- Oil traders note - Saudi airstrikes in Yemen expose escalating tensions with UAE
- China defies easing calls as PBOC keeps rates steady and shifts focus to fiscal support
- Silver steadies after sharpest sell-off in 5 years as metals head for best year since 1979
- PBOC sets USD/ CNY central rate at 7.0348 (vs. estimate at 7.0112)
- South Korea to unveil MSCI Developed Market inclusion roadmap early next year
- Trump warns Iran of renewed strikes, keeps Middle East oil risk premium simmering
- US oil inventories surprise higher as geopolitics keeps crude supported
- Nvidia completes $5bn Intel investment as strategic partnership takes shape
- Apple China iPhone demand rebound bolsters US$300–$315 price target outlook
Financial markets across the region traded in subdued fashion as the countdown to 2026 continued and most professional participants remained in holiday mode. Major FX pairs were confined to narrow ranges, regional equities were quietly mixed, and Japanese government bond yields eased slightly. The data calendar was largely empty, keeping conviction low. In commodities, oil prices were steady to marginally higher, while silver clawed back some ground following its sharp recent correction.
Geopolitics provided the main source of direction, though markets largely looked through the headlines. In Asia, China conducted a further 10 hours of live-fire drills around Taiwan on Tuesday, extending what Beijing has described as its largest-ever exercises around the island. The drills, spanning multiple zones in surrounding sea and airspace, were framed by China’s Eastern Theatre Command as a show of resolve against separatism. The manoeuvres follow a recent US announcement of a large arms package for Taiwan. Despite the scale of the exercises, broader market reaction remained muted.
Elsewhere, Middle East risk continued to underpin energy markets. US President Donald Trump warned that Washington could support fresh strikes should Iran be found rebuilding weapons programs, while also urging Hamas to disarm. The comments revived regional risk considerations and reinforced a geopolitical premium in oil, even in the absence of immediate supply disruptions.
Oil prices were also supported earlier by conflict-related headlines from Ukraine and Yemen. Saudi Arabia carried out airstrikes in southern Yemen targeting STC-linked positions and, for the first time, accused weapons supplies of arriving via UAE channels — a notable escalation that highlights a widening rift between Riyadh and Abu Dhabi. The episode adds a new layer of uncertainty to Middle East stability.
Meanwhile, US inventory data showed crude stocks rising by 405,000 barrels last week against expectations for a draw, with gasoline inventories jumping nearly 3 million barrels. Ordinarily bearish, the figures were largely shrugged off as geopolitical concerns continued to dominate price action.
Overall, thin liquidity and year-end positioning kept markets range-bound, with geopolitics shaping risk sentiment more than fundamentals for now.
Asia-Pac stocks:
- Japan (Nikkei 225) -0.25%
- Hong Kong (Hang Seng) +0.45%
- Shanghai Composite -0.1%
- Australia (S&P/ASX 200) -0.1%
