**U.S. Greenlights NVIDIA Chip Sales to China Amid Trade Tensions**

U.S. President Trump recently confirmed that he informed Chinese President Xi that American tech giant NVIDIA will be allowed to ship its advanced H200 chips to approved customers in China and other countries. This move comes as part of a broader effort to ease trade tensions between the two nations. However, despite U.S. approval, reports suggest China may still restrict access to these high-performance chips. NVIDIA shares initially rose on the news but have since pulled back slightly.

**Mixed Market Reactions to Trade News and Economic Uncertainty**

European stock markets traded mostly lower, while U.S. equity futures showed a mixed picture, with the Nasdaq dipping slightly after the NVIDIA-China news broke. The U.S. Dollar Index (DXY) held steady around 99.00 as traders awaited more clarity from upcoming Federal Reserve announcements.

Currency markets saw the Australian Dollar strengthen after the Reserve Bank of Australia (RBA) held interest rates steady and signaled no immediate plans for rate cuts. Meanwhile, the Japanese Yen was flat but saw brief strength following comments from the Bank of Japan (BoJ) Governor about the importance of exchange rates on inflation.

**Bond Markets Steady Ahead of Key Economic Data**

Global bond markets began the day cautiously but gained momentum as the session progressed. U.S. Treasuries moved higher, buoyed by safe-haven demand and comments from BoJ officials that increased appetite for low-risk assets. European bonds also edged up, with French bonds (OATs) underperforming slightly ahead of a crucial vote on the country’s 2026 social security budget.

In the UK, government bonds (Gilts) rose in anticipation of comments from several Bank of England members scheduled to speak throughout the day.

**Energy and Commodities Update: Oil Steady, Copper Slips**

Crude oil prices remained in a tight range ahead of the U.S. Energy Information Administration’s (EIA) Short-Term Energy Outlook report. Prices had dipped earlier in the week due to broader market risk-off sentiment but have since stabilized.

Copper prices continued to retreat from recent all-time highs, falling during Asian trading hours amid cautious sentiment following China’s underwhelming economic policy announcements. Meanwhile, gold prices climbed as the U.S. dollar softened and investors looked ahead to Wednesday’s Federal Reserve meeting.

**Trade Policy Developments: U.S.-China, Mexico Water Dispute, and More**

President Trump also revealed that China is expected to increase soybean purchases beyond previous agreements. In addition, he mentioned that chipmakers like AMD and Intel will follow a similar export process as NVIDIA.

However, Trump warned Mexico that it faces a 5% tariff if it fails to release 200,000 acre-feet of water owed under a treaty that supports Texas agriculture. He criticized Mexico for not responding and emphasized the impact on U.S. farmers.

Meanwhile, lawmakers are urging Trump to ease tariffs on Japan to counterbalance China’s growing economic influence. The U.S. Treasury is also working on finalizing a trade deal with India.

Chinese Premier Li highlighted rising global concerns over tariffs and called for reforms in global economic governance during a high-level international dialogue.

**European Updates: New Reporting Rules and Military Spending**

The European Parliament reached a provisional agreement to tighten sustainability and due diligence rules for large companies. Businesses with over 1,000 employees and high revenues will now need to disclose more detailed environmental and social data.

Germany is set to approve €52 billion in new military orders, signaling a boost in defense spending amid geopolitical uncertainties.

**U.K. Retail and Consumer Data Show Mixed Signals**

Retail sales in the U.K. grew modestly in November but slowed compared to previous months. Consumer spending declined year-over-year by 1.1%, marking the sharpest drop since early 2021. Grocery inflation remained high at 4.7% over the past four weeks.

**Geopolitical Updates: Middle East and Russia-Ukraine**

Tensions remain high in the Middle East as Israel struck Hezbollah infrastructure in southern Lebanon.

In Europe, EU Commission President Ursula von der Leyen reaffirmed strong support for Ukraine amid ongoing peace talks. She stressed the importance of securing Ukraine’s sovereignty and long-term stability.

Russia dismissed claims that President Putin plans to attack NATO as “complete nonsense.”

**Crypto Market: Slight Decline in Bitcoin and Ethereum**

Bitcoin held just below $90,000, while Ethereum hovered above $3,100, both showing mild losses amid cautious investor sentiment ahead of key macroeconomic events.

**Asia-Pacific Market Recap: Central Bank Focus and Trade News**

Asian stocks were mostly subdued as traders waited for Wednesday’s Federal Reserve meeting. Australian shares fell after the RBA held rates steady at 3.60%, with Governor Bullock hinting that further cuts are unlikely anytime soon.

Japanese stocks traded sideways as investors brace for a potential BoJ rate hike next week. Chinese markets struggled following disappointing economic signals from a recent Politburo meeting, and local chip stocks dropped after the announcement that NVIDIA could resume limited exports to China.

**Key Takeaways for Traders and Investors**

– U.S.-China trade relations show signs of improvement with chip exports resuming.
– Global markets remain cautious ahead of key data releases and central bank decisions.
– Energy and metal markets are stabilizing after recent volatility.
– Ongoing geopolitical tensions continue to shape investor sentiment.
– Watch for updates from the Federal Reserve and other central banks this week for potential market-moving news.