Morning wrap (31.12.2025)

Global markets are trading in tight ranges with low liquidity during the post-holiday period. Full market participation is not expected to return until around January 5.

China’s official manufacturing PMI rose to 50.1 (vs 49.2 prior and 49.2 expected), breaking an eight-month streak of contraction and moving back above the 50-point expansion threshold. The improvement came despite factory profits recording their steepest year-on-year decline in over a year, underscoring that the recovery remains tentative and fragile.

The non-manufacturing PMI increased to 50.2 (from 49.5), reversing November’s contraction in services and construction. The composite PMI improved to 50.7 (from 49.7), signaling a broad — though still modest — pickup in activity heading into year-end.

The South China Morning Post reported that ByteDance plans to spend around USD 14 billion on Nvidia chips in 2026, reflecting growing demand for computing power and reinforcing the narrative of strong AI infrastructure investment despite broader macro uncertainty.

Regional indices are mostly trading lower. Chinese markets are down between 0.90–1.00%, Japan’s JP225 is down 0.33%, and Australia’s AU200cash is lower by 0.25%.

Precious metals are seeing another wave of selling following yesterday’s rebound. Gold is down 0.60% to USD 4,300 per ounce, silver is down 6.30% to USD 71.40, palladium is down 6.40%, and platinum is down 10.50%.

The market expects OPEC+ to confirm its decision to pause further supply increases at the January 4 meeting. Signals of oversupply and slower demand growth are emerging in the oil market, while the IEA is currently warning of a potentially record level of oversupply in 2026.

China is expanding its consumer subsidy program, but the scale of support remains limited. In the first phase, China will allocate ¥62.5 billion (≈ USD 11.5 billion) from the issuance of long-term special bonds to expand its “trade-in” subsidy scheme, and in 2026 it will extend the program to include digital and smart devices (a 15% rebate, capped at ¥500 per product).

Minutes from the FOMC meeting describe the rate-cut decision as “finely balanced.” Most members supported lowering the target range to 3.50–3.75%. However, two argued for leaving rates unchanged, while Miran advocated a 50-bp cut. Policymakers highlighted risks related to a weakening labor market.

Bitcoin is slightly higher at USD 88,400, while Ethereum is also up to USD 2,970. The cryptocurrency market remains in a tight consolidation range, essentially unchanged for about a month.