Global markets surge again after Christmas: RMB 6.99 hits September high, gold and silver both reach historic new highs

Market Turmoil, Renminbi Accelerates Toward Integer Levels

The first trading day after the holiday saw unusual movements. On Thursday, the USD/CNY exchange rate strengthened significantly, with offshore RMB reaching as high as 6.9960, the highest level since September this year. Onshore RMB also fell to 7.0051, matching the lowest since May 2023. Market participants generally believe that the continued end-of-year currency conversion demand, coupled with the lack of upward momentum in the US dollar, is accelerating the RMB’s appreciation.

A trader at a Chinese-funded bank revealed that the currency conversion market is very active, with offshore USD also weakening, and bullish expectations have become consensus. Goldman Sachs’s latest analysis points out that the People’s Bank of China (PBOC) has recently alternated between statements emphasizing “resilience” and “flexibility,” which suggests the central bank is inclined toward a stronger RMB exchange rate but still aims to control the pace of appreciation to prevent it from accelerating too quickly. The bank maintains forecasts that the RMB exchange rate will reach 6.95, 6.90, and 6.85 respectively after 3, 6, and 12 months.

Meanwhile, the New Taiwan dollar (TWD) faces rising appreciation pressure, posing a clear challenge to export industries. The TWD’s appreciation against the USD has widened, directly impacting Taiwan’s export competitiveness, especially affecting traditional export sectors such as electronics and panels.

Commodities Rise Together, Gold and Silver Hit New Highs

The commodity markets are also experiencing gains. On Friday, gold broke through the $4,500 mark, reaching a high of $4,504, while silver surged to $73.67, both setting new records. Market speculation suggests that a global easing of monetary policy, a weakening US dollar, and geopolitical risks are collectively driving precious metals higher.

Bank of America’s latest forecast indicates that the Federal Reserve will cut interest rates once in June and July 2026, and predicts that the 10-year US Treasury yield will fall back to the 4% to 4.25% range by the end of the year, with further downside possibilities. These expectations support safe-haven assets like gold.

Central Bank Signals New Policy Clues, Japan Maintains Rate Hike Path

Bank of Japan Governor Ueda Kazuo stated that Japan’s core inflation is steadily approaching the 2% policy target, and the central bank is prepared to continue raising interest rates. He emphasized that unless the economy faces significant negative shocks, the labor market will remain tight, exerting upward pressure on wages. Companies continue to pass on rising labor costs in food and other goods and services, indicating Japan is forming a mechanism where wages and inflation rise in tandem.

At the same time, Japanese Prime Minister Sanae Takaichi announced that the new fiscal year starting April 2026 will have a total budget of 122.3 trillion yen, a record high, an increase of 6.3% from this fiscal year. However, new government bond issuance will remain within 29.6 trillion yen, the second consecutive year below 30 trillion yen, and dependence on debt will decrease from 24.9% to 24.2%, the first time in 27 years that it has fallen below 30%. Following the announcement, the yield on Japan’s 40-year government bonds fell by 7 basis points to 3.62%.

Tech Stocks Outlook Bullish, Semiconductors Reach New Milestone

Bank of America semiconductor analyst Vivek Arya pointed out that AI development is still in the middle of a structural transformation, with the overall industry trend upward led by leading companies with competitive advantages. He predicts that global semiconductor sales will grow 30% by 2026, reaching a key milestone of over $1 trillion for the first time. Companies with high gross margins and solid market positions will continue to be core investment targets.

BofA named NVIDIA, Broadcom, Lam Research, KLA Corporation, AMD, and Cadence Design Systems as the six most confident investment targets. Recently, NVIDIA announced an licensing agreement with AI chip startup Groq, granting access to their chip technology, and hired Groq CEO Simon Edwards. Groq will remain an independent company, and its cloud business will continue to operate. After completing a $750 million funding round in September, Groq’s valuation reached $6.9 billion, focusing on the “inference” area of training AI models.

US Stock Outlook, Growth in 2026 May Fall Short of Expectations

However, CFRA Chief Investment Strategist Sam Stovall stated that for the US stock market to achieve double-digit gains again, all engines need to run at full speed. The firm’s forecast for the S&P 500 at the end of 2026 is 7,400 points, about 7% higher than current levels. While the market may still rise next year, increasing adverse factors suggest it may not replicate the strong performance of 2024.

Major global markets are subdued due to the Christmas holiday. US markets were closed all day on December 25, reopening on December 26. Hong Kong markets were also closed for two days, and major European exchanges remained closed on December 26 due to the holiday. Trading activity has significantly decreased, but market attention remains focused on policies and data at year-end and the beginning of the new year.