Global bond yields rose and stocks fell on Monday after Bank of Japan Governor Kazuo Ueda hinted that interest rates may rise later this month, cooling investor optimism around an expected U.S. rate cut and getting December trading off to a rocky start.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
Today's Key Market Moves
Today's Talking Points
* Japan's Ueda scares the horses
A heavy wave of equity and bond selling in Japan rippled through global markets on Monday, as investors braced for a Bank of Japan rate hike on December 19. Interestingly though, for once the spike in JGB yields lifted the yen. Has the Japanese currency bottomed?
The prospect of an imminent rate hike intensifies the spotlight on JGBs, how much longer Japan's consumers and businesses can tolerate surging yields, and the fiscal-monetary policy nexus. Prime Minister Sanae Takaichi's planned fiscal stimulus may not be accompanied by her preferred monetary accommodation after all.
* High-ho, silver lining
The latest run-up in silver means the metal has now doubled in price so far this year. Silver hit a record high of $58.83 an ounce on Monday, up 104% from the $28.87 close on December 31. It is up as much as 20% in the last week alone.
Tight supply, the prospect of more Fed easing, investor diversification, and bullish momentum have all fueled the surge. Silver has shown remarkable resilience in recent weeks, consolidating and even strengthening when gold, stocks, crypto and other assets have retreated to varying degrees.
* Global manufacturing down in the dumps
Global growth may be holding up ok, but tariffs and trade tensions are taking their toll on manufacturing - the latest purchasing managers' index (PMI) figures show activity in the United States, euro zone, China and Japan contracted last month.
Factory activity in the U.S. has now shrunk nine months in a row, suggesting that President Donald Trump's plans to onshore and ultimately revive U.S. industry have yet to bear fruit. There are some bright spots - notably Britain and Italy - but overall it's a fairly gloomy picture.
What could move markets tomorrow?
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