Daily Market Outlook, December 8, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Global markets climbed on Monday as investors geared up for a busy week of central bank meetings, with the Federal Reserve widely anticipated to cut interest rates. MSCI's Asia-Pacific equity index edged up 0.3%, with the tech sector leading the charge. U.S. futures also gained, with S&P 500 futures up 0.2% and Nasdaq 100 futures rising 0.3%. Meanwhile, European stock futures remained flat. In mainland China, equities outperformed, buoyed by government initiatives to attract investment into the stock market and stronger-than-expected export data. Over in Japan, the government revealed on Monday that the economy shrank during the third quarter, based on revised data. This came as tensions with China appeared to escalate over the weekend. While the contraction adds complexity to the Bank of Japan's policy meeting set for next week, it’s unlikely to derail its steady path of rate hikes. Defense stocks in both Japan and China saw gains on Monday as diplomatic tensions between the two nations intensified. Over the weekend, reports emerged that Chinese fighter jets had locked radar systems on Japanese military aircraft for the first time, escalating the ongoing conflict. Elsewhere, the U.S. Dollar index slipped slightly on Monday, while Treasury yields held steady. Gold prices surged as China's central bank increased its gold reserves for the 13th consecutive month in November, while silver hovered near record levels. Oil prices remained steady as traders monitored India's continued purchases of Russian oil and Ukraine's strikes on Russian energy infrastructure.
Domestically, the latest KPMG & REC report on jobs for the UK in November paints a mixed picture of the labour market. While new employment levels continue to decline, salaries are on the rise. The index for permanent job placements slightly improved to 45.5 in November, up from 45.2 in October, but it remains well below the 50 threshold that signals stable hiring activity. On the other hand, permanent salaries saw a notable increase, climbing to 52.7 from October's 50.8. This trend aligns closely with findings from the Bank of England’s Decision Maker Panel survey last week, which also highlighted growing pay pressures alongside a sharper drop in employment. As with much of the UK’s November data, pre-Budget uncertainty likely played a role, particularly in dampening hiring confidence. However, the rise in wages seems less tied to this uncertainty and more reflective of broader market dynamics. With wages under upward pressure, the market’s ~90% expectation of a Bank Rate cut next week might still materialize, though any decision could come with a narrow vote margin, potentially as close as 5-4.
Looking ahead domestically the real action comes on Friday with the release of the monthly UK GDP, output, and trade reports, offering substantial insights. Reports like Thursday’s RICS housing data and BRC shop sales figures are unlikely to move the needle much. Over in the Eurozone, the week is relatively quiet, with the Sentix survey on Monday being the key aggregate data release.
The US economic calendar is also light. On Tuesday, we’ll see the October JOLTS report and Q3 productivity data, followed by Wednesday’s Q3 Employment Cost Index (ECI). Thursday brings jobless claims and the Q3 flow of funds, rounding out a modest slate of updates. On the central banking front, however, there’s plenty to watch. In the UK, Bank of England (BoE) members will appear before the Treasury Select Committee on Tuesday to discuss the Monetary Policy Report (MPR) and likely share thoughts on the recent budget and its implications. Governor Andrew Bailey is expected to miss this session due to illness, but Lombardelli, Ramsden, Dhingra, and Mann will take the lead. Meanwhile, Wednesday’s FOMC meeting in the US is expected to deliver a 25bps rate cut as the Fed continues to prioritize labor market risks over inflation. While there may be a couple of dissenting voices, Chair Powell is likely to signal a pause after three consecutive cuts, emphasizing the need to assess their impact. The updated Summary of Economic Projections will also provide insights into how policymakers view the balance of risks and the potential for further rate adjustments next year.
Elsewhere, rate decisions are due from the Reserve Bank of Australia (RBA) on Tuesday, the Bank of Canada on Wednesday, and the Swiss National Bank (SNB) on Thursday. While all are expected to hold rates steady, their guidance will be crucial as each faces unique challenges. Additionally, BoE speakers Taylor and Lombardelli are scheduled for Monday, with Bailey set to speak on Thursday. Finally, the European Central Bank (ECB) enters its quiet period starting Thursday, wrapping up a week packed with central bank activity.
Overnight Headlines
China Exports Return To Growth As Trade Surplus Tops $1T
China Foreign Reserves Rise In November
China’s Steel Surplus ‘Not Easy To Tackle,’ Industry Group Warns
Japan Confirms Deeper GDP Decline, Backing Stimulus Package
Ten-Year JGB Yield Declines After Lacklustre GDP Data
Dollar-Yen Bulls Hold Their Ground Despite Ueda’s Rate-Hike Hint
RBA Set To Hold Rates Again As Markets Watch For Hawkish Shift
Bond Traders Defy The Fed And Spark Heated Debate On Wall Street
Morgan Stanley Says It Jumped The Gun On December Fed Rate Call
Fed Expected To Cut Rates Despite Deep Divisions Over US Outlook
Trump’s Top Advisers Press Him To Focus On High Prices
Trump Voices Disappointment In Zelenskiy As Peace Talks Drag
European Allies To Rally Support For Ukraine As US Pressure Mounts
OpenAI Goes From Stock-Market Saviour To Liability As AI Risks Mount
IBM Nears Roughly $11B Deal For Confluent
Silver, Copper Eclipse Gold As Top Metals Bets On Supply Fears
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.1575 (893M), 1.1590-00 (517M), 1.1615-25 (968M)
1.1640-50 (1.5BLN), 1.1660-70 (1.4BLN), 1.1680-85 (401M)
1.1725 (331M), 1.1795-00 (2.14BLN)
USD/JPY: 154.00 (505M), 154.20 (275M), 154.50 (284M)
155.00 (1.74BLN), 155.65-71 (360M), 156.00-10 (1.9BLN)
EUR/CHF: 0.9400 (200M)
GBP/USD: 1.3050 (740M), 1.3100 (327M), 1.3450 (200M), 1.3500 (500M)
AUD/USD: 0.6550-60 (528M), 0.6595-00 (480M), 0.6665 ((302M)
NZD/USD: 0.5670 (453M), 0.5730 (926M), 0.5770-75 (370M)
0.5785-00 (580M). AUD/NZD: 1.1475-80 (321M),
USD/CAD: 1.3870 (282M), 1.3900-10 (951M), 1.3930-40 (1.7BLN)
1.3945-55 (370M)
USD/ZAR: 17.00 (230M)
CFTC Positions as of the Week Ending 7/10/25
CFTC FX positioning data backlog clears January 20. Upcoming data on December 2, 5, 9, 12, 16, 19, 23, 30, followed by January 6, 9, 13, 16, 20. Normal service resumes January 23.
CFTC Positions (Week of October 28th):
- S&P 500 CME net short: +21,626 contracts (458,504 total)
- S&P 500 CME net long: +7,029 contracts (906,817 total)
- CBOT US 5-year Treasury net short: +130,976 contracts (2,404,926 total)
- CBOT US 10-year Treasury net short: +64,407 contracts (910,930 total)
- CBOT US 2-year Treasury net short: +34,053 contracts (1,312,475 total)
- CBOT US UltraBond Treasury net short: -2,057 contracts (297,053 total)
- CBOT US Treasury bonds net short: -12,678 contracts (15,103 total)
- Bitcoin net short: -543 contracts
- Swiss franc net short: -27,858 contracts
- British pound net short: -20,262 contracts
- Euro net long: 107,333 contracts
- Japanese yen net long: 68,115 contracts.
Technical & Trade Views
SP500
Daily VWAP Bullish
Weekly VWAP Bullish
Above 6854 Target 6920
Below 6834 Target 6770
EURUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 1.1647 Target 1.17
Below 1.1590 Target 1.1550
GBPUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 1.33 Target 1.3435
Below 1.3270 Target 1.3228
USDJPY
Daily VWAP Bearish
Weekly VWAP Bullish
Above 155.69 Target 157.79
Below 155.36 Target 154.59
XAUUSD
Daily VWAP Bearish
Weekly VWAP Bullish
Above 4274 Target 4319
Below 4215 Target 4151
BTCUSD
Daily VWAP Bullish
Weekly VWAP Bearish
Above 90.8k Target 95.7k
Below 89.4k Target 86.2k
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Past performance is not indicative of future results.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!