Articles

Summary:

• China extends policy allowing disposal of bad personal loans

• Aim is to support banks amid rising defaults and weak margins

• Transfers of bad personal loans surged sharply last year

• Credit card loan stress remains a key concern

• Regulators prioritising balance-sheet stability

China’s financial regulators have moved to extend a key policy allowing banks and asset management firms to dispose of non-performing personal loans, signalling a renewed push to stabilise balance sheets as credit stress builds and profitability comes under pressure.

According to sources familiar with the matter, report Bloomberg (gated), the National Financial Regulatory Administration (NFRA) issued guidance last week extending rules that permit the transfer and sale of soured personal loans and non-performing single-borrower corporate loans beyond their original end-2025 deadline. The policy, first introduced in early 2021, had been due to expire next year.

The extension highlights regulators’ growing concern over deteriorating asset quality, particularly in consumer finance. Rising defaults on credit cards and other personal loans have become a notable strain for banks, even as broader economic conditions remain uneven and household confidence fragile. By allowing greater flexibility in offloading bad assets, authorities are seeking to prevent further pressure on capital ratios and preserve financial stability.

Chinese lenders have already stepped up efforts to clean up their balance sheets. Transfers and write-offs of distressed assets have accelerated sharply as net interest margins have fallen to record lows, squeezing profitability and reducing banks’ capacity to absorb losses organically. Official data cited by local media show transfers of bad personal loans reached 37 billion yuan in the first quarter of last year, more than eight times higher than the same period a year earlier.

Within that total, transfers of non-performing credit card loans rose to 5.19 billion yuan, underlining stress in unsecured consumer lending. The surge in activity points to a more proactive approach by banks to managing problem assets, though transparency has become more limited after the official credit asset transfer centre suspended regular disclosure of detailed figures.

For policymakers, the extension of the disposal framework reflects a balancing act. Regulators want banks to recognise and resolve bad loans more quickly, but without triggering a sharp tightening in credit conditions or undermining confidence in the financial system. Allowing continued asset transfers to specialised management firms provides a pressure valve at a time when economic recovery remains patchy.

Overall, the move reinforces Beijing’s message that financial stability remains a priority, even as rising defaults and weak margins underscore the challenges facing China’s banking sector in the current cycle.

This article was written by Eamonn Sheridan at investinglive.com.

Summary:

• Japan services PMI slowed to 51.6, weakest since May

• New order growth softened despite renewed export demand

• Employment rose at fastest pace since mid-2023

• Input costs and selling prices accelerated sharply

• Business confidence remains historically strong

Japan’s service sector continued to expand in December, but at its slowest pace in seven months, signalling a loss of momentum as 2025 drew to a close, according to the latest survey data from S&P Global.

The Services PMI Business Activity Index slipped to 51.6 in December from 53.2 in November, marking the softest pace of expansion since May. While activity remained in growth territory for a ninth consecutive month, the moderation points to cooling demand conditions across large parts of the sector. Finance and insurance firms remained the standout performers, recording the strongest rise in activity among the major service industries surveyed.

New business volumes also increased at a slower and only modest rate, reflecting mixed demand conditions. Some firms cited improved customer flows and new project wins, while others reported subdued client activity. Notably, total new order growth slowed despite a return to growth in export services demand, the first such increase since June, highlighting tentative improvement in foreign demand.

Employment trends remained a clear bright spot. Service-sector hiring accelerated sharply, with staff numbers rising at the fastest pace since May 2023. Firms pointed to higher sales volumes and efforts to fill long-standing vacancies, while a renewed rise in outstanding business suggested growing capacity pressures that supported additional hiring.

Cost dynamics, however, remained challenging. Input cost inflation accelerated to its highest level since May, driven by rising prices for labour, raw materials, fuel, equipment and construction inputs. These pressures were passed through to customers, with output charges rising at a historically strong pace, reinforcing concerns that services-led inflation remains sticky.

The broader private-sector picture also softened. The Composite PMI Output Index eased to 51.1 from 52.0, the slowest expansion since May, as services growth moderated while manufacturing output broadly stabilised after a prolonged downturn. Composite new orders rose only slightly, though foreign demand for goods and services declined at the slowest pace in nine months.

Despite softer momentum, business confidence remained elevated. Firms expressed optimism that new product launches, store openings and improving demand conditions would support activity through 2026, even as they balance rising costs against increasingly price-sensitive customers.

This article was written by Eamonn Sheridan at investinglive.com.

Australian CPI November 2024

Headline y/y 3.4%

• expected 3.7%, prior 3.8%

Headline m/m 0.0%

• prior 0%

Trimmed Mean y/y 3.2%

• expected 3.2%, prior 3.3%

Trimmed Mean m/m 0.3%

• prior 0.3%

Posting the data here for quick access, detail on a separate post soon.

Summary:

This article was written by Eamonn Sheridan at investinglive.com.

Summary:

• Rubio says U.S. threats against Greenland do not signal an imminent invasion. (Wall Street Journal, gated)

• Administration still discusses buying the island from Denmark.

• European leaders warn force would imperil NATO.

• Greenland officials reject being sold or taken.

• Arctic competition with Russia and China underpins strategic interest.

Secretary of State Marco Rubio has sought to calm alarms among U.S. lawmakers over recent statements from the Trump administration about Greenland, clarifying that aggressive rhetoric does not mean an imminent military action to seize the Arctic island. Rubio told congressional leaders that Washington’s goal remains negotiating a purchase of Greenland from Denmark, not undertaking an invasion, according to people familiar with the briefing.

The remarks come amid increasingly combative comments from the White House, where senior officials including President Donald Trump have publicly refused to rule out force as an option in securing control of the semi-autonomous territory. White House spokespeople have framed Greenland’s strategic location in the high Arctic, at the crossroads of Russian and Chinese military interest, as a national security priority for the United States.

For now, Rubio’s comments suggest the administration hopes to temper fears in Washington that recent threats equate to a planned assault. The secretary of state’s reassurance came during a closed briefing focused primarily on broader security issues, where he emphasised that discussions with Copenhagen are ongoing and that market-moving military action is not planned.

The controversy has, however, drawn sharp rebukes from European allies. Leaders from several NATO members have publicly defended Greenland’s sovereignty and warned that any attempt to use force against a territory of a treaty ally would undermine the alliance itself, with Denmark’s prime minister saying such a move could spell the end of NATO cooperation.

Greenland’s own leadership has also rejected the notion of being sold or forcibly acquired, underscoring the island’s right to self-determination and railing against external pressure. Polls show overwhelming local opposition to U.S. control, reflecting deep concerns over sovereignty and regional stability.

The episode highlights rising geopolitical competition in the Arctic, where Russia and China are expanding their presence. While Washington’s emphasis on data, minerals and strategic positioning underscores Arctic importance, allies stress that cooperation, not coercion, must guide future engagement.

This article was written by Eamonn Sheridan at investinglive.com.

• Senior US official: US acquisition of Greenland is “not going away”
• US final S&P Global Services PMI 52.5 vs 52.9 prelim
• Fed’s Barkin: Tax changes, deregulation and rate cuts should add stimulus this year
• Germany December preliminary CPI +1.8% vs +2.1% y/y expected
• So many false starts but peace looks increasingly possible in Ukraine

Markets:

• Gold up $41 to $4489
• Silver up 6% to $80.64
• WTI crude down $1.31 to $57.07
• US 10-year yields up 1 bps to 4.17%
• S&P 500 up 0.65%
• AUD leads, CHF lags

Equity market steadily climbed higher on Tuesday while crude trended lower. The big winner was silver which caught fire again, including a late flourish to a 6% gain. The US continues to talk about annexing Greenland and a White House statement put a military option on the table. That certainly didn’t hurt the bid in precious metals, which also saw gold test $4500 before backing off slightly.

The Australian dollar hit a fresh one-year high late in the day as money continues to look for a South Pacific refugre, a place that’s largely immune from that tariff worries while also benefiting from the bull market in commodities.

The US Supreme Court scheduled a decision day for Friday and that’s the first possible tariff decision data, so it adds to Friday’s NFP drama and intrigue.

Generally, the US dollar was stronger on the day but the moves were modest and mostly unwound yesterday’s decline.

In equities, memory names were the big winners led by a 8% gain in Texas Instruments. Amazon led the megacap names with a 3.4% rally, something I wrote about.

Tomorrow we get the latest ADP data and it comes with markets pricing in a 23% chance of a January Fed cut.

This article was written by Adam Button at investinglive.com.

Two things are hitting at once and they’re surely related. The first is from an unnamed US official quoted by Reuters but it came simultaneously with a White House statement saying:

• Trump has made clear that acquiring Greenland is a ‘national security priority’
• Trump would like to acquire Greenland during his term
• Trump and advisors discussing options including purchasing it from Denmark or forming a compact of free association
• Utilizing the military is always an option

That last one is the real kicker.

What a bizarre saga this is, straight mafia stuff. Anything untoward or violent would certainly force the EU to go from ‘strong levels of concern’ to actual repercussions, if only on trade.

This article was written by Adam Button at investinglive.com.

Some time in the not-too-distant future, markets are going to be hit with headlines about the US Supreme Court on tariffs.

Technically, they have until late-June to rule but because this was an expedited hearing, that’s likely to come much sooner. It was looking like the earliest option would be the week of January 19 based on the Court’s schedule but today that scheduled changed. Friday has been announced as a ‘decision day’.

This is how the court usually operates. There is a 1-3 day ‘heads up’ that a decision is coming but no indication of which cases will be decided. It could be tariffs or a myriad of other cases before the court. We will have to be ready for until it’s announced, which is usually at 10 am ET.

Arguments in early November suggested the court was skeptical that Trump had authority to impose the tariffs under a 1977 law. Kalshi pegs the odds at 70/30 that tariffs are struck down so that’s a good guide on what’s priced in but the stakes are high.

Some trades to consider on both sides of the decision:

1) Import-heavy retailers (gross margin relief + fewer price hikes)

• XRT, COST, WMT, TGT, AMZN, BBY

2) Apparel & footwear (sourcing-heavy, high sensitivity to landed costs)

• NKE, GAP, RL

3) Consumer discretionary factor (tax-cut-like effect for goods)

• XL, FIV, ELF

4) Housing / “stuff in the house” supply chain (materials + fixtures + appliances)

• ITB, LEN, W, RH

5) Downstream manufacturers (big metal users; tariffs are a cost)

• CAT, DE, PCAR, ETN

6) Autos & cross-border supply chains (North America / global OEMs)

• GM, F, TM

7) USMCA currencies

• You can buy MXN or CAD or the country ETFs EWW (Mexico), EWC (Canada)

If tariffs are upheld, you could see a benefit in the steel names but those are protected under separate Section 232 tariffs that aren’t at risk from the Supreme Court, so I would buy a dip in steel names at some point (maybe not right after the decision). It’s similar for aluminum.

I also believe that one of the cleanest trades on the tariff ruling is gold as it should weaken if tariffs are blocked and pop if they’re upheld.

Some names that could do well if tariffs are upheld

1. Reshoring / factory build-out / industrial capex (picks-and-shovels)

• XLI, FLR, PWR, J, ROK, PH

2. Inflation/uncertainty hedges (if tariffs = higher prices + noisier growth)

• XLE (energy as hedge)

• GDX (gold miners as uncertainty/stagflation hedge)

3. Bonds as uncertainty rises

• If the Supreme Court supports fentanyl tariffs as a national emergency, what else might they support?

I would also keep a very close eye on the above names in the lead-up to Friday because everything leaks lately and it’s open season on insider trading.

There is plenty of nuance at stake about whether the Supreme Court leaves other paths open and whether tariffs are refunded (unlikely) but it’s something to think about for the next two days.

This article was written by Adam Button at investinglive.com.

Could today be the pivot we’ve been waiting for?

The big news out of Ukraine meetings in Paris is that the US appears to be supporting security guarantees for Ukraine with its military. The four-year anniversary of the war is Feb 24 and hopefully we can get a ceasefire before then.

The headlines crossing the wires from Paris today are painting an increasingly constructive picture. While markets have learned to be skeptical of geopolitical headlines, the coordination displayed today by the “Coalition of the Willing” feels substantial.

The meeting between Zelenskiy, Macron, Starmer, and US envoys has produced a “Declaration of Paris,” and for investors, the details regarding security guarantees are the key takeaway.

Here is a look at why today’s news matters for the risk outlook.

1. Clarity on US Involvement

One of the persistent market fears has been the ambiguity of U.S. support in a post-conflict scenario. Today offered some necessary clarity. Macron’s comments on a “US backstop” and Envoy Witkoff’s statement that they are prepared to “do anything necessary” suggest a firmer commitment than previously.

2. Rebuilding

Reconstruction is a major theme in the headlines. The discussion of a “prosperity agreement” linked directly to security protocols is significant. It signals that the West is looking to anchor peace through economic integration. For European markets, this is a potentially strong signal for future growth, though the timeline remains an open question.

3. “Hardest Yards” Still Ahead

It is important to keep the optimism in check. PM Starmer rightly noted that the “hardest yards are still ahead,” and Zelenskiy acknowledged that “territorial issues” were discussed—likely the most difficult part of any negotiation. However, agreeing on a legal framework for security guarantees is a necessary precondition for those difficult talks to proceed. It’s a milestone, even if it’s not yet the finish line.

The market has been gradually pricing out extreme geopolitical risks and I wonder if peace is already priced in but there are some clear trades if not:

• EUR/USD: The euro stands to benefit from any reduction in regional instability and it was the top performer last year after years of struggles. A credible path to peace removes a significant structural drag on the currency.

• European Equities: Stability is the primary requirement for capital flows. If these security guarantees look durable, it improves the long-term case for European assets, particularly in sectors tied to infrastructure and reconstruction.

• Gold: If the geopolitical temperature lowers significantly, the safe-haven premium in gold could face some headwinds, though this will likely be a slow grind rather than a sudden drop. Then again, one war ending just puts the superpowers on course for a different one in a world that’s increasingly unmoored.

This article was written by Adam Button at investinglive.com.

• Prelim was 52.9
• Prior was 54.1

Chris Williamson, Chief Business Economist at S&P Global
Market Intelligence:

“Business activity continued to expand in December, rounding
off another quarter of robust growth, but the resilience of
the US economy is showing signs of cracking. New business
placed at services providers showed the smallest rise in some
20 months which, accompanied by the first fall in orders
placed at manufacturers for a year, points to a broad-based
weakening of demand growth.

“Not only has service sector business activity slowed in
response to concerns over order books, with the December
surveys signaling the weakest economic expansion since last
April, but the number of companies cutting headcounts has
exceeded those reporting higher employment for the first
time since February.

“We also enter 2026 with future output expectations running
much lower than seen at the start of 2025, fueling concerns
that December’s slowdown and job market malaise could spill
over into the new year.

“Confidence has been dampened principally by uncertainty
over government policy and the broader economic outlook,
with tariffs and affordability featuring as common threads
throughout companies’ more cautious views on their
prospects.

“These affordability worries are underscored by companies
reporting an increased impact of tariffs on both input costs
and selling prices in December, suggesting we could see the
unwelcome combination of slower economic growth and
stubbornly high inflation at the start of the new year.

“However, there is an expectation among many companies
that lower interest rates and government policy will start to
boost demand again as the new year proceeds.”

This article was written by Adam Button at investinglive.com.

• Prior +2.3%
• HICP +xx% vs +2.2% y/y expected
• Prior +2.6%

This article was written by Giuseppe Dellamotta at investinglive.com.

• ASX 200 braces for impact with Australia’s CPI release: How is the market likely to react?
• AUDUSD Technical Analysis: Big day for Australia tomorrow with the inflation data release
• UK December final services PMI 51.4 vs 52.1 prelim
• German states see softer headline inflation readings in December
• Eurozone December final services PMI 52.4 vs 52.6 prelim
• Germany December final services PMI 52.7 vs 52.6 prelim
• France December final services PMI 50.1 vs 50.2 prelim
• Italy December services PMI 51.5 vs 54.0 expected
• USDJPY Technical Analysis: The focus turns to Japanese wage data, US NFP
• Spain December services PMI 57.1 vs 54.5 expected
• France December preliminary CPI +0.8% vs +0.9% y/y expected
• What are the main events for today?
• Japanese bonds selloff continues to run in the new year
• FX option expiries for 6 January 10am New York cut

The main highlights of the session were the French and German states CPI readings. The data missed across the board but didn’t really change anything for the ECB, which is widely expected to remain on hold for 2026. We had also the final PMI readings for the major Eurozone economies and the UK, and although the data was mixed, it leant on the slightly softer side.

The US dollar recovered some of the losses seen yesterday after the soft US ISM Manufacturing PMI. The general price action is still cautious as we await the US NFP report on Friday and then the US CPI next week. The market pricing for the major central banks hasn’t changed in the past couple of weeks as traders await the key data releases.

In the equities space, the mood remains positive with most major stock indices seeing gains on the day. Precious metals remain well supported with gold up 0.35% and silver more than 2%. The upward momentum is still intact amid the Fed’s dovish reaction function and the recent soft US data. US Treasuries, on the other hand, remain in the same old range since September with long-term rates seeing more upward pressure compared to short-term ones.

We don’t have much on the agenda in the American session, but from tomorrow we will start getting lots of important economic reports beginning with the Australian monthly CPI.

This article was written by Giuseppe Dellamotta at investinglive.com.

• Prior 51.3
• Final Composite PMI 51.4 vs 52.1 prelim
• Prior 51.2

Key findings:

• Business activity expansion remains marginal
• Renewed upturn in new orders
• Input cost inflation accelerates to seven-month high

Comment:

Tim Moore, Economics Director at S&P Global Market
Intelligence, said:

“Lacklustre business activity growth continued across
the UK service sector at the end of 2025. Moreover, the
speed of expansion was softer than signalled by the
earlier ‘flash’ survey in December and lower than seen
on average in the second half of the year.

“The most positive development was a renewed upturn
in new business intakes, following a slight decline during
November. Modest growth of incoming new work was
attributed to tentative signs of a recovery in client
confidence after an extended period of pre-Budget
gloom. Order books were also supported by a marginal
rebound in export sales.

“However, survey respondents still noted sales
headwinds linked to weak UK economic prospects,
alongside challenging operating conditions due to
factors such as sharply rising business costs and soft
demand in major overseas markets. Worries about
squeezed margins and broader growth prospects
contributed to another marked reduction in service
sector employment during December.

“Meanwhile, inflationary pressures across the service
economy strengthened at the end of the year. Input
prices rose to the greatest extent for seven months, and
output charge inflation rebounded from November’s
recent low, despite the subdued demand backdrop.”

This article was written by Giuseppe Dellamotta at investinglive.com.