Daily Market Outlook, December 10, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Wall Street remained relatively quiet as traders held back from making bold moves ahead of the Federal Reserve's final interest-rate decision of 2025, set to be announced in less than 24 hours. The S&P 500 closed with minimal changes after JPMorgan issued a cautionary note about higher-than-expected costs and described consumers as "fragile", prompting the bank's stock to tumble over 4%. Meanwhile, the Dow edged lower, and the Nasdaq 100 managed to eke out a modest gain. The yield on 10-year Treasury notes hovered around 4.18% following a government bond auction, while the dollar stayed steady and Bitcoin bounced back from earlier losses. Bitcoin markets in Asia are stabilising despite structural challenges, with significant supply held by short-term investors. U.S. ETF flows are steadying, but on-chain activity remains near cycle lows, reflecting limited capital inflows. Bitcoin and Ether prices are rebounding due to spot demand and improved sentiment, while gold gains strength from U.S. labour market data and expectations of Federal Reserve rate cuts. 

Kevin Hassett, seen as the leading contender in former President Trump's search for Jerome Powell's successor at the Federal Reserve, shared his outlook during an event on Tuesday. Hassett suggested there’s significant room to slash interest rates, potentially going beyond a typical quarter-point cut. Looking ahead, money markets are reflecting expectations of two rate cuts in 2026, following a likely quarter-point reduction set for Wednesday. However, optimism has cooled compared to recent weeks, with some analysts warning of the possibility of a "hawkish cut"—where the Fed lowers rates but signals it may hold off on further reductions for now. In other developments, the Treasury Department's auction of 10-year notes resulted in a yield of 4.175%, aligning with market predictions before the deadline. Earlier in the day, yields had ticked slightly higher. A recent dip in U.S. government bond prices has dampened risk appetite, as investors grow cautious about the pace of monetary easing after the Fed’s upcoming decision. For now, all eyes remain on the central bank’s rate move and its outlook for 2026, which will likely shape market sentiment in the days ahead.

Asian markets remained steady as investors also await clues on the Federal Reserve's next move regarding interest rates in its final decision of the year. Meanwhile, Chinese stocks took a hit after a government report revealed a rise in inflation for November, dimming hopes for potential rate cuts. Japan's markets also saw declines, while Taiwan experienced gains. Silver continued its upward trajectory, hitting new highs, and Australian bonds extended their slide following the central bank's hawkish stance earlier in the week. Silver's rally gained momentum after it broke past $60 per ounce for the first time on Tuesday. The surge was fuelled by supply constraints and speculation about further monetary easing from the Fed. By Wednesday, silver soared even higher, jumping 1.3% to a record-breaking $61.4797 per ounce.

Yesterday's UK Treasury Select Committee hearing with MPC members aimed to discuss the November MPR but largely focused on Budget leaks, QT details, and the Bernanke Review, offering little insight into near-term policy rate decisions. Governor Bailey's absence was notable, as his vote could sway November's unchanged decision toward a rate cut. Ramsden highlighted the Beveridge Curve's return to pre-pandemic trends, suggesting further labour market loosening may lead to larger unemployment adjustments. While this supports the case for a December rate cut, the decision remains uncertain pending upcoming labour market, inflation, and PMI data.

The FOMC is expected to cut the Fed Funds rate by 0.25% to 3.50-3.75% on Wednesday. However, the market focus will likely shift to the updated Summary of Economic Projections, particularly the outlook for 2026 and beyond. Chair Powell may frame December's move as an insurance cut, citing weaker labour data, but persistent inflation and solid economic growth could raise the threshold for further easing. This may be reflected in tighter convergence in the dot plot, aside from dovish outliers. Interpreting next year’s policy remains complex, especially with upcoming Fed leadership changes. While the market trusts the committee's independence, shifts in leadership style, external influences, and expansionary fiscal policy could challenge moderates, with stubborn inflation adding to the uncertainty.

Overnight Headlines

  • FOMC Set To Cut Again; Powell Expected To Push Back On Further Easing

  • SNB Set To Hold Rates This Week, Maybe Much Longer; Analysts Say

  • BoC Poised To Hold Rates As Economy Shows Signs Of Stabilisation

  • Trump Says He Has ‘Good Idea’ Of Who He Wants For Fed Chair

  • Trump To Kick Off Final Round Of Fed Chair Interviews This Week

  • Trump Pushes Ukraine To Accept Peace Deal, Saying It Is Losing

  • Trump’s Reprieve For Nvidia’s H200 Spurred By Huawei’s AI Gains

  • China To Limit Access To Nvidia’s H200 Chips Despite US Export Approval

  • China Consumer Inflation Picks Up To Fastest Pace In Over A Year

  • Eli Lilly To Build $6B Plant In Alabama For New Obesity Pill, Other Drugs

  • SpaceX To Pursue 2026 IPO Raising Above $25B, Source Says

  • Microsoft To Invest Over $17B In India, Following Google And Amazon

  • Amazon Raises India Investment Pledge To $35B By 2030

  • EU: Close To Russian Assets Deal, Summit Ongoing Till Agreement

  • EU Races To Bypass Orbán On Russian Assets Before Summit

  • JPMorgan Expects Higher Than Expected 2026 Expenses

FX Options Expiries For 10am New York Cut 

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

  • EUR/USD: 1.1500-10 (3.44BLN), 1.1515 (542M), 1.1545-50 (410M)

  • 1.1570-80 (3.6BLN), 1.1585-90 (1.03BLN), 1.1600-10 (1.43BLN)

  • 1.1650-60 (1.5BLN), 1.1665-75 (532M), 1.1700 (436M), 1.1720-30 (585M)

  • 1.1750-55 (1.61BLN), 1.1775 (350M), 1.1800 (2.1BLN)

  • USD/JPY: 155.50 (423M), 156.00 (888M)

  • USD/CHF: 0.8020-40 (533M), 0.8085 (296M), 0.8100 (374M)

  • EUR/CHF: 0.9295 (200M)

  • GBP/USD: 1.3225-30 (600M), 1.3300 (540M), 1.3350-60 (414M)

  • EUR/GBP: 0.8695-00 (700M), 0.8795-00 (350M)

  • AUD/USD: 0.6550-60 (1.12BLN), 0.6575-80 (303M), 0.6600-10 (1.2BLN)

  • 0.6700 (450M), 0.6800 (785M). NZD/USD: 0.5700 (558M), 0.5800 (276M)

  • USD/CAD: 1.3775-85 (340M), 1.3790-00 (668M), 1.3900 (340M)

  • 1.3925 (230M)

  • USD/ZAR: 16.90 (550M), 17.1575 (178MN)

CFTC Positions as of the Week Ending 7/10/25 

  • CFTC FX positioning data backlog clears January 20. Upcoming data on December 2, 5, 9, 12, 16, 19, 23, 30, followed by January 6, 9, 13, 16, 20. Normal service resumes January 23.

  • CFTC Positions (Week of October 28th):

  • - S&P 500 CME net short: +21,626 contracts (458,504 total)

  • - S&P 500 CME net long: +7,029 contracts (906,817 total)

  • - CBOT US 5-year Treasury net short: +130,976 contracts (2,404,926 total)

  • - CBOT US 10-year Treasury net short: +64,407 contracts (910,930 total)

  • - CBOT US 2-year Treasury net short: +34,053 contracts (1,312,475 total)

  • - CBOT US UltraBond Treasury net short: -2,057 contracts (297,053 total)

  • - CBOT US Treasury bonds net short: -12,678 contracts (15,103 total)

  • - Bitcoin net short: -543 contracts

  • - Swiss franc net short: -27,858 contracts

  • - British pound net short: -20,262 contracts

  • - Euro net long: 107,333 contracts

  • - Japanese yen net long: 68,115 contracts.

Technical & Trade Views

SP500

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 6860 Target 6920

  • Below 6834 Target 6770

EURUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 1.1647 Target 1.17

  • Below 1.1590 Target 1.1550

GBPUSD 

  • Daily VWAP Bearish

  • Weekly VWAP Bullish

  • Above 1.3330 Target 1.3435

  • Below 1.3280 Target 1.3228

USDJPY 

  • Daily VWAP Bullish

  • 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 4319

  • Below 4215 Target 4151

BTCUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bearish

  • Above 90.8k Target 95.7k

  • Below 89.4k Target 86.2k