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This follows a decline of 0.9% in retail sales volume for October, which was revised up from a 1.1% decline previously. The year-on-year estimate for November shows that UK retail sales are now 0.6% higher compared to the same month a year ago. However, that is a marked miss on estimates of +1.6% with the monthly reading missing on estimates of a gain of 0.3%.

Looking at the breakdown, food store sales (-0.5%) once again showed a decline while non-store retailing (-2.9%) was a big drag for the month. Meanwhile, other non-food store sales (-0.8%) also showed a modest decline in November.

All of that is somewhat offset by stronger sales in textile clothing and footwear stores (+1.7%) as well as household goods store sales (+1.8%) – likely attributed to longer Black Friday discounting.

Touching on that, it serves as a good reminder that UK retail sales for November 2024 did not include the impact of Black Friday. That spilled over into the December 2024 reporting period. As such, that makes the year-on-year showing here even less enthusiastic. ONS notes that “when Black Friday falls into the November period there is normally a larger monthly rise in November than in either October or December”.

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

• Japanese markets are volatile, adjusting to the BoJ rate hike – wary eye now BoJ Gov Ueda
• More detail on Bank of Japan decision to raise rates by 25bp to the highest in 30 years
• Bank of Japan hikes its short term rate by 25bp to 0.75%, as expected
• Toyota to sell U.S.-made vehicles in Japan to ease trade tensions
• Japan finance minister flags fiscal sustainability, debt reduction focus
• EU seals €90bn financing deal for Ukraine for 2026–27 – long-term funding plan for Ukraine
• EU moves toward budget-backed loan for Ukraine – EU leaders agree in principle
• Trump admin reviews Nvidia AI chip sales to China – Trump backs chip sales to China
• PBOC sets USD/ CNY reference rate for today at 7.0550 (vs. estimate at 7.0378)
• Australia private sector credit growth steady in November
• Goldman Sachs expects the BoE to cut rates by 25bp in March, June and September 2026
• UK consumer confidence rises in December but remains deeply pessimistic
• Japan core CPI holds at 3.0% in November, reinforcing BoJ outlook
• Goldman Sachs says U.S. CPI unlikely to move Fed policy outlook
• Tesla Cybercab reportedly spotted testing on public roads in Austin (Bullish!)
• Japan should consider nuclear weapons – source shaping security policy in government
• New Zealand records November trade deficit as imports exceed exports (d’uh 😉 )
• investingLive Americas market news wrap: Big drop in US CPI sparks confusion

The main focus during the session was the Bank of Japan policy decision. As expected, the BoJ raised its short-term policy rate by 25 basis points, from 0.5% to 0.75%, delivering exactly what markets had priced.

The Bank had previously lifted rates back in January, and today’s move, taking the policy rate to its highest level in three decades, neatly provides the other bookend for the year. Together, the January and December hikes frame 2025 as the year Japan decisively stepped away from its ultra-easy monetary past, albeit cautiously.

In the lead-up to the announcement, the yen softened modestly, though moves were contained. Immediately after the decision, the initial reaction was a brief, shallow bout of yen strength before the currency weakened again. USD/JPY pushed above 156.10, before pulling back toward 155.85 as liquidity thinned and attention shifted to guidance rather than the hike itself.

The key takeaways from the BoJ statement were familiar but important. Policymakers stressed that real interest rates remain significantly negative and that monetary conditions remain accommodative, despite the higher policy rate. The decision was approved by a unanimous vote, though the statement revealed differing views on inflation dynamics.

Board member Takata opposed the description of the inflation outlook, arguing that CPI, including underlying measures, has already broadly reached the price stability target. Separately, board member Tamura objected to the wording on underlying inflation, saying it is likely to be broadly consistent with the target from the middle of the projection period. Neither member formally dissented from the rate decision.

The Bank reiterated that it will continue to raise the policy rate if the economy and prices evolve in line with forecasts, signalling conditional openness to further tightening.

In rates markets, JGB yields remain elevated, with the 10-year yield touching its highest level since May 2006.

Elsewhere, major FX pairs were subdued, trading in largely rangebound conditions as the session drew to a close.

Asia-Pac
stocks took their lead from an improved Wall Street:

• Japan
  (Nikkei 225) +1.14%
• Hong
  Kong (Hang Seng) +0.65%
• Shanghai
  Composite +0.5%
• Australia
  (S&P/ASX 200) +0.5%

Next up, Bank of Japan Governor Ueda press conference at 0630 GMT / 0130 US Eastern time:

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

Summary

• Toyota to export U.S.-made vehicles to Japan
• Move aimed at easing U.S.–Japan trade tensions
• Tariff relief a key motivation

Toyota Motor Corp plans to begin selling U.S.-manufactured vehicles in Japan from 2026, a move aimed at easing trade tensions with Washington and strengthening ties with President Donald Trump’s administration as tariff negotiations remain in focus.

The Japanese automaker said it will export three U.S.-built models, the Camry, Highlander and Tundra, to the Japanese market, with production sourced from plants in Kentucky, Indiana and Texas. Toyota said the vehicles are intended to meet a range of customer needs in Japan while also demonstrating the company’s commitment to balanced Japan–U.S. trade relations.

The decision comes as Toyota and other Japanese automakers seek to encourage the Trump administration to ease or remove tariffs on Japanese car and auto-parts exports to the United States. Trump has repeatedly criticised trade imbalances in the auto sector and has pushed foreign manufacturers to expand U.S. production and exports as part of his broader trade agenda.

Toyota already operates extensive manufacturing operations in the United States and has long argued that it is a major contributor to U.S. employment and investment. Exporting U.S.-made vehicles back to Japan represents a symbolic reversal of traditional trade flows and underscores Toyota’s willingness to align with Washington’s policy priorities.

While Japan’s domestic auto market has historically favoured smaller vehicles, Toyota said the selected models reflect growing diversity in consumer preferences and will complement its existing lineup. The company did not disclose expected sales volumes, but analysts view the move primarily as a strategic trade and political gesture rather than a volume-driven initiative.

From a broader perspective, the plan highlights how global automakers are increasingly adapting supply chains and sales strategies in response to geopolitical pressures rather than pure market demand. For Toyota, the move reinforces its position as a bridge between the world’s two largest auto markets at a time when trade policy uncertainty remains elevated.

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

Summary

• Japan signals greater focus on fiscal sustainability
• Debt-to-GDP reduction framed as confidence booster
• Tax relief costs revised higher

Japan’s Finance Minister Katayama signalled a renewed emphasis on fiscal discipline when outlining priorities for compiling the next fiscal year’s budget, highlighting the need to balance policy support with long-term sustainability and market confidence.

Speaking on Friday, Katayama said the government would take fiscal sustainability into account “to some extent” when preparing the upcoming budget, an acknowledgement of growing scrutiny over Japan’s public finances as interest rates rise and debt servicing costs edge higher. Japan’s debt-to-GDP ratio remains the highest among advanced economies, leaving fiscal policy closely intertwined with monetary policy and market sentiment.

Katayama said the government aims to boost market confidence by lowering the debt-to-GDP ratio, reinforcing messaging that fiscal credibility remains a priority even as policymakers consider measures to support households and growth. While the comments stopped short of committing to specific consolidation targets, they suggest a cautious approach to budget expansion following years of pandemic-era stimulus and elevated spending.

The finance minister also highlighted the fiscal trade-offs associated with proposed tax relief measures. The Ministry of Finance now estimates that lifting the tax-free income threshold would reduce annual tax revenue by around ¥650 billion, significantly more than its earlier estimate of ¥400 billion. The revision underscores the budgetary cost of measures aimed at easing household tax burdens, particularly at a time when inflation and wage dynamics remain in flux.

For markets, the remarks are notable against the backdrop of an expected Bank of Japan rate hike and rising Japanese government bond yields. A stronger focus on fiscal sustainability could help reassure investors concerned about the interaction between higher rates and Japan’s debt load, particularly if policy normalisation continues gradually. Katayama said there is no gap in thinking with Bank of Japan Governor Ueda, that finance ministry communications with Bank have been very positive.

At the same time, the government faces competing pressures: maintaining fiscal credibility while responding to political demands for tax relief and economic support. How those tensions are resolved in the final budget will be closely watched by bond investors, rating agencies and currency markets alike.

Overall, Katayama’s comments suggest the government is keenly aware that fiscal policy will play an increasingly important role in anchoring confidence as Japan transitions away from ultra-loose monetary settings.

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

Summary

• EU agrees in principle on Ukraine loan
• Funding to be backed by EU budget headroom
• Unanimity among member states appears possible

European Union leaders have agreed in principle to provide a new loan to Ukraine, funded through EU borrowing on capital markets and backed by unused EU budget headroom, according to draft conclusions seen by Reuters.

Under the proposal, the European Commission would raise funds on financial markets, with the loan guaranteed by the EU’s budgetary capacity rather than direct national contributions. An EU official said there appears to be a pathway toward unanimity among member states to use the headroom of the EU budget to provide funding for Ukraine, according to draft text seen by Reuters.

The draft also specifies that any mobilisation of EU budget resources used as a guarantee for the loan would not affect the financial obligations of the Czech Republic, Hungary or Slovakia, addressing concerns from some governments about potential fiscal exposure, the draft text showed.

EU leaders further agreed that work should continue on the technical and legal aspects of the instruments establishing what has been described as a “reparations loan,” according to the draft seen by Reuters, as discussions continue over longer-term funding mechanisms and the possible use of frozen Russian assets.

The agreement in principle highlights the EU’s continued commitment to supporting Ukraine while navigating internal political sensitivities. By relying on collective borrowing and budget guarantees, EU leaders aim to sustain financial assistance without placing immediate strain on national budgets.

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

Summary

• EU approves €90bn Ukraine financing for 2026–27
• Deal builds on budget headroom borrowing plans
• Multi-year support aims to boost certainty

European Union leaders have reached agreement on a major new financial support package for Ukraine, approving €90 billion of funding for 2026–27, according to comments from European Council President António Costa. German Chancellor Merz confirms the 90bn euro loan is interest free and the Europe will keep Russian assets frozen until Putin has compensated Ukraine.

“We have a deal to finance Ukraine,” Costa said, confirming that the decision to provide €90bn of support over the two-year period had been approved. The announcement follows earlier indications that EU leaders were close to consensus on a financing framework built around collective borrowing and the use of EU budget headroom.

The agreement builds on draft conclusions seen earlier by Reuters, which outlined plans for the European Commission to raise funds on capital markets, with the loans backed by unused EU budget capacity rather than direct national contributions. EU officials had said there was a realistic path to unanimity, particularly after clarifications that the mechanism would not affect the financial obligations of certain member states, including Hungary, Slovakia and the Czech Republic.

The structure is designed to ensure predictable, multi-year funding for Ukraine as the war with Russia continues, while limiting immediate fiscal strain on individual EU governments. Leaders have also called for continued work on the technical and legal aspects of the instruments underpinning the financing, including options linked to so-called “reparations loans” and the potential future use of frozen Russian assets.

The €90bn envelope underscores the EU’s intent to provide sustained support rather than rolling short-term packages, a shift aimed at improving financial certainty for Kyiv and strengthening longer-term planning for reconstruction and defence. It also reflects a growing willingness within the bloc to deploy EU-level borrowing as a geopolitical tool, following precedents set during the pandemic and energy crisis.

From a market perspective, the deal is unlikely to materially disrupt near-term sovereign issuance or euro-area funding conditions. However, it reinforces the structural trend toward greater EU-level debt issuance and deeper fiscal coordination, with longer-term implications for euro-area bond markets and regional stability.

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

United Kingdom GfK Consumer Confidence for December 2025: -17

• vs. expected -18, prior -19

Summary

• Improved modestly in December
• Budget restraint and easing inflation offered support
• Spending remains weak despite real wage gains

British consumer confidence edged higher in December, reaching its joint-highest level of the year, though sentiment remains weak by historical standards, according to a closely watched monthly survey from GfK.

The GfK consumer confidence index rose to -17 in December, matching levels last seen in October and August. The reading marks the strongest level since August 2024, shortly after the Labour government took office, but still points to a cautious and fragile consumer backdrop.

The modest improvement followed Chancellor Rachel Reeves’ annual budget, which imposed relatively few immediate tax increases on households. While the budget raised Britain’s overall tax burden by around £26 billion per year, this was notably smaller than the £40 billion increase announced in 2024, and much of the additional tax impact will not take effect until later years.

GfK noted that households’ assessment of the general economic outlook improved more than perceptions of their own personal finances. Encouragingly, consumers’ willingness to make major purchases recorded the largest gain among the survey’s components, suggesting tentative signs of easing caution.

Commenting on the data, GfK consumer insights director Neil Bellamy likened consumers to “a family on a festive winter hike,” moving forward slowly while hoping for better conditions ahead, a metaphor that captures both resilience and ongoing uncertainty.

The confidence uptick also comes against a slightly more supportive inflation backdrop. Consumer price inflation slowed to 3.2% in November, its lowest level since March, and the government’s budget included measures to shift climate-related costs away from household energy bills and into general taxation, potentially easing near-term pressure on disposable incomes.

Despite these factors, consumer spending in the UK has remained subdued. Although wages have outpaced inflation this year, households — like their counterparts across much of Europe — have continued to save at elevated rates. This reluctance to spend has puzzled economists and suggests that confidence, while improving, has yet to translate into a meaningful recovery in consumption.

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

Summary

• Core CPI held at 3.0% in November
• Underlying inflation pressures remain firm
• Data supports gradual BoJ tightening

Japan’s nationwide inflation data for November showed price pressures remaining firmly entrenched, reinforcing expectations that the Bank of Japan will continue its gradual path toward policy normalisation.

Government data released on Friday showed core consumer prices rose 3.0% year-on-year in November, matching market expectations and marking another month of inflation running well above the Bank of Japan’s 2% target. The core measure excludes fresh food prices but includes energy, making it one of the most closely watched gauges of underlying inflation trends.

Headline inflation was little changed, with overall CPI rising 2.9% year-on-year, underscoring persistent price pressures across the economy despite recent volatility in energy markets and a modest slowdown in global growth momentum.

A broader measure of underlying inflation, which excludes both fresh food and energy prices, also rose 3.0% from a year earlier. The strength of this “core-core” gauge suggests inflation is no longer being driven solely by imported cost pressures, but is increasingly supported by domestic factors such as services prices, labour costs and corporate pricing behaviour.

The November data reinforces the view that Japan’s inflation backdrop remains fundamentally different from the deflationary environment that characterised much of the past two decades. While policymakers continue to stress the need for sustainable, demand-driven inflation, recent readings point to a more persistent trend than initially expected.

From a policy perspective, the inflation figures strengthen the case for the Bank of Japan’s expected rate hike, which would take its policy rate to the highest level in roughly three decades. However, officials are likely to maintain a cautious tone, mindful of the recent rise in Japanese government bond yields and the sensitivity of financial conditions to further tightening.

For markets, the data is broadly in line with expectations and therefore unlikely to trigger significant volatility on its own. Instead, attention is expected to remain focused on the BoJ’s policy guidance and Governor Kazuo Ueda’s assessment of whether current inflation dynamics are sufficiently durable to justify further rate increases over time.

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

Summary

• PM office source raises nuclear weapons debate

• Comments clash with Japan’s non-nuclear tradition

• Security concerns driving renewed discussion

Japan’s long-standing stance on nuclear weapons has come under renewed scrutiny after a source within the prime minister’s office suggested the country may ultimately need to possess nuclear arms, comments that risk sparking political backlash both domestically and internationally. Kyodo reporting.

Speaking to reporters on Thursday, the source — who is involved in shaping security policy under Prime Minister Sanae Takaichi’s government — said Japan should consider nuclear weapons in principle, while simultaneously acknowledging that such a move would be highly impractical. “I think we should possess nuclear weapons,” the source said, adding that “in the end, we can only rely on ourselves,” while stressing that nuclear armament is not something that could be achieved quickly.

The remarks come as Prime Minister Takaichi, known for her hawkish views on national security, weighs whether to review Japan’s Three Non-Nuclear Principles, which prohibit the possession, production, or introduction of nuclear weapons. First articulated by then-Prime Minister Eisaku Sato in 1967, the principles became a cornerstone of Japan’s postwar identity. Sato later received the Nobel Peace Prize in 1974 for his role in promoting nuclear restraint.

Any attempt to revisit Japan’s nuclear policy remains deeply controversial. Public opposition is rooted in the country’s pacifist constitution and its unique historical experience as the only nation to have suffered atomic bombings. The issue also conflicts with Japan’s longstanding diplomatic commitment to nuclear disarmament, a cause strongly supported by survivors of Hiroshima and Nagasaki.

At the same time, critics note that Japan already relies on the U.S. nuclear umbrella for deterrence, a dependence some argue sits uneasily alongside the non-nuclear principles. This tension has periodically resurfaced during periods of heightened regional security risk.

The prime minister’s office source said there had been no direct discussion with Takaichi on formally revising the principles. Still, the comments have revived memories of past political fallout: in 1999, then parliamentary vice defence minister Shingo Nishimura was dismissed after suggesting Japan consider nuclear armament.

For now, the remarks underscore the growing strain between Japan’s historical pacifism and evolving regional security realities.

—

When these guys are your near neighbor …

Anyway, more near term, the BoJ is set to make history today:

• Economic and event calendar in Asia December 19, 2025 – Bank of Japan rate hike expected

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

New Zealand recorded a monthly trade deficit of NZ$163 million in November, as import growth slightly outpaced exports, according to data released by Statistics New Zealand. While the deficit was relatively modest in monthly terms, the figures highlight the ongoing challenge of balancing external trade amid uneven global demand and domestic consumption trends.

Total exports rose to NZ$6.99bn in November, reflecting steady shipments across key commodity categories, including dairy and agricultural products. However, imports climbed to NZ$7.15bn, resulting in the net deficit for the month. The strength in imports suggests resilient domestic demand and ongoing investment needs, though it also points to continued pressure on the external balance.

On an annual basis, New Zealand’s trade deficit widened to NZ$2.06bn, underscoring the structural imbalance between export earnings and import spending over the past year. While export performance has improved from earlier lows, it has not yet been sufficient to fully offset higher import volumes and prices, particularly for capital goods and energy-related items.

For financial markets, the trade data offers a mixed signal. A narrower-than-feared monthly deficit may provide some reassurance around near-term external stability, but the persistent annual shortfall reinforces the view that net trade is unlikely to be a strong driver of economic growth in the near term. Currency markets tend to focus less on the headline deficit and more on broader macro dynamics, including interest-rate expectations and global risk sentiment.

From a policy perspective, the data is unlikely to materially alter the Reserve Bank of New Zealand’s near-term outlook on its own. However, sustained trade imbalances could remain a background consideration as policymakers assess growth momentum, inflation pressures and the transmission of monetary policy through the economy.

Overall, November’s trade figures point to steady but unspectacular export performance, offset by firm import demand, leaving New Zealand’s external position modestly in deficit as the year draws to a close.

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

• US November CPI 2.7% y/y vs 3.1% expected
• ECB leaves rates unchanged at 2.00% as expected, but lifts 2026 inflation forecast
• Bank of England rate decision: A quarter-point rate cut as expected
• US initial jobless claims 224K versus 225K estimate.
• Fed’s Goolsbee: The latest inflation data was favorable
• ECB sources report: Policymakers had no appetite to take rate cut off the table
• Carney: Sectoral deals are unlikely, talks likely to roll into USMCA review
• BOE’s Bailey: I’m ‘very encouraged’ by progress in hitting inflation target
• ECB’s Lagarde: Economy resilient, service-led growth expected to continue

Markets:

• WTI crude flat at $56.04
• US 10-year yields down 3.3 bps to 4.12%
• Gold down $10 to $4330
• S&P 500 up 0.8%
• EUR lags, AUD leads

For such a lively day in terms of economic data, the FX market was surprisingly flat at the finish. The moves have been limited to 16 pips or less, with a modest decline in the euro as the most-notable move. It came as an ECB sources report following the decision highlighted that the governing council isn’t ready to let go of dovish optionality, given a number of risks to growth next year.

The CPI report sparked some serious confusion. The big downside miss on headline and core initially sparked USD selling but skepticism arrived shortly afterwards. The BLS chose not to estimate a number of items and instead left them as zeros for October’s data. This is the first real report since the government shutdown and the inability to collect data during that period forced a series of assumptions. For what it’s worth, two-year yields are virtually flat since the report even with Goolsbee offering a dovish take.

The Bank of England decision was not a big surprise but initially led to some good sized GBP bids as cable ran to 1.3448 in a nearly 1 cent rally. It couldn’t hold on though and gave the vast majority back, in part due to some more-dovish comments from Bailey later.

Gold went on a $40 round trip to $4371 and back down to $4331 while silver cooled a tad from its earlier record.

The big winner on the day was stocks in part due to a huge revenue beat from Micron. Megacap tech was bid and the Nasdaq led the way in a partial reversal following four days of declines. Is Santa finally arriving to the market? Fedex reported after the bell and the early indications are 4% and that’s good news from the economic bellwether.

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

At the end of the day, a government’s economic job is to spend money and collect taxes.

The ones that spend too much ultimately have to pay it back, with interest. Running deficits is almost always popular with voters (and certainly with donors), particularly when it makes the stock market go up.

BCA today has a great chart showing just how much more the US has been spending than any other major economy. The deficits are out of control and were worsened further this year by latest round of corporate tax cuts.

The damage started with Trump’s election really. That tamed the Tea Party movement and it’s since been wiped out completely. the The Tax Cuts and Jobs Act of 2017 kicked off the spending orgy, covid worsened it, Biden added his infrastructure act and now Trump has gone back to the deficit trough.

There is no end to it and seemingly no political appetite to deal with it. Rather, we’re more likely to get politicians who lean on central banks to monetize the deficit with artificially low rates.

What’s worse in the US situation is that it’s sitting on a time bomb around social security, medicare and healthcare in general. Congress doesn’t look like it will pass Obamacare subsidies so those rates will rise in the new year but the pressure to help people pay for healthcare isn’t going to go away, nor will the aging demographics and out-of-control costs of US treatment.

Notably, the US dollar has been in a bull market for nearly the entirety of this chart and I don’t think that’s a coincidence. If/when Congress changes its tune on deficits (or the market barks), that’s going to be a reversal in the USD excess. At the same time, I don’t think it’s a surprise that euro had a better year this year as Germany signalled a loosening of spending in order to fund military investments.

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