Asia Market Quick Take – December 16, 2025

FX:

• The dollar gauge weakened on Monday as traders awaited delayed US payrolls to guide expectations for the Federal Reserve’s rate path, while the yen outperformed G‑10 peers on bets the Bank of Japan will hike this week. Governor Kazuo Ueda is widely expected to raise the BoJ’s key rate to its highest in three decades on Friday; beyond that, the outlook is murkier as the government’s need for cheap financing clashes with a weakening yen that is lifting import prices. In the final full trading week of 2025, multiple central banks meet, including the BoE, ECB and BoJ, with Sweden and Norway also due; in emerging markets, Chile, Colombia, Indonesia and Mexico are among those weighing rate changes.
• USDJPY fell 0.4% to155.23 as the BoJ’s Tankan showed large‑manufacturer confidence at a four‑year high, reinforcing hike expectations.
• USDCAD was little changed near 1.3773 after data showed headline inflation at 2.2% year on year in November, matching October.
• USDSEK rose 0.2% to 9.2920, with the krona poised for a strong 2026 after leading G‑10 gains this year amid an improving domestic economy.
• EURUSD advanced 0.1% to 1.1750, GBPUSD was little changed at 1.3372, NZDUSD fell 0.4% to 0.5782 after the RBNZ said financial conditions have tightened beyond what its central OCR projection implies, and AUDUSD slipped 0.2% to 0.6639.

Commodities:

• WTI fell below $57 a barrel—its lowest since February 2021—in thin pre-holiday trade as equities wavered, with renewed optimism over a Ukraine peace deal, after the US offered stronger security guarantees to Kyiv in a move seen as pressuring President Zelenskiy on territory, offset by mixed Chinese data; any settlement could ease curbs on Russian oil flows in an already well-supplied market.
• Gold steadied after five days of gains as investors await US data for clues on the Fed’s appetite for further cuts amid conflicting 2026 signals, with bullion little changed around $4,309—within $80 of October’s $4,381.52 record—while silver held at $64.09 and platinum and palladium inched higher.

Fixed income:

• US Treasuries ended narrowly mixed with a steeper curve, as US‑morning block trades in 2‑year and Ultra Bond futures pushed the 2s30s spread to nearly 135bps—the steepest since November 2021—while options demand favoured calls betting the 10‑year yield moves around 4%. European and UK bonds bull‑flattened with the long end outperforming—UK 30‑year yields fell 3bps to 5.24%, French and Italian 30‑year yields slipped 2bps to 4.44% and 4.40%—as focus shifts to UK labour data and a 2031 gilt sale, euro‑area PMIs and Germany’s ZEW.

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