USA
Risk sentiment recovered late in the week as cooler inflation and a still-stable labor market reinforced the “soft-landing” narrative. The BLS CPI report for November (released Dec 18) showed CPI +2.7% y/y, helping rates expectations stay anchored. Weekly initial jobless claims (released Dec 18) came in at 224k for the week ending Dec 13, consistent with only gradual labor cooling. There was no new GDP print during Dec 15–19 (BEA’s next GDP release was scheduled for Dec 23), so macro focus stayed on inflation/claims and activity updates. Equity performance reflected “growth leadership” returning late-week: S&P 500 +0.1% w/w and NASDAQ +0.5% w/w, while the Dow -0.7% w/w (rotation/sector mix and rate sensitivity).
Europe
European equities had a constructive week even as forward-looking surveys softened, because the market leaned on disinflation progress and easing-rate expectations. Eurostat’s final November euro-area inflation was reported around 2.1% y/y, keeping inflation close to target and supportive for duration-sensitive equities. On growth, the latest official read available to investors was Eurostat Q3 2025 GDP +0.3% q/q (euro area)—no major GDP release landed during Dec 15–19 itself. The STOXX Europe 600 rose from 1,446.25 (Dec 12) to 1,469.53 (Dec 19) (+1.61% w/w). UK equities outperformed: FTSE 100 +2.6% w/w, helped by sector leadership (e.g., miners/defense in market commentary) despite a data-heavy backdrop. Core continental indices were also positive: DAX +0.42%, CAC +1.03%, IBEX 35 +1.87%.
Japan
Japan was the clear underperformer as policy tightening dominated the tape. On Dec 19, the Bank of Japan raised the money-market operations guideline to ~0.75% (a key step in normalization), which pushed rates expectations higher and pressured equity multiples. The latest growth context was still the earlier official revision that Q3 GDP contracted at an annualized -2.3% (released prior to this week), adding sensitivity to any tightening shock. Equities sold off on the week: Nikkei 225 -2.61%, and TOPIX -1.17%. FX/rates volatility (and official jawboning about yen moves in subsequent reporting) reinforced that Japan’s market was being driven more by policy repricing than by incremental macro prints.
China
China’s week was shaped by soft domestic-demand signals from the official November activity batch and ongoing debate about the scale of stimulus. The National Bureau of Statistics (released Dec 15) reported retail sales +1.3% y/y and other indicators in its monthly release, pointing to uneven consumption momentum. Inflation was modest: China CPI +0.7% y/y in November (NBS release). For growth context, the latest official GDP available was Q3 2025 GDP +4.8% y/y (NBS). Mainland equities were essentially flat: Shanghai Composite +0.03%—policy support offsetting growth concerns. Hong Kong lagged (higher beta to global risk/flows): Hang Seng -1.10%, consistent with cautious sentiment despite periodic risk-on bursts.