Global News Summary 20-27 Dec 2025
This holiday-week window was shaped more by thin liquidity, late-year positioning, and policy aftershocks than by blockbuster new data. In the US, equities stayed close to record territory as investors looked through patchy macro signals, while inflation progress still looked “good but not done”. In Europe, the backdrop remained steady-to-soft, with inflation hovering near target and bond moves largely following global duration trends. In Japan, attention shifted to the fiscal–rates mix, with a record FY2026 budget alongside a stated intention to limit new bond issuance, keeping markets focused on debt dynamics in a higher-rate regime. China remained cautious but supportive, holding key credit benchmarks steady while leaning on targeted property measures rather than broad stimulus.
USA
Economic growth
US stocks finished the post-Christmas session little changed, with the S&P 500 at 6,929.94 on 26 Dec — roughly ~1% below 7,000 — and up about ~18% for 2025 (a strong “soft-landing + resilient earnings” narrative into year-end).
Jobs
No major weekly jobs release landed within the holiday stretch in a way that dominated market pricing; labour discussion during the week was mostly inference-based (confidence, hiring anecdotes, and the market’s sensitivity to any January “data catch-up”).
Inflation
The key late-year framing remained disinflation without full policy comfort: headline CPI for November was widely referenced around the high-2% area, keeping markets confident about easing, but not enough to remove policy caution.
Debt securities
Treasury yields were relatively contained in holiday trading (the 10-year was around the low-4% area), but the larger issue remained the path of cuts in 2026 rather than near-term issuance headlines.
AI
AI remained central to leadership, but the week’s tone was less about hype and more about capex discipline and monetisation timing — with broad risk appetite, not only “AI bid”, supporting index levels.
UK
Economic growth
Boxing Day retail signals were mixed-to-soft: overall visits to retail locations slipped slightly year-on-year, and high streets/shopping centres were weaker, while retail parks outperformed (convenience/free parking dynamics).
Central London footfall was reported as down high-single digits year-on-year (commonly cited around ~7–8%, though some trackers show a slightly smaller drop).
Total Boxing Day sales spending was broadly estimated around £3.6bn, notably below the prior year — reinforcing cost-of-living sensitivity and more selective consumer behaviour.
Jobs
Labour concerns remained part of the consumer backdrop (spending restraint and confidence), but there was no single labour release in this week that reset the narrative.
Inflation
Inflation remained above the 2% target and therefore still relevant to how quickly policy can ease — but the direction of travel continues to be downward.
Debt securities
The policy anchor remained Bank Rate at 3.75%, keeping UK front-end rates biased towards an easing path, with growth fragility a key driver.
AI
The UK’s AI discussion during this period was more structural (productivity vs job displacement themes) than about a specific new policy action in the week.
EU (Eurozone)
Economic growth
The dominant framing remained “slow growth, not collapse”. Markets appeared less worried about an immediate recession shock than about the pace of recovery.
Inflation
Euro area inflation was around 2.1% year-on-year in November, with EU-wide inflation around 2.4% — consistent with the view that disinflation has largely brought price growth back near target levels.
Debt securities
With no major new ECB surprise in this exact window, bonds were driven mainly by global duration and year-end positioning.
Recession
With inflation near target and the policy stance broadly supportive, the week’s pricing tone was late-cycle caution rather than acute recession fear.
China
Economic growth
Policy messaging remained supportive but measured, focused on domestic demand while recognising the property sector remains a drag.
Inflation
Inflation was not the binding constraint; attention stayed on demand softness and credit transmission.
Debt securities / credit
Key credit benchmarks were kept steady (including LPR settings), signalling preference for stability over aggressive rate cuts.
Property stress continued to surface through selective credit headlines (including restructurings and extension requests on offshore/onshore obligations).
Recession
The tone stayed “stabilise and support” rather than recession alarm.
Japan
Economic growth
Japan leaned into fiscal support with a record FY2026 budget of ¥122.3 trillion (about $783bn), reinforcing growth support even as policy normalises.
Inflation
Tokyo core inflation eased but stayed above target at 2.3% year-on-year (December) — consistent with the case for continued normalisation.
Debt securities
Fiscal signalling mattered as much as the headline budget size:
New JGB issuance planned at about ¥29.6 trillion
A stated debt dependence ratio around 24.2% (notably low by recent decades’ standards)
Debt servicing costs projected to rise to around ¥31.3 trillion, using an assumed ~3.0% interest rate — highlighting sensitivity to higher yields.
FX / spillover
The yen weakened in thin trade to around 156.5 per USD during the week, keeping markets attentive to the risk of verbal or direct intervention if moves become disorderly.
Australia
Economic growth
Australia’s late-December discussion was dominated by the intersection of fiscal projections and a central bank that remains alert to inflation persistence.
Inflation re-accelerated into late 2025 (with October inflation around 3.8% and core around 3.3% referenced in policy discussion), strengthening the risk that policy stays restrictive for longer.
Debt securities
The official mid-year fiscal update projected an underlying cash deficit of about A$36.8bn for 2025–26, shaping the domestic bond narrative more than issuance headlines.
Recession
The tone remained “slowdown management” rather than recession shock, with inflation persistence the main constraint.
New Zealand
Economic growth
A widely used comparative outlook projected ~0.7% GDP growth for 2025, improving thereafter — placing NZ on the softer end among developed peers.
Inflation
CPI inflation was around 3.0% (near the top of the target band in the most recently referenced quarter), with expectations that it trends towards ~2% by mid-2026.
Debt securities / policy
The OCR stood at 2.25%, reflecting an easing cycle that has already delivered substantial support to demand.
Recession
NZ remains one of the more recession-sensitive economies in this group due to lower growth momentum, though the near-term framing remains “slow recovery”.
Singapore
Economic growth
The key year-end anchor remained an upgraded 2025 growth outlook around ~4.1%, consistent with a resilient expansion profile.
Jobs
Labour conditions remained broadly steady in the most recent official reporting framework, supporting consumption and services activity.
Inflation
November readings showed core inflation at 1.2% y/y and headline inflation at 1.2% y/y, both slightly below consensus expectations — confirming a benign inflation backdrop going into year-end.
Debt securities
No major sovereign issuance headline dominated this week; Singapore continued to be influenced mainly by global rates while domestic inflation stayed contained.
Recession
With growth strong and inflation low, recession risk remained muted.
Switzerland
Economic growth
Switzerland continued in a steady-but-subdued growth profile, with policy discussion centred on inflation and currency conditions.
Jobs
No Swiss jobs release dominated this holiday week’s macro narrative.
Inflation
The inflation outlook remained extremely low, with projections for ~0.3% next year and ~0.6% in 2027 frequently cited in market commentary.
Debt securities / policy
Policy rates remained at 0%, with the debate more about FX conditions and whether negative rates ever return than about near-term hikes.
Recession
Near-term recession fear was not the dominant Swiss narrative; the key focus was policy tool choice (rates vs FX) under very low inflation.
Quick portfolio implications from 20–27 Dec
Rates are still the hidden driver: even when equities feel “risk-on”, changes in fiscal expectations and global duration (especially Japan) can move portfolios via yields and FX.
Consumer signals remain uneven: UK footfall/spend patterns and sentiment indicators elsewhere still point to pockets of pressure despite strong index levels.
China is stabilising, not reflating: steady benchmark rates and targeted property measures are supportive, but not the sort of catalyst that typically ignites a global growth surge on their own.