On Monday, December 29th, as the market anticipates further rate cuts by the Federal Reserve next year, global stock markets continue to wait to reach historic highs at the end of 2025, while the US dollar has been hovering near its lowest level in nearly three months.
The MSCI global stock index remained flat during early European trading, with futures indicating a slight pullback from the historic high set on Wall Street on Friday. The global stock benchmark index has risen by nearly 21% so far this year.
As the year-end approaches, investors continue to anticipate further rate cuts by the United States.
Becky Qin, portfolio manager at Fidelity International, mentioned, “We believe that the risk of runaway inflation is not the base case, so we still think there is room for the Fed to cut rates and that risk assets can still demonstrate considerable resilience.”
On Monday, investors took profits in some precious metals trading, with gold prices falling by 2% to $4,438 per ounce, but still poised to achieve the largest annual gain since 1979, with an increase of nearly 70%.
Silver prices soared past the $80 per ounce mark for the first time amidst intense fluctuations on Monday, then sharply declined to $75.09.
Charu Chanana, Chief Investment Strategist at Saxo Bank, attributed the rise in precious metals prices this year to a combination of rate cut benefits, hedging geopolitical and fiscal uncertainties.
Chanana noted, “Coupled with supply concerns, prices have exhibited a parabolic rise, nearing vertical surges towards the year-end, especially with the surge in silver prices, increasing the risk of intensified price volatility. In the short term, risks mainly come from technical factors and position fluctuations.”
The MSCI Asia Pacific stock index started the final week of the year strong, with stock markets rising by 0.3%. With the market betting on the prospects of artificial intelligence and temporarily setting aside concerns about trade tariffs, most Asian markets recorded double-digit gains in 2025.
South Korea’s composite stock price index rose by 2.2% on Monday, expected to achieve its best annual performance since 1999, as investors diversified AI investments beyond Wall Street, boosting Taiwan’s stock market, which has grown by 25% so far this year.
This week, investors will focus on the release of the latest Federal Reserve meeting minutes on Tuesday.
The US central bank has already lowered the federal funds rate to a range of 3.5% to 3.75% this month, with the money market expecting two more rate cuts by next September, each by 0.25 percentage points.
President Trump is inclined towards lowering borrowing costs.
On Monday, the US dollar remained steady against a basket of major currencies, including the euro and yen, close to its lowest levels since October.
With this news boosting sentiment, the yen strengthened against the dollar by 0.2% to 156.26. Earlier, the summary of the Bank of Japan’s December policy meeting showed that many board members believe it is necessary to further raise rates to curb inflation.
On December 19, the yen fell to 157.78, sparking expectations of intervention by the Bank of Japan.
In the wake of uncertainty surrounding the situation in Ukraine, Eurozone government bond prices rallied in the fixed-income market, with the yield on 10-year German bonds declining by around 2 basis points to approximately 2.85%.
Influenced by stimulus commitments and the strong indication from the European Central Bank that the rate cut cycle is coming to an end, yields on German bonds are expected to rise by approximately 50 basis points before year-end. Benchmark US bond yields fell by 2 basis points, slightly above 4.1%.
Brent crude oil futures prices rose by 2.1% in volatile trading, reaching $61.92 per barrel, after dropping by over 2% on Friday ahead of the meeting between Trump and Zelensky.
The market is assessing whether President Trump can reach an agreement with Ukrainian President Volodymyr Zelensky and ultimately end the war between Ukraine and Russia based on Trump’s comments.
Following the meeting between Trump and Zelensky in Florida, geopolitics became a focal point. Trump described the meeting as “constructive,” but no agreements have been reached on the Ukraine peace issue.
Meanwhile, on Monday, the Chinese military conducted the “Mission of Justice 2025” exercise in the surrounding areas of Taiwan, mobilizing its army, navy, air force, and artillery units. Taiwan has expressed its firm determination to defend its democratic system.
(This article was referenced from Reuters reports)