Daily Market Outlook, December 16, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Stocks declined while the Dollar held steady at two-month lows as investors scaled back on risk ahead of key US economic reports that might signal the future of interest rates. Asian stocks dropped by 1.5%, and futures indicated a third consecutive day of losses for the S&P 500 as traders exercised caution before the November US jobs report on Tuesday, which is expected to show a weakening labour market. Chinese stocks fell to significant negative technical levels due to diminishing technological advantages and rising concerns about economic growth. European stocks were also set for a bleak start. Bitcoin rebounded, trading above $86,000. Oil prices remained close to their lowest since 2021 as traders evaluated the potential for a truce in Ukraine, while gold prices decreased after five days of gains. These fluctuations reflected a growing sense of unease in the closing weeks of a year that began with April's market lows, triggered by record-high US tariffs that unsettled investors, followed by a robust AI-driven recovery and easing from the Fed. With a series of critical economic data set to be released this week, investors will gain clarity on whether this trend can sustain itself. In Asia, currencies were also in the spotlight, with the Yen strengthening against the Dollar, trading below 155 in anticipation of the BoJ's expected decision to raise its benchmark rate to the highest in three decades on Friday. The Indian rupee has hit record lows, and more policymakers are calling for a stronger Yuan to aid in rebalancing China's economy.

Domestically the UK ONS labour market report shows pay growth exceeding expectations, with headline earnings, including bonuses, rising 4.7% 3m/y in October—0.3ppts above consensus. However, public sector pay timing effects may unwind next year. Private sector ex-bonus earnings growth slowed to 3.9% 3m/y, the first sub-4% in five years, slightly above forecasts. To meet the BoE’s Q4 projection of 3.5% 3m/y, November and December growth must stay around 0.2% m/m, a feasible target. HMRC data indicates median pay growth softened to 2.7% y/y in November. Meanwhile, unemployment rose to 5.1% in October, with 38k job losses in November. The labour market shows modest deterioration, unlikely to alter the ~90% odds of a 25bp Bank Rate cut on Thursday.

China's latest weak economic data shifts focus to how the government will address imbalances in 2024. The new five-year plan emphasises technological self-sufficiency and boosting domestic demand, but structural issues challenge consumer confidence. A key factor is the housing slump, with home prices over 20% below peak and declining further due to excess inventory from uncompleted projects. Most household savings are tied to housing, once seen as a retirement asset during the boom years. However, demographic shifts are shrinking the key homebuying group (ages 25–44), worsening the supply-demand imbalance. With an estimated 35 million unsold units (excluding 40–50 million investment properties), rebuilding consumer confidence will be difficult.

US Nonfarm payrolls are estimated to have increased by 10k (70k private) in October and 55k (50k private) in November, exceeding the consensus of +50k for November but falling short of the three-month average of +62k. The unemployment rate is projected to have risen to 4.5% in November, up from an unrounded 4.44% in September. Average hourly earnings increased by 0.30% in October and 0.35% in November. The effect of the deferred resignation programme on payroll growth remains uncertain, but it will not influence private payrolls, which will likely better reflect underlying job growth.

Overnight Headlines

  • ZEW German Investor Morale Set To End Year On High Note

  • BoJ Set To Raise Benchmark Rates To Highest Since 1995

  • Ukraine Peace Talks Progressing, Russia Open To EU Membership

  • US Plans To Reduce G-20 Finance Minister Meetings

  • Trump Files $10B Lawsuit Against The BBC

  • Shell Mergers Chief Quit After CEO Blocked BP Takeover

  • PayPal Applies To Become A Bank As US Loosens Regulatory Reins

  • Nasdaq Seeks SEC Nod For 24/7 Trading

  • Ford Takes $19.5B Charge To Write Down EV Investments

  • OpenAI Poaches Google Exec To Lead Corporate Strategy

  • Citigroup Closes Deal To Sell Banamex Stake To Chico Pardo

  • Citi Sets 2026 S&P 500 Target At 7,700, Expects AI To Drive Growth

  • Samsung Nears Deal To Supply 30% Of Nvidia’s HBM4 Memory In 2026

  • China Vanke Faces Record Quarterly Drop Amid Debt Crisis

  • EU To Launch Commission On Ukraine War Damages

  • UK Watchdog Unveils Proposals To Regulate Crypto Market

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1600-10 (671M), 1.1635-45 (777M), 1.1650-55 (1.1BLN)

    1.1675-85 (503M), 1.1695-00 (1.4BLN), 1.1735-45 (390M), 1.1750-55 (2.04BLN)

    1.1800 (223M), 1.1825-30 (631M), 1.1870-75 (1.1BLN), 1.1885 (680M)

  • USD/JPY: 153.95-00 (1.0BLN), 154.20-25 (267M), 154.80 (200M)

    155.00 (266M), 155.50 (USD/CHF: 0.7890-00 (475M), 0.7920 (300M)

    0.7985-95 (426M), 0.8070-75 (427M).

    EUR/CHF: 0.9300 (250M), 0.9395-00 (1.0BLN)

    GBP/USD: 1.3350 (310M), 1.3450 (697M), 1.3500 (4.9BLN)

    AUD/USD: 0.6500 (440M), 0.6625-35 (315M), 0.6640-50 (761M)

    0.6685 (269M). NZD/USD: 0.5845-50 (544M). AUD/NZD: 1.15 (239M)

    USD/CAD: 1.3680-85 (570M), 1.3750-55 (860M), 1.3900-10 (674M)

  • CFTC Positioning

  • CFTC FX positioning data backlog clears January 20. Upcoming data on December 12, 16, 19, 23, 30, followed by January 6, 9, 13, 16, 20. Normal service resumes January 23.

  • CFTC Positions as of November 25, 2025:

  • - S&P 500 CME net short position rises by 26,722 to 380,984; net long position falls by 1,702 to 905,745.

  • - CBOT US 5-year Treasury futures net short decreased by 90,691 to 2,291,322.

  • - CBOT US 10-year Treasury futures net short increased by 27,686 to 781,383.

  • - CBOT US 2-year Treasury futures net short decreased by 78,603 to 1,266,676.

  • - CBOT US UltraBond net short down by 2,025 to 283,658.

  • - CBOT US Treasury bonds net short decreased by 35,910 to 31,601.

  • - Bitcoin net short position: -83 contracts.

  • - Swiss franc: -35,360 contracts net short.

  • - British pound: -93,221 contracts net short.

  • - Euro: 94,071 contracts net long.

  • - Japanese yen: 26,517 contracts net long.

Technical & Trade Views

SP500

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 6865 Target 7030

  • Below 6850 Target 6700

EURUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 1.17 Target 1.1780

  • Below 1.1650 Target 1.16

GBPUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 1.3330 Target 1.3435

  • Below 1.3280 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 Bullish

  • Weekly VWAP Bullish

  • Above 4274 Target 4380

  • Below 4260 Target 4151

BTCUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bearish

  • Above 90.8k Target 95.7k

  • Below 87.9k Target 80.6k