Asia Market Quick Take – January 06, 2026

Asia Market Quick Take – January 6, 2026

Key points:

• Macro: US ISM Manufacturing PMI falls to 47.9, lowest since October 2024
• Equities: Dow Jones surge to record high after Chevron +5.3%, Goldman +3.7%
• FX: CAD underperformed amid Venezuela oil market concerns
• Commodities: Gold and oil rally 2.7% and 1.7% respectively
• Fixed income: US Treasuries rose amid heavy new corporate issuance

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US ISM Manufacturing PMI fell to 47.9 in December 2025, the lowest since October 2024, indicating faster contraction in manufacturing. Production and inventories declined, while price pressures remained high. New orders, backlog, and exports improved, and employment contracted less sharply.
• UK mortgage approvals dropped to 64,500 in November 2025, the lowest in five months, due to tax changes and falling house prices. Remortgaging approvals rose to 36,600. The interest rate for new mortgages increased to 4.20%, and for existing mortgages to 3.90%.
• Australia's Services PMI fell to 51.1 in December from 52.8 in November, indicating slower growth. New orders slowed, employment rose, and export demand softened. Business confidence peaked since June, while input and selling price inflation increased.
• Fed's Kashkari noted the cooling job market and high inflation, warning of potential unemployment rate increases. He expects housing services inflation to decline and suggests rates are nearly neutral.

Equities: 

• US - U.S. stocks rallied Monday, led by energy and financials with Dow jumping 1.4% to a record high, while the S&P 500 rose 0.8% and Nasdaq gained 0.9%. Chevron surged 5.3% on expectations of expanded operations in Venezuela, and refiners advanced on prospects of increased heavy crude supply. Banks outperformed, with Goldman +3.7%, Citi +3.9%, and BNY Mellon +3.4%. Broader sentiment remained supported by anticipated Fed rate cuts, with focus turning to Friday’s December jobs report.
• EU - European stocks surged Monday, with tech and manufacturers driving gains. The Eurozone STOXX 50 rose 1.3% to 5,924 and STOXX 600 added 0.9% to 602, both hitting record highs. Defense stocks rallied strongly—Rheinmetall, Leonardo, and Thales jumped 5–10%. Tech led the charge, with ASML up nearly 7% and Infineon gaining 4.5%. The session extended last year’s momentum, supported by optimism around growth and policy stability across Europe’s largest economies.
• HK - Hang Seng closed nearly flat at 26,347 on Monday, erasing early gains as traders booked profits after Friday’s six-week high. Sentiment turned cautious following a private survey showing China’s services growth slowed to a six-month low in December. Producer prices, however, fell for the 38th straight month. Sector moves were muted, with Kuaishou (+11%), China Resources Land (+5%), and SMIC (+1.6%) offsetting declines in Xiaomi (-2.7%) and miners.

Earnings this week:

• Tuesday: AngioDynamics, AAR, and Penguin Solutions.
• Wednesday: Constellation Brands, Jefferies, Albertsons, PriceSmart, Azenta.
• Thursday: TD SYNNEX, Helen of Troy, Acuity Brands, and RPM International, Fast Retailing, Seven & I

FX:

• The Dollar Index dropped as the ISM Manufacturing PMI unexpectedly fell to 47.9, offsetting gains from the US capture of Venezuelan President Maduro, which had initially boosted USD. Focus remains on geopolitical fallout, especially concerning US ties with Colombia and Greenland. DXY hit a high of 98.86 before retreating to 98.27 in APAC trading.
• GBP, NZD, JPY, and AUD advanced against the USD, while EUR and CHF showed modest gains. A metals rally supported NZD and AUD currencies, while Sterling benefited from an unexpected surge in the BoE's Consumer Credit in November, reaching GBP 2.077 billion against expectations of 1.1 billion.
• CAD was the key underperformer, as analysts pointed to Canada's oil market vulnerabilities with the potential re-entry of Venezuela's oil reserves. Observers noted Canada's limited competition for heavy crude and its reliance on US exports, which may face economic pressure if Venezuela's reserves are unlocked, given the US's historic reliance on heavy crude. USDCAD remained firm at approximately 1.3760.

Commodities:

• Oil steadied after its strongest rise in a week as traders weighed Venezuela’s outlook amid lingering glut concerns, with WTI near $58 a barrel after a 1.7% gain in the previous session following the weekend capture of Venezuela’s president by US forces, which heightened geopolitical risk and lifted oil company shares on hopes of an energy-sector revival.
• Gold steadied as traders looked past Venezuelan tensions toward a busy US data slate, hovering near $4,440 an ounce after a 2.7% jump following Nicolás Maduro’s capture amid governance uncertainty after President Donald Trump said the US plans to “run” the country.

Fixed income:

• Treasuries rose on a weaker-than-expected December ISM manufacturing reading and heavy flows tied to the largest daily corporate supply since October, with bullish options positioning for 10-year yields to fall to 4% or below, block buying in five- and 10-year futures adding support, a 20-name investment-grade slate totalling $37.05 billion briefly capping futures gains, money markets pricing two quarter-point Fed cuts in 2026 with about a 30% chance of a third, and Japan’s Ministry of Finance set to auction roughly ¥2.6 trillion of bonds maturing 20 December 2035 later in the day.

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