Global financial markets closed the week from Monday through yesterday on a cautiously stable footing, as investors balanced central-bank expectations, resilient US data, and uneven signals from Europe, Asia, and emerging markets. While volatility remained contained, conviction was limited, with most asset classes ending the period modestly changed rather than decisively higher or lower.
Equities: gains capped by policy caution
Global equity markets opened the week with mild optimism, driven by hopes that the major central banks are approaching the end of their tightening cycles. US equities set the tone early, supported by solid corporate earnings updates and continued strength in consumer-related sectors. However, gains faded as the week progressed, with investors increasingly reluctant to push valuations higher ahead of clearer guidance from the Federal Reserve.
European markets tracked a similar pattern. Early advances in industrials and financials were offset later in the week by renewed concerns over sluggish growth in Germany and France. UK equities were relatively resilient, aided by strength in energy and defensive stocks, though broader indices remained range-bound.
Asian markets delivered a mixed performance. Japanese equities continued to outperform, supported by a weaker yen and improving corporate governance trends. In contrast, Chinese stocks remained under pressure despite selective policy support, with property-sector stress and subdued domestic demand weighing on sentiment across the region.
Fixed income: yields stabilise after recent moves
Bond markets experienced a calmer week following recent volatility. US Treasury yields fluctuated within a narrow range as investors reassessed the likelihood and timing of future rate cuts. Strong labour-market data reduced expectations of aggressive easing, while softer inflation components helped anchor yields from rising further.
European government bonds largely mirrored US movements, with modest declines in yields mid-week before stabilising. Peripheral euro-zone debt remained well supported, reflecting confidence that the European Central Bank will proceed cautiously and avoid policy surprises.
Currencies: dollar firm, but not dominant
In foreign exchange markets, the US dollar remained broadly firm but lacked the momentum seen earlier in the quarter. The euro traded sideways, constrained by weak growth data but supported by expectations that ECB policy will remain restrictive for longer than previously anticipated. Sterling held steady, benefiting from relatively stable UK inflation expectations.
In emerging markets, currency performance diverged. Latin American currencies generally held up well on attractive yield differentials, while several Asian currencies weakened slightly amid concerns over Chinese growth and regional trade demand.
Commodities: energy up, metals mixed
Oil prices edged higher over the course of the week, supported by supply discipline from major producers and ongoing geopolitical risks. Industrial metals delivered a mixed performance, with copper steady but iron ore softer on concerns about Chinese construction activity. Gold traded sideways, reflecting the balance between geopolitical uncertainty and stable real yields.
Outlook: data-driven markets ahead
As markets head into the next trading week, focus is expected to remain firmly on economic data and central-bank communication. Investors appear prepared to react quickly to surprises, but for now, global markets continue to signal caution rather than conviction, waiting for clearer confirmation of the next phase in the monetary-policy cycle.
Newshub Editorial in the Global Markets – 12 December 2025
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