DBG Markets: Market Report for Dec 22, 2025

The Christmas “Santa Rally” Takes Center Stage Weekly Outlook: Dollar, Gold & Risk Assets Market

Last week marked a pivotal moment for the 2025 market close. A combination of a complex NFP report and a significantly cooler CPI print has fundamentally reshaped the market landscape.

Pivot to Optimism

November CPI fell to 2.7% (Core at 2.6%), providing the definitive “inflation cover” the Federal Reserve needed. Markets have now decisively priced in a more aggressive easing cycle for the first half of 2026, shifting focus from fighting inflation to supporting economic growth.

The “growth scare” that dominated early December has given way to a “risk-on” relief rally. With the Feds 2026 path now appearing more dovish, fears of stagflation have eased, allowing capital to return to risk-sensitive assets.

BoJs Dovish Hike

Meanwhile, the Bank of Japan (BoJ) delivered a 25bps rate hike to 0.75%, marking a 30-year high. While this might have been bullish for the yen, the market largely absorbed the move as a normal step in monetary normalization.

The lack of hawkish forward guidance reassured investors that the hike would not threaten global liquidity, keeping the low-yield yen attractive as a funding currency for carry trades and risk assets, which in turn contributed to further yen weakness.

The “Santa Rally” Theme Dominates.

Following the volatility of “Super Thursday,” markets are now entering the classic Santa Rally period.

· Sentiment Shift: Risk-off sentiment has largely been neutralized. Cooling inflation confirms a “green light” for investors to maintain long positions through year-end.

· Market Conditions: With a light economic calendar and major central bank decisions behind us, liquidity is expected to be thin, and trading volumes lower. Such conditions often amplify small moves, allowing the current optimistic momentum to carry markets higher during the holiday week.

This suggests that the market is likely to continue building on last weeks momentum. Risk assets could remain supported and gradually push higher, while the yen, weakened as a funding currency amid a risk-on environment, may continue to influence market dynamics this week.

Weekly Outlook: Dollar, Metals & Risk-Assets

US Dollar: Rebound Expected, Upside Limited

USD Index, H4 Chart

With the Fed expected to cut rates in early 2026, the Dollar‘s yield advantage is gradually eroding. Nonetheless, the Bank of Japan’s dovish move continues to support the USD, keeping its yield appeal intact.

Technically, the US Dollar has reclaimed the 98.00 level, suggesting near-term support and allowing for a potential rebound during the Santa Rally. However, upside remains limited, as the broader bearish structure is intact and the rising wedge pattern continues to cap gains.

Gold: The Safe-Haven

Precious metals continue to benefit from cooling CPI and falling yields, even amid a mild risk-on sentiment.

XAUUSD, H2 Chart

Gold quietly surged to a new record high of 4,389 during Mondays Asian session. In the near term, 4,350 remains a key structural support, while the market appears poised for a slow grind toward 4,400 as macro themes continue to favor gold.

Key support levels are 4,350 and 4,376–4,380 (previous record highs), providing reference points for short-term traders.

Nasdaq100: Still Showing Resilience

The U.S. equity market remains firmly in risk-on mode, with the Nasdaq 100 (UT100) eyeing a retest of recent highs. Earlier concerns over recession risks and AI overvaluation are gradually giving way to soft-landing optimism.

UT100, Daily Chart

Technically, the Nasdaq 100 remains in a phase of consolidation, with converging price action suggesting a bullish-to-consolidation bias. Holding above the key 25,000 psychological level supports a continued upside outlook, though resistance near 26,000 may cap near-term gains.

Cryptocurrency: Bitcoin Momentum Pending

Bitcoin has been consolidating near the 90,000 level, with 85,000 providing a strong floor for the market. The prospect of Fed rate cuts in 2026 has restored liquidity, creating a supportive backdrop for a potential bullish move.

The crypto market is expected to largely follow equity trends. However, Bitcoin faces a technical momentum challenge, as many market participants remain on the sidelines, awaiting clearer signals in early 2026.

BTCUSD, Daily Chart

For Bitcoin, a break above 94,000 is needed to confirm a sustained bullish run. Until then, the market remains cautious. The 85,000 support level presents a potential entry point, but traders should monitor for a decisive move above 94,000 before committing to a stronger bullish bias.

Week Ahead: A Thin but Optimistic Finish

As we head into the holiday season, the market remains in a Santa Rally posture. The economic calendar is exceptionally light, meaning price action will be driven largely by the residual optimism from last week's CPI miss.

While thin liquidity requires caution regarding “flash” moves, the fundamental bias remains firmly Risk-On as we close out 2025.