Dollar steadies as Asia stocks split on Fed jitters; oil climbs as China export rebound masks US slump
Asian equities were mixed and the dollar held firm as traders braced for the Federal Reserve’s rate decision, while oil extended gains and fresh China trade data revealed a sharp US-bound export drop despite a broader rebound.
Market snapshot
- Asian stocks were uneven amid Fed policy uncertainty and simmering Japan–China tensions.
- China’s November exports rose 5.9% y/y, but shipments to the US reportedly plunged 29%.
- US private payrolls fell by 32,000 in November, underscoring a softer labor backdrop ahead of the Fed.
- Crude oil advanced, lending support to energy shares and commodity-linked sentiment.
- US equity futures were flat, with Wall Street hovering near all-time highs after two strong weeks.
- Ulta Beauty jumped 12.7% and Victoria’s Secret rose 18% on earnings-driven relief.
- Soybean futures ticked higher on China trade hopes; prices remain near 2020 lows despite aid measures.
- Coinbase signaled a renewed push in India, targeting a fiat on-ramp by 2026 amid a 30% crypto tax regime.
Asia opens cautious into the Fed
Risk appetite in Asia was tentative as investors balanced hopes of a soft landing against lingering inflation concerns and geopolitical friction between Japan and China. The broader tone kept regional equity indices diverging, with investors rotating defensively ahead of the Fed’s policy statement and updated projections.
The FX backdrop reflected the wait-and-see mood. Major pairs consolidated as traders weighed the odds of an extended pause from the Fed against pockets of slower US data. Liquidity was thin into the event risk, keeping intraday volatility contained.
China’s export rebound hides a US demand hole
Headline momentum in China’s November exports surprised to the upside at 5.9% year-on-year, yet the composition showed strain: shipments to the United States reportedly tumbled 29%. The split highlights how global demand is rebalancing and how supply chains continue to adjust.
For FX, the picture is nuanced. A stronger export pulse can offer the yuan some support, but a steep drop to the US market—China’s high-value demand center—tempers the outlook. Commodity-linked currencies sensitive to Chinese activity, such as AUD and NZD, may remain headline-driven by advanced manufacturing orders and electronics cycle signals rather than the headline total alone.
US labor soft patch raises the stakes
A decline of 32,000 in US private payrolls for November adds to the case that the labor market is cooling at the margin. For rates and FX, softer jobs momentum typically pulls Treasury yields lower and caps the dollar if inflation cooperates. However, with services inflation sticky, the Fed is likely to emphasize data dependence rather than signal early easing. Markets will parse any tweaks to growth, unemployment and inflation projections closely.
Commodities: oil climbs, soybeans bounce
Crude prices pushed higher, underpinned by tightness concerns and resilient demand signals into year-end. Higher oil typically bolsters energy equities and can lend support to petro FX, though traders remain sensitive to OPEC+ compliance headlines and inventory data.
Agriculture found a bid as soybean futures rose on renewed China purchase hopes, even as spot levels hover near 2020 lows. US aid for farmers totaling $12 billion offers a buffer, but without sustained import demand, rallies may be checked by ample supply.
Corporate moves and crypto watch
Earnings were a bright spot: Ulta Beauty surged 12.7% and Victoria’s Secret rallied 18%, adding to the feel-good factor in US discretionary names as index futures tracked near records. In digital assets, Coinbase’s plan to re-enter India with a fiat on-ramp targeted for 2026, alongside a partner valuation of $2.45 billion at CoinDCX, signaled incremental progress in a key growth market despite heavy taxation.
What’s next
With US futures flat and risk assets already pricing a benign policy path, positioning into the Fed is tight. FX desks will focus on the statement tone, dot plot, and Chair Jerome Powell’s guidance on how quickly policy might pivot if growth data softens further. A cautious Fed could keep the dollar range-bound; any hawkish surprise risks a squeeze higher.
FAQ
Why were Asian markets mixed today?
Asian stocks reflected a cautious tone ahead of the Fed decision, alongside nervousness over Japan–China tensions. Investors rotated defensively and avoided big directional bets before key US policy and jobs cues.
How does China’s export rebound affect currencies?
The 5.9% export rise can support sentiment around China-sensitive FX, but the 29% slump in US-bound shipments highlights demand risk in high-value markets. That divergence may limit sustained yuan strength and keep AUD/NZD reactive to forward-looking manufacturing orders.
What does the US private payrolls decline mean for the Fed?
A 32,000 drop suggests the labor market is cooling at the edges, which could reinforce a “higher for longer, but watching closely” stance. It raises the probability of an eventual policy pivot in 2025 if inflation trends allow, but a firm easing signal today is unlikely.
How is the oil rally feeding into markets?
Rising crude prices support energy equities and can aid petro-linked currencies, but gains are capped by uncertainty over OPEC+ output discipline and global demand trends. Traders are watching inventory data and any supply disruption headlines.
Are US stocks still near record highs?
Yes. After two winning weeks, US benchmarks are hovering near all-time highs, with futures flat as traders await the Fed’s guidance.
What should FX traders watch next?
Focus on the Fed’s dot plot, Powell’s press conference tone, and upcoming labor and inflation prints. For Asia-Pacific pairs, keep an eye on advanced manufacturing indicators from China and any shifts in geopolitical risk that could sway safe-haven flows.
This article was produced by BPayNews.
Last updated on December 8th, 2025 at 05:56 am
