The Overnight News Roundup

Jan 09, 2025

PiQ and Zack Eiseman provide you with a consolidated roundup of the overnight news that matters most to markets.

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MACRO:

The pound tumbled to its weakest level against the US dollar in over one year as investors’ concerns over the UK fiscal and inflation outlook send the nation’s assets into a tailspin. Gilts have also opened sharply lower on Thursday. (BBG)
Wednesday was the busiest day for pound options trading since the currency slumped toward an all-time low in 2022, an omen of deepening jitters around the UK currency. (BBG)
President Joe Biden’s administration plans one additional round of restrictions on the export of AI chips from the likes of Nvidia and AMD just days before leaving office, a final push in his effort to keep advanced technologies out of the hands of China and Russia. (BBG)
The yen saw fleeting strength after Japanese workers’ base salaries grew the most in 32 years. However, real cash earnings dropped 0.3% from a year earlier, extending the streak of declines to four months. (Newswires)
A wide range of Japanese firms see the need to continue raising wages due to structural labour shortages, the Bank of Japan said on Thursday in its regional assessment report, suggesting conditions for a near-term interest rate hike were continuing to fall into place. (RTRS)
Japan's 30-year bond auction was strong, receiving bids worth 3.72 times the amount sold, higher than a ratio of 3.46 times at the previous auction. (RTRS)
Japan’s dealmakers are expecting a busier 2025 after more than $230 billion in mergers and acquisitions last year, underpinned by companies’ changing attitudes around business expansion. (BBG)
China's consumer prices barely rose in 2024 (+0.2%) while factory-gate prices extended into a second straight year of declines. However, core inflation nudged up slightly to 0.4% in December from 0.3% in November, the highest in five months. (RTRS)
China's new yuan loans are expected to have risen by almost 38% in December from November, a Reuters poll showed, as confidence in taking out debt grew stronger on the back of Beijing's fiscal measures to spur economic growth. (RTRS)
China's yuan was steady near the 16-month low against the dollar on Thursday, though closer to the weaker end of its trading band, as the PBoC announced a record amount of offshore yuan bill sales to support the currency. (RTRS)
Chinese investors are buying up large amounts of Hong Kong mutual fund products that invest overseas, particularly bonds, after authorities expanded a cross-border trading channel this month and opened for them an avenue to get better yields. (RTRS)
China has called out the EU for imposing what it says are unfair trade barriers on Chinese companies, ending its months long investigation into the bloc’s efforts to protect its businesses from foreign subsidies. (WSJ)
HSBC is turning bullish on Chinese stocks listed in Hong Kong, touting them as beneficiaries of more “favorable policy rhetoric” in mainland China and a better outlook for the domestic economy. (BBG)
Chinese health authorities said they had detected the new mutated mpox strain clade Ib as the viral infection spreads to more countries after the WHO declared a global public health emergency last year. (RTRS)
FT have a piece on the precarious state of the sovereign debt market titled "Bond market ‘police’ are back as investors patrol spending plans", noting bond markets have entered a new era of antagonism with governments as investors sell sovereign debt in the UK, France, and the US amid high borrowing. (FT)
Corporate borrowers kicked off 2025 with a record $83bn in dollar bond sales, according to LSEG data, capitalising on buoyant investor demand to raise debt ahead of any market volatility sparked by Donald Trump’s return to power. (FT)
Trump reposted a New York Sun column titled "Trump and Elon Musk Are Right: Legal Immigrants Are a Boon to America’s Economy... legal immigration, yes; illegal immigration, no." (Truth)
Elon Musk reiterated that DOGE will try to cut $2 trillion from federal spending, but he said that is the "best-case outcome" in a conversation with Mark Penn, chairman and CEO of ad company Stagwell. (WSJ)
At least five people have died and tens of thousands have been forced to evacuate as multiple wildfires devastate the LA area. The fires have destroyed over 1,000 structures and injured first responders and residents. (WSJ)
The union representing 45,000 dock workers on the U.S. East and Gulf Coasts and their employers on Wednesday said they reached a tentative deal on a new six-year contract, averting further strikes. (RTRS)
Elon Musk has privately discussed with allies how Keir Starmer could be removed as UK PM before the next election, according to FT sources. “His view is that western civilisation itself is threatened”. (FT)
Annual U.K. shop prices declined again in December, driven by heavy discounts as retailers seek to make up for the lower sales earlier in the year, but cost pressures are expected to drive prices higher in 2025, according to the BRC. (WSJ)
UK recruiters reported a further slowdown in hiring in December as companies sought to cut staffing costs in response to planned tax rises, new worker rights and a worsening economic climate, according to a KPMG survey. (FT)
German exports rose thanks to strong demand from countries outside the EU and industrial production rose more than expected in November. (RTRS)
Australian retail activity jumped in November, supported by Black Friday sales and widespread discounting ahead of Christmas. (WSJ)
New Zealand’s working-age population grew at a slower pace last year amid an exodus of young Kiwis seeking better opportunities abroad. (BBG)
Overseas investors have turned the most bearish on Indian stock index futures in seven months just as the earnings seasons is about to start. (BBG)
The cost to hedge foreign-exchange risk in Indian assets rose to the highest in more than two years as bets mount that authorities are easing their iron grip on the rupee. (BBG)
The cost of hedging Asian investments for dollar-funded investors is set to drop from a two-year high, a shift that could lead to reduced support for the region’s currencies. (BBG)
Saudi Arabia's crude oil supply to China is set to decline in February from the prior month, after the kingdom hiked its official selling prices to Asia for the first time in three months. (RTRS)
A rally in liquefied natural gas has pushed Asian prices to a rare and substantial premium over oil, paving the way for major consumers to shift to cheaper but dirtier fuels. (BBG)
Cheap coal will continue to provide the ballast for China’s energy security in the coming year, according to the country’s top industry grouping. (BBG)
Chilean officials unanimously rejected a mining and port project in the latest twist in more than a decade of legal and regulatory deliberation over a $3 billion investment that pitted environmental protection against economic growth. (BBG)

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GEOPOLITICAL:

Trump reposted a Hill opinion piece on Truth Social titled "Were 750,000 additional lives wasted in Ukraine for less than nothing?". That spoke of the approaching ceasefire deal and how Ukraine will be in a much worse position for not considering one sooner. (Truth)

EQUITIES:

D-Wave Quantum CEO Alan Baratz said Nvidia’s Jensen Huang is “dead wrong” about quantum computing after his comments sent stocks plunging. Baratz said companies are using "annealing" quantum computing today, albeit "gate-based" quantum may be decades away. (CNBC's top trending article)
Nvidia, in response to Biden's latest chip restriction efforts, said "A last-minute rule restricting exports to most of the world would be a major shift in policy that would not reduce the risk of misuse but would threaten economic growth and U.S. leadership.” (CNBC)
Nvidia CEO Huang heard assurances from SK Group Chairman Tae-won Chey that SK Hynix has sped up the pace of HBM chip R&D. (Korea Times)
Nvidia CEO Huang confirmed plans to visit Taiwan after CES 2025. Nvidia may announce the location of its new Taiwan headquarters during Computex Taipei 2025, which runs May 20 to 23. (UDN)
The Dutch government announced it had reached a deal with Nvidia for the supply of hardware and technological knowledge for a possible AI facility after the government set aside EUR 204.5mln for AI investments last year. (RTRS)
Moderna CEO has pledged not to transfer its mRNA technology to China amid its ongoing expansion in the region amid geopolitical scrutiny. (WSJ)
Blackstone is investing in DDN, a company that helps organizations more efficiently store and analyze large amounts of data. It is the private-equity firm’s latest bet on a business that supports the growth of AI. (WSJ)
Edison International said the deadly Eaton fire near Pasadena started in its service area and the utility-owner is conducting a review of the event, as blazes scorch vast areas of Los Angeles. (BBG)
Nuclear energy companies, led by Westinghouse, are trying to shrink reactors to the size of shipping containers in a bid to compete with electric batteries as a source of zero-carbon energy. (FT)
Jefferies’s profit soared on a rebound in mergers and acquisitions and a surge in equity-trading revenue, signs that the multiyear dealmaking slump is coming to an end. (BBG)
JCPenney has merged with Sparc Group, the owner of brands including Aéropostale and Brooks Brothers, to form a new apparel powerhouse called Catalyst Brands. (WSJ)
SoftBank and its majority-owned Arm Holdings are exploring a deal for Oracle-backed Ampere Computing. (BBG)
Fast Retailing (12% Nikkei index weight) reported first-quarter operating profit rose 7.4%, a solid start to its plan to achieve record profits for a fourth-straight year. However, its operating profit of 157.6bln yen trailed estimates. (RTRS)
Seven & i Holdings reported a drop in nine-month net profit due to a weaker performance across segments and left its annual earnings guidance unchanged. (WSJ)
Hyundai Motor Group announced plans to make a record Won24.3tn ($16.7bn) investment in its home market this year as it accelerates its shift to EVs amid growing domestic and geopolitical challenges. (FT)
China Vanke Co., one of the country’s largest property developers, is facing a record deluge of debt coming due as worries grow about its liquidity with the property market stuck in a deep slump. (BBG)
Tesco reiterated its profit target for its fiscal year after reporting sales growth during the Christmas period. (WSJ)