Asia Market Quick Take – December 17, 2025

Key points:

• Macro: Nov jobs reports beats but Oct revised and missed; Unemployment rises to 4.6%
• Equities: Tesla reaches record high; DBS gains on new yuan clearing role
• FX: USD dipped on weak job growth; GBP rose due to strong data
• Commodities: Oil rebounded after Trump’s Venezuela tanker blockade
• Fixed income: 2s30s yield curve spread at 137bps, steepest since late 2021

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Disclaimer: Past performance does not indicate future performance.

Macro:

• November's jobs report showed payroll growth of 64K, beating forecasts, but October's numbers were revised down and reported at -105k, unemployment rose to 4.6%, the highest since 2021. The US unemployment rate rose to 4.6% in November 2025, surpassing the expected 4.4% and reaching its highest since September 2021. Unemployment was 7.8 million, with the participation rate steady at 62.5%. The U-6 unemployment rate also increased due to more involuntary part-time employment.
• US retail sales were flat in October from September 2025, missing the forecast of a 0.1% rise. However, core sales, which exclude certain categories and contribute to GDP, jumped 0.8%, rebounding from a 0.1% dip in September and exceeding the 0.4% expectation.
• Japan's trade balance swung to a surplus of JPY 322.2 billion in November 2025, from a JPY 120.8 billion deficit a year ago, beating forecasts of JPY 71.2 billion. Exports rose 6.1%, driven by strong foreign demand, while imports grew 1.3%, reflecting softer domestic demand and lower energy prices.
• New Zealand's central bank will lower some capital requirements while keeping them above international levels. Major banks will reduce tier 1 capital to 12% from 16%, increase tier 2 capital to 3% from 2%, and maintain 6% internal loss absorbing capacity. Smaller banks' capital requirements will decrease to 14% from 16%.
• The S&P Global US Flash Manufacturing PMI dropped to 51.8 in December 2025, a five-month low, down from 52.2 in November and below the expected 52. Production slowed, new orders fell, and input inventories grew slower. However, employment increased the most since August, and supplier delivery times lengthened significantly.

Equities: 

• US - S&P 500 fell 0.1% and the Dow dropped 0.4% Tuesday, while the Nasdaq gained 0.4%. November payrolls rose 64K, slightly above forecasts, but October was revised sharply lower to -105k and unemployment hit 4.6%, its highest since 2021, signaling a cooling labor market. Retail sales were flat, pointing to weakening demand. Energy led losses as oil slid below $55, pressuring Exxon (-2.6%) and Chevron (-2%). Megacaps were mixed: Alphabet fell 0.5%, Apple and Microsoft were flat, while Nvidia (+0.8%), Meta (+1.5%), Tesla (+3.1%), Broadcom (+0.4%) and Oracle (+2%) lifted the Nasdaq.
• EU - European stocks fell Tuesday, with the STOXX 50 down 0.5% and STOXX 600 off 0.4%, as optimism over Russia–Ukraine peace talks weighed on defense shares. Rheinmetall (-4.6%), Leonardo (-3.9%), BAE Systems (-1.7%) and Thales (-1.6%) led declines. Tech also dragged, with ASML (-2.1%) and SAP (-1.4%) weaker amid softer global growth signals. Luxury outperformed, with LVMH up 1.7% on resilient demand.Flash PMI showed eurozone activity weakening as services cooled and manufacturing deteriorated, led by Germany, while France’s services sector slowed more than expected, signaling a mixed outlook.
• HK - Hang Seng dropped 393 points (1.5%) to 25,217 on Tuesday, hitting a near four-week low as mainland stocks weakened and caution grew ahead of key U.S. data. China’s November data signaled slowing momentum, with industrial output and retail sales disappointing. Property shares led losses after China Vanke failed to secure approval to extend a bond payment, sparking concerns over a prolonged downturn. Tech, consumer, and financial stocks also retreated, while Xiaomi fell 2% and Zijin Gold (-5.9%), Tencent Music (-3.4%), China Hongqiao (-2.9%), and SMIC (-2.2%) lagged.
• SG - Straits Times Index hovered around 4,582 amid global risk-off sentiment and anticipation of key U.S. data releases. DBS reached an intraday high of S$56, while OCBC hit S$19.44, reflecting robust bank performance despite cautious market conditions. DBS rose 28.1% year-to-date and OCBC up 16.5%, with daily gains driven by DBS's new yuan clearing role and attractive dividends. Conversely, UOB traded at S$34.79, declining over 4% YTD due to asset quality concerns. The solid performance of DBS and OCBC helped stabilize STI amid broader market uncertainties.

Earnings this week:

• Wednesday: Micron

FX:

• USD dipped due to weak job growth but rebounded. October job losses were mainly from the shutdown, while November added 64k jobs. Despite a higher unemployment rate, retail sales showed strong spending. DXY fell to 97.87, then rose to about 98.16.
• GBP strengthened against the USD, driven by higher-than-expected October wage growth and positive December Flash PMIs, lifting Cable to 1.3420.
•  European PMIs were mixed, with growth in French manufacturing but declines in Germany and the Eurozone; EURUSD settled at 1.1750 after an initial rise.
• AUDUSD stayed flat due to negative sentiment in Asia, with markets anticipating stable RBA rates in February and potential hikes in May.
• JPY strengthened as USDJPY fell below 155.00, driven by expectations of a BoJ rate hike and narrowing yield differentials between the US and Japan.

Commodities:

• Gold steadied after sluggish US jobs data failed to alter expectations for further rate cuts, rising 0.1% to $4,306.05—near $4,305 and within $80 of October’s $4,381.52 record—as the Fed downplays shutdown‑affected figures; silver dipped 0.1% to $63.70, platinum edged lower, and palladium climbed.
• Oil rebounded from its lowest since 2021 as President Donald Trump ordered a blockade of sanctioned tankers to and from Venezuela, even as signs of a swelling global glut kept pressure on the market; WTI rose above $56 after nearly 6% losses over the past four sessions, while Brent settled just below $59.

Fixed income:

• Treasury futures were choppy after November’s jobs report showed an unexpected rise in unemployment, but yields drifted lower into the US afternoon as curve steepening held, with heavy long‑end options activity, Fed expectations broadly unchanged as swaps price about 60bps of cuts by the end of next year, the 2s30s spread topping 137bps—the steepest since late 2021—and Australian bonds trading in a tight range ahead of the mid‑year fiscal update.

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