Articles

• Australia November employment -21.3K vs +20.0K expected
• Mexico approves tariffs as high as 50% taiff on Chinese and Asian imports
• UK RICS house price survey -16 vs -21 expected
• New Zealand Q3 manufacturing sales +1.1% vs -2.9% prior
• Japan Q4 business survey index +4.7% vs +3.8%
• RBC forecasts gold to average $4,600 in 2026 and hit $5,100 in 2027
• Shares of Oracle fall 10% the questions about AI spending continue

Markets:

• Gold down $15 to $4212
• US 10-year yields down 4 bps to 4.12%
• WTI crude oil flat at $58.45
• S&P 500 futures down 53 points or 0.8%
• JPY leads, AUD lags

The Australian dollar struggled after a soft jobs report. The unemployment rate managed to hold steady but only because of a three-tick drop in the participation rate. AUD fell about 20 pips on the headline but that was the extent of that move.

The continued selling in AUD after that came on generalized risk aversion and an unwind of the post-Fed trade. After the decision, the US dollar sold off and stock markets rallied. The move in stock markets has been completely erased and the dollar is rebounding. The equity selling was helped along by a bad post-earnings reaction in Oracle shares, which are down 11% and nearly 50% since their prior earnings spike.

The theme around AI overspending and profitability isn’t going away and will likely nag markets throughout the year ahead.

Neither will tariffs and Mexico made an interesting move by blocking off much of its Asia imports via tariffs. That sets up a potential negotiation with the US to create a bloc and replace Chinese low-cost goods.

Other moves saw silver hit as high as $62.88 as that rally continues. But the profit taking quickly unwound the gains on the day and gold is down modestly.

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

Mexico’s Senate has approved tariffs of 5-50% on imports from China and other parts of Asia.

The duties will hit Asian countries that don’t have trade deals with Mexico, including China, India, South Korea, Thailand and Indonesia.

• Automobiles (Light Vehicles): 50% (up from 20%)

• Textiles and Clothing generallly 35% (this was a big focus of the bill)

• Steel and Aluminum: 35% (with some at 50%)

• Footwear, Plastics, and Glass: 35%

• Electronics and Appliances: Mixed (5% – 35%) –

  • Some inputs and specific parts were “softened” to lower rates (5% to 10%) to avoid hurting Mexican assembly plants, while finished consumer appliances likely face the 35% rate.

This is starting to look like a bid to get a deal with Trump but note that the original proposal was much harsher. From the US perspective though, all I see is a shift in manufacturing to Mexico from China. If that’s the case, then maybe hurting China was the real strategy all along.

What’s starting to take shape is a US-led fortress North America strategy or perhaps all the Americas. What’s notable is South Korea getting cut out, which is/was a strong US ally. That could further fears that the US is abandoning Asia to China.

This strategy could beg for retaliation from China to Mexico. It also puts Canada in a tough place unless it can get zero tariffs from the US.

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

In 2025, the Trump administration took on the world with its trade but 2026 will be about its neighbors.

There is a sense that the trade war has stabilized and hopefully it has but the year ahead will be all about the USMCA trade agreement. Mexico and Canada represent nearly 30% of US imports and have largely avoided tariffs so far. Meanwhile, Canada and Mexico represent about 33% of US exports.

U.S. Trade Representative Jamieson Greer said Wednesday that the Trump
administration is keeping all options on the table for the future of the trade agreement, which Trump negotiated in his first term.

It’s a big year for the agreement but there is an automatic review in 2026 and each country has the opportunity to extend it, renegotiate it or withdraw.

I strongly suspect the US will aim for bilateral agreements and Greer hinted at the same today, noting structural differences in the two countries.

“The labour situation’s different. The import-export profile is
different. The rule of law is different. So it makes sense to talk about
things separately with Canada and Mexico,” he said.

Here is a key detail that’s also critical. All three countries must indicate by July 1 about their intentions for the deal but the US must provide a report to Congress 180 days before the deadline — that’s January 2 — and it must signal the administration’s intentions.

It’s possible the deal survives, or at least the important parts but Greer appeared before a U.S. Senate subcommittee on Tuesday, telling
senators that one of his key goals is tightening CUSMA’s “rules of
origin”.

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

• Prior was 42.2K
• Full time -56.5K vs +55.3K prior
• Unemployment rate 4.3% vs 4.4% expected (prior 4.3%)
• Participation rate 66.7% vs 67.0% prior

The RBA decision was yesterday but Bullard tipped a more-hawkish stance and the market saw a 33% chance of rate hike as soon as March but we will need to mark that down. Don’t let the lower unemployment rate fool you as it came on a sharp decline in participation. If that had held steady, it would have ticked to 4.6%.

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

• Prior was -19

If you squint, you can start to see a turn upward.

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

• Prior was +3.8%

The trade war isn’t hurting manufacturing and the latest yen weakness won’t hurt as well (at least on the export side, it’s not so great for importers).

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

• Prior was -2.9%

This is a nice rebound after poor Q2 reading.

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

The calendar is looking a bit top-heavy for the Thursday session in Asia. While we have some Japanese flow data and a check-in on the UK housing market, the main event is inarguable — the Australian labor market report.

We kick things off at 2145 GMT with New Zealand Manufacturing Sales for Q3. The prior read was a soft -2.9% and there is no consensus but I would expect a bounce.

Then, attention turns to Tokyo at 23:50. We’ll get the Business Survey Index (BSI) Large Manufacturing for Q4. Again, there is no consensus but the prior was +3.8%.

The Main Event is Australian Employment Data

At 00:30, the trading will pick up significantly as the Australian Bureau of Statistics drops the November employment numbers. Last month we saw a solid print, but the expectations are for a bit of a cooldown this time around to a still-robust +20.0K. I strongly suspect the RBA saw these numbers before yesterday’s hawkish hold.

Here is what economist are looking for:

• Employment Change: Expected to add 20.0k jobs (down from the hefty 42.2k prior).

• Unemployment Rate: Expected to tick up slightly to 4.4% (from 4.3%).

• Participation Rate: Expected to hold steady at 67.0%.

The “full time” employment component (Prior 55.3k) is always be key. If we see headline weakness but full-time jobs remain robust, the AUD should stay firm but watch Feb hike pricing data, which is currently a shade below 25%. If the unemployment rate ticks up beyond 4.4% forget about the Feb hike and AUD will slip.

Also of note at 00:01 GMT is the UK RICS Housing Survey. It’s expected to slide further to -21 from -19, signaling continued pressure in the British property market.

Here is the schedule for the session:

21:45

• NZ: Manufacturing Sales (Q3) – Prior: -2.9%

23:50

• JP: Foreign Bond Investment – Prior: -771.3B

• JP: Foreign Invest JP Stock – Prior: 655.6B

• JP: Business Survey Index (BSI) Large Manufacturing (Q4) – Prior: 3.8%

00:01

• UK: RICS Housing Survey (Nov) – Exp: -21 / Prior: -19

00:30

• AU: Employment Change (Nov) – Exp: 20.0k / Prior: 42.2k

• AU: Unemployment Rate (Nov) – Exp: 4.4% / Prior: 4.3%

• AU: Participation Rate (Nov) – Exp: 67.0% / Prior: 67.0%

There are no major speeches scheduled but we will watch out for the fallout from the Fed and the usual tirades from Trump on Truth Social.

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

• Powell signals neutral policy stance as non tariff driven inflation fades
• Fed Powell:Layoffs, hiring remain low. Rates are now in a plausible range of neutral.
• The line-by-line comparison of the October and the December FOMC statements
• The Federal Reserve cuts rates by 25 basis points to 3.50% to 3.75%
• White House economic advisor Hassett: Fed has plenty of room to cut rates
• BOC Macklem: Markets can count on us taking decisions one at a time
• Crude oil inventories see a drawdown at -1.812 million versus -2.310 million estimate
• A line by line comparison of the October and December BOC statements.
• BOC Macklem: Given the current balance of risks, the policy rate is at the right level
• The Bank of Canada keeps rates unchanged at 2.25% at the December 2025 meeting.
• US employment cost index for Q3 0.8% versus 0.9% estimate
• investingLive European FX news wrap: Final countdown to the last Fed decision of 2025

The Federal Reserve cut rates by 25 basis points as expected to 3.5% to 3.75%. The also announced that they would be purchasing bills in what traders and analysts are calling a mini-QE. The cut was expected to be a hawkish cut. It was more neutral in that the Fed chair emphasized that the Fed is “well-positioned”.

The vote split came in at 9–3, with Fed Governors Goolsbee and Schmid dissenting in favor of keeping rates unchanged. Meanwhile, Governor Miran dissented in the opposite direction, calling for a 50-basis-point cut.

The dot plot shows that four additional Fed presidents preferred to hold rates steady, suggesting a larger bloc of hawkish resistance underneath the headline decision. While the full list of dissenters isn’t yet confirmed, it’s highly likely that Dallas Fed President Logan and Cleveland Fed President Hammack were among them—both are well-known inflation hawks and will serve on the FOMC in 2026.

The identities of the remaining two “hold” voters are still unclear, but based on the composition of the upcoming rotation, it is safe to conclude that Goolsbee and Schmid will be replaced next year by presidents who leaned toward keeping rates unchanged. That shift could be more hawkish (depending on the other two) or unchanged in 2026.

We should expect to hear more from those hawkish members in the next day or two as they explain their stance and begin shaping the narrative around the Fed’s evolving policy bias.

Looking at the projections for end of year GDP, Unemployment rate and PCE inflation (headline and core) showed:

• GDP projected higher to 2.3% from 1.8%
• Unemployment projected unchanged at 4.4%
• PCE inflation projected lower at 2.4% from 2.6%
• PCE Core projected lower at 2.5% vs 2.6%
• The year end Fed Funds target projected unchanged at 3.4%

Key Takeaways from the Powell press conference comments.

During Powell’s press conference, key takeaways were:

• Powell signaled that policy is now in the plausible range of neutral, with no preset path and decisions remaining data dependent.

• The labor market is softening gradually, with rising downside risks to employment but no signs of a sharp downturn.

• Inflation remains somewhat elevated, driven largely by tariffs, while services disinflation continues.

• Consumer spending is resilient, and AI-related business investment remains strong.

• Powell emphasized the Fed is well-positioned to wait for more data before deciding on January policy moves.

In Summary

Chair Powell framed today’s decision as part of a careful shift toward neutral policy, stressing that the Fed has no preset path and will continue to evaluate incoming data “meeting by meeting.” He noted that the labor market has softened—job gains have slowed, unemployment has edged higher, and labor demand has cooled—but he does not foresee a sharp deterioration, even as downside risks to employment have increased. On inflation, Powell said overall price pressures remain somewhat elevated, with goods inflation now entirely driven by tariffs while services disinflation continues. He also cautioned that recent shutdown-distorted inflation and labor data will require careful interpretation.

Powell highlighted that consumer spending remains solid and that business investment, especially in AI data-center capacity, continues to expand. Housing remains weak, and a quarter-point rate cut would do little to improve affordability given long-standing supply constraints. Looking ahead, Powell said the Fed is well-positioned to wait for a substantial amount of new data before the January meeting, adding that the Committee broadly supported today’s decision and remains focused on guiding inflation back to 2% while avoiding unnecessary damage to the labor market.

The markets were encouraged by the Fed chair comments and the decision from the Fed.

US stocks did move lower on the comment that the rate was now near neutral, but reversed higher as the fear of inflation seemed less a concern (with growth continuing).

• Dow industrial average rose 497.46 point or 1.05% to 48057.75. The all-time record high close reached on November 12 was at 48254.82.
• S&P index rose 46.17 points or 0.67% to 6886.68. That is just short of its record high reached on October 29 at 6890.59.
• NASDAQ index rose and 77.67 points or 0.33% at 23654.16. Its all-time high close reached on October 29 is at 23958.47.
• Russell 2000 rose 33.36 points or 1.32% at 2559.60. The index closed at a new record high.

Yields were encouraged by the comments:

• 2-year yield 3.538%, -7.5 basis points. The 2-year yield is now within the Fed funds target rate between 3.5% and 3.75%.
• 5 year yield 3.730%, -4.9 basis points
• 10 year yield 4.150%, -3.5 basis points
• 30 year yield 4.795%, -1.3 basis points.

The USD moved lower after the decision. The declines of the greenback vs the major currencies showed:

• EUR, -0.58%
• JPY -0.58%
• GBP -0.65%
• CHF -0.78%
• CAD -0.35%
• AUD -0.57%
• NZD -0.61%

This article was written by Greg Michalowski at investinglive.com.

The Federal Reserve cut rates by 25 basis points as expected.

The full statement from the Fed.

December 10, 2025

Federal Reserve issues FOMC statement

For release at 2:00 p.m. EST

Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.

In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting; and Austan D. Goolsbee and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.

The table of Fed projections shows:

Of significance from the projections for end of 2026:

• GDP higher to 2.3% from 1.8%
• Unemployment unchanged at 4.4%
• PCE inflation lower at 2.4% from 2.6%
• PCE Core lower 2.5% vs 2.6%
• The year end Fed Funds target group is unchanged at 3.4%

The chance of a cut was around 90%.

Just before the decision:

• Dow was up 0.34%
• S&P was unchanged
• Nasdaq was down -0.38%

Overall,

• The vote was more dovish with only 2 voting for no change. There was not a doubt on the vote.
• The Fed did say they will buy shorter-term bills. A mini-QE? Dovish.
• The dot plot did indicate that 4 additional non-voting members would have voted to keep rates unchanged. 13 did vote for a cut.

This article was written by Greg Michalowski at investinglive.com.

Speaking on Fox News:

• Fed has plenty of room to cut rates.
• Probably will need to do some more.
• Data could support 50 basis point cut
• You could definitely get to 50 or even more.
• The president will make his decision on Fed chair in a week or so.
• He is honored to be a candidate for the role.

Yesterday, Hassett struck a more Powell-like tone, emphasizing that monetary policy remains data dependent. By contrast, Fed Governor Miran and Treasury Secretary Bessent have leaned more openly toward pre-emptive rate cuts, arguing that slower growth and rising labor-market risks in the first quarter warrant earlier action. Both Miran and Bessent have also expressed confidence that inflation will decline sharply in 2026, reinforcing their case for easing sooner rather than later – and not so data dependent NOW.

Unfortunately, the key economic data—including employment and inflation—won’t be released until next week, leaving the market without the confirmation it needs. Those reports could easily swing expectations in either direction, especially if inflation comes in hotter or the labor market proves stronger than anticipated.

Meanwhile, the race for the next Fed Chair is accelerating. Kevin Hassett remains a leading contender for the role that opens in 2026, and President Trump is now interviewing finalists. Reports indicate that Kevin Warsh received the first interview, signaling he may be gaining traction.

Prediction markets reflect the shifting momentum. On Polymarket, Hassett’s odds have fallen from 88% last week to about 70%, while Warsh has climbed to 14%, and Fed Governor Christopher Waller has inched up to around 6%.

This article was written by Greg Michalowski at investinglive.com.

Key Data Summary (Actual vs. Estimate vs. Prior)

• Crude Stock: -1.812M vs -2.310M est. (Prior +0.574M)

• Distillate Stock: +2.502M vs +1.943M est. (Prior +2.059M)

• Gasoline Stock: +6.397M vs +2.764M est. (Prior +4.518M)

• Crude Imports: +0.212M vs Prior -0.470M (no estimate)

• Refinery Utilization: +0.4% vs 0.3% est. (Prior +1.8%)

• Crude Cushing Stocks: +0.308M vs Prior -0.457M (no estimate)

Market Summary — Inventories vs. Expectations

This week’s EIA report showed a smaller-than-expected crude draw but the drawdown was less than the private data released late yesterday.

The major standout in the report today was higher than expected gasoline and distillate builds, both of which came in sharply above forecasts — a bearish signal for refined product demand. The private data also showed a gasoline in distillate build.

Crude imports flipped from a decline to a rise, refinery utilization ticked higher, and Cushing stocks increased modestly — all reinforcing a theme of supply increasing faster than demand this week.

The private data released late yesterday showed:

• Crude -4800K
• Prior was +2480K
• Gasoline +7000K
• Distillates +1000K

The price of crude oil is trading down $0.42 or -0.72% at $57.83.

This article was written by Greg Michalowski at investinglive.com.