Asia Markets Mixed as Investors Eye China Trade Data and RBA Decision

Economic

Stocks

Summary:

Asia-Pacific markets showed mixed performance on Monday, with investors awaiting China’s November trade data and the Reserve Bank of Australia’s (RBA) policy decision...

Markets Await China Trade Recovery as Sentiment Remains Cautious

Asia-Pacific equities traded without clear direction as investors focused on the upcoming release of China’s November trade data, with expectations of an export recovery. According to a Reuters poll, China’s exports are forecast to grow 3.8% year-over-year in November, reversing October’s 1.1% decline. Imports are also expected to rise 3%, up from 1% previously. A better-than-expected print could strengthen confidence in China’s manufacturing and global trade momentum heading into 2026.

Meanwhile, Hong Kong’s Hang Seng Index futures pointed to a higher open, and the index rose 0.24% during the session. Mainland China’s CSI 300 added 0.43%, with markets drawing support from optimism around a trade rebound.

However, the excitement from Moore Threads’ massive IPO debut last week waned, as the Beijing-based GPU maker saw its shares drop more than 5% following Friday’s 400% surge on Shanghai’s STAR Market. Despite the slip, the stock remains well above its IPO price of 114.28 yuan, closing at 600.50 yuan.

Japan’s Growth Disappoints, Raises Concerns About Economic Momentum

Japan’s economic outlook dimmed as revised data showed a sharper contraction in Q3. The economy shrank at an annualized rate of 2.3% between July and September, worse than both the initial estimate of a 1.8% fall and economists’ forecast of a 2.0% decline. The downward revision underscores persistent domestic weaknesses amid sluggish consumption and global headwinds.

Japan’s Nikkei 225 slipped 0.14%, while the broader Topix managed a modest 0.25% gain, suggesting some sector rotation even as growth concerns deepened.

Australia Awaits RBA Decision Amid Rate Hold Expectations

The Reserve Bank of Australia (RBA) began its two-day policy meeting, with a decision due Tuesday. Economists widely expect the central bank to maintain its cash rate at 3.60% and hold steady through 2026. Market participants are closely watching for any shifts in the RBA’s tone regarding inflation risks or labor market trends.

The S&P/ASX 200 edged 0.17% lower as investors turned cautious ahead of the announcement. Some analysts suggest that with inflation moderating and household consumption under pressure, the RBA is likely to retain its current stance, though market-implied pricing still leaves the door open for cuts later in 2026.

Regional Performance Snapshot

As of the latest updates, major indexes across Asia-Pacific displayed diverging trends. South Korea’s Kospi rose 0.78% to 4,132.22, supported by gains in technology stocks, while the Kosdaq added 0.45%. India’s Nifty 50 fell 0.39% to 26,083.70, tracking broader concerns over global economic growth and domestic valuations.

China’s Shanghai Composite gained 0.62% to close at 3,927.19, reflecting moderate optimism ahead of the trade data. The Nikkei ended slightly positive at 50,525.59 (+0.07%), rebounding from earlier losses.

U.S. Markets Set the Tone with Cautious Optimism

Investor sentiment in Asia was also influenced by Wall Street’s Friday performance. All three major U.S. indexes posted gains despite mixed economic data. The S&P 500 rose 0.19% to 6,870.40, achieving its fourth consecutive winning session and moving within 0.7% of its all-time intraday high.

The Nasdaq Composite climbed 0.31% to 23,578.13, while the Dow Jones Industrial Average added 104.05 points (+0.22%) to finish at 47,954.99. The modest gains suggest resilient investor confidence amid hopes for a soft landing and potential rate cuts in 2026.

As markets await China’s November trade report and the RBA’s rate decision, the region remains in a holding pattern. A positive surprise from China could lift sentiment and fuel momentum in Asia-Pacific equities. However, recent disappointments such as Japan’s weaker GDP highlight the fragile recovery still underway across the region. Investors will be watching closely for signals that could shift monetary policy expectations or reveal new insights into global demand trends.

Source: CNBC

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Gerik

Economic

Commodity

Silver Pauses After Explosive Surge

Silver prices wavered near $58.23 an ounce on Monday, pulling back slightly after touching $59.33 on Friday just shy of its all-time high. The white metal had gained over 2% in the previous session and has more than doubled in value this year, fueled by a potent mix of macroeconomic expectations, structural shortages, and speculative activity.

ETF investors added nearly 590 tons to silver-backed funds last week, marking the strongest inflow since July. This surge in institutional interest is a clear indication that many investors believe the rally still has room to run despite signs of overheating.

Fed Policy Outlook: Driving the Rally or Fueling the Bubble?

Investor positioning in silver has been deeply influenced by expectations that the Federal Reserve will cut interest rates at its upcoming meeting. Lower rates reduce the opportunity cost of holding non-yielding assets like precious metals, making them more attractive in a softening rate environment.

The anticipation of monetary easing has strengthened both silver and gold, with the latter also rebounding to $4,205.21 an ounce after a minor 1% dip last week. The Bloomberg Dollar Spot Index edged 0.1% lower, providing an additional tailwind for dollar-denominated commodities.

However, analysts are split on the sustainability of the rally. Justin Lin of Global X Management warned of “frothy” conditions, noting that the current price action reflects significant momentum-chasing behavior, particularly among retail investors.

Structural Supply Pressures Add Fuel

Beyond macro drivers, silver’s rally is underpinned by a continuing global supply strain. October’s historic short squeeze in London shocked the market, and while some physical silver has since flowed into London’s trading vaults, lease rates remain unusually elevated at around 6%, indicating persistent scarcity.

The strain has rippled to other key markets. In China, silver inventories in Shanghai are hovering near decade lows. This tightness is drawing interest from both commercial hedgers and speculative traders who foresee further upside or heightened volatility.

Options trading on Comex silver futures is surging as investors position themselves for wider price swings. Micro silver futures, in particular, have seen five-day average volumes that are second only to peaks recorded during the October squeeze, based on CME Group data.

Retail and Institutional Buying Intensifies

Retail participation remains a crucial part of the rally’s current phase. The uptick in micro contracts and heavy ETF inflows suggests that smaller investors are piling into the trade, chasing the price momentum and reinforcing the upward pressure. This surge in retail activity mirrors past episodes of parabolic silver moves, raising concerns that sentiment may be running ahead of fundamentals.

Meanwhile, institutional investors appear to be hedging for higher volatility or seeking exposure to further upside. Comex options data confirms heightened activity on call spreads and straddles, indicating expectations of continued large price moves in either direction.

Gold Holds Ground, Central Banks Keep Buying

Gold, while less volatile than silver recently, also showed resilience. Prices rose 0.2% Monday, buoyed in part by central bank activity. China’s central bank added to its gold reserves for the 13th consecutive month, pushing total holdings to around 74.12 million troy ounces. This sustained accumulation reflects strategic diversification away from the dollar and adds credibility to the broader precious metals rally.

Other precious metals showed mixed results, with platinum rising slightly and palladium falling.

A Fragile Rally Fueled by Rate Bets and Supply Squeeze

Silver’s explosive move toward record highs reflects a rare alignment of monetary policy expectations, speculative energy, and structural supply disruption. While the rally has strong technical and sentiment backing, its long-term sustainability remains uncertain.

With the Federal Reserve decision looming and volatility rising, silver markets are entering a critical phase. Any deviation from the expected rate-cut narrative or signs of easing physical constraints could trigger sharp reversals. Until then, both bulls and bears are likely to face high-stakes swings in a market where fundamentals and momentum are locked in a delicate balance.

Source: Bloomberg

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Gerik

Bond

Yields Climb as Fed Cuts: A Rare Disconnect

In a striking reversal of normal market dynamics, U.S. Treasury yields have risen sharply even as the Federal Reserve has reduced its benchmark rate by 1.5 percentage points since September 2024. Ten-year yields have climbed to 4.1% and 30-year yields are up more than 0.8 percentage points, undermining the usual pattern where lower short-term rates lead to falling long-term borrowing costs.

Such divergence hasn’t occurred at this scale since the 1990s, prompting a heated debate on Wall Street over what this behavior signals ranging from optimism about growth to fears over policy credibility and debt sustainability.

Dueling Interpretations: Growth vs. Structural Breakdown

Some analysts see this as a vote of confidence in the economy’s strength, interpreting higher yields amid easing policy as a sign that the Fed is successfully engineering a soft landing. Jay Barry of JPMorgan argues that markets had already priced in the pivot months before the Fed began cutting, muting the yield response. Furthermore, with inflation still above target, rate cuts reduce recession risk rather than amplify it hence less downward pressure on yields.

However, others see darker implications. The rising term premium the extra compensation investors demand for holding long-term bonds suggests deeper fears. According to the New York Fed, this premium has risen by nearly one full percentage point since rate cuts began, signaling concerns over persistent inflation, ballooning federal deficits, and potential erosion of Fed independence.

Jim Bianco of Bianco Research warns the Fed is cutting too aggressively while inflation remains above 2%. "The market is really concerned about the policy,” he says, suggesting that continued easing could push mortgage rates “vertical,” hurting financial stability rather than supporting it.

Politics in Play: Trump, the Fed, and the Next Chair

The debate is further inflamed by political pressure. President Donald Trump is widely expected to nominate a loyalist Kevin Hassett to replace Chair Jerome Powell when his term ends in May. Trump's repeated calls for aggressive rate cuts have already raised questions about the Fed’s independence, and markets fear that a more compliant chair could further erode confidence in policy discipline.

Steven Barrow of Standard Bank warns that political interference won’t achieve Trump’s goal of lower long-term yields. “Putting a political figure at the Fed will not get bond yields down,” he argues, pointing out that credibility not rhetoric drives real outcomes.

Structural Forces: Beyond the Fed’s Control

Some experts frame the current scenario as part of a broader return to pre-crisis norms. Robert Tipp of PGIM believes yields are settling at “normal” levels not seen since before the 2008 financial crisis, driven by higher expected real returns and the Fed’s long-term inflation target.

Others argue that the supply-demand dynamics in the global bond market have shifted. During the Greenspan era, excess global savings suppressed yields despite rate hikes now, says Barrow, the opposite is true: a glut of sovereign debt is overwhelming demand, pushing yields higher even as central banks ease.

This suggests the Fed’s ability to steer long-term rates may be structurally constrained. As Barrow puts it, “At the end of the day, central banks don’t determine the long-term rate.”

Economic Calendar: All Eyes on Data and Fed Guidance

Market participants will watch closely this week’s data releases including JOLTS, inflation readings, and jobless claims and Fed communications for hints about the next policy steps. With another 25-basis-point cut priced in and two more expected in 2026, any shift in tone or dissent within the FOMC could rattle markets.

Treasury Secretary Scott Bessent remains publicly optimistic, calling 2025 “the best year for bonds since 2020” and projecting inflation to fall significantly in 2026. However, this sentiment contrasts with the upward trajectory of yields, reinforcing the market’s growing disconnect from official narratives.

A Crisis of Confidence or Return to Normal?

The divergence between Fed policy and bond market behavior reflects more than a short-term anomaly it highlights deep tensions between political goals, market expectations, and institutional credibility. Whether yields eventually respond to rate cuts or remain stubbornly elevated will depend on inflation data, fiscal discipline, and the Fed’s ability to maintain independence under political pressure.

As Wall Street debates whether this marks a structural shift or a policy misstep, the outcome will have profound implications for everything from mortgages and credit cards to federal borrowing costs and financial market stability.

Source: Reuters

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Gerik

Political

Russia-Ukraine Conflict

Disappointment Signals Fractured Momentum in Peace Talks

Former U.S. President Donald Trump has publicly criticized Ukrainian President Volodymyr Zelenskiy for not yet reviewing a U.S.-led peace proposal aimed at ending the war with Russia. Speaking to reporters in Washington, Trump revealed that although Zelenskiy's aides were reportedly supportive of the draft framework, the Ukrainian leader himself had not read the document as of “a few hours ago.” Trump contrasted this with his characterization of Russia’s response, stating that “Russia’s fine with it.”

This marks a growing impatience from Trump, whose team led by envoy Steve Witkoff and adviser Jared Kushner has engaged both Ukrainian and Russian leadership in backchannel discussions. While Trump maintains his tone of optimism regarding Russian President Vladimir Putin’s reaction, he appears less satisfied with Kyiv’s pace in moving forward.

Peace Proposal and the Stalemate in Miami

U.S. negotiators last week announced they had agreed with Ukraine on a "framework of security arrangements," but did not offer specifics or evidence of any near-term resolution. The ongoing discussions in Miami, now in their third day, are being conducted amid continued Russian air strikes on Ukraine, further complicating diplomatic overtures.

According to a social media post from Zelenskiy, he did meet with both Witkoff and Kushner to discuss the proposed terms, and both sides agreed to proceed with further talks. However, details of the actual content remain confidential, and it is unclear whether the framework includes concessions that could threaten Ukraine’s long-term sovereignty.

Trump’s dissatisfaction with Zelenskiy especially after lauding Putin’s perceived willingness to deal suggests a significant divergence in expectations. The disparity also reflects the increasing pressure on Kyiv to respond swiftly to U.S. diplomatic maneuvers, even as the conflict intensifies.

European Allies Join the Process

Leaders from France, Germany, and the UK are expected to meet Zelenskiy in London to assess the state of U.S.-brokered negotiations and potentially realign European positions. These allies have remained largely supportive of Ukraine’s terms for a just peace, and their involvement may serve as a moderating force amid Trump’s assertive push for resolution.

Meanwhile, the Kremlin has not formally endorsed the current U.S. proposal. President Putin acknowledged last week that while some ideas are under consideration, the plan includes elements that are unacceptable to Russia. This signals that despite the rhetoric, both sides remain far from a mutually acceptable settlement.

Fragile Diplomacy and Diverging Expectations

The gap between U.S. expectations and Ukraine’s strategic priorities is becoming more visible. Trump’s public rebuke of Zelenskiy paired with his praise of Putin raises questions about the perceived neutrality of the U.S. position and the extent to which any proposal can achieve balanced legitimacy.

With little consensus reached and substantial policy differences remaining, the current round of talks risks falling into a pattern of symbolic diplomacy rather than substantive resolution. The presence of European leaders may help recalibrate the discussion, but Zelenskiy now faces mounting pressure from both allies and adversaries as he weighs the next steps.

Source: Bloomberg

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Winkelmann

Forex

China–U.S. Trade War

Economic

China's Exports Rebound In November, Massively Beating Expectations After U.S. Trade Truce_1

A cargo ship loaded with containers departs from Qingdao Port in Qingdao City, Shandong Province, China, on December 4, 2025.

China's exports massively beat market expectations in November as manufacturers rushed to ship out inventory on the back of a trade deal with Washington, following a meeting between the leaders of the world's top two economies.

Outbound shipments surged 5.9% in November in U.S. dollar terms from a year earlier, China's customs data showed Monday, topping economists' forecast for a 3.8% growth in a Reuters poll. That growth marked a rebound from an unexpected 1.1% drop in October — the first contraction since March 2024.

Imports growth of 1.9%, however, missed expectations for a 3% rise, as Beijing renewed pledges to expand imports and work toward balancing trade amid widespread criticism against its aggressive exports.

Imports had grown just 1% in October from a year earlier as a protracted housing downturn and rising job insecurity continued to be drag on domestic consumption.

Chinese manufacturers breathed a sigh of relief after Chinese leader Xi Jinping and U.S. President reached a deal during their meeting in South Korea in late October, putting on hold a raft of restrictive measures for one year.

The two sides agreed to roll back steep tariffs on each other's goods, export controls for critical minerals and advanced technology, with Beijing committing to buying more American soybeans and working with Washington to crack down on fentanyl flows.

Following the truce, the U.S. levies on Chinese goods remain at around 47.5% according to Peterson Institute for International Economics. Beijing tariffs on imports from the U.S. stand at around 32%

China's factory activity shrank for an eighth month in November, an official manufacturing survey showed, with new orders staying in contraction. A private survey focused on exporters showed manufacturing activity unexpectedly fell into contraction.

Chinese policymakers are expected to meet later this month for the annual Central Economic Work Conference, to discuss economic growth target, budget and policy priorities for next year. The specific targets will not be officially announced until the "Two Sessions" meeting in March next year.

Beijing is expected to keep the 2026 growth target unchanged at "around 5%," according to Goldman Sachs, which would require incremental policy easing early next year to ensure a growth acceleration from a likely lackluster reading in the fourth quarter of 2025.

The Wall Street bank expects Chinese authorities to lift the augmented fiscal deficit ceiling by 1 percentage point of GDP, cut policy rates by a total of 20 basis points and step up stimulus measures to rein in the housing slump.

Source: CNBC

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Justin

Political

Economic

Australia will not extend cost-of-living relief to households in the form of electricity rebates, Treasurer Jim Chalmers said, as the government looks to rein in spending in the face of large, structural budget deficits.

"This wasn't an easy decision, but it's the right decision," Chalmers told reporters in Canberra on Monday. "This was a difficult call that we made as a Cabinet, but it's the right call."

Chalmers added that the decision "recognizes the pressures on the budget." The government has spent almost A$7 billion ($4.5 billion) on three rounds of energy rebates so far, Chalmers told reporters.

The rebates covered virtually every household in Australia.

The government first announced the energy rebates in late 2022 as a temporary measure and later extended them through 2025. The plan has helped put some downward pressure on headline inflation.

The center-left Labor government will announce a midyear budget outlook next week with Chalmers saying there won't be a mini-budget this time but "there will be savings and there will be difficult decisions."

Chalmers said that Australian inflation is "higher than we would like" and the budget update would take that into consideration.

"We've got two sets of challenges here. At the front end, we've got this challenge with inflation, which is more persistent than anyone would like," Chalmers said. "And in the medium term and the longer term, we're trying to turn around two decades of underperformance on productivity."

Chalmers' decision comes a day before Australia's central bank is expected to leave interest rates at 3.6% for a third straight meeting.

Source: Bloomberg Europe

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FastBull Featured

Daily News

[Quick Facts]

1. US–UA wrap 3-day talks on territory, security guarantees.

2. Japan GDP overshoots downside; BOJ hike bias intact.

3. US Treasury: holiday spend solid, 2024E GDP +3%.

4. BOJ hawk tilt fails to lift JPY bears.

5. Netanyahu to meet Trump, flags Gaza phase-two.

6. U-Mich US Dec CSI surprise spike.

7. Villeroy: downside inflation risks outweigh upside risks.

[News Details]

US–UA wrap 3-day talks on territory, security guarantees

Miami, Florida — The U.S. and Ukrainian delegations concluded three days of closed-door consultations on 6 Dec., focusing on Ukraine's territorial integrity and long-term security guarantees, according to U.S. media reports.

Citing informed sources, Axios reported that discussions on territorial issues proved "difficult." Moscow continues to demand Kyiv's withdrawal from portions of the Donbas currently under Ukrainian control. Washington is crafting a new compromise map to bridge positions.

The second core agenda item, post-war security guarantees for Ukraine, saw "significant headway," one source said, with the parties "close to consensus language." Nonetheless, further drafting sessions are required to align both capitals' interpretations of the prospective security-guarantee text.

Japan GDP overshoots downside; BOJ hike bias intact

Japan's economy contracted more than initially estimated, yet the Bank of Japan (BoJ)'s tightening bias remains intact.

According to the revised Cabinet Office data released Monday, Japan's real gross domestic product (GDP) shrank 0.6% QoQ in 2025 Q3, translating to an annualised –2.3 %. The print is materially below the advance estimate of –0.4 % QoQ (–1.8% annualised) and marks the first technical contraction since 2021 Q1.

The breakdown is mixed. Capital expenditure, historically the economy's key growth driver, fell 0.2% QoQ, sharply undershooting the preliminary +1.0% and accounting for the bulk of the downward revision. Private consumption, which accounts for more than half of nominal GDP, rose 0.2% QoQ, a modest uptick from the first print.

Economists attribute the quarterly weakness largely to a one-off drop in residential investment triggered by regulatory changes. Despite the headline contraction, the result is unlikely to alter the BoJ's policy trajectory. With underlying inflation still above the 2% target and tail risks from trade-policy uncertainty receding, Governor Kazuo Ueda's recent hawkish guidance has already fully priced in a 10 bp increase in the overnight call rate at the 19-20 December Monetary Policy Meeting.

US Treasury: holiday spend solid, 2024E GDP +3%

U.S. Treasury Secretary Scott Bessent said the economy is "closing out 2024 on a solid note," with real GDP expected to expand 3% for the year as holiday-season consumption runs well above trend. Despite the recent government-shutdown episode, activity has outperformed consensus. The U.S. has already printed several quarters of around 4% annualised growth. Bessent argued that media coverage has materially shaped household perceptions of affordability.

Hard data show the economy contracting 0.6% QoQ annualised in 2025 Q1, followed by a 3.8% rebound in Q2. The Bureau of Economic Analysis will release its advance Q3 estimate on 23 Dec., while the Atlanta Fed's GDPNow model (5 Dec. print) projects Q3 real GDP growth at a 3.5% pace.

Personal-consumption expenditures account for roughly 70% of U.S. nominal GDP, yet consumer sentiment remains subdued: the University of Michigan index rose 4.5% MoM to 53.3 in December but is still 28% below the year-ago level.

BOJ hawk tilt fails to lift JPY bears

Governor Kazuo Ueda's recent signal that the Bank of Japan (BOJ) could "soon" lift the policy rate, together with market chatter of a December move, has not dissipated investors' structural short bias against the yen. Traders at Bank of America, Nomura and RBC Capital Markets say positioning data still show heavy JPY downside exposure.

Citigroup (Citi)'s proprietary JPY "Pain Index" has remained deeply negative, corroborating the bearish consensus. Analysts argue that even if the BOJ initiates its first hike, the Japan–U.S. rate differential will stay wide. JGB yields are expected to remain well below Treasury yields, a structural carry dynamic that continues to favour USD over JPY.

Ivan Stamenković, head of G10 FX trading for Asia-Pacific at Bank of America, notes that positioning remains skewed toward further USDJPY upside into year-end. "Unless the BOJ delivers a genuine policy shock, this trend is unlikely to reverse," he said, adding that Governor Ueda's hawkish rhetoric has sparked debate but has not materially shifted sentiment.

Netanyahu to meet Trump, flags Gaza phase-two

Israeli Prime Minister Benjamin Netanyahu announced that he will meet U.S. President Donald Trump later this month, stressing that "we believe the opportunity for peace is within reach." He indicated that the Gaza operation is expected to transition to Phase Two "very soon."

Netanyahu noted that Jerusalem sees "a path to a broader peace with Arab states" and that, for the foreseeable future, the status quo in the West Bank will be maintained. Toward the end of the month he will hold "a critical conversation on how to lock in the objectives of Phase Two."

On the current Gaza plan, Netanyahu said, "We are about to complete Phase One of the framework presented by the Trump administration, we're almost there." He also made it clear that, even if granted immunity, he will not leave political life.

U-Mich US Dec CSI surprise spike

Preliminary data released Friday by the University of Michigan showed a much larger–than-expected rebound in the U.S. Consumer Sentiment Index (CSI) in December. The headline index rose to 53.3 from 51.0 in November, beating the consensus forecast of 52.0. The print marks a decisive bounce from the cyclical low of 50.0 posted in June 2022.

Joanne Hsu, director of the Surveys of Consumers, noted that the improvement was concentrated among younger households. "Consumers perceive that economic conditions have improved modestly since November, yet the overall mood remains pessimistic, with elevated price levels still the dominant concern," she added.

Underlying components: The Index of Consumer Expectations jumped to 55.0 from 51.0. The Current Economic Conditions index edged down to 50.7.

Inflation expectations: One-year ahead expected inflation dropped sharply to 4.1% (November: 4.5%), the lowest reading since January 2025. Long-run inflation expectations eased to 3.2% from 3.4%, matching the level seen in January 2025.

Villeroy: downside inflation risks outweigh upside risks

European Central Bank (ECB) Governing Council member François Villeroy de Galhau stated that the ECB currently faces greater downside than upside inflation risks. Should inflation persistently undershoot the 2% target, the Bank will adopt counter-measures. A stronger euro and lower-priced imports from China could subtract around 0.2% from consumer-price growth by 2027.

A sharper deceleration in negotiated wage growth would likewise exert downward pressure on inflation. Upside risks stem from supply-chain fragmentation and a sizeable increase in German government spending. Downside risks to the inflation outlook remain at least as pronounced as upside risks. We will not tolerate a prolonged deviation below target.