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MORNING BID EUROPE - Futures try to achieve a Fed accompli
Wayne Cole gives us a look at what the day will bring for European and global markets. The Fed's decision week has finally arrived and is shaping up to one of the most contentious meetings in recent history. Only 19 of 108 polled analysts favored a hold, with the remainder predicting an easing Wednesday. Futures prices are 88% in favor of a rate reduction, as if to force policymakers into a decision that they would not dare refuse. Official commentary suggests that at least two out of 12 voting Fed members would dissent from a rate cut. More opposition could come from Fed policymakers divided, even though one Trump-appointed Governor argues for a 50 basis point or greater reduction. Since 1990, the Federal Open Market Committee (FOMC) has only had three or more members express dissent at a single meeting nine times. Analysts point out that up to nine of the 19 members can use their "dot-plot" forecasts in order to indicate they are against a reduction for December. The markets will pay close attention to how Powell frames all of this during his press conference and whether he will focus on the risks to employment or inflation. Futures markets assume Powell will be hawkish and give only a 24 percent chance that he'll make a move by January. The future is more uncertain, given that President Trump will announce Powell's replacement at any moment and is likely to favor loyalty over expertise and experience. The Treasury market may not be able to deal with a political appointee in the most powerful position of central banks around the world. But it is unlikely to bode very well for those at the far end of the curve. All three central banks are expected to maintain their current stance. Swiss National Bank would like to ease further to counter the strength of their franc but it 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 and are even pricing in a rate increase for late 2026. Wall Street futures are up just a little bit, while European futures are down the same amount. Asian shares are mostly up, with a 1% rise for China, which reported a 5.9% increase in exports in November, exceeding forecasts, and continues to defy U.S. Tariffs. The dollar is broadly weaker, and Treasuries have been hushed up for the Fed's countdown. The JOLTS report will be released tomorrow, and it could cause more noise than usual because the payrolls report won't be due until December 16th. The following are the key developments that may influence markets on Monday. - Euro zone Sentix Index, Germany's Industrial Output for October - Appearances of Bank of England policymakers Alan Taylor, and Clare Lombardelli. Piero Cipollone, ECB board member, also speaks - NY Fed 1 year Inflation expectations
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CNBC Indonesia reported that Indonesia will revise its retention rules for export revenues in the new year.
CNBC Indonesia reported Monday that Indonesia will require all natural resource exporters, starting January 1, to deposit and retain their foreign currency earnings at state-owned banks. The report was based on a government document. According to the new rules, which were introduced in January, exporters are required to keep for a minimum of one year all proceeds from the sale of natural resources such as coal, palm oil, and nickel, within the Indonesian bank system, including private-owned banks. Exporters who are reluctant to convert their proceeds into rupiah can use the money for business purposes if they exchange it. CNBC Indonesia reported that under the new rules, a maximum 50% of the proceeds may be converted to rupiahs for operational purposes, down from the 100% allowed in the old regulations. The news website reported that exporters can place their deposits in government bonds issued on the local market which are denominated in foreign currencies. The Indonesian finance and economic ministry, the President's Office and the Central Bank did not immediately respond when contacted for comment. (Reporting and editing by David Stanway; Stefanno Sulaiman, Gayatri Suroyo)
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UN reduces its aid appeal to 2026 despite rising need
The United Nations appealed on Monday for a budget for aid that was only half of what they had hoped to receive this year. They acknowledged a drop in funding from donors at a moment when the humanitarian crisis is more urgent than ever. The U.N.'s $23 billion appeal is a blatant attempt to shut out the tens and millions of people who are in dire need of assistance. Falling support has made it necessary for the U.N. to prioritize only the most desperate. These funding cuts are on top of the other challenges facing aid agencies, including security threats to staff in conflict zones as well as lack of access. Tom Fletcher, U.N. chief of aid, told reporters that "it's ultimately the cuts that force us to these tough, hard, brutal choices we're forced to make." He said, "We're overstretched and underfunded. We are also under attack." "And we drive our ambulance toward the fire." In your name. We are now also asked to extinguish the fire. There isn't enough water in the tank. And we're being shot at." The U.N. had requested $47 billion in aid for 2025, but this figure was reduced as President Donald Trump and other Western donors like Germany cut back on their funding. The figures for November showed that it has received just $12 billion, the lowest amount in ten years. This is only a little over a quarter. The $23 billion plan for next year identifies 87 millions people as priority cases, whose lives are at risk. It says that a quarter billion people need immediate assistance and will help 135 millions of them for $33 billion, if they have the funds. The occupied Palestinian territory is the recipient of the largest single appeal, $4 billion. Gaza is the main recipient of this money, as it has been devastated by two years of Israel-Hamas violence, leaving nearly all its 2.3m inhabitants homeless and dependent upon aid. Sudan is second, followed by Syria. Fletcher warned that humanitarian groups were facing a grim scenario, with a growing population, disease spreading and violence at record levels. He said: "(The appeal is) laser-focused on preventing deaths where shocks are most severe: wars and climate disasters; earthquakes, epidemics and crop failures." U.N. agencies that provide humanitarian aid are heavily reliant upon voluntary donations from Western donors. The United States is by far the largest donor in history. U.N. statistics showed that despite Trump’s cuts, it still held the top spot in 2025. However, its share of the total had dropped from more than a third to just 15.6%. (Reporting and editing by Aidan Lewis; Emma Farge)
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China's rare Earth exports jumped in November following Xi and Trump meeting
China's exports of rare earth minerals jumped in November. This was the first month that President Xi Jinping, and U.S. president Donald Trump had agreed to accelerate shipment. The General Administration of Customs of China reported that exports jumped by 26.5% in November from October, to reach 5,493.9 tons. The customs office will release a breakdown of countries on December 20, but it is not known if increased shipments into the U.S. and Europe fueled that jump. Since April, the introduction of export controls on 17 minerals that are used in autos and consumer electronics as well as defence has caused disruptions for months. The requirement to obtain a licence for every export led to shortages, which brought the auto supply chain crashing down. This gave China a huge advantage in the trade negotiations with the U.S. Last week, it was reported that China had issued its first 'general licences' - one-year permits aimed to speed up exports after the Xi and Trump meeting. These licences will likely start to impact trade data in 2019. Rare earth exports have totaled 58,193.1 tonnes, an increase of 11.6% annually.
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Gold prices rise as the dollar weakens and traders prepare for a Fed rate cut
Gold edged higher on Monday as traders became more confident that the U.S. Federal Reserve would cut interest rates at its meeting this week. As of 0319 GMT, spot gold was up by 0.3% to $4,212.70 an ounce. U.S. Gold Futures for December Delivery were unchanged at $4,241.30 an ounce. Gold priced in greenbacks is now cheaper for foreign buyers. Tim Waterer, KCM Trade's Chief Market Analyst, said that the Fed is on track to reduce rates this week. The expectation of a looser monetary policy will drive gold prices higher. He added that "the anticipated rate reduction this week keeps the dollar under control while giving the gold some room to move upwards." After three consecutive months of gains, U.S. Consumer Spending increased modestly in September. This suggests a loss in momentum at the end third quarter due to a lacklustre job market and increasing cost of living. Last month, private payroll data showed the largest decline in over two and a half years. The Fed's dovish comments have further fueled expectations for monetary ease. CME's FedWatch shows that markets are pricing in an approximate 88% chance for a rate cut of 25 basis points at the Fed meeting on December 9-10. Gold is a non-yielding asset that tends to be favoured by lower interest rates. After hitting a new record high of $59,32 per ounce on Friday, silver fell 0.4% to $58.06 an ounce. The white metal has risen more than 100 percent this year. Waterer stated that silver is still widely viewed as undervalued compared to gold. Its 2025 rally reflects a growing industrial appetite, and the expectation that demand will continue outpace supply until 2026. Palladium fell 0.1%, to $1455.97, and platinum rose 0.7%, to $1653.0.
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China's imports of iron ore in November fell due to a shrinking margin
China's imports of iron ore in November dropped for the second consecutive month by 0.7% compared to the previous month. The decline was due to a decrease in buying interest after several mills began equipment maintenance because profit margins were shrinking. Data from the General Administration of Customs revealed on Monday that China imported 110.54 millions metric tons of this key ingredient for steelmaking last month. It was less than 111.3 millions tons in October, but higher than 101.86 in the same month of last year. Last month, more steel mills performed maintenance on furnaces as iron ore prices remained stable and steel demand was weakening. Mysteel, a consultancy, reported that the average daily hot metal production - an indicator of demand – fell 1.7% in November compared to the previous month. Mysteel's data shows that only 35% (down from 45%) of steel mills made a profit at the end November, compared to late October. Imports were above 100 million tonnes for the sixth consecutive month, contributing towards a build-up of portside stocks. Portside inventory Steelhome's data showed that at the end of November, shipments had risen 2.5% compared to a month ago. Iron ore imports in the first 11 month of 2025 rose by 1.4% compared to the same period the year before, reaching 1.139 billion tonnes, setting the annual record. In November, steel exports increased by 2% over the previous month to 9,98 million tons. This represents an increase of 7.5% year-over-year. The November shipments brought the year-to date exports to 107.72 millions tons, which is a record for this period. This represents an increase of 6.7%. (Reporting and editing by Amy Lv, Lewis Jackson and Christopher Cushing).
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China's coal imports in November were down by 20% on a year-on-year basis
The General Administration of Customs reported on Monday that coal imports from China, the largest buyer in the world, dropped 20% from their record high of the previous year. Imports in November, at 44.05 millions metric tons, were up by 6% compared to 41.74 tons in October. Imports in November of the previous year had reached 54.98 millions tons, a monthly record. The China Coal Transportation and Distribution Association's (CCTD) website reported in late November that although imported coal has a slight price advantage, this arbitrage has decreased as domestic coal prices have fallen. CCTD stated that due to supply constraints, imports are likely to be lower than the previous year's levels in the last two months of the calendar year. The cold weather in Russia and Australia has affected Russian exports, and heavy rains in Indonesia have curtailed exports. The data revealed that China's imports of coal fell by 12% in the first 11 month of 2025 compared to a year ago, reaching 432 million tonnes. (Reporting and editing by Tom Hogue; Colleen howe)
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Oil nears two-week highs due to geopolitical risks and an expected US interest rate reduction
Oil prices were at a two-week high on Monday, as investors waited for a possible U.S. Federal Reserve rate cut to boost economic growth and increase energy demand. They also monitored geopolitical risks that threatened Russian and Venezuelan supplies. Brent crude futures were up 9 cents or 0.14% to $63.84 per barrel at 0321 GMT. U.S. West Texas Intermediate crude rose 8 cents or 0.13% to $60.16. Both contracts closed the Friday trading session at their highest level since November 18. LSEG data shows that the markets are pricing an 84% probability of a quarter point cut during the Fed meeting scheduled for Tuesday and Wednesday. Board member comments suggest that the meeting will be the most divisive for years. Investors are now more focused on the bank’s internal dynamics and policy direction. The pace of progress in Europe's Ukraine peace talks is slow. There are still disagreements over the security guarantees for Kyiv, and about the status of Russian occupied territory. U.S. officials and Russian officials have also differing opinions on the peace plan presented by the Trump administration. In a note to clients, ANZ analysts stated that "the various possible outcomes from Trump's recent push to end war could release a shift in oil supply of over 2 million barrels per daily." Vivek Dhar, an analyst at Commonwealth Bank of Australia, said that a ceasefire was the primary downside risk for the outlook of oil prices. However sustained damage to Russia’s oil infrastructure represents a significant upward risk. Dhar wrote in a note to clients that "we think the oversupply concern will be realized, especially when Russian oil and refined products flows circumvent sanctions. Futures prices should then track toward $60/bbl by 2026." People familiar with the situation have told me that the Group of Seven and the European Union were in discussions to replace the price cap on Russian crude oil exports by a complete maritime services ban. This would further reduce the supply of the world's largest oil producer. The U.S. also increased pressure on Venezuela, a member of the Organization of the Petroleum Exporting Countries. This included strikes against boats that it claimed were attempting smuggle illicit drugs out of Venezuela. It also talked of military action in order to topple President Nicolas Maduro. Analysts and trade sources said that independent Chinese refiners are also increasing their purchases of Iranian oil sanctioned from tanks onshore, using newly-issued import quotas. This is helping to ease a glut in supply. (Reporting and editing by Florence Tan, Jamie Freed, and Christopher Cushing).
China's copper exports to China decline in November amid rising prices
Official data released on Monday showed that China's imports of copper fell for the second consecutive month in November, due to rising prices for the metal.
The General Administration of Customs reported that imports fell 2.51% in November, from 438,000 metric tons the month before to 427,000 tons.
China is the largest consumer of copper, and imports unwrought copper, as well as copper products. This includes anodes and refined metals, alloys, and semi-finished products.
The London Metal Exchange benchmark three-month price of copper rose 2.77% in November, reaching a record high of $11,210.50 per ton. However, supply concerns led to a break through this level in December.
China's leading smelters have agreed to reduce output by 10% in 2026, to combat negative processing charges. This has fueled expectations of a tighter supply for refined copper next year.
Yangshan Copper Premium
As traders raced to profit from the arbitrage between Comex and LME, more global refined copper was shipped to the United States during the entire year.
Comex stocks of copper
Chile's copper giant, owned by the state, sought to increase premiums for contracts that would last until 2026.
The traders saw the Codelco premiums at record levels as a way to make money from arbitrage between the Comex and LME, not for the purpose of supplying markets outside the United States.
According to official data, China imported 4,88 million tons (down from 5,12 million) of copper in the period January through November. This is down from the 5.12 million tonnes in the same period in 2024.
Imports of copper concentrate, which is used in smelters to produce metal, increased from 2.45 million tons a month ago to 2,53 million tons in November.
China imported 27,61 million tons (up from 25,57 million) of copper concentrate between January and November. (Reporting and editing by Clarence Fernandez; Lewis Jackson and Dylan Duan)
(source: Reuters)