Sample Category Title

Markets

Bank of Japan governor Ueda finally embraced a next rate hike by the Bank of Japan, very likely when the central bank meets next on December 19. A 25 bps increase lifts the policy rate from the 0.5% in place since January to 0.75%. The market implied probability of such move increase from around 35% a week ago to currently 80%. Ueda highlighted that uncertainties surrounding US tariff policy and the US economy have significantly declined compared to a few months ago. Additionally, the yen’s recent weakness could accelerate inflation in Japan, potentially impacting corporations’ wage-and price-setting behavior and underlying inflation. Ueda compared raising rates at an appropriate level with taking the foot off the accelerator enough to achieve price growth and price stability rather than putting the breaks. He also warned that delaying the next rate hike for too long could cause sharp inflation and force the BoJ into (unwanted) rapid policy adjustments. Japanese markets reacted accordingly. JGB’s sold off with yields rising by 4.2 bps to 6.1 bps, the belly of the curve underperforming the wings. The Japanese 2-yr yield breached the 1% mark for the first time since 2008. The 10-yr yield (1.88%) also hit the highest level since that year with the 30-yr yield testing the 3.4% all-time high. The Japanese yen rises from the ashes after dismal performances in October and November. USD/JPY falls from 156.25 to 154.75. EUR/JPY falls from 181.10 to 108.25. Less bullish risk sentiment (-0.5% to -1% in Europe; -0.5% open in the US) and renewed weakness in crypto space (Bitcoin -6%) support the yen from the safe haven perspective.

The JGB sell-off spilled to core bonds markets in absence of relevant eco data. European and UK yield curves bear steepen. UK yields add 2 bps (2-yr) to 7 bps (30-yr) ending the very short relief rally after last week’s Budget presentation. German yields rise by 2.7 bps (2-yr) to 6 bps (30-yr) with EUR swap rates adding 2 to 5 bps in the similar steepening move. The EU 10y swap rate hits the highest level since July of last year (2.8%). The 30-y swap rate goes above 3.12% for the first time since November 2023. US Treausuries initially outperformed, but joined the sell-off as the US trading session got going. A new spike in the SOFR rate (4.12% on Friday from 4.05% on Wednesday; reported with one day delay) above the upper bound of the Fed funds target range added to general nervousness. End-of-month settings and lower liquidity in the Thanksgiving weekend are probably part of the explanation but the amount of liquidity banks pulled on the NY Fed’s standing repo facility already increased further today after the first of two daily operations. US T’s went from outperforming to underperforming, lifting US yields by 3.9 bps (2-yr) to 7.4 bps (30-yr) at the time of writing. The US dollar slightly underperformed today, but it’s hard to connect the dots. The move slowed as US yields started catching up. EUR/USD changes hands at 1.1630 from a start near 1.16.

News & Views

Polish Q3 GDP growth was slightly upwardly revised to 0.8% Q/Q and 3.8% Y/Y. Details showed consumption expenditure rising by 1% Q/Q (4.4% Y/Y). Household consumption eased slightly at -0.1% Q/Q after strong growth in the previous quarter (+1.5%). Government consumption rose 1.8% Q/Q and gross fixed capital formation added 3.5%. Exports increased (2.7%) slightly more than imports (2.4%). From a supply side point of view, industry added 1.6% Q/Q and 4.9% Y/Y. Added value in construction rose 0.6% Q/Q, transportation and storage 1.1% and accommodation and catering 0.8%. Despite decent economic growth since Q4 of last year, the National Bank of Poland (NBP) is expected to ease its policy rate further by 25 bps to 4% on Wednesday as November inflation eased back below the 2.5% NBP inflation target (2.4%). The zloty holds near the strong side of the 4.22/4.31 trading range.

Material shortages in the German manufacturing sector are worsening, according to the German IFO institute. German manufacturing is struggling with more and more bottlenecks in the supply of intermediate products. 11.2% of the companies surveyed reported difficulties in obtaining the materials they need for production (from 5.5% in October). Head of IFO Klaus Wohlrabe said that “the shortage of semiconductors is exacerbating the already difficult situation in the industry”. The shortage has become particularly acute in the automotive industry as more than one in four companies (27.6%) reported (from less than 1% in October). Manufacturers of electronic and optical products are also experiencing increasing problems (from 10.4 to 17.5%.). Idem for manufacturers of electrical equipment (16% reporting shortage up from 10%). In mechanical engineering, the figure rose to 8.2%.

US ISM Manufacturing PMI fell to 48.2 in November from 48.7, missing expectations for 49.0 and marking the ninth straight month of contraction.

New orders dropped sharply to 47.4 from 49.4. Employment deteriorated further from 46.0 to 44.0. Production was one of the few bright spots, rising from 48.2 to 51.4 and suggesting that output is holding steady even as new business slows. Input prices edged up from 58.0 to 58.5.

Based on the historical relationship between PMI Manufacturing and broader activity, November’s reading corresponds to an estimated 1.7% annualized increase in real GDP.

Full US ISM manufacturing release here.

Daily Pivots: (S1) 1.1568; (P) 1.1587; (R1) 1.1619; More…

EUR/USD's rebound from 1.1490 extends higher today and focus is now on 1.1655 resistance. Decisive break there will complete a head and should bottom pattern (ls: 1.1540, h: 1.1467, rs: 1.1490). That would argue that whole fall from 1.1917 has completed as a correction. Further rise should then be seen to 1.1727 resistance first. On the downside, though, below 1.1554 will turn bias to the downside for 1.1490 support first.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1345) holds, the up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2000 will carry larger bullish implications. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Daily Pivots: (S1) 1.3204; (P) 1.3229; (R1) 1.3258; More...

Intraday bias in GBP/USD is back on the upside with breach of 1.3267 temporary top. Sustained trading above 55 D EMA (now at 1.3265) should confirm that fall from 1.3787 has completed as a correction. Further rise should then be seen to 1.3725/3787 resistance zone. Nevertheless, break of 1.3199 minor support will revive near term bearishness, and bring retest of 1.3008.

In the bigger picture, the break of 55 W EMA (now at 1.3184) is taken as the first sign that corrective rise from 1.0351 (2022 low) has completed. Decisive break of trend line support (now at 1.2760) will solidify this case and target 38.2% retracement of 1.0351 to 1.3787 at 1.2474 next. Meanwhile, in case of another rise, strong resistance should emerge below 1.4248 (2021 high) to cap upside to preserve the long term down trend.

Daily Pivots: (S1) 0.8019; (P) 0.8046; (R1) 0.8064; More…

Intraday bias in USD/CHF is back on the downside with break of 55 D EMA (now at 0.8015). Rebound from 0.7877 could have completed at 0.8101 already, and deeper fall would be seen back to this support. Overall, price actions from 0.7828 low are seen as a corrective pattern. Firm break of 0.7877 will argue that larger down trend is ready to resume. On the upside, above 0.8046 minor resistance will turn intraday bias neutral again.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

Daily Pivots: (S1) 155.91; (P) 156.25; (R1) 156.52; More...

USD/JPY's fall from 157.88 extends lower today and focus is now on near term rising channel support (now at 154.21). Strong support could be seen there to bring rebound. Above 156.57 minor resistance will bring retest of 157.88. Further break of 157.88 will resume the whole rally from 139.87. Next target is 158.86 structural resistance, and then 161.94 high. However, sustained break of the channel support will bring deeper correction to 55 D EMA (now at 152.86), and raise the chance of near term trend reversal.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 150.90 resistance turned support will dampen this bullish view and extend the corrective range pattern with another falling leg.

Dollar fell broadly today, though the move lacked a clear single trigger. Fed expectations barely shifted, with December cut bets ticking up only marginally to 87%, not meaningfully different from last week. US yields were also steady to firmer, with 10-year Treasury yields recovering back above the 4% mark, offering no obvious impetus for a USD selloff. Yet sentiment remained shaky, with US equity futures dipping slightly as Japan-led risk aversion carried through Europe into the US session.

One plausible driver is position unwinding in USD/JPY. The Yen surged broadly after BoJ Governor Kazuo Ueda signaled that policymakers will “consider the pros and cons” of raising rates at the December meeting—his strongest hint yet that a hike could materialize this month. The comments triggered a recalibration of expectations, ending weeks of speculation that political pressure would push the BoJ toward delay.

Ueda added further fuel by saying the central bank would explain its future path once the policy rate reaches 0.75%. The message was clear: the debate now extends beyond one symbolic lift-off. Instead, the governor may be preparing the market for a meaningful, multi-step adjustment process.

Japan’s estimated neutral rate range—1.00% to 2.50%—remains broad, but it carries an important implication: the BoJ could deliver at least one or two more hikes without entering restrictive territory. With real rates still deeply negative, investors are reassessing the possibility that Japan’s tightening cycle may be more sustained than previously assumed.

That shift matters for USD/JPY, which has been heavily driven by rate differentials. The sudden unwind raises the question of whether the pullback could develop into a near-term bearish reversal. If that occurs, the Dollar’s weakness may broaden.

This comes at a sensitive moment for the greenback too. December is packed with high-impact US data: ISM Manufacturing and Services and PCE inflation this week, the FOMC meeting and expected rate cut next week, followed by NFP and CPI in the week after. With markets already leaning dovish, any additional softness in yields or US data could amplify USD pressure.

For now, Dollar is the worst performer today, followed by Loonie and then Aussie. Yen leads the board, trailed by Euro and Swiss Franc, while Sterling and Kiwi sit mid-pack. Whether this ranking holds depends heavily on whether USD/JPY selling stabilizes—or accelerates—into the US session.

In Europe, at the time of writing, FTSE is down -0.18%, DAX is down -1.38%. CAC is down -0.70%. UK 10-year yield is down -0.036 at 4.483. Germany 10-year yield is up 0.049 at 2.742. Earlier in Asia, Nikkei fell -1.89%. Hong Kong HSI rose 0.67%. China Shanghai SSE rose 0.65%. Singapore Strait Times rose 0.05%. Japan 10-year JGB yield rose 0.072 to 1.879.

UK PMI manufacturing finalized at 50.2, returns to growth for first time in 14 months

UK Manufacturing PMI was finalized at 50.2 in November, up from 49.7 and marking a 14-month high. S&P Global’s Rob Dobson said the month delivered further signs of recovery, with output rising for a second straight month and new orders stabilizing after more than a year of continuous decline. Business optimism also strengthened to a nine-month high.

What stands out is that this improvement came despite elevated business uncertainty ahead of the Autumn Budget, during which some firms maintained a cautious tone. With that political overhang now lifted, December could see a further boost in sentiment—though Dobson noted that the Chancellor’s “absence of significant growth-promoting measures” may limit the scale of any rebound in activity or investment.

Price indicators added a dovish twist. Rising competitive pressures and cooling cost inflation pushed factory gate prices lower for the first time in more than two years. This combination of a still-soft industrial recovery and easing price pressures reinforces the shift in BoE's policy debate “away from inflation fears towards supporting economic growth”.

Eurozone PMI manufacturing finalized at 49.6, small economies improve, big ones falter

Country-level data showed a striking split. Six of the eight surveyed economies—led by Ireland at 52.8, Greece at 52.7, and the Netherlands at 51.8—remained in expansion. Italy and Austria also posted multi-year highs, pointing to broad stabilization beneath the surface. However, the aggregate picture remains weak because the region’s industrial heavyweights continue to contract. Germany fell to a nine-month low of 48.2, while France stayed at 47.8.

HCOB’s Cyrus de la Rubia emphasized that while most countries are improving, the downturn in the two largest economies overwhelms the progress elsewhere. France’s weakness reflects ongoing political uncertainty that has delayed investment decisions, whereas Germany is grappling with frustration over government direction and growing doubts about the country’s reform capacity.

Nevertheless, forward-looking sentiment improved across the bloc. Most firms expect production to rise over the next year, with Germany showing a gradual return of optimism and France shifting noticeably into positive territory. The improvement suggests that confidence may be stabilizing after a difficult year.

Ueda signals December hike debate as BoJ reviews wage momentum

BoJ Governor Kazuo Ueda said the board will actively debate the “pros and cons” of raising interest rates at its December 18–19 meeting. He emphasized that the bank is now focused on whether firms’ "active wage-setting behavior" will persist, calling it a key determinant of the timing of the next hike.

Ueda noted that even with an increase, real interest rates would remain deeply negative, meaning policy would still be accommodative—more akin to “easing off the accelerator” than “applying the brakes.”

On the Yen, Ueda said Monday that further weakness is likely to push consumer inflation higher, a development that requires close monitoring when setting policy.

Japan's PMI manufacturing finalized at 48.7, contraction eases and confidence hits year high

Japan’s Manufacturing PMI was finalized at 48.7 in November, slightly above October’s 48.2, but still pointing to contraction. S&P Global’s Annabel Fiddes noted that conditions remained challenging, with firms reporting “another solid decline” in new business as demand stayed weak across both domestic and external markets..

Despite the soft order flow, sentiment improved meaningfully. Business confidence rose to the strongest level since the start of the year, supported by expectations that market conditions will begin stabilizing in 2026. That optimism translated into a further rise in employment, with firms hiring in anticipation of a longer-term recovery in activity.

A key focus now shifts to the government’s newly announced stimulus package—the largest since the pandemic—which aims to accelerate investment in strategic sectors such as AI. Its success in lifting demand will be critical in determining whether the manufacturing sector can move out of contraction after a long period of subdued momentum.

China RatingDog PMI slips into contraction at 49.9 as production, demand stall

China’s RatingDog PMI Manufacturing fell back into contraction in November, dropping from 50.6 to 49.9 and missing expectations of 50.5. Founder Yao Yu said both production and demand slowed to levels near stagnation. While new export orders improved, the pickup was not enough to offset sluggish domestic demand, leaving overall new orders almost flat.

The loss of momentum weighed on hiring, purchasing activity, and inventory decisions. Manufacturers scaled back their workforce and procurement while adopting more cautious stock management. Inventories of raw materials and finished goods both declined, with the average inventory level hitting its lowest point in nearly three years. Also, raw material inventories fell for the first time in seven months. Pricing indicators also highlighted pressure on margins, with input prices rising while output prices continued to fall.

Official data released over the weekend offered mixed signals. NBS PMI Manufacturing edged up from 49.0 to 49.2, in line with expectations, hinting at modest stabilization. However, Non-Manufacturing PMI slipped from 50.1 to 49.5—the sector’s first contraction since December 2022—showing that weakness is now spreading beyond factories and reinforcing concerns about China’s softer near-term growth path.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 155.91; (P) 156.25; (R1) 156.52; More...

USD/JPY's fall from 157.88 extends lower today and focus is now on near term rising channel support (now at 154.21). Strong support could be seen there to bring rebound. Above 156.57 minor resistance will bring retest of 157.88. Further break of 157.88 will resume the whole rally from 139.87. Next target is 158.86 structural resistance, and then 161.94 high. However, sustained break of the channel support will bring deeper correction to 55 D EMA (now at 152.86), and raise the chance of near term trend reversal.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 150.90 resistance turned support will dampen this bullish view and extend the corrective range pattern with another falling leg.

Silver moves deeper into uncharted territory and hit new record high ($57.84) in early Monday trading, in extension of Friday’s strong acceleration higher (up 5.6%, the biggest daily gain in nearly 8 months) which broke and close above previous all-time high at $54.64.

Weaker dollar on fast growing bets of Fed December rate cut and expectations that new Fed Chairman will more comply with President Trump’s dovish view on monetary policy, was mainly behind the latest strong increase in demand.

Technical picture turned to full bullish setup after completion of $54.64/$45.53 corrective phase, with completion of bullish failure swing pattern on daily chart and break above the upper boundary of near-term bull-channel, opening prospects for further advance and unmasking Fibo projections at $5812 (138.2%), 59.20 (150%) and psychological barrier at $60.

However, overbought daily studies warn of increased headwinds that bears may face at this stage, which may slow the action.

Repeated daily close above previous record high is seen as minimum requirement to keep bulls intact, with (so far) long tail on today’s candle suggesting that bulls firmly hold grip.

Res: 57.84; 58.12; 59.20; 60.00.
Sup: 56.80; 56.42; 55.85; 54.68.

Market Overview

The crypto market took a painful hit at the start of trading on Monday, marking the beginning of winter and the new month with a 5% drop in 24 hours and a return below $3 trillion. This seems to be part of the Bears’ plan to create the most emotional pressure, as the beginning of the month is considered an emotional precursor for the weeks to come. The market also slipped during the period of lowest liquidity, which added drama in the form of a downward swing. Still, before the start of active trading in Europe, the market is showing signs of stabilisation and rebound.

Bitcoin fell to $85.5K on the strategy day but rebounded to $86.7K at the time of writing. Technically, a bearish picture is emerging, with the first cryptocurrency falling sharply after four days of consolidation at the 61.8% Fibonacci retracement line. Strictly speaking, we can only say that a quick rebound did not happen, but the signal for a decline to $64K (161.8%) will only be given on a drop below $80.5K.

Bitcoin fell 17.5% in November to $91.3K, marking the first decline in three years and defying the seasonal trend of one of the best months of the year. From a seasonal perspective, December is considered a relatively successful month for BTC with an average 8.7% increase. Over the past 14 years, Bitcoin has ended the month with growth on seven occasions. The average increase was 29.7%, and the average decline was 12.3%.

News Background

The inflow into the recently launched Solana ETFs in the US has continued for five consecutive weeks. Investors have poured more than $108 million into SOL ETFs in a week and nearly $620 million since the funds launched on October 28th. Inflows into spot XRP ETFs launched on 14 November in the US exceeded $666 million.

CryptoQuant points to several key on-chain indicators that are creating fertile ground for Bitcoin’s resumption of growth. One of the most significant signals is the reduction of leverage.

Bitcoin is still in the ‘high risk zone.’ Still, the situation is stabilising: selling pressure is easing, and spot demand is ‘finally beginning to shift the balance of power,’ according to Bitcoin Vector.

To continue its growth, Bitcoin needs to overcome ‘clusters of large buyer supply’ in the $93,000-96,000 and $100,000-108,000 ranges, according to Glassnode.

Bitwise points out that the last time such an ‘asymmetrical ratio’ of risk and potential return was observed in Bitcoin was during the COVID-19 pandemic, when BTC fell below $4,000.

Gold climbed to 4,240 USD per ounce on Monday, reaching its highest level in five weeks, as expectations solidified for an imminent Federal Reserve interest rate cut. Markets have priced in an 87% probability of a 25 basis point reduction at this month's policy meeting.

The dovish shift has been reinforced by commentary from Fed officials and a string of weaker-than-expected macroeconomic data following the prolonged US government shutdown.

Investor focus now turns to manufacturing and private-sector employment data due this week, which may deliver final signals before the Fed convenes.

The precious metal has advanced nearly every month this year and is on track for its strongest annual performance since 1979. Sustained demand from central bank purchases and ongoing inflows into gold-backed ETFs continue to underpin the rally, having previously propelled prices to a record high above 4,380 USD.

Technical Analysis: XAU/USD

H4 Chart:

On the H4 chart, XAU/USD continues to advance within a bullish impulse and is now testing the upper boundary of a Double Bottom reversal pattern, where buyers are meeting resistance. A decisive break above this zone would open the path for sustained gains toward 4,385 USD.

The Stochastic Oscillator supports the upward bias, with its signal lines positioned above 80 and yet to cross, indicating persistent bullish momentum. A deeper correction would require a break and close below the lower boundary of the bullish channel, particularly below 4,185 USD.

H1 Chart:

On the H1 chart, the pair is rising after bouncing from local support at 4,215 USD. Buyers are attempting to secure a close above the key resistance level of 4,245 USD. A swift rebound and sustained trading above the EMA-65 confirm buyer dominance and signal potential for a short-term continuation higher.

The session’s technical outlook suggests the potential for a minor bearish correction, followed by a renewed push toward 4,345 USD, where the upper boundary of the bullish channel lies. The Stochastic Oscillator provides an additional positive signal, as its signal lines are rebounding from an ascending trendline, supporting the potential for further gains.

Conclusion

Gold continues to draw strength from growing expectations of Fed easing, positioning the metal for a potential test of record highs. The technical structure remains constructive, favouring further gains toward 4,385–4,345 USD on a sustained break above 4,245 USD. While a brief, shallow pullback cannot be ruled out, the broader uptrend appears intact, supported by strong fundamentals and sustained institutional demand.