Year: 2025

Australian consumer confidence fell sharply in December, reversing the tentative improvement seen the previous month, as renewed concerns over inflation and interest rates weighed on household sentiment, according to the latest Westpac-Melbourne Institute survey.

The headline Consumer Sentiment Index fell 9.0% to 94.5, unwinding much of November’s 12.8% surge and pushing the index back below the neutral 100 level, signalling that pessimists once again outnumber optimists. While confidence has improved materially from the deep troughs of 2024, the latest reading underscores the fragility of sentiment and the difficulty in sustaining a move into outright optimism.

The December pullback was broad-based. Views on the economic outlook and family finances deteriorated, while expectations around mortgage rates turned sharply more negative, highlighting the sensitivity of households to inflation and monetary policy developments. Homebuyer sentiment also weakened, with expectations for house price gains pared back, suggesting higher borrowing costs continue to constrain housing-related confidence.

The survey’s quarterly news recall questions shed further light on the drivers behind the decline. Inflation remained the most frequently recalled topic, with the tone decisively negative. Around 78% of respondents viewed inflation-related news as unfavourable, following upside surprises in Q3 inflation data and a strong initial read from the full monthly CPI in October.

Interest rate news also weighed more heavily on sentiment. 64% of respondents assessed coverage as unfavourable, a marked increase from September and June, reflecting growing concern that rates may remain higher for longer. News related to domestic economic conditions and employment was similarly viewed more negatively than three months earlier.

In contrast, international developments played a smaller role. Recall of global news fell to its lowest level this year, while the tone improved to its least unfavourable since June, partly reflecting easing trade tensions among Australia’s major trading partners.

Despite the overall deterioration, consumers remained broadly unfazed about labour market prospects, suggesting that employment stability continues to provide a partial buffer against cost-of-living pressures. Overall, the survey points to an Australian consumer that is no longer deeply pessimistic, but still cautious and highly sensitive to inflation and interest rate risks heading into 2026.

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The sharp pullback in consumer sentiment is mildly negative for the Australian dollar at the margin, reinforcing expectations that domestic demand will remain constrained into 2026. For rates, the survey supports a cautious RBA stance, with weaker household confidence playing off against offsetting inflation risks, limiting the urgency for further tightening. As a result, AUD is likely to remain more sensitive to global drivers, particularly U.S. rates, risk sentiment and China-related news, than to domestic data in the near term, while front-end rate pricing should stay anchored around a prolonged hold scenario.

The Reserve Bank of Australia does not meet again until 2-3 February next year, with expectations for rate hikes next year firming up somewhat:

• Citi forecasts 2 RBA rate hikes in 2026, February followed by May, as inflation risks rise

This article was written by Eamonn Sheridan at investinglive.com.

The euro could be poised for further gains in the near term if European Central Bank President Christine Lagarde refrains from pushing back forcefully against market pricing for higher interest rates at this week’s policy meeting, according to Morgan Stanley.

In a note, the bank’s FX strategists said the absence of clear resistance from ECB officials to recent rate-rise speculation has heightened the risk around Thursday’s meeting. Markets have increasingly questioned whether policy settings are restrictive enough, particularly as euro-area inflation proves more resilient and growth holds up better than expected.

Morgan Stanley argued that if Lagarde avoids leaning decisively against expectations for higher rates, the euro could strengthen further, especially if the ECB communication shift coincides with softer U.S. nonfarm payrolls data. A weaker U.S. labour print would reinforce expectations that the Federal Reserve ease further, adding downside pressure to the dollar.

From a technical perspective, the bank sees scope for the euro to break above key resistance levels. A sustained move above $1.1920 would open the path toward $1.20, a level not seen since earlier phases of the post-pandemic recovery. Broader dollar weakness could extend the rally further, even if the ECB ultimately delivers rate cuts later in the cycle.

Looking beyond the near term, Morgan Stanley’s broader framework suggests a more constructive medium-term outlook for the single currency. The bank does not view an “ECB on hold” scenario as its base case and continues to expect 50 basis points of rate cuts, though it argues that euro appreciation can still occur in that environment if U.S. rates, risk premia and global capital flows evolve in the euro’s favour.

In a more bullish scenario, Morgan Stanley said a combination of shifting U.S. rate expectations, declining dollar risk premia and stabilising European growth dynamics could ultimately push the euro toward $1.30 over the longer term. While that outcome would require sustained dollar weakness and favourable global conditions, the strategists see euro downside risks as increasingly limited relative to upside potential.

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The US jobs data, October NFP is due at 1330 GMT / 0830 US Eastern time today, Tuesday, December 16, 2025.

The ECB policy announcement is due on Thursday:

• statement at 1315 GMT/ 0815 US Eastern time
• Lagarde speaks a half hour later

This article was written by Eamonn Sheridan at investinglive.com.

Australia Westpac Consumer Confidence increased to 94.5% in December from previous 12.8%

The USD/JPY pair loses traction to around 155.10 during the early Asian session on Tuesday.  The Japanese Yen (JPY) edges higher against the US Dollar (USD) amid the expectation that the Bank of Japan (BoJ) will raise interest rates at the upcoming policy meeting on Friday.

Slop refers to the low-quality content created by artificial intelligence that’s showing up across social media.

Nasdaq is preparing to take a major step toward round-the-clock equity trading, as Wall Street accelerates plans to meet surging global demand for U.S. stocks, according to a Reuters exclusive.

The exchange operator said it will submit paperwork to the U.S. Securities and Exchange Commission seeking approval to extend weekday trading hours to 23 hours a day, five days a week. The move would mark Nasdaq’s first formal step toward near-continuous trading, with the exchange targeting a launch in the second half of 2026, following earlier discussions with regulators.

• Nasdaq’s proposal would expand trading from the current 16 hours to a 23-hour structure, split into two sessions. The day session would run from 4 a.m. to 8 p.m. Eastern time, incorporating pre-market, regular trading hours and post-market activity, including the traditional opening and closing bells.
• A night session would then operate from 9 p.m. to 4 a.m., following a one-hour break for maintenance and clearing. Under the plan, trades executed late at night would be recorded as next-day activity, and the trading week would begin on Sunday evening.

The initiative comes as rival exchanges, including the New York Stock Exchange and Cboe Global Markets, have also announced plans to move toward round-the-clock trading. Proponents argue that extended hours would allow investors, particularly those outside the U.S., to respond more quickly to geopolitical events, macroeconomic developments and earnings news that occur outside standard U.S. market hours.

Nasdaq executives said demand for overnight trading has already surged, with investors increasingly using alternative trading systems and off-exchange venues to access U.S. equities. However, major Wall Street banks have expressed caution, warning that lower liquidity, higher volatility and uncertain returns could limit the benefits of nonstop trading.

The success of Nasdaq’s plan will also depend on infrastructure upgrades, including enhancements to the securities information processor and the rollout of 24/7 clearing by the Depository Trust and Clearing Corporation, expected by the end of 2026

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If you are tempted to trade 23/5 … while extended trading hours could boost global participation in U.S. equities, the obvious risks include thinner liquidity and higher volatility during overnight sessions, potentially reshaping intraday pricing dynamics.

This article was written by Eamonn Sheridan at investinglive.com.

Goldman Sachs has raised its 2026 copper price forecast, citing a lower likelihood that the United States will impose refined copper tariffs in the first half of the year, as affordability concerns take precedence despite ongoing supply tightness.

In a note published Monday, the investment bank lifted its 2026 average price forecast to US$11,400 per metric ton, up from US$10,650. Goldman said policymakers appear increasingly sensitive to the inflationary impact of tariffs, reducing the odds of near-term implementation even as copper prices trade at elevated levels.

While the US excluded refined copper from the 50% import tariffs introduced in August, the issue remains under active review, keeping policy risk elevated. Goldman estimates a 55% probability that the Trump administration announces a 15% tariff on copper imports in the first half of 2026, with implementation expected in 2027 and a potential increase to 30% in 2028. The bank said expectations of future tariffs are likely to keep US copper prices trading at a premium to the London Metal Exchange benchmark, encouraging further stockpiling and tightening supply in ex-US markets — now a key driver of global pricing dynamics.

Goldman added that structural forces, including stockpiling and trade policy uncertainty, continue to underpin prices.

Despite the higher 2026 forecast, Goldman left its 2027 price projection unchanged at US$10,750 per ton, anticipating that LME prices would retreat once tariffs are enacted and global markets rebalance. The bank also raised its forecast for the 2026 global copper surplus to 300,000 tons from 160,000 tons, reflecting stronger supply growth further out.

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The forecast upgrade supports near-term copper prices and miners. While copper prices jumped to a record high late last week (Friday), Goldman’s unchanged 2027 view highlights downside risks once tariffs distort global flows and surplus supply builds. For the near-term, though, tight supply is an underpinning factor.

This article was written by Eamonn Sheridan at investinglive.com.

Australia S&P Global Manufacturing PMI climbed from previous 51.6 to 52.2 in December

The preliminary reading of Australia’s S&P Global Manufacturing Purchasing Managers Index (PMI) came in at 52.2 in December versus 51.6 prior, the latest data published by S&P Global showed on Friday.

EUR/USD holds firms above the 1.1700 threshold on Monday as the US Dollar weakens while investors wait for the latest Nonfarm Payrolls report on Tuesday. At the time of writing, the pair trades at 1.1739 unchanged.