Asia Market Quick Take – January 02, 2026

Key points:

• Macro: Singapore’s GDP grew 5.7% yoy, strongest since Q3 2024
• Equities: US stocks ended lower on final day of 2025, but post strong annual gains
• FX: USD weakens 8% in 2025
• Commodities: Gold and Silver posts largest yearly gains since 1979
• Fixed income: US Treasuries has best year since 2020

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• Singapore’s economy grew 5.7% year-on-year (est 6.3%) inQ4 2025, the strongest since Q3 2024, and 1.9% quarterly (est 2.7%), following 2.4% growth previously. Overall, GDP rose 4.8% in 2025, up from 4.4% in 2024.
• U.S. initial jobless claims dropped by 16,000 to 199,000 in the week ending December 27, below the expected 220,000 and marking the lowest since January, excluding Thanksgiving. Continuing claims decreased to 1.89 million. Federal employee claims rose slightly to 812 amid the shutdown.
• China's Q3 2025 current account surplus reached a record $198.7 billion, up from $157.4 billion last year. The goods surplus was $269.5 billion, services deficit $49.3 billion, primary income shortfall $29.6 billion, and secondary income surplus $8.1 billion. For the first three quarters, the surplus totaled $492.8 billion.
• President Xi Jinping announced China is on track for its 2025 growth target, with GDP expected to grow 5% this year. Speaking at a political conference, he emphasized resilience and innovation-driven growth, with plans for proactive macroeconomic policies in 2026 to sustain momentum. 
• US decided to trim anti-dumping levies on Italian pasta brandsand also delay tariff increases on some furniture and cabinet imports for 1 year.

Equities:

• US - U.S. stocks closed lower on the final day of 2025 as investors trimmed risk and digested Fed minutes. The S&P 500 fell 0.6%, Nasdaq 0.7%, and Dow 0.4%, extending a mild post-Christmas pullback. Despite late volatility, equities posted strong annual gains: S&P +16.6%, Nasdaq +20.4%, and Dow +13.2%, driven largely by AI-led growth. Fedminutes signaled debate over 2026 rate cuts but maintained an easing bias. Gold and silver volatility reflected year-end rebalancing and cautious positioning into early 2026.
• EU - On the last trading day of 2025, European equities neared record highs, achieving their best annual performance since 2021. The STOXX 50 closed at 5,791 points, up 18%, while the STOXX 600 reached 592 points, rising 17%. Banks led the gains, marking their strongest performance since 1997, followed by the basic resources sector due to higher precious metal prices. Utilities also thrived from increased power demand. Looking ahead, European equities are expected to continue their momentum, driven by investors seeking value beyond US markets amid a weaker dollar, geopolitical tensions, and concerns over a potential AI-driven market bubble.
• HK - Hang Seng Index dropped 224 points, or 0.9%, closing early at 25,630 on the final trading day of 2025 due to New Year preparations. Despite this dip, it saw a nearly 28% annual gain thanks to a strong IPO market, improved U.S.–China trade relations, and supportive fiscal and monetary policies from Beijing. Top performers included China Hongqiao Group, SMIC, and Pop Mart Intl., with increases of 179%, 117%, and 118%, respectively, driven by robust market demand. 

FX:

• USD fell 8% in 2025, marking its worst annual decline since 2017, with further drops expected if new Fed leadership pursues rate cuts. Divergent Fed policies have reduced the currency's appeal, boosting bearish bets. Speculation surrounds Jerome Powell's successor as Kevin Hassett emerges as a frontrunner for the role.

Commodities:

• Gold and silver ended 2025 with a decline on the final trading day but posted their largest annual gains since 1979 amid geopolitical risks and U.S. Federal Reserve rate cuts. Gold increased 63%, surpassing historical inflation-adjusted peaks, while silver rose over 140% due to both speculative buying and industrial demand. CME Group twice raised margin requirements due to volatility, impacting prices.
• Oil steadied on the first trading day of 2026 following its largest annual decline in 2025 since 2020. WTI traded above $57 a barrel, while Brent closed below $61. An upcoming OPEC+ meeting on January 4 plans tomaintain a halt on supply increases. Geopolitical tensions, like U.S. sanctions on Venezuelan oil and Russia-Ukraine conflicts, are affecting prices. Despite short-term support, oversupply concernsremain.

Fixed income:

• US Treasuries had their strongest returns since 2020 but fell on Wednesday as the 10-year yield rose to 4.17%.

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