InvestMacro

The US equities concluded the final trading day of 2025 with declines as risks were trimmed and expectations for Fed policy were reassessed. At the close of Wednesday, the Dow Jones (US30) fell by -0.63%, the S&P 500 (US500) dropped by -0.74%, and the Nasdaq (US100) closed -0.76% lower. Despite the weak finish, the year proved strong: the S&P 500 gained approximately +16.6%, the Nasdaq +20.4%, and the Dow +13.2%. AI-related companies remained the primary driver, while the broader market balanced geopolitical risks, tariff uncertainty, high valuations, and shifting rate expectations. Disagreements within the Fed regarding the pace of easing in 2026 and sharp volatility in the precious metals market in late December amplified the cautious investor sentiment at the start of the new year.

The Canadian dollar weakened above the 1.37 level per U.S. dollar, retreating from its highest point since July amid deteriorating domestic macroeconomic signals and year-end strength in the greenback. Statistics Canada recorded a -0.3% contraction in real GDP for October, confirming an economic slowdown in the fourth quarter and weakening the case for a tighter policy stance compared to the U.S. Additional pressure came from falling oil prices, which reduced export revenues, as well as a widening yield spread: Canada’s 10-year bond yield dipped toward 3%, while the US 10-year yield holds near 4%.

On the final trading day of 2025, European equities held near all-time highs, closing the year with their best performance since 2021. The German DAX (DE40) was not traded on Wednesday, the French CAC 40 (FR40) closed down -0.23%, the Spanish IBEX 35 (ES35) fell -0.27%, and the British FTSE 100 (UK100) finished Wednesday down -0.09%. Growth was supported by relatively resilient macroeconomic dynamics and expectations for expanded fiscal spending in the region; key contributions came from the banking sector, which posted its best results since the late 1990s, and basic resource companies following the rally in precious metals.

On Wednesday, silver plummeted by more than -5% to $72 per ounce, correcting from a record high of $86.62 reached earlier in the week due to year-end profit-taking. The correction is technical in nature following a meteoric rally: in 2025, the metal appreciated by more than 150%, significantly outperforming gold and making it the strongest year in silver’s history. Looking ahead, analysts expect continued interest from both retail and institutional investors, especially given the likelihood of further Fed easing in 2026, which may limit the depth of corrections after such powerful growth.

The US crude oil (WTI) inventories for the week ending December 26 decreased by 1.93 million barrels, the largest weekly decline since mid-November and notably exceeding market expectations. Nevertheless, total commercial inventories remain high at year-end, approximately 423 million barrels, which is significantly above historical norms and points to a persistent global supply surplus despite geopolitical constraints, including the blockade of Venezuelan supplies and sanctions against Russian producers.

The US natural gas prices declined toward approximately $3.70 per MMBtu, a minimum since late October, amid forecasts of warmer weather and weakening short-term heating demand. The expected reduction in heating degree days and downward revisions to consumption forecasts suggest lower demand in the coming weeks, while prospects for production growth add pressure to prices. However, in the broader horizon, the market remains relatively resilient: in 2025, gas prices may rise by about 4% thanks to record LNG exports. In 2026, the market will likely be supported by structural factors, including increased electrification and higher gas usage in power generation, despite the expected further expansion of supply.

Asian markets mostly declined on the final day of 2025. The Japanese Nikkei 225 was not traded, the FTSE China A50 (CHA50) fell by -0.59%, the Hong Kong Hang Seng (HK50) dropped -0.87%, and the Australian ASX 200 (AU200) showed a negative result of -0.03% on Wednesday.
President Xi Jinping stated that China’s economy is on track to meet its 5% growth target for 2025. Furthermore, Xi Jinping indicated that in 2026, authorities intend to move toward a more proactive macroeconomic policy to sustain growth rates. The focus will be on innovative development and maintaining stability amid ongoing global uncertainty, signaling Beijing’s readiness to ramp up stimulus measures if necessary.

On Monday, the US stock indices corrected after hitting record highs at the end of last week. The Dow Jones (US30) decreased by 0.51%. The S&P 500 (US500) fell by 0.35%. The tech-heavy Nasdaq (US100) closed lower by 0.46%. The primary pressure once again came from the technology sector amid growing doubts about the justification of high valuations for AI-related companies. The sell-off was led by Nvidia and Tesla, while weakness also affected Oracle and Palantir, as investors continue to question whether massive AI investments by software developers and data center operators can translate into comparable earnings growth.
European stock markets ended Monday with moderate gains, supported by strengthening shares in automakers and the technology sector. The German DAX (DE40) rose by 0.04%, the French CAC 40 (FR40) closed up 0.10%, the Spanish IBEX 35 (ES35) gained 0.13%, and the British FTSE 100 (UK100) closed at negative 0.04%. Investors continued to assess the regional geopolitical situation, attempting to gauge whether the momentum of the strong rally can persist into the beginning of next year.

On Tuesday, silver recovered by more than 1%, rising toward $73 per ounce following a sharp collapse in the previous session, the strongest daily decline in five years, triggered by profit-taking. The metal continues to find support from its safe-haven status amid ongoing geopolitical tensions, including prolonged and unstable negotiations between Russia and Ukraine, rising risks surrounding Iran, and increased Chinese military activity near Taiwan. Despite high short-term volatility, the medium-term outlook for silver remains positive.

WTI oil prices consolidated around $58.1 per barrel on Tuesday after a sharp increase of over 2% the day before, driven by intensified geopolitical risks. Uncertainty regarding a settlement of the conflict in Ukraine rose again following Moscow’s statements about a possible revision of its negotiating position, despite recent signals from the US and Ukraine of progress, with key issues remaining unresolved. Additional tension is building over the situation in Venezuela, where production has reportedly begun to halt in a key region following US actions. Nevertheless, despite short-term geopolitical support, the oil market overall remains under pressure: prices have declined by nearly 20% since the start of the year, marking the sharpest annual drop since 2020 amid expectations of sufficient global supply.

The US natural gas prices rose toward the $4 per MMBtu mark, maintaining most of their recovery from a two-month low recorded in late December. Prices were supported by prognoses of colder weather, which boosted expectations for increased heating demand in early January and prompted utility companies to build positions in short-term contracts. An additional factor was EIA data showing a storage withdrawal of 166 billion cubic feet for the week ending December 19, a level exceeding the seasonal norm that pushed inventories below five-year averages. This occurred despite record production, as the expansion of LNG export capacity and European restrictions on Russian gas continue to support external demand for American LNG.

Asian markets traded mixed yesterday. The Japanese Nikkei 225 (JP225) fell by 0.44%, the Chinese FTSE China A50 (CHA50) rose by 0.10%, the Hong Kong Hang Seng (HK50) dropped 0.71%, and the Australian ASX 200 (AU200) showed a negative result of 0.42%.

On Tuesday, the Dow Jones (US30) rose by 0.16%, the S&P 500 (US500) gained 0.16%, and the Nasdaq (US100) closed 0.57% higher. The US equities saw a moderate decline on Wednesday after the S&P 500 hit a fresh all-time high the previous day, marking its fourth consecutive session of gains. Despite robust macro data, with US Q3 GDP growing at 4.3% YoY, its fastest pace in two years, driven by consumption, exports, and government spending, markets continue to price in Fed rate cuts for next year. Political pressure on the Fed intensified as National Economic Council Director Kevin Hassett stated the regulator is moving too slowly on easing, noting that the AI boom supports growth while simultaneously curbing inflation. The tech sector dominated again: Nvidia (+3%), Broadcom (+2.3%), and Amazon (+1.6%) extended their rallies, while Tesla corrected (-0.7%) after briefly hitting a new record. Trading activity is subdued due to the holiday schedule; US financial markets close early on Wednesday and will remain closed on Thursday and Friday for Christmas.

European equity markets mostly rose yesterday. The German DAX (DE40) climbed 0.23%, the French CAC 40 (FR40) dropped 0.21%, the Spanish IBEX 35 (ES35) rose by 0.14%, and the British FTSE 100 (UK100) closed up 0.24%. European stock markets opened without significant changes as the Christmas holidays began. Many platforms are operating on shortened schedules, and liquidity is noticeably decreasing. Investors are scaling back activity, and trading dynamics are expected to be driven by specific corporate news rather than macroeconomic factors. Most key regional exchanges will remain closed until Friday.
WTI prices rose to $58.6 per barrel on Wednesday, marking a sixth consecutive session of gains and reaching a two-week high fueled by geopolitical tensions. Prices were supported by US actions to intercept Venezuelan oil tankers and new strikes on energy infrastructure in the Black Sea region amid the Russia-Ukraine conflict. However, pressure remains from API data showing a 2.4 million barrel increase in crude inventories alongside builds in gasoline and distillates. Overall, oil remains influenced by expectations of a supply surplus next year, trending toward an annual decline of over 18%.

Silver (XAG) prices surpassed $72 per ounce on Wednesday, rising for a fourth straight session and hitting a new all-time high. The market is buoyed by expectations of US monetary easing and increased demand for safe-haven assets. Geopolitical tension added fuel to the rally after President Donald Trump ordered the blocking of Venezuelan oil tankers last week. Silver has gained approximately 149% year-to-date, supported by a structural supply deficit and its recent inclusion in the US critical minerals list.

Platinum (XPT) prices broke above $2,300 per ounce, marking a new historical peak amid supply shortages and high investment demand. This marks a ten-session winning streak, the longest since 2017. Year-to-date, the metal has soared over 150%, its best performance since the late 1980s. Key drivers include mining disruptions in South Africa, a third consecutive year of market deficit, anticipation of US Section 232 trade restrictions, and strong demand in China following the launch of platinum futures in Guangzhou.

Asian markets were predominantly higher yesterday. The Nikkei 225 (JP225) rose by 0.02%, the FTSE China A50 (CHA50) gained 0.69%, the Hang Seng (HK50) edged down 0.11%, and the ASX 200 (AU200) posted a strong gain of 1.10%.

The Hong Kong market saw moderate gains on Wednesday morning, supported by expectations of Chinese stimulus measures, including urban renewal plans and property market stabilization in the new 2026–2030 five-year plan. Gains were capped by local factors such as a narrowing current account surplus and inflation holding at 1.2%. Financials and developers outperformed, while consumer stocks traded cautiously ahead of the shortened session.

The “kiwi” strengthened to around $0.585, marking its third consecutive day of gains and reaching its highest level since late September. The rally is driven by expectations of a potential RBNZ rate hike in 2026, Q3 economic recovery data, and a weakening US dollar. RBNZ Governor Anna Breman signaled that rates will likely remain on hold for some time. Overall, the NZD is on track for an annual gain of over 4% in 2025.

On Friday, the Dow Jones (US30) rose by 0.38% (for the week -0.95%), while the S&P 500 (US500) gained 0.88% (for the week -0.37%). The Nasdaq Technology Index (US100) closed 1.31% higher (for the week -0.03%). The US stock markets ended Friday with solid gains amid a triple-witching derivatives expiration. AI-related stocks showed signs of recovery, with Oracle shares jumping over 7% following reports that TikTok agreed to sell its US business to a new joint venture involving Oracle and Silver Lake. Micron Technology gained 7%, building on a 10% gain from the previous day, while Nvidia rose more than 3% amid reports that the Trump administration is considering allowing the company to sell advanced AI chips to China. Meanwhile, Nike shares plummeted 11% following a report of declining revenue in China and the negative impact of higher tariffs on the company’s gross margins.

European equity markets mostly rose. The German DAX (DE40) increased by 0.37% (weekly -0.04)%, the French CAC 40 (FR40) finished up 0.01% (weekly +0.80%), the Spanish IBEX 35 (ES35) rose by 0.22% (weekly +1.40%), and the British FTSE 100 (UK100) closed 0.61% higher (weekly +2.57%). The ECB’s decision to keep interest rates unchanged starting from June 2025 confirms the bank’s current neutral stance, meaning the central bank sees no need to ease or tighten monetary policy without a significant shift in inflation or economic growth. ECB staff expectations point to moderate growth and inflation in the medium term.

Precious metal prices climbed, with silver showing particularly strong momentum. Gold continues to receive structural support from central banks. The People’s Bank of China (PBoC) increased its gold reserves by 30,000 ounces in November to a total of 74.1 million troy ounces, marking the thirteenth consecutive month of accumulation. Additionally, the World Gold Council reported that central banks purchased 220 tons of gold in the third quarter, a 28% increase compared to the second quarter.

Silver is further supported by concerns over a physical metal deficit in China. As of November 21, silver inventories in warehouses linked to the Shanghai Futures Exchange fell to 519,000 kg, the lowest level in the last 10 years. Although the market faced pressure from profit-taking and ETF outflows after reaching record highs in mid-October, demand from funds has begun to recover, with long positions in silver ETFs reaching a nearly 3.5-year high on Tuesday.

Asian markets traded with mixed results last week. The Japanese Nikkei 225 (JP225) rose by 0.38%, the Chinese FTSE China A50 (CHA50) fell by 0.40%, the Hong Kong Hang Seng (HK50) dropped by 0.35%, and the Australian ASX 200 (AU200) showed a positive five-day result of 1.18%.

As expected, the People’s Bank of China maintained its key lending rates at historic lows, leaving the one-year LPR at 3.0% and the five-year rate at 3.5%. This decision, representing the seventh consecutive period of no change, confirms the regulator’s stance that there is no urgent need for additional stimulus to reach annual GDP growth targets, despite November statistics showing a slowdown in retail sales and industrial production growth.

The New Zealand dollar is showing a steady recovery, rising toward 0.577 USD and nearly fully reversing its drop to two-week lows amid a revision of market expectations regarding Reserve Bank policy. The currency was supported by third-quarter GDP data confirming the national economy’s exit from a long period of stagnation, which significantly reduced the likelihood of monetary easing. Since the existing economic downturn prevents inflation from rising in the near term, market expectations for rate hikes have become more modest, with the probability of such a move by July falling from 50% to 40%.