SummaryByteDance plans to lift AI investment sharply in 2026, sources say.Preliminary capex budget is around Rmb160bn ($23bn), up from 2025.About half of spending is earmarked for advanced semiconductors.AI chip access remains uncertain due to US export controls.Move highlights intensifying AI competition between China and the US.TikTok owner ByteDance is planning a significant increase in artificial-intelligence spending in 2026, underscoring the urgency among Chinese technology groups to keep pace with US rivals amid tightening geopolitical and technology constraints.According to people familiar with the matter, the Beijing-based company has preliminarily budgeted around Rmb160bn ($23bn) in capital expenditure for 2026, up from roughly Rmb150bn this year. Around half of the planned spending is expected to be directed toward advanced semiconductors, with approximately Rmb85bn earmarked specifically for AI processors.The proposed increase highlights ByteDance’s determination to scale its AI capabilities across content recommendation, advertising, and generative AI applications, even as access to cutting-edge chips remains uncertain. US export controls have limited Chinese companies’ ability to procure the most advanced processors from firms such as Nvidia, forcing companies to balance stockpiling, alternative sourcing and in-house optimisation.ByteDance has emerged as one of China’s most aggressive investors in AI infrastructure, reflecting the strategic importance of machine learning to its core businesses, including TikTok and its Chinese counterpart Douyin. AI plays a central role in recommendation algorithms, content moderation and advertising efficiency, making compute capacity a critical competitive input.The spending plans also illustrate the broader shift underway among China’s largest internet companies, which are prioritising long-term technological self-sufficiency over short-term margin preservation. As US technology firms ramp up AI investment at an unprecedented pace, Chinese groups are under pressure to respond despite regulatory and supply-chain headwinds.While the budget remains preliminary and subject to change, the scale of the proposed outlay suggests ByteDance is preparing for sustained competition in AI over the coming years. For markets, the plans reinforce expectations that AI-related capital expenditure will remain elevated globally, even as access to advanced hardware becomes increasingly fragmented along geopolitical lines. This article was written by Eamonn Sheridan at investinglive.com.

SummaryStarlink said its global customer base has exceeded 9 million users.The figure is up from 8 million reported just a month earlier.Growth reflects expanding satellite capacity and global rollout.Starlink is a key revenue pillar within SpaceX’s long-term strategy.Rapid adoption underscores strong demand for low-orbit broadband.Satellite internet provider Starlink, owned by SpaceX (to go public soon in an unusual way?) , said its global customer base has surpassed 9 million users, marking a sharp increase from 8 million just one month earlier and underscoring accelerating demand for its broadband services.The milestone highlights the pace at which Starlink has expanded since moving from early-stage deployment into mass-market adoption. The service, which uses a rapidly growing constellation of low-Earth-orbit satellites, has positioned itself as a viable alternative to traditional broadband in rural, remote and underserved regions, while also gaining traction in maritime, aviation and enterprise markets.Starlink’s growth trajectory reflects both improving network capacity and wider international rollout. SpaceX has steadily increased satellite launches, enhancing coverage, reducing latency and supporting higher data throughput. That expansion has allowed the company to onboard users at a faster rate, even as it continues to invest heavily in infrastructure and ground equipment.The subscriber jump also reinforces Starlink’s role within SpaceX’s broader commercial strategy. While SpaceX remains privately held, Starlink is widely viewed as a key long-term revenue driver, helping fund the company’s ambitious launch cadence and next-generation projects. Founder Elon Musk has previously suggested that Starlink could eventually be spun off or listed once cash flows become more predictable.Competition in satellite broadband is intensifying, with rivals advancing their own low-orbit constellations. Even so, Starlink’s first-mover advantage, scale and vertically integrated launch capability continue to differentiate the service.For investors and industry observers, the rapid rise from 8 million to 9 million users in a single month signals strong underlying demand and suggests Starlink’s growth phase is far from over. 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%. In open market operations today the People's Bank of China injected 59.3bn yuan in 7-day reverse repos at an unchanged rate of 1.4%.---The reference rate at 7.0523 is a near 15-month high. This is reflective of broad dollar weakness so far this week. The gap between the official midpoint and Reuters' market-based estimate had the largest weak side deviation since the data became available in November 2022. Earlier:PBOC is expected to set the USD/CNY reference rate at 7.0267 – 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.---In recent months, the People’s Bank of China has taken deliberate steps to moderate the speed of appreciation in the onshore yuan, signalling a preference for stability over sharp currency gains. Rather than targeting a specific level, policymakers appear focused on preventing an overly rapid rise in CNY that could disrupt trade, capital flows and domestic financial conditions.China operates a managed floating exchange-rate system, under which the PBOC sets a daily midpoint (or fixing) around which the onshore yuan can trade within a prescribed band. A key tool has been the consistent setting of weaker-than-market-expected fixings, even during periods when spot-market forces point to faster yuan appreciation. By leaning against market momentum at the fixing stage, authorities have effectively smoothed the currency’s ascent.The central bank has also relied on state-owned banks to manage intraday price action. These banks are widely seen selling yuan or buying dollars at key moments, particularly during periods of thin liquidity, helping cap upside moves without the need for explicit, large-scale intervention. This approach keeps volatility low while reinforcing the official signal that appreciation should be orderly.Slowing yuan gains also serves several macro objectives. A rapidly appreciating currency would squeeze exporters at a time when China is still navigating uneven domestic demand and structural adjustment. It could also encourage speculative inflows and carry trades, complicating monetary management given China’s relatively low interest rates. By managing the pace of appreciation, the PBOC reduces the risk of one-way bets building in the currency.Importantly, these actions do not suggest Beijing is resisting a stronger yuan outright. Instead, the strategy reflects a desire to align currency moves with economic fundamentals while avoiding destabilising swings. For markets, the message is clear: the PBOC is comfortable with a firmer yuan, but only on its own terms and at a controlled speed. This article was written by Eamonn Sheridan at investinglive.com.

Reserve Bank of Australia Minutes of the December 2025 Monetary Policy Board Meeting. SummaryRBA minutes show rising concern that inflation pressures may be more persistent.Confidence that policy is still restrictive has diminished.Monthly CPI seen as useful but unreliable for now; quarterly CPI remains key.Labour market assessed as still a little tight, with excess demand risks.Board discussed conditions under which rate hikes could be considered.Minutes from the December meeting of the Reserve Bank of Australia show the Board growing less confident that monetary policy remains restrictive, as evidence mounts that inflation pressures may prove more persistent than previously expected.While the cash rate was left unchanged at 3.60% by unanimous decision, members noted that recent inflation data, including the inaugural full monthly CPI release, pointed to upside risks in the near term. Headline inflation had risen to 3.8% in October, and a range of indicators suggested cost pressures were becoming more broad-based. Unit labour costs and average earnings had surprised to the upside, while capacity-utilisation measures indicated that the economy may be operating with a degree of excess demand.The Board stressed caution in interpreting the new monthly CPI series, highlighting its short history, volatility and challenges around seasonal adjustment. As a result, members agreed that quarterly CPI would remain the primary guide for assessing underlying inflation momentum for now, with December-quarter inflation data seen as critical ahead of the February meeting.Importantly, the minutes reveal an active debate over whether financial conditions are still restrictive. Some members judged that conditions may no longer be restrictive, pointing to stronger credit growth, aggressive competition among banks, low risk premia and a marked response in housing activity following earlier policy easing. Others argued conditions remained mildly restrictive, citing elevated mortgage prepayments, higher household savings and the lagged impact of monetary policy still to come.Members agreed that labour-market conditions remain “a little tight”, with low underutilisation, persistent hiring difficulties and upward revisions to estimates of excess demand. The recent rise in the unemployment rate was seen as temporary, reducing the risk of a material easing in labour-market conditions.While the Board judged it was too early to conclude that inflation persistence had materially increased, members discussed scenarios in which a cash-rate increase may need to be considered in the coming year if capacity constraints and price pressures do not ease. For now, the balance of risks has tilted to the upside, reinforcing a cautious, data-dependent stance.I posted a preview to this earlier as background if you need:Preview of the Reserve Bank of Australia December meeting minutes due today, December 23 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.

SummaryMUFG says sustained franc strength could force the SNB to respond with negative rates or intervention.Falling oil prices in 2026 could add disinflationary pressure in Switzerland.Negative rates would make the franc more attractive as a funding currency.Fed independence concerns may continue to support CHF against the dollar.Progress on Ukraine peace talks could cap franc gains versus the euro.The Swiss National Bank could be forced back into active policy easing if the Swiss franc remains strong and global energy prices decline further in 2026, according to a research note from MUFG Bank.MUFG analysts argue that persistent franc strength would increase pressure on the SNB to respond through a combination of renewed currency intervention and potentially reintroducing negative interest rates. While Switzerland exited negative rates only recently, the bank warns that prolonged disinflationary forces, particularly from lower oil prices, could undermine the SNB’s inflation outlook and complicate its policy stance.A return to negative rates would likely have broader market implications. MUFG notes that such a move could re-establish the Swiss franc as an attractive funding currency, particularly if global financial-market volatility remains subdued and economic growth improves. Under those conditions, investors may once again look to fund higher-yielding positions through franc-denominated borrowing.The note also highlights external drivers supporting the franc, including lingering concerns around Federal Reserve independence. MUFG suggests that political or institutional uncertainty surrounding the Fed could continue to favour safe-haven demand for the franc against the US dollar, reinforcing upward pressure on the currency.However, MUFG sees potential limits to franc outperformance against the euro. Any meaningful progress toward a peace settlement in Ukraine could reduce safe-haven demand within Europe, softening support for the franc relative to the single currency. In that scenario, EUR/CHF could stabilise even if the franc remains firm against the dollar.Overall, MUFG frames the outlook as one in which policy risks are skewed toward further SNB accommodation should current currency and commodity trends persist into next year. This article was written by Eamonn Sheridan at investinglive.com.

SummaryTrump said the US may sell or retain oil seized near Venezuela.The seized crude could be used to replenish the Strategic Petroleum Reserve.Washington will also keep the confiscated ships, Trump said.The move follows tighter US enforcement on Venezuelan-linked oil flows.Comments add to geopolitical uncertainty in energy markets.US President Donald Trump said the United States is weighing whether to sell oil seized near Venezuela in recent weeks or retain it for domestic use, including potentially adding it to the nation’s strategic stockpiles.Speaking to reporters on Monday, Trump said Washington could take multiple approaches to the confiscated crude. “Maybe we will sell it, maybe we will keep it,” he said, adding that the oil could be used to replenish the Strategic Petroleum Reserve. Trump also said the seized vessels themselves would be retained by the United States.The comments follow a recent escalation in US enforcement actions targeting oil shipments linked to Venezuela, part of a broader effort to tighten pressure on Caracas through sanctions and maritime controls. The moves have added a geopolitical risk premium to oil markets, particularly as supply conditions remain sensitive to disruptions.While Trump did not provide details on the volume of oil seized or a timeline for any sale or transfer to reserves, his remarks highlight the flexibility Washington is seeking in managing confiscated energy assets. Any decision to sell the oil could add marginal supply to the market, while diverting it to the SPR would reduce near-term market impact but strengthen US energy security.The comments come as traders continue to assess the implications of tougher enforcement on sanctioned oil flows, with recent developments already contributing to heightened volatility in crude prices. There is ongoing geopolitical risk around Venezuelan oil supply. The potential implications for crude prices will depend on whether seized barrels reach the market or Trump sends them to the US Strategic Petroleum Reserve (the SPR). This article was written by Eamonn Sheridan at investinglive.com.

SummaryNvidia aims to resume H200 AI chip shipments to China by mid-February, sources told Reuters.Initial deliveries would come from existing inventory, with larger capacity planned for 2026.Shipments hinge on Chinese government approval and US export licensing.The move follows Trump’s decision to allow H200 sales with a 25% fee, reversing Biden-era restrictions.The report supported US tech stocks during Europe and US trade on Monday.Shares of Nvidia and broader US equities found support during European and US trading hours on Monday after a Reuters report said the chipmaker is aiming to resume shipments of advanced AI processors to China as early as mid-February.According to sources familiar with the matter, Nvidia has told Chinese customers it plans to begin shipping H200 AI chips, its second-most powerful processor, before the Lunar New Year holiday, using existing inventory. Initial deliveries are expected to total between 5,000 and 10,000 chip modules, equivalent to roughly 40,000–80,000 H200 chips.The company has also signalled plans to add new production capacity for China-bound H200 chips, with orders for that capacity potentially opening in the second quarter of 2026. However, sources cautioned that the entire plan remains contingent on Chinese government approval, with Beijing yet to formally clear any purchases.The prospective shipments would mark the first deliveries of H200 chips to China since US President Donald Trump said earlier this month that Washington would allow such sales subject to a 25% fee. Reuters previously reported that the Trump administration had launched an inter-agency review of export license applications.While the H200 belongs to Nvidia’s earlier-generation Hopper line and has been superseded by newer Blackwell chips, it remains widely used in AI workloads and is seen as materially more powerful than the H20 chips previously permitted for China.For Chinese technology groups such as Alibaba Group and ByteDance, which have expressed interest in the H200, the potential resumption of shipments would significantly improve access to high-performance AI hardware. That said, Chinese authorities are reportedly weighing conditions for approval, including proposals that imported chips be bundled with domestically produced processors.The report helped buoy US tech sentiment late Monday, reinforcing the view that regulatory risk around AI chip exports may be easing at the margin, even as political and approval uncertainty remains elevated. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Japan’s finance minister said authorities have a “free hand” to act against speculative yen moves.Remarks followed yen weakness after the BOJ’s rate hike and lifted the currency in Europe and US trade.Comments built on earlier Asia-session support after verbal intervention from Atsushi Mimura.Reference to the Japan–US FX accord suggests Tokyo believes it has scope to intervene if volatility worsens.Fiscal expansion plans add complexity, with rising yields highlighting market sensitivity to public finances.Japan’s finance minister Satsuki Katayama delivered her strongest warning yet against currency speculation, saying Tokyo has a “free hand” to take bold action against yen moves that are not aligned with economic fundamentals.In remarks to Bloomberg on Monday, Katayama said the yen’s sharp weakening late last week, even after the Bank of Japan raised interest rates to their highest level in 30 years, was “clearly not in line with fundamentals but rather speculative.” She said authorities were prepared to respond forcefully, citing language in the Japan–US finance ministers’ joint statement that preserves the option of intervention during periods of excessive volatility.The comments helped underpin yen strength during European and US trading hours on Monday, extending gains that had already begun earlier in the Asia session following verbal intervention from Japan’s top currency diplomat Atsushi Mimura. Mimura had warned against “one-sided” and “sharp” FX moves, prompting initial short-covering in USD/JPY.Katayama’s reference to the bilateral agreement with Washington suggests Tokyo believes it has tacit approval to act without further negotiation. The accord, signed in September by her predecessor Katsunobu Kato and US Treasury Secretary Scott Bessent, reaffirmed that while markets should determine exchange rates, intervention remains appropriate in cases of disorderly moves.Japan spent roughly US$100bn defending the yen last year, with action clustered around the ¥160 level. The currency was trading closer to ¥157.40 on Monday evening. Katayama declined to define specific trigger levels, stressing that each episode of volatility is judged on its own merits.Beyond FX, Katayama acknowledged near-term pressure on Japan’s public finances as Prime Minister Sanae Takaichi’s government pursues aggressive fiscal stimulus. However, she argued any deterioration would be temporary, with stronger growth, investment and tax revenue expected to follow. Concerns around fiscal expansion helped push Japan’s 10-year government bond yield to a 27-year high of 2.1% on Monday. This article was written by Eamonn Sheridan at investinglive.com.

SummaryTreasury Secretary Bessent flagged possible changes to the Fed’s inflation framework and communications.Said Kevin Miran could return to the White House by February or March, aligning with a likely Fed chair decision.Bessent indicated support for an inflation target range, but only once inflation is back at 2%.He floated the idea that a new Fed chair could scrap the dot plot.Comments add to market debate around Fed communication and perceived independence.US Treasury Secretary Scott Bessent has signalled potential changes to the Federal Reserve’s policy framework and communications as the White House moves closer to naming its next Fed chair.Speaking on a podcast, Bessent said current fill-in Fed governor Kevin Miran is likely to return to the White House in February or March, a timeline that markets interpreted as aligning with a formal decision on the next Federal Reserve chair.Bessent also appeared to open the door to a rethink of the Fed’s inflation framework, suggesting he favours the idea of an inflation “range” rather than a fixed point target. However, he was careful to stress that such a change would not be appropriate while inflation remains above 2%, signalling that any review would be conditional on inflation being firmly under control.In a further hint at potential reform, Bessent suggested a new Fed chair could consider scrapping the dot plot — the quarterly projection of policymakers’ rate expectations — a move that would mark a significant shift in how the central bank communicates its policy outlook.The remarks stop short of signalling imminent change, but they add to growing market sensitivity around Federal Reserve independence, communication tools and long-term policy credibility. With rate cuts already priced for later in 2026, investors are increasingly focused on whether a change in leadership could alter how policy intentions are signalled, even if the near-term rate path remains data-dependent. This article was written by Eamonn Sheridan at investinglive.com.

The economic and event calendar in Asia today, Tuesday, December 23, 2025, is nearly empty. We do get RBA December meeting minutes and that's about it. Due at 0030 GMT / 1930 US Eastern time I've posted a preview of what seems likely from these below. Summary:The Reserve Bank of Australia minutes are likely to reinforce that the easing phase is over, with policy now in an extended pause rather than moving toward rate cuts.The Board is expected to emphasise growing discomfort with inflation, noting signs of a broader-based pick-up and upside risks despite caution around the new monthly CPI series.Stronger-than-expected private demand, renewed housing momentum and still-tight labour-market conditions are likely to be framed as sources of ongoing inflation pressure.Governor Michele Bullock’s press conference comments suggest the minutes will show rate hikes were not actively considered in December, but scenarios for further tightening were discussed.Markets will be alert for language signalling that if inflation fails to slow convincingly, renewed tightening could come back onto the agenda as early as the February meeting.RBA minutes preview: what the December record is likely to showWhen the Reserve Bank of Australia releases the minutes of its December meeting later today, markets will be looking to gauge just how close the Board is to re-opening the door to tighter policy, even as rates were left unchanged.At the meeting, the Reserve Bank of Australia held the cash rate at 3.60%, but the accompanying statement and Governor Michele Bullock’s press conference struck a noticeably firmer tone than in recent months. The minutes are therefore likely to reinforce the idea that the easing cycle has ended for now, and that policy is now in a holding pattern with a tightening bias rather than an easing one.What the minutes are most likely to emphasiseThe minutes are expected to show a detailed discussion around inflation risks, with the Board acknowledging that while inflation has fallen substantially from its 2022 peak, recent data point to a renewed and potentially broader-based pick-up. Members are likely to reiterate caution around interpreting the new monthly CPI series, but also to note that some of the recent strength may prove persistent and therefore warrants close monitoring.On activity, the minutes should underline that momentum in private demand has been stronger than anticipated, supported by both consumption and investment, alongside renewed strength in housing activity and prices. This backdrop, combined with easier financial conditions earlier in the year and policy lags still flowing through, is likely to be framed as a source of upside risk to inflation rather than reassurance.Labour-market discussion in the minutes is likely to echo the statement’s message: conditions have eased modestly, but remain “a little tight”. Expect emphasis on low underutilisation, elevated capacity-utilisation measures and continued labour shortages reported by firms, alongside unease about still-strong unit labour cost growth.How Bullock’s press conference may shape the recordGovernor Bullock’s remarks from her press conference that followed the statement on the day suggest the minutes will confirm that the Board did not actively consider a rate hike at the December meeting, but did discuss the circumstances under which further tightening might be required. Her repeated emphasis on meeting-by-meeting decision-making, caution around reacting to single data points, and a clear focus on upcoming inflation and labour-market data is likely to be reflected in the minutes.Importantly, the record is also expected to show that rate cuts were not part of the discussion, with the balance of risks judged to have shifted toward the upside.Market lensFor markets, the key risk is that the minutes read as more uncomfortable with inflation than the statement alone implied, reinforcing the idea of an extended pause with a live tightening option should inflation fail to slow convincingly into early 2025.Bonus! What economists are sayingFollowing the December meeting, several major banks updated their outlooks for RBA policy. Forecasts from Citi, Citi forecasts 2 RBA rate hikes in 2026, February followed by May, as inflation risks riseNAB, NAB sees RBA hiking twice in 2026, clashing with market expectations for extended holdCBA, CBA sees February RBA rate hike as growth runs hot. Citi & NAB also expect February hike.are for rate hikes soon. The forecast from Westpac, Westpac sees RBA holding firm through 2026 as inflation risks linger. Cuts seen in 2027. broadly converges on the view that the easing phase is over for now, but does not project renewed tightening. This article was written by Eamonn Sheridan at investinglive.com.

Executive Summary: A World on EdgeEscalating Nuclear Anxiety: Prime Minister Netanyahu has signaled that Iran’s recent military exercises and nuclear ambitions remain a primary threat, with high-level strategy talks set to begin with the Trump administration.Defense Sector Breakthrough: The U.S. Aerospace & Defense sector (ITA) is hitting record highs as President Trump and Secretary of War Pete Hegseth prepare a major shipbuilding announcement to bolster naval superiority.The Safe-Haven Stampede: Heightened uncertainty in Ukraine, new U.S. naval blockades near Panama, and surveillance operations in Nigeria have created a perfect storm for precious metals, with gold up nearly $100 in a single session.Geopolitical Flashpoints: Conflict and SurveillanceThe global landscape is shifting rapidly as diplomatic efforts struggle to keep pace with military movements.Israel and Iran: Prime Minister Netanyahu warned today of a "sharp response" to ongoing Iranian missile drills, which Israeli intelligence suggests could be cover for a surprise attack. Netanyahu is scheduled to meet President Trump at Mar-a-Lago on December 29 to discuss "basic expectations" regarding Iran's nuclear activities.Russia-Ukraine: Vice President JD Vance expressed skepticism regarding a "peaceful solution" in the near term but noted that 28-point peace negotiations are continuing. He emphasized that any deal must be acceptable to both parties to ensure the conflict does not restart.Nigeria and West Africa: The U.S. has ramped up surveillance flights over Nigeria following President Trump's threat to intervene militarily to protect Christian populations from ongoing violence.Maritime Friction: Tensions are rising in the Caribbean as the Panama Foreign Minister confirmed that ships intercepted by the U.S. (part of a newly announced "blockade" on sanctioned oil) had failed to respect international maritime regulations.The Military Build-Up: ICBMs and ShipbuildingA new Pentagon report has sent shockwaves through the defense community, detailing a massive acceleration in China's nuclear capabilities.China’s Silo Fields: Intelligence reports indicate China has likely loaded over 100 intercontinental ballistic missiles (ICBMs) across three silo fields near the Mongolian border. Beijing currently shows "no appetite" for arms-control talks.Naval Expansion: All eyes are on Palm Beach at 4:30 PM today, where President Trump and Secretary of War Pete Hegseth are expected to announce a massive new shipbuilding initiative. This move is designed to reclaim U.S. naval dominance and has already sent defense stocks soaring.Market Reaction: Gold, Silver, and Defense RecordsThe financial markets are reflecting the growing "anxiety premium" as investors rotate out of risk and into defensive assets.Precious Metals & EnergyAerospace & Defense (ITA ETF)The ITA US Aerospace and Defense ETF is trading at $219.24, up 2.44%. This move puts the fund on pace for a record-high close, successfully recovering from its November corrective lows. Since November 21, the sector has surged 12% in just 20 trading days.Equities PerformanceDespite the global tension, U.S. indices remain resiliently positive as the trading day nears its conclusion:Dow Jones: 48,386.71 (+252 pts / 0.52%)S&P 500: 6,876.67 (+42.14 pts / 0.62%)NASDAQ: 23,423.00 (+117 pts / 0.51%) This article was written by Greg Michalowski at investinglive.com.

The US treasury auctioned off $69B of 2-year notes at a high yield of WI level at the time of the auction 3.496%Tail +0.3 basis points vs 6 month average of -0.4 bpsBid to cover 2.54Xvs 6 month average of 2.61XDirects 34.1% vs 6 month average of 31.7%Indirects 53.2% vs 6 month average of 57.1%Dealers 12.7% vs 6 month average of 11.2%.AUCTION GRADE:D+Auction demand is typically assessed by comparing the key components against their six-month averages.The bid-to-cover ratio measures the number of bids received relative to the amount offered, providing a snapshot of overall demand. Direct bidders represent the share taken by domestic U.S. investors, while indirect bidders reflect international participation. The dealer take shows how much of the issue was absorbed by the U.S. government dealer community.In this auction, the only clear positive was that domestic demand exceeded its six-month average. International participation was below average, while dealers were left holding a larger share than normal, indicating weaker end-user demand. The auction tailed, and the bid-to-cover ratio came in below its recent average, reinforcing the softer tone.While the result was not a disaster, and seasonal effects from the Christmas holiday week may have weighed on participation, the auction outcome was below average overall.The U.S. Treasury continues to auction debt to fund ongoing deficits. Following today’s 2-year note auction, the Treasury will sell $70 billion of 5-year notes on Tuesday and $44 billion of 7-year notes on Wednesday. This article was written by Greg Michalowski at investinglive.com.

Market Summary at a GlanceHistoric Milestones: Both gold and silver are on track for record-breaking closes, with gold up over 2% and silver gaining more than 2.5%.Monetary Tailwinds: Expectations for two additional U.S. interest rate cuts in 2025 are lowering real yields and boosting demand for non-yielding assets.Geopolitical Safety: Rising tensions in Venezuela and broader global uncertainty are driving consistent "safe-haven" capital flows into bullion.Supply Scarcity: Silver is benefiting from a "double-whammy" of record industrial demand (EVs/Solar) and constrained mine production.Key Levels to Watch: Gold eyes the $4,515 Fibonacci extension, while silver remains bullish as long as it stays above its moving average support.Gold Analysis: Testing the Channel TopGold is currently trading at $4,438.50, marking its largest single-day gain since November. The metal is riding its strongest annual performance since 1979, currently up approximately 68% for the year.The Bull Case: Ongoing central bank accumulation and steady inflows into gold-backed ETFs provide a structural floor for prices.Technical Resistance: Sellers are currently defending a topside channel trendline near $4,439. A clean break above this level targets the 127.2% Fibonacci extension at $4,515.17.Support & Risk: Buyers must hold the $4,380.79 level (the previous October high) to maintain momentum. A dip below the recent high of $4,375.17 would signal a "failed breakout" and potential disappointment for bulls.Silver Analysis: Industrial Demand Meets Speculative FireSilver has outperformed gold today on a percentage basis, trading at $68.83. While gold often leads the rally, silver’s historical tendency to "catch up" with higher volatility is currently on full display.Fundamental Drivers: Beyond its role as a hedge, silver is seeing "unrelenting" demand from the solar, EV, and electronics sectors. Because silver is often a by-product of other mining operations, the supply cannot easily scale to meet this surge.Technical Outlook: The price has moved above an hourly topside trendline. While currently stalling near the $69.00 psychological barrier, the broader trend remains upward.Trailing Support: The 100-hour Moving Average (MA) at $66.12 is the critical line in the sand. This moving average has successfully supported dips throughout December. Only a break below this MA, followed by a move under the 200-hour MA at $64.38, would shift the short-term bias to the downside.The Hard-Asset RallyThe strength isn't limited to just one metal; gains in platinum confirm that we are seeing a broad-based move into hard assets. As investors hedge against inflation and macro uncertainty, the "trend is your friend" for the precious metals complex as we head into the new year. This article was written by Greg Michalowski at investinglive.com.

Sector OverviewToday’s market heatmap reveals a notable upswing in the technology sector, driven, in large part, by impressive gains in semiconductors and software infrastructure. Nvidia (NVDA) has surged by 1.33%, leading a bullish trend within the semiconductor space, with Micron Technology (MU) showing a further gain of 3.66%. Meanwhile, Oracle (ORCL) in software infrastructure has jumped by 2.42%, contributing significantly to today's positive market sentiment.On the other hand, the healthcare sector is showing varied performance, with UnitedHealth (UNH) declining by 1.19%, possibly reflecting sector-specific challenges or profit-taking after previous gains.Market Mood and TrendsThe overall market sentiment is optimistic, fueled by strong performances in tech stocks and resilient consumer cyclical segments. The modest rise in Amazon (AMZN) by 0.37% and Google (GOOGL) by 0.58% suggests ongoing confidence in consumer trends and digital advertising.Mixed signals remain in the consumer defensive and utilities sectors, reflecting a more cautious approach amid economic uncertainties. Walmart (WMT) is down 0.24%, indicating possible investor shifts towards growth-oriented sectors.Strategic RecommendationsThe current market dynamics suggest a favorable climate for investing in technology and semiconductors, given their strong performances today. Investors might consider allocating resources towards these sectors to capitalize on their upward trajectory.However, caution is advised within the healthcare sector due to mixed signals, as well as selective positioning in consumer defensives which show volatility. Diversification remains key, so balancing growth sectors like tech with defensive holdings can offer stability against potential downturns.For detailed analysis and expert insights, stay connected with InvestingLive.com, where we provide real-time data and in-depth market coverage. This article was written by Itai Levitan at investinglive.com.

Fed's Miran is speaking on Bloomberg TV. Says there were anomalies in inflation data tied to the government shutdown, Anomolies point toward the Fed needing to move in a more dovish directionDoes not see a near-term recessionBelieves the neutral rate has shifted lower, Policy needs to reflect that shiftStresses it is important for the policy rate to continue adjusting lower; otherwise, recession risks increaseSees potential for tariff or tax refunds to boost growth, but says forecasts should wait until policy details are clearerOn the possibility of a 50 bp cut at the next meeting:Says that, given policy moves so far, the need to dissent and push for another 50 bp cut has diminished somewhatEmphasizes the need to see incoming data before decidingNotes the Fed may eventually reach a point of “micro-managing” the policy rate as it gets closer to neutral, but it is not there yetUncertain about remaining at the Fed; says if no replacement is confirmed by end-January, he will assume he is staying onMiran joined the Fed Board in September 2025 to fill an unexpired term that officially runs through January 31, 2026, and has quickly emerged as one of the most dovish voices on policy. He has repeatedly argued that inflation data—particularly around the government shutdown—may be overstating underlying price pressures, that the neutral rate has shifted lower, and that policy should continue adjusting down to avoid increasing recession risks. While he previously dissented in favor of larger rate cuts, Miran now says the case for another 50 bp cut has lessened somewhat given moves already made, stressing the need to stay data-dependent as the Fed approaches neutral. Looking ahead, Miran has indicated he expects to remain on the Board beyond January if no successor is confirmed, but his longer-term future hinges on whether he is re-nominated and approved for a full term.Miran did vote for a 50 basis point cut at the December meeting. The Fed cut rates by 25 basis points at that meeting for the 3rd cut in as many meetings. In 2024, the Fed cut rates by 100 basis points. In 2025 the Fed cut rates by 75 basis points.The Fed started to cut rates in September 2024. At the time the 10-year yield was around 3.72%. The current rate is at 4.162%. The 30 year mortage moved from about 6.10% up to 7.04%. It is back down to 6.22%. The rate reaction debunks the notion bantered about by the Trump administration that the Fed cutting rates would help the housing market by making housing more affordable.The 2 year yield over the time period, moved from 3.6%, up to 4.424% and is back down to 3.495% currently. This article was written by Greg Michalowski at investinglive.com.

IPPI for November 6.1% vs 6.0% priorRMPI YoY 6.4% vs 5.8% priorIPPI MoM 0.9% vs 0.3% est and 1.5% previousRMPI MoM 0.3% vs 1.6% lastDetails of the IPPI:Annual Change: Gained 6.1% year-over-year, marking the 14th straight annual increase.Broad-Based Rise: 16 out of 21 commodity groups saw prices rise compared to last year.Summary of the Primary Drivers of IncreaseEnergy and Petroleum Products (+4.3%):This was the strongest monthly gain for energy since January 2025.Diesel (+7.9%) and Gasoline (+1.5%) rose due to tighter global supply linked to sanctions on Russia and infrastructure disruptions from the Russia-Ukraine conflict.Seasonal demand for home heating oil also added upward pressure.Precious Metals (+0.8%):Marked the seventh straight monthly gain for non-ferrous metals.Silver (+3.2%) and Gold (+1.2%) prices were pushed higher by investors anticipating U.S. Federal Reserve interest rate cuts and global supply tightness.On a yearly basis, this group surged 58.7%, the largest jump since 2011.Food and Agriculture (+1.3%):Driven by Grain and Oilseed products (+7.3%).Prices spiked after China made significant purchases of U.S. soybeans, signaling a shift in trade tensions.Meat products remain high annually, with poultry up 37.9% and beef up 28.1% compared to last year.Key Takeaways for 2026The "Core" Trend: Even when stripping out volatile energy and petroleum, the IPPI still rose 0.4%, showing that inflation is "sticky" across the manufacturing sector.Geopolitical Impact: Global conflict and trade shifts (Russia/Ukraine and U.S./China trade) are directly dictating the costs for Canadian producers.Supply Chain Squeeze: While energy is the current headline driver, the massive year-over-year increase in metals and meat suggests that high input costs will continue to filter through to consumer prices (CPI) as we head into the new year.Details of the RMPI:The "Core" Trend: Stripping out volatile crude energy, the RMPI surged 19.0% year-over-year, indicating massive price pressure in non-energy sectors.Summary of the Primary Drivers of RMPI ChangeMetal Ores, Concentrates, and Scrap (+1.5% Monthly):This group was the main driver of the monthly increase.Precious Metals (Gold, Silver, Platinum): Rose 4.0% in November, marking an incredible 15th straight monthly gain.Yearly Impact: On an annual basis, these metals are up 57.5%, reflecting a global rush into safe-haven assets.Animals and Animal Products (-2.0% Monthly):This was the largest monthly drop for the group in over a year.Hogs (-7.5%): Prices fell due to lower production costs (increasing supply) and the end of the summer grilling season.Yearly Contrast: Despite the monthly dip, Cattle and Calves remain 20.9% more expensive than they were a year ago.Crude Energy Products (-0.5% Monthly / -15.0%+ Yearly):Energy acted as a "brake" on inflation. Conventional Crude Oil fell 0.9% in November and is down 15.2% year-over-year.The Cause: Massive global oil oversupply throughout 2025 has offset the "geopolitical risk premium" caused by the Russia-Ukraine conflict.Key Takeaways for 2026A "Two-Speed" Input Market: Manufacturers relying on metals and livestock are facing extreme cost increases (+19.0% core RMPI), while those relying on oil and gas are seeing significant relief.Persistent Metal Surge: With 15 months of consecutive gains in precious metals, the "base cost" for electronics, jewelry, and industrial components has shifted structurally higher.Supply vs. Demand: The drop in hog prices shows that when production costs fall and supply increases, prices can actually retreat, offering a rare bit of deflationary news in an otherwise hot report.------------------------------------------------------------What is it?In simple terms, IPPI and RMPI are the two halves of Canada's "Producer Price Index."1 They track inflation at the business level rather than the grocery store level.2Here is the breakdown of what each represents:1. RMPI (Raw Materials Price Index)What it is: This measures the price of inputs. It tracks what Canadian manufacturers have to pay to get raw materials into their factories.What’s included: Raw minerals, metal ores, crude oil, logs, and unprocessed agricultural products (like wheat or cattle).Key Detail: This is a "purchaser's price." It includes the cost of the item plus the extra stuff it takes to get it to the factory door, like transportation, custom duties, and taxes.2. IPPI (Industrial Product Price Index)What it is: This measures the price of outputs. It tracks the money manufacturers receive for the goods they’ve finished making as they leave the building.What’s included: Finished or semi-finished goods like gasoline, lumber, processed food (like meat), and machinery.Key Detail: This is a "factory gate price." It represents only what the producer actually receives. It specifically excludes taxes, transportation, and retail markups.The Main Differences at a Glance This article was written by Greg Michalowski at investinglive.com.

As the year winds down towards a close and the holiday season takes over, there are still important lessons that one can take away from trading this period. Yes, markets will remain open and that means we as traders need to know how to navigate through the conditions in play.So, what is the worst thing that you can do when dealing with markets during this period?I would argue it is to go looking for something that just isn't there.Everyone likes action in markets. Nobody likes a dull day. However, it doesn't mean that every action is one worth noting and chasing. And especially in a time like this, it doesn't mean that things are what they would seem.Liquidity conditions are thin and so the flows that are still there will exacerbate price movements in pretty much all asset classes.Yes, some of moves might fit a certain narrative or bias that we as traders will associate to a certain asset. But again, correlation doesn't mean causation in this case.The thing about holiday-thin trading especially when the flows are pretty much the lowest for the year during a one-week period, is that sometimes things just don't make sense. Price movements are exacerbated and there can be sudden spikes in volatility.However, that doesn't mean that markets are "moving" and that there is some fundamental event that is "shifting" the market narrative.At the end of the day, we as retail traders can only go with the flow. And it's important to always read the tea leaves and understand what trading conditions play to our advantage.And this period just isn't one of those times, typically. Yes, we can get lucky and get something from trades in the next week or so. But I would say, it's more or less the same as going to the roulette table.So if you're wanting to chase that extra bit of profit or to make up for something else in the next week or so, proceed with heavy caution. This won't be one of those normal trading periods with normal liquidity and market conditions, far from it.Sometimes the best trade that you can make is to do nothing at all. And that's an important lesson to always remember, especially when dealing with times like these.To those already done for the year, I hope that 2025 has been a fruitful year of gains, profits, and lessons for everyone. And to those already on break, have a wonderful Christmas and New Year's holiday! Catch you again next year. This article was written by Justin Low at investinglive.com.

The next rate hike to 1.00% could come around June or July next yearBut that would be dependent on the strength of the economy, as well as wage and price developmentsFurther rate hikes after that could become more challenging thoughThat as it would bring borrowing costs closer to the neutral rate, which has not yet been specifiedIn doing so, that will continue to draw the ire and criticism from Japan prime minister TakaichiBOJ won't say so publicly but probably sees 1.75% as the estimated neutral rate levelA rate hike to 1.50% would be comfortably below that level, and still leave the BOJ enough room to cut rates if neededPossibly two rate hikes to follow in the next fiscal yearThat is if the US economy holds up and underpins the Japanese economy and domestic inflation remains above the central bank's 2% targetBut if economic uncertainty heightens, BOJ could opt to hike rates just once in the next fiscal year and delay further rate hikes to 2027"BOJ probably wants to ‌resume rate hikes at a pace of about once ‍every six months, but worried about the risk of facing pushback from Takaichi's administration""That may have been behind Ueda's ambiguous communication"In the interview mentioned, Sakurai is said to retain "close contact" with incumbent policymakers. So, just keep that in mind when reading into the above. But as mentioned before, the BOJ won't be explicit in trying to push forward with the next rate hike.Ueda left the door open for that option but didn't necessarily outline that they would take that next step following the spring wage negotiations next March.It's going to be a meeting-by-meeting basis as per before but just be wary that the threshold now is much, much higher as the central bank has to deal with potential backlash and pressure from Takaichi now as well. This article was written by Justin Low at investinglive.com.

If you ask around, most people would've heard the term Santa Claus rally in markets. There's always that feeling that stocks will perform better as we get towards the end of the year.Call it the Santa Claus rally, call it window dressing, call it whatever you want. However, most investors tend to have a positive bias during the festive period it would seem. But is it really a thing though? Or is it just some unconscious bias that one develops over the years?Well, let's try and debunk that myth - if it is one. The best way is to take a more seasonal approach of course. As such, let's take a look at how the S&P 500 has fared over the past two decades during Christmas week.Here's a summary of the performance by the index during the festive week:2024: +0.7%2023: +0.3%2022: -0.1%2021: +2.3%2020: -0.2%2019: +0.6%2018: +2.9%2017: -0.4%2016: -1.1%2015: +2.8%2014: +0.9%2013: +1.3%2012: -1.9%2011: +3.7%2010: +1.0%2009: +2.2%2008: -1.7%2007: -0.4%2006: +0.5%2005: +0.1%The average weekly performance as such is +0.65% during Christmas week. So, there is some credence at least to the supposed Santa Claus rally.But just like everything else, correlation doesn't always mean causation. And I would caution anyone who thinks that as long as we're in Christmas week, stocks are bound to gain more often than not.In fact, the period between Christmas and New Year is also a rather interesting one. If you factor that into the picture, the S&P 500 actually posted its first loss during the interim period between both holidays for the first time in seven years in 2024.And even when you look at Christmas week itself above, consecutive yearly losses are a relatively rare occurrence.Still, it doesn't mean that we're due a hot streak just because. Think about the hot hands fallacy if you must.As the Fed delivers a seemingly more hawkish rate cut this month, that has tempered with some of the recent market optimism. But all in all, stocks are still holding up relatively well; that despite concerns surrounding the AI bubble as well.The S&P 500 is still poised for roughly 16% gains this year and that for me is the bigger takeaway. Whatever the Santa Claus rally stands for this year, it won't mean much in that context.So yes, there is historically and seasonally a pattern of gains for stocks during the festive period in Christmas through to New Year's. But amid recent uncertainty from the Fed and AI valuations, the thinner liquidity conditions we're about to see may not necessarily deliver another round of gains in 2025.In other words, it's a case of just about anything goes during this period even if we tend to associate it with a more positive performance in the past. This article was written by Justin Low at investinglive.com.