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Dollar struggles, stocks tumble as Trump's Greenland gamble rattles markets
Asian stocks fell Tuesday as trade war concerns resurfaced and caused a sell-off in U.S. ?assets. Investors are rushing to secure assets such as the Swiss Franc or gold in response to U.S. president Donald Trump's threat to impose additional tariffs on Greenland. This could fuel trade tensions between the U.S. and Europe. Talk of the "Sell America" trade has been revived after the tensions. This is where investors sell U.S. stocks, dollars and Treasuries. The trade seemed to be gaining momentum during Tuesday's Asian hours. Nasdaq futures and S&P500 futures both fell 1% during the early trade. The dollar was still vulnerable, and the yield of the 10-year U.S. Treasury Note rose to 4.265% - its highest level since September. The broadest MSCI?index of Asia-Pacific stocks outside Japan fell 0.44%, moving further away from its record highs set last week. Henry Cook, MUFG Europe economist, said that last year "taught us to not overreact to Trump’s threats". He noted European policymakers would look to engage in dialogue and negotiate?first to at least 'buy some more time'. Trump's threats have sparked a strong pushback in Europe, and his remarks raise questions about the future of trade agreements struck with Europe since then. Cook stated that "even if the situation is resolved, this incident will cause many people to doubt any agreement with Trump. The uncertainty over tariffs will therefore remain high." Citi downgraded European stocks as their strategists noted that the recent step-up of tensions and uncertainty over tariffs dents the near-term investment case. This casts doubt on the broad-based earnings inflection expected in 2026. European futures are 0.12% lower. This suggests a mellower opening later in the day. Sources say that all eyes are now on Davos, where Trump will meet with global business leaders in Switzerland this Wednesday. The U.S. President's presence is a major factor at the annual gathering of global elites. The Nikkei index fell 0.8%, and the dollar last traded at 157.92 yen. Investors were looking ahead to next month's elections, where Prime Minister Sanae Takaichi is seeking to increase spending, reduce taxes, and implement a new strategy for security that will accelerate defence building-up. The sale of Japanese Government Bonds (JGBs), which will take place on Tuesday, will be a test for the markets to see if Takaichi's promise of tax cuts during his election campaign is true. On Monday, both short- and longterm JGB yields reached record highs amid fears that tax cuts, hailed by Takaichi’s ruling Liberal Democratic Party as well as opposition groups, would worsen the already stretched finances of the government. Gold was unchanged at $4,670 an ounce on Tuesday, barely a smidgen below the record high reached on Monday. (Reporting and editing by Ankur Banerjee, Singapore)
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Greenland is in the spotlight as oil gains are attributed to positive China data
Oil prices rose on Tuesday after China's better-than expected economic growth data lifted demand optimism. Markets also watched President Donald Trump’s threats to increase U.S. Tariffs on European Nations over?his desire to buy Greenland. Brent futures were up 19 cents or 0.3% to $64.13 a barrel at 0100 GMT. The U.S. West Texas Intermediate Crude Contract for February, which expires Tuesday, is up 25 cents or 0.4% from Friday's closing price of $59.69. The WTI March contract, which is the most actively traded, gained 0.08 cents or 0.13% to $59.42. Due to the U.S. Martin Luther King Jr. Day Holiday, WTI contracts were not settled on Monday. Tony Sycamore, IG's market analyst, said that WTI Crude Oil was trading slightly higher yesterday due to the better-than expected Q4 2025 GDP figures from China. This resilience in the world's largest oil importer has provided a boost to demand sentiment. According to data released Monday, China's GDP grew by 5.0% in the past year. This was in line with the government's goal of capturing a record share for global demand to offset weak domestic consumption. This strategy has been effective in reducing the impact of U.S. Tariffs, but it is becoming increasingly difficult to maintain. Government data released on Monday showed that China's crude oil production in 2025 will grow by 1.5% while its refinery output will increase 4.1%. Both were all-time records. Fears of a new trade war grew over the weekend after Trump announced that he would increase import taxes by 10% on goods from Denmark, Norway and Sweden as well as France, Germany, The Netherlands, Finland, and Britain. These levies will rise to 25% if a deal is not reached on Greenland. Sycamore said that the USD's weakness, a result of markets selling the greenback in response to President Trump’s continued tariff threats against Greenland, helped to support the commodity. The dollar fell?0.3% versus its peers. Oil contracts in dollar terms are cheaper for holders of currencies other than the greenback. The markets are also closely watching Venezuela's oil industry after Trump stated that the U.S. will run the sector following the?captured of President Nicolas Maduro. Multiple sources confirmed that Vitol had offered Venezuelan oil at a discount of $5 per barrel compared to ICE Brent to Chinese buyers for delivery in April. According to shipping and trade data, China has also imported the most Russian Urals oil since 2023. This is after India, which was a major buyer of Russian oil before Western sanctions were imposed and before a ban by the European Union on products made with Russian oil. (Reporting and editing by Jamie Freed in Bengaluru, Anushree mukherjee)
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Australian shares fall as Trump's threat of tariffs dampens sentiment
Australian shares dropped on Tuesday. Heavyweight miners, financial stocks and other sectors led the losses. Global risk sentiment was soured by escalating tensions following U.S. President Donald Trump's threat to impose extra tariffs against Europe. As of 0007 GMT, the?S&P/ASX 200 was down 0.5% to?8,832.9. The benchmark closed Monday 0.3% lower. Overnight, global stocks fell as Trump announced he would add 10% to the tariffs imposed on eight European nations that oppose his takeover Greenland. U.S. stock markets were closed for a public holiday. S&P 500 Eminis futures fell 70.75 points or 1.01% early on Tuesday. Meanwhile, Japan's Nikkei dropped 0.5%. The "Big Four", which comprise a large portion of the benchmark, fell between 0.6% to 0.9%. The mining subindex fell by almost 1%. Iron ore fell to a two-week low following data from China, the largest consumer. BHP shares fell 0.7% as the sector's heavyweight announced that it had accepted lower iron ore prices during annual contract negotiations in China and also flagged a 20 percent increase in costs at its Jansen Potash project in Canada. However, the miner reported record-breaking?first half iron ore production. Rio Tinto, due to announce its fourth quarter production results on Tuesday, has also slipped 0.7%. Market participants will also be watching the December jobs data to determine the Reserve Bank of Australia rate cut trajectory. The broader mining sub-index lost 0.3% of its value as the price of safe-haven gold retreated from record highs. Real estate stocks dropped 0.9% on their way to their steepest single-day drop since earlier this month. Technology stocks, which were bucking the mood of gloom, added 0.7%. Healthcare and consumer discretionary stocks, on the other hand, rose by 0.2% and 0.4% respectively. New Zealand's benchmark S&P/NZX50 index fell by 0.4%, to a low of 13,523.19.
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BHP flags price concessions, reports record HY ore production
BHP Group accepted lower prices during annual contract negotiations. It said this on Tuesday as it reported record production in the first half of steelmaking's key ingredient. The miner has also reported a 20% increase in the costs of its Jansen Potash Project in Canada. BHP?said that it is currently negotiating a contract?terms of annual with the state iron ore buyer, China Mineral Resources -Group (CMRG). BHP stated in a press release that "during negotiations, we continue optimising product placement distribution channels as well as taking?actions? within our operations so to preserve 'operational flexibility and productivity". This has had some impact on the realised price. BHP has separately announced that the estimated total investment for its Jansen Stage 1 project is now $8.4?billion, up from an earlier estimate of between $7 billion and $7.4 billion. The cost increase was attributed to the construction hours and materials used that were not included in earlier estimates. The world's biggest listed miner reported that?iron ore produced from its Western Australia operations was 146.6 metric?tons on a 100 percent basis in the six-month period ended December 31. This is a 1% rise from the same time last year. (Reporting from Rajasik Mukherjee, Bengaluru. Editing by Jamie Freed.)
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UK targets struggling water sector through new regulator
Britain will announce plans on Tuesday to improve England's Water Sector. They promise a "new regulator" with the power to check more on infrastructure and prevent sewage spills?and?supply outages. After years of underinvestment in the water sector, the government declared that the privatised system was broken. Meanwhile, the biggest provider of the country, Thames Water, struggles to survive, having been?loaded with debt. Two incidents in the last six weeks left thousands of homes in south east England with no water for several days. Last July, the creation of a regulator that would "combine existing authorities" was suggested. Environment Minister Emma Reynolds said new legislation planned by the government would ensure improved performance from water companies. Water companies won't be able to hide their poor performance. Customers will receive the service they deserve. Investors will see an?system designed for the future", she said. Thames Water is attempting to get regulatory approval for a plan of rescue led by some of its lenders. However, the heavy fines that it has to pay prevent it from investing in order to improve performance. The government announced a plan to create a "Performance Improvement Regime" that would help "underperforming companies recover quicker". The government did not give any further details. The new regulator will also be able to perform "health checks" of water companies' infrastructure and pipes. (Reporting and editing by Paul Sandle, Sarah Young)
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UK to overhaul its antitrust system to drive growth
Britain wants to improve its competition regime. It has launched a formal consultation to see if it can be made "faster, predictable, and more proportionate". The government announced that it would speed up and simplify the anti-trust investigations, "working closely" with CMA (competition regulatory body) while maintaining its independence. It added that the consultation proposed changes to the way the CMA makes merger decisions and market investigations. This would ensure market remedies were regularly reviewed and businesses could be more certain about whether they will face merger controls. The CMA's decision-making independence will not be affected by these proposals, it was added. The CMA announced on Monday that they would review their historical interventions in order to determine if any of them were still needed to reduce the burden?of compliance. They identified 33 market'remedies' - 60 percent of all those already in place – that might no longer be necessary. The government has also announced that the state-owned bank for development will invest in Kraken Technologies 25 million pounds ($34million) as its largest direct investment, supporting the AI energy software company ahead of an eventual London listing. The government announced that the investment in Kraken, valued at $8.45billion after its spinoff from UK-based Octopus last year, follows reforms made to the British Business Bank mandate, allowing them to take larger, more risky stakes in important scale-ups. Peter Kyle, the business minister, said that Britain's most promising businesses have been looking abroad for support to help them grow. "We are cutting red tape and backing innovators who can really 'firepower'. According to a statement, The BBB, 'owned by the Government's Business Department but operatingly independent', will invest separately 50 million pounds in Epidarex Capital and IQ Capital. Kraken, a company that provides energy software to utilities, energy groups, and companies such as EDF, National Grid U.S., and Tokyo Gas, has 70,000,000 global customers. It "may list in London", the government said, following its demerger.
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The Russian budget deficit in 2025 was 2.6% of the GDP, which is the highest level since 2020
The Finance Ministry announced on Monday that Russia had a budgetary deficit of 5.6 trillion roubles, or 2.6% of GDP, by 2025. This is the largest deficit in terms of percentage of GDP since 2020 and in roubles since 2006. In 2024, Russia's fiscal deficit was equal to 1.7% of its GDP. The?government increased the deficit target in 2025 from the initial?1.2 trillion Rubbles or 0.5% GDP due to the shrinking energy revenue and a strong Rouble. Budget revenues were 37.28 trillion rubles, down 7.5% on the original target. This was due to the 24% drop in oil and gas revenue, which reached its lowest level since 2020 despite the corporate profit and income tax increases. Budget spending, at 42.93 trillion rubles, was up 6.8% from 2024, and 3.5% more than the original?budget plan. Analysts doubt that the government will be able to meet its target, despite the fact that the government has raised the value added tax in order to keep the deficit this year at 1.6% of GDP.
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Italian fashion great Valentino dead at 93
His foundation announced that Valentino Garavani, the Italian designer of fashion, died on Monday. Valentino, who is usually only known by his first name, was 93 years old and had Retired in 2008 Valentino, the founder of his eponymous label, was a pioneer in haute couture, who built a successful business empire, and also introduced to fashion a new color, the so-called "Valentino Red". The foundation posted on Instagram that "Valentino passed away today in a?his Roman home, surrounded by his loved ones." It added that the funeral would take place at 11am (1000 GMT) on Friday in Rome. Valentino, along with Giorgio Armani, Karl Lagerfeld and other great designers of an era when fashion was not a globalized industry dominated by marketing executives and accountants but rather a highly commercialized one. Lagerfeld The year 2019 has seen the death of many people. Armani Died in September. (Written by Alvise Armillini, edited by Gavin Jones).
MORNING BID AMERICAS - Is Santa Claus coming?
What Mike Dolan, the ROI team and I are looking forward to reading, watching and listening to this weekend.
Hello Morning Bid readers! Federal Reserve Chair Jay Powell boosted markets with a rare monetary policy move: the dovish "hawkish cut". AI-induced anxiety is threatening to derail a "Santa Claus?" rally. This week, the Fed dominated the headlines with a 25 basis point cut in interest rates that was widely anticipated. The Chair Powell announced a Treasury Bill buying program starting at $40 billion per month. This was a "surprise", as Jamie McGeever, ROI markets' columnist, had suggested. The Chair praised U.S. productivity growth and hinted that it might be the key to resolving the 'triangle' of solid growth with sticky inflation, and a weak jobs market.
But it wasn't all rosy. The Fed said that there will only be one rate cut of 25 basis points next year, followed by a second in 2027. Markets had expected two cuts in 2026. This is a sign of a bigger issue: The global easing cycle seems to be over. The Reserve Bank of Australia announced that rate cuts were over, while the Bank of Canada held rates this week. Hawks at the European Central Bank hinted that a hike could be the next step, whenever it may come. There's also the Bank of Japan. Kazuo Ueda, the BoJ's governor, has announced in essence that rates will be raised next week. Now, he's expected to also pledge to continue?hiking. This global shift will have major implications on currencies and debt markets.
Investors are concerned about AI capex that is increasingly financed by debt. Oracle is a good example. Oracle's credit-default-swaps (CDS), a type of hedge that protects bondholders against default, hit a new five-year-high on Thursday. The U.S. seizure and threat of taking more Venezuelan tanks has had some small ripples in crude prices. The escalating tensions between Washington, D.C. and Caracas have raised the question as to what would happen to Venezuela's petroleum industry if President Nicolas Maduro were to lose power. Venezuela is not leaving OPEC, regardless of what happens. In light of the rising geopolitical tensions the G7 proposed late last week a "plan" to ban tankers from transporting Russian oil. This would intensify the West's standoff with Moscow. The question is now whether the governments will increase punishments for those who skirt sanctions. In India, the tightening of Russian sanctions does not appear to be having any major impact. India's crude oil imports from Russia will likely reach a six-month record in December. According to a U.S. Energy Information Administration (EIA) report, the U.S. shale oil industry faces a major turning point this month. Oil production in the Permian Basin is poised to reach its peak. Although drilling technology has improved, the output of America's largest oil patch is expected to remain stable for many years. Texas' main electricity system is expected to produce more energy through solar farms in 2025 than it does from coal plants. This will be a major milestone for America's biggest power network. The U.S. still trails Asia in the clean-energy race, and Europe is also falling behind. This will set the stage for a divergence between East and West in energy transition momentum in 2026. Check out the ROI team’s suggestions for what you should be reading, listening to and watching to prepare for the coming week. Check out the newest episode of Morning Bid, the daily podcast. Subscribe to the podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. Please contact me at
MIKE DOLAN is the Editor-at-Large for ROI Financial Markets. This article by Boston University Professor Laurence Kotlikoff argues that the United States has a worse fiscal situation than Italy.
JAMIE MCGEEVER, ROI Finance columnist: Louis-Vincent Gave is the founder and CEO of Gavekal and has done a great job in analyzing and examining the US-China strategic and economic rivalry. China is playing the long-term game while the US is focusing on short-term solutions. It may soon be clear what the consequences are.
GAVIN MAGUIRE is the ROI Global Energy Transition Columnist. This excellent Wired report describes the dramatic rise and fall of an offsetting company which convinced U.S. technology giants that it could balance their carbon footprints through dumping woodchips in the ocean. This is both fascinating and frustrating, but well worth reading.
RON BOUSSO is a columnist for ROI Markets. In the latest episode of Cleaning Up, former BP CEO John Browne is interviewed. He argues that the world must adapt to climate changes and develop new technologies.
JAMIE MCGEEVER, ROI Finance columnist: Louis-Vincent Gave is the founder and CEO of Gavekal and has done a great job in analyzing and examining the US-China strategic and economic rivalry. China is playing the long-term game while the US has chosen short-term solutions. It may soon be clear what the consequences are.
Mukesh SAHdev, the former Rystad oil analyst and head of Rystad's Oil Analysis department has been doing some amazing interviews on his Youtube channel. He talks about biofuels with XAnalysts Mukesh Shdeve and Michael Pope, a former Shell executive. They focus on the challenges of scaling up production.
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(source: Reuters)