Last week witnessed a series of major global economic developments that pointed to a clear slowdown in economic momentum alongside growing signals of monetary easing. In the United States, economic data were mixed: nonfarm payrolls showed a modest increase, but this was accompanied by a rise in the unemployment rate to its highest level in four years, weaker wage growth, and softer manufacturing and services activity indicators. Inflation also came below expectations, reinforcing market bets on future interest rate cuts.
In the euro area, the European Central Bank kept interest rates unchanged, with a relative improvement in industrial production offset by continued weakness in PMI indicators and lower inflation. In the UK, the Bank of England cut interest rates as expected, amid rising unemployment and slower income and inflation growth, despite an improvement in PMI readings.
In Japan, the central bank raised interest rates, with stable inflation and a relative improvement in manufacturing activity and exports, while the services sector showed some slowdown. In China, economic pressures persisted, reflected in weak industrial production, retail sales, and real estate investment, highlighting ongoing challenges in domestic demand. Elsewhere, data from Canada, Australia, and Switzerland pointed to limited slowing, confirming that the broader global economic picture continues to lean toward moderation, alongside increased reliance by central banks on accommodative policies.
Market Analysis
GBP/USD
After reaching a high of 1.3456 on Tuesday, December 16—the highest level since October 17, 2025—the British pound against the US dollar retreated to 1.3312 on Wednesday before closing at 1.3372. Despite this pullback, the pair remains up around 7% year to date. Recently released UK economic data have been notably weak, strengthening expectations that the Bank of England will continue cutting interest rates in the coming period. The Relative Strength Index (RSI) currently stands near 59, indicating still positive momentum for GBP/USD.
Silver
Silver prices recorded a new all-time high on Friday at $67.46, rising around 132% since the beginning of the year and outperforming all other commodities, notably gold and platinum. Expectations point to a continuation of the upward trend, driven by several key factors. These include the positive correlation between gold and silver—where silver typically rises at a faster pace when gold advances—strong industrial demand due to its widespread use in medical supplies, electronics, electric vehicles, and solar panels, and the additional boost from the artificial intelligence era, which relies heavily on silver-intensive electronic components. Furthermore, a persistent supply deficit, where demand exceeds annual supply, continues to push prices higher, alongside market expectations of two US Federal Reserve rate cuts next year. The RSI currently stands at 76, placing silver in overbought territory and signaling strong bullish momentum. The MACD also shows a bullish crossover, reinforcing the likelihood of continued upside momentum.
FTSE 100 Index
The UK’s FTSE 100 index continues its upward trajectory, reaching 9,913 points on Friday, December 19, 2025, and approaching its all-time high. The index has risen by approximately 32% from its low of 7,533 recorded on April 7, 2025, to last Friday’s peak, and is up nearly 21% year to date. The RSI is currently around 64, indicating sustained bullish momentum. Meanwhile, the MACD shows a bullish crossover, supporting the probability that the FTSE 100 will continue its upward trend.
Key Events to Watch This Week
Markets are closely watching several important economic indicators and data releases this week, which could have a direct impact on global market movements.
- Monday: The loan prime rate decision from the People’s Bank of China, UK GDP data, and the US core Personal Consumption Expenditures (PCE) price index.
- Tuesday: Canada’s GDP figures, along with a series of US indicators including durable goods orders, GDP, industrial production, consumer confidence, and new home sales.
- Wednesday: US weekly jobless claims and the US crude oil inventories report.
- Friday: Tokyo Consumer Price Index (CPI) data from Japan.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
