Articles

Summary:

• RICS sees sales expectations turn significantly more positive

• House price balance steady, but activity remains weak

• Rate-cut expectations and fiscal clarity lift housing sentiment

• UK climbs to third in global FDI rankings, McKinsey says

• AI and clean energy dominate inflows, manufacturing lags

Britain’s housing market showed tentative signs of stabilisation in December, with surveyors turning more upbeat on the outlook for sales and prices despite ongoing weakness in current activity, according to the Royal Institution of Chartered Surveyors (RICS).

The RICS survey showed the headline house price balance holding at -14 in December, unchanged from November, though the prior month’s reading was revised slightly higher. While buyer enquiries remained in negative territory for a sixth consecutive month, near-term and 12-month sales expectations improved sharply. Expectations for sales volumes over the next three months rose to their highest level since October 2024, while optimism for the year ahead climbed to the strongest level since late 2024.

RICS attributed the improved sentiment to easing uncertainty around UK fiscal policy following Chancellor Rachel Reeves’ November budget, as well as growing confidence that borrowing costs will fall further as the Bank of England moves closer to interest-rate cuts. New vendor instructions stabilised after months of decline, though surveyors cautioned that low appraisal activity suggests any meaningful increase in housing stock will take time. Conditions in the rental market softened, with tenant demand easing and new landlord instructions remaining deeply negative.

In other news, Britain has climbed global rankings as a destination for foreign direct investment, helped by strong inflows linked to artificial intelligence and clean energy, according to consultancy McKinsey & Company.

McKinsey said the UK ranked as the world’s third-largest destination for newly announced FDI projects between 2022 and 2025, behind the United States and India, with annual inflation-adjusted inflows averaging around $85 billion. However, the firm warned that investment remains heavily concentrated in large AI and clean-energy projects, with comparatively little flowing into advanced manufacturing such as EV batteries and semiconductors, leaving Britain at risk of missing out on broader industrial investment.

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

more to come

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Earlier, repeating ICYMI:

Japan’s Producer Price Index (PPI), officially known as the Corporate Goods Price Index (CGPI), measures changes over time in the prices that domestic producers receive for the goods they sell. The index is compiled and published by the Bank of Japan, and is designed to capture price movements earlier in the supply chain than consumer-facing inflation gauges.

Unlike the Consumer Price Index (CPI), which tracks the prices households pay for a basket of goods and services, the CGPI focuses solely on prices charged by companies. As such, it provides insight into cost pressures facing producers rather than consumers. Movements in the index can therefore act as an early signal of inflationary forces building within the economy, particularly if firms attempt to pass rising costs on to end users.

The CGPI is constructed using a broad basket of domestically produced goods that reflects the structure of Japan’s industrial economy. This includes raw materials such as metals and chemicals, semi-finished goods, and a range of finished products. Each category is assigned a weight based on its relative importance to overall economic activity, allowing the index to capture shifts across different stages of production.

However, the CGPI has several limitations worth noting. It does not adjust for quality improvements over time, which means price increases may sometimes overstate underlying inflation. In addition, the index only covers domestically produced goods and excludes imported items, limiting its usefulness in assessing external price shocks such as exchange-rate moves or global commodity swings.

From a market perspective, the CGPI is closely watched for its implications for both consumer inflation and currency dynamics. A firmer-than-expected reading could support the view that pipeline inflation remains alive, potentially lending the yen short-term support. However, given the broader backdrop of expected fiscal stimulus, political uncertainty, and speculation over an early election, any yen strength following the release may struggle to persist once the initial reaction fades.

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

Summary:

• Two-thirds of Japan firms expect economy to suffer from frayed China ties

• Nearly half report or anticipate direct business impact

• Rare-earth supply risk flagged as critical vulnerability

• 43% may reassess China-linked business if tensions persist

• Majority back BOJ’s latest rate hike, citing yen risks

More than two-thirds of Japanese companies expect the domestic economy to suffer from deteriorating ties with China, according to a Reuters corporate survey, highlighting rising concern over geopolitics, supply chains and export exposure. Nearly half of firms said they are already seeing, or expect to see, a direct business impact from tensions with Japan’s largest trading partner.

Relations have worsened since Prime Minister Sanae Takaichi warned in November that a Chinese attack on Taiwan could pose an existential threat to Japan, a comment Beijing condemned as “provocative.” Since then, China has advised its citizens against travelling to Japan and imposed restrictions on exports of goods with potential military applications, stoking fears of tighter controls on rare-earth shipments critical to Japan’s automotive and electronics sectors.

The survey found that 9% of firms reported their business had already been affected, while a further 35% anticipate some impact. Tourism-linked sectors appear to be among the earliest casualties, with one transport operator citing falling Chinese visitor numbers weighing on hotel utilisation and room revenues. Manufacturers, meanwhile, flagged strategic vulnerability to China’s control over rare-earth processing, with one electronics executive describing policy shifts as a “matter of life and death.”

China still accounts for roughly 60% of Japan’s rare-earth imports despite years of diversification efforts. Reflecting this exposure, 43% of respondents said prolonged deterioration in bilateral relations would likely force a reassessment of China-related business, including sales, procurement and production footprints.

On monetary policy, sentiment was notably more settled. Almost two-thirds of firms judged the Bank of Japan’s latest interest-rate hike appropriate, backing the move to lift the policy rate to a 30-year high of 0.75%. Respondents broadly agreed that failing to normalise policy risks further yen depreciation, which many view as a longer-term drag on the economy. Looking ahead, opinions on the timing of the next hike were split, though most see further tightening as inevitable if growth and inflation track forecasts outlined by Kazuo Ueda.

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

• US November retail sales +0.6% vs +0.4% expected
• US November PPI final demand Y/Y +3.0% vs +2.7% expected
• US Supreme Court doesn’t issue decision on tariffs
• Beige Book: Overall activity increased at slight-to-modest pace in most districts
• Fedspeak recap: Odds of a January or March rate cut dwindle
• EIA weekly US crude oil inventories +3391K vs -1702K expected
• US Oct business inventories +0.3% vs +0.2% expected
• US existing home sales 4.35m vs 4.21m expected
• US Q3 current account -226B vs -238B expected
• Trump appears to have decided on a military strike against Iran – Reuters

Markets:

• Gold and silver hit fresh records
• WTI crude oil down $1.15 to $60.06
• US 10-year yields down 2.7 bps to 4.14%
• Bitcoin up 3.8%
• S&P 500 down 0.7%
• JPY leads, USD lags

Eyes were on the Supreme Court today but we didn’t get a tariff decision. There was some trepidation in markets ahead of time with stocks sliding but when no ruling was issued, there was a sizeable pop in stocks. Unfortunately, it slowly faded over the day and the S&P 500 was down more than 1% at the lows, with megacap tech names and financials dragging.

Gold and silver were in the spotlight once again with Iran and potential US attacks as a possible catalyst. Beyond that, gold did a nice turnabout to highs after some selling midway through yesterday’s US session. That was halted in Asia and there was a steady march higher today and a 7% further pop in silver to $93 for the first time ever.

The FX market was less action-packed as the US dollar mostly slid. The headline on the retail sales report was a touch better but revisions were lower and the core components a drag. Auto sales flattered the headline while better measures of consumer comfort were less-enthusiastic.

Comments from financials on the US consumer and lending outlook were positive but that didn’t stop a round of profit taking, including a 4% fall in Bank of America shares. The earnings continue on Thursday.

Oil was hit with a huge build in US gasoline inventories for the second week but with turmoil potentially coming in Iran, the crowded short in crude were getting out of the way in a squeeze as high as $62.36. However later in the day, Trump said that executions had stopped and there was a report that a high-profile one had been postponed. That was seen as de-escalatio and oil quickly fell more than $2/barrel. That’s the spot to watch in the day ahead.

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

Japan’s Producer Price Index (PPI), officially known as the Corporate Goods Price Index (CGPI), measures changes over time in the prices that domestic producers receive for the goods they sell. The index is compiled and published by the Bank of Japan, and is designed to capture price movements earlier in the supply chain than consumer-facing inflation gauges.

Unlike the Consumer Price Index (CPI), which tracks the prices households pay for a basket of goods and services, the CGPI focuses solely on prices charged by companies. As such, it provides insight into cost pressures facing producers rather than consumers. Movements in the index can therefore act as an early signal of inflationary forces building within the economy, particularly if firms attempt to pass rising costs on to end users.

The CGPI is constructed using a broad basket of domestically produced goods that reflects the structure of Japan’s industrial economy. This includes raw materials such as metals and chemicals, semi-finished goods, and a range of finished products. Each category is assigned a weight based on its relative importance to overall economic activity, allowing the index to capture shifts across different stages of production.

However, the CGPI has several limitations worth noting. It does not adjust for quality improvements over time, which means price increases may sometimes overstate underlying inflation. In addition, the index only covers domestically produced goods and excludes imported items, limiting its usefulness in assessing external price shocks such as exchange-rate moves or global commodity swings.

From a market perspective, the CGPI is closely watched for its implications for both consumer inflation and currency dynamics. A firmer-than-expected reading could support the view that pipeline inflation remains alive, potentially lending the yen short-term support. However, given the broader backdrop of expected fiscal stimulus, political uncertainty, and speculation over an early election, any yen strength following the release may struggle to persist once the initial reaction fades.

• This snapshot from the investingLive economic data calendar.
• The times in the left-most column are GMT, subtract 5 hours for the US Eastern time
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

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

• Prior was -3832K
• Gasoline +8977K vs +3565K exp
• Distillates -29K vs +512K exp

That’s a mammoth gasoline build on top of another huge one last week. It will be tough to keep oil prices up with that much product in the system.

Private oil inventories released late yesterday:

• Crude +5270K
• Gasoline +8230K
• Distillates +4340K

Given the private survey, the big build in the official numbers isn’t a huge surprise .That said, earlier oil gains have faded with WTI at $61.69 from a high of $62.10.

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

The US Supreme Court ruling on tariffs was potentially due today but four other decisions were rendered, and no word on tariffs. No other decision days have been announced for this week.

The IEEPA is a 1977 law that gives the President broad powers to regulate commerce after declaring a national emergency. Historically, it’s been the “sanctions button”—used to freeze assets of terrorists or rogue states. But the Trump administration dusted it off to impose sweeping tariffs, effectively using it as a trade weapon.

The legal battle (specifically cases like Trump v. V.O.S. Selections) boils down to one critical question: Does the power to “regulate” imports include the power to tax them?

Importers argue that “regulating” isn’t “taxing.” They say if Congress wanted the President to levy tariffs unilaterally, they would have said so. The government argues the statute is broad enough to cover it.

Why this matters for markets

If the Supreme Court rules against the government, the implications are staggering.

We are talking about potential refunds on tariffs collected under IEEPA. Estimates put this north of $150 billion. If importers (think big retail, tech, autos) get that cash back, it’s a massive injection of liquidity into corporate balance sheets.

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

Eyes will be on the US Supreme Court at 10 am ET (1500 GMT) as it delivers another decision.

We don’t know whether today’s decision will be on tariffs or something else. The Supreme Court doesn’t schedule its decisions, it only announces that a decision on one of the cases before it will be delivered today. We went through the same thing on Friday and tariff anticipation built up but the ultimate decision was on criminal law.

Betting sites saw a surge in the odds that tariffs will be struck down after oral arguments in November. A majority of Justices sounded skeptical that Congressional powers of taxation were being respected, or that the rule of law was being followed. If they’re struck down, the reasoning and remedy will be critical.

If the reasoning leans towards it being a ‘major questions’ problem, the other tariff remedies could also be under threat. If it’s more technical, then it clears the way for Trump to use other tariff powers to reconstitute tariffs, something that administration officials have pledged.

I looked at how the administration could pivot and use different tariff powers here.

The remedy is also a thorny issue. If the Supreme Court rules that tariffs must be refunded, then it would be a windfall for importers and a big hit to the US government’s finances. it’s nowhere near the ‘trillions’ that Trump often touts but the refunds would amount to around $130-$150 billion.

Last week, I wrote about the stocks that could be winners and losers on the tariff decision.

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

• Prior was +2.7%
• PPI M/M +0.2% vs 0.2% expected
• Prior +0.3%
• Core PPI Y/Y +3.0% vs +2.7% expected
• Prior +2.6%
• Core PPI M/M +0.0% vs +0.2% expected
• Prior +0.1%

The BLS notes that the November increase in prices for final demand can be traced to a 0.9-percent advance in the index
for final demand goods. Prices for final demand services were unchanged.

As a reminder, this is November data and besides being old news at this point, it could have the same shutdown related issues of the November CPI. I don’t expect the market to focus too much on the data because we already got the more important and more timely December CPI yesterday.

The market is pricing 54 bps of easing by year and that’s unlikely to change much with today’s data. The recent Fedspeak has shown zero interest for a rate cut in January even though the market still assigns it a 9% probability. The Fed projected just one cut in 2026 at the last policy meeting and we will need more labour market deterioration or bigger than expected fall in inflation to see them going faster on rate cuts.

We’ve seen minimal reaction to the data as expected.

WHAT THE US PPI MEASURES?

The Producer Price Index (PPI) is an economic indicator that measures the average change over time in the selling prices received by domestic producers for their output. In simpler terms, it tracks inflation from the perspective of the seller/business rather than the consumer like the Consumer Price Index (CPI).

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

• Prior was 0.0% (revised to -0.1%)

Details:

• Ex-autos +0.5% vs +0.4% expected
• Prior ex autos +0.4% (revised to +0.2%)
• Ex autos and gas +0.4% vs +0.5% prior (revised to +0.4%)
• Control group +0.4% vs +0.4% expected
• Prior control +0.8% (revised to +0.6%)
• Retail sales y/y % vs +3.47% prior

This is generally in-line on the headline but the overall report is a tad soft because of the revisions.

The US retail sales report is one of the market’s cleanest reads on the health of the American consumer, and by extension the broader economy. Released monthly by the Census Bureau, it tracks the dollar value of sales across a wide range of retailers, from autos and gas stations to restaurants and online stores. Because consumer spending accounts for roughly two-thirds of US GDP, the report carries real weight for growth expectations and interest-rate pricing.

Markets tend to focus on the “control group,” which strips out autos, gasoline, building materials, and food services. That subset feeds directly into GDP calculations and often matters more than the headline. Strong retail sales suggest resilient demand, firmer pricing power, and less urgency for rate cuts. Weak numbers raise questions about consumer fatigue, credit stress, and the durability of the expansion.

It’s a noisy report, prone to revisions and seasonal quirks, but when trends persist, markets listen.

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

Headlines:

• Japanese Yen rebounds amid barrage of verbal intervention and “sell the fact” trade
• Japan’s finance minister offers up an oddly specific comment
• Tokyo officials intensify verbal intervention on the Japanese yen
• Nippon Ishin party leader says Takaichi is to call snap election at start of Diet session
• Trump says that the US needs Greenland for the purpose of national security
• China customs authorities say Nvidia’s H200 chips are not permitted – report
• Tariffs? What tariffs? China posts record-breaking trade surplus in 2025

Markets:

• JPY leads, USD lags on the day
• European equities mixed; S&P 500 futures down 0.5%
• US 10-year yields down 1.9 bps to 4.151%
• Gold up 1.0% to $4,634.19
• WTI crude oil up 1.1% to $61.88
• Bitcoin up 0.7% to $94,750

The Japanese yen was the main focus on the session after dropping in Asia, with USD/JPY ramping up above 159.00 to its highest since July 2024 at one point.

All that before some verbal intervention from Tokyo officials, mostly as you would expect. However, included in there was an oddly specific comment by Japan finance minister Katayama. He singled out the yen decline last Friday as being not in line with fundamentals, triggering some selling in USD/JPY amid rising intervention risks.

That halted the yen rout with the pair seeing some volatile price action but ultimately now being lower by 0.3% to 158.56 with the drop earlier even touching 158.15 on the session. That as Japan prime minister Takaichi also confirms that she will be dissolving the parliament’s lower house later this month and will call for a snap election in February.

As for other major currencies, there wasn’t anything exciting with the dollar keeping more tepid ahead of more US data later in the day.

The other notable headline on the session was that China has banned Nvidia’s H200 AI chips from entering the country, barring special circumstances. That’s keeping risk trades on edge alongside Trump threatening to claim Greenland on the pretext of “national security”.

US futures are sitting lower across the board with tech shares leading declines. S&P 500 futures are down 0.5% with Nasdaq futures down 0.7% currently.

Meanwhile, European equities were off to a decent start with major benchmark indices in France, Spain, and the UK all posting fresh record highs at the open. However, the momentum is slowly fizzling out now with the DAX even being down 0.4% as risk trades err on the side of caution.

The other big movers on the day are none other than precious metals once again. After catching a bid in Asia, gold and silver are holding on to gains for the most part in European morning trade. Gold is up 1.0% to $4,634 while silver is up near 5% to $91.30 on a break of the $90 mark today. The hot streak continues. 🔥

This article was written by Justin Low at investinglive.com.

It looks like geopolitics is back on the menu as we look to the day ahead. From the man himself:

“The United States needs Greenland for the purpose of National Security. It is vital for the Golden Dome that we are building. NATO should be leading the way for us to get it. IF WE DON’T, RUSSIA OR CHINA WILL, AND THAT IS NOT GOING TO HAPPEN! Militarily, without the vast power of the United States, much of which I built during my first term, and am now bringing to a new and even higher level, NATO would not be an effective force or deterrent – Not even close! They know that, and so do I. NATO becomes far more formidable and effective with Greenland in the hands of the UNITED STATES. Anything less than that is unacceptable. Thank you for your attention to this matter! President DJT”

What a time to be alive when world leaders start talking about countries and territories ever so trivially, as though like a kid talking about toys.

With Nvidia also in the microscope as China bans its H200 chips, it’s going to be a bumpy start for US stocks later at the open. S&P 500 futures are already down 0.4% on the day now with Nasdaq futures down 0.6% and Dow futures down 0.3%.

Circling back to geopolitics, it’s not just Greenland in the picture at the moment. Trump also has his eyes on Iran and that is also drawing plenty of flak from other big nations.

This article was written by Justin Low at investinglive.com.