Markets Brace for 2025 Uncertainty as Trump Era Looms

Global markets are grappling with uncertainty as central banks end their policy meetings amid inflation concerns and Trump’s potential presidency. Core PCE data remains crucial ahead of Christmas, with U.S. government shutdown risks looming. Equities and the U.S. dollar thrived, while Treasury losses persist.

With 2024 drawing to a close, global markets are anticipating a potentially tumultuous 2025, as central banks wrap up their policy meetings with varied outcomes. The spectre of Donald Trump returning to the White House adds to the uncertainty facing global economies and trade dynamics.

The U.S. Core Personal Consumption Expenditures (PCE), a key inflation gauge for the Federal Reserve, stands as the final economic hurdle before the typically tranquil Christmas period. Amid revived concerns over inflation, the PCE outcome could significantly impact markets, prompting caution across Asia. MSCI's index for Asia-Pacific shares outside Japan reached a three-month low, while both Nasdaq and EUROSTOXX 50 futures saw declines.

Investor nerves are strained as internal disapproval among Republicans threatens Trump's spending plans, with a potential U.S. government shutdown looming. Market projections for U.S. rate cuts in 2025 have shrunk, raising Treasury yields and sustaining a pattern of market losses. However, equities, bitcoin, and the U.S. dollar posted strong 2024 performances despite wider economic challenges.

(With inputs from agencies.)