Global Markets Consolidate As Year-End Positioning Dominates Trade

Global markets traded in narrow ranges on December 29 as investors focused on year-end positioning rather than fresh macro catalysts. With liquidity thin and most major economic data already priced in, price action across equities, FX, and commodities was driven largely by portfolio rebalancing and profit-taking.

U.S. equities held close to record levels but struggled to extend gains after the recent Santa rally. The S&P 500 and Nasdaq moved sideways, reflecting a balance between lingering optimism around 2026 rate cuts and caution over elevated valuations following a strong year-end run.

In bond markets, Treasury yields were little changed, consolidating after December’s pullback. Investors appeared reluctant to make large duration bets ahead of the new year, especially with uncertainty still surrounding the pace and timing of monetary easing in 2026.

FX markets reflected the subdued tone. The U.S. dollar traded narrowly against major peers, holding near recent lows as rate-cut expectations remained intact but lacked new confirmation. The euro and pound were steady, while the yen saw mild safe-haven demand amid thin trading conditions.

Gold consolidated after its late-December advance, supported by lower yields but capped by reduced demand for defensive assets. Oil prices also moved sideways as traders balanced year-end demand softness with expectations of supply discipline from major producers.

For traders, the final sessions of the year are reinforcing a familiar pattern: reduced liquidity, muted conviction, and range-bound conditions. Attention now shifts to early January, when normal trading volumes return and markets begin repricing expectations for growth, inflation, and central-bank policy in 2026.