InvestMacro

At the close of trading, the Dow Jones Index (US30) rose by 0.21%. The S&P 500 Index (US500) gained 1.34%. The technology-heavy Nasdaq Index (US100) closed lower by 0.25%. Investors rotated out of overheated technology companies into cyclical and value stocks following the Fed’s 25 basis point rate cut and a soft signal on future policy. The largest gains were seen in the financial sector and payment systems: Visa added 6.2% after a BofA rating upgrade.

Mastercard and American Express rose by 4.6% and 2.5%, respectively. Major financial companies, including JPMorgan, UnitedHealth, Goldman Sachs, Wells Fargo, and Progressive, also showed solid growth. The technology sector, conversely, dragged the market down: Oracle shares fell by 10.8% due to weak revenue and worsened cloud expectations, raising doubts about the return on AI investments.

The Mexican peso (MXN) strengthened to 18 per dollar, returning to its July 2024 highs amid the dollar’s weakness following the Fed rate cut and its softer tone. Simultaneously, investors revised expectations for further Banxico policy easing: November inflation accelerated to 3.8% y/y, and core inflation to 4.43% y/y, which complicates rapid future rate cuts. Although the Fed cut the rate by 25 basis points and began purchasing $40 billion in short-term bonds, tightening monetary conditions, Mexico remains attractive due to its high real interest rates.

European stock markets rose steadily yesterday. Germany’s DAX (DE40) rose by 0.68%, France’s CAC 40 (FR 40) closed up 0.57%, the Spanish IBEX 35 (ES35) added 1.11%, and the British FTSE 100 (UK100) closed 0.52% higher.

The Swiss franc strengthened to 0.79 per dollar, approaching its 2011 highs amid the dollar’s weakness and the SNB’s decision to keep the rate unchanged at 0% for the second consecutive time. The regulator noted a slight improvement in economic prospects, partly due to a recently concluded tariff agreement with the US, and recorded lower-than-expected inflation, which led to a reduction in short-term expectations without serious changes to medium-term ones. SNB Chairman Martin Schlegel confirmed expectations of gradual inflation growth in the coming quarters, reinforcing the prognoses for stable monetary policy.

Palladium prices (XPD) held around $1,490 per ounce. Production of platinum group metals in South Africa grew by 3.9% y/y in October, the second consecutive month, indicating a stabilization of supply. Demand prospects are improving due to a 3.4% y/y increase in car sales in China in November, an 11-month high. An additional impact on the auto sector may come from the upcoming EU decision on emissions rules on December 16: the initial ban on ICE vehicles by 2035 is likely to be softened and shifted to 2040 due to industry pressure and a slower pace of transition, which could support demand for palladium in the medium term.

WTI crude oil prices fell by approximately 2% on Thursday to $57.3 per barrel, dropping to a seven-week low amid concerns about a growing global supply surplus driven by increased production from OPEC+ and producers in North and South America. Although the International Energy Agency (IEA) slightly reduced its projections for a record surplus for the first time since May, it still anticipates a significant oil surplus in the market.

The US natural gas (XNG) prices fell by 7% on Thursday, below $4.3/MMBtu, reaching a five-week low amid warm weather expectations, weak demand, and near-record production levels. Above-normal temperatures are expected until December 26, reducing heating demand. Production in the continental states rose to 109.7 billion cubic feet per day, surpassing the November high and raising inventories approximately 3% above the seasonal level. Despite a large withdrawal of gas from storage last week (177 billion cubic feet) due to a short period of intense cold, high supply, and accumulated inventories continue to pressure the market.

Asian markets traded mixed yesterday. The Japanese Nikkei 225 (JP225) fell by 0.10%, the Chinese FTSE China A50 (CHA50) dropped by 0.61%, the Hong Kong Hang Seng (HK50) rose by 0.42%, and the Australian ASX 200 (AU200) showed a positive result of 0.72% for the day. Stocks in Hong Kong opened strongly higher on Friday: the Hang Seng Index rose by 1.1% after a decline the day before. At the Central Economic Work Conference, Chairman Xi Jinping stated that 2025 would be a “truly outstanding year” and noted confidence in achieving key goals. Fiscal policy remains stimulative, and monetary policy remains soft, with an emphasis on supporting domestic demand.

The US stock indices rose on Wednesday in reaction to the FOMC decision and Powell’s comments. The Dow Jones Index (US30) rose by 1.05%. The S&P 500 Index (US500) gained 0.67%. The technology-heavy Nasdaq Index (US100) closed higher by 0.33%. The Fed cut the rate by 25 basis points and maintained its expectations for one more cut next year. However, Powell’s remarks on whether to end the cycle or cut rates “a little” or “more than a little” bolstered expectations for further easing: the market prices the probability of two or more cuts in 2025 at approximately 68%. Industrial companies performed the best. In corporate news, Amazon stock stood out, rising 1.7% after announcing a $35 billion investment in India, and JPMorgan, which added 3.2%. Microsoft, conversely, fell by 2.8% amid reports of plans to invest $17.5 billion in India over the next four years.

The Canadian dollar strengthened above $1.38 per US dollar, reaching a twelve-week high, driven by a combination of softer Fed rate expectations and the Bank of Canada’s (BoC) hawkish stance, underpinned by strong domestic data. The BoC kept its rate unchanged at 2.25% and signaled that it views the current policy as adequate, citing unexpectedly strong Q3 GDP growth (2.6% y/y) and a tight labor market with unemployment around 6.5%. All of this reduces the likelihood of imminent policy easing and supports the Canadian currency.

European stock markets traded mixed on Wednesday. The German DAX (DE40) fell by 0.13%, the French CAC 40 (FR40) closed lower by 0.37%, the Spanish IBEX 35 (ES35) gained 0.17%, and the British FTSE 100 (UK100) closed up by 0.14%. In France, the approval of the social budget reduced short-term political uncertainty, giving the euro additional support, although key risks remain during the discussion of the overall state budget. In Switzerland, the rate is expected to remain unchanged at 0%, and market attention shifts to next week’s ECB meeting, where the regulator is expected to keep the rate at 2% until at least 2026, given that inflation and growth align with current prognoses.

WTI crude oil prices dropped to $58 per barrel on Thursday, partially reversing the gains of the previous session: the market is balancing geopolitical risks against persistently bearish fundamental expectations. The US interception of a sanctioned tanker off Venezuela and a Ukrainian attack on a vessel from the “shadow fleet” linked to Russian oil trade increased fears of supply disruptions and added to the risk premium. However, these factors are offset by prognoses of a supply glut: growth in production by OPEC+ and allies is expected to exceed weak global demand. Investors await fresh reports from OPEC and the IEA, which may clarify market balance expectations. Meanwhile, US government data showed a reduction in commercial crude oil inventories by 1.8 million barrels.
The price of silver climbed above $61.8 per ounce, continuing its record rally following the Fed’s 25 basis point rate cut and Powell’s comments, which were perceived as dovish by the markets. This weakened the dollar and reduced the opportunity cost of holding the metal. Additional support was provided by severe physical market constraints: inflows into ETFs and spot demand have increased this year, Asian and Indian demand remains high, and the shortage of available metal has led to rising lease rates and borrowing costs for silver.

Asian markets traded mixed yesterday. The Japanese Nikkei 225 (JP225) fell by 0.10%, the Chinese FTSE China A50 (CHA50) dropped by 0.61%, the Hong Kong Hang Seng (HK50) rose by 0.42%, and the Australian ASX 200 (AU200) showed a positive result of 0.72%.

The Australian dollar retreated on Thursday after the release of weak labor market data: the economy unexpectedly lost 21.3 thousand jobs in November, the largest drop in nine months, with the decline concentrated in full-time employment, and labor force participation weakened, which kept unemployment at 4.3%. This data reinforced signs of a gradual cooling in the labor market and shifted expectations for an RBA rate hike to the second half of 2026 instead of May. However, the regulator still assesses the labor market as tight, pointing to a high level of vacancies and rising labor costs.

On Tuesday’s close, the Dow Jones Index (US30) fell by 0.38%. The S&P500 Index (US500) decreased by 0.09%. The technology-heavy Nasdaq Index (US100) closed higher by 0.13%. A fresh estimate of US job openings (a rise to 7.67 million) maintained investor focus on labor market signals amid expectations of a likely 25 basis point Fed rate cut this week. Among other movements: Nvidia dropped by 0.3% on reports of potential restrictions on H200 chip purchases in China, and Home Depot declined by 1.3% following more cautious profit expectations for 2026.

The Mexican peso weakened to 18.3 per dollar, pulling back from a one-and-a-half-year high. The currency was pressured by rising US yields and a narrowing yield premium in Mexico, as markets anticipate further Banxico policy easing in 2026. Weaker economic prognoses and expectations of lower real interest rates create additional pressure, limiting capital inflows and increasing the peso’s vulnerability.

European stock markets traded directionally mixed on Tuesday. The German DAX (DE40) rose by 0.49%, the French CAC 40 (FR 40) closed down by 0.69%, the Spanish IBEX 35 (ES35) gained 0.13%, and the British FTSE 100 (UK100) closed down by 0.03%.

Silver climbed above $60 per ounce on Tuesday amid expectations of a Fed rate cut and a persistent physical metal deficit. The rally is supported by increased industrial demand from solar energy, electric vehicles, and electronics against limited mining output, leading to outflows from exchange warehouses and inflows into ETFs. However, tougher signals from the Fed or an increase in supply could cap further gains.

WTI continued its decline on Tuesday. Pressure on quotes intensified due to signs of increasing supply: China boosted purchases of Saudi oil after reduced selling prices, and Iraq resumed production at the West Qurna-2 field, adding volume to the market amidst rising US inventories. Additional negative sentiment was generated by estimates from the IEA and OPEC+, indicating a possible supply surplus in 2026. Geopolitical risks continue to support the market, but traders’ attention is also focused on the Fed meeting: the expected rate cut could strengthen demand expectations for oil next year.

Asian markets traded mixed yesterday. The Japanese Nikkei 225 (JP225) rose by 0.14%, the Chinese FTSE China A50 (CHA50) fell by 0.02%, the Hong Kong Hang Seng (HK50) dropped by 1.29%, and the Australian ASX 200 (AU200) showed a negative result of 0.45%.

The Australian dollar is holding near a three-month high thanks to a hawkish signal from the RBA on monetary policy. Despite a pause in rate changes at the December meeting, RBA Governor Bullock suggested the possibility of a rate hike as early as February if there is no progress in reducing inflation, which sharply strengthened tightening expectations: the market prices the probability of a February hike at approximately 30%, and nearly 100% by May. Rising Australian bond yields boosted capital inflow through the carry trade and supported the Australian currency.

On Wednesday, the offshore yuan held around 7.06 per dollar, as increased consumer inflation softened expectations of further monetary policy support. China’s consumer prices rose by 0.7% year-on-year in November 2025, the highest reading since February 2024. Earlier this week, the Politburo promised to expand domestic demand and support the overall economy in 2026, though it demonstrated a cautious approach to stimulus. Meanwhile, factory gate deflation unexpectedly worsened to 2.2% in November, marking the 38th consecutive month of producer price declines.

By the end of Monday, the Dow Jones (US30) declined by 0.45%, the S&P500 (US500) fell by 0.35%, and the Nasdaq (US100) closed lower by 0.14%. Investors remain cautious ahead of the Fed’s decision on Wednesday: the probability of a 25 bp rate cut is estimated at around 90%, but inflation concerns make markets more restrained about the trajectory of rates in 2026. On the corporate front, deals and rating changes stood out. Warner Bros. Discovery shares rose by 4.4% after a competing offer from Paramount Skydance, while Netflix fell by 3.4%. Tesla dropped 3.4% after a downgrade. Attention also shifted to upcoming reports from Broadcom and Oracle, with Broadcom shares already hitting a record high on news of talks with Microsoft about chip production.

European stock markets traded mixed on Monday. Germany’s DAX (DE40) rose by 0.07%, France’s CAC 40 (FR40) closed down 0.08%, Spain’s IBEX 35 (ES35) gained 0.14%, and the UK’s FTSE 100 (UK100) closed negative 0.23%. In Europe, ECB’s Isabel Schnabel stated that she agrees with market expectations that the central bank’s next step could be a rate hike.

WTI crude prices fell more than 2% and traded below $59 per barrel, approaching a monthly low. Prices were pressured by a stronger dollar and weaker global fuel demand expectations amid weakness in the transport and industrial sectors. An additional downside came from EIA data showing US crude inventories rose by 0.57 million barrels, reinforcing signals of oversupply.

The US natural gas prices fell nearly 7% on Monday to $4.9 per MMBtu after strong gains last week, as prognoses of milder weather weakened seasonal demand expectations. Record production of about 109.7 bcf per day and comfortable inventory levels added pressure, indicating no short‑term supply risks.
Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) rose by 0.18%, China’s FTSE China A50 (CHA50) gained 0.87%, Hong Kong’s Hang Seng (HK50) fell by 1.23%, and Australia’s ASX 200 (AU200) closed down 0.12%.

The Hang Seng Index fell by 1.2% to 25,765 points, ending a two‑day rally, pressured by the financial, real estate, and consumer sectors. The market remained cautious amid persistent deflation risks in China and anticipation of key policy signals from the upcoming Politburo meeting and annual economic conference.
The Australian dollar strengthened after the Reserve Bank of Australia (RBA) kept the refinancing rate at 3.60% for the third consecutive time. The regulator noted persistent inflationary pressures and a tight labor market, emphasizing that future steps depend on data. Markets now estimate the probability of a rate hike by May 2026 at about 50/50, while most economists believe the easing cycle has ended.

The New Zealand dollar consolidated near a five‑week high, supported by expectations that the Reserve Bank of New Zealand (RBNZ) has ended its easing cycle. Although the regulator recently cut the rate by 25 bp, its projections suggest only a 20% chance of another cut in 2026, given easing inflation and improved economic prospects. New RBNZ Governor Anna Breman emphasized the priority of controlling inflation while supporting growth and employment. Markets now expect the next move to be a rate hike, not before late 2026. Additional support for the currency comes from US dollar weakness ahead of the anticipated Fed rate cut.