- Musk flags silver supply (and price!) risks as China export curbs spark market concern
- PBOC sets USD/ CNY mid-point today at 7.0331 (vs. estimate at 7.0057)
- China launches “Justice Mission 2025” drills simulating blockade around Taiwan (more info)
- BoJ signals more rate hikes ahead as policy seen far from neutral. JPY trades higher.
Christmas Day/Boxing Day/Weekend:
- China to conduct live-fire military drills surrounding Taiwan on December 30
- China flags more proactive fiscal policy in 2026 to boost domestic demand
- Ukraine peace talks gain momentum as Trump and European leaders signal progress
- China industrial profits slump at fastest pace in 14 months as demand weakens
- Trump: “Final stages of talking” on Ukraine-Russia deal
- Oil drops again but OPEC’s market share war could create a generational buying opportunity
- Mixed sector performances as tech and healthcare show gains
- Tokyo CPI eased in December but stayed above target, BOJ to stay on gradual rate hike path
- BOJ’s Ueda sees wages and inflation reinforcing rate-hike case (Post when Ueda spoke on December 25)
TL;DR summary:
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Silver hit fresh record highs above US$83 before a sharp pullback, with volatility driven by strong industrial demand and supply concerns
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Elon Musk warned higher silver prices are problematic for industry, highlighting EVs’ heavy reliance on the metal
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China industrial profits slumped 13.1% y/y in November, underscoring persistent deflation and “involution” pressures
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Beijing signalled a more proactive fiscal stance in 2026, supporting consumption, innovation and growth near 5%
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USD/CNY fixing hit its strongest level since September 2024, while BoJ commentary kept further rate hikes in focus
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Ukraine peace talks made incremental progress, while PLA drills around Taiwan kept geopolitical risk elevated
Silver was volatile to start the new week, surging to another record high above US$83 before sharply retracing below US$75. As of writing, prices have stabilised around the mid-range near US$80. The move drew broader attention over the weekend after Elon Musk weighed in on rising prices, warning: “This is not good. Silver is needed in many industrial processes.”
The concern is well-founded from an industrial perspective. Electric vehicles use roughly twice as much silver as internal combustion engine cars, with the metal critical for power electronics, inverters, high-voltage contacts and fast-charging systems due to its superior conductivity and reliability. The episode reinforces how sensitive silver has become to the electrification and AI capex cycles.
China was also in focus over the weekend. Industrial profits fell 13.1% y/y in November, the sharpest decline in more than a year, as weak domestic demand and persistent deflation offset relatively resilient exports. The data underscore that “involution” pressures remain firmly in place, with firms still forced to compete aggressively on price and push excess supply offshore as the economy heads into 2026.
Against that backdrop, China’s finance ministry said fiscal policy will be more proactive in 2026, with a renewed focus on boosting consumption, supporting innovation and strengthening the social safety net in an effort to sustain growth near 5%. The guidance helped lend some support to the AUD, while on Monday the People’s Bank of China set the USD/CNY fixing at its strongest level since late September 2024. The yuan is strong while the PBoC seeks to stabilise the currency.
The yen was another mover. USD/JPY dipped below 156.10 before rebounding back above 156.50. The Bank of Japan’s December Summary of Opinions showed policymakers remain confident that policy is still far from neutral, with several members backing steady further rate hikes to avoid falling behind the curve, even as real rates remain deeply negative. In the points above yopu’ll see notes from Ueda’s speech on Christmas Day and Tokyo inflation data published on December 26.
Geopolitics also remained a bubbling risk. Ukraine peace talks showed further progress after constructive discussions involving Donald Trump, EU leaders and Volodymyr Zelenskyy, though unresolved territorial issues continue to limit any full “peace dividend” pricing. Meanwhile, China’s People’s Liberation Army Eastern Theater Command launched a multi-day exercise around Taiwan dubbed “Justice Mission 2025,” featuring blockade-style operations and joint live-fire assaults, keeping regional geopolitical risk elevated.
Asia-Pac
stocks:
- Japan
(Nikkei 225) -0.31% - Hong
Kong (Hang Seng) +0.42% - Shanghai
Composite +0.31% - Australia
(S&P/ASX 200) -0.37%
Bitcoin gained ground, up over 2.5% to above US$90K.
This article was written by Eamonn Sheridan at investinglive.com.
