Global Markets Overnight, Dec. 10, 2025: Asia Closes Mixed as Europe Opens Cautiously Ahead of Fed Decision

Global markets moved into classic “wait-and-see” mode overnight, with Asian equity indices ending mostly lower but mixed across the region while European stocks opened flat to slightly weaker on Wednesday, December 10, 2025. At the centre of it all: the U.S. Federal Reserve’s final policy decision of the year, where traders widely expect a quarter‑point rate cut but fear hawkish forward guidance. ^[1]

Below is a deep dive into how Asia and Europe traded, what’s driving sentiment, and what major strategists are forecasting for the hours around the Fed announcement.

Asia: Mixed Close as Fed Jitters Meet Soft China Data

Asian markets delivered a muted, patchy session as investors pared risk ahead of the Fed and digested another round of lukewarm Chinese inflation data.

Japan: The Nikkei 225 started higher but slipped to finish roughly 0.1% lower, while the broader Topix managed a small gain of about 0.1%, reflecting a tug‑of‑war between exporters benefitting from a weak yen and broader macro caution. ^[2]
China:
- Shanghai’s Composite Index fell around 0.2%, pressured by renewed worries about persistent factory‑gate deflation.
- Official data showed consumer inflation rising 0.7% year‑on‑year in November, matching expectations, but producer prices fell 2.2% and remained in deflation for the 38th consecutive month. ^[3]
Hong Kong: The Hang Seng index bucked the broader softness, climbing around 0.4% as tech names benefited from reports that Nvidia would be allowed to sell more advanced AI chips to China, even as Beijing signals tighter controls on cutting‑edge hardware. ^[4]
South Korea: Seoul’s Kospi slipped about 0.2% as investors stayed on the sidelines before the FOMC outcome and as defence names fell on signs of progress in Ukraine peace negotiations. ^[5]
Broad regional picture: MSCI’s broad index of Asia–Pacific shares outside Japan eased roughly 0.1%, while Chinese blue‑chip stocks underperformed with losses of around 0.8%. ^[6]

In Australia, the ASX 200 closed down 0.1% at 8,579 points, after a listless session dominated by macro headlines rather than stock‑specific news. Materials names outperformed, while academic and educational services lagged. ^[7]

The common thread across Asia was not panic, but paralysis: trading volumes were light, intraday moves were faded quickly, and most desks framed Wednesday as a placeholder session until the Fed speaks.

Europe: Stoxx 600 Flat as Wednesday’s Cash Session Opens

By the time European cash markets opened, the global narrative hadn’t changed: caution first, conviction later.

At the open on Wednesday, the pan‑European Stoxx 600 was essentially flat around 577 points, with:
- Germany’s DAX and France’s CAC 40 both trading modestly lower, and
- The UK’s FTSE 100 up about 0.2%, helped by gains in large‑cap energy and financial stocks. ^[8]

Sharecast and other European market commentators framed the tone as “edging lower,” reflecting a weak bias but no wholesale risk‑off move. The focus is firmly on whether the Fed’s policy path will justify the strong run in global stocks seen through much of 2025. ^[9]

Tuesday’s Close Still Shapes Sentiment

The overnight mood in Europe is also coloured by Tuesday’s close:

Stoxx 600 ended Tuesday effectively unchanged, down about 0.1%, as investors refused to take big positions ahead of the Fed. ^[10]
The DAX gained roughly 0.5% while France’s CAC 40 dropped close to 0.7%, highlighting divergent sector performance. ^[11]
Luxury and consumer names underperformed, with Ray‑Ban owner EssilorLuxottica tumbling after Google announced plans for AI‑enabled glasses in partnership with Warby Parker, putting pressure on broader European luxury stocks. ^[12]
Insurers and defence names were relative bright spots as investors looked for earnings resilience amid uncertain growth and geopolitics. ^[13]

Taken together, Europe is entering the Fed decision from a position of high valuations, modest earnings momentum, but very little conviction on rates beyond tonight’s move.

Fed Meeting: Markets Price a “Hawkish Cut”

Both Asian and European moves are ultimately orbiting the same gravitational centre: the FOMC decision and dot plot.

According to Reuters and other major outlets:

Futures markets are pricing an almost 90% probability that the Fed cuts rates by 25 basis points to 3.50–3.75% at this meeting. ^[14]
Traders, however, expect only a slim chance (around 20%) of another cut as early as January, reflecting the belief that tonight’s move may be the last in this mini‑easing phase unless growth or inflation data deteriorate meaningfully. ^[15]
Analysts also expect the “dot plot” to show fewer cuts in 2026 than markets had been pricing, raising the risk of a “hawkish cut” – a rate reduction packaged with a firmer long‑term tightening bias. ^[16]

City Index strategist Fiona Cincotta notes that if the dots fail to converge towards the market’s expectation of two cuts in 2026, equities may need to “hawkishly re‑price” the outlook, potentially putting the traditional Santa rally in jeopardy. ^[17]

On Investing.com, several high‑profile previews sharpen that message:

“FOMC Meeting Preview: Could This Be Powell’s Last Cut at the Fed?” argues that the base case is a single cut tonight, with Powell signalling a higher bar for further easing unless data materially weaken. ^[18]
“FOMC Preview: Hawkish Cut Looms Amid Fed Divisions” highlights internal disagreements on the committee and warns that a more divided vote could boost volatility across FX, rates and equities. ^[19]
In a widely‑shared column titled “Tomorrow’s Fed Decision Could Break the Market – Are You Ready for It?”, Kathy Lien sketches three trading approaches—proactive, reactive, and stand‑aside—underscoring that the greatest risk may be a sharp post‑decision whipsaw rather than the headline rate move itself. ^[20]

The recurring theme across these forecasts: the rate cut itself is largely priced; the guidance is not.

Cross‑Asset Moves: Silver’s Record, Yen’s Slide, Oil Steady

The overnight session wasn’t just about equities. Several cross‑asset moves added texture to the “cautious but not panicked” picture.

Silver and Gold

Silver has smashed through the $60/oz barrier, trading around $61–61.5, its highest level on record. Reuters notes that silver has more than doubled in 2025, driven by tight inventories, speculative momentum and surging demand from solar, EVs, data centres and AI‑related infrastructure. ^[21]
Gold is hovering just above $4,200/oz, off its October peak but still historically elevated as investors hedge both policy and geopolitical risk. ^[22]

Strategists warn that a hawkish dot plot could trigger a knee‑jerk dip in precious metals, but any sign of growing recession risk or slower 2026 growth could quickly reignite safe‑haven demand. ^[23]

Currencies: Yen and Dollar in Focus

The U.S. dollar index is slightly softer on the day, but the yen remains under intense pressure, with the euro and pound near or at record highs against the Japanese currency after a sharp overnight slide. ^[24]
A Bank of Korea board member warned that authorities “can’t sit and do nothing” about a weakening won, signalling that Asian central banks are increasingly sensitive to Fed‑driven FX swings that complicate their own inflation fight. ^[25]

FX analysts at several houses see USD/JPY especially vulnerable to any surprise dovish tilt tonight; a more aggressive easing path could send the pair sharply lower, while a hawkish dot plot might fuel another leg of yen weakness. ^[26]

Oil and Broader Commodities

Brent crude is trading around $62 a barrel, a modest 0.2% gain after previous declines linked to Iraq restoring output at the West Qurna‑2 field. ^[27]
Industrial metals like copper are a touch firmer, helped by hopes of incremental Chinese stimulus despite the mixed inflation picture. ^[28]

How Strategists Are Framing the Next 24 Hours

Across bank notes, broker commentaries and macro newsletters, several key narratives are emerging:

“Hawkish Cut” as the Base Case
- Many analysts expect the Fed to cut tonight but raise the implied terminal rate path for 2026, signalling that it will move more slowly from here.
- Pieces like “FOMC Preview: Hawkish Cut Looms” and “What if the Next Fed Move Was Up?” warn that if core inflation proves sticky, the next major surprise in 2026 could actually be toward tightening, not further easing. ^[29]
AI Earnings as a Secondary Volatility Trigger
- Earnings from Oracle and Broadcom, now seen as bellwethers for AI and cloud infrastructure, are scheduled right after the Fed. Options pricing implies double‑digit percentage swings, suggesting a second wave of potential turbulence for tech and broader growth stocks. ^[30]
Santa Rally at Risk
- Several strategists highlight that December often delivers weak performance early in the month, followed by a late‑month “Santa rally.” A hawkish Fed message could delay or mute that seasonal pattern, especially with major indices already near record highs. ^[31]
Global Central Banks Converging on Caution
- The ECB is widely thought to be done cutting, while markets have sharply scaled back expectations of further easing in Australia, New Zealand and Canada, leaving the Fed and Bank of England as relative outliers. ^[32]

What This Means for Investors Today

For traders and investors watching “Global Markets Overnight: Asia Closes Mixed, Europe Opens Cautiously” on December 10, 2025, the key takeaways are:

Equities:
- Asia’s mixed close and Europe’s flat open signal position‑squaring, not panic selling.
- The near‑term direction of indices like the Nikkei 225, Hang Seng, Stoxx 600 and S&P 500 will likely be determined by the Fed’s tone rather than by today’s data flow.
Rates & FX:
- U.S. 10‑year yields have crept higher into the meeting, setting up a binary reaction: a dovish surprise could push yields down and lift growth stocks, while a hawkish dot plot may extend the upward drift in yields and support the dollar. ^[33]
Commodities & Crypto:
- Silver’s record run and elevated gold prices show that the “hard‑asset hedge” trade is alive and well.
- Oil is stable but vulnerable to any Fed‑induced growth worries.
- Bitcoin hovering in the low‑$90k range underscores that crypto is also trading as a macro risk asset into the decision. ^[34]

As always, any short‑term positioning around central bank decisions carries significant risk. The first move after the statement is often a head‑fake, and liquidity can thin out around the announcement, amplifying whipsaws.

This article is for informational and editorial purposes only and does not constitute investment advice. Anyone trading around the Fed decision should carefully assess their risk tolerance, time horizon, and need for professional guidance.