Asia Markets Start December Lower as China PMI Misses and Crypto Warnings Hit Hong Kong

Vietnam's manufacturing sector maintained growth in November despite severe storms disrupting supply chains, according to the latest S&P Global Vietnam Manufacturing PMI data.

The PMI posted 53.8 in November, slightly down from 54.5 in October, but still indicating solid improvement in business conditions. This marks the fifth consecutive month of strengthening operating conditions.

New orders increased for the third straight month, helping drive production growth, though both metrics expanded at a slower pace than in October. New export orders grew at a faster rate, reaching a 15-month high, with manufacturers noting improved demand from mainland China and India.

Severe weather conditions in November significantly impacted supply chains, with suppliers' delivery times lengthening markedly to the largest extent since May 2022. The storms also hampered manufacturers' ability to complete work on time, leading to the sharpest accumulation of backlogs since March 2022.

Despite these challenges, employment increased for the second consecutive month as firms responded to higher output requirements. The modest rise in staffing levels was the largest in almost a year-and-a-half, with respondents indicating new staff were often hired on a full-time basis.

Manufacturers increased purchasing activity for the fifth straight month, with the rate of expansion quickening to a four-month high. Stocks of inputs also rose slightly for the second month in a row.

The storms contributed to higher raw material costs as supply was restricted. Input prices increased sharply, marking the second-fastest pace since July 2024, though inflation eased from October. Output price inflation also softened but remained solid as firms passed higher costs to customers.

Looking ahead, manufacturers expressed optimism about the year-ahead outlook for output, with sentiment reaching a 17-month high. Nearly half of respondents predicted increased production, citing expected improvements in new orders and hopes for calmer weather conditions.

Andrew Harker, Economics Director at S&P Global Market Intelligence, noted: "The pick-up in growth seen in October was largely sustained through to November as the Vietnamese manufacturing sector looks to be enjoying a positive end to the year. While rates of expansion in output and new orders eased, firms took on extra staff at a stronger pace in order to deal with workloads."

Source: Investing

Over the past week, precious metals broadly advanced, with gold bulls standing out. The rally is mainly driven by a sharp repricing of U.S. interest rate expectations: Fed officials have delivered consecutive dovish signals, December rate cut odds surged, and markets anticipate the next Fed chair may lean even more toward easing, all boosting bullish sentiment.

With the Thanksgiving holiday behind us, the market will return to a "data-driven" rhythm this week. Traders will focus on key U.S. economic releases, including ISM Services PMI, ADP employment data, and core PCE inflation. With the Fed entering a blackout period, even marginal data changes could trigger outsized market reactions.

Technical Outlook: Bulls Back in Control, $4,250 Key

Looking at the XAUUSD daily chart, gold buying regained momentum last week, with a nearly 3.8% weekly gain. While markets expected thin holiday trading, Friday's strong push broke that assumption, allowing gold to comfortably surpass $4,200.

With the holiday over and CME's earlier technical issues resolved, price discovery should be more robust this week. Gold is currently challenging its mid-November high of $4,250. A close above this level would open the door for a push toward $4,300 and potentially revisit the all-time high of $4,381.

On the downside, profit-taking at elevated levels could find support around $4,200 and further down at $4,130. Overall, technicals remain bullish, though the strength of the breakout and market sentiment will need confirmation from this week's data.

Fed Rate Cut Odds Surge, Supporting Gold Bulls

The recent acceleration in gold is mainly fueled by a shift in Fed policy expectations. Dovish tones are now clear—both Fed Governor Waller and NY Fed President Williams have publicly backed a December rate cut, altering the market's baseline expectations.

Economic data also support this trend. U.S. retail sales slowed in September, consumer confidence fell to 88.7 in November—the lowest since April—and the Fed's Beige Book showed cooling hiring, reduced hours, and even some layoffs, with consumer spending easing. Overall, U.S. economic momentum is weakening, while inflation, though moderating, remains sticky.

Against this backdrop, bets on a December Fed rate cut have surged, currently priced near 90%. Stronger rate cut expectations imply lower real rates, the key logic supporting a rise in non-yielding assets like gold.

Dollar performance reflects this shift. As the U.S. interest rate advantage fades, the dollar index has come under pressure. Meanwhile, policy shifts in Japan add to dollar weakness.

Sanae Takahashi's aggressive fiscal stance has raised concerns over the continuation of Abenomics, while Ueda hinted at a possible December rate hike (current odds above 60%), increasing the potential for a yen rebound. If realized, this would further weaken the dollar and provide additional support for gold.

Hassett Poised to Lead, Dovish Tilt Boosts Gold

Treasury Secretary Janet Yellen indicated that President Trump may announce the next Fed chair before Christmas. Current NEC Director Hassett, a long-time proponent of Trump-style monetary easing, is the frontrunner, with betting markets pricing his nomination at roughly 64%.

Markets expect that if Hassett takes the helm, his stance will be more dovish, likely keeping rates lower than under Powell. This expectation has pushed traders to increase bets on future rate cuts and raises questions about Fed independence, naturally benefiting non-yielding, safe-haven gold.

Moreover, concerns over aggressive rate cuts heighten attention to U.S. debt expansion, while central bank gold buying provides a solid floor. Together, these factors make it difficult to break gold's upward path in the near term.

Final Week Before the Rate Decision: Can Gold Keep Rising?

In short, gold bulls have surged recently, driven by higher December rate cut bets, a softer dollar, and expectations of a more dovish next Fed chair. Central banks continue to accumulate gold, and geopolitical risks remain, offering additional support.

In a low-rate, uncertain U.S. economic environment, gold's path of least resistance remains upward, with dip buying still the prevailing strategy. Any short-term pullbacks are likely to be limited.

This week marks the final week before the December Fed meeting. Fed officials will enter a blackout period, amplifying the market impact of economic data. Key releases include Wednesday's November ADP private payrolls and ISM Services PMI, and Friday's delayed September core PCE.

Consensus is for ADP jobs to rise 10k, below 42k previously, while core PCE is expected to fall from 2.9% YoY to 2.8%. If results align, showing a soft labor market with controlled inflation, they could reinforce December rate cut bets, pressuring the dollar and modestly lifting gold. Even if employment improves slightly and inflation remains sticky, it's unlikely to change market pricing for cuts, leaving gold in a narrow trading range.

Additionally, as major central banks diverge in policy paths—especially the RBA, NZD central bank, and BoJ returning to a rate hike trajectory—traders should monitor yield differentials for both risk and opportunity when trading gold.

Source: Pepperstone

Key points:

Disney'sZootopia 2 became the highest-grossing animated foreign film ever in China, despite generally muted interest in overseas movies in the country.

As of Monday morning Beijing time, box office tracker Maoyan showed Zootopia 2's local box office tally reaching 1.95 billion yuan ($275.6 million) in its first six days of release.

"It is Disney's most important movie in China this year, for sure," said Ashley Dudarenok, founder of China digital consultancy Chozan, with its themes of personal resilience and societal harmony resonating with local audiences.

Its runaway success in China - where Zootopia 2 sales accounted for around 95% of all movie ticket sales over its opening weekend - is particularly notable given the changing environment for foreign films in China over the nine years since the first Zootopia film was released. The original Zootopia also became China's most popular foreign animated film when it was released in 2016.

Hollywood films were caught up earlier this year in the China-U.S. trade war. Beijing curbed the number of U.S. films that were allowed to be shown in China in retaliation for higher tariffs on Chinese goods - a move analysts said would only have a limited impact, given the waning influence of foreign films in China.

AN EXCEPTION, NOT THE RULE

Hollywood studios once looked to China, the world's second-largest film market, to help boost their box office performances. But domestic movies increasingly have outperformed Hollywood fare in China. Earlier this year, local animation "Ne Zha 2" eclipsed Pixar's "Inside Out 2" to become the world's highest-grossing animated film of all time after raking in nearly $2 billion at the Chinese box office.

Even so, Disney seemed confident that Zootopia 2 would find a significant audience in China, with Chief Executive Bob Iger travelling to Shanghai for a local premiere a fortnight ago. In addition, Disney partnered with China Eastern Airlineson a Zootopia 2-themed plane.

And the Shanghai Disneyland resort is home to the world's only Zootopia-themed land, which opened in 2023 to capitalise on local affection for the original film.

"Disney is heavily reliant on huge blockbuster releases, which in turn become IP and monetise through experiences, merchandise and other areas," said PP Foresight analyst Paolo Pescatore, adding that in spite of geopolitical tensions and an uncertain macroeconomic environment, China remains a "massive and expanding market for its theme parks, movies and merchandise."

According to Chris Fenton, author of "Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, and American Business," a potential downside of Zootopia 2's success could be the false hope it might give Hollywood studios that China could be rekindling a love affair with foreign films.

"Beijing doesn't view Hollywood as a solution to restrained consumer spending [in China], so I wouldn't read into this being a pivot on Beijing's part," he said. "Beijing knows if Hollywood sees some continued promise in their market, filmmakers will continue to kowtow to Beijing's storytelling requirements."

($1 = 7.0750 Chinese yuan)

Source: TradingView

Record Chip Shipments Drive Export Acceleration

Automobile Exports Rebound After U.S. Trade Agreement

Mixed Performance Across Major Markets

Imports Lag, Trade Surplus Hits Multi-Year High

Trade Resilience Reinforces Policy Stability

Source: Reuters

Copper touched new peaks on Monday after top Chinese smelters agreed to a plan to cut output in 2026 and on record-high premium offers by Codelco, the world's biggest copper producing company.

The most-active copper contract on the Shanghai Futures Exchangesurged 2.08% to 89,020 yuan ($12,583.40) per metric ton as of 0230 GMT, after setting a record high at 89,650 yuan.

The benchmark three month copperon the London Metal Exchange, meanwhile, also climbed to a new all-time high of$11,294.5 a ton, after setting a record high on Friday.

The London copper contract was up 0.24% to $11,216 a ton as of 0230 GMT.

The China Smelters Purchase Team (CSPT), a group of the largest Chinese copper smelters, said on Friday that its members have agreed to cut production by more than 10% in 2026 in a bid to combat negative copper concentrate processing fees.

Traders are also positioning themselves after bullish headlines from last week's Asia Copper Week 2025 in Shanghai.

Chile's Codelco, the world's top copper producer, sought a dramatic hike in copper premiums to Chinese buyers, as high as $350 a ton during the week, a level many saw as no longer relevant for Chinese participants, suggesting little spillover into copper supply-demand dynamics locally.

Offers for Codelco's United States clients also saw a surge above $500 a ton, according to sources, participants saw the Codelco premiums as designed for those who have access to the Comex exchange to profit from the Comex-LME arbitrage amid tariff uncertainties.

Rising optimism of an interest rate cut by the Federal Reserve in December also helped copper to set new peaks, as greater economic activity is associated with higher demand for copper.

The U.S. Dollarcontinued to soften, supporting the market by making commodities traded with the greenback cheaper for investors using other currencies.

Among other SHFE base metals, aluminiumrose 1.44%, zincadded 0.78%, nickelwas up 0.26%, tinsurged 2.68%, and leadwas little changed.

Elsewhere among LME metals, aluminiumwas up 0.21%, zincticked 0.13% higher, nickelgained 0.34%, tinrose 1.08%. The London leadalso posted little changed.

Source: TradingView