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09/12/2025 - 08:03 UTCThe U.S. dollar firmed against major currencies on Monday in volatile trading with the USDX ending the session 0.08% higher, as investors positioned themselves for a week dominated by global central bank meetings — led by the Federal Reserve, where a rate cut is widely expected. Markets are bracing, however, for guidance that may signal a gentler easing path than previously anticipated.
The yen weakened broadly after a powerful 7.6-magnitude earthquake struck northeastern Japan late Monday, triggering tsunami warnings and evacuation orders. Alongside the Fed’s decision on Wednesday, the central banks of Australia, Brazil, Canada and Switzerland will also set policy this week. None are expected to adjust rates.
Analysts anticipate a “hawkish cut” from the Fed — a 25-basis-point reduction paired with messaging that keeps the bar high for further easing. The Federal Open Market Committee is expected to lower the benchmark overnight rate to a range of 3.50%–3.75%, marking a third consecutive cut.
Asian equities traded in a narrow, mostly lower range on Tuesday as investors grew cautious ahead of this week’s Federal Reserve policy decision, while Australian shares extended losses following a hawkish hold from the Reserve Bank. Chinese markets were broadly flat as traders digested fresh pledges of fiscal support from the Communist Party’s top leadership, which convened on Monday.
Sentiment toward Chinese tech weakened after U.S. President Donald Trump said NVIDIA would be allowed to sell a more advanced AI chip in China, pressuring domestic semiconductor stocks.
In Australia, the Australia 200 slipped 0.27% as of 07:24 GMT on the iForex platform after the RBA warned of rising inflation risks and signaled limited room for further easing, with some analysts even suggesting the possibility of a future rate hike. In China, both the China SSE and China SZSE indices edged lower as investors reacted to the Politburo’s commitment to expand fiscal support amid persistent challenges from the property downturn and weak consumer demand.
Futures were muted on Monday evening following a broadly negative session on Wall Street, driven by pre-Fed caution and profit-taking after recent market strength. U.S. equities ended lower on Monday as traders awaited the Fed’s decision and took profits following two weeks of gains. The central bank is expected to cut rates by 25 basis points at the conclusion of its meeting on December 10, with last week’s softer PCE inflation data reinforcing expectations. However, investors remain focused on the Fed’s economic outlook amid broader uncertainty surrounding U.S. growth.
In corporate news, Nvidia rose in aftermarket trade, extending Monday’s gains after Trump said he had notified Chinese President Xi Jinping of the decision to allow H200 chip sales to China. The H200, introduced in 2023, is estimated to be about six times more powerful than the H20—the most advanced AI chip currently approved for sale in the Chinese market. While the move could boost Nvidia’s China-related sales, Beijing has increased scrutiny of the company as it pushes for greater self-reliance in advanced semiconductor development. Nvidia has already stopped including China in its revenue and profit forecasts this year.
Gold prices were little changed in Asian trade on Tuesday, holding steady after modest early-December weakness but still supported by four consecutive months of strong gains. Silver, meanwhile, continued to outperform: the metal hovered near record highs around $58 an ounce after last week’s surge to $59.35, driven by tightening supply expectations, speculative interest, and its designation as a U.S. critical mineral.
The euro slipped against the U.S. dollar on Monday, with EUR/USD down 0.04% as rising U.S. Treasury yields and broader dollar strength pressured the pair ahead of Wednesday’s Federal Reserve policy decision.
The dollar found support as Treasury yields climbed, with traders positioning for a potentially higher neutral rate in the U.S. despite inflation remaining near 3%. A New York Fed survey showed U.S. households growing more pessimistic about both current and future financial conditions, reinforcing caution around the economic outlook.
The euro, however, drew some stability from comments by European Central Bank official Isabel Schnabel, who signaled confidence in market expectations for a potential rate hike. Fresh Eurozone data also provided modest support: Germany’s industrial production rose 1.8% month-on-month in October, beating expectations, while the Sentix Investor Confidence index improved in December.
Looking ahead, markets will monitor Tuesday’s U.S. ADP employment data and JOLTS job openings, alongside Germany’s trade balance and a speech from ECB policymaker Joachim Nagel.
Bitcoin edged lower early on Tuesday as traders avoided taking major positions ahead of the Federal Reserve’s policy meeting, where markets broadly expect a 25-basis-point rate cut.
The subdued price action reflected broader consolidation in digital assets, with investors awaiting clearer signals on the U.S. economic outlook. While softer labor data and moderating inflation have strengthened the case for easier monetary policy, Fed officials remain divided—leaving the door open to a potential surprise hold. Bitcoin has benefited in recent months from expectations of a longer easing cycle, as lower interest rates generally weaken the dollar and enhance the appeal of non-yielding assets.
Separately, Strategy, the largest publicly listed Bitcoin-holding company, disclosed it purchased an additional 10,624 BTC between December 1 and 7 at an average price of roughly $90,615. The acquisition brings its total holdings to about 660,624 BTC. The latest accumulation underscores the firm’s continued conviction in Bitcoin despite potential index exclusion risks and shifting market dynamics.
Oil prices were steady in Asian trade on Tuesday following a sharp decline in the previous session, as traders assessed renewed supply from Iraq, developments in Ukraine peace negotiations, and expectations ahead of the Federal Reserve’s policy meeting. Both benchmarks had dropped about 2% on Monday after Iraq moved to restore output at the West Qurna-2 oilfield, a key contributor to its export volumes.
Geopolitical attention turned to Europe, where Ukraine signaled plans to present a revised peace proposal to the U.S. following talks between President Volodymyr Zelenskiy and leaders of France, Germany, and the U.K. Any signs of progress toward a negotiated settlement could trim the geopolitical risk premium in crude and potentially allow Russian barrels to re-enter markets more freely, adding downward pressure on prices.
Traders were also awaiting the start of the Federal Reserve’s two-day meeting later on Tuesday. Markets currently price in a high probability of a 25-basis-point rate cut, which could improve demand prospects by lowering borrowing costs and supporting fuel consumption.
In a separate note, analysts warned that global oil markets are likely to face a growing surplus in 2026 as OPEC+ unwinds supply curbs faster than expected and non-OPEC output continues to expand.
The US 500 closed lower on Monday as traders exercised caution ahead of this week’s Federal Reserve meeting, widely expected to deliver an interest-rate cut. Despite Monday’s pullback, all three major indexes posted gains last week, marking their second consecutive positive week.
Investor focus remains on the Fed, with markets pricing in roughly an 88% chance of a 25-basis-point rate cut, according to CME FedWatch data. The cooler-than-expected September core PCE inflation reading, combined with signs of a softening labor market and weaker consumer spending, has reinforced expectations for further policy support.
Corporate earnings are expected to influence market direction this week, with results due from Lululemon, Costco, Broadcom, Oracle, and Adobe. Ahead of Broadcom’s report, The Information noted that Microsoft is considering switching its custom chip design from Marvell Technology to Broadcom.
The high-profile Netflix-Warner Bros merger remains in focus, with Paramount launching a rival bid for Warner Bros following President Donald Trump’s comments on potential regulatory concerns. Trump indicated that any antitrust evaluation would consider the respective market shares of Netflix and Paramount Skydance.
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