Market Quick Take – 18 December 2025

Market drivers and catalysts

• Equities: Global equities slide as US and Europe retreat on AI worries, while Hong Kong and mainland China rebound
• Volatility: VIX higher, CPI and central banks in focus
• Digital assets: BTC steady, ETH softer, IBIT inflows vs ETHA outflows, regulatory tone easing
• Currencies: USD chops back to neutral, JPY remains weak ahead of key Bank of Japan meeting Friday.
• Commodities: Platinum at 17-year high on hard-asset demand; wheat nears multi-year lows; Brent rebounds above USD 60 on supply risks
• Fixed Income: US Treasuries steady, front end yield lower on weak risk sentiment. JGB’s hold breath for Bank of Japan meeting Friday.
• Macro events: Sweden’s Riksbank, Norway’s Norges Bank, ECB, US Nov. CPI, Japan CPI (early Friday) Bank of Japan (Friday)

Macro headlines

• The Fed's Waller, who President Trump recently interviewed for the position as next Fed Chair, sees a "very soft" labor market but is optimistic about 2026. Inflation expectations are stable, with rates above target but expected to decrease. He sees no rush to cut rates, despite being 50-100bps over neutral. The Fed's Bostic expects solid GDP growth next year, with employment trends uncertain.
• Business services and manufacturing expanded, while information media and telecommunications declined. Exports and investments rose, with household spending up slightly. GDP increased 1.3% year-on-year after a Q2 drop.
• Euro Area's annual core inflation held at 2.4% in November 2025, consistent with estimates and unchanged for three months. Since May's near four-year low of 2.3%, it has stabilized, suggesting no further ECB rate cuts. Monthly core prices decreased by 0.5%.
• UK inflation fell to 3.2% year-on-year in November 2025 for both headline and core inflation, the lowest in eight months and both were below expectations for 3.5% and 3.4%, respectively. Significant price drops occurred in food, especially bread and cereals, while alcohol and tobacco reached their lowest since December 2022. Transport, housing, and utility costs decreased, and services inflation eased. Clothing prices fell, leading to a 0.2% month-on-month CPI decrease.

Macro calendar highlights (times in GMT)

0830 – Sweden Riksbank Rate Decision (exp. Unch.)
0900 – Norway Rate Decision (exp. Unch.)
1200 – Bank of England Rate Decision (exp. -0,25%)
1315 – ECB Rate Decision (exp. Unch.)
1330 – US Nov CPI
1330 – US Weekly Initial Jobless Claims
1330 – US Dec. Philly Fed Survey
1530 – EIA's Natural Gas Storage Change
2330 – Japan Nov. National CPI
Friday (0200-0400) – Bank of Japan Rate Decision

Earnings events

• Today: Accenture, Nike, Cintas, Fedex, Heico, Darden Restaurants
• Friday: Paychex

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• USA: The S&P 500 fell 1.2% to 6,721.4 on Wednesday, the Nasdaq slid 1.9%, and the Dow Jones dropped 0.5% to 47,886 as the tech selloff deepened. Artificial intelligence (AI) leaders drove the retreat after fresh worries about how much spending is needed to earn a return: Oracle sank 5.4% on talk of a stalled data center project, while Nvidia fell 3.8%. Micron rises about 8.1% after hours after it beats estimates and guides well above forecasts, as AI data-centre demand keeps memory pricing and volumes firm. Energy was the rare bright spot as oil jumped on Venezuela headlines, lifting ConocoPhillips 4.6% and Devon Energy 5.3%.
• Europe: Europe ends mixed on Wednesday: the Euro STOXX 50 fell 0.6%, while the STOXX Europe 600 finished flat at 579.8 as losses in big industrial and tech names offset energy and defence. ASML dropped 3.8% after reports China is testing an extreme ultraviolet (EUV) lithography prototype, a reminder that export limits can speed up local alternatives. Schneider Electric fell 3.5% and Siemens slipped 2% as investors trimmed exposure to big investment themes, even while Rheinmetall rose 1.7% on news Germany approved more than €50 billion of defence contracts. Today’s focus shifts to rate decisions from the European Central Bank (ECB) and the Bank of England, which could set the tone for banks, builders, and other economy-sensitive shares.
• Asia: Hong Kong rebounds on Wednesday: the Hang Seng rose 0.9% to 25,468.8 and the Hang Seng Tech Index gained 1.0% to 5,457.9 as buyers stepped in after two rough sessions. Mainland China joined the bounce, with the Shanghai Composite up 1.2% to 3,870.3 and the CSI 300 up 1.8% to 4,579.9 as tech shares steadied and investors leaned on hopes for more pro-growth policy. Pop Mart jumped 3.7%, Trip.com added 2.6%, and SMIC rose 2.4%, while MetaX Integrated Circuits’ debut in Shanghai surged about 700% at one point, a reminder that speculation can return fast. Next up, markets watch Hong Kong inflation data and any fresh signals on China’s 2026 policy agenda.

Volatility

• Market volatility edged higher as investors positioned cautiously ahead of today’s crucial inflation and rate decisions. The VIX rose to 17.62 (+6.9%), while short-term gauges such as VIX1D jumped 41.7% as traders braced for CPI data and central bank announcements from the ECB, BoE, and BoJ. The S&P 500 fell 1.16% to 6,721, with downside hedging activity increasing through deep ITM puts and index protection. For long-term investors, today’s cluster of macro events may dictate whether volatility remains elevated into year-end or fades back toward calmer ranges.
• SPX expected move (options-implied, this week): about ±76 points (±1.1%) through Friday’s expiry.
• 0DTE skew indicator (today’s expiry): pricing remains slightly inverted, with calls trading richer than puts, signalling residual demand for upside exposure after the recent selloff.

Digital Assets

• Crypto markets were broadly stable despite mixed sentiment. Bitcoin trades near $86.8k (+0.6%), Ether at $2.84k (+0.1%), while Solana ($123) and XRP ($1.84) softened slightly. Spot Bitcoin ETFs saw continued inflows, led by IBIT +$111m, helping offset weakness in Ether ETFs (ETHA -$19.6m). This divergence underscores institutional preference for Bitcoin over Ether, even as BlackRock’s filings show IBIT’s AUM near $66.7bn vs ETHA’s $10.1bn (as of 17 Dec).
• Altcoins remain muted ahead of the U.S. CPI report, while sentiment is supported by the Federal Reserve’s removal of outdated crypto guidance, viewed as a small but symbolic regulatory tailwind.

Fixed Income

• US Treasuries have offered modest safe haven appeal amidst widespread weakness in risk sentiment yesterday. The benchmark 2-year treasury yield has edged a couple of basis points lower to below 3.47%, less than five basis points from the cycle low daily close from October near 3.425%. The benchmark 10-year treasury yield ended the day near 4.14% after a pull higher earlier in the session on Wednesday.
• Japanese government bonds were quiet with yields near the top of the range all across the curve ahead of the national CPI release for Japan for November early in Friday’s Tokyo session and ahead of what is seen as a pivotal Bank of Japan meeting, which is expected to deliver the first rate hike since January.

Commodities

• Platinum extended its steep rally to a 17-year high near USD 2,000, rising more than 3% during Asian trading amid heavy activity in the recently launched Chinese futures contract, lifting its YTD gain to 121%—not far behind silver, which is holding steady near record highs. Together with gold, these semi-precious metals, supported by tight supply and robust demand, have benefited greatly in 2025 from rising demand for hard assets in a world marked by fragmentation, fiscal strain, Tariff risks tightening supply outside the US, and geopolitical uncertainty.
• CBOT wheat is reversing toward the multi-year low near USD 5, pressured by reports of bumper harvests in Argentina and Australia that continue to swell global supplies. Adding to the pressure, China has booked its first Argentine cargo in decades, attracted by prices that remain competitive relative to US origin. Low volatility, combined with a one-year contango of around 13%, has made wheat a favored short among leveraged funds, which have maintained a net-short position almost continuously since July 2022.
• Oil extended its rebound from a four-and-a-half-year low, with Brent moving back above USD 60, as markets weighed US plans for fresh sanctions on Russia and a blockade of Venezuelan exports—raising supply-side risks—against an otherwise bearish fundamental backdrop. With liquidity thinning ahead of the festive season, price moves may become more exaggerated, potentially lifting volatility.

Currencies

• The major currencies are generally locked in tight ranges with the exception of the JPY as the USD comeback from its sell-off after weak data on Tuesday faded, keeping EURUSD near the 1.1750 centre point of recent price action as of early European hours Thursday.
• The Japanese yen has broadly weakened again after mounting a half-hearted rally on weak US data, with USDJPY pulling as high as 155.89 in Asia’s Thursday session and EURJPY pulling back close to its record high above 183.00.
• Sterling weakened Wednesday in the wake of surprisingly soft CPI numbers and ahead of today’s (Thursday’s) Bank of England meeting, which is expected to deliver a 25 basis point cut, while the market awaits guidance on the scale of further easing as the voting committee is rather evenly divided between hawks and doves. The EURGBP level of 0.8800 is important resistance should it fall.

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