KEY POINTS:USDINR continues to consolidate below a key resistance around the 90.40 levelThe RBI intervention paused the selloff in the Indian RupeeThe main trend remains to the upsideIn the short-term, traders will look for technical breaksFUNDAMENTAL OVERVIEWUSD:The US CPI yesterday surprised to the downside across the board, but as we’ve seen with the NFP report, the market took the data with a pinch of salt. The dollar weakened following the CPI release but eventually recovered all the losses and strengthened across the board. It should also be noted that we got the US Jobless Claims yesterday and the data was strong. The Initial Claims remain around the same low levels we got used to for years, but Continuing Claims dropped to the lowest level since May. The next NFP report won’t have the shutdown related issues, so we will get a clearer view of the US labour market conditions. For now, I’d say the greenback is kind of neutral, although skewed to the downside a bit.INR:The RBI intervened this week to stop the recent selloff in the Indian Rupee. The last intervention was in October, but as it usually happens when the fundamentals remain against a currency, the INR eventually fell to new lows. We can expect the Rupee to weaken again in the next months, but in the short-term, traders will look for key technical breaks before piling into USDINR longs again. USDINR TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that USDINR sold off from the upper bound of the rising channel following the RBI’s intervention. The natural target for the sellers remains the lower bound of the channel around the 89.00 level, but they will need to keep the price below the key zones. The buyers, on the other hand, will continue to step in around the key levels to keep targeting new record highs.USDINR TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see that we have a strong resistance around the 90.40 level. The sellers continue to step in there with a defined risk above the level to position for a drop into the 89.70 level next. The buyers, on the other hand, will want to see the price rising above the 90.40 level to pile in for a rally into new all-time highs.USDINR TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much else we can add here as the sellers will likely continue to step in around the resistance to target new lows, while the buyers will look for a break higher to position for a rally into a new record high. This article was written by Giuseppe Dellamotta at investinglive.com.

EUROPEAN SESSION:In the European session, the main highlight was the UK Retail Sales report. The data came out negative disappointing expectations and weighing a bit on the pound. In the bigger picture, it doesn't change anything for the BoE as it remains focused mainly on inflation.Looking ahead, we will just get a couple low-tier releases like the French PPI and the Italian consumer confidence that won't change anything for the ECB or the market, so the reaction will likely be muted.AMERICAN SESSION:In the American session, the only highlight will be the Canadian Retail Sales report. The data is not going to change anything for the BoC though, so I wouldn't expect much from the release. In fact, the Bank of Canada finished its easing cycle and can wait for an extended period of time to see how the economy evolves after the cuts. The market, on the other hand, isn't waiting and has actually started to price in rate hikes for 2026 following several strong employment reports. CENTRAL BANK SPEAKERS:08:00 GMT/03:00 ET - ECB's Wunsch (neutral - voter)09:00 GMT/04:00 ET - ECB's Kocher (neutral - voter)10:00 GMT/05:00 ET - ECB's Rehn (dovish - voter)12:00 GMT/07:00 ET - ECB's Cipollone (neutral - voter)15:10 GMT/10:10 ET - ECB's Lane (neutral - voter) This article was written by Giuseppe Dellamotta at investinglive.com.

Lower risks to inflation and growth triggered conditions for a rate hike todayUnderlying inflation is running above the 0% markSo far, market players are not all too convinced. And pardon me for also reserving some skepticism towards the probability of Ueda really hitting back at the government for a second time. They won the first round today but as mentioned earlier, the threshold for the next rate hike will be even higher than this one.Ueda has left the door open for that but he's not being overly pushy or explicit about really wanting to stick to another rate hike in March. For now, "data-dependent" seems to be the best alternative in terms of communication that they can offer.USD/JPY is continuing to climb on the day, up to 156.38 currently. Key resistance from the earlier highs in December at 156.90 levels will be the next big technical points. This article was written by Justin Low at investinglive.com.

This follows a decline of 0.9% in retail sales volume for October, which was revised up from a 1.1% decline previously. The year-on-year estimate for November shows that UK retail sales are now 0.6% higher compared to the same month a year ago. However, that is a marked miss on estimates of +1.6% with the monthly reading missing on estimates of a gain of 0.3%.Looking at the breakdown, food store sales (-0.5%) once again showed a decline while non-store retailing (-2.9%) was a big drag for the month. Meanwhile, other non-food store sales (-0.8%) also showed a modest decline in November.All of that is somewhat offset by stronger sales in textile clothing and footwear stores (+1.7%) as well as household goods store sales (+1.8%) - likely attributed to longer Black Friday discounting.Touching on that, it serves as a good reminder that UK retail sales for November 2024 did not include the impact of Black Friday. That spilled over into the December 2024 reporting period. As such, that makes the year-on-year showing here even less enthusiastic. ONS notes that "when Black Friday falls into the November period there is normally a larger monthly rise in November than in either October or December". This article was written by Justin Low at investinglive.com.

Japan's economy is showing moderate recovery, though weakness persistsLoose monetary policy to sustain economic recoveryJapan's real interest rates are likely to remain very lowUncertainties in US economy and trade policies have decreasedWage increases likely will match that of the previous yearFuture monetary moves will reflect economy, inflation, and financial trendsRecent yen decline may affect prices, needs close attentionSeveral policymakers feel weak yen possibly influencing underlying inflationNo major tightening observed from previous rate hikesNeutral rate plays a vital role in guiding monetary policyThere's nothing here that he hasn't already said before for the most part. However, I guess the fact that he is continuing to talk about keeping the door open for another rate hike is something. But again, the threshold to trigger that will be much higher than it would be for the one today, even if he wouldn't say so.USD/JPY is trading a little higher on his remarks, holding around 156.04 currently with the high earlier touching 156.43. The early December highs just below 157.00 will be the key resistance point to watch out for amid a double-bottom bounce just below 155.00 this month. This article was written by Justin Low at investinglive.com.

Let's get this out of the way first and foremost. The rate hike today was very well anticipated and priced in by markets already. As such, there isn't all too much reaction with the Japanese yen even falling after the fact even as interest rates are at the highest since 1995.Markets don't react to just the event itself. Markets tend to react to surprises instead. And this time around, the BOJ decision was rather straightforward after how the narrative has shifted in recent weeks.BOJ governor Ueda took a bolder stance to defy Japan prime minister Takaichi's wishes in wanting the central bank to play ball alongside the government's ambitious fiscal stance. And that led to a bit of a square off in recent weeks with lawmakers continuing to want the central bank to take a more patient approach.But with the window to hike rates perhaps closing, this was a better late than never move on the part of the BOJ. It would have been "cleaner" had they acted in October but at the time, one could feel that they might be more comfortable with waiting on the spring wage negotiations next year.So, that puts us to where we are now.I mean, they still could've waited for confirmation from the outcome of the spring wage negotiations next year. However, the optics would look even poorer than what it is now as that would be a real blow to the government's fiscal plans.Where does all this leave us though?Even with the rate hike today, it doesn't mean that the BOJ will have it easy to push for another rate hike. Don't get me wrong. If wages data stays hot, they will have reason to stay on this path.However, don't expect Takaichi and her lackeys to make it easy for Ueda & co. in the coming months.As such, the threshold for the next rate hike will be even higher than what it was to have taken the bold step to hike rates today. And that says a lot.So, any further pricing on that and stronger tailwind for the Japanese yen will depend on the BOJ's conviction.The first test of that will be BOJ governor Ueda's press conference later. Let's see if he will say anything about keeping their options open for March. I suspect that he would but he surely won't be overly explicit and pushy on the matter. This article was written by Justin Low at investinglive.com.

Japanese markets are volatile, adjusting to the BoJ rate hike - wary eye now BoJ Gov UedaMore detail on Bank of Japan decision to raise rates by 25bp to the highest in 30 yearsBank of Japan hikes its short term rate by 25bp to 0.75%, as expectedToyota to sell U.S.-made vehicles in Japan to ease trade tensionsJapan finance minister flags fiscal sustainability, debt reduction focusEU seals €90bn financing deal for Ukraine for 2026–27 - long-term funding plan for UkraineEU moves toward budget-backed loan for Ukraine - EU leaders agree in principleTrump admin reviews Nvidia AI chip sales to China - Trump backs chip sales to ChinaPBOC sets USD/ CNY reference rate for today at 7.0550 (vs. estimate at 7.0378)Australia private sector credit growth steady in NovemberGoldman Sachs expects the BoE to cut rates by 25bp in March, June and September 2026UK consumer confidence rises in December but remains deeply pessimisticJapan core CPI holds at 3.0% in November, reinforcing BoJ outlookGoldman Sachs says U.S. CPI unlikely to move Fed policy outlookTesla Cybercab reportedly spotted testing on public roads in Austin (Bullish!)Japan should consider nuclear weapons - source shaping security policy in governmentNew Zealand records November trade deficit as imports exceed exports (d'uh ;-) )investingLive Americas market news wrap: Big drop in US CPI sparks confusionThe main focus during the session was the Bank of Japan policy decision. As expected, the BoJ raised its short-term policy rate by 25 basis points, from 0.5% to 0.75%, delivering exactly what markets had priced.The Bank had previously lifted rates back in January, and today’s move, taking the policy rate to its highest level in three decades, neatly provides the other bookend for the year. Together, the January and December hikes frame 2025 as the year Japan decisively stepped away from its ultra-easy monetary past, albeit cautiously.In the lead-up to the announcement, the yen softened modestly, though moves were contained. Immediately after the decision, the initial reaction was a brief, shallow bout of yen strength before the currency weakened again. USD/JPY pushed above 156.10, before pulling back toward 155.85 as liquidity thinned and attention shifted to guidance rather than the hike itself.The key takeaways from the BoJ statement were familiar but important. Policymakers stressed that real interest rates remain significantly negative and that monetary conditions remain accommodative, despite the higher policy rate. The decision was approved by a unanimous vote, though the statement revealed differing views on inflation dynamics.Board member Takata opposed the description of the inflation outlook, arguing that CPI, including underlying measures, has already broadly reached the price stability target. Separately, board member Tamura objected to the wording on underlying inflation, saying it is likely to be broadly consistent with the target from the middle of the projection period. Neither member formally dissented from the rate decision.The Bank reiterated that it will continue to raise the policy rate if the economy and prices evolve in line with forecasts, signalling conditional openness to further tightening.In rates markets, JGB yields remain elevated, with the 10-year yield touching its highest level since May 2006. Elsewhere, major FX pairs were subdued, trading in largely rangebound conditions as the session drew to a close. Asia-Pac stocks took their lead from an improved Wall Street:Japan (Nikkei 225) +1.14%Hong Kong (Hang Seng) +0.65% Shanghai Composite +0.5%Australia (S&P/ASX 200) +0.5%Next up, Bank of Japan Governor Ueda press conference at 0630 GMT / 0130 US Eastern time: This article was written by Eamonn Sheridan at investinglive.com.

Summary BoJ raised rates to 0.75% as expected Yen reaction weaker, but muted without guidance surprise Gradual policy normalisation remains base caseJGB yields have risen, 10yr to highest since May 2006The Bank of Japan raised its short-term policy rate to 0.75%, the highest level in three decades, delivering another milestone in its gradual exit from ultra-loose monetary policy. The 25 basis point hike, approved by a unanimous vote, was widely expected and had been fully priced by markets ahead of the decision.With little surprise in the move itself, market attention quickly shifted to Governor Kazuo Ueda’s press conference and the outlook for further tightening. Several market participants noted that the rate increase alone was unlikely to generate sustained moves across currencies or rates without clearer forward guidance from the central bank.The yen initially strengthened very small following the announcement but quickly gave back those gains, a move attributed by some to thin liquidity conditions amplifying short-term price action rather than a change in fundamentals. A number of analysts argued that a durable recovery in the yen would require a combination of more assertive BoJ guidance, credible fiscal discipline from policymakers and a more supportive external backdrop, particularly a softer U.S. dollar.Others emphasised that the BoJ is likely to remain gradualist in normalising policy, given Japan’s long history of near-zero rates and the economy’s sensitivity to higher borrowing costs. From this perspective, the central bank is expected to signal future changes well in advance, reducing the risk of disruptive market reactions.In credit markets, some participants expect Japanese corporates to increasingly seek funding in offshore U.S. dollar markets rather than domestically, potentially lifting issuance volumes. However, they noted that any pressure on credit spreads could be offset by solid economic growth, strong corporate balance sheets and sustained investor demand for Japanese credit.Rates strategists largely downplayed the impact on Japanese government bonds, arguing that supply-and-demand dynamics — including issuance patterns — are likely to remain the dominant driver rather than macro policy shifts. With much of the expected terminal rate already priced in, further JGB weakness may be limited.Looking ahead, opinions diverge on the yen’s medium-term path. Some see scope for renewed weakness as carry trades reassert themselves, while others argue that Fed easing and higher hedging ratios by Japanese investors could support the currency over time. For now, markets await further clarity from Governor Ueda on how cautiously the BoJ intends to proceed into 2026 and beyond. This article was written by Eamonn Sheridan at investinglive.com.

Summary BoJ raised policy rate to 0.75% as expected Decision was unanimous, but wording saw dissent Real rates remain significantly negativeThe Bank of Japan raised its short-term policy rate by 25 basis points to 0.75%, delivering a widely anticipated move that takes borrowing costs to their highest level in around three decades. The decision was approved by a unanimous vote, underscoring broad agreement among policymakers that conditions now justified a further step toward normalisation. Despite the hike, the BoJ was careful to emphasise that monetary conditions remain accommodative, repeatedly highlighting that real interest rates are expected to stay significantly negative even after the policy adjustment. Officials said the move should be seen as part of a gradual and cautious process rather than a shift toward restrictive policy.In its statement, the central bank said it would continue to raise the policy rate if the economy and prices move in line with its forecasts, signalling conditional openness to further tightening. Policymakers added that the likelihood of achieving the baseline scenario has been rising, reflecting growing confidence that inflation dynamics are becoming more durable.The BoJ reiterated that it will conduct policy from the perspective of sustainably and stably achieving its 2% inflation target, while avoiding excessive tightening that could destabilise financial conditions. Officials said wages and inflation are likely to continue rising moderately in tandem, reinforcing the narrative that price pressures are increasingly supported by domestic demand rather than temporary cost factors.However, the meeting also revealed nuances within the Policy Board. Board member Takata opposed the description of the inflation outlook, arguing that the rate of increase in CPI, including underlying measures, had already generally reached the price stability target. Separately, board member Tamura opposed the wording on underlying CPI inflation and said it was likely to be broadly consistent with the target from the middle of the projection period.These objections did not extend to the rate decision itself but highlight an emerging debate over how close Japan is to achieving price stability on a sustained basis, a discussion that could shape the pace of future tightening.From a market perspective, the decision was said to be fully priced, limiting immediate volatility in the yen and JGBs. Despite this the yen fas dipped, with USD/JPY popping above 158.00. Focus is expected to remain on guidance, wage trends and how confidently the BoJ views inflation sustainability heading into 2026.Overall, the message was clear: normalisation is progressing, but the Bank remains committed to moving slowly, carefully and data-dependently, with no preset path for further rate increases. ---Due at 0630 GMT is Bank of Japan Governor Ueda's news conference This article was written by Eamonn Sheridan at investinglive.com.

The Bank of Japan raised its short-term policy rate by 25 basis points, lifting it to 0.75%, in a widely anticipated move that marks the highest level in roughly three decades and underscores the central bank’s gradual shift away from ultra-loose policy. I'll have more specific detail on the statement and associated BoJ releases soon, but for now I want to note the following. The decision had been fully priced by markets following a steady drumbeat of firm inflation data and increasingly confident signals from policymakers. As a result, the immediate market reaction was muted, with attention quickly turning from the rate hike itself to the Bank’s forward guidance and Governor Kazuo Ueda’s assessment of the path ahead.In its statement, the BoJ acknowledged that inflation has remained above its 2% target for an extended period, supported not only by imported cost pressures but also by firmer domestic price dynamics. At the same time, policymakers emphasised that real interest rates remain clearly negative, reinforcing the view that monetary conditions are still accommodative even after the hike.Governor Ueda will likely strike struck a cautious tone in his press conference, stressing that future adjustments will depend on whether inflation proves sustainable and demand-driven. He'll highlight the importance of wage developments, household consumption and corporate investment, while also noting the recent rise in Japanese government bond yields and the need to avoid destabilising financial conditions.Markets continue to debate the timing of the next move. While some pricing points to another hike as early as mid-2026, others argue the bar for further tightening has risen, particularly given lingering uncertainty around global growth and the transmission of higher rates through Japan’s highly leveraged public sector.From a market perspective, the lack of surprise reduced the risk of volatility seen during earlier policy shifts. Unlike past episodes that triggered sharp yen-funded carry unwinds, the currency’s reaction this time is likely to be driven more by guidance than by the rate increase itself.Overall, the decision reinforces the BoJ’s message: policy normalisation is under way, but it will proceed slowly, cautiously and data-dependently, with no preset course for further tightening. Bank of Japan Governor Ueda's press conference begins at 0630 GMT / 0130 US Eastern time. This article was written by Eamonn Sheridan at investinglive.com.

Summary Toyota to export U.S.-made vehicles to Japan Move aimed at easing U.S.–Japan trade tensions Tariff relief a key motivationToyota Motor Corp plans to begin selling U.S.-manufactured vehicles in Japan from 2026, a move aimed at easing trade tensions with Washington and strengthening ties with President Donald Trump’s administration as tariff negotiations remain in focus.The Japanese automaker said it will export three U.S.-built models, the Camry, Highlander and Tundra, to the Japanese market, with production sourced from plants in Kentucky, Indiana and Texas. Toyota said the vehicles are intended to meet a range of customer needs in Japan while also demonstrating the company’s commitment to balanced Japan–U.S. trade relations.The decision comes as Toyota and other Japanese automakers seek to encourage the Trump administration to ease or remove tariffs on Japanese car and auto-parts exports to the United States. Trump has repeatedly criticised trade imbalances in the auto sector and has pushed foreign manufacturers to expand U.S. production and exports as part of his broader trade agenda.Toyota already operates extensive manufacturing operations in the United States and has long argued that it is a major contributor to U.S. employment and investment. Exporting U.S.-made vehicles back to Japan represents a symbolic reversal of traditional trade flows and underscores Toyota’s willingness to align with Washington’s policy priorities.While Japan’s domestic auto market has historically favoured smaller vehicles, Toyota said the selected models reflect growing diversity in consumer preferences and will complement its existing lineup. The company did not disclose expected sales volumes, but analysts view the move primarily as a strategic trade and political gesture rather than a volume-driven initiative.From a broader perspective, the plan highlights how global automakers are increasingly adapting supply chains and sales strategies in response to geopolitical pressures rather than pure market demand. For Toyota, the move reinforces its position as a bridge between the world’s two largest auto markets at a time when trade policy uncertainty remains elevated. This article was written by Eamonn Sheridan at investinglive.com.

Summary Japan signals greater focus on fiscal sustainability Debt-to-GDP reduction framed as confidence booster Tax relief costs revised higherJapan’s Finance Minister Katayama signalled a renewed emphasis on fiscal discipline when outlining priorities for compiling the next fiscal year’s budget, highlighting the need to balance policy support with long-term sustainability and market confidence.Speaking on Friday, Katayama said the government would take fiscal sustainability into account “to some extent” when preparing the upcoming budget, an acknowledgement of growing scrutiny over Japan’s public finances as interest rates rise and debt servicing costs edge higher. Japan’s debt-to-GDP ratio remains the highest among advanced economies, leaving fiscal policy closely intertwined with monetary policy and market sentiment.Katayama said the government aims to boost market confidence by lowering the debt-to-GDP ratio, reinforcing messaging that fiscal credibility remains a priority even as policymakers consider measures to support households and growth. While the comments stopped short of committing to specific consolidation targets, they suggest a cautious approach to budget expansion following years of pandemic-era stimulus and elevated spending.The finance minister also highlighted the fiscal trade-offs associated with proposed tax relief measures. The Ministry of Finance now estimates that lifting the tax-free income threshold would reduce annual tax revenue by around ¥650 billion, significantly more than its earlier estimate of ¥400 billion. The revision underscores the budgetary cost of measures aimed at easing household tax burdens, particularly at a time when inflation and wage dynamics remain in flux.For markets, the remarks are notable against the backdrop of an expected Bank of Japan rate hike and rising Japanese government bond yields. A stronger focus on fiscal sustainability could help reassure investors concerned about the interaction between higher rates and Japan’s debt load, particularly if policy normalisation continues gradually. Katayama said there is no gap in thinking with Bank of Japan Governor Ueda, that finance ministry communications with Bank have been very positive. At the same time, the government faces competing pressures: maintaining fiscal credibility while responding to political demands for tax relief and economic support. How those tensions are resolved in the final budget will be closely watched by bond investors, rating agencies and currency markets alike.Overall, Katayama’s comments suggest the government is keenly aware that fiscal policy will play an increasingly important role in anchoring confidence as Japan transitions away from ultra-loose monetary settings. This article was written by Eamonn Sheridan at investinglive.com.

Summary EU approves €90bn Ukraine financing for 2026–27 Deal builds on budget headroom borrowing plans Multi-year support aims to boost certaintyEuropean Union leaders have reached agreement on a major new financial support package for Ukraine, approving €90 billion of funding for 2026–27, according to comments from European Council President António Costa. German Chancellor Merz confirms the 90bn euro loan is interest free and the Europe will keep Russian assets frozen until Putin has compensated Ukraine.“We have a deal to finance Ukraine,” Costa said, confirming that the decision to provide €90bn of support over the two-year period had been approved. The announcement follows earlier indications that EU leaders were close to consensus on a financing framework built around collective borrowing and the use of EU budget headroom.The agreement builds on draft conclusions seen earlier by Reuters, which outlined plans for the European Commission to raise funds on capital markets, with the loans backed by unused EU budget capacity rather than direct national contributions. EU officials had said there was a realistic path to unanimity, particularly after clarifications that the mechanism would not affect the financial obligations of certain member states, including Hungary, Slovakia and the Czech Republic.The structure is designed to ensure predictable, multi-year funding for Ukraine as the war with Russia continues, while limiting immediate fiscal strain on individual EU governments. Leaders have also called for continued work on the technical and legal aspects of the instruments underpinning the financing, including options linked to so-called “reparations loans” and the potential future use of frozen Russian assets.The €90bn envelope underscores the EU’s intent to provide sustained support rather than rolling short-term packages, a shift aimed at improving financial certainty for Kyiv and strengthening longer-term planning for reconstruction and defence. It also reflects a growing willingness within the bloc to deploy EU-level borrowing as a geopolitical tool, following precedents set during the pandemic and energy crisis.From a market perspective, the deal is unlikely to materially disrupt near-term sovereign issuance or euro-area funding conditions. However, it reinforces the structural trend toward greater EU-level debt issuance and deeper fiscal coordination, with longer-term implications for euro-area bond markets and regional stability. This article was written by Eamonn Sheridan at investinglive.com.

Summary EU agrees in principle on Ukraine loan Funding to be backed by EU budget headroom Unanimity among member states appears possibleEuropean Union leaders have agreed in principle to provide a new loan to Ukraine, funded through EU borrowing on capital markets and backed by unused EU budget headroom, according to draft conclusions seen by Reuters.Under the proposal, the European Commission would raise funds on financial markets, with the loan guaranteed by the EU’s budgetary capacity rather than direct national contributions. An EU official said there appears to be a pathway toward unanimity among member states to use the headroom of the EU budget to provide funding for Ukraine, according to draft text seen by Reuters.The draft also specifies that any mobilisation of EU budget resources used as a guarantee for the loan would not affect the financial obligations of the Czech Republic, Hungary or Slovakia, addressing concerns from some governments about potential fiscal exposure, the draft text showed.EU leaders further agreed that work should continue on the technical and legal aspects of the instruments establishing what has been described as a “reparations loan,” according to the draft seen by Reuters, as discussions continue over longer-term funding mechanisms and the possible use of frozen Russian assets.The agreement in principle highlights the EU’s continued commitment to supporting Ukraine while navigating internal political sensitivities. By relying on collective borrowing and budget guarantees, EU leaders aim to sustain financial assistance without placing immediate strain on national budgets. This article was written by Eamonn Sheridan at investinglive.com.

Summary U.S. launches interagency review of Nvidia H200 exports Trump backs controlled chip sales to China National security concerns remain centralThe Trump administration has initiated a multi-agency review that could pave the way for the first-ever sales of Nvidia’s H200 artificial intelligence chips to China, according to sources familiar with the process cited by Reuters, marking a potential shift in U.S. technology export policy.The review follows President Donald Trump’s recent pledge to allow sales of Nvidia’s H200 chips to China, subject to a 25% fee paid to the U.S. government. Trump has argued that permitting controlled exports would help U.S. firms maintain technological leadership by reducing incentives for China to accelerate domestic chip development.According to sources, the U.S. Commerce Department has circulated license applications for the proposed shipments to the State, Energy and Defense Departments for interagency review. Under export control rules, those agencies have 30 days to assess the applications, with the final decision resting with the president if disagreements emerge. The start of the review process has not been previously reported.The move has reignited debate in Washington. China hawks across both parties have warned that advanced AI chips could enhance Beijing’s military capabilities and undermine U.S. dominance in artificial intelligence. The H200, while slower than Nvidia’s flagship Blackwell chips, remains a powerful and widely used accelerator that has never been permitted for sale to China.Nvidia has reportedly been considering increasing production of the H200 after initial demand from China exceeded available capacity, according to a separate Reuters report. However, uncertainty remains over whether Chinese authorities would approve domestic firms purchasing the chips if U.S. licenses are granted.Within the administration, officials led by White House AI adviser David Sacks argue that allowing limited sales could blunt the rise of Chinese competitors such as Huawei, discouraging accelerated efforts to rival Nvidia and AMD at the cutting edge.While you'd expect this to be a positive for NVDA, and it is, its not like Trump's support for sales to China is new news. This should keep any positive market response more subdued than otherwise. This article was written by Eamonn Sheridan at investinglive.com.

The People's Bank of China (PBOC), China's central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a "band," around a central reference rate, or "midpoint." It's currently at +/- 2%. The close of the previous session was at 7.0412. The rate at 7.0550 today is the strongest setting for CNY since 30 September, 2024.Earlier:PBOC is expected to set the USD/CNY reference rate at 7.0378 – Reuters estimateThe daily fixing of this mid-rate is often interpreted as a policy signal rather than just a technical reference point. A higher-than-expected USD/CNY midpoint is typically read as a sign the PBOC is leaning against CNY appreciation pressure, like today. ---While you're here, an ICYMI via Reuters. China has made a significant, if still incomplete, advance in its push to challenge Western dominance in advanced semiconductor manufacturing, according to sources familiar with a highly classified project in Shenzhen.In a secure laboratory, a team of Chinese engineers has built a prototype extreme ultraviolet (EUV) lithography machine, the critical technology required to manufacture the most advanced chips used in artificial intelligence, smartphones and military systems. The machine, completed in early 2025 and now undergoing testing, reportedly occupies most of a factory floor and was developed by former engineers from Dutch chip-equipment maker ASML who reverse-engineered the technology, sources said.EUV lithography sits at the centre of what has become a technological Cold War, as the West has sought to restrict China’s access to the machines through export controls. The systems use extreme ultraviolet light to etch circuits thousands of times thinner than a human hair, enabling the production of the world’s most powerful semiconductors.While China’s prototype is operational and has successfully generated EUV light, it has not yet produced functional chips, underscoring the technical hurdles that remain. The Chinese government is targeting 2028 for the production of working chips using domestically built EUV tools, though people close to the project say 2030 is a more realistic timeline.If successful, the effort would mark a major breakthrough in China’s quest for semiconductor self-sufficiency and reduce its reliance on Western technology, with far-reaching implications for global supply chains, geopolitics and the balance of technological power. This article was written by Eamonn Sheridan at investinglive.com.

Australia Private Sector Credit for November 2025: +0.6% m/mexpected +0.6%, prior +0.7% Summary Credit growth matched expectations in November Lending remains steady, as do rates for now Limited implications for RBA policyAustralia’s private sector credit growth held steady in November, offering little in the way of fresh signals for monetary policy but reinforcing the view of a cautiously expanding credit environment.Data published by the Reserve Bank of Australia showed private sector credit rose 0.6% month-on-month in November, in line with market expectations and only marginally softer than the 0.7% increase recorded in October. The result points to stable borrowing conditions across the economy, with neither a sharp acceleration nor a meaningful slowdown in credit demand.Private sector credit is a broad measure capturing lending to households and businesses, and is closely watched as an indicator of financial conditions, economic momentum and the transmission of monetary policy. Sustained strength in credit growth can signal rising demand and inflationary pressure, while weakness may point to tighter financial conditions and slowing activity.The November reading suggests that stable interest rates continue to restrain borrowing at the margin, but have not triggered a sharp contraction in credit. Household balance sheets remain relatively resilient, while business borrowing appears steady, supported by ongoing investment needs and population-driven demand.For the RBA, the data is unlikely to materially shift the policy outlook on its own. Credit growth at this pace is broadly consistent with an economy growing modestly below trend.From a market perspective, private sector credit is best viewed as a secondary indicator, offering confirmation rather than a catalyst. FX and rates markets tend to respond more directly to inflation, wages and labour market data, with credit figures used to validate broader narratives around growth and financial conditions.Still, the steadiness of credit growth matters at the margin. A sustained deceleration would strengthen the case for eventual easing, while any renewed acceleration could reignite concerns about household leverage and inflation persistence.This screenshot shows the dates of Reserve Bank of Australia policy meetings coming in 2026. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

Summary Goldman expects three BoE cuts in 2026In March, June and September, from their previous forecast of a cut in each of February, April, and July.Labour market weakening supports easing Inflation seen remaining containedThe Bank of England’s decision to cut interest rates on 18 December has reinforced expectations that the UK central bank is entering a more sustained easing cycle, with Goldman Sachs continuing to forecast multiple rate cuts through 2026 amid weakening economic momentum.In a research note, Goldman said it expects the BoE to deliver 25 basis point cuts in March, June and September, revising its earlier call that had pencilled in moves in February, April and July. The shift in timing reflects the bank’s assessment that the Monetary Policy Committee (MPC) will proceed cautiously but steadily as evidence mounts that inflation pressures are easing and labour market conditions are deteriorating.Goldman argues that recent UK data has increasingly tilted risks toward a softer growth outlook. Labour market indicators have shown signs of cooling, including slower hiring, rising unemployment risks and easing wage pressures. At the same time, the bank expects inflation to remain well-behaved through 2026, reducing the need for the BoE to maintain a restrictive policy stance.While markets currently price a gradual pace of easing, Goldman sees scope for the BoE to cut rates more aggressively than investors anticipate if incoming data continues to confirm these trends. The bank notes that weak activity data could give policymakers greater confidence to lean dovish, particularly if inflation expectations remain anchored.The December cut marked a shift in the BoE’s policy narrative, signalling that the balance of risks has moved away from persistent inflation and toward supporting growth. However, policymakers are expected to retain a data-dependent approach, closely monitoring wage dynamics, services inflation and broader financial conditions.From a market perspective, the evolving BoE outlook has implications for UK rates, sterling and relative monetary policy divergence. A faster or deeper easing cycle would likely weigh on the pound while supporting UK risk assets, particularly if global central banks move more cautiously.Overall, Goldman’s revised forecast underscores growing confidence that the BoE’s tightening phase is firmly over, with the next challenge centred on calibrating the pace and depth of rate cuts as the UK economy navigates a softer growth environment. This article was written by Eamonn Sheridan at investinglive.com.

United Kingdom GfK Consumer Confidence for December 2025: -17 vs. expected -18, prior -19 Summary Improved modestly in DecemberBudget restraint and easing inflation offered support Spending remains weak despite real wage gains British consumer confidence edged higher in December, reaching its joint-highest level of the year, though sentiment remains weak by historical standards, according to a closely watched monthly survey from GfK.The GfK consumer confidence index rose to -17 in December, matching levels last seen in October and August. The reading marks the strongest level since August 2024, shortly after the Labour government took office, but still points to a cautious and fragile consumer backdrop.The modest improvement followed Chancellor Rachel Reeves’ annual budget, which imposed relatively few immediate tax increases on households. While the budget raised Britain’s overall tax burden by around £26 billion per year, this was notably smaller than the £40 billion increase announced in 2024, and much of the additional tax impact will not take effect until later years.GfK noted that households’ assessment of the general economic outlook improved more than perceptions of their own personal finances. Encouragingly, consumers’ willingness to make major purchases recorded the largest gain among the survey’s components, suggesting tentative signs of easing caution.Commenting on the data, GfK consumer insights director Neil Bellamy likened consumers to “a family on a festive winter hike,” moving forward slowly while hoping for better conditions ahead, a metaphor that captures both resilience and ongoing uncertainty.The confidence uptick also comes against a slightly more supportive inflation backdrop. Consumer price inflation slowed to 3.2% in November, its lowest level since March, and the government’s budget included measures to shift climate-related costs away from household energy bills and into general taxation, potentially easing near-term pressure on disposable incomes.Despite these factors, consumer spending in the UK has remained subdued. Although wages have outpaced inflation this year, households — like their counterparts across much of Europe — have continued to save at elevated rates. This reluctance to spend has puzzled economists and suggests that confidence, while improving, has yet to translate into a meaningful recovery in consumption. This article was written by Eamonn Sheridan at investinglive.com.