- In European morning trading, the recent overnight rally from Thursday in Wall Street futures is being continued. The US100 is up 0.2%, while the US500 remains close to Tuesday’s close.
- Today’s gains extend the rebound in technology stocks, which saw significant gains during Tuesday’s session.
- It is worth noting that most markets remain closed today, but Wall Street will operate as normal.
- The current market volatility suggests that the Santa Claus Rally and January Effect could still be in play. Both the US100 and US500 are testing historic highs.
- The JAP225 is up 0.5% this morning, potentially linked to comments from BoJ’s Ueda. Conversely, the CH50 from China is down 0.2%.
- Ueda, the BoJ governor, indicated that inflation risks remain elevated. He stated that interest rates will remain below neutral to ensure inflation converges towards the 2% target. He also suggested that if the economy performs as forecast, the BoJ will raise rates.
- During last week’s meeting, Ueda indicated that March’s wage negotiation data would be crucial for decision-making. This implies that the BoJ will not raise rates in January.
- In the currency market, there is a slight move away from the dollar, but EURUSD remains below 1.0400. The yen is also weakening.
- The World Bank estimates that China’s growth reached 4.9% this year, but forecasts a slowdown to 4.5% next year.
- Chinese lawmakers voted on Wednesday to adopt a value-added tax (VAT) law, marking significant progress in enforcing the principle of taxation. This law is set to come into effect on 1 January 2026.
- The National People's Congress is scheduled for 5 March, where further measures to stimulate the economy may be presented.
- Oil is rebounding during today’s session on hopes of a Chinese recovery in the coming months. Brent crude is up 0.25%, trading slightly above $73 a barrel.
- Natural gas, after strong gains and testing levels around $3.5/MMBTU, is declining today. Although the turn of December and January is expected to be mild, a minor cold snap is forecast to return to the eastern US states from 2 January.
- Gold is gaining this morning, benefiting from a slightly weaker dollar. Gold is up 0.4%, trading marginally below $2,630 an ounce.
- Bitcoin is down 0.6% this morning, 26 December, and is trading below 98,000.
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