CZECHIA: Czech Economy Expands By 2.4% Y/Y In 4Q25

The Bloomberg dollar index is re-testing earlier session highs of 1204.3,  currently +0.1% today. A pullback in US yields after China announced additional tariffs on beef imports has had a limited impact on FX markets, with aggregate activity contained given the NYE holiday in several countries. A higher close for the BBDXY today would mark a fourth consecutive positive session, although resistance levels at 1205.4 (Dex 23 high) and 1207.5 (20-day EMA) remain intact.

• The Kiwi underperforms the G10 basket, with NZDUSD down 0.4% at typing. The pair is testing support at the 50-day EMA of 0.5766, clearance of which would expose the December 19 low of 0.5736.
• Meanwhile is AUDUSD, focus remains on the psychological 1.16 figure (currently +0.2% at 1.1585).
• Both USDCNH and USDCNY are hovering just below the 7.0000 figure. Overnight, the official Chinese manufacturing and non-manufacturing PMIs for December were stronger-than-expected, inching into expansionary territory.
• The USD/CNY fix printed at 7.0288, while the BBG market consensus was below the 7.00 level at 6.9966. The USD/CNY fixing was below yesterday’s and last week’s levels resuming the downtrend. We wrote yesterday that Authorities may act to slow any acceleration in the downtrend, but the outlook for CNY remains positive, with markets almost uniformly looking for USDCNY further below 7.00 in 2026. See here: https://www.mnimarkets.com/articles/higher-usdcny-fix-only-provides-temporary-support-before-new-lows-1767082916217
• Today’s European session is very quiet, with only UK markets open for a half day. Focus this afternoon is on the US weekly jobless claims release.

Latest from Reuters sources on NVIDIA chip demand from China:

• "Nvidia NVDA.O is scrambling to meet strong demand for its H200 artificial intelligence chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co 2330.TW to ramp up production, sources said."
• "Chinese technology companies have placed orders for more than 2 million H200 chips for 2026, while Nvidia currently holds just 700,000 units in stock, two of the people said."
• "The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said Nvidia has asked TSMC to begin production of the additional chips, and work is expected to start in the second quarter of 2026."

US Treasury yields have pulled back around 1bp across the curve as details of China’s additional beef tariffs filtered through. The US will have to pay 55% additional tariffs on beef exports to China, above its specified quota (164k tons a year in 2026). 

• 2- and 10-year yields are now -0.8bps versus yesterday’s close. 10-year yields have traded in a contained 4.10%-4.20% range through most of December, currently at 4.114%. 30-year yields are little changed at 4.806%.
• A reminder that Treasuries were closed overnight owing to the Japanese market holiday.
• Today’s calendar is headlined by weekly jobless claims data at 0830ET/1330GMT.
• Note that markets will close early (1300ET; 1600ET Globex) for New Years eve, re-open/electronic trade Thursday evening for Friday's order of business.
• Yesterday’s FOMC minutes did not generate any major market moves. The key paragraph indicated (as did the meeting Dot Plot) a sizeable minority of members seeing no further easing through end-2026, but a base case among a solid if narrow majority that further limited cuts would ensue if the data cooperate.