The Monday Report – 15 December 2025

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Led by a sell off in Broadcom and Oracle, the Nasdaq led US markets lower on Friday (after record highs in the S&P500) along with silver and other more speculative areas of the markets.

After a third week of gains, the ASX200 is set to take a breather for the start of this week, with futures pointing to a weaker opening on Monday morning.

Good Morning,

Looks like Friday’s strong share market performance will not see a follow-through on the other side of the weekend, as tragedy in Sydney has captured global headlines.

Our hearts and minds are with families and everybody else who has been affected.

What happened last week, Tony Sycamore, IG extract

The ASX200 finished 62 points or 0.73% higher last week at 8697, marking a third week of gains. Tailwinds from offshore markets supported the move, helping to offset the RBA’s hawkish hold.

The key event on the local calendar this week is Tuesday’s Westpac Consumer Confidence Index release for December.

Last month (November), Australian consumer confidence soared by 12.8% to 103.8. Excluding pandemic disruptions, this was the most positive reading in seven years, supported by signs of economic recovery and easing external risks.

Notably, the surge occurred despite a sharp rise in RBA rate hike expectations following the red-hot Q3 CPI report released in late November.

Across the sub-indexes, there was a broad-based boost in sentiment with the notable exception of labour market views as unemployment expectations increased 9.3% to 139.5, remaining above the long-term average. 

Last week’s hawkish RBA “on hold” decision and increased chatter regarding RBA rate hikes in the first half of 2026 are expected to see consumer sentiment ease back towards the 100 mark in December.

The Australian rates market starts the week pricing in 6bp of RBA rate hikes for February, with 20bp of rate hikes priced for June and a cumulative 34bp of rate hikes priced between now and the end of 2026. 

What happened last Friday, NAB Markets Today Research

Friday’s session had little news flow to provide direction, and moves across markets were generally modest outside of equity markets. US equities slid on Friday, but the move was narrow, driven lower by tech stocks amid fresh concerns about AI spending.

FOMC speakers included Goolsbee, who clarified his dissent last week was about timing rather than (expected) direction. US longer end yields continued climbed higher and the curve steepened.

Goolsbee said in an interview on CNBC “I am not hawkish on rates for next year,” and said in an earlier statement explaining his dissent that “I felt the more prudent course would have been to wait for more information”.

Schmid, who also dissented in favour of a hold, wrote in a statement that “Inflation remains too high, the economy shows continued momentum, and the labor market —though cooling— remains largely in balance,” he said. “I view the current stance of monetary policy as being only modestly, if at all, restrictive.”

Both Goolsbee and Schmid are non-voters next year. Paulson, who becomes a voter next year, said Friday she is “still a little more concerned about labor market weakness than about upside risks to inflation.”

President Trump said in an interview with the WSJ he was leaning toward choosing either former Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the Federal Reserve beginning next year, suggesting Warsh remains solidly in contention even as Hasset has been widely viewed as the front runner. 

Trump said he thought the next Fed chair should consult with him on where to set interest rates and said that a year from now interest rates should be “1% and maybe lower than that”. 

The US curve steepened on Friday, with 2yr yields -2bp lower and 10yr yields 3bp higher. Similar over the week, with -4bp fall in 2yr yields but 10 and 30yr yields 5bp higher. The US 10yr spread is around 66bp, its highest in 3 years.

Fed pricing was little changed, with slightly more than 2 cuts priced by the end of 2026.

A Trader’s Week Ahead Playbook: Chris Weston, Pepperstone

We roll into the final week of trading for 2025 before many square off their books and call it a year. Some will have already done so, choosing to dial down risk ahead of a week littered with scheduled macro event risk and no obvious directional skew in how markets could react to outcomes.

The depth of liquidity in order books will be key for the trading environment this week. The volume to fill orders at the top of book as well as the resting limit orders are set to have a strong influence on volatility, daily high-low ranges, and the cost to trade through bid-offer spreads.

One suspects liquidity conditions will thin out this week from what is typical, but remain sufficient for size to be worked without excessively moving prices, but will then really drop next week. 

The technical set-ups and the price action will matter greatly this week.

A further sell-off (higher yields) in 10- and 30-year developed market government bonds may catalyse broader selling in risk assets, particularly if 10-year JGB yields break above 2% and US 10-year yields push through 4.25%.

Should the MAG7, Broadcom, Nasdaq100, Russell2000 or S&P500, and silver follow through on Friday’s selling, many traders may feel compelled to cut back hard on extended long positioning, lock in gains, and seek first-mover advantage before others unwind portfolio winners.

Alternatively, if the selling seen on Friday in the 2025 winners such as silver, quantum computing, AI leaders, and AI power generators proves short-lived, and buyers step up to reverse prices higher, active participants may feel obliged to run positions hot and chase these themes into year-end.

Last week’s FOMC meeting was about as market friendly as bulls could have hoped for. That said, Chair Powell did signal the Fed’s base case is for the fed funds rate to be held for an extended period. He also made it clear policy settings are at or close to neutral (the policy setting considered to be neither stimulatory nor restrictive), so the bar to ease further in the near-term is now fairly high. 

With both November US nonfarm payrolls and CPI released this week, both sides of the Fed’s mandate are in play. These releases could drive pre-positioning flows ahead of the tier 1 data, trigger volatility on the outcomes, but also help set the tone for risk markets heading into 2026.

Equity bulls would like to see US nonfarm payrolls print between 50k and 70k, with the unemployment rate at either 4.4% or 4.5%. This would represent a ‘Goldilocks’ outcome, where labour market concerns ease modestly while keeping Fed rate cuts on the table.

Conversely, should payrolls show net job losses, which is possible, and the unemployment rate rises to 4.6%, labour market concerns could dominate market sentiment. Even if interest rate markets price a higher probability of a Fed cut in January or March, the likely response is a broad equity de-risking, a weaker USD, and rotation into cash, bonds, and safe-haven assets.

A November core CPI print at 2.9% y/y, or below, would offer further tailwinds to risk markets and validate Chair Powell’s relative lack of concern on the inflation outlook. Depending on the payrolls outcome, a core CPI print above 3.2% y/y would likely prompt traders to reduce risk exposure or remain engaged through the holiday period via low-volatility defensive assets.

While US NFP and CPI are the marquee risks this week, traders also navigate five G10 central bank meetings. Consensus expectations point to policy changes from the Bank of Japan, via a hike, and the Bank of England, via a cut, while the remaining meetings are expected to be low-impact and largely priced.

Of these, the BoJ meeting carries the greatest potential to influence broader market volatility. A 25bp hike from the BoJ is almost fully discounted in swaps, but focus will remain on guidance around the pace of hikes in 2026 and any updates to the Bank’s estimated terminal policy rate.

Double Bubble: Lance Roberts, Real Investment Advice extract

This weekend, global investors are reckoning with a stark warning from the Bank for International Settlements (BIS). In its December 2025 Quarterly Review, the BIS flagged what it called a rare “double bubble” forming across both gold and equity markets.

According to the report, “the combination of gold and share prices soaring in unison is a phenomenon not seen in at least half a century.” In fact, BIS Economic Adviser Hyun Song Shin put the risk clearly: “Gold has behaved very differently this year compared to its usual pattern. The interesting phenomenon this time has been that gold has become much more like a speculative asset.”

The data also reflects the increased risk in both asset classes. Gold has jumped about 60% in 2025, its strongest annual performance since 1979. At the same time, U.S. equities, led by tech and AI-related names, have pushed major indexes to record highs as investors chase yield, growth, and momentum.

Notably, the backdrop for today’s conversation is that, starting in October 2022, both stocks and gold began a parabolic ascent, breaking from their previous growth trendlines.

That is not a fundamentally driven move; that is solely speculation. As noted in the BIS report, for the first time in over 50 years, both gold and equities have shown “explosive behavior” simultaneously.

In prior episodes, such explosive behavior occurred separately. For example, gold saw a steep bubble in the late 1970s, culminating around 1980 during a period of high inflation. In that episode, gold peaked, then collapsed and spent decades losing relevance as a mainstream asset, illustrating the fleeting nature of speculative gold booms. 

On the equity side, previous bubbles, such as the late 1990s technology stock run-up, ended in sharp corrections when speculative exuberance outpaced fundamentals. Because the last time both markets were “bubbly” at once was over a half-century ago, the BIS lacks a recent precedent for what could happen.

The concern, however, is rather simplistic:

“If history repeats itself, overvaluation followed by reversion, investors could suffer steep losses in both their equity and gold holdings simultaneously, eliminating the traditional diversification benefit of holding both.”

While the underlying drivers of the “double bubble” are multiple, this does not equate to a “this time is different” scenario.

For example, while it is true that central banks have increased their purchases of bullion at a rate of approximately 1% annually over the last five years, these purchases are insignificant in terms of overall price appreciation.

However, it has been retail investors, speculators, and professionals, drawn in by momentum, that have pushed gold prices sharply higher. That momentum chase, ETF inflows, and media coverage have caused investment dollars to flood into both gold and equity funds. 

As the BIS stated, ETF prices trading consistently above net asset value (NAV) is a clear sign of “strong buying pressure coupled with impediments to arbitrage.”

The result is a market environment where traditional relationships between risk and haven, growth and refuge, appear broken. As the BIS notes, the most significant risk of the “Double Bubble” is that what seems to be diversification may actually be concentrated risk.

Let me be very clear. I am not stating that, with absolute certainty, that a “mean-reverting” event is about to occur. Irrational markets can persist in this state for a prolonged period. 

However, as investors, we must consider the rising risk of a simultaneous correction in both gold and equities due to the current “Double Bubble.” 

This makes a measured and more flexible approach sensible.

Corporate news in Australia

-On its ASX debut, BMC Minerals (silver & zinc) ((BMC)) rallied 25% higher from its IPO price with enthusiasm for the miner’s polymetallic KZK project in Canada.

-Ioneer ((INR)) is looking at Rio Tinto’s ((RIO)) US boron assets to expand its Nevada project.

-Igneo, Orix and Northleaf are vying for Macquarie Group’s ((MQG)) EUR900m Dutch data centre stake.

-Austal ((ASB)) shares slip after the Chairman approves Hanwa lifting its stake to 19.9%.

-Ravenswood Gold Mine is raising $300m via royalties before sale on record gold prices.

-4DMedical ((4DX)) received $30.2m underwriting via Bell Potter.

-Sharon AI is launching a $100m pre-IPO capital raising to help buy Nvidia GPUs.

-The Whiskey Project Group has appointed Morgans & Canaccord Genuity as joint leader of the 1H2026 IPO and $7m pre-IPO convertible notes.

-Medallion Metals ((MM8) launches $55m capital raising at 33c per share.

On the calendar today:

-AUCKLAND INTERNATIONAL AIRPORT LIMITED ((AIA)) Nov Traffic Update

-FLEETPARTNERS GROUP LIMITED ((FPR)) ex-div 13.6c

-ROBEX RESOURCES INC ((RXR)) Shareholder Meeting Ref: PDI Merger

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

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