Christmas markets in the US, Europe, and South Korea are closed, the offshore RMB breaks 7, gold falls below 4,500 USD, and silver fluctuates at high levels

As the Christmas holiday approaches, U.S. stock and bond markets will be closed for one day. Trading in Brent crude oil futures contracts on the Intercontinental Exchange is suspended for the entire day. Trading in precious metals, WTI crude oil, foreign exchange, and stock index futures contracts on the Chicago Mercantile Exchange is also suspended for the entire day. Most major European stock markets are closed for the Christmas holiday, including Germany, France, the UK, Italy, and Spain. Additionally, the markets in Australia and South Korea are closed today. Overnight, U.S. stocks steadily rose in light trading volume, successfully kicking off the historically high-probability "Christmas rally," with the S&P reaching a new high.

On December 25, Asian stock indices showed mixed results, and Japanese bond yields rose. The Chinese yuan and Japanese yen strengthened, with the offshore yuan breaking the 7 mark. The precious metals market saw a correction after hitting new highs, with gold falling below $4,500 per ounce, platinum and palladium experiencing significant pullbacks, while silver remained strong, fluctuating above $71 per ounce. Brent crude oil saw a slight decline, and cryptocurrencies rose.

Core market trends are as follows:

The Nikkei 225 index closed up 0.13% at 50,407.79 points, while the Tokyo Stock Exchange index rose 0.3%.

The yield on Japan's 2-year government bonds rose to 1.119%, and the yield on Japan's 5-year government bonds increased by 1 basis point to 1.5%.

The offshore yuan against the U.S. dollar broke above the 7.0 mark for the first time since the end of September 2024; the yen rebounded to around 155.8.

Spot gold fell more than 0.1% to $4,479 per ounce; spot silver remained at $71.80 per ounce; Brent crude oil decreased by 0.05% to $61.84 per barrel.

Bitcoin rose 0.18% to $87,779.81, while Ethereum fell 0.26% to $2,937.87.

The offshore yuan exchange rate has risen above the 7.0 mark, making the appreciation of the yuan a recent market focus. Industrial Securities believes that the recent appreciation of the yuan is not merely a passive response to the weakening of the U.S. dollar, but more so driven by the endogenous forces of market capital inflow and increased demand for currency settlement. Under the "push" of expectations for a shift to a more accommodative U.S. monetary policy and the potential narrowing of the China-U.S. interest rate differential, combined with the "pull" of the trend of previously flowing out capital returning, the current trend of yuan appreciation may have just begun.

The yen has rebounded to around 155.8. According to Wall Street Journal, Bank of Japan Governor Kazuo Ueda stated that as wage growth drives prices up, Japan is steadily approaching its stable inflation target of 2%. If economic performance meets expectations, the central bank will continue to follow the path of interest rate hikes.

Demand for Japan's two-year government bond auction was weak, leading to an increase in the yield on bonds of that maturity. The bid-to-cover ratio (a key indicator of demand) was 3.26, down from 3.53 in the previous auction and below the average of 3.65 over the past 12 months. The yield on the two-year government bond rose by 2.5 basis points to 1.125%, reaching a new high since 1996.

Gold fell back below $4,500 after hitting a historic high during the session, previously reaching $4,525.18. According to Wallstreetcn, after breaking through the key $4,500 level, the gold market experienced a technical adjustment. Despite the short-term pullback, analysts remain optimistic about the future. Wyckoff noted that the next upward target for the gold market is $4,600 per ounce, expected to be reached by the end of the year, with the technical outlook still bullish.

Silver performed strongly, reaching a historic high of $72.70 during the session, and then maintaining around $71.80. Since the beginning of the year, silver prices have surged by 149%, far exceeding gold's 70% increase, supported by strong fundamentals. Wyckoff expects the next upward target for silver to be $75 per ounce, also likely to be achieved by the end of the year. The dual characteristics of silver's industrial demand and investment attributes have allowed it to gain greater increases in this round of the precious metals bull market.