IC Markets Global – Europe Fundamental Forecast | 10 December 2025

IC Markets Global – Europe Fundamental Forecast | 10 December 2025

What happened in the Asia session?
China’s November CPI rose 0.7% year-on-year, matching expectations and accelerating from October’s 0.2%, while month-on-month it fell 0.1%; PPI declined 2.2% year-on-year, deeper than the forecasted 2.0% drop and extending deflationary pressures. No major Japanese data releases occurred during the session, with focus shifting to later low-impact items like BSI surveys and foreign investment flows. Markets reacted amid anticipation for US Fed decisions, with Asian equities easing: Nikkei down amid yen weakness, Hang Seng falling 1.2% on China price concerns, CSI 300 off 0.91%, and GIFT Nifty signaling a lower open.

What does it mean for the Europe & US sessions?
Traders must watch the pivotal FOMC rate decision and dot plot at 2:00 PM ET, where markets price a likely 25bps cut amid hawkish dissent risks, potentially sparking volatility in equities, dollar, and rates. The preceding 8:30 AM ET US Employment Cost Index offers critical wage data (last at 3.6% YoY), influencing Fed projections, while subdued European calendars leave focus on sentiment upticks like ESI at 96.8 and China’s looming CPI amid soft Asian opens (CSI 300 -0.91%). Overnight mixed US closes and GIFT Nifty downside signal caution, with no ECB action until later, prioritizing these US catalysts for directional trades.​

The Dollar Index (DXY)

Key news events today

Employment Cost Index q/q (1:30 pm GMT)

Federal Funds Rate (7:00 pm GMT)

FOMC Economic Projections (7:00 pm GMT)

FOMC Statement (7:00 pm GMT)

FOMC Press Conference (7:30 pm GMT)

What can we expect from DXY today?

The US Dollar Index (DXY) stands near 99, following a rise to 99.23 on December 9 amid market anticipation for the Federal Reserve’s interest rate decision expected today, potentially including a 0.25% cut as the third of 2025. Markets remain focused on the Fed’s final meeting of the year, with growing divisions among officials and recent economic data like PCE inflation shaping expectations for policy easing, which has contributed to the dollar’s recent weakness, down 0.36% over the past month and 6.74% yearly.

Central Bank Notes:

• The Federal Open Market Committee (FOMC) is widely expected to lower the federal funds rate target range by 25 basis points to 3.50%–3.75% at its December 9–10, 2025, meeting, marking the third consecutive cut after the October reduction to 3.75%–4.00%
• The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market showing further softening as the unemployment rate rose to 4.4% in September 2025 amid modest job gains.
• Officials note persistent downside risks to growth alongside resilient activity, with inflation easing to 3.0% year-over-year CPI in September but remaining elevated due to tariff effects; core PCE stands at around 2.8% as of October.
• Economic activity grew at a 3.8% annualized pace in Q2 2025 per revised estimates, though Q3 and Q4 face headwinds from trade tensions, fiscal restraint, and data disruptions like the government shutdown.
• September’s Summary of Economic Projections forecasts 2025 unemployment at a median 4.5%, with PCE inflation near 3.0% and core PCE at 3.1%, signaling a gradual disinflation path; updates expected on December 10 may adjust for higher unemployment and lower growth.
• The Committee maintained its data-dependent approach, noting a softening labor market and inflation above the 2% target, while deciding to lower the federal funds rate target range by 25 basis points to 3.50%-3.75%. Dissent persisted, with multiple members opposing the cut or advocating for a hold, reflecting divisions similar to recent meetings.​
• The FOMC confirmed the conclusion of its quantitative tightening program effective December 1, 2025, with Treasury rolloff caps at $5 billion per month and agency MBS caps at $35 billion per month to ensure ample reserves and market stability.
• The next meeting is scheduled for  27 to 28 January 2026.

Next 24 Hours Bias
Medium bearish

Gold (XAU)

Key news events today

Employment Cost Index q/q (1:30 pm GMT)

Federal Funds Rate (7:00 pm GMT)

FOMC Economic Projections (7:00 pm GMT)

FOMC Statement (7:00 pm GMT)

FOMC Press Conference (7:30 pm GMT)

What can we expect from Gold today?

Gold prices showed modest gains amid global market fluctuations, with spot gold trading around $4,212 per ounce after rising 0.54% the previous day, supported by its role as a safe-haven asset during Middle East geopolitical tensions following regime changes in Syria. In Indian markets, 24K gold recovered by ₹180 to ₹77,940 per 10 grams in Delhi, with similar upticks in Mumbai and other cities at ₹77,790, while silver held flat at ₹91,900 per kg due to mixed industrial demand. Traders remain cautious ahead of key US inflation data (CPI) and Federal Reserve decisions expected today, which could influence the dollar and gold’s trajectory, with forecasts suggesting potential declines to around $4,060 if data surprises to the upside.​

Next 24 Hours Bias   
Medium Bullish

The Euro (EUR)

Key news events today

ECB President Lagarde Speaks (10:55 am GMT)

What can we expect from EUR today?

The euro (EUR) traded steadily around 1.1628 against the US dollar, marking a slight 0.01% decline from the prior session but holding near its strongest levels since mid-October amid hawkish signals from the European Central Bank (ECB). ECB Executive Board member Isabel Schnabel expressed comfort with market expectations for potential rate hikes, citing upside risks to both growth and inflation, bolstered by robust eurozone business activity expanding at its fastest pace since May 2023 and November inflation ticking up to 2.2%. Diverging monetary policies with the US Federal Reserve widely expected to cut rates by 25 basis points this week further supported the euro’s resilience, alongside ongoing Ukraine peace talks that could enhance Europe’s energy security if progress materializes.

Central Bank Notes:

• The Governing Council of the ECB kept the three key interest rates unchanged at its 30 October 2025 meeting. The main refinancing rate remains at 2.15%, the marginal lending facility at 2.40%, and the deposit facility at 2.00%. This decision reflects policymakers’ assessment that the current monetary stance remains consistent with medium-term price stability, while incoming data confirm a gradual return of inflation towards the target.
• Recent indicators point to stable price dynamics. Headline inflation remains near the 2% mark, with energy prices contained and food inflation easing slightly after earlier supply bottlenecks. Wage growth continues to moderate, contributing to the slowdown in domestic cost pressures. The ECB reiterated its commitment to a data-driven, meeting-by-meeting approach and emphasized flexibility amid uncertain global financial conditions.
• Eurosystem staff projections have not been materially altered since September. Headline inflation averages remain at 2.0% for 2025, 1.8% for 2026, and 2.0% for 2027. Recent softening in producer prices and subdued pipeline pressures suggest limited upside risks to inflation, though geopolitical tensions and potential commodity shocks continue to pose uncertainties to the outlook.
• Euro area GDP growth remains on track with earlier forecasts, projected at 1.1% for 2025, 1.1% for 2026, and 1.4% for 2027. Forward-looking indicators, including PMIs and industrial sentiment surveys, signal some stabilization in activity following weakness in the third quarter. Public investment and recovering export activity are expected to offset softer private sector demand in the near term.
• The labor market remains resilient, with unemployment rates at multi-decade lows and participation rates strong. Real income growth continues to support household spending, even as consumption growth normalizes from earlier highs. Financing conditions remain favorable, supported by stable banking-sector liquidity and improved credit demand among small and medium-sized firms.
• Business sentiment remains mixed, reflecting lingering uncertainty over global trade policy and the path of US tariffs. However, easing supply chain costs and improved export competitiveness due to softer exchange rates are providing some relief to manufacturing and external-oriented sectors.
• The Governing Council reaffirmed that future decisions will depend on an integrated assessment of incoming data—covering inflation trends, financial conditions, and the state of policy transmission. The Council emphasized that no pre-set path for rates exists; keeping all options open should the economic outlook shift markedly.
• Balance sheet reduction continues smoothly, with holdings under the APP and PEPP declining as reinvestments have ceased. The ECB confirmed that the pace of portfolio runoff remains in line with its previously communicated normalization plan, supporting a gradual withdrawal of monetary accommodation in a predictable manner.
• The next meeting is on 17 to 18 December 2025

Next 24 Hours Bias
Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news event

What can we expect from CHF today?

The Swiss Franc (CHF) remains strong near 2021 highs against the USD at around 0.80-0.8061, with USD/CHF down 0.11-0.15% on December 9 amid safe-haven demand and SNB policy expectations. Traders anticipate the Swiss National Bank to hold rates at 0% in its final 2025 meeting, despite CPI stagnation in November and deflation risks, as officials tolerate temporary negative inflation while eyeing slight rises ahead.

Central Bank Notes:

• The SNB maintained its key policy rate at 0% during its meeting on 25 September 2025, pausing a sequence of six consecutive rate cuts as inflation stabilized and the Swiss franc remained firm.
• Recent data showed a modest rebound in inflation, with Swiss consumer prices rising 0.2% year-on-year in August after staying above zero for three consecutive months; this helped alleviate fears of deflation that were mounting earlier in the year.
• The conditional inflation forecast remains broadly unchanged from June: headline inflation is expected to average 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027. The risk of a negative rate move has diminished for now, but the SNB retains flexibility should inflationary pressures weaken again.
• The global economic outlook has deteriorated further, weighed down by heightened trade tensions—especially with the U.S.—and ongoing uncertainty in key Swiss export markets.
• Swiss GDP growth moderated in Q2 after a strong Q1 boosted by front-loaded U.S. exports. The SNB expects growth to slow and remain subdued, with forecasted GDP expansion between 1% and 1.5% in both 2025 and 2026.
• Labor market sentiment in the Swiss industrial sector has softened on concerns over export competitiveness and potential adjustments to production, but the overall growth outlook stays broadly unchanged
• The SNB reiterated its readiness to respond as needed if deflation risks re-emerge, emphasizing its commitment to medium-term price stability and a robust, transparent communication policy, with the introduction of more detailed monetary policy minutes beginning in October.
• The next meeting is on 11 December 2025.

Next 24 Hours Bias
Medium Bullish

The Pound (GBP)

Key news events today

No major news event

What can we expect from GBP today?

The British Pound (GBP) showed modest stability around the $1.33 mark against the USD on December 10, 2025, following a slight dip the previous day amid anticipation of Federal Reserve policy signals and UK economic data. Against the EUR, the pound maintained strength above €1.21 from earlier December peaks, buoyed by Bank of England (BoE) expectations of less aggressive rate cuts compared to the ECB.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) met on 6 November 2025 and voted 7–2 to keep the Bank Rate unchanged at 4.00 percent for a second consecutive meeting. The decision reflects the Committee’s cautious approach as inflation remains above target, but underlying economic momentum continues to weaken. Two members maintained their votes for a 25-basis-point cut, citing further signs of labor-market softening and weak business sentiment.
• The BOE adjusted its guidance on quantitative tightening (QT), maintaining the reduced pace established in September. The planned reduction of UK government bond holdings remains at £67.5 billion over the next 12 months, leaving the current gilt balance near £550 billion. Policymakers described the recalibrated QT path as “appropriate for current market conditions,” emphasizing the importance of liquidity management amid heightened volatility.
• Headline inflation moderated slightly to 3.6 percent in October from 3.8 percent previously, driven by easing food and transport prices. However, core inflation has shown only gradual progress, holding near 3.9 percent. The MPC noted that services inflation and administered energy costs continue to exert pressure, highlighting the challenge of achieving the 2 percent target sustainably. The Committee’s latest projections see inflation falling toward 3 percent by mid-2026, with further downside expected if energy and wage dynamics continue to normalize.
• Economic activity remains subdued. Estimates place Q3 GDP growth close to zero, with both business output and consumer spending restrained. The unemployment rate has edged up to 4.8 percent, while pay growth cooled to just under 5 percent year-on-year. MPC members acknowledged that pay settlements are weakening further, signaling an easing in labor cost pressures as demand softens. Surveys from the manufacturing and services sectors suggest muted hiring intentions through year-end.
• International factors continue to complicate the policy outlook. Fluctuating oil prices—partly linked to renewed Middle East tensions—alongside fragile global demand have contributed to higher market volatility. The MPC reiterated that external shocks, including global food and energy disruptions, could temporarily slow the disinflation path but remain unlikely to derail the medium-term moderation in prices.
• The Committee assessed risks around inflation as balanced. Downside risks arise from sluggish domestic growth and declining real income momentum, while upside risks remain tied to elevated inflation expectations and stubborn services inflation. Policymakers emphasized the need for patience, maintaining that any rate cuts ahead of clear inflation progress could undermine confidence in policy credibility.
• The MPC’s overall stance remains restrictive but increasingly balanced, with future moves expected to follow a cautious, data-driven trajectory. The Committee reaffirmed that monetary policy will stay tight until there is compelling evidence that inflation is returning to the 2 percent target on a durable basis.
• The next meeting is on 18 December 2025.

  Next 24 Hours Bias
  Medium Bullish

The Canadian Dollar (CAD)

Key news events today

BOC Rate Statement (2:45 pm GMT)

Overnight Rate (2:45 pm GMT)

What can we expect from CAD today?

The Canadian Dollar (CAD), or loonie, has shown strength recently, trading above 72 US cents amid anticipation for the Bank of Canada’s interest rate decision today, December 10, 2025, where rates are expected to hold steady at 2.25% the low end of its neutral range, while markets price in a Federal Reserve rate cut to 3.75%. Recent jobs data beating estimates for the third month has propelled the CAD to a 10-week high, supported by bullish forecasts targeting 77 US cents by 2026 due to narrowing interest rate differentials with the US, stable oil prices, and positive risk sentiment.

Central Bank Notes:

• The Council noted that U.S. tariff tensions have eased slightly following early progress in bilateral discussions, though the external trade environment remains fragile. Businesses continue to hold back on long-term investment, with the Bank highlighting that sustained clarity on U.S. trade policy is needed to restore confidence.
• The Bank acknowledged that uncertainty persists despite the softer U.S. tone, as incoming data show limited improvement in export orders. The manufacturing sector has stabilized but remains below pre-2024 output levels, reflecting weak global demand and cautious corporate spending.
• Canada’s economy showed tentative signs of recovery in early Q4, with GDP estimated to expand by 0.3% in October after two quarters of contraction. Mining and energy activity strengthened modestly, aided by steady crude demand, while goods exports posted a fractional gain.
• Service sector growth remained uneven, supported mainly by tourism-related and technology services. However, retail spending and household consumption were subdued, constrained by slower job creation and lingering consumer caution. The Bank judged overall momentum as fragile but improving marginally.
• Housing activity showed modest reacceleration in major urban markets as mortgage rates stabilized near record lows. Nonetheless, affordability pressures and stricter lending standards continue to limit overall resale volumes, resulting in only a gradual recovery in the housing sector.
• Headline CPI inflation rose to 2.1% in October, reaching the Bank’s target for the first time in six months. Higher energy prices and a modest uptick in food and shelter costs drove the increase. Core inflation measures remained stable, suggesting underlying price pressures are contained.
• The Governing Council reiterated its data-dependent stance, indicating that the current policy rate remains appropriate amid tentative growth and balanced inflation risks. Officials noted that while additional stimulus is not ruled out, the emphasis has shifted toward monitoring the sustainability of the recovery rather than immediate rate adjustments.
• The next meeting is on 17 to 18 December 2025.

Next 24 Hours Bias
Medium Bullish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

On Wednesday, the oil market remained cautious with prices stabilizing after recent declines, driven by Iraq’s quick resumption of output at a major field, offsetting geopolitical tensions from Ukraine talks and U.S.-Venezuela issues; traders await critical IEA and Fed updates amid projections of ample 2026 supply weighing on sentiment. Bearish momentum persists below key supports like $61.95 for Brent, with risks of further declines to $58-60 if oversupply confirms, though Fed decisions could provide short-term support.

Next 24 Hours Bias
Medium Bearish

The post IC Markets Global – Europe Fundamental Forecast | 10 December 2025 first appeared on IC Markets | Official Blog.