Singapore: Global financial markets began the final full trading week of 2025 on a cautious note as investors pulled back from riskier assets, anticipating a series of pivotal central bank decisions and key economic data releases. Asian equities led the decline, with the MSCI Asia-Pacific index outside Japan falling 1%, while South Korean shares, one of the top performers this year, dropped by as much as 2.7%. Analysts attributed the dip to year-end portfolio adjustments and thinner liquidity conditions.
Investors are closely watching policy actions from several major central banks this week. The Bank of Japan is expected to raise interest rates by 25 basis points to 0.75%, while the Bank of England may trim rates to 3.75%. The European Central Bank, Sweden’s Riksbank, and Norway’s Norges Bank are anticipated to maintain their current monetary stances. In the United States, delayed economic reports, including November jobs data and the consumer price index, are due for release, adding further uncertainty to market sentiment.
China’s economic slowdown added to global market unease. Recent data indicated further deceleration in factory output and retail sales, while new home prices continued to decline in November, reflecting fragile domestic demand. Investor confidence was further shaken after China Vanke, a major state-backed property developer, failed to secure bondholder approval to defer a bond payment, raising the risk of default and reigniting concerns about the troubled property sector. Analysts warned that any default could have widespread ramifications across China’s real estate market.
In commodities, Brent crude rose 0.6% to $61.46 per barrel, bolstered by supply concerns stemming from U.S.-Venezuela tensions and other geopolitical risks. Meanwhile, gold extended its rally for the fifth consecutive day, approaching record highs as investors sought safe-haven assets amid heightened market uncertainty.
Markets are likely to remain volatile throughout the week as global investors monitor central bank decisions, U.S. economic releases, and developments in China’s property sector. The combination of slowing growth in major economies and ongoing geopolitical risks underscores the cautious sentiment that has gripped markets heading into the year-end trading period.