Calmer markets as we drift into busier early 2026

Notes/observations

- Little catalysts as thin liquidity continues ahead of end of year holiday closures. Europe is modestly green while Asian markets were subdued with muted price action. Minimal macro data was released, letting broader risk sentiment rather than fundamentals drive markets; US equity futures remained flat.

- EU bond yields ticked higher after falling to recent lows, even as Spanish inflation eased below 3%, reinforcing expectations that ECB policy will remain unchanged in the near term. US Treasury yields were steady ahead of the Fed’s Dec minutes, with markets pricing in around two rate cuts next year amid a softening jobs outlook but persistent inflation pressures.

- China is reportedly requiring chipmakers to source at least 50% of equipment domestically when adding new capacity, with projects that miss the threshold often rejected unless supply constraints justify flexibility - and officials would prefer the share to be well above 50% on the way to an eventual 100% domestic toolchain. As part of this push, Naura is testing advanced etch tools on SMIC’s 7nm line, beginning to displace foreign incumbents like Lam Research and Tokyo Electron alongside rival AMEC. Innovation is accelerating too (Naura filed 779 patents in 2025 and AMEC 259, per AcclaimIP and Reuters), and analysts estimate China is now around 50% self-sufficient in photoresist-removal and cleaning equipment, a segment once dominated by Japanese suppliers but increasingly led locally by Naura.

- After sharp volatility, precious metals stabilized. Silver rebounded strongly after margin-related selling pressure, while gold, copper, platinum, and palladium all recovered modestly.

- Meta is reportedly set to acquire agentic AI firm with Chinese roots Manus for more than $2B, keep Manus operating and selling its service from Singapore, and integrate it into Meta products including Meta AI.

- TTN Early 2026 near-term risk radar includes: US jobs report on Friday; Pending Supreme Court decision window on IEEPA legality, Trump’s Fed Chair pick, and the Fed’s Miran term ending Jan 31 could reprice policy uncertainty, while earnings season from mid-Jan will test AI and macro narratives against real margins and demand. Near-term catalysts: OpenAI’s Jan model drop and a potential Oracle jumbo ~$38B debt offering, plus the Jan 30 US government funding deadline, create a tight cluster of headline and liquidity risk into month-end.

- Asia closed mixed with Nikkei225 underperforming -0.4%. EU indices +0.3-0.8%. US futures 0.0%. Gold +0.9%, DXY -0.1%; Commodity: Brent +0.5%, WTI +0.6%; Crypto: BTC +0.3%, ETH +0.6%.

Asia

- South Korea Dec Manufacturing Business Survey: 94.4 v 92.7 prior; Non-Manufacturing Business Survey: 93.2 v 91.8 prior.

- South Korea Nov Industrial Production M/M: 0.6% v 2.4%e; Y/Y: -1.4% v +2.2%e.

Global conflict/tensions

- Russia Foreign Min Lavrov noted that everyone in the west understood that Russia held the strategic initiative in Ukraine. The west must come to terms with the new territorial realities in Ukraine.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.38% at 591.48, FTSE +0.34% at 9,900.53, DAX +0.32% at 24,443.23, CAC-40 +0.31% at 8,136.99, IBEX-35 +0.58% at 17,295.39, FTSE MIB +0.82% at 44,801.50, SMI +0.18% at 13,246.50, S&P 500 Futures +0.01%].

-European equity markets are experiencing a subdued session with thin volumes, as STOXX 600 trades flat but remains on track for an 18% annual gain. In the UK, the FTSE 100 rose 0.1% to 9,876, inching toward record highs driven by strength in mining stocks like Fresnillo. However, sentiment remains cautious amid resurfacing geopolitical tensions regarding Ukraine and anticipation of the Federal Reserve's latest meeting minutes.

Equities

- Consumer discretionary: Ocado [OCDO.UK] -0.5% (confirms mutual exclusivity has now ended with retailers in the majority of markets where Ocado's technology is currently live, including the US with Kroger).

- Energy: Savannah Energy [SAVP.UK] -0.5% (business update).

- Healthcare: Novo Nordisk [NOVOB.DK] -0.5% (confirms cutting Wegovy prices in China from Jan 1st).

- Technology: ASML [ASML.NL] +1.0% (China is requiring chipmakers to use at least 50% domestically made equipment for adding new capacity).

Speakers

- Sweden Central Bank (Riksbank) Dec Minutes noted that was appropriate to keep policy rate for some time. Seeing increasingly clear signs that demand for Labor would soon start to rise, and next year household purchasing power would also be strengthened by a more expansionary fiscal policy. Overall picture pointed to continued subdued cost pressures and falling inflation.

- Japan PM Takaichi stated that was aiming for strong economy with virtuous cycle and reiterated view to have new strategy to boost economy by next summer.

- Thailand Central Bank reiterated view that THB currency (Baht) strength was beyond fundamentals and did have measures to handle the situation

- South Korea Pres Lee to visit China Jan 4-7th, to meet with China Pres Xi.

- China said to be requiring chipmakers to use at least 50% domestically made equipment for adding new capacity.

Currencies/fixed income

- USD stayed well contained within a tight range against the major pairs.

- EUR/USD steady at 1.1770 area.

- USD/JPY at 155.92 by mid-session.

- China offshore Yuan again broke through 7.00 and on to its strongest level since May 2023.

- 10-year German Bund yield at 2.84%, France 10-year Oat at 3.53% and 10-year Gilt yield at 4.49% 10-year Treasury yield: 4.12%; 10-year JGB: 2.05%.

Economic data

- (RU) Russia Dec Services PMI: 52.3 v 52.2 prior; Composite PMI: 50.0 v 50.1 prior.

- (FI) Finland Nov GDP Indicator Y/Y: +0.3% v -1.8% prior.

- (SE) Sweden Nov Household Lending Y/Y: 2.8% v 2.9% prior.

- (TR) Turkey Nov Unemployment Rate: 8.6% v 8.5% prior.

- (TR) Turkey Dec Economic Confidence: 99.5 v 99.5 prior.

- (TH) Thailand Nov Current Account Balance: -0.6$B v +$1.5Be; Overall Balance of Payments (BOP): +$0.8B v -$0.5B prior; Trade Account Balance: -$0.2B v -$1.0B prior; Exports Y/Y: 5.5% v 5.3% prior; Imports Y/Y: 17.3% v 17.1% prior.

- (TH) Thailand May Foreign Reserves w/e Dec 26th: $282.5B v $278.0B prior.

- (ES) Spain Dec Preliminary CPI M/M: 0.3% v 0.3%e; Y/Y: 2.9% v 2.8%e; CPI Core Y/Y: 2.6% v 2.5%e.

- (ES) Spain Dec CPI EU Harmonized M/M: 0.3% v 0.3%e; Y/Y: 3.0% v 3.0%e.

- (ES) Spain Nov Adjusted Retail Sales Y/Y: 6.0% v 3.9% prior; Retail Sales Y/Y: 3.7% v 4.4% prior.

- (CH) Swiss Dec KOF Leading Indicator: 103.4 v 101.4e.

- (AT) Austria Nov PPI M/M: 0.3% v 0.2% prior; Y/Y: -1.3% v -1.2% prior.

- (ES) Spain Oct Current Account Balance: €7.2BB v €1.9B prior.

- (NO) Norway Central Bank (Norges) Jan Daily FX Transactions (NOK): -650M v +150M prior.

Fixed income issuance

- None seen.

Looking ahead

- (MX) Mexico Nov Public Balance (MXN): No est v -783.7B prior.

- (CO) Colombia Nov Retail Confidence: No est v 22.1 prior; Industrial Confidence: No est v 4.9 prior.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:25 (CH) Switzerland to sell 3-month Bills.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 06:00 (PT) Portugal Nov Retail Sales M/M: No est v 0.4% prior; Y/Y: No est v 4.6% prior.

- 06:30 (BR) Brazil Nov Nominal (overall) Budget Balance (BRL): -95.5Be v -81.5B prior; Primary Budget Balance (BRL): -14.3Be v +32.4B prior; Net Debt to GDP: 65.3%e v 65.0% prior.

- 07:00 (BR) Brazil Nov National Unemployment Rate: 5.4%e v 5.4% prior.

- 07:00 (CL) Chile Nov Unemployment Rate: 8.2%e v 8.4% prior.

- 08:00 (RU) Russia Q3 Final Current Account Balance: No est v $8.2B prior.

- 08:00 (UK) No Daily Baltic Dry Bulk Index.

- 08:15 (US) ADP Preliminary Employment Change for 4-weeks ending Dec 12th: No est v +16.3K prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (US) Oct FHFA House Price Index M/M: 0.1%e v 0.0% prior.

- 09:00 (US) Oct S&P Cotality CS 20-City M/M: 0.15%e v 0.13% prior; Y/Y: 1.10%e v 1.36% prior; House Price Index (overall) Y/Y: No est v 1.29% prior.

- 09:45 (US) Dec Chicago Purchase Managers Index (PMI): 39.8e v 36.3 prior.

- 10:30 (US) Dec Dallas Fed Services Activity: No est v -2.3 prior.

- 11:00 (RU) Russia Q3 Final GDP (3rd reading) Y/Y: 0.6%e v 0.6% prelim.

- 11:30 (US) Treasury to sell 6-Week Bills.

- 12:00 (BR) Brazil Nov Total Formal Job Creation: +78.7Ke v +85.1K prior.

- 13:00 (BR) Brazil Nov Total Federal Debt (BRL): No est v 8.254T prior.

- 13:00 (US) Weekly Baker Hughes Rig Count data.

- 14:00 (US) Dec FOMC Minutes.

- 16:30 (US) Weekly API Crude Oil Inventories.

- 18:00 (KR) South Korea Dec CPI M/M: +0.2%e v -0.2% prior; Y/Y: 2.3%e v 2.4% prior; CPI (ex-food/energy) Y/Y: 2.0%e v 2.0% prior.

- 20:30 (CN) China Dec Manufacturing PMI (Govt Official): 49.2e v 49.2 prior; Non-manufacturing PMI: 49.6e v 49.5 prior; Composite PMI: No est v 49.7 prior.

- 20:45 (CN) China Dec RatingDog PMI Manufacturing: 49.8e v 49.9 prior.

- 21:00 (SG) Singapore Nov M2 Money Supply Y/Y: No est v 7.1% prior; M1 Money Supply Y/Y: No est v 12.7% prior.