-off traces back to September 10, the day the stock peaked at $345.72. This peak followed the announcement of major infrastructure deals after the close on September 9. While initially celebrated, the narrative has shifted dramatically. The market is now fixated on the large debt burden required to finance this massive buildout, causing the stock to be on a steep, relentless decline ever since.Technical Breakdown: Approaching June LowsThe selling pressure has pushed Oracle to its lowest levels in six months.Current Price: The stock is currently trading around $178.79.The Danger Zone: This valuation brings the price uncomfortably close to the levels seen on June 11, when the share price closed at $166.64.Traders will be watching this $166.64 level closely. If the $178.79 support fails to hold, that June closing price becomes the primary technical floor.Reality Check: Still Green on the YearPerhaps the most telling statistic of this volatility is the Year-to-Date performance. Even after a nearly 50% haircut from the highs, Oracle shares are still higher on the year by 7.4%.This statistic serves as a stark reminder of how overextended and overbought the stock became during its run-up to the September highs. The current move is not just a reaction to news, but a violent unwinding of a crowded momentum trade. This article was written by Greg Michalowski at investinglive.com.

Key Technical TakeawaysThe Resistance Cluster: USDJPY is currently pinned against a critical resistance zone defined by the 100-hour MA (155.62) and the 4-hour 100-bar MA (155.675).The Foundation: The rally was triggered after buyers successfully defended a major swing support area between 154.33 and 154.472 during yesterday's session and early Asian trading.The Bullish Trigger: A sustained break above 155.675 opens the door for a move toward 156.17 and the November highs.The Downside Risk: Failure to break higher could see price rotate back below the 200-bar MA at 155.277, re-exposing the 154.33 lows.The Battle at Resistance: Converging Moving AveragesAs trading moves deeper into the North American session, the USDJPY pair finds itself locked in a tight technical battle. The price action has been pinned firmly against a wall of short-term resistance.This resistance is technically significant because it represents a convergence of two different timeframes:The 100-hour moving average: Currently located at 155.62.The 100-bar moving average on the 4-hour chart: Currently coming in at 155.675.The intraday high so far has reached 155.63, landing precisely in the "kill zone" between these two moving averages. For the bulls to claim control of the session, they must chew through this supply and establish a foothold above 155.675.How We Got Here: Defending the 154.33 Swing FloorThe impetus for today's upside move didn't just appear out of nowhere; it was built on a solid foundation of support established over the last 24 hours.Both yesterday and during the early hours of today's Asian session, the market tested a key downside swing area between 154.33 and 154.472.Yesterday's Low: Bottomed out at 154.388.Asian Session Low: Buyers stepped in slightly higher at 154.507, just above the swing area.The market's inability to push below this key floor gave buyers the "go-ahead" signal. Recognizing that sellers were exhausted at the lows, bulls seized the momentum to push the price back up to the current resistance levels.What Next? Bullish Breakout ScenariosIf the buyers can finish the job and extend the price above the 100-bar moving averages on both the hourly and 4-hour charts—and crucially, stay above them—the technical bias will shift further to the upside.A confirmed breakout would have traders looking toward the following targets:Target 1: The immediate intermediate level at 156.17.Target 2: A swing area between 156.736 and 156.95.Target 3: The major high from November, which extended all the way up to 157.872.The Bearish Alternative: Watching the 200-Bar MATraders must also respect the possibility of a failure at resistance. If the price cannot clear the 155.675 hurdle, sellers may look to regain control.The key level to watch on the downside is the 200-bar moving average on the 4-hour chart, currently located at 155.277. A fall below this level would negate the short-term bullish momentum and could see sellers return with force. In that scenario, the focus would shift back to the support "floor" established yesterday near the 154.33 – 154.477 area. This article was written by Greg Michalowski at investinglive.com.

The U.S. Treasury sold $13 billion of 20 year bonds at a high yield of WI level at the time of the auction 4.799%Tail -0.1 bps vs 6 month average of -0.5 bpsBid to cover 2.67X vs 6 month average of 2.65XDealers 12.57 vs 6 month average of 11.0%Directs 22.24% vs 6 month average of 25.3%Indirects 65.19% vs 6 month average of 63.7%AUCTION GRADE: Given the results compared to the 6-month average, I give the auction an average grade of C. Not good. Not bad. Just average. The 20-year Treasury bond occupies a unique and somewhat awkward position on the US yield curve compared to the "benchmark" 10-year and 30-year issues. It is often referred to by traders as an "orphan" issue.1. The "Orphan" StatusUnlike the 10-year note (the global benchmark for risk-free rates) and the 30-year bond (the primary instrument for long-duration pension hedging), the 20-year bond lacks a natural, dedicated buyer base.10-Year Role: Used by everyone—mortgage lenders, corporate bond pricers, and foreign central banks—as the primary reference point for the US economy.30-Year Role: heavily favored by pension funds and insurance companies who need "long duration" assets to match their long-term liabilities (like payouts due in 30+ years).20-Year Role: It falls in a "no man's land." It is too long for tactical traders who prefer the 10-year, but not "long enough" for pension funds who prefer the convexity and duration of the 30-year.2. The Yield Anomaly (The 20s-30s Inversion)Because of this "orphan" status, the 20-year bond typically trades with a liquidity premium, meaning investors demand a higher yield to hold it because it is harder to sell than a 10-year or 30-year bond.This often results in a "kink" in the yield curve where the 20-year yield is near or even inverted to the 30-year yield.This phenomenon occurs because demand for the 30-year is structurally higher (due to pensions), pushing its price up and its yield down, while the 20-year languishes with less demand, keeping its price lower and yield higher.3. Liquidity and TradingVolume: The 20-year bond sees significantly less trading volume than the 10-year and 30-year issues.Volatility: Due to lower liquidity, the 20-year yield can be more volatile and prone to erratic moves during market stress compared to its neighbors.Overview: The Auction ProcessThe US Department of the Treasury sells bills, notes, and bonds to finance the US government’s debt. These auctions are closely watched by traders (Forex, Equities, and Bond traders alike) because they provide a direct read on the demand for US assets and the direction of interest rates.When the auction results are released, the market immediately compares the actual data against the "Pre-Auction" expectations.Key Metrics for Auctions of US Treasuries.: A Bulleted Review1. The WI Level (When-Issued Yield)The "When-Issued" market is essentially a futures market for the Treasury security that is about to be auctioned. It trades in the days leading up to the auction and right up until the auction deadline.The Benchmark: The WI yield at the exact time of the auction bidding deadline (1:00 PM ET) is the "expected" price.The "Stop" (High Yield): This is the actual highest yield accepted by the Treasury to sell the entire auction amount.The Tail: If the Auction Stop yield is higher than the WI yield, it is called a "Tail." This is bearish (bad demand) because the Treasury had to offer a cheaper price (higher yield) than the market expected to get the deal done.Stop-Through: If the Auction Stop yield is lower than the WI yield, it is a "Stop-Through." This is bullish (strong demand) because buyers were willing to accept a lower yield than expected to secure the paper.2. Bid-to-Cover RatioThis is the primary measure of overall demand depth. It is calculated by dividing the total dollar amount of bids received by the amount of debt being sold.Measurement: A ratio of 2.5 means there was $2.50 of demand for every $1.00 of debt sold.Interpretation: A higher number indicates stronger demand. Traders usually compare today's Bid-to-Cover against the "Six-Month Average" or the previous ten auctions to see if demand is rising or falling.3. Indirect BiddersThese are buyers who place bids through a primary dealer rather than directly with the Treasury.Who they are: This category is heavily dominated by Foreign Central Banks (via the Fed) and international investors.Significance: This is widely viewed as a proxy for Foreign Demand. A strong Indirect number (e.g., 65% or higher) suggests that foreign entities remain confident in the US Dollar and US debt, which is generally supportive of the USD.4. Direct BiddersThese are non-primary dealer institutions that place bids directly with the Treasury.Who they are: Domestic money managers, hedge funds, pension funds, insurers, and occasionally individuals.Significance: This is a proxy for Domestic Demand. If the Direct bid percentage rises, it often signals that US-based investment funds see value in the current yield levels.5. Dealers (Primary Dealers)Primary Dealers are large banks (like Goldman Sachs, JPMorgan, etc.) that are obligated to bid in Treasury auctions to ensure the debt gets sold.Role: They act as the "backstop." They buy whatever the Indirect and Direct bidders do not.Interpretation: You generally want to see the Dealer award be low.Low Dealer Award (e.g., <15%): Bullish. Real investors bought the debt, leaving the banks with very little "inventory" they have to sell later.High Dealer Award (e.g., >25%): Bearish. Real investors didn't show up, forcing the banks to absorb the supply. This creates "indigestion" because dealers will immediately try to sell that debt into the secondary market, pushing yields up. This article was written by Greg Michalowski at investinglive.com.