As expected, it was a muted trading week last week, with many major centres partially closed through the week due to Christmas holiday celebrations. Despite the lower liquidity, we saw a familiar theme, with global equity indices pushing higher and precious metals driving to record levels.

On the geopolitical front, markets are focusing on a potential peace deal between Russia and Ukraine, with Ukrainian President Volodymyr Zelinsky set to meet with his US counterpart, Donald Trump, in the coming days. However, US strikes in Nigeria in the last few days, and the ongoing actions by the US against Venezuela, have kept haven flows strong.

It is another holiday-disrupted week ahead, with the New Year’s holiday coming midway through the week, very little on the macroeconomic calendar, and many desks operating on skeleton levels as traders enjoy extended breaks. Traders are expecting liquidity to remain at low levels in the coming days, which could lead to some sharp moves, especially if any surprise geopolitical updates hit the newswires.

Here is our usual day-by-day breakdown of the major risk events this week:

It is a quiet start to a quiet week on Monday. The Asian session will see a focus on Japanese markets early in the day, with the Bank of Japan’s Summary of Opinions due out, and there is little else on the calendar until the US Pending Home Sales and weekly crude oil inventory numbers in the New York session.

There is little on the calendar in the first two trading sessions of the day on Tuesday; however, we do have the highlight of the week close to the New York close, when the latest FOMC Meeting Minutes are released.

It is New Year’s Eve on Wednesday, and many traders will be looking to get away early; however, there are a few events on the calendar to negotiate first. The Asian session sees the release of the latest Chinese Manufacturing PMI and Non-Manufacturing PMI data midway through the day, and the US Weekly Unemployment Claims numbers will be released early in the New York session.

It is New Year’s Day on Thursday, and markets are likely to be very quiet, with most major trading centres closed.

Markets do reopen on Friday; however, there is very little on the macroeconomic calendar that is likely to spur fresh moves, and most desks are expected to be operating at minimal levels as traders look to take another long weekend.

The post The Week Ahead – Week Commencing 29 December 2025 first appeared on IC Markets | Official Blog.

IC Markets Global – Europe Fundamental Forecast | 29 December 2025

What happened in the Asia session?
During the Asia session, markets traded mixed with thin volumes: Nikkei down 0.55% on hawkish BOJ Summary of Opinions advocating more rate hikes to combat sticky inflation, while Kospi rose 0.62%; silver smashed records above $80/oz on supply tightness and rate cut hopes, oil edged up on geopolitics, and India’s core sector growth of 1.8% in November supported GIFT Nifty’s flat open ahead of full IIP data yen strengthened most notably, alongside pressure on Japanese equities.

What does it mean for the Europe & US sessions?
Traders should monitor thin holiday trading volumes across global markets, with Asian stocks expected to open muted and focus shifting to U.S. crude oil inventories data at 10:30 GMT, alongside ongoing signals from the Bank of Japan on potential rate hikes. European and U.S. sessions face a light economic calendar today, December 29, 2025, amid year-end positioning, gold’s surge past $4,550/oz boosting miners, and broader market records in equities driven by a 22% global stock rise in 2025.

The Dollar Index (DXY)

Key news events today

Pending Home Sales m/m (3:00 pm GMT)

What can we expect from DXY today?

The US dollar remains near multi-month lows, with the DXY index trading around 98.00 amid expectations of further Federal Reserve rate cuts in 2026. It hovered near its lowest since early October, showing minimal daily change of about -0.01% to +0.003%. The DXY fell to 98.0081 earlier today, down slightly from recent sessions, while forecasts predict it at 98.00 by quarter-end and 95.73 in 12 months. Over the past month, the dollar weakened by 1.55%, and it’s down 9.21% over the last year. In Asia, it traded lower against the Taiwanese dollar at NT$31.430.

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 labour 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% annualised pace in Q2 2025, according to revised estimates. However, Q3 and Q4 are expected to face headwinds from trade tensions, fiscal restraint, and data disruptions, such as 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%, signalling 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 labour 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

Pending Home Sales m/m (3:00 pm GMT)

What can we expect from Gold today?

Gold remains elevated near recent record highs of $4,532, driven by US-Venezuela tensions, Fed rate-cut anticipation, and a softer dollar, with year-to-date gains exceeding 72% amid safe-haven demand; however, profit-taking and thin holiday trading could keep prices range-bound between $4,370 and $4,580 today, per forecasts.

Next 24 Hours Bias   
Strong Bullish

The Euro (EUR)

Key news events today

No major news event

What can we expect from EUR today?

The euro edged higher against the dollar to about 1.1777 in quiet holiday trading, with EUR/USD showing bullish short-term momentum toward 1.1825 but poised for a rebound lower per weekly forecasts targeting 1.0955; no significant economic releases impacted the currency, as markets awaited post-holiday activity amid thin liquidity and lingering technical bearishness for the year ahead.

Central Bank Notes:

• The Governing Council of the ECB is widely expected to keep the three key interest rates unchanged at its 17–18 December 2025 meeting, maintaining the main refinancing rate at 2.15%, the marginal lending facility at 2.40% and the deposit facility at 2.00%. This would reflect policymakers’ assessment that the current policy stance remains broadly consistent with medium‑term price stability, while inflation hovers close to the 2% target and the economy expands at a modest pace. Market pricing and recent ECB commentary suggest a high “option value” in staying on hold, with no clear pre‑set path for the next move amid two‑sided risks around growth and inflation.
• Recent indicators point to broadly stable price dynamics around the ECB’s target. Headline HICP inflation is projected to hover near 2% through late 2025, with earlier energy‑related disinflation largely behind and food price pressures contained compared with previous years. Services and wage inflation remain somewhat firmer than anticipated, but the trend is one of gradual moderation, consistent with a scenario in which inflation stabilizes around but not persistently above 2% over the medium term.
• Eurosystem staff projections to be released in December are expected to show only small revisions from the September exercise, maintaining a profile of headline inflation close to 2% in 2025, dipping slightly below in 2026, and returning near target in 2027. Soft producer prices, fading pipeline cost pressures, and anchored long‑term inflation expectations limit upside risks, though officials continue to flag uncertainty from geopolitical tensions, commodity price shocks, and fiscal policy choices.
• Euro area GDP growth remains subdued but resilient, with most forecasters and survey‑based indicators pointing to an expansion around 1 — 1.25% in 2025 and 2026, followed by a similar pace into 2027. PMIs and confidence surveys suggest activity has stabilised after earlier weakness, with modest support from public investment and improving external demand offsetting soft private consumption and investment.
• The labour market remains tight in aggregate, with unemployment rates close to multi‑decade lows and participation relatively high, even as job creation has slowed from its earlier peak. Real income growth has turned slightly positive again as inflation normalises, underpinning household spending, while financing conditions, though tighter than in the pre‑hiking era, remain consistent with a gradual expansion in credit to households and firms.
• Business sentiment is mixed, reflecting uncertainty around global trade, the policy outlook in the United States, and the potential impact of future tariff or industrial policy shifts. At the same time, easing supply‑chain costs and a relatively competitive euro exchange rate versus major trading partners provide support to manufacturing and export‑oriented sectors at the margin.​
• The Governing Council is expected to reiterate that future decisions will remain data-dependent and taken meeting by meeting, based on an integrated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission. Officials have recently stressed that both further hikes and eventual cuts remain contingent on incoming data, implying no commitment to a particular path and a readiness to adjust if inflation or growth diverge materially from baseline projections.
• Balance sheet normalisation is set to continue gradually and predictably, with the stock of assets under the APP and PEPP declining as reinvestments have already been halted or scaled back in line with prior guidance. The ECB is expected to confirm that the current pace of portfolio runoff remains appropriate, supporting a slow withdrawal of monetary accommodation without disrupting market functioning.
• The next meeting is on 4 to 5 January 2026

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 remains range-bound in quiet holiday trading, with USD/CHF forecasts pointing to downside risks near 0.7865 amid fading investor optimism (ZEW index at 6.2) and lingering GDP contraction effects, though year-to-date strength persists at +13% versus the dollar; no major SNB or economic releases today shift the steady backdrop.

Central Bank Notes:

• At its 11 December 2025 monetary policy assessment, the Swiss National Bank (SNB) is widely expected to leave the policy rate unchanged at 0%, extending the pause that began in September as the Governing Board judges that current settings are sufficient to keep inflation near, but still below, its target while avoiding an unnecessary move into negative rates.
• Recent data show that the tentative rebound in Swiss inflation has stalled, with headline CPI easing from 0.1% year‑on‑year in October to 0.0% in November and core inflation slipping to about 0.4%, reinforcing the view that underlying price pressures remain very weak and that deflation risks, while contained, have not fully disappeared.
• The SNB’s conditional inflation forecast is likely to remain close to the September projections, with inflation still seen averaging roughly 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027 under an unchanged policy rate path, though the latest CPI prints argue for a slightly lower near‑term profile and keep open the option of renewed easing if activity or prices weaken further.
• The global backdrop has deteriorated further, as continuing U.S. tariff actions and softer external demand weigh on world trade, while uncertainty in key European and U.S. markets for Swiss exports persists, leaving the SNB cautious about the growth outlook despite Switzerland’s relatively resilient domestic demand.
• Business and labour-market sentiment in export‑oriented manufacturing remains subdued, with firms reporting pressure on margins from the still‑strong franc and softer foreign orders, although the broader economy is still expected to grow at around 1–1.5% in 2025 and unemployment only drifting up gradually from low levels.
• The SNB continues to stress its willingness to act if deflation risks re‑emerge, reiterating that it can ease policy through renewed rate cuts or targeted foreign‑exchange intervention if necessary, while also highlighting its commitment to transparent communication, including the publication of detailed minutes from recent assessments and ongoing dialogue with international partners on FX policy

The next meeting is on 19 March 2026.

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 pound holds steady near 1.35 amid forex forecasts of short-term upside tests but medium-term declines, influenced by technical patterns, sparse economic data, and global policy shifts, with traders eyeing holiday-thinned volatility. Light trading persists due to year-end holidays, with no major UK data releases until Friday’s manufacturing PMI; broader factors include Bank of England rate cut expectations (88% odds for December) and US Dollar weakness from Fed policy and Trump administration dynamics. GBP/USD faces downside risks below the 1.3395 support.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) will meet on 18 December 2025, with the current Bank Rate standing at 4.00 per cent after being held in a close 5–4 vote at the 5 November meeting. Market pricing and analyst commentary point to a high risk of a 25‑basis‑point cut to 3.75 per cent, but this remains conditional on incoming inflation and labour‑market data, so the December note should be treated as pre‑decision guidance rather than an ex‑post summary.
• The BoE is expected to leave its quantitative tightening (QT) framework broadly unchanged through year‑end, maintaining the lower reduction pace in gilt holdings that was set earlier in 2025. Official communications still characterise the existing QT path as consistent with a restrictive stance, with policymakers stressing that balance‑sheet reduction will remain gradual and sensitive to market‑liquidity conditions.
• Headline CPI inflation eased to 3.6 per cent year‑on‑year in October 2025, down from 3.8 per cent in September, helped by softer energy and goods prices, though it remains almost twice the 2 per cent target. Underlying inflation pressures, particularly in services, have continued to moderate only slowly, so the MPC’s central projection still envisages inflation moving closer to, but not yet reaching, 3 per cent over the course of 2026, contingent on further normalisation in energy and wage dynamics.
• UK economic activity remains weak heading into the December meeting, with the labour market showing further signs of slackening. The unemployment rate has risen toward just above 5 per cent on the latest three‑month figures to October, while overall regular pay growth has slowed to around the mid‑4 per cent range, reinforcing the view that domestic cost pressures are gradually easing.
• External conditions continue to cloud the outlook, with fragile global growth and fluctuating commodity prices contributing to bouts of financial‑market volatility. The MPC has highlighted that renewed global energy or food price shocks could temporarily slow the pace of disinflation, but such risks are currently judged unlikely to derail the medium‑term downward trajectory for inflation if domestic demand stays subdued.
• The balance of risks around the inflation outlook remains finely poised. Downside risks are linked to persistently weak domestic demand and rising unemployment, while upside risks come from still‑elevated inflation expectations, sticky services inflation, and the possibility that structural changes in the labour market leave less slack than conventional indicators suggest.
• Overall, the MPC’s stance going into December is restrictive but increasingly open to a gradual easing cycle, with any rate cuts expected to be measured and data‑dependent. Policymakers have reiterated that the Bank Rate will need to stay in restrictive territory until they are confident inflation is on a sustainable path back to the 2 per cent target, and they have signalled that the profile of cuts, once started, is likely to be shallow rather than rapid.
• The next meeting is on 5 February 2026.

  Next 24 Hours Bias
  Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news event

What can we expect from CAD today?

The USD/CAD pair dipped slightly by 0.01-0.05% in recent sessions, reflecting CAD gains to near five-month highs, bolstered by Canada’s 0.1% November GDP rebound and steady 2.2% CPI inflation. Forecasts suggest a potential test of resistance at 1.3755, followed by a possible downside to 1.3555 if selling pressure persists.
​
Central Bank Notes:

• The Governing Council left the target for the overnight rate unchanged at 2.25% at its 10 December 2025 meeting, in line with market expectations and signalling that the earlier easing cycle has likely concluded. The Bank noted that while global tariff tensions and trade uncertainty persist, the external backdrop has stabilised somewhat, reducing the need for additional insurance cuts even as world trade remains fragile.
• The Council acknowledged that uncertainty around U.S. trade policy and tariffs continues to weigh on business sentiment, but recent data show Canadian manufacturing and goods exports holding up better than anticipated. Surveys cited by the Bank suggest export order books have stopped deteriorating, with firms reporting some rebuilding of backlogs despite still‑cautious capital spending plans.
• Canada’s economy rebounded more strongly than expected in the third quarter, with real GDP expanding at an annualised pace of about 2.6% after a 1.8% contraction in Q2, largely on the back of higher crude exports and government spending. Monthly data show output rising 0.2% in September, though flash estimates point to a softer start to Q4 as some sectors give back earlier gains.
• Service sector activity has firmed, with indicators showing the services PMI back above the 50 threshold and broadening gains in business and professional services. However, consumer-facing categories remain mixed, as still‑elevated price levels and only modest real income growth keep a lid on discretionary spending even as tourism and technology‑related services expand.
• Housing markets have continued to stabilise, with national resale activity and prices edging higher through the autumn alongside the earlier decline in borrowing costs. The Bank noted that while some major urban centres are seeing renewed price pressures, tighter underwriting standards and still‑high affordability constraints are expected to cap the pace of any rebound.
• Headline CPI inflation eased to 2.2% year over year in October and is estimated to have remained near that rate in November, keeping it slightly above the 2% target but comfortably within the 1%–3% control range. Core measures have drifted lower, with CPI‑median and CPI‑trim around 3% or below, reinforcing the assessment that underlying price pressures are gradually moderating even as gasoline and some shelter components remain volatile.
• The Governing Council reiterated that the current policy rate is “about the right level” to keep inflation close to target while supporting the economy through a period of structural adjustment, and it signalled a shift away from near‑term easing expectations. While the Bank did not rule out future adjustments, officials stressed that, barring a material downside surprise to growth or inflation, further rate cuts are unlikely before 2026, and attention is now focused on the durability of the recovery and the evolution of core inflation.
• The next meeting is on 28 January 2026.

Next 24 Hours Bias
Medium Bullish

Oil

Key news events today

No major news event

What can we expect from Oil today?

Oil prices edged higher on Monday, with Brent crude rising above $61 per barrel and West Texas Intermediate nearing $57, amid prospects for stronger Chinese demand and stalled US-led talks on Ukraine. China’s Ministry of Finance pledged to broaden its fiscal spending base in 2026, signalling sustained government support for economic growth in the world’s top crude importer, which could help absorb global surpluses despite ongoing property sector challenges and US trade frictions.

Next 24 Hours Bias
Medium Bearish

The post IC Markets Global – Europe Fundamental Forecast | 29 December 2025 first appeared on IC Markets | Official Blog.

IC Markets Global – Asia Fundamental Forecast | 29 December 2025

What happened in the U.S. session?

U.S. markets traded quietly overnight with stocks hovering near record levels and volatility suppressed as traders looked past a data‑light session toward Monday’s pending home sales figures and the final flows of the year. Risk assets remained supported by a narrative of resilient 2025 U.S. growth and rising profits, while expectations for eventual Fed easing in 2026 underpinned both equities and interest‑rate‑sensitive sectors.

What does it mean for the Asia Session?

Going into Monday, Asian traders face a session shaped more by flows than by data: the regional calendar is light with no major new Asia‑specific releases, but markets are trading through thin year‑end liquidity and special New Year trading schedules that can magnify moves in FX, rates, and equity index futures. Portfolio rotation is an important theme after Jefferies’ latest Asia ex‑Japan shift toward India and Taiwan and away from China and Indonesia, which may support IN/ TW equities and weigh on China‑linked risk sentiment.

The Dollar Index (DXY)

Key news events today

Pending Home Sales m/m (3:00 pm GMT)

What can we expect from DXY today?

The Dollar is trading in relatively quiet, year‑end conditions, with the Dollar Index hovering just below the 98–98.2 area after a modest rebound, while major pairs like EUR/USD remain near recent highs and vulnerable to choppy, liquidity‑driven swings rather than strong directional moves. Traders are focused more on positioning into year‑end than on fresh macro catalysts, so intraday spikes can be exaggerated in both directions.

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 of 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

Pending Home Sales m/m (3:00 pm GMT)

What can we expect from Gold today?

Gold is trading just under fresh record highs around the mid‑4,500 USD/oz area, consolidating gains after a powerful Q4 rally that left prices nearly 9% higher on the month and over 70% above last year’s levels. The broader trend remains firmly bullish as long as gold holds above the 4,200–4,300 USD/oz support band, with technical projections and analyst commentary still pointing to upside potential toward 4,600 and even the 5,000 USD/oz handle over the medium term.

Next 24 Hours Bias
Strong Bullish

The Australian Dollar (AUD)

Key news events today

No major news event

What can we expect from AUD today?

The Australian dollar is trading near a 14‑month high around 0.67 against the US dollar, supported by a mix of RBA hawkishness, firm commodity prices, and a softer greenback, while domestic data flow is minimal today, so price action is being driven mainly by global risk sentiment and technical positioning rather than fresh Australian releases.

Central Bank Notes:

• The Reserve Bank of Australia held its cash rate steady at 3.60% at the November 2025 policy meeting, adopting a cautious tone amid a surprise uptick in inflation data for the September quarter. This marks the fourth consecutive pause since the 25 basis point cut in August. The Board attributed some of the inflation rise to temporary factors like higher petrol prices and council rates, but noted signs of more persistent pressures from consumer demand.​
• Policymakers emphasized vigilance on inflation, with trimmed mean inflation expected to remain elevated in the near term before nearing the 2–3% target midpoint by mid-2027. Recent data showed underlying inflation staying above target until at least the second half of 2026, prompting upward revisions to forecasts. Capacity pressures are seen as slightly more pronounced than previously assessed, delaying any easing.
• Headline CPI for the September quarter exceeded expectations, driven partly by temporary items, while underlying measures signal ongoing stickiness. The shift to monthly CPI reporting, with the first full edition in November 2025, will enhance real-time inflation monitoring. Housing and services remain resilient contributors to price pressures.
• Domestic demand shows firmness in services alongside below-trend growth elsewhere, with capacity pressures not expected to ease significantly. The labor market is gradually softening, with unemployment projected to stabilize around 4.4%, though wage growth and productivity dynamics keep unit labor costs a concern. Household spending faces headwinds from high borrowing costs.​
• Global risks include geopolitical tensions and commodity volatility, set against modestly revised-up world growth outlooks. The Board describes its policy as mildly restrictive and data-dependent, balancing inflation control with employment goals. No rate hike was considered despite the inflation surprise.
• Monetary policy remains mildly restrictive to address lingering price stability risks amid household and global vulnerabilities. Communications reaffirm the dual mandate of 2–3% inflation and full employment, with readiness to adjust based on incoming data.​
• Market expectations point to the cash rate holding through early 2026, with a possible modest cut to 3.3% mid-year if inflation eases as forecast. The new monthly CPI data will be key for timely insights.
• Monetary policy remains mildly restrictive, balancing progress on price stability against vulnerabilities in household demand and global outlook. Board communications reaffirm a dual mandate: price stability and full employment, while underscoring readiness to respond should risks materialize sharply.
• Analysts generally expect the cash rate to remain at current levels through early 2026, with only modest cuts possible later in the year if inflation moderates. The new monthly CPI release (first full edition Nov 2025) will be watched closely for timely signals on price trends.
• The next meeting is on 2 to 3 February 2026.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news event

What can we expect from NZD today?

On Monday, the New Zealand dollar is trading close to 0.58 against the US dollar, holding above recent lows but struggling to break cleanly higher as markets balance a steady, relatively restrictive RBNZ stance against lingering global and China‑related growth concerns. The central bank’s decision to cut the Official Cash Rate to 2.25% while signalling that further easing is unlikely has supported the kiwi, which has posted modest monthly and solid annual gains versus the greenback, aided by a softer US dollar on expectations of additional Federal Reserve rate cuts.

Central Bank Notes:

• The Monetary Policy Committee (MPC) left the Official Cash Rate (OCR) unchanged at 2.25% at its 26 November 2025 meeting, following the widely anticipated 25-basis-point reduction from 2.50%, and signaled that policy is now firmly in stimulatory territory while keeping the option of further easing on the table if needed.
• The decision was again reached by consensus, with members judging that the cumulative 325 basis points of easing over the past year warranted a period of assessment, even as several emphasized a willingness to cut further should incoming data point to a more protracted downturn or renewed disinflationary pressures.
• Headline consumer price inflation is projected to hover near 3% in late 2025 before gradually easing toward the 2% midpoint of the 1–3% target band through 2026, supported by contained inflation expectations around 2.3% over the two-year horizon and an expected pickup in spare capacity.
• The MPC noted that domestic demand remains subdued but shows tentative signs of stabilisation, with softer household spending and construction only partially offset by improving services activity; nevertheless, policymakers still expect services inflation to ease as wage growth moderates and the labour market loosens further over the coming year.
• Financial conditions continue to ease as wholesale and retail borrowing rates reprice to the lower OCR, contributing to gradually rising mortgage approvals and improving housing-related sentiment, although broader business credit growth remains patchy and sensitive to uncertainty about the durability of the recovery.
• Recent data confirm that GDP momentum is weak but not deteriorating as sharply as earlier in 2025, with high-frequency indicators pointing to a shallow recovery from a low base and ongoing headwinds from elevated living costs and fragile confidence weighing on discretionary consumption and investment.
• The MPC reiterated that external risks remain skewed to the downside, particularly from softer Chinese demand and uncertainty around United States trade policy, but noted that a lower New Zealand dollar continues to provide some offset via improved export competitiveness and support for tradables inflation.
• Looking ahead to early 2026, the Committee maintained a mild easing bias, indicating that a further cut toward 2.00–2.10% cannot be ruled out if activity fails to gain traction or if inflation undershoots projections, but current forecasts envisage the OCR remaining near 2.25% for an extended period provided inflation converges toward target and the recovery proceeds broadly as expected.
• The next meeting is on 18 February 2026.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news event

What can we expect from JPY today?

Today the yen stays on the back foot around the mid‑150s per dollar in quiet year‑end trading, still weighed down by wide yield differentials despite the BoJ’s recent hike to 0.75%. Markets are watching for the BoJ’s Summary of Opinions later today for any stronger language on inflation or currency moves, against a backdrop of core Tokyo CPI running above target and concerns that a weak yen plus record fiscal spending could feed sticky price pressures.

Central Bank Notes:

• The Policy Board of the Bank of Japan will meet on 18–19 December with markets almost fully pricing a 25-basis-point hike, which would raise the short-term policy rate from 0.50% to around 0.75%, as the bank moves further away from its ultra-loose stance while stressing that any tightening will remain gradual and data-dependent.
• The BOJ is expected to continue guiding the uncollateralized overnight call rate in a narrow band around the new policy rate, near 0.75%, while signaling that the pace and timing of any additional hikes will depend on how past increases affect bank lending, corporate financing conditions, and overall economic activity.
• The quarterly path of JGB purchases remains on a pre-announced, gradual taper: outright purchases are being reduced by about ¥400 billion per quarter through March 2026, then by roughly ¥200 billion per quarter from April to June 2026, with the bank still aiming for JGB purchases to settle near ¥2 trillion in Q1 2027 and retaining flexibility to adjust the pace if market functioning or yield volatility deteriorate.
• Japan’s economy has softened in the near term, with Q3 2025 GDP contracting at an annualized rate of approximately 2.3%, as weaker residential investment and external demand weighed on activity. Meanwhile, business sentiment in manufacturing has recently improved to a roughly four-year high.
• Core consumer inflation (excluding fresh food) accelerated to around 3.0% year-on-year in October, up from 2.9% in September and remaining above the BOJ’s 2% target, while the “core-core” measure excluding both fresh food and energy rose to about 3.1%, underscoring persistent underlying price pressures.
• In the very near term, some input-cost pressures are easing as earlier import price surges fade, but services inflation linked to labor shortages, along with steady wage gains, continues to support broader price momentum; firms’ and households’ medium-term inflation expectations remain anchored slightly above 2%, keeping short-term inflation risks tilted to the upside.
• For the coming quarters, the BOJ assesses that real growth will likely run below potential as the economy digests tighter financial conditions and past yen depreciation. However, accommodative real rates, positive real wage growth, and improving corporate sentiment are expected to help sustain a modest recovery in private consumption and business investment.
• Over the medium term, as overseas demand stabilizes and domestic labor markets remain tight, the BOJ expects wage settlements and inflation expectations to keep core inflation on a gradual upward trajectory around or slightly above 2%, providing room for further cautious rate normalization as long as financial conditions remain supportive and the recovery is not derailed.
• The next meeting is scheduled for 22 to 23 January 2026.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

No major news event

What can we expect from Oil today?

Oil begins Monday, with Brent around the low‑60s and WTI in the high‑50s, extending a weak year in which both benchmarks sit nearly 20% below year‑ago levels as the market prices in a looming 2026 supply overhang. Thin, post‑holiday liquidity and year‑end book‑squaring are amplifying moves, but price action remains bounded between oversupply‑driven selling on rallies and a geopolitical floor tied to US actions against Venezuelan shipments and ongoing uncertainty around Russian flows.

Next 24 Hours Bias
Medium Bearish

The post IC Markets Global – Asia Fundamental Forecast | 29 December 2025 first appeared on IC Markets | Official Blog.

As we look to wrap up 2025, the AI bubble just about managed to get away unscathed to end the year. That being said, there were rising concerns to deal with especially that on valuation. And in talking about that, it is fair to say that all of this will be a mainstay in the conversation for 2026. So the question is, have markets gotten too optimistic about the impact of AI? And are we going to see a reality check come next year?

Well, it definitely is something worth thinking about and considering.

The simple understanding of AI is that it boosts productivity by making processes more efficient and faster right. Let’s take an intelligible example of making orange juice from the fruit itself. Yes, I love fruit examples. It always brings me back to this article here in explaining the whole LIBOR scandal back in the day.

But yes, orange juice.

Let’s say you are someone who squeezes orange juice to sell, and one day you make it known that you are going to buy a high-tech and super-quick orange peeler and squeezer to get the juice ready to sell. People get excited about that and throw you $500 even though you only make like $5 in profits at the time.

The people aren’t fussed about the money today because they “believe” that with the new technology, you’re going to revolutionise the world of selling orange juice.

So, that’s pretty much where we were or somewhat still are at in the whole AI bubble. The sense check hasn’t quite happened yet but it’s only a matter of time until questions are asked about the following:

• Is the new technology really that good?
• How has it really improved the efficiency and time cost of getting the orange juice ready for sale?
• Has it really helped to increase profit margin by a great amount?

If you translate that to companies and firms that are knee deep in AI investment, these are all valid questions at some point. And that could be what investors are demanding next year.

Before this, markets would cheer on AI investment and increased capital expenditure to be revolutionary. Now, doing so isn’t anything new but instead it’s rather commonplace instead.

It’s like having the new PlayStation 5 on release. You’re the cool kid and everyone wants to hang out with you when you have it. But then when everyone else also starts to own it, what you have isn’t anything different and people hang out at their own homes instead.

And so the question then turns to how do you get the people i.e. investors to stay? What makes yours more “magical” and “special”? That is where the productivity conversation comes in.

For Big Tech, that means the conversation isn’t anymore about spending on AI. It’s about who can actually use that correctly to reflect a better bottom line.

For the likes of Google and Meta, it’s all about translating that to ad revenue with the former also going to be scrutinised on their cloud business. And so far, they are two of the better ones that have an easier time to show how increased productivity and how that translates to earnings in general.

Then you have the likes of Amazon and Microsoft, who both have laid out massive amounts of capital in trying to convince investors that they are keeping up in the AI game.

Now, Amazon has committed the most in terms of capital expenditure on AI as compared to everyone else and one thing they are hiding behind for now is that their revenue stream and productivity gains are spread across multiple points. They have their warehouse technologies, robots, website, and cloud systems all layered with AI advancements. And so, the profits have to keep rolling in to convince investors against their big amount of money spent.

That said, Amazon is also big enough to insulate themselves from risks of having to rely on chipmakers and external data centers. They do work to develop their own chips and are going big in expanding on the latter as well. I spoke about data centers and the importance of the fight for power last week here.

As for Microsoft, it’s quite straightforward with Copilot being their biggest push product offering. The proof will be in the numbers, that being how many people actually feel the need to sign up for AI software delivered by the firm. And personally speaking, I’m not a big fan with my own taste preference being to continue using Windows 10.

And we can’t talk about Big Tech without talking about the poster boy of the whole AI bubble now, can we? Nvidia has been the biggest name of them all during this run and is it time that the lofty expectations finally catch up to them?

The Blackwell chip release shows that demand is still well outweighing supply. But if backlogs start to reduce and companies like Amazon and Microsoft also start developing their own AI ecosystem, that could be a troubling sign for Nvidia amid the pressure to constantly outperform and deliver well above what they are doing.

Don’t get me wrong. Nvidia is still a major cash cow and the biggest earner from the continued focus in the AI bubble. But are investor expectations too high that anything less than perfect will get punished? That will be interesting to see, especially with key risks from the China market that could provide some untimely headlines.

But if all goes well for Jensen Huang and his company, they could be the first ever $5 trillion market cap stock. Or if you want to dream big, maybe even $10 trillion.

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

As we look to wrap up 2025, the AI bubble just about managed to get away unscathed to end the year. That being said, there were rising concerns to deal with especially that on valuation. And in talking about that, it is fair to say that all of this will be a mainstay in the conversation for 2026. So the question is, have markets gotten too optimistic about the impact of AI? And are we going to see a reality check come next year?

Well, it definitely is something worth thinking about and considering.

The simple understanding of AI is that it boosts productivity by making processes more efficient and faster right. Let’s take an intelligible example of making orange juice from the fruit itself. Yes, I love fruit examples. It always brings me back to this article here in explaining the whole LIBOR scandal back in the day.

But yes, orange juice.

Let’s say you are someone who squeezes orange juice to sell, and one day you make it known that you are going to buy a high-tech and super-quick orange peeler and squeezer to get the juice ready to sell. People get excited about that and throw you $500 even though you only make like $5 in profits at the time.

The people aren’t fussed about the money today because they “believe” that with the new technology, you’re going to revolutionise the world of selling orange juice.

So, that’s pretty much where we were or somewhat still are at in the whole AI bubble. The sense check hasn’t quite happened yet but it’s only a matter of time until questions are asked about the following:

• Is the new technology really that good?
• How has it really improved the efficiency and time cost of getting the orange juice ready for sale?
• Has it really helped to increase profit margin by a great amount?

If you translate that to companies and firms that are knee deep in AI investment, these are all valid questions at some point. And that could be what investors are demanding next year.

Before this, markets would cheer on AI investment and increased capital expenditure to be revolutionary. Now, doing so isn’t anything new but instead it’s rather commonplace instead.

It’s like having the new PlayStation 5 on release. You’re the cool kid and everyone wants to hang out with you when you have it. But then when everyone else also starts to own it, what you have isn’t anything different and people hang out at their own homes instead.

And so the question then turns to how do you get the people i.e. investors to stay? What makes yours more “magical” and “special”? That is where the productivity conversation comes in.

For Big Tech, that means the conversation isn’t anymore about spending on AI. It’s about who can actually use that correctly to reflect a better bottom line.

For the likes of Google and Meta, it’s all about translating that to ad revenue with the former also going to be scrutinised on their cloud business. And so far, they are two of the better ones that have an easier time to show how increased productivity and how that translates to earnings in general.

Then you have the likes of Amazon and Microsoft, who both have laid out massive amounts of capital in trying to convince investors that they are keeping up in the AI game.

Now, Amazon has committed the most in terms of capital expenditure on AI as compared to everyone else and one thing they are hiding behind for now is that their revenue stream and productivity gains are spread across multiple points. They have their warehouse technologies, robots, website, and cloud systems all layered with AI advancements. And so, the profits have to keep rolling in to convince investors against their big amount of money spent.

That said, Amazon is also big enough to insulate themselves from risks of having to rely on chipmakers and external data centers. They do work to develop their own chips and are going big in expanding on the latter as well. I spoke about data centers and the importance of the fight for power last week here.

As for Microsoft, it’s quite straightforward with Copilot being their biggest push product offering. The proof will be in the numbers, that being how many people actually feel the need to sign up for AI software delivered by the firm. And personally speaking, I’m not a big fan with my own taste preference being to continue using Windows 10.

And we can’t talk about Big Tech without talking about the poster boy of the whole AI bubble now, can we? Nvidia has been the biggest name of them all during this run and is it time that the lofty expectations finally catch up to them?

The Blackwell chip release shows that demand is still well outweighing supply. But if backlogs start to reduce and companies like Amazon and Microsoft also start developing their own AI ecosystem, that could be a troubling sign for Nvidia amid the pressure to constantly outperform and deliver well above what they are doing.

Don’t get me wrong. Nvidia is still a major cash cow and the biggest earner from the continued focus in the AI bubble. But are investor expectations too high that anything less than perfect will get punished? That will be interesting to see, especially with key risks from the China market that could provide some untimely headlines.

But if all goes well for Jensen Huang and his company, they could be the first ever $5 trillion market cap stock. Or if you want to dream big, maybe even $10 trillion.

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

Global Markets:

•  Asian Stock Markets : Nikkei down 0.18%, Shanghai Composite up 0.31%, Hang Seng up 0.30% ASX down 0.32%
• Commodities : Gold at $4,538.80 (-0.31%), Silver at $79.660 (3.20%), Brent Oil at $60.83 (0.96%), WTI Oil at $57.31 (1.00%)
• Rates : US 10-year yield at 4.135, UK 10-year yield at 4.5080, Germany 10-year yield at 2.8624

News & Data:

• (JPY) Unemployment Rate  2.6%  to 2.6% expected

Markets Update:

Asian markets began the week on a mixed note Monday, with activity remaining relatively subdued as global markets move into the final trading days of the year. With limited fresh economic or corporate cues, sentiment across the region stayed cautious. Following last week’s Christmas and Boxing Day holidays, several markets are also set for shortened sessions midweek, and many will close again on Thursday for the New Year break, adding to thin volumes.

In Australia, the S&P/ASX 200 slipped 16.30 points, or 0.19%, to 8,746.40, while the broader All Ordinaries dipped 18.10 points, or 0.2%, to 9,050.90. Mining counters helped limit broader declines, though healthcare and banking stocks weighed. James Hardie Industries, CSL, Alcoa, Capstone Copper, Evolution Mining, South32, BHP Group, Block, AEA Group, and ANZ recorded moderate to strong gains. On the downside, Santos, Sigma Healthcare, Goodman Group, SGH, News Corp., Northern Star Resources, Newmont, QBE Insurance, Westpac, and Brambles eased between 0.3% and 1%.

Japan’s Nikkei 225 also traded weaker, shedding 200.22 points, or 0.39%, to 50,550.17 by the morning break. Losses from Trend Micro, Sumitomo Dainippon, DIC Corp., Advantest, Kawasaki Heavy Industries, and Daikin Industries dragged the index lower, while Itochu Corp. rallied nearly 4.5%. Gains were also seen in Fujikura, Sumitomo Metal Mining, Mitsubishi Materials, and Hino Motors.

China’s Shanghai Composite added 15.13 points, or 0.37%, to 3,978.81, supported by strength in financial and energy heavyweights. Elsewhere, South Korea’s KOSPI rose sharply, Hong Kong’s Hang Seng edged higher, while Malaysia and New Zealand softened and Singapore traded mildly positive.

Upcoming Events:

• 03:30 PM GMT – USD Crude Oil Inventories

The post Monday 29th December 2025:Asian Markets Mixed as Year-End Trading Stays Muted first appeared on IC Markets | Official Blog.

DXY (U.S. Dollar Index):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 98.53

Supporting reasons: Identified as a pullback resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 97.18

Supporting reasons: Identified as a pullback support that aligns with the 78.6% Fibonacci retracement, indicating a potential area where the price could again stabilize.

1st resistance: 99.22
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 1.1687

Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement, where renewed buying pressure could emerge to push the price higher.

1st support: 1.1550

Supporting reasons: Identified as a swing low support, indicating a potential level where the price could stabilize once again.

1st resistance: 1.1807

Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

EUR/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 181.62

Supporting reasons: Identified as an overlap support, where renewed buying pressure could emerge to push the price higher.

1st support: 177.97
Supporting reasons: Identified as a pullback support, indicating a potential area where the price could again stabilize.

1st resistance: 188.13
Supporting reasons: Identified as a resistance that is supported by the 161.8% Fibonacci extension, indicating a potential level that could cap further upward movement.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 0.8744

Supporting reasons: Identified as a pullback resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 0.8667
Supporting reasons: Identified as an overlap support, indicating a potential area where the price could stabilize once more.

1st resistance: 0.8867
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 1.3405

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 1.3279
Supporting reasons: Identified as an overlap support, indicating a potential area where the price could stabilize once more.

1st resistance: 1.3585
Supporting reasons: Identified as a pullback resistance that aligns with the 78.6% Fibonacci retracement, indicating a potential level that could halt further upward movement.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance

Pivot: 207.19

Supporting reasons: Identified as an overlap support, where renewed buying pressure could emerge to push the price higher.

1st support: 204.65
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 211.77
Supporting reasons: Identified as a resistance that is supported by the 161.8% Fibonacci projection, indicating a potential level that could halt further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 0.7875

Supporting reasons: Identified as an overlap support, where renewed buying pressure could emerge to push the price higher.

1st support: 0.7855
Supporting reasons: Identified as a multi-swing low support, indicating a potential level where the price could stabilize once again.

1st resistance: 0.8104
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could cap further upward movement.

USD/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price has already bounced off the pivot and may continue its bullish move toward the 1st resistance

Pivot: 154.41

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 151.03

Supporting reasons: Identified as a pullback support, indicating a strong area where buyers might return, and the price could stabilize once again.

1st resistance: 160.23

Supporting reasons: Identified as a pullback resistance. This level represents the next key area where upward movement could be capped amid increased selling pressure

USD/CAD:

Potential Direction: Bearish                                                                                                                                                                                            

Overall momentum of the chart: Bearish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 1.3733

Supporting reasons: Identified as a pullback resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 1.3566

Supporting reasons: Identified as a swing low support, indicating a key level where the price could stabilize once more.

1st resistance: 1.3908

Supporting reasons: Identified as a pullback resistance, making it a possible target for bullish advances and a level where some sellers could return to cap gains

AUD/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance

Pivot: 0.6582

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 0.6404

Supporting reasons: Identified as a pullback support, this area has provided strong support historically and may attract buying interest for a potential short-term bounce

1st resistance: 0.6798

Supporting reasons: Identified as a pullback resistance that aligns with the 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance

Pivot: 0.5682

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 0.5584

Supporting reasons: Identified as a swing low support, this area has provided strong support historically and may attract buying interest for a potential short-term bounce

1st resistance: 0.5838

Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance

Pivot: 47,063.30

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 45,135.60

Supporting reasons: Identified as an overlap support, suggesting a potential area where the price could stabilize once again.

1st resistance: 50,049.13

Supporting reasons: Identified as a resistance that is supported by the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price has already bounced off the pivot and may continue its bullish move toward the 1st resistance

Pivot: 23,834.30

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 23,059.30

Supporting reasons: Identified as a pullback support, indicating a key level where the price could stabilize once more.

1st resistance: 24,635.40

Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

US500 (S&P 500):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could make a short-term pullback toward the pivot before rising again toward the 1st resistance

Pivot: 6,772.84

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 6,506.28

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 7,032.73

Supporting reasons: Identified as a resistance that is supported by the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

The price has already reacted off the pivot and may continue its bearish move toward the 1st support.

Pivot: 94,255.27

Supporting reasons: Identified as a pullback resistance that aligns with the 50% Fibonacci retracement, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 80,712.26

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 106,846.29

Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 3,390.47

Supporting reasons: Identified as a pullback resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 2,725.92

Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where the price could stabilize once more.

1st resistance: 3,838.62
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 60.30

Supporting reasons: Identified as an overlap resistance, where selling pressures could intensify and potentially cap any upward retracement

1st support: 54.80
Supporting reasons: Identified as a swing low support, indicating a key level where the price could stabilize once more.

1st resistance: 65.75
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 4,379.38

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 4,211.75
Supporting reasons: Identified as a pullback support, indicating a key level where the price could stabilize once more.

1st resistance: 4,684.35
Supporting reasons: Identified as a resistance that is supported by the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

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The post Monday 29th December 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

• Musk flags silver supply (and price!) risks as China export curbs spark market concern
• PBOC sets USD/ CNY mid-point today at 7.0331 (vs. estimate at 7.0057)
• China launches “Justice Mission 2025” drills simulating blockade around Taiwan (more info)
• BoJ signals more rate hikes ahead as policy seen far from neutral. JPY trades higher.

Christmas Day/Boxing Day/Weekend:

• China to conduct live-fire military drills surrounding Taiwan on December 30
• China flags more proactive fiscal policy in 2026 to boost domestic demand
• Ukraine peace talks gain momentum as Trump and European leaders signal progress
• China industrial profits slump at fastest pace in 14 months as demand weakens
• Trump: “Final stages of talking” on Ukraine-Russia deal
• Oil drops again but OPEC’s market share war could create a generational buying opportunity
• Mixed sector performances as tech and healthcare show gains
• Tokyo CPI eased in December but stayed above target, BOJ to stay on gradual rate hike path
• BOJ’s Ueda sees wages and inflation reinforcing rate-hike case (Post when Ueda spoke on December 25)

TL;DR summary:

• Silver hit fresh record highs above US$83 before a sharp pullback, with volatility driven by strong industrial demand and supply concerns

• Elon Musk warned higher silver prices are problematic for industry, highlighting EVs’ heavy reliance on the metal

• China industrial profits slumped 13.1% y/y in November, underscoring persistent deflation and “involution” pressures

• Beijing signalled a more proactive fiscal stance in 2026, supporting consumption, innovation and growth near 5%

• USD/CNY fixing hit its strongest level since September 2024, while BoJ commentary kept further rate hikes in focus

• Ukraine peace talks made incremental progress, while PLA drills around Taiwan kept geopolitical risk elevated

Silver was volatile to start the new week, surging to another record high above US$83 before sharply retracing below US$75. As of writing, prices have stabilised around the mid-range near US$80. The move drew broader attention over the weekend after Elon Musk weighed in on rising prices, warning: “This is not good. Silver is needed in many industrial processes.”

The concern is well-founded from an industrial perspective. Electric vehicles use roughly twice as much silver as internal combustion engine cars, with the metal critical for power electronics, inverters, high-voltage contacts and fast-charging systems due to its superior conductivity and reliability. The episode reinforces how sensitive silver has become to the electrification and AI capex cycles.

China was also in focus over the weekend. Industrial profits fell 13.1% y/y in November, the sharpest decline in more than a year, as weak domestic demand and persistent deflation offset relatively resilient exports. The data underscore that “involution” pressures remain firmly in place, with firms still forced to compete aggressively on price and push excess supply offshore as the economy heads into 2026.

Against that backdrop, China’s finance ministry said fiscal policy will be more proactive in 2026, with a renewed focus on boosting consumption, supporting innovation and strengthening the social safety net in an effort to sustain growth near 5%. The guidance helped lend some support to the AUD, while on Monday the People’s Bank of China set the USD/CNY fixing at its strongest level since late September 2024. The yuan is strong while the PBoC seeks to stabilise the currency.

The yen was another mover. USD/JPY dipped below 156.10 before rebounding back above 156.50. The Bank of Japan’s December Summary of Opinions showed policymakers remain confident that policy is still far from neutral, with several members backing steady further rate hikes to avoid falling behind the curve, even as real rates remain deeply negative. In the points above yopu’ll see notes from Ueda’s speech on Christmas Day and Tokyo inflation data published on December 26.

Geopolitics also remained a bubbling risk. Ukraine peace talks showed further progress after constructive discussions involving Donald Trump, EU leaders and Volodymyr Zelenskyy, though unresolved territorial issues continue to limit any full “peace dividend” pricing. Meanwhile, China’s People’s Liberation Army Eastern Theater Command launched a multi-day exercise around Taiwan dubbed “Justice Mission 2025,” featuring blockade-style operations and joint live-fire assaults, keeping regional geopolitical risk elevated.

Asia-Pac
stocks:

• Japan
  (Nikkei 225) -0.31%
• Hong
  Kong (Hang Seng) +0.42%
• Shanghai
  Composite +0.31%
• Australia
  (S&P/ASX 200) -0.37%

Bitcoin gained ground, up over 2.5% to above US$90K.

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

TL;DR summary:

• Drills include blockade-style operations and joint assault scenarios

• Exercises involve multi-directional air and naval approaches

• Rhetoric framed as warning against Taiwan independence

• Markets watch for signs of escalation beyond scheduled drills

China’s military has announced a new, larger-scale exercise around Taiwan (earlier info: China to conduct live-fire military drills surrounding Taiwan on December 30), intensifying pressure on the island and reinforcing concerns that recent drills are evolving beyond routine signalling into more explicit rehearsal scenarios.

The People’s Liberation Army Eastern Theater Command said it will begin a major exercise later this evening U.S. time, running through Tuesday, under the codename “Justice Mission 2025.” According to the command, the drills will focus on sea–air combat readiness patrols, joint seizure of comprehensive superiority, and the blockade of key ports and areas, language that closely aligns with scenarios designed to isolate Taiwan rather than conduct limited demonstrations.

In a statement, an Eastern Theater Command spokesperson said the exercises will involve vessels and aircraft approaching Taiwan from multiple directions, with forces from different military services conducting joint assault operations. The drills are intended to test joint operational capabilities across domains, a central requirement for sustained high-intensity operations rather than symbolic manoeuvres.

The spokesperson described the operation as a “stern warning” to Taiwan independence forces, calling it a legitimate and necessary action to safeguard China’s sovereignty and national unity. The emphasis on “all-dimensional deterrence outside the island chain” marks a notable escalation in rhetoric, suggesting an intent to project control not only around Taiwan but also across surrounding sea and air corridors.

From a market perspective, the announcement reinforces a shift from episodic drills toward more complex, extended exercises that explicitly reference blockade-style tactics. While similar operations in the past have not disrupted trade flows, the framing raises sensitivity around shipping routes, insurance costs, and technology supply chains, particularly semiconductors, should such exercises become more frequent or prolonged.

Asian markets have historically absorbed Taiwan-related military headlines with limited immediate repricing unless accompanied by operational spillover or political escalation. However, the duration of the exercise, its codename, and its explicit operational objectives may sustain a modest geopolitical risk premium, particularly for regional equities and currencies.

For now, investors are likely to monitor whether the drills remain time-bound and contained, or whether follow-on operations are announced. A transition from scheduled exercises to rolling deployments would mark a more material shift in the regional risk environment.

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

TL;DR summary:

• China announces major PLA drills around Taiwan on December 30

• Exercises include live-fire activities in surrounding waters and airspace

• Drills run from 8 a.m. to 6 p.m. local time

• Markets view the move as a familiar geopolitical risk signal

• Focus remains on whether exercises are extended or escalated

China announced it will conduct major military drills around Taiwan on December 30, underscoring persistent geopolitical tensions in the region and keeping markets alert to potential escalation risks, even as no immediate disruption to trade or shipping has been signalled.

According to a statement, the People’s Liberation Army Eastern Theater Command will carry out large-scale exercises from 8 a.m. to 6 p.m. local time, covering designated waters and airspace surrounding Taiwan. The drills will include live-fire activities, a detail that typically heightens investor sensitivity given the proximity to key shipping lanes and semiconductor supply chains.

The Eastern Theater Command is responsible for military operations focused on Taiwan and the East China Sea, making its involvement closely watched by regional governments and financial markets alike. While Beijing regularly conducts exercises in the area, the inclusion of live firing often signals a firmer show of force, reinforcing strategic pressure without crossing into direct confrontation.

For markets, the announcement revives a familiar risk backdrop rather than introducing a new shock. Asian equities and currencies have historically absorbed similar headlines with limited immediate impact unless drills are extended, expanded, or paired with explicit political messaging. However, traders remain sensitive to any developments that could disrupt regional stability or global supply chains, particularly those tied to advanced manufacturing and shipping.

Taiwan remains central to global technology production, and any perceived increase in military risk tends to support defensive positioning across regional assets while underpinning safe-haven flows during periods of heightened uncertainty. At the same time, past episodes suggest that short-dated geopolitical premiums often fade quickly in the absence of follow-through.

The timing, confined to a single trading day, suggests the drills are intended as a controlled demonstration rather than a sustained escalation. Nonetheless, the use of live fire keeps attention firmly on cross-strait dynamics and reinforces the need for markets to monitor official communications closely.

Until further details emerge, investors are likely to treat the exercises as a reminder of underlying geopolitical risks rather than a catalyst for repricing, with attention turning to whether additional drills or political statements follow in coming days.

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

TL;DR summary:

• China signals a more proactive fiscal stance for 2026

• Policy focus shifts toward consumption, innovation and social support

• Authorities aim to reduce reliance on exports and lift domestic confidence

• Growth target around 5% likely to be retained

• Fiscal policy expected to play a central stabilising role

China’s fiscal stance is set to turn more forcefully supportive in 2026, with the government signalling a renewed push to revive domestic demand, accelerate technological innovation and strengthen the social safety net as the economy continues to grapple with weak confidence at home.

In a statement released Sunday after a two-day policy meeting, the China Ministry of Finance said fiscal policy would be “more proactive” next year, reaffirming priorities that include boosting consumption, expanding investment and nurturing new sources of growth. The messaging comes as global trading partners continue to urge Beijing to rebalance away from export-led growth and address structural weaknesses in domestic demand.

The ministry said it would actively expand investment in what it described as “new productive forces,” a phrase commonly used by policymakers to refer to advanced manufacturing, digital industries and emerging technologies. Supporting innovation and fostering new growth engines will be a core focus, alongside policies aimed at improving people’s overall development and economic resilience.

Strengthening the social security system also featured prominently in the ministry’s agenda. Authorities pledged to improve access to healthcare and education, measures seen as crucial to easing household precautionary saving and encouraging consumers to spend more freely. China’s prolonged property downturn has weighed heavily on sentiment, reinforcing the need for policies that stabilise expectations and rebuild confidence among households.

Beyond demand support, the ministry outlined broader structural goals for 2026, including deeper integration between urban and rural economies and further progress toward a greener growth model. These initiatives align with longer-term efforts to shift China’s economy toward more sustainable and balanced development, even as near-term growth pressures persist.

Earlier this month, senior leaders reiterated their commitment to a “proactive” fiscal policy designed to stimulate domestic demand while maintaining relatively strong headline growth. The latest comments from the finance ministry reinforce that message, signalling that fiscal support will remain a cornerstone of China’s macro strategy into the year ahead.

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

TL;DR summary:

• European and US leaders report “good progress” in Ukraine peace discussions

• Trump reiterates talks are close, but admits key territorial issues remain

• Security guarantees largely agreed, though not yet finalised

• Europe stresses need for ironclad guarantees from day one

• Markets remain cautious about pricing a full peace dividend

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Momentum around Ukraine peace talks appeared to build further over the weekend, adding fresh colour to President Donald Trump’s earlier claim that negotiations are in the “final stages,” though markets will remain cautious about declaring a true geopolitical inflection point.

Following Trump’s comments after talks with Volodymyr Zelenskyy, European leaders confirmed a coordinated push to consolidate progress. European Commission President Ursula von der Leyen said she had held a one-hour call with Trump, Zelenskyy and several European leaders to discuss the latest peace negotiations, describing the talks as constructive and pointing to “good progress.”

Von der Leyen stressed that Europe is ready to continue working closely with Ukraine and the United States, while emphasising that any agreement must be underpinned by “ironclad” security guarantees from day one — language that mirrors Trump’s earlier promise of a “strong” security arrangement as part of any deal.

In London, a Downing Street spokesperson confirmed that UK Prime Minister Keir Starmer also participated in the discussions, with leaders commending Trump for progress achieved so far. The coordinated messaging suggests growing alignment among Western partners, at least on process, even as key substantive issues remain unresolved.

Trump himself struck an upbeat but qualified tone. He said negotiations were “getting a lot closer” following what he described as a “terrific” meeting with Zelenskyy, while acknowledging that one or two “thorny issues” remain — notably territorial questions, which he said were not yet resolved but could be settled. Trump suggested the outcome of the talks could become clearer within “a few weeks,” reinforcing the sense of urgency flagged in his earlier remarks.

On security guarantees, Zelenskyy said U.S.–Ukraine assurances were “100% agreed,” while Trump characterised them as 95% settled — a small but telling divergence that highlights how close, yet incomplete, the talks remain. Trump also said Russia would be involved in Ukraine’s reconstruction and claimed Washington would find ways to overcome President Vladimir Putin’s resistance to a ceasefire.

For markets, the narrative still resembles cautious optimism rather than a confirmed “peace dividend.” As highlighted in the earlier brief, the euro could benefit if investors begin to price in lower energy costs and a reduced geopolitical risk premium, while oil prices could remain under pressure. However, until concrete milestones — such as a scheduled in-person Trump-Putin meeting or a signed framework — emerge, investors are likely to treat the headlines as incremental progress rather than a decisive regime shift.

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Early EUR/USD trade has the pair not a lot changed from late Friday circa 1.1765 and thereabouts. Do be aware that at this time of year many professional traders are away from the market, leaving wholesale participation light.

Oil futures will reopen for the week at the top of the hour, 1800 US Eastern time. The same ‘light participation’ comments apply to Globex also.

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