Worldwide

A dovish Fed cuts 25bp with renewed asset purchases (not strictly QE, but good for risk assets) saw equities jump (S&P500 +0.7%), the dollar fell (0.60%) and yields fell (2yr down -7bp). But suddenly overnight after dreadful Oracle earnings the markets have reversed, Oracle was down 11% after hours, Nasdaq futures are currently down (-1.2%), Bitcoin is down 3%, and Ethereum down -4%.
Silver makes another new all-time high, and gold sits on a key support line, overnight events should support precious metals. (Chart 1 gold, Bloomberg)
The Fed cut by 0.25% (with 3 dissents:1 cut, 2 hold, less than thought) and will resume ‘temporary’ T-Bill purchases. The dot plots still see one cut in both 2026 & 2027, thought the OIS prices 53bp cuts in 2026. The Fed is also getting more optimistic about the economy. Big revision up in GDP growth for 2026 with inflation cooling faster. Unemployment peaks at 4.5% this year, Inflation peaks at 2.9% this year, with GDP for 2026 is now estimated 2.3% (prior forecast was 1.8%). The Fed will also start “temporarily” buying $40B of T-bills per month. They say this isn’t QE, but a sign liquidity in the banking system is too tight. The Fed believes it has over done QT and needs to reverse it quickly because they are concerned about the reserve drain from April 15th, tax payments. It’s abundance of caution, but still, its adding liquidity to the markets.
Oracle currently carries $127B in debt, with $25B due within three years. Despite this, the company is free cash flow negative, reporting roughly –$13B over the past 12 months, and it’s not expected to be FCF + before 2028.
The dollar resumes its downtrend (Chart 2, dollar index, Bloomberg)
CHINA’S BEIJING STOCK EXCHANGE 50 INDEX EXTENDS GAINS TO 5%
Bloomberg forward looking indicator in inflation is showing renewed disinflation in the next 6 months, with core cpi goods trending back down by mid-2026.
The Indian Rupee is EVEN WEAKER than the dollar….. INDIAN CENTRAL BANK LIKELY SELLING U.S. DOLLARS TO HELP RUPEE AVERT SHARP FALL – TRADERS
Donald Trump latest economic insight. “Instead of a 4% GDP or 3% GDP, it should be able to be 20 or 25%. I don’t know why it can’t be.”…….. hhhhmmmmmmmm!

Goldman Sachs Asset Management just laid out its “10 for 2026” market roadmap
And Bank of America’s 2026 macro calls.
Data today – SNB rate decision

The focus today is firmly on the FED meeting, and more importantly what Chair Powell says after the 25bp cut. Long end yields are on the grind higher again, if the market fears reckless cuts at the front of the curve, then long end yields will continue higher, with equities already taking notice and losing momentum and silver rallying another 5.7% in 2 days. Long end yields are IMHO the biggest risk to financial markets in Q1 2026.
Investment in the Nasdaq 100 has climbed to around $32.5T, up from $12.5T just three years prior. Precious-metals equities have likewise jumped, doubling from $300B to over $600B in only twelve months. When even small amounts of capital begin moving into hard assets, the impact is large. And to put in context gold is a mere 2.8% of investors AUM.
YTD Silver +103%, Gold +59%, Bitcoin -3%!
The National Federation of Independent Businesses survey for prices just posted the biggest one month jump in the history of the survey.
While yesterday’s JOLTS (job openings) rate ticked up the bigger story is the QUITS rate fell sharply, and at 1.8% (lowest since May 2020) this is heading towards oversupplied territory (Chart 1, @lebas_janney, Bloomberg).

Chinese inflation falls back into deflation, CPI -0.1% MoM, +0.7% YoY, PPI -2.2% YoY.
Economic activity in China likely slowed further in November, with the high-frequency index and dashboard showing a sharp drop in the second half of the month. Sales of new homes and home appliances led the deterioration in demand, with new-home sales falling 41% year on year in the four weeks through Nov. 28. (Chart 2, @dlacalle_IA, Bloomberg economics)
More Chinese data censorship. While China’s property slump continues Beijing had told the two private sector housing data agencies (China Real Estate Information (CREI) & the China Index Academy) to withhold the numbers until further notice. (Chart 3, Telegraph, BIS, FRED)
JPMorgan fell nearly 5% yesterday after the bank told investors that it will spend billions of dollars more in expense.
Bullish investor sentiment is surging, in fact the gap between bullish and bearish readings jumped to 13.5 points, the 2nd-highest this year. (Chart 4, Bloomberg, zerohedge)

Trafigura Chief Economist Saad Rahim on oil in 2026: “Whether it’s a glut or a super glut, it’s kind of hard to get away from that…”
AUDUSD higher in 13 out of the last 14 days. OIS has 31bp hikes priced for the RBA over the next 12 months and 77bp cuts priced by the FED. Interest rate differentials matter.
Data today – Chinese inflation, Fed and BK of Canada rate decisions, Oracle & Broadcom earnings.

Australia’s hawkish pivot is ripping through global rates. Bullock’s “no cuts for the foreseeable future” stance has catapulted AU 10-year yields to the top of the developed-market league table, widening the AU–US spread to the highest since early 2022. With Q4 CPI now the swing factor for a potential RBA hike in May, divergence versus a Fed still cutting has become the dominant theme. The 10-year differential (Figure 1) shows Australia breaking away, dragging AUD higher.
Meanwhile, the Fed is set for a third cut tomorrow, but support for more easing is thinning out, now only 72bps of cuts priced in the next 12 months, compared to over 90 bps at the end of November (Figure 2). USTs cheapened a little ahead of FOMC with 10yr pinned in its 4.00–4.20% range. NY Fed survey shows inflation expectations steady but household sentiment souring.
Germany is accelerating its military build-out, with Merz vowing to turn the Bundeswehr into Europe’s strongest army and committing to hit NATO’s new 3.5%-of-GDP defence target by 2029 – six years early. Berlin is leaning heavily on Rheinmetall, KNDS and the US–Israeli Arrow 3 system as it rewires Europe’s security architecture.
RBI launches unprecedented FX operation, with traders reportedly selling $100 million USD per minute, in an attempt to curb record depreciation without draining liquidity. Governor Malhotra is embracing a more flexible, two-way regime to deter speculation, but a widening trade deficit, 50% US tariffs and foreign outflows keep pressure intense as the rupee now holds just below the psychologically critical 90 level.
Trump permits sales of Nvidia H200 chips to China, though Nvidia share price reaction was muted, up 1.7% yesterday. Nvidia shares are still 12.5% down from record high at end of October, while S&P 500 index is just 1.1% off its late-October high. Globally, indices remain near record highs: Kopsi just 2% down, Nikkei 3.3% down.
Data today: JOLTS, ADP weekly, NFIB business optimism, BoE Bailey speech.

Key trends continue, copper rises another 0.5%, AUDUSD rallies for its 12th consecutive day, and Japanese yield continue their uptrend, dragging global long end yield with them.
Three notable data points from the US on Friday:
Consumer Confidence: While current conditions fell to the lowest levels since 1930’s, sentiment rose for the first time in nearly six months, climbing from 51 to 53.3 (above the consensus estimate of 52).
Inflation Expectations: Consumers now expect inflation at 4.1% over the next year and 3.2% over the next 5–10 years.
September Core PCE: The Fed’s preferred inflation gauge eased to 2.8% from 2.9%, coming in slightly cooler than expected. The headline PCE measure ticked up from 2.7% to 2.8%, matching consensus.

September PCE Price Index +2.8% y/y vs. +2.8% est. & +2.7% prior … core +2.8% vs. +2.8% est. & +2.9% prior (Chart 1, Bloomberg)
December Uni Mich Consumer Sentiment Index up to 53.3 vs. 51 prior; Current Conditions down to 50.7 vs. 51.1 prior (Chart 2, Augur Infinity) an all-time low and worst perception of the US economy since the 1930s Great Depression.
Meanwhile, Expectations up to 55 vs. 51 prior and short- and long-run inflation expectations fall to 11-month lows

Wall Street banks expect US stocks to post another year of double-digit gains in 2026.(Chart 3, FT)
Soon all commodity charts will look like gold – BofA’s Harnett
US heavy truck sales have plunged -47% over the last 3 months compared to the prior 3 months, to an annualized rate of 363,000, the lowest since the 2020 pandemic. Truck sales have now declined in 4 out of the last 5 months. (Chart 4, RenMac ,Haver Analytics, Bureau of Economic Analysis)
On appositive note, another surprise surge in Canadian employment for a third month in a row Canada added 53,600 jobs in November compared to estimated loss of 2,500 jobs The unemployment down CAME DOWN to 6.5% from 6.9%
Data this week:
Monday – US consumer inflation expectations
Tuesday – UK retail sales, RBA rate decision, US ADP, retail sales.
Wednesday – China inflation, FOMC rate decision
Thursday – SNB rate decision
Friday – UK GDP & IP