{"id":3897,"date":"2025-12-18T23:41:51","date_gmt":"2025-12-18T23:41:51","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/12\/18\/financial-forex-market-recap-dec-18-2025\/"},"modified":"2025-12-18T23:41:51","modified_gmt":"2025-12-18T23:41:51","slug":"financial-forex-market-recap-dec-18-2025","status":"publish","type":"post","link":"https:\/\/ft365.org\/index.php\/2025\/12\/18\/financial-forex-market-recap-dec-18-2025\/","title":{"rendered":"Financial &#038; Forex Market Recap \u2013 Dec. 18, 2025"},"content":{"rendered":"<div>\n<header>\n<div>\n<p><img decoding=\"async\" alt=\"Pippo\" loading=\"lazy\" src=\"https:\/\/ft365.org\/wp-content\/uploads\/2025\/06\/467-pippo-avatar.jpg\" previous-src=\"https:\/\/ft365.org\/wp-content\/uploads\/2025\/06\/467-pippo-avatar.jpg\"><\/p>\n<\/p><\/div>\n<\/header>\n<div>\n<div dir=\"ltr\">\n<div>\n<p>Markets staged a dramatic reversal on Thursday, with equities rallying and Treasury yields declining after a distorted but surprisingly soft US inflation report bolstered hopes for Federal Reserve rate cuts in 2026, though central banks in Europe signaled caution about further easing.<\/p>\n<p>Check out the forex news and economic updates you may have missed in the latest trading session!<\/p>\n<h2>Forex News Headlines &#038; Data:<\/h2>\n<\/p><\/div>\n<ul>\n<li> <strong>New Zealand GDP Growth Rate <\/strong>for September 30, 2025: 1.1% q\/q (0.8% q\/q forecast; -0.9% q\/q previous);\u00a01.3% y\/y (1.1% y\/y forecast; -0.6% y\/y previous)<\/li>\n<li>Australia Consumer Inflation Expectations for December 2025: 4.7% (3.2% forecast; 4.5% previous)<\/li>\n<li>Swiss Balance of Trade for November 2025: 3.0B (2.9B forecast; 2.6B previous)<\/li>\n<li>France Business Confidence for December 2025: 102.0 (97.0 forecast; 98.0 previous)<\/li>\n<li>Euro area Construction Output for October 2025: 0.5% y\/y (0.5% y\/y forecast; -0.3% y\/y previous)<\/li>\n<li>Canada CFIB Business Barometer for December 2025: 59.9 (54.0 forecast; 55.5 previous)<\/li>\n<li> <strong>U.K. Official Bank Rate for December 18, 2025: 3.75% (3.75% forecast; 4.0% previous)<\/strong>\n<ul>\n<li>Vote Cut: 5.0 (4.0 previous); Vote Hike: 0.0 (0.0 previous); MPC Vote Unchanged: 4.0 (5.0 previous)<\/li>\n<\/ul>\n<\/li>\n<li> <strong>ECB Interest Rate Decision for December 18, 2025: 2.15% (2.15% forecast; 2.15% previous)<\/strong>\n<ul>\n<li>Euro area Marginal Lending Rate for December 18, 2025: 2.4% (2.4% forecast; 2.4% previous)<\/li>\n<li>Euro area Deposit Facility Rate for December 18, 2025: 2.0% (2.0% forecast; 2.0% previous)<\/li>\n<li>In the ECB press conference, President Lagarde stressed a data-dependent, meeting-by-meeting approach with no preset rate path, keeping all options open as growth and inflation forecasts were revised slightly higher on the back of a more resilient euro area economy<\/li>\n<\/ul>\n<\/li>\n<li>Canada Average Weekly Earnings for October 2025: 2.2% y\/y \u00a0(3.0% y\/y forecast; 3.1% y\/y previous)<\/li>\n<li> <strong>U.S. Consumer Price Index Growth Rate for November 2025<\/strong>: 2.7% y\/y (3.0% y\/y forecast)\n<ul>\n<li>U.S. Core CPI Growth Rate for November 2025: 2.6% y\/y (3.0% y\/y forecast)<\/li>\n<\/ul>\n<\/li>\n<li> <strong>U.S. Initial Jobless Claims<\/strong> for December 13, 2025: 224.0k (229.0k forecast; 236.0k previous)<\/li>\n<li>Philadelphia Fed Manufacturing Index for December 2025: -10.2 (6.0 forecast; -1.7 previous)\n<ul>\n<li>Philly Fed Employment for December 2025: 12.9 (6.0 previous)<\/li>\n<li>Philly Fed Prices Paid for December 2025: 43.6 (56.1 previous)<\/li>\n<\/ul>\n<\/li>\n<li>U.S. Kansas Fed Manufacturing Index for December 2025: -3.0 (11.0 forecast; 18.0 previous)<\/li>\n<\/ul>\n<p><h2>Broad Market Price Action:<\/h2>\n<\/p>\n<div>\n<div>\n<p>Thursday\u2019s session delivered a reversal in market sentiment as traders embraced surprisingly soft US inflation figures despite widespread acknowledgment that the data was severely distorted by the record-long government shutdown.<\/p>\n<p><strong>US equities<\/strong> rallied sharply, with the S&#038;P 500 climbing to close around 6,765, halting a four-day slide. The index initially dipped during the Asian session, possibly correlating with overnight weakness in global markets, before catching a strong bid at the US open that coincided with the CPI release at 8:30 am ET. The rally extended through midday before equities topped out around the London close and pulled back modestly into the afternoon close. Despite numerous caveats about data quality\u2014including the BLS\u2019s inability to collect October prices and shortened November sampling period\u2014traders appeared willing to interpret the 2.6% year-over-year core CPI reading (versus 3.0% expected) as evidence that disinflation remains intact. Technology shares led the advance, with Micron Technology soaring 10% after issuing a robust outlook that underscored sustained demand for AI-related infrastructure.<\/p>\n<p><strong>Gold<\/strong> declined 0.14% to settle near $4,332, pulling back from recent highs as the softer inflation print reduced near-term safe-haven demand and inflation hedges. The precious metal traded sideways through the Asian session before seeing selling pressure during London hours, possibly as traders repositioned ahead of the US data releases. The metal stabilized during the US afternoon despite falling Treasury yields that would typically support gold prices, suggesting profit-taking after its recent run may have been the dominant factor.<\/p>\n<p><strong>WTI crude oil<\/strong> dropped 1.04% to close around $55.90, extending losses that began during the Asian session. The decline appeared to correlate initially with President Trump\u2019s Wednesday evening speech, which included economic announcements but also remarks about soon naming a new Federal Reserve chair who favors \u201csignificantly lower interest rates\u201d\u2014comments that may have sparked concerns about policy uncertainty. Oil continued lower through London and US trading hours with no direct energy-specific catalysts to point to, so it\u2019s possible that broader risk sentiment or positioning adjustments ahead of year-end dominated price action.<\/p>\n<p><strong>Bitcoin<\/strong> fell 0.81% to trade near $85,252, underperforming traditional risk assets despite the equity rally. The cryptocurrency rallied from the Asian session through the US morning session, with pronounced coming after to end the day in the red. There were no direct crypto-specific news catalysts to point to, so it\u2019s possible that the divergence from equities reflected either profit-taking after recent gains or concerns that easier Fed policy might strengthen traditional financial assets at crypto\u2019s expense.<\/p>\n<p><strong>Treasury yields<\/strong> declined 0.84% to settle around 4.10% on the 10-year note, with the drop accelerating following the 8:30 am ET CPI release. Yields had been trading relatively flat through Asian and early London sessions before falling sharply as bond buyers emerged on the inflation data. The move reflected increased expectations for Federal Reserve rate cuts in 2026, with traders now pricing approximately 27% odds of a January cut and two full cuts by mid-year. However, the rally in Treasuries occurred even as European government bonds underperformed, with UK gilts and German bunds posting relative weakness following signals of lower rate cut odds from the Bank of England and European Central Bank.<\/p>\n<h2>FX Market Behavior: U.S. Dollar vs. Majors<\/h2>\n<\/p><\/div>\n<div>\n<p>The U.S. dollar experienced mostly choppy and mixed trading on Thursday, posting a slightly bullish lean during Asian hours before turning decisively lower through London and US sessions, ultimately closing as a net loser against most major currencies.<\/p>\n<p>During the Asian session, the dollar traded with an arguably net bullish lean, possibly reflecting cautious positioning ahead of the day\u2019s heavy calendar of central bank decisions and US inflation data. New Zealand\u2019s stronger-than-expected GDP data (1.1% q\/q versus 0.8% forecast) provided early support to the kiwi, though markets appeared unconvinced about the durability of the recovery given household consumption remained soft.<\/p>\n<p>The London session marked the first clear directional shift, with the dollar briefly trading net higher in early European hours before turning lower ahead of the US open. This initial strength may have reflected positioning adjustments following the Bank of England\u2019s 7:00 am ET rate decision, which delivered an expected 25 basis point cut but included notably hawkish commentary from Governor Bailey about \u201cmore limited space\u201d for future reductions. However, this dollar bid proved short-lived as traders likely began positioning for the upcoming US CPI release, with the greenback weakening steadily into the 8:30 am ET data.<\/p>\n<p>The US session brought the most decisive move, with the dollar turning net bearish and choppy immediately following the 8:30 am ET inflation data. <strong>The core CPI print of 2.6% year-over-year\u2014well below the 3.0% consensus and the slowest pace since early 2021<\/strong>\u2014sparked sharp dollar selling that appeared to outweigh the significant data quality concerns raised by economists. The move likely reflected traders focusing on the directional implications for Fed policy rather than the reliability of the specific figures, with Fed rate cut expectations for 2026 climbing notably despite Fed Chair Powell\u2019s warning that the data \u201cmay be distorted\u201d by the government shutdown.<\/p>\n<p>The dollar\u2019s weakness persisted through the afternoon, possibly on signals from European central banks that their rate cutting cycles are likely over. The ECB\u2019s decision to hold rates at 2.0% came with reports that officials view the cutting cycle as likely finished, while BOE\u2019s Bailey warned that future rate cuts will be \u201cfinely balanced\u201d as they approach neutral.<\/p>\n<h2>Upcoming Potential Catalysts on the Economic Calendar<\/h2>\n<ul>\n<li>New Zealand Balance of Trade for November 2025 at 9:45 pm GMT<\/li>\n<li> <strong>Japan Consumer Price Index Growth Rate<\/strong> for November 2025 at 11:30 pm GMT<\/li>\n<li>New Zealand ANZ Business Confidence for December 2025 at 12:00 am GMT<\/li>\n<li>U.K. GfK Consumer Confidence for December 2025 at 12:01 am GMT<\/li>\n<li>Australia Private &#038; Housing Sector Credit for November 2025 at 12:30 am GMT<\/li>\n<li>New Zealand Credit Card Spending for November 2025 at 2:00 am GMT<\/li>\n<li><strong>BOJ Gov Ueda Speech at 2:30 am GMT<\/strong><\/li>\n<li><strong>Bank of Japan Interest Rate Decision for December 19, 2025 at 3:00 am GMT<\/strong><\/li>\n<li>Australia Commodity Prices for December 2025 at 5:30 am GMT<\/li>\n<li>Germany PPI for November 2025 at 7:00 am GMT<\/li>\n<li>Germany GfK Consumer Confidence for January 2026 at 7:00 am GMT<\/li>\n<li>U.K. Retail Sales\u00a0for November 2025 at 7:00 am GMT<\/li>\n<li>U.K. CBI Distributive Trades for December 2025 at 11:00 am GMT<\/li>\n<li>Canada Retail Sales Prel for November 2025 at 1:30 pm GMT<\/li>\n<li>Canada New Housing Price Index\u00a0for November 2025 at 1:30 pm GMT<\/li>\n<li>Euro area Consumer Confidence Flash for December 2025 at 3:00 pm GMT<\/li>\n<li>U.S. Existing Home Sales for November 2025 at 3:00 pm GMT<\/li>\n<li> <strong>UoM U.S. Consumer Sentiment Index<\/strong> for December 2025 at 3:00 pm GMT<\/li>\n<li>Euro area ECB Lane Speech at 3:10 pm GMT<\/li>\n<\/ul>\n<p>Friday\u2019s calendar is dominated by the <strong>Bank of Japan\u2019s highly anticipated policy decision at 3:00 am GMT<\/strong>, where markets are watching for any signals about the timing of future rate hikes given recent yen weakness and sticky Japanese inflation.<\/p>\n<p><strong>UK retail sales<\/strong> at 7:00 am GMT will provide crucial insight into consumer resilience following Thursday\u2019s BOE rate cut and Governor Bailey\u2019s cautious outlook, with weak numbers potentially reinforcing concerns about economic stagnation.<\/p>\n<p>During the US session, the<strong> University of Michigan consumer sentiment survey<\/strong> could spark volatility if inflation expectations show any material shift, though following Thursday\u2019s distorted CPI data, traders may place greater weight on the December reading due in early January for a clearer picture of underlying price pressures heading into 2026.<\/p>\n<p>Stay frosty out there, forex friends, and don\u2019t forget to check out our Forex Correlation Calculator when planning to take on risk!<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<section>\n<p><span>About <strong>Pippo<\/strong><\/span> <\/p>\n<div>\n<p> Hello! I&#8217;m Pippo the Forex Hippo! What do you call a hippo that passes gas? A Rippofartimus! \ud83d\ude02 <\/p>\n<p>More from Pippo<\/p>\n<\/p><\/div>\n<\/section><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Markets staged a dramatic reversal on Thursday, with equities rallying and Treasury yields declining after a distorted but surprisingly soft US inflation report bolstered hopes for Federal Reserve rate cuts in 2026, though central banks in Europe signaled caution about further easing. Check out the forex news and economic updates you may have missed in<\/p>\n","protected":false},"author":2,"featured_media":3898,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-3897","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news"],"featured_image_urls":{"full":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405.png",780,405,false],"thumbnail":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405-150x150.png",150,150,true],"medium":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405-300x156.png",300,156,true],"medium_large":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405-768x399.png",640,333,true],"large":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405.png",640,332,false],"1536x1536":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405.png",780,405,false],"2048x2048":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405.png",780,405,false],"morenews-featured":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405.png",780,405,false],"morenews-large":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405.png",780,405,false],"morenews-medium":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405-590x405.png",590,405,true],"crawlomatic_preview_image":["https:\/\/ft365.org\/wp-content\/uploads\/2025\/12\/3897-Dated-Market-Recap-2025-12-18-780x405-260x135.png",260,135,true]},"author_info":{"display_name":"henry","author_link":"https:\/\/ft365.org\/index.php\/author\/henry\/"},"category_info":"<a href=\"https:\/\/ft365.org\/index.php\/category\/latest-news\/\" rel=\"category tag\">Latest News<\/a>","tag_info":"Latest News","comment_count":"0","_links":{"self":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/3897","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/comments?post=3897"}],"version-history":[{"count":0,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/3897\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media\/3898"}],"wp:attachment":[{"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media?parent=3897"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/categories?post=3897"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/tags?post=3897"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}