Markets Today: Silver Soars Above $66, UK Inflation Falls More Than Expected & FTSE 100 Explodes Higher

Most Read: Bank of England (BoE) Preview: A Hawkish Cut in a Stagnating Economy? Implications for the GBP & FTSE 100

After two days of falling prices, technology stocks in Asia have bounced back. The most dramatic rise was seen in China, where a new chip-making company called MetaX Integrated Circuits skyrocketed by more than 755% on its very first day of public trading.

In Japan, the main stock market index, known as the Nikkei, rose slightly by 0.3%. This small increase helped the market recover from a recent two-week low, largely because Japanese tech companies followed the positive trends seen in the US stock market the night before.

Several major companies helped lift the Japanese market. Advantest, a company that makes equipment for testing computer chips, saw its stock rise by nearly 1.6%, providing the biggest boost to the index. Fast Retailing (the owner of the clothing store Uniqlo) and the robot manufacturer Fanuc also saw their share prices go up.

However, not every company did well; SoftBank Group saw a small drop in value. Overall, the market was fairly split, with about half of the companies seeing their stock prices fall and slightly less than half seeing them rise.

Looking ahead, the Nikkei will likely drift without a clear direction until the end of the year. Prices are expected to go up and down slightly as two different groups of investors influence the market: those selling their stocks to cash in on recent profits, and individual buyers looking to purchase stocks whenever prices dip.

In November 2025, inflation in the UK cooled down more than experts anticipated, dropping to 3.2%. This figure is the lowest recorded in eight months and sits comfortably below the 3.4% rate that the Bank of England had predicted.

The main driver for this improvement was a slowdown in price hikes for food and drinks, particularly bakery items like bread, cakes, and cereals, which actually became cheaper this year.

Several other sectors also helped bring inflation down. Price increases for alcohol and tobacco slowed to their lowest levels since late 2022, while costs for housing, rent, and transport also rose more slowly than before.

Notably, the price of clothing and footwear actually dropped, driven largely by cheaper women's clothing. While the cost of recreation and culture remained steady, inflation in the services sector eased slightly.

Overall, consumer prices fell by 0.2% compared to the previous month, marking the biggest monthly drop since July 2024.

European stock markets rose on Wednesday, recovering from a drop the day before.

The FTSE 100 index went up slightly, but the UK market performed especially well, rising 0.8% after a surprise drop in inflation made investors hopeful for an interest rate cut soon.

Banks were the top performers, reaching their highest value levels since 2008. Energy and mining companies also saw gains because the prices of oil and silver increased. Investors are now watching closely for upcoming interest rate decisions from major central banks later this week.

However, not every company did well; shares in the supply business Bunzl fell 7% because the company predicted it would make less profit in 2026.

On the FX front, the US dollar recovered slightly on Wednesday, moving up from its lowest point since early October. This happened after new reports showed that the job market remains weak, leaving investors unsure about when the Federal Reserve will decide to cut interest rates next.

Despite this small rise, the dollar has had a difficult year overall; it has lost about 9.5% of its value, which puts it on track for its biggest yearly drop since 2017.

In other currency markets, the Euro fell slightly but remains near a three-month high as traders wait for the European Central Bank's meeting on Thursday, where interest rates are expected to stay unchanged.

Meanwhile, the Australian and New Zealand dollars both dipped slightly today, but they are finishing the year strongly. The New Zealand dollar is set to gain over 3% this year, ending a four-year losing streak, while the Australian dollar is on pace for a nearly 7% rise, its best performance since 2020.

Currency Power Balance

Oil prices rose by more than 1% on Wednesday after President Trump ordered a total blockade of Venezuelan oil tankers.

This decision has increased political tension worldwide, causing the price of major oil benchmarks to jump by about 1.5%, with Brent crude nearing $60 a barrel and US crude climbing to over $56.

At the same time, the price of precious metals surged to record levels. Silver jumped significantly, passing $66 per ounce for the first time ever, while gold prices rose to over $4,330/oz.

These increases were driven by new reports showing a slowdown in the US job market. Investors believe this weak data means interest rates will be cut next year, which makes owning gold and silver more attractive than holding cash.

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ECB: Rates on hold, debate heats up

The European session has been busy so far from a data perspective withGerman iFO data. CPI data will follow shortly.

There are no major US economic reports scheduled for today, but investors are focused on a speech by Federal Reserve official Christopher Waller at 14:15 CET.

Although Waller supported last week's interest rate cut, he is now weighing two conflicting possibilities for the economy. He is unsure if high consumer spending will drop to match the weak job market which would mean the Fed needs to cut rates further or if the job market will improve to match the strong spending, which would allow the Fed to stop cutting rates indefinitely.

This debate remains unresolved, especially after data released yesterday showed that retail sales in October were unexpectedly strong. Because Waller’s speeches have heavily influenced financial markets in recent years, traders will react quickly if he seems to favor one outcome over the other.

Currently, the US Dollar is holding steady above a specific price level (97.80). Unless Waller makes comments that strongly favor lowering interest rates, the dollar is likely to stay above this level until the European Central Bank meets on Thursday.

From a technical standpoint, the FTSE 100 index is finally breaking higher after a period of consolidation.

The index bounced off support at 9661 before breaking above both the 100 and 200-day MAs and making a fresh high eyeing the ATH at 9943.

The question now is can the FTSE 100 reach the 10000 handle?

The period-14 RIS is just shy of overbought territory which could be a cause for concern.

FTSE 100 Index Daily Chart, December 17, 2025

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