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Investors expect Fed rate cut next week; US yields and dollar rise after Japan earthquake
Investors weighed the possible impact of an earthquake in Japan on the U.S. Treasury yields and the Japanese yen, while the major stock indexes fell. The northeastern region of Japan was shook by a powerful earthquake measuring 7.6 on the Richter scale, prompting tsunami alerts and evacuation orders. The iShares MSCI Japan ETF fell 0.7%. Dollar was up 0.3% last against the yen. This week, the Federal Reserve will make an announcement on Wednesday. A rate cut is expected by many, but some analysts believe the Fed's Policy Committee could be divided. Investors speculated that this meeting might be the most contentious of recent times. Since 2019, the Federal Open Market Committee had not seen three or more dissenters at a single meeting. It has only happened nine times since 1990. Investors waited for signs of a milder cycle of easing than expected. According to CME Group’s FedWatch Tool, the expectation that the Fed would cut its policy rate 25 basis points is at 87.4%. The markets had priced in less than 30% of a chance until recent comments by Fed officials sparked a change in expectations. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. JAPAN DELAY IN RATE DECISION? After the news of the Japanese earthquake, the dollar increased against the yen. Analysts said that depending on the extent of damage caused by the earthquake, the Bank of Japan may delay its expected rate increase next week. The next BOJ monetary meeting is scheduled to take place on December 18-19, 2020, with the statement and policy decision expected the second day. The yield on benchmark U.S. Treasury notes. Last up 2.7 basis point at 4.166% after reaching 4.19% its highest level since 26 September, and on track to a third consecutive session of gains. All major S&P sectors except technology were down on Wall Street. The Dow Jones Industrial Average dropped 297.28, or 0.62 %, to 47 658.70. The S&P 500 declined 35.60, or 0.52 %, to 6,834.83 while the Nasdaq Composite lost 86.67, or 0.37 %, to 23,491.46. Paramount Skydance’s hostile bid for Warner Bros Discovery attracted some investor interest as it sought to outbid Netflix. Netflix shares fell 3.6%. MSCI's global index of stocks fell 3.67 points or 0.36% to 1,007.06. The pan-European STOXX 600 fell by 0.07%. Nikkei soared 90.07 points or 0.18% to 50.581.94. Beijing's diplomatic spat between Tokyo and Beijing worsened after a Chinese carrier-strike group conducted intense air operations in the vicinity of Japan at the weekend. All three central banks will meet this week, and are expected to maintain their current stance. Swiss National Bank would like to ease further to counter the strength of their franc but is already at zero percent and does not want to go below that. The markets have given up on the Reserve Bank of Australia easing again after a string of strong economic data. They even priced in a rate increase for late 2026. Energy U.S. crude fell $1.20, to settle at $58,88 per barrel, after Iraq restored its production at an oilfield that accounts for 0.5% world oil supply. Caroline Valetkevitch reported from New York. Additional reporting was provided by Iain Withers and Wayne Cole, both in Sydney and London, as well as Alun John, in London. Joe Bavier, Aide Lewis, and Nick Zieminski edited the story.
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Investors show caution as gold prices drop ahead of FOMC meeting
Gold prices fell slightly on Monday as investors were cautious in advance of the U.S. Federal Reserve’s two-day meeting to discuss policy and Chairman Jerome Powell’s remarks. Investors are looking for clues about future monetary policies. By 01:50 pm, spot gold had fallen 0.2% to $4,189.49 an ounce. ET (1850 GMT). U.S. Gold Futures for February Delivery settled 0.6% lower, at $4,217.7 an ounce. Peter Grant, senior metals analyst at Zaner Metals and vice president of the company, said that "the market is waiting on the Fed's decision and more policy guidance." Grant stated that gold remains attractive, as fundamentals are strong and central banks continue to buy. He added that a move towards $5,000 per ounce is achievable in the first quarter 2026. The markets are expecting a rate cut of 25 basis points, and traders see a 90% chance, up from 66% in November. Powell will hold a presser after the Fed's Open Market Committee concludes its meeting Wednesday. The FOMC will announce its final policy of the year. Gold that doesn't yield is more attractive when interest rates are lower. The leaders of France and Germany, as well as the British Prime Minister, showed their support in London for Ukrainian President Volodymyr Zelenskiy, at what they called a "crucial moment" for Kyiv. This was due to U.S. demands that Kyiv agree a peace agreement with Russia. Gold is a safe haven asset that tends to perform well in times of economic and geopolitical instability. Morgan Stanley believes that gold will continue to rise, due to a declining U.S. Dollar, the strong ETF purchases, central bank purchases and demand for safe havens. Silver fell 0.5%, to 57.98 dollars per ounce after reaching a record-high of $59.32 an ounce on Friday. Jim Wyckoff said that silver is normally a close follower to gold. However, in the last few weeks, the price of silver has outpaced gold. He added that the prices would rise above $60 per ounce, and might even reach $70 by the end of the year. Palladium rose 0.2% to 1,460.75, while platinum fell by 0.1%. (Reporting by Sarah Qureshi in Bengaluru; Additional reporting by Arunima Kumar; Editing by Joe Bavier, Shailesh Kuber and Krishna Chandra Eluri)
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Investors eye Fed rate reduction this week; US yields and dollar increase after Japan earthquake
Investors weighed the possible impact of an earthquake in Japan on the U.S. Treasury yields and the Japanese yen, while the major stock indexes dipped slightly. The northeastern region of Japan was shook by a powerful earthquake measuring 7.6 on the Richter scale, prompting tsunami alerts and evacuation orders. The iShares MSCI Japan ETF fell 0.7%. Dollar was up 0.4% last against yen. This week, the Federal Reserve will make an announcement on Wednesday. A rate cut is expected by many, but some analysts believe the Fed's Policy Committee could be divided. Investors speculated that this meeting might be the most contentious of recent times. Since 2019, the Federal Open Market Committee had not seen three or more dissenters at a single meeting. It has only happened nine times since 1990. Investors awaited signs of a milder cycle of easing than expected. According to CME Group’s FedWatch Tool, the expectation that the Fed would cut its policy rate 25 basis points is at 87.4%. The markets were only pricing in a 30 percent chance of a rate cut, until recent comments by Fed officials sparked a change in expectations. The market may be expecting the Fed to indicate that there will be a pause after this rate reduction in the first quarter 2026. However, I do not subscribe to that," Peter Cardillo said, chief market analyst at Spartan Capital Securities, New York. JAPAN DELAY IN RATE DECISION? After the news of the Japanese earthquake, the dollar increased against the yen. Analysts said that depending on the extent of damage caused by the earthquake, the Bank of Japan may delay its expected rate increase next week. The next BOJ monetary meeting is scheduled to take place on December 18-19, 2020, with the statement and policy decision expected the second day. The yield on benchmark U.S. Treasury notes. The rate rose by 4.9 basis points, to 4.188%. It had previously reached 4.19%. This was its highest level since 26 September. The Dow Jones Industrial Average dropped 159.43, or 0.33 percent, to 47.796.26. The S&P 500 declined 21.37, or 0.30 percent, to 6,849.53, and the Nasdaq Composite lost 40.44, or 0.17% to 23,537.69. The MSCI index of global stocks fell 2.64 points or 0.26% to 1,008.09. The pan-European STOXX 600 fell by 0.11%. Nikkei soared 90.07 points or 0.18% to 50.581.94. Beijing's diplomatic spat between Tokyo and Beijing worsened after a Chinese carrier-strike group conducted intense air operations in the vicinity of Japan at the weekend. All three central banks will meet this week, and are expected to maintain their current stance. Swiss National Bank would like to ease further to counter the strength of their franc but is already at zero percent and does not want to go below that. The markets have given up on the Reserve Bank of Australia easing again after a string of strong economic data. They even priced in a rate increase for late 2026. Energy prices fell by 1.47% to $62.81 per barrel for U.S. crude and 1.53% for Brent. Caroline Valetkevitch reported from New York. Additional reporting was provided by Iain Withers and Wayne Cole, both in Sydney and London, and Alun Johnson in London. Joe Bavier and Aiden Lewis edited the story.
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German Foreign Minister in China urges to end supply chain uncertainty
German Foreign Minister Johann Wadephul called on Monday to end the uncertainty surrounding vital Chinese semiconductors and rare Earths deliveries to European manufacturers. Wadephul’s first trip to China took place at a time of turmoil for the European industry. The dependence on Chinese suppliers, particularly in strategic chips and rare Earths, has been exposed by Beijing’s export restrictions as global trade tensions have escalated. Wadephul stated that "in all of these fields there was uncertainty and this needs to be removed." Hildegard Müller, the head of Germany's VDA automobile industry association, was part of a small delegation that accompanied Wadephul in China. Wadephul was forced to Postponement A planned visit last week was cancelled after Beijing only agreed to one of his office's requests. He said that the talks were open and intensive, and that his trip would pave the way for a visit from Chancellor Friedrich Merz in early 2013. He said that "quite some work" is still required to convince Beijing to grant new licences for rare earths to German firms. This indicates that German companies were not among the first batch of licenses announced last Thursday. The U.S.-China Trade War has caused months of disruptions since April when China introduced export controls on minerals that are used in autos, consumer electronics, and defence. Beijing also placed restrictions on certain semiconductors used by the automotive industry following the Dutch government’s decision to ban them. seize control Nexperia, a Chinese-owned chipmaker. China's Minister for Commerce Wang Wentao China said it "valued German concerns" on issues such as export controls and chip but that the Dutch government's "most urgent task" is to stop "improper administration interference and stabilize semiconductor supply chain". The growing surplus of China's trade, as described by French President Emmanuel Macron during his visit to China last week, had already strained relations between Europe and China. Unsustainable TAIWAN Wadephul also met with the Chinese Foreign Minister during his visit. Wang Yi He reiterated China's position regarding Taiwan, and stated that its "One China policy" was a key political foundation in relations. Taiwan's government denies that China considers democratically-governed Taiwan to be its territory. It also rejects the "One China" principle, which states that both sides of Taiwan Strait are part of one country. Wadephul, according to the German Foreign Ministry, will discuss European security concerns, including Russia's invasion in Ukraine, in his meeting Wang. However, there is no indication that China has changed its position. According to a foreign ministry statement, Wang stated that "China will continue to play an active role in promoting peace." Berlin tried to strike a balance between imposing a tougher stance on Beijing in relation to trade disputes and geopolitical conflict, as per European partners, but also trying to maintain its relationship with the top trading partner. The German government established a committee to advise the parliament on "security relevant trade relations" with China. This was part of an effort to reduce Germany's reliance on China for key materials as well as customers of its industrial exports. (Reporting and writing by Alexander Ratz of Beijing Newsroom, Sarah Marsh, James Mackenzie, and Christoph Steitz Additional reporting by Toby Chopra and Gareth Jones; Editing and rewriting by Toby Chopra and Andrew Heavens.
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Investors show caution as gold prices drop ahead of FOMC meeting
Gold prices fell slightly on Monday, as investors were cautious in advance of the U.S. Federal Reserve’s two-day meeting to discuss policy and Chairman Jerome Powell’s remarks on future monetary policies. By 11:25 am, spot gold had fallen by 0.1% to $4,191.44 an ounce. ET (16:25 GMT). U.S. Gold Futures for February Delivery fell 0.5% to $4.220.70 an ounce. Peter Grant, senior metals analyst at Zaner Metals and vice president of the company, said that "the market is awaiting Fed policy guidance and a decision by the Fed." Grant stated that gold remains attractive, as fundamentals are strong and central banks continue to buy. He added that a move towards $5,000 per ounce is achievable in the first quarter 2026. The markets are expecting a rate cut of 25 basis points, with 90% probability. This is up from 66% in November. Powell will hold a presser after the Fed's Open Market Committee concludes its meeting Wednesday. The FOMC will announce its final policy of the year. Gold that doesn't yield is more attractive when interest rates are lower. The leaders of France and Germany, as well as the British Prime Minister, showed their support in London for Ukrainian President Volodymyr Zelenskiy, at what they called a "crucial moment" for Kyiv. This was due to U.S. demands that Kyiv agree to a proposed deal for peace with Russia. Gold is a safe haven asset that tends to perform well in times of economic and geopolitical instability. Morgan Stanley believes that gold will continue to rise, due to a declining U.S. Dollar, the strong ETF purchases, central bank purchases and demand for safe havens. Silver fell 0.6%, to $57.95 an ounce after reaching a record-high of $59.32 per ounce on Friday. Jim Wyckoff said that silver is normally a close follower to gold. However, in the last few weeks, the price of silver has been leading the gold market. He added that the prices would rise above $60 per ounce, and might even reach $70 by the end of the year. Palladium rose 0.3%, to $1,461.60, while platinum was down 0.1%. (Reporting and editing by Joe Bavier, Shalesh Kuber and Arunima K. in Bengaluru)
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Hollywood's Golden Globe nominees are led by 'One Battle After Another.
The dark comedy "One Battle After Another", starring Leonardo DiCaprio, received nine Golden Globe nominations in a row on Monday. This puts the thriller at the top of the list for Hollywood's race to the Academy Awards. DiCaprio stars in the movie directed by Paul Thomas Anderson as a revolutionary who takes action when his daughter is threatened. Warner Bros' film will be competing in the category of best movie musical, or comedy against other films such as "Bugonia" and "Marty Supreme". Norwegian family drama "Sentimental Value", which won eight nominations in total, was just one ahead of the supernatural horror film "Sinners", with seven. Both films were nominated in the category of best movie drama, alongside Guillermo del Toro’s version of "Frankenstein", and "Hamnet," which tells a story about William Shakespeare's family. DiCaprio's "One Battle" co stars Benicio del Toro, Sean Penn and Chase Infiniti were among the nominees for acting. Adam Sandler and George Clooney received nominations for the film "Jay Kelly", as did Dwayne Johnson and Jessie Buckley. Ariana Grande, Cynthia Erivo and others were nominated for their roles in the Universal Pictures "The Wizard of Oz: The Prequel" sequel "Wicked: For Good." However, the second half of the Universal Pictures "The Wizard of Oz: The Prequel" failed to win any awards either in the musical or comedic categories. The Globes is one of the first Hollywood award ceremonies that precedes the Oscars in March. The Globes will be broadcast on Jan. 11, 2019. Globes voters have nominated a number of podcasts in a new category. These include "Armchair Expert With Dax Shepard", "Call Her Daddy", "Good Hang with Amy Poehler", "The Mel Robbins' Podcast", "Smartless", and National Public Radio’s "Up First". Netflix's limited series "Adolescence", about a 13 year old accused of murder, was nominated for six awards in the TV categories. Netflix is the pioneer of streaming Warner Bros Discovery is attempting to reinvent Hollywood by buying TV, film, and streaming assets. The network dominated the television category with 22 nominations. The independent distributor Neon (the studio behind "Sentimental Value," It Was Just an Accident," and "The Secret Agent") received the most nominations for films with 21. More than 300 entertainment journalists around the globe choose the Globe winners, as opposed to the 9,000 Oscar voters. In recent years, the Globes voting panel was expanded and reforms were implemented after critics criticized for ethical lapses or a lack diversity. Nikki Glaser, a comedian and actress from Los Angeles, will host the Globes for a second consecutive time. The show will air live on CBS, and be streamed by Paramount+. (Reporting and editing by Bernadette B. Baum, Nick Zieminski, and Lisa Richwine)
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US utilities secure data center supply agreements as AI drives demand surge
U.S. utilities are racing to sign supply deals with data-center operators as the artificial-intelligence boom sparks a surge in power demand, setting the stage for higher profits in the coming quarters. Goldman Sachs reported in May that data centers will account for 8% (compared to 3%) of the electricity generated in the U.S. in 2030. Here are some of the deals that utilities have announced for 2024 and 2025. NextEra Energy has expanded its partnership to Alphabet’s Google Cloud in order to increase data center capacity across the U.S. by multiple gigawatts, and improve energy infrastructure. Meta Platforms has signed 11 power purchase agreements, two energy storage agreements and over 2.5 GW in clean energy contracts with the utility. These projects will be completed between 2026-2028. PPL's Kentucky division, Louisville Gas and Electric Company signed in January 2025 a power supply contract with developers PowerHouse Data Centers and Poe Companies who will develop a 400 Megawatts (MW), data center campus in Louisville. The first 130 MW of power will be available by October 2026. Constellation Energy and Microsoft have signed a deal to restart a unit at Three Mile Island Nuclear Plant in Pennsylvania. The agreement will see the utility provide 835MW of power to the data centers of the tech giant. This deal will also be the first time a nuclear plant has been restarted in the U.S. since it was closed. Constellation and Meta also reached an agreement to keep one of Meta's Illinois reactors operational for a further 20 years. Ameren has signed a deal to supply a 250-MW data center. It also received commitments for expansion and signed new contracts for over 85 MW additional load from smaller data centers in Missouri and Illinois. Alliant Energy has said that it has signed multiple power supply agreements with data centres, but didn't disclose any details. Exelon has announced that it is currently in the engineering stage for data centers with a capacity of more than five gigawatts. ComEd, Exelon subsidiary, has also received deposits from data-center clients to order transmissions and breakers. The firm revealed this during its post-earnings conference call. American Electric Power has signed letters of intent for an additional 15 GW data centers to be powered by the end the decade. Meta Platforms data center in Minnesota will be powered by Xcel Energy. Entergy received approval from the Mississippi legislature for an investment in transmission and production to serve Amazon’s new Amazon Web Services (AWS), facility. The utility also signed an agreement with Meta for the supply of power to Facebook's parent company's hyperscaler in Louisiana. Meta would have its largest data center anywhere in the world at this location. Pinnacle West Capital is committed to more than 4,000MW of data center customers. This does not include the more than 10,000 requests for data centers that it has received. AES has signed a contract with Google to provide 310 MW of power for its Ohio data centres. It expanded its previously announced partnership with Google by signing a 15-year agreement to purchase 727 MW of power in Texas. Meta has also signed two long-term agreements to provide 650 MW of solar power to Facebook's parent data centers located in Texas and Kansas. In November, the utility reported that it had signed 11.1 GW of power purchase agreements. Of these, 4 GW were with hyperscalers, and the majority will be online in the next three to four years. Talen Energy has announced that it will supply electricity to Amazon AWS and its data center campus in Pennsylvania. NorthWestern Energy signed a letter committing to providing energy services to an Montana data center developer. The energy service load will be at least 50 MW by 2027, and grow to 250 or more MWs by 2029. (Reporting from Vallari Srivastava in Bengaluru, Seher Dareen in Mumbai and Pooja menon at the University of Michigan; editing by Sriraj Kalluvila & Alan Barona).
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Former president Moreno is ordered to stand trial by an Ecuadorian judge
A judge in Ecuador ordered Monday that former president Lenin Moreno stand trial for alleged bribery related to the construction of Ecuador's largest hydroelectric plant. The case was first brought in March 2023 by the prosecutor’s office. It involved Moreno and members of his family as well as local and Chinese business partners in connection with bribes paid for the construction Coca Codo Sinclair, which started operations in 2016. Since then, it has been plagued by technical problems. According to the prosecutor, Sinohydro (the Chinese builder of the hydroelectric plant) allegedly paid around $76million in bribes between 2009 and 2018. Moreno has denied these allegations repeatedly. He served as vice-president from 2007 to 2013, and president from 2017 to 2020. He is currently living in Paraguay which will complicate the legal proceedings. In a video that was posted last week on social media, Moreno stated: "I've presented all of the evidence to the Attorney General's Office and they haven't been able prove that I received even a cent." "Let's stop such an injustice." Since its inception, the Coca Codo Sinclair factory has faced a number of technical and structural problems. Moreno was required to appear before Ecuador's National Court of Justice, Quito, periodically while the investigation continued. In his ruling, Judge Olavo Hernández stated that "this judge resolves to prosecute citizen Lenin Moreno as the direct perpetrators of the crime of corruption". (Reporting from Alexandra Valencia).
Draft document shows that EU will delay proposals on carbon border tax for auto industry
By Kate Abnett and Philip Blenkinsop
BRUSSELS - According to a draft agenda of the European Commission, seen by, the European Union intends to delay until December 16 legal proposals for expanding its carbon border levy, and possibly weakening a ban on new CO2-emitting vehicles in 2035.
Carmakers and governments are closely watching the plans, including Germany, Italy and others, who have asked that the EU revise their 2035 auto CO2 emission policy, as it currently stands, would effectively ban new combustion engine vehicles.
The original publication date for the proposals was Wednesday.
On Monday, officials from the Commission were still negotiating timings and the draft agenda may still change before publication. Some EU officials have suggested that the proposals for autos could be further delayed, possibly into 2026.
The spokesperson for the Commission declined to comment on a draft agenda that was seen by.
Brussels is working on proposals to extend its carbon border tariff, which will be implemented in the near future, to include more downstream products like washing machines. This would prevent foreign companies from avoiding this world-first measure.
The proposals for autos are being developed amid lobbying by European carmakers to allow greater flexibility in the 2035 policy. This includes allowing plug-in hybrids and combustion engine vehicles that run on so called CO2-neutral gasolines, continue sales beyond this deadline.
The European auto industry needs flexibility to deal with the slower-than-expected electric vehicle sales and the fierce competition from China.
The EU's climate goals could be compromised if the policy is weakened. This would result in more CO2-emitting vehicles on the roads of Europe by 2050 when it has committed to achieving net zero emissions for its entire economy. Reporting by Kate Abnett and Philip Blenkinsop. Editing by Louise Heavens.
(source: Reuters)