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Daily Pivots: (S1) 156.54; (P) 156.80; (R1) 157.15; More… Intraday bias in USD/JPY is mildly on the upside with breach of 157.88 resistance. Rise from 139.87 is trying to resume. Firm break of 158.85 key structural resistance will be an important medium term bullish sign. Next target will be 161.94 high. In any case, outlook […]

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Daily Pivots: (S1) 1.1678; (P) 1.1703; (R1) 1.1748; More…. Intraday bias in EUR/USD remains neutral for the moment. Rise from 1.1467 could still be in progress. Firm break there will resume the rally to retest 1.1917 high. However, break of 1.1658 support will target 1.1467, as corrective pattern from 1.1917 has started the third leg. […]

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The Canadian manufacturing sector remains stuck in the mud as the final Canadian S&P Global survey of manufacturers was released.

It’s another soft reading for the Canadian economy, and the details here are painting a stagflationary picture that the Bank of Canada isn't going to like.

Here are the details from the S&P Global Manufacturing PMI for December:

• 48.6 vs 48.4 prior.

• Output Index: Declined at a quicker rate

• New Orders with a 'solid decline'

• Employment: 11th consecutive month of job shedding.

• Prices: Selling price inflation hit a six-month high.

The report explicitly blames tariffs for driving up prices while simultaneously killing demand. Fortunately, the consumer side of the economy has remained strong as manufacturing gets left behind. A year of prolonged uncertainty around USMCA negotiations isn't going to help.

Firms reported that average lead times lengthened because of customs delays, specifically with US imports. Even worse, the uncertainty around trade policy is causing a "general air of uncertainty" that is weighing on output for the year ahead, something that will hit capex

Paul Smith, Economics Director at S&P Global:

“Canada’s manufacturing economy ended the year on a subdued note, with output and new orders both falling again – as they have done in each month of 2025 apart from January. Once again, tariffs remained an important theme amongst PMI survey respondents, with a general air of uncertainty continuing to negatively weigh on current and expected output levels for the year ahead. “This means firms remain naturally cautious, and seeking an operating leanness, either in terms of labour capacity or inventory holdings. Purchasing activity was also cut again in December, although supply-chain delays continue, and the price of inputs shifted higher – which firms once again closely linked to tariffs.”

This is a reminder that there are problems in Canadian manufacturing as this survey has been in contraction for 11 straight months, shedding jobs the whole way down. Normally, that would scream for more cuts but look at the inflation component: Input price inflation picked up, and selling price inflation is at a six-month high. Firms are passing those tariff costs right along to consumers.

USD/CAD is up 16 pips on the first real trading day of 2026 after falling about 5% last year.

Yesterday, I wrote a Canadian dollar outlook for 2026 and later today I will be on BNNBloomberg TV talking about it.

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As is usual for a Monday morning, market liquidity is very thin until it improves as more Asian centres come online ... prices are liable to swing around, so take care out there.

Do be aware that many wholesale market participants have closed now for the holiday period. This is partially because they have closed for the holiday period (d'uh) and partially because others have closed so liquidity and market tradability have diminished. If you are a retail trader it'll pay to take extra care right through now until January 5, the absence of the other time frame (OTF) until then will make trading more choppy. If that's your bag, great, but if not your time may be better spent and capital preserved for ammo for the new year.

Coverage on investingLive will diminish until January 5. We'll still be around, but not quite so much.

After all that, early indications, not too much change from late Friday is showing.

• EUR/USD 1.1719
• USD/JPY 157.69 (check this out, spot on: Disastrous day: The yen is a big problem for Japanese officials)
• GBP/USD 1.3391
• USD/CHF 0.7947
• USD/CAD 1.3795
• AUD/USD 0.6611
• NZD/USD 0.5750

As for the calendar, its nearly empty. Even that People's Bank of China rate setting is a non-event, more on this below:

China's Loan Prime Rates (LPRs) were held steady in November 2025, , marking the sixth consecutive month without a change

• the one-year LPR at 3.0%
• and the five-year LPR (for mortgages) at 3.5%

Most lending in China is tied to the one-year LPR, while the five-year rate guides mortgage pricing. Both rates were last trimmed by 10 basis points in May.

A look at the past changes in the LPR, since early 2022:

China's main policy rate is now the reverse repo rate, currently at 1.4% for the 7-day.

The 7-day rate serves as a key policy benchmark, influencing other lending rates like the Loan Prime Rates (LPRs). The PBOC uses these open market operations to inject or absorb funds, influencing interbank lending rates.