FOMC Minutes sharpens focus on Jan 9th jobs, CN PMIs surprise to upside amid EoY wind-down

General trend and developments

- December FOMC Minutes predictably saw divided views among policy makers, but with the Fed as concerned about the outlook for jobs as they are inflation, there will be particular focus on Jan 9th’s catch-up BLS jobs data when the holes left over from the US government shut down will finally be plugged and up-to-date.

- China official PMI Manufacturing unexpectedly moved back into expansion (just) for the first time in 9 months, nearly a full percentage point above estimates. A few minutes later the RatingDog PMI Manufacturing also edged back into expansion. Analysts noted figures were supported by higher amounts of new work and new product launches.

- China government to bite the bullet and keep issuing $8.9B of trade-in subsidies in 2026 for auto purchases and will also include digital and smart products. [**Note: 2026 is expected to see the first overall contraction in China EV domestic sales for many years. Analysts attribute the likely fall to intense price competition and years of subsidies along with economic stagnation mean that most people that wanted to buy a new EV have already bought one.]

- Amid a loosening of US restrictions on chipmaking tools being sent to China by Hynix, Samsung and a new, less burdensome US annual licensing system, today Bytedance reportedly to increase its purchases of Nvdia chips to $14B in 2026, a 17% increase over 2025. This comes despite reports of China mandating at least a 50% domestic supply rule for Chinese chipmakers, aiming eventually to reach 100% domestic equipment.

- Very quiet for equities on the last day of the year, with Kospi and Nikkei closed, ASX in Australia closed flat on a half-day of trading. Hang Seng underperformed -0.9% on a half-day.

- Korea CPI slightly hotter in a light macro session for Asia, with equity markets closed in Korea as well as Japan. Bank of Korea said it is still worried abo hut the impact of FX movements on inflation even as the Won is now trading back at early November levels. Korean press noted drivers include higher oil product prices amid USD strength vs the KRW .

- China PBOC again set the Yuan reference rate at a 15-month high, up into the 7.02 handle. Comes as yet another China newspaper warned of ‘rationality’ of bets as the Yuan climbs in value, with offshore Yuan nearly hitting 6.98 overnight and again threatened today.

- Silver dropped -5% of its overnight highs, back down to $72/oz and Platinum -9% back below $2,000/oz as precious metals volatility continued amid the extended price gains seen this year.

- US equity FUTs -0.1% to -0.2% during Asian trading.

Looking ahead (Asian-weighted focus, using Asian time zone)

- Thu Jan 1st KR Dec Exports.

- Fri Jan 2nd S&P Dec Global PMIs, ID Dec CPI.

Holidays in Asia this week

- Tue Dec 30th Philippines.

- Wed Dec 31st Australia (half-day), Hong Kong (half-day), Japan, Philippines, South Korea, Thailand.

- Thu Jan 1st Australia, China, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, UK

- Fri Jan 2nd China, Japan, New Zealand, Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +1.0% at 8,724.

China/Hong Kong

- Hang Seng opens -0.2% at 25,801 (half-day only); Shanghai Composite opens +0.1% at 3,968.

- Hang Seng closed down -0.9% in a shortened half-day, but ended the year with a +28% gain for 2025, best in several years.

- CHINA DEC MANUFACTURING PMI (GOVT OFFICIAL): 50.1 V 49.2E (1st expansion in 9 months).

- CHINA DEC RATINGDOG PMI MANUFACTURING: 50.1 V 49.8E (moves back into expansion after one month contraction).

- China banks said to cut business loan rates to <3.00% - China Securities Journal, citing sources including bank managers.

- Bytedance Follow up: Reportedly to invest ~$14B into Nvidia chips during 2026, +17% y/y – SCMP.

- (HK) MiniMax plans to raise up to HK$4.2B in Hong Kong IPO - Press [update].

- Follow up: China official responds to Dutch official remarks over Nexperia; Urges Netherlands to restore supply chain stability - financial press.

- China Pres Xi: 2025 marks 'concrete step' in partnership with Russia - Xinhua.

- China "experts" expect copper prices to rise further in 2026 - China Securities Journal.

- Reportedly China is requiring chipmakers to use at least 50% domestically made equipment for adding new capacity; This mandate is one of the most significant measures China has introduced to wean itself off reliance on foreignh technology – press.

- China NDRC (state planner): Delivers CNY295B fund for 2026 funding of key projects - statement.

- China to keep issuing trade-in subsidies for auto purchases; China to include digital and smart products in 2026 subsidy scheme – press [overnight update].

- China Pres Xi: Reiterates China achieved 2025 main goals of economic goals; To drive reasonable economic growth in 2026 - financial press.

- China to implement VAT law from Jan 1st 2026, as expected – press [overnight update].

- SCMP: China's "lagging basic research" needs a core technology pivot due to US tech curbs - citing advisor [overnight update].

- China PBOC sets Yuan reference rate: 7.0288 v 7.0348 prior (strongest since Sept 30th, 2024).

- PBOC also stepped up year-end liquidity, with a >CNY500B.

Japan

- Nikkei 225 closed for holiday.

- Asia data center developers have started to use complex financing arrangements – Nikkei [update].

Korea

- Kospi closed for holiday.

- SOUTH KOREA DEC CPI M/M: 0.3% V 0.2%E; Y/Y: 2.3% V 2.3%E.

- Bank of Korea (BOK): Will closely watch the impact of FX movement on inflation.

Other Asia

- Singapore Nov M2 Money Supply Y/Y: 5.7 v 7.1% prior.

- Indonesia Mining Minister: Govt to cut mining quotas to support prices [overnight update].

- Taiwan unveils plan to boost financial sector cyber resilience - statement from Financial Supervisory Commission [overnight update].

North America

- (US) OCT FHFA HOUSE PRICE INDEX M/M: 0.4% V 0.1%E.

- (US) OCT S&P COTALITY HOUSE PRICE INDEX (20-CITY) M/M: 0.32% V 0.15%E; Y/Y: 1.31% V 1.10%E.

-OpenAI sources say SoftBank has fully funded its previously announced $40B commitment to OpenAI - CNBC's Faber.

- (US) DEC CHICAGO PURCHASE MANAGERS INDEX (PMI): 43.5 V 40.0E.

- (US) Dec Dallas Fed Services Activity Index: -3.3 v -4.6e.

- (US) FOMC DEC MINUTES: MOST PARTICIPANTS JUDGED FURTHER EASING WOULD BE APPROPRIATE IF INFLATION DECLINED OVER TIME; SOME SAW APPROPRIATE TO HOLD RATES STEADY 'FOR SOME TIME' AFTER DECEMBER'S CUT.

Europe

- (IR) Iran govt forces begin shooting protesters as countrywide uprising threatens Islamic regime; Iran reportedly fires test ballistic missile amid threat of Israel taking further action against Iranian missile capabilities - independent press, citing Iranian sources and video.

- (PT) Portugal Nov Retail Sales M/M: -1.1% v -0.4% prior; Y/Y: 1.7% v 4.1% prior.

Levels as of 01:20 ET

- Nikkei 225 closed; ASX 200 flat; Hang Seng -0.9%; Shanghai Composite +0.2%; Kospi closed.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; DAX +0.9%; FTSE100 -0.1%.

- EUR 1.1733.117.49; JPY 156.33-156.54; AUD 0.6689-0.6702; NZD 0.5774-5793.

- Gold -0.9% at $4,348/oz; BTC +1.4% at $88,467; Crude Oil flat at $57.97bbl; Copper -1.0% at $5.6888/lb.