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Holiday-thinned liquidity is shaping price action into Christmas Day, with FX led by broad USD softness, precious metals extending a sharp upside move, and oil holding gains on geopolitics despite light volumes.
FX: USD stays on the back foot; JPY intervention risk remains a key tail risk
The dollar remained under pressure with investors still pricing roughly two Fed cuts in 2026, and the DXY around 97.767 (a multi-week low) with an annual decline of about 9.9% cited in the update. pasted
The euro traded near $1.1806, while AUD and NZD firmed toward $0.6710 and $0.58475, respectively; sterling hovered near $1.3531 as markets continue to price at least one BoE cut in 1H26.
Into year-end, USD price action is also being framed by “risk premium” commentary tied to confidence and policy expectations.
In Japan, traders stayed alert to potential yen-buying intervention after warnings from Finance Minister Satsuki Katayama; USD/JPY was cited around 155.60.
Japan: budget headlines add to duration sensitivity
Japan’s draft budget framework pointed to new bond issuance of about 29.6 trillion yen (~$189.55B) for FY2026 and a total budget size around 122.3 trillion yen, keeping focus on supply and long-end yields; the 30-year JGB yield was cited near 3.45%.
Metals: gold breaks above $4,500; silver and platinum are also at records
Spot gold traded around $4,495/oz after printing a record near $4,525, with futures also at record territory; silver ~$72.16 after touching $72.70, and platinum ~$2,333 after peaking near $2,377 (palladium near $1,916).
The narrative cited includes hedging demand amid geopolitical/trade risks, as well as expectations for lower U.S. rates, with thin holiday liquidity amplifying market moves.
Energy: oil holds gains on Venezuela risk premium; inventories a cross-current
Brent and WTI were referenced near $62.42 and $58.42, respectively, supported by supply-disruption risk (Venezuela) and a solid U.S. Q3 GDP print of 4.3% annualized. pasted
API data showed U.S. crude stockpiles at ~2.4 million barrels (week ended Dec. 19), while markets awaited official confirmation amid holiday-delayed scheduling.
Equities: Asia muted; U.S. closed for Christmas Day after a record S&P 500 close
Asian equities were broadly range-bound in thin year-end trading, while the S&P 500 was cited as closing at a fresh record, and futures were little changed; U.S. exchanges were set to be closed on Thursday for Christmas Day.
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