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Easier Money, China’s Trade Gap and the AI Boom Set the Tone for 2026

Markets are recalibrating as China’s outsized surplus fuels currency debate and central banks tilt dovish, reshaping where growth and risk can run next year.

Overview

  • China’s trade surplus reached about $1.08 trillion through November and CPI rose 0.7% year over year, intensifying calls to allow a stronger yuan even as producer prices stayed negative.
  • The IMF raised its 2025 China growth forecast to 5% and pressed for faster structural reforms, citing property-sector stress, local-government debt and weak domestic demand.
  • Policy signals turned easier with the Swiss National Bank holding its policy rate at 0% on soft inflation and the Central Bank of Jordan cutting 25 basis points as reserves and price stability improved.
  • NVIDIA remains the prime earnings beneficiary of the AI buildout heading into 2026, though analysts flag potential challenges from Alphabet’s TPUs and supply and energy constraints in data centers.
  • Emerging markets are projected to gain in 2026 on a softer dollar and Fed easing, with the UAE’s non‑oil GDP up 5.7% in the first half of 2025 and crypto markets still volatile as institutions split on the next leg.