Morning everyone,

Hope you managed to switch off a bit over the weekend before the Christmas rush kicks in. Markets are back open after a big week of central bank decisions, but we are now heading into one of the quietest trading weeks of the year.

With Christmas falling on Wednesday, liquidity will be extremely thin. When fewer players are on the field, small bits of news can cause exaggerated moves. This is not the week for hero trades. It is a week for awareness and protection.

Despite softer US inflation data earlier in the week, the US dollar finished Friday on a firm footing. A lot of the movement was driven by position squaring rather than fresh conviction, but the broader theme remains unchanged. Yield differentials still favour the USD.

Approximate New York close levels from Friday, December 19:

Last week was all about central banks, and the takeaway is simple. Policy paths are still moving in different directions, and that supports the dollar.

Bank of Japan

The BOJ delivered a 25 basis point hike, taking rates to 0.75 percent, the highest level in 30 years. On paper, that sounds supportive for the yen. In reality, the market had already priced it in. The yen weakened straight after the announcement as traders sold the fact.

The bigger issue is still the gap between US and Japanese rates. Carry trades remain attractive, and until that gap narrows meaningfully, JPY remains under pressure. If USD/JPY keeps running higher, talk of intervention will start to reappear.

Bank of England

A very tight 5 to 4 vote saw rates cut by 25 basis points to 3.75 percent. The minutes showed caution about further cuts, with UK inflation still sitting above 3 percent. Sterling initially held up, but weaker retail data and the prospect of renewed USD strength leaves GBP vulnerable.

European Central Bank

The ECB held rates steady once again. President Lagarde pushed back on any hawkish interpretation and reinforced a data-dependent stance. Growth forecasts were upgraded slightly, which helped the euro stabilise, but the broader divergence story limits upside for now.

Bottom line

Japan is slowly tightening. The UK is easing. Europe is pausing. The US remains comparatively attractive on yield. That combination continues to support the dollar, particularly against the yen.

This is a very light calendar, which actually increases risk if you are exposed. Thin markets can move sharply without warning.

Key data points:

Tuesday, December 23

Wednesday, December 24

Christmas Day

After that, it is essentially year-end flows and low-volume trading into 2026.

This is not a week to chase moves. It is a week to manage exposure.

For athletes, agents, and anyone dealing with large transfers or staged payments, thin liquidity weeks are where poor timing can quietly cost you money. You do not need to predict the market. You need structure, protection, and a plan.

If you are holding risk into year-end, make sure you know why. If you are unsure, this is often a good time to reduce exposure or lock in certainty.

Stay disciplined. Enjoy the holidays. And remember, protecting the result is just as important as chasing it.

If anything meaningful breaks this week, I will flag it.

Chris

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_{*Per Masterworks data. Investing involves risk. Past performance not indicative of future returns. Important Reg A disclosures: masterworks.com/cd}

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