Japan’s foreign investment in stocks decreased dramatically from \u00a5528.3 billion to \u00a5-1 billion by 19 December. This represents a huge shift in investor sentiment towards Japanese markets.<\/p>\n
The USD\/CAD trades near five-month lows, benefiting from policy differences between the Bank of Canada and the Federal Reserve. Meanwhile, gold pulls back from record highs due to profit-taking in lower-volume trading sessions.<\/p>\n
The GBP\/USD pair sees slight movement as holiday-thinned markets persist, maintaining a narrow range around 1.3500. In addition, silver continues to rise for the fourth day, motivated by hopes of Federal Reserve easing and its appeal as a safe-haven asset.<\/p>\n
On Christmas Eve, the EUR\/USD moves sideways, struggling to find direction below 1.1800 amidst subdued trading activity. Gold retraces from its highs, settling below $4,500, driven partly by persistent US Dollar weakness.<\/p>\n
Bitcoin trades just below $87,000, following intensified ETF outflows and less participation from large investors, known as whales. The latest data shows a continuous outflow from US-listed spot ETFs, totalling $188.64 million on Tuesday for the fourth day in a row. <\/p>\n
Avalanche hovers near $12 as Grayscale updates its ETF filing with the US Securities and Exchange Commission. The market remains under pressure following a slight decline from the previous day.<\/p>\n
We are seeing a significant reversal in sentiment toward Japanese equities. The drop in foreign investment to a net negative position is a stark warning, especially after the strong inflows we witnessed through much of 2023 and 2024. This suggests a potential near-term top, making put options on the Nikkei 225 an attractive hedge for early 2026.<\/p>\n
The US Dollar’s weakness appears set to continue into the new year, driven by expectations of Federal Reserve easing. With recent Core PCE data from November 2025 showing inflation continuing its cooling trend toward the 2% target, the market is pricing in rate cuts for the first half of 2026. This environment favors shorting the dollar against currencies with more hawkish central banks, like the Canadian Dollar.<\/p>\n
Gold’s retreat from its record high above $4,520 should be viewed as a consolidation phase rather than a trend reversal. The underlying support from expected Fed rate cuts remains firmly in place, and we saw similar profit-taking during the bull run of 2024 before prices pushed higher. We see any dip below $4,450 as a buying opportunity for call options expiring in the first quarter of 2026.<\/p>\n
In the cryptocurrency space, the recent ETF outflows for four straight days signal institutional caution heading into year-end. This is a significant change from the strong inflows that propelled the market after the ETFs were initially approved back in early 2024. Until we see a sustained return of positive flows, we would avoid long positions and consider protective puts on major crypto assets like Bitcoin.<\/p>\n
While overall market activity is subdued for the holidays, the thin liquidity can lead to exaggerated price swings on any unexpected news. We are watching the CBOE Volatility Index (VIX), which has been hovering near multi-year lows, suggesting complacency in the market. Traders should be wary of this and might consider buying cheap, out-of-the-money options to protect against a sudden spike in volatility as full trading resumes in January.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Japan\u2019s stock investment drops sharply; USD\/CAD gains; Bitcoin dips below $87K amid ETF outflows. Gold cools.<\/p>\n","protected":false},"author":62,"featured_media":16985,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-37716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=37716"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37716\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16985"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=37716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=37716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=37716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}