Last week, global markets showed some resilience amid Christmas holiday volatility. Economic data released by the United States showed a rebound in business investment and consumer confidence, but there was an adjustment in the labor market. Bank of Japan Governor Kazuo Ueda gave a speech, and the surge in data provided support for policy adjustments, while the stock market performed strongly. The profit decline of Chinese industrial companies narrowed, and the A-share market continued to rebound. European markets were closed for the holidays, and the broader market posted modest gains.

U.S. stocks fell before the end of last week, led by technology stocks, which sold off shares of the world's largest technology companies as a banner year came to an end. But the major indexes remained positive during the holiday week. The Dow Jones Industrial Average closed at 42,992.21 points last week, up 0.4%, ending three consecutive weeks of decline; the S&P 500 closed at 5,970.84 points last week, up 0.7% for the week, and set its best Christmas Eve performance since 1974 on Tuesday Performance; The Nasdaq Composite Index rose 0.8% last week to close at 19,722.03 points. The S&P 500 is expected to rise about 25% in 2024. It would be the second consecutive year of gains of more than 20% and the first time since 1997-98.

Gold prices fell last week as U.S. Treasury yields rose. The appeal of non-yielding gold waned in a light holiday week, with markets focused on the potential impact of President-elect Donald Trump's return to office and his inflationary policies on the Federal Reserve's 2025 outlook. Spot gold fell to $2,615.50 an ounce. Gold prices fell 0.28% for the week.

Silver prices extended gains for the sixth day in a row but are still trading $30.000 lower. Silver prices may find upside support on safe-haven demand as markets anticipate signals from the U.S. economy amid the incoming Trump administration and the Federal Reserve's 2025 interest rate outlook.

The U.S. dollar traded in a very tight range last week, with the U.S. Dollar Index holding near 108.00, as markets remained cautious and trading was reduced due to the Christmas holiday. The dollar failed to react to further market action. The U.S. dollar index recently hit a two-year high and is trending upward on the charts. In the new year, foreign exchange traders are expected to continue selling major currencies (EUR, GBP, CAD, AUD, JPY) to buy USD, as well as peripheral currencies.

Oil prices rose more than 1% last week and posted weekly gains as U.S. crude inventories fell more than expected and trading volumes were light at the end of the year. Last week, major European energy companies were focusing on oil and gas rather than renewable energy for short-term profits, a trend expected to continue into 2025. On a weekly basis, Brent crude and WTI crude oil were both up about 1.4%.

In the final days of a record-breaking year for the digital asset, a rally in Bitcoin is breaking out of a froth as investors assess the remaining momentum in Donald Trump’s cryptocurrency sector. Bitcoin staged a rise and then fall last week, regaining the $96,500 level before the weekend. The market error triggered a black swan event. The error showed that Bitcoin Dominance plummeted to 0%, resulting in large-scale liquidation of long positions.

Last week, rising U.S. Treasury yields likely weighed on stocks. The 10-year U.S. Treasury yield rose another 4 basis points on Friday to 4.621%, after hitting its highest level since May in the previous session. The two-year Treasury yield fell to 4.31% from 4.33%. The rise in bond yields reflects caution about the economic outlook while putting pressure on highly valued technology stocks.

Outlook for this week:

Global markets are forecast to start the new year with an accommodative data schedule; the U.S. economy may face a number of issues in 2025, including the outlook for stubborn price inflation and/or any new trade tariffs initiated by the incoming President Trump's administration adverse effects. However, the U.S. dollar is likely to remain the winner among other major currencies. The U.S. dollar still retains the title of the world's safest currency, so any new geopolitical turmoil is also likely to support the U.S. dollar index.

The U.S. dollar index traded tepidly during the year-end holiday period but remains near the high end of its 2024 chart trend. Market flows will ease this week, with mid-week New Year's holiday sentiment set to permeate global markets into 2025. The results of the U.S. ISM Manufacturing Purchasing Managers Index (PMI) survey will be released later on Friday, and investors generally expect the composite business forecast to decline again. The Federal Reserve announced a rate cut that may be slower than expected in 2025, reducing market expectations for significant interest rate cuts throughout the year.

EUR/USD holds steady around 1.0400 to end the Christmas holiday week, forming a rough sideways pattern in the short term as euro traders grapple with the outlook for the upcoming New Year. The European Central Bank will continue to cut interest rates until 2025 to boost the European economy in the face of uneven growth data and increasingly severe headwinds such as persistent uneven demand development and an overly cautious global trade outlook. EUR/USD is likely to continue falling as the ECB's policy rate strategy will continue to lower the reference rate, as Euro rates differ from USD rates.

As 2024 draws to a close, GBP/USD is broadly in lockstep with its geographical neighbors, forming a mid-range price action pattern. There is a complete lack of meaningful UK economic data in next week's data catalog, causing GBP to start 2025 on a decidedly calm note.

AUD/USD is also facing the same data, although a new round of key Chinese economic data may have some knock-on effects on the Australian dollar. December PMI data from China's National Bureau of Statistics will be released early next Tuesday, followed by Caixin PMI results on Thursday.

USD/JPY continues to break above multi-month highs as the calendar rolls to 2025. Key Japanese data this week remains light, but the U.S. dollar's long-term slow return to highs undermines the Bank of Japan's costly efforts to shore up the yen through mid-2024.

In the new year, foreign exchange traders are expected to continue selling major currencies (EUR, GBP, CAD, AUD, JPY) to buy USD, as well as peripheral currencies.

Importantly, in 2025, the gold and silver markets are expected to become less sensitive to an appreciation of the U.S. dollar in the FX markets (no longer susceptible to declines due to it). From a long-term perspective, this phenomenon has been evident in recent years. Just look at the longer-term gold chart and the US dollar index chart - both are in an uptrend.

Summarize :

Global markets are showing a certain mentality and positive signals. U.S. economic data boosted corporate investment and consumer confidence, but the labor market showed preliminary signs; the Bank of Japan is expected to raise interest rates, and the stock market broke through historical highs; the profit decline of Chinese industrial companies continued to narrow, and the A-share market rebounded in Manhattan; the European market is on holiday Performance is stable. In the future, the monetary policy trends and economic data of various countries will still dominate market sentiment.

Trump's mobilization efforts and jobs data will test markets.

Overview of important events and economic data this week: (Sydney time)

Important: Monday (December 30): Reserve Bank of Australia Assistant Chairman Jones participates in a fireside chat

 Wednesday (January 01): Global New Year’s Day holiday

Economic data overview:

Monday (December 30): US December Chicago PMI; US November seasonally adjusted existing home contracted sales index monthly rate (%)

Tuesday (December 31): Swiss official reserve assets in November (100 million Swiss francs); US FHFA house price index monthly rate in October

Thursday (January 02): Australia’s AIG Manufacturing Performance Index in December; Eurozone’s January SPGI Manufacturing PMI

 Initial value; UK December SPGI manufacturing PMI final value; US as of the beginning of the week ending December 28

 Number of people filing for unemployment benefits (10,000); US December ISM Manufacturing PMI

Friday (January 03): Australia’s November investment home loan value monthly rate (%); US December SPGI manufacturing PMI future value

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