Morning Brew December 8 2025

Good morning,

We are entering a crucial week for markets as the Federal Open Market Committee (FOMC) prepares for one of its most controversial meetings. While it is almost certain that the Fed will cut rates at this meeting, the outcomes of subsequent meetings are much less predictable.

U.S. indexes have been trading close to new all-time highs, and unless there is a negative surprise, the possibility of ending the year at record levels remains strong. To understand the impact of unexpected Fed decisions, consider what happened in December 2018. The S&P 500, FTSE, Nikkei, and MSCI World are all less than 0.5% away from reaching their all-time highs.

On Friday, the indexes saw modest gains: the Dow and S&P increased by 0.2%, and the Nasdaq by 0.3%. Overall, the week was unspectacular, with the S&P 500 gaining 0.3%, the Dow 0.5%, and the Nasdaq 0.9%.

Silver had a strong day, despite closing lower than its intraday record of above 59. Will it reach 60 before the year ends? On Friday, Silver increased by 2%, while Gold declined by 0.2%, Platinum remained stable, and Bitcoin fell below 90,000 once more. This morning, Silver is at 58.35, Gold is at 4,215, and Bitcoin has risen back to 91,500.

The USD Index closed just below 99, with EUR/USD at 1.1640, GBP/USD at 21.3330, and USD/JPY at 155.30.

EU 10-year yields have been rising, currently at 2.8%, with the next technical resistance level at 3%.

Five-year inflation expectations came in lower on Friday at 3.2%, down from 3.4% previously. One-year expectations are at 4.1%, down from 4.5%.

We are anticipating key decisions from four central banks: the Reserve Bank of Australia, the Bank of Canada, the U.S. Federal Open Market Committee, and the Swiss National Bank. All but the U.S. are expected to leave rates unchanged, with probabilities near certain. The main open question is the division within the Fed and the implications for upcoming meetings.

President Donald Trump stated in a strategic document on Friday that the United States will reaffirm its dominance in the Western Hemisphere, enhance military strength in the Indo-Pacific, and possibly reevaluate its relationship with Europe.

Shares of Warner Bros. Discovery (WBD.O) climbed 6.3% after Netflix agreed to buy its TV, film studios, and streaming division for $72 billion, ending a weeks-long bidding war. Netflix shares closed 2.9% lower, while Paramount Skydance, one of the other bidders for Warner Bros., fell by 9.8%.

China's exports exceeded forecasts in November, driven by a surge in shipments to non-U.S. markets. Imports fell short of expectations, causing the trade balance to surpass 110 billion USD.

Tensions between China and Japan remain elevated as China conducts military drills near Japan.

Thailand announced airstrikes on Cambodia on Monday as fighting broke out in multiple areas along their disputed border.

Monday December 8

China Trade, Germany Industrial Output

Tuesday December 9

Royal Bank of Australia Rate Decision

Wednesday December 10

China CPI & PPI US FOMC Rate Decision, Bank of Canada Rate Decision

Thursday December 11

Swiss National Bank Rate Decision

Friday December 12

Germany Inflation, UK GDP, France CPI