2025-12-15 05:36

A look at the day ahead in European and global markets from Gregor Stuart Hunter China's property sector is taking centre stage as traders kick off the last full trading week of the year, contending with a calendar strewn with risk events. No fewer than five G10 central bank decisions are due, alongside a slew of delayed economic data releases from the U.S. Sign up here. Among the central banks making decisions this week, the Bank of Japan is expected to hike rates by 25 basis points to 0.75%, while the Bank of England may make an equal-sized cut to 3.75%. The European Central Bank is expected to keep interest rates on hold, alongside Sweden's Riksbank and Norway's Norges Bank. But markets start the week grappling with news from China Vanke (000002.SZ) , opens new tab, which said it would convene a second bondholder meeting after failing to secure bondholder approval last week to extend by one year a bond payment falling due today, which has a five-business-day grace period. Shares of Vanke tumbled in Shenzhen and Hong Kong <2202.HK , opens new tab>. The development increases the risk of default by the state-backed developer and has renewed concerns about the crisis-hit property sector. Official Chinese data showed on Monday that new home prices extended declines in November, indicating that a recovery in demand remains elusive despite the government vowing to stabilise the sector. Adding to pressure on policymakers in Beijing: The Chinese yuan appreciated to its strongest level in more than a year, after factory output and retail sales data slowed further in November, providing fresh evidence that the economy is stalling. With the prevailing mood more "lump of coal" than "Santa rally", investors are taking risk off the table in Asian trading on Monday and booking profits for the year. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab shed 1.2%, led by a drop of as much as 2.7% in South Korean shares (.KS11) , opens new tab, one of the world's best-performing markets this year. In early European trades, pan-region futures were last up 0.4%, German DAX futures were up 0.4% and FTSE futures were up 0.3%. Key developments that could influence markets on Monday: Economic data: Euro Zone: Industrial Production for October Debt Auctions: France: 1-month, 3-month, 7-month and 1-year government debt https://www.reuters.com/world/china/global-markets-view-europe-2025-12-15/

2025-12-15 05:20

Increased interest in EM FX a key takeaway from whipsawed 2025 Dollar weakness expected to continue in 2026, bolstering EMs Hedge funds, bank FX desks benefited the most LONDON, Dec 15 (Reuters) - Trading in the Hungarian forint, long a niche emerging market currency, has more than doubled since U.S. President Donald Trump took office in January, with trader interest only growing since his sweeping "Liberation Day" import tariffs announcement. These increased volumes are no blip either, say traders, strategists and hedge funds navigating the almost $10-trillion-a-day global FX markets. Sign up here. The forint has strengthened roughly 20% against the dollar this year, set for its best year in almost a quarter of a century and making it one of 2025's top emerging currency performers . It has been a good year more widely: MSCI's Emerging Market Currency Index (.MIEM00000CUS) , opens new tab hit a record in July and is on course for its best year since 2017, having gained more than 6%. Traders, fund managers and analysts spoken to by Reuters mostly expect this trend to continue next year, too. The gains come as a more volatile and weakening dollar prompts investors to rethink exposure to the currency and question long-held assumptions about the direction and standing of the greenback. Meanwhile, they are betting on improving value across some developing countries from South Africa to Hungary as they diversify away from U.S. assets. "We think that the cycle of what we would call a bear market for EM currencies, which has lasted for 14 years now, has likely turned," said Jonny Goulden, head of EM Fixed Income Strategy Research at JPMorgan. "That is part of this turn in the dollar cycle, where the world owns a lot of U.S. assets and has avoided EM assets." TRADING RISKS DRAW IMF WARNING For Elina Theodorakopoulou, portfolio manager for emerging markets debt at Manulife, the surprise this year was that price swings were triggered by events in developed economies. "It was the cool kid in the class this year, emerging markets, in the sense that it wasn't the driver of volatility," said Theodorakopoulou. The U.S.-driven splintering of world trade, geopolitical upheaval and divergent central bank policy is expected to continue to drive price moves. Investors, including hedge funds, are making and losing money, while for governments, appreciating currencies and capital inflows have major economic implications, from reducing the appeal of exports to bolstering their ability to raise and repay debt. The risks have not gone unnoticed. The International Monetary Fund in its latest financial stability report warned about dangers from currency markets. Nearly half of global FX turnover is intermediated by just a small group of mostly large banks, leaving the market exposed should they scale back activity during periods of stress, the IMF said. Currency volumes are up almost 30% in the past three years, the latest data by the Bank for International Settlements from April shows. And 2025 has been a rollercoaster ride, with developed market currency volatility (.DBCVIX) , opens new tab spiking to two-year highs in April before easing. A steadier market has made it a more attractive environment for carry trades -- borrowing in low-yielding currencies to invest in higher-yielding ones. Hedge fund EDL Capital, which manages $1 billion, is up 28% this year, on gains at the start of the year and around so-called Liberation Day, helped by bets against the dollar, said a source with knowledge of the matter. As a money-spinner for banks, trading EM currencies was a boon, data compiled for Reuters by Vali Analytics shows. EM currency trading generated almost $40 billion in revenue for the top 25 global banks in the first nine months, their best year so far. That's more than twice the $19 billion the banks earned from Group of 10 currencies, the data firm's analysis shows. The G10 comprises major currencies from the dollar to sterling to the euro. Finding opportunities to make money in currency trading, especially among the G10, has been challenging, said Samer Oweida, global head of foreign exchange and emerging markets trading at Morgan Stanley. "If investors stayed within FX, they rotated into higher-yielding structural stories across emerging markets." Just over half of 14 top currency traders, hedge fund managers and analysts Reuters spoke to see greater interest in EM currencies as a key trend likely to continue in 2026. Increased hedging and volatility in an era where dollar strength is no longer a given are also likely to persist, they said. A NEW LIGHT The soft dollar tide has not floated all boats, however. Anaemic trade and investment flows pushed India’s rupee to record lows, while worries about central bank independence and political unrest have hurt Indonesia's rupiah IDR=. But while the dollar has recovered from a beating -- it suffered its biggest first-half dive since the early 1970s with losses of almost 11% -- analysts expect U.S. rate cuts will bring further weakness. Traders are pricing two more quarter-point rate cuts by the Federal Reserve next year, LSEG data show. For many EM currencies that backdrop is key and has fuelled inflows. For some, ramped-up carry trades have added to momentum. Mexico's peso and Brazil's real are also among the best-performing emerging currencies this year. They feature prudent central banks and high interest rates, in Brazil's case rates are at a two-decade high of 15%, as well as easily accessible currency and bond markets. "There have been strong inflows into broad EM, across both local and external (bond markets), and I would not bet on that trend reversing anytime soon,” said Nikolas Skouloudis, portfolio manager at Amia Capital, which manages roughly $1.4 billion. The hedge fund returned 16% in the year so far, said a separate source familiar with the fund's performance. https://www.reuters.com/business/wild-currency-swings-put-emerging-markets-spotlight-2025-12-15/

2025-12-15 05:01

Brent, WTI climb after 4% loss last week Venezuelan oil exports down sharply since US seizure of a tanker Surplus outlook and potential Ukraine peace deal weigh TOKYO/SINGAPORE, Dec 15 (Reuters) - Oil prices climbed on Monday as supply disruptions linked to escalating U.S.-Venezuela tensions outweighed oversupply worries and the impact of a potential Russia-Ukraine peace deal. Brent crude futures were up 30 cents, or 0.49%, at $61.42 a barrel, as of 0725 GMT, and U.S. West Texas Intermediate crude was at $57.72 a barrel, up 28 cents, or 0.49%. Sign up here. Both contracts slid more than 4% in the prior week, weighed down by expectations of a surplus in 2026. "Peace talks between Russia and Ukraine have swung between optimism and caution, while tensions between Venezuela and the U.S. are escalating, raising concerns about potential supply disruptions," said Tsuyoshi Ueno, a senior economist at NLI Research Institute. "Still, with markets lacking clear direction, oversupply concerns remain strong and unless geopolitical risks escalate sharply, WTI could fall below $55 early next year." Venezuela's oil exports have fallen sharply since the United States seized a tanker earlier last week and imposed fresh sanctions on shipping companies and vessels doing business with the Latin American oil producer, according to shipping data, documents and maritime sources. The market is closely monitoring developments and their impact on oil supply, with Reuters reporting that the U.S. plans to intercept more ships carrying Venezuelan oil following this week's tanker seizure, intensifying pressure on President Nicolas Maduro. Rising expectations of a surplus, however, continued to weigh on prices. JPMorgan Commodities Research said in a note on Saturday that oil surpluses in 2025 are expected to widen further into 2026 and 2027, as global oil supply is projected to outpace demand, expanding at three times the rate of demand growth through 2026. Ukrainian President Volodymyr Zelenskiy offered to drop his country's aspiration to join the NATO military alliance as he held five hours of talks with U.S. envoys in Berlin on Sunday. Negotiations are set to continue on Monday. U.S. envoy Steve Witkoff said "a lot of progress was made," though additional details were not divulged. Ukraine's military said on Friday that it attacked a major Russian oil refinery in Yaroslavl, northeast of Moscow; industry sources said the facility had suspended output. Russian state oil and gas revenue in December is likely to fall by nearly half from a year earlier to 410 billion roubles ($5.12 billion) due to lower crude prices and a stronger rouble, Reuters calculations showed on Friday. A possible peace deal could eventually increase Russian oil supply, which is currently sanctioned by Western countries. On the supply side, U.S. energy firms last week cut the number of oil and natural gas rigs operating for a second time in three weeks, energy services firm Baker Hughes (BKR.O) , opens new tab said on Friday. ($1 = 80.0455 roubles) https://www.reuters.com/business/energy/oil-rises-fears-supply-disruption-us-venezuela-tensions-escalate-2025-12-15/

2025-12-15 03:50

Dollar target="_blank">(.DXY) hovering near two-month low Non-farm payrolls data due on Tuesday ANZ flags silver downside risks on possible U.S. tariff exemptions, stretched valuations vs gold Dec 15 (Reuters) - Gold held near a more than seven-week high on Monday on a weaker dollar and lower U.S. yields ahead of key jobs data, while silver climbed but remained shy of Friday's record peak. Spot gold rose 1% to $4,344.40 an ounce by 0656 GMT. Bullion hit its highest since October 21 on Friday. Sign up here. U.S. gold futures gained 1.1% to $4,377.40 an ounce. The dollar (.DXY) , opens new tab hovered near a two-month low hit last week, making bullion more attractive for overseas buyers, while benchmark 10-year U.S. Treasury yields edged lower. "Gold is likely to remain well bid into U.S. non-farm payrolls, as evidence of labour market slack would keep front-end yields capped and the dollar weak, supporting a push toward $4,380–$4,440 after a firm rebound from the $4,243 support zone," OANDA senior market analyst Kelvin Wong said. Markets remain focused on the Fed's policy outlook after the U.S. central bank delivered a 25-basis-point rate cut last week in a rare split decision, while signalling a likely pause as inflation remains sticky and the labour outlook is uncertain. Two Fed officials who dissented said inflation was still too high to justify easier policy. Investors are currently pricing in two rate cuts next year, with this week's U.S. jobs report seen as a key test of those expectations. Non-yielding assets, such as gold, typically benefit in a lower interest rate environment. India's move to allow pension funds to invest in gold and silver ETFs could lift institutional participation, ANZ said in a note. "We believe such regulation can boost confidence and strengthen investor sentiment, supporting higher allocations across portfolios." Spot silver rose 2% to $63.23 per ounce. It hit a record high of $64.65 on Friday before closing sharply lower. Despite a rally of more than 115% so far this year, ANZ flagged downside risks, citing the likelihood of a U.S. tariff exemption that could ease supply tightness and stretched valuations versus gold that may prompt fund rotation. Spot platinum lost 0.4% to $1,738.23, while palladium firmed 2.9% to $1,531.28 per ounce. https://www.reuters.com/world/india/gold-rises-softer-dollar-yields-markets-eye-us-jobs-data-silver-steadies-2025-12-15/

2025-12-15 03:02

MUMBAI, Dec 15 (Reuters) - The Indian rupee is set to dip at open and trade with a heavy tone on Monday, pressured by weak risk appetite and lopsided flows, after sliding to lifetime lows in back-to-back sessions. The 1-month non-deliverable forward indicated the rupee will open in the 90.46-90.52 range versus the U.S. dollar, having settled at 90.4150 on Friday. Sign up here. The rupee slid to a new all-time low of 90.55 per dollar on Friday, marking its second straight session of a new low and capping a week in which it lost nearly 0.5%. Year-to-date, the currency is down 5.6%. A familiar mix of headwinds continues to dominate - the lack of a U.S. trade deal has sapped sentiment, capital flows remain weak at a time when the trade deficit is widening, and a depreciation bias is encouraging importers to step up hedging, leaving exporters reluctant to add dollar supply. "What stands out is how skewed the daily flow has become," a Mumbai-based currency trader said. "The order book is stacked with buying interest, with exporter offers thin and spaced out." The Reserve Bank of India has stepped in frequently in recent months to slow the rupee's slide. However, its support has appeared less forceful since the currency weakened past the 88.80 level. The rupee Monday will have to contend with the poor risk sentiment on the day. Asian equities dipped, tracking the slide in their U.S. peers on Friday. While the softer risk tone has so far left most Asian currencies largely unscathed, the rupee may still struggle, a currency trader said. Attention this week be on central bank meetings. The Bank of Japan is widely expected to raise rates by 25 basis points to 0.75%, while the Bank of England is seen delivering an equal-sized cut to 3.75%. The European Central Bank, meanwhile, is expected to keep the policy rate unchanged. A slate of U.S. economic data delayed by the federal shutdown is due this week, including the November jobs report and the monthly consumer price index. KEY INDICATORS: ** One-month non-deliverable rupee forward at 90.75-80; onshore one-month forward premium at 24 paise ** Dollar index down at 98.32 ** Brent crude futures up 0.5% at $61.4 per barrel ** Ten-year U.S. note yield at 4.18% ** As per NSDL data, foreign investors sold a net $204.9 million worth of Indian shares on December 11 ** NSDL data shows foreign investors sold a net $15.5 million worth of Indian bonds on December 11 https://www.reuters.com/world/india/rupee-hover-near-all-time-low-fragile-risk-tone-skewed-flows-2025-12-15/

2025-12-15 02:47

Central banks including ECB, BOJ, BOE, Riksbank and Norges Bank due to meet Delayed US data including jobs and inflation to resume China Vanke bondholder vote renews concerns around property sector SINGAPORE, Dec 15 (Reuters) - Asian stocks tumbled on Monday, weighed by a Wall Street selloff and fresh Chinese property worries and as investors reined in risk-taking at the start of a week loaded with big central bank decisions and economic data. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab shed 1.2%, led by a drop of as much as 2.7% in South Korean shares (.KS11) , opens new tab, one of the world's best-performing markets this year. Sign up here. "The risk-off tone across Asia looks more like a spillover from last Friday’s selloff in U.S. momentum and tech than a region-specific catalyst," said Marc Velan, head of investments at Lucerne Asset Management in Singapore. "The unwind in the AI-capex trade weighed on global risk appetite, and in thin year-end liquidity those moves tend to travel quickly across regions." S&P 500 e-mini futures rebounded 0.3%, while the yield on the U.S. 10-year Treasury bond was last down 2.2 basis points at 4.1743% as investors awaited a string of economic data releases and a slew of decisions from central banks. CHINA PROPERTY WOES Against the Chinese yuan trading offshore , the U.S. dollar slipped 0.1% to 7.0486 yuan, hovering around its strongest level in more than a year, after factory output and retail sales data slowed further in November. Official data showed on Monday that new home prices extended a decline in November, indicating that a recovery in demand remains elusive despite the government vowing to stabilise the sector. China Vanke (000002.SZ) , opens new tab said it would convene a second bondholder meeting, after the state-backed property developer failed to secure bondholder approval to extend by one year a bond payment falling due Monday, increasing the risk of default and renewing concerns about the crisis-hit property sector. "If Vanke ultimately defaults, we think the ramifications on the China property sector can be significant," said Jeff Zhang, equity analyst at Morningstar. "Investors may be more concerned about the balance sheet and government's attitude towards bailout for even the 'safe names'." CENTRAL BANK DECISIONS LOOM Among the central banks making decisions this week, the Bank of Japan is expected to hike rates by 25 basis points to 0.75%, while the Bank of England may make an equal-sized cut to 3.75%. The European Central Bank is expected to keep interest rates on hold, alongside Sweden's Riksbank and Norway's Norges Bank. Investors will also have the chance to catch up on economic data that was delayed by the U.S. government shutdown, including the jobs report for November and the monthly consumer price index. "It's worth taking this week’s data with a pinch of salt given problems collecting data as well as the direct economic impact of the government shutdown," said Ben Bennett, head of investment strategy Asia at L&G Asset Management in Hong Kong. "We’ll have to wait until 2026 to get a clearer reading on the U.S. economy." In Japan, stocks gained some support after the BOJ's closely watched "tankan" survey showed on Monday that big manufacturers' business sentiment hit a four-year high, suggesting the economy was weathering the hit from higher U.S. tariffs. The Topix (.TOPX) , opens new tab was last up 0.2%, while the yen appreciated 0.6% to 154.955 against the U.S. dollar, nearing its strongest level in a week. The kiwi dollar slid 0.4% to $0.5781 after comments from New Zealand's new central bank governor Anna Breman warning financial market conditions had tightened in recent weeks, leading investors to pare back rate hike expectations for next year. In commodities, Brent crude was 0.5% higher at $61.44 as supply fears from U.S.-Venezuela tensions and elsewhere lifted prices. Imperial Oil (IMO.TO) , opens new tab said on Sunday it had issued a fire alert at its 120,000 barrel-per-day refinery facility in Ontario, Canada. Meanwhile, Russia said that an oil refinery in Afipsky was undamaged by a Ukrainian drone attack. On the geopolitical front, U.S. envoy Steve Witkoff said "a lot of progress was made" in peace talks to end the Ukraine war in Berlin on Sunday. Gold extended its recent rally into a fifth day as it approaches a record high of $4,381.21. Spot bullion prices were last up 1.0% at $4,344.89. Cryptocurrency markets snapped a three-day losing streak, with bitcoin last up 1.3% at $89,598.96 and ether = rising 1.5% to $3,127.57. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-12-15/