Concerns over US fiscal sustainability are gaining renewed attention in global markets, with a growing focus on funding dynamics rather than outright selling of US assets. A recent warning from a senior adviser connected to the People’s Bank of China highlighted the risks posed by rising US deficits and increased debt issuance. The adviser cautioned that these factors could undermine confidence among global investors, especially amid heightened geopolitical tensions and trade frictions that are reshaping capital flows. The core message was that the US’s ongoing dependence on external funding makes it vulnerable to shifts in global demand for dollar-denominated assets. [...]

The Australian dollar is showing a positive outlook for global growth this year, reflected in its recent strong performance against the US dollar. Today, the AUD/USD pair rose by 83 pips to 0.6843, reaching its highest level since October 2024. That month, the pair had touched 0.6942 but failed to sustain a move above the 70-cent mark. After that, the Australian dollar fell to as low as 59 cents following the market reaction to Trump’s Liberation Day, before gradually climbing back to current levels. The sharp recent appreciation partly stems from Australia’s role as a major mining exporter. Rising gold [...]

The key points from the recent economic accounts provide important insights for forex traders monitoring the euro area. Members of the Governing Council broadly agreed with the current assessment of the economy. Indicators of underlying inflation have changed little in recent months and remain consistent with the European Central Bank’s (ECB) 2% medium-term inflation target. The euro area economy has shown resilience alongside global economic activity, despite ongoing elevated geopolitical risks. These risks could increase uncertainty over an extended period and potentially undermine the growth dynamics of the euro area. Members emphasised the urgent need to strengthen the euro area’s [...]

The latest US jobless claims report reveals a stronger-than-expected labour market, with both initial and continuing claims showing notable developments. Initial jobless claims came in at 1,849,000, slightly below the expected 1,900,000 and improving on the prior revised figure of 1,990,000 (originally 198,000). Continuing claims stood at 1,875,000, marginally down from the previous revised figure of 1,884,000. This data continues to support the view of a "low hire, low fire" labour market heading into 2025. Initial claims have maintained relative stability, while continuing claims, which had been reaching cycle highs, are now showing signs of levelling off. More recently, jobless [...]

The final real GDP growth for the third quarter was revised up to 4.4%, an improvement on the initial estimate of 4.3% and notably higher than the second quarter’s final reading of 3.8%. This upward revision mainly reflects stronger-than-expected exports and investment, although consumer spending was revised downwards slightly. Key components of the Q3 GDP growth include increases in consumer spending, exports, government spending, and investment. Specifically, contributions to GDP in percentage points were as follows: - Government spending: +0.38 - Net exports: +1.62 - Inventories: -0.12 - Fixed investment: +0.15 - Services: +1.7 (with healthcare alone contributing +0.75) - [...]

The Bank of Japan (BoJ) is expected to maintain its interest rate at 0.75%, alongside releasing its Outlook Report. This report is anticipated to show an upgrade in economic growth forecasts, supported by the government’s expansionary fiscal policy, and may also include a slight upward revision to inflation expectations. For forex traders, the main focus will be on Governor Ueda’s forward guidance. There is a possibility that the BoJ might surprise markets by slowing the pace of its tapering of bond purchases. This adjustment would be a response to the rapid rise in long-term bond yields. The BoJ has kept [...]

Japan’s Nikkei 225 rebounded sharply on Thursday, ending a five-day losing streak as government bonds extended their gains and global risk sentiment improved following easing tariff and geopolitical concerns from US President Donald Trump. By early afternoon in Asia, the Nikkei had risen 1.6% to 26,667.72, marking a potential end to its longest run of daily declines in about a year. The broader Topix index also climbed 0.9% to 1,623.72, supported by a calmer bond market and positive cues from Wall Street during the previous session. This month’s volatile market movements have been closely linked to Japan’s political developments and [...]

Goldman Sachs has raised its gold price forecast for December 2026 to $5,400 per ounce, up from $4,900. The bank attributes this upward revision to increasing private sector allocations to gold and continued central bank demand, which it views as structurally driven. Goldman highlights that private investors are moving beyond tentative interest in gold towards more sustained, strategic portfolio allocations. This shift reflects growing concerns about correlation risks, geopolitical uncertainty, and doubts over the long-term durability of the global disinflation trend. As a result, gold is increasingly seen not just as a tactical trade but as a core holding within [...]