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The rate hike is a possibility, but the yen will not decline.
Ankur Banerjee gives us a look at what the future holds for European and global markets After the Bank of Japan Governor Kazuo ueda's clearest indication yet of a potential move in the near future, the year that began with a rate increase in Japan could end with another. This will set the stage for an important month of divergence of monetary policy. Ueda stated that the BOJ would consider "pros" and "cons" of increasing interest rates during its next policy meeting, which will take place in two weeks. This statement helped strengthen the fragile yen by pushing Japanese government bonds yields to their highest level in 17 years. Investors are already preparing for a possible interest rate cut by the U.S. Federal Reserve after dovish remarks from several policymakers. Fed Chair Jerome Powell will speak later today and traders will analyze his comments to determine the short-term rate path. The BOJ's and Fed's divergent actions have helped to relieve the yen from its 10-month lows, which had been causing concern about intervention. On Monday, the currency rose 0.5% to reach 155.41 U.S. dollars. Analysts are quick to note that the yen's weakness is not likely to end anytime soon, as there will be a large gap between U.S. rates and Japan rates, even after Japan normalises its policy. The spread between U.S. 10-year bond rates and Japanese rates is at its tightest level since April 2022, with 219 basis points. However, U.S. bonds yields are still significantly higher than Japanese ones. In April 2022 the yen traded at around 123 per dollar. After a positive end to November investors have begun to be more cautious as they await a number of economic reports from around the world, including the European Manufacturing data. European futures suggest a lower opening in a slow start to the month, after the pan-European STOXX 600 recorded its fifth consecutive month of gains. The markets will also want to know who will be the next Powell. His term will end in one year. White House economic advisor Kevin Hassett is the frontrunner. This could put pressure on the dollar. Market developments on Monday that may have a significant impact Data on the November PMI for Germany, France and UK
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India weighs Mongolian coking coal imports despite transport hurdles, source says
India is considering the viability to import coking coal from Mongolia, despite the transport bottlenecks. New Delhi wants to diversify its supplies of this key ingredient in steelmaking. India, which is the second largest crude steel producer in the world, imports about 85% its coking coal, more than half of which comes from Australia. The source stated that the demand is expected to increase in the coming years. This will prompt the government and steelmakers alike to seek out new suppliers. Mongolia is a landlocked country with two export trade routes - one via Russia, and the other through China. The source declined to identify herself as the information wasn't public. The Ministry of Steel in India did not reply to an email seeking a comment. New Delhi and Beijing are slowly rebuilding their economic ties, after a deadly border clash in 2020 that triggered a long-lasting military standoff. Industry officials have cited Mongolian coking as a source of high quality coal at lower prices. The source stated that logistics are the main obstacle. India has not yet received the trial shipments that were planned for earlier this year of Mongolian coal. In May, the State-run Steel Authority of India had requested 1 metric tons of Mongolian coal. The steelmaker stated in an email that it is "in constant contact with Mongolian coal suppliers to determine the technical and logistical feasibility of sourcing from Mongolia". The Mongolian Ministry of Mining and Heavy Industry has not responded to a comment request. Source: Separately, Russia, and the United States, each account for approximately 15% of India's imports of coking coal.
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The dollar is lower and the risk-off mood in stocks has led to a six-week gold high.
On Monday, gold prices reached a six-week-high as investors reacted to a possible rate cut in the United States later this month. Silver also hit a record-high. Gold spot rose by 0.2% at 0401 GMT to $4240.54 an ounce after reaching its highest level since October 21. U.S. Gold Futures for December Delivery gained 0.5%, to $4276.00. Silver rose 2%, to 57.48 dollars per ounce. It had previously reached a record high of 57.86 dollars. Holders of other currencies can now buy gold at a lower price than before, as the U.S. Dollar has fallen to its lowest level in two weeks. S&P Futures are down 0.8%, in line with the sell-off in major crypto currencies. This has created a positive feedback loop for gold, which is a safe-haven asset in today's thinly traded session. In Asian trading, U.S. stocks futures fell, and among cryptocurrencies bitcoin dropped 3.6% to $87.881.82 while ether dropped 5% at $2,871.59. Recent dovish comments from Federal Reserve Governor Christopher Waller, and New York Fed president John Williams, along with softer U.S. economic data, have strengthened expectations that the Federal Reserve policy will be eased in December. According to CME's FedWatch, futures indicate an 87% probability of a rate reduction. Kevin Hassett is a White House economist who has been tipped as the frontrunner to become Fed chair. He said that he would gladly accept this position if President Donald Trump were to nominate him. Hassett, like Trump, believes that rates should be lowered. The markets are now awaiting the core U.S. The Fed will be looking at Friday's Personal Consumption Spending figures for more clues about its policy direction. Non-yielding gold tends to be supported by lower borrowing costs. Wong said that silver prices rose due to the thin liquidity created by the CME's outage last Thursday, and not because of any fundamental factors. Palladium rose 2.1%, to $1 482,45, and platinum gained 1.3%, to $1 694,70. (Reporting by Ishaan Arora in Bengaluru; Editing by Subhranshu Sahu and Mrigank Dhaniwala)
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Asian stocks fall; yen rises as Ueda's comments raise rate hike expectations
Stocks fell on Monday, after a strong November. A bout of risk-aversion gripped the markets as optimism about U.S. interest rate cuts remained unchanged. The yen strengthened as investors considered the possibility of a rate increase as early as this month. Investors were looking for clues about the timing of the next rate hike as Bank of Japan governor Kazuo Ueda spoke in Nagoya. Ueda told business leaders in an address that the central banks would weigh the "pros" and "cons" of raising interest rates at their next policy meeting. This was the strongest indication yet as to whether or not a rate hike is on the horizon for later this month. Ueda will speak again later today. His comments boosted the yen and pushed down the Nikkei by more than 1,5%. Japanese government bond yields also reached their highest level in 17 years. The yield on the two-year JGB, which is most sensitive to BOJ policy rates, increased by 2 basis points, to 1.01%. This was its highest level since June 2008. Markets have been focused on the yen in recent weeks due to uncertainty over the timing and fiscal policies of Prime Minister Sanae Takaichi. Charu Chanana is the chief investment strategist for Saxo. She said that traders interpreted Ueda’s comments as a sign that he would "almost be on board" with a rate increase this month, but any such move was unlikely. "Remember that Japan is not sprinting, but rather edging its way away from a policy of ultra-easy." Chanana stated that "that means the yen could claw back some of the ground lost on BOJ hints, and lower global yields. However, it is hard to predict the end of the yen's weakness as long as the U.S.-Japan rates gaps remain so wide." STOCKS SURRENDER AROUND NOVEMBER STRONG Investors shrugged off fears of an AI bubble at the end of November. Traders were now looking for catalysts that would continue upward momentum. This week, they will be focusing on economic data. U.S. Stock Futures fell in Asian Hours, with Nasdaq and S&P 500 down 0.8% each. Bitcoin and ether, two crypto currencies, both fell more than 5%. This highlights the cooling of risk appetite. Hong Kong's Hang Seng rose by more than 1% and pushed Asian stocks higher. MSCI's broadest Asia-Pacific share index outside Japan rose 0.1%. It has gained over 23% in the past year, and is on track for its best gain since 2017. Chanana from Saxo said that there was no single factor driving the current risk-off mood, but rather a number of factors, such as rising JGB yields, and falling cryptocurrencies. Hong Kong stocks have beaten the regional trend because weak China PMIs revived hopes for stimulus. Investors will focus on U.S. releases this week, which cover consumer sentiment and manufacturing activity. Matt Simpson, senior analyst at StoneX, in Brisbane, says that if incoming data signals a slowdown, but not a recession, then the sentiment will probably remain positive, even if the U.S. Dollar weakens, as it usually does during this time of the year. The dollar index (which measures the U.S. Dollar against six rival currencies) was 99.414, which is little changed from the previous day. The index is down 8% for the year, with most of the losses occurring in the first half. Focus on Consumer Spending Investors are looking for clues about what the Fed is going to do at its meeting next week by listening to the comments of Federal Reserve Chair Jerome Powell. After a series of dovish remarks from policymakers over the past few days, traders are pricing in a 87% chance that a cut will occur. As data from Black Friday, Cyber Monday and other retail sales events begins to trickle in, attention will be paid to holiday consumer spending. Adobe Analytics, a company that tracks the visits made by shoppers to online retail sites, reports that U.S. consumers spent $11.8 billion on Black Friday online, a record amount. This is up 9.1% since 2024. Oil prices increased in commodities after OPEC+ decided to maintain the same oil production levels for the first three months of 2026. The group is reducing its efforts to regain market shares amid fears of a looming glut of supply. Brent crude futures rose 1% to $63,03 per barrel. U.S. West Texas Intermediate Crude was up 0.99% at $59.16 per barrel. (Reporting and editing by Muralikumar Anantharaman, Kate Mayberry, and Ankur Banerjee from Singapore)
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Demand for medium-grade cargoes drives iron ore prices higher
Iron ore prices rose for the fourth consecutive session on Monday. The gains were limited by blast furnace maintenance at year's end. By 0320 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange rose by 0.88% to $799 yuan (US$112.95) per metric ton. The benchmark January Iron Ore at the Singapore Exchange rose by 0.88% to $103.1 per ton. According to Mysteel, China's blast furnace steel production edged down last week, as some mills started annual maintenance. Capacity utilisation was also down by 0.6 percentage points. Mysteel reported that despite weakening fundamentals in the iron ore market, prices were still supported by a strong demand for medium grade ores. Everbright Futures, a broker, said that the supply of iron ore from overseas is expected to continue to recover in December. However, weak blast furnace margins, as well as heavier maintenance at year's end, will lead to further decreases in pig-iron production. The European Union has called on the United States to remove its 50% tariff on steel and aluminum it imposed in August on 407 "derivative" products, such as motorcycles and wind turbines. If not, the EU will retain its tariffs until a solution can be found. SteelHome data shows that the total stockpiles in China of iron ore dropped by 0.42% on a week-on-week basis to 139 million tonnes as of November 28. China announced plans on Friday to expand the market for public real estate trusts to include commercial property, following the collapse of developer China Vanke’s bonds and shares to record lows in the previous week. This sparked fears about the impact the crash could have on the wider property sector. Coking coal and coke, which are used to make steel, have both gained in price, rising by 1.88% and 2.03 percent, respectively. The benchmark steel prices on the Shanghai Futures Exchange have increased. The Shanghai Futures Exchange saw a rise in steel benchmarks. ($1 = 7.0738 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Copper reaches record highs as Chinese smelters cut production
Copper reached new highs on Monday, after the top Chinese smelters accepted a plan for reducing output by 2026. Codelco also offered premiums that were record-highs. As of 0230 GMT the most active copper contract at the Shanghai Futures Exchange soared by 2.08%, to 89.020 yuan per metric tonne ($12,583.40), after reaching a record high of 89.650 yuan. After setting a record on Friday, the benchmark three-month copper price on the London Metal Exchange also rose to a new high of $11,294.5 per ton. As of 0230 GMT, the London copper contract had risen 0.24% to $10,216 per ton. The China Smelters Purchase Team, a group of China's largest copper smelters said Friday that their members had agreed to reduce production by over 10% in 2026 to combat negative fees for copper concentrate processing. The bullish headlines of last week's Asia Copper Week in Shanghai have also prompted traders to take positions. Codelco in Chile, the top copper producer in the world, wanted to increase copper premiums for Chinese buyers to as much as $350 per ton. Many thought this level was no longer relevant to Chinese participants and that there would be little impact on the supply-demand dynamics of copper locally. Sources say that the Codelco premiums were designed to allow those with access to Comex to benefit from arbitrage between Comex and LME amid tariff uncertainty. Copper also reached new heights due to the optimism that an interest rate reduction by the Federal Reserve will occur in December. This is because increased economic activity is linked with increased demand for copper. The U.S. dollar continued to weaken, supporting markets by making commodities that are traded in greenbacks cheaper for investors who use other currencies. Aluminium, zinc, nickel, tin, and lead were all up in price. Nickel gained 0.34% and tin rose 1.08 %. London lead was also little changed. Monday, December 1, DATA/EVENTS, (GMT) 0850 France HCOB Manufacturing Mfg. PMI, Nov 0855 Germany HCOB Manufacturing Mfg. PMI, Nov 0900 EU HCOB Manufacturing Final PMI, Nov 0930 UK S&P Global Manufacturing PMI, Nov 1445 US S&P Global Manufacturing Final, ISM Manufacturing Final PMI, Nov
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Venezuelan oil prices rise on OPEC+ plan to increase output
The oil price rose by as much as 1.5 percent on Monday, after OPEC+ members reaffirmed a commitment to halt production increases during the first quarter next year. Also, the possibility of U.S. sanctions against Venezuelan oil producers unnerved the market. Brent crude futures subsequently pared their gains, and were up by 0.98% or $62.99 a barrel at 0052 GMT. U.S. West Texas Intermediate Crude was at $59.12 up 57 cents or 0.99%. Early November, the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to take a pause. They feared a glut of supply. OPEC+ stated that after a Sunday meeting, it "reaffirmed its importance to adopt a cautious approach while retaining the full flexibility of continuing pausing or reversing the additional voluntary production adjustment". Vivek Dhar, an analyst at Commonwealth Bank of Australia, said that the outcome of Sunday was widely expected given the previous decision. Dhar wrote that "market worries about a growing glut on global oil markets likely played a part in the OPEC+'s decision." The move by U.S. president Donald Trump to close Venezuelan's airspace has created new uncertainty on the oil market, given that the South American nation of Venezuela is a major producer. Analysts at ING wrote in a note to clients that "adding more support to the Venezuelan crude oil market increases the supply risk after President Trump announced he was considering closing the airspace above the country". Trump said on Sunday that he spoke with Venezuelan President Nicolas Maduro, but he did not provide details. He also did not elaborate on his comments about the airspace or whether they indicated military strikes against Venezuela. Trump said, "Don't take anything at face value." In Europe, the increasing uncertainty surrounding a Russia-Ukraine deal has reversed the bearish sentiment from the last two weeks when it looked like a deal was closer. This raised the possibility of large quantities of Russian oil currently sanctioned flooding the market. Ukraine's military said via social media that it hit a Russian refinery and the Beriev military aircraft plant in Rostov Region on Saturday. Separately two Ukrainian naval drones struck two sanctioned oil tankers heading for a Russian port in the Black Sea, to pick up crude oil to sell abroad. Officials from Ukraine and the United States met in Florida, the U.S. State on Sunday for a discussion about the war. Marco Rubio, the Secretary of the U.S. Department of State called the meeting "very productive". He added that more efforts are needed to bring an end to the war which is now in its third year. Helen Clark, Chris Reese, and Christopher Cushing edited the report.
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Asian stocks rise on Fed rate cut optimism; yen firm
Asian stocks started the month of December 2025 steadily on Monday as optimism about a rate cut in the United States lifted risk sentiment before economic data. The yen strengthened, with investors weighing up the possibility of a rate hike near-term. Investors are analyzing the comments of Bank of Japan Governor Kazuo Ueda in Nagoya to determine when the next rate hike will be. Ueda told business leaders in an address that the central banks will weigh the "pros" and "cons" of increasing interest rates during its next policy meeting, which is scheduled for December. MSCI's broadest Asia-Pacific share index outside Japan, which includes Japan, was unchanged at 703,19. It has gained 23.5% this year, and is on track to achieve its best annual gains since 2017. Japan's Nikkei dropped 1.3% in the early trading. The U.S. futures were lower during Asian hours. Hong Kong's Hang Seng, however, rose by over 1%, pushing Asian stocks to higher levels. Chris Weston is the head of research for Pepperstone. He said, "The risk bulls are feeling good about their directional bias as they roll into December." As the clouds of concern that hung over the markets from mid-November onwards slowly dissipate they give way new emotions, namely the fear of missing out and the risk of falling short of benchmark targets. This week, investors will focus on U.S. economic data that covers manufacturing and service activity, as well as consumer sentiment. Matt Simpson, senior analyst at StoneX, Brisbane, said: "With the U.S. Data void being finally filled and an economic calendar that is busy, December appears to be a happy month for volatility hunters." Simpson said that if the data indicate a slowdown, but not a recession, then the sentiment is likely to remain buoyant as the U.S. Dollar weakens like it usually does during this time of the year. The dollar index (which measures the U.S. Dollar against six rival currencies) was 99.414, which is little changed from the previous day. The index is down 8% for the year, with most of the losses occurring in the first half. Focus on Consumer Spending Investors are looking for clues about what the Fed is going to do in the next few days by listening to the comments of Federal Reserve Chair Jerome Powell. Investors have been convinced by the dovish remarks of policymakers that a rate reduction is imminent. Traders have priced in an 87% probability of a rate cut in the next month. As data from Black Friday, Cyber Monday and other retail sales events start to trickle in, early indications of holiday consumer spending will be a focus. Adobe Analytics, a company that tracks the 1 trillion visits made by shoppers to online retail sites, reports that U.S. consumers spent $11.8 billion on Black Friday. This is a record amount. The yen has been the focus of the market for the past few weeks due to uncertainty over the timing of the next rate hike and concerns over the fiscal policies implemented by Prime Minister Sanae Takayichi. Japan's Finance Minister said that the recent erratic swings on the foreign exchange markets and the rapid weakening of the yen are "clearly driven by fundamentals". This is yet another verbal warning which has so far not helped to slow down the yen’s decline. Oil prices increased after OPEC+ decided to keep oil production levels the same for the first three months of 2026. The group has slowed its efforts to regain market shares amid fears of a looming glut of supply. Brent crude futures rose 1% to $63.03 per barrel. U.S. West Texas Intermediate Crude was up 0.99% at $59.16 per barrel. (Reporting and editing by Muralikumar Anantharaman in Singapore.
Gold reaches a six-week high amid equities' risk-off mood
Silver prices reached a new record high after reaching a six-week-high on Monday. Investors were focused on the potential U.S. interest rate cut that could occur later in the month.
As of 0534 GMT, spot gold fell 0.1% to $4225.91 an ounce after reaching its highest level since October 21. U.S. Gold Futures for December Delivery gained 0.1% at $4,260.20.
Silver rose 0.7%, to $56.78 an ounce. It had earlier reached a record high of $57.86.
Holders of other currencies can now buy gold at a lower price than before, as the U.S. Dollar has fallen to its lowest level in two weeks.
S&P Futures are down 0.8%, in line with the sell-off in major crypto currencies. This has created a positive feedback loop for gold, which is a safe-haven asset in today's thinly traded session.
In Asian trading, U.S. stocks futures fell, and among cryptocurrencies bitcoin dropped 3.6% to $87.881.82 while ether fell 5% to $2.871.59.
Recent dovish comments from Federal Reserve Governor Christopher Waller, and New York Fed president John Williams, along with softer U.S. economic data, have strengthened expectations that the Federal Reserve policy will be eased in December. According to CME's FedWatch, futures indicate an 87% probability of a rate reduction.
Kevin Hassett is a White House economist who has been tipped as the frontrunner to become Fed chair. He said that he would gladly accept this position if President Donald Trump were to nominate him. Hassett, like Trump, believes that rates should be lowered.
The markets are now awaiting the core U.S. The Fed will be looking at Friday's Personal Consumption Spending figures for more clues about its policy direction.
Non-yielding gold tends to be supported by lower borrowing costs.
Wong said that silver prices rose due to the thin liquidity created by the CME's outage last Thursday, and not because of any fundamental factors.
Palladium rose 1%, to $1,465.44, while platinum gained 0.6%, to $1683.03. (Reporting by Ishaan Arora in Bengaluru; Editing by Subhranshu Sahu and Mrigank Dhaniwala)
(source: Reuters)