The Overnight News Roundup

Jan 06, 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:

Trump urged his fellow Republicans in Congress to combine his priorities into one massive bill that would cut taxes, bolster border security and increase domestic energy production, saying "it will all be made up with tariffs, and much more, from countries that have taken advantage of the U.S. for years". (Truth Social)
House Speaker Johnson laid out a plan for combining all of Trump’s legislative priorities into a single package that could be brought up for a House vote as soon as the first week in April. However, Republican lawmakers have expressed caution in rushing through the bill. (WSJ)
President Joe Biden is set to order a ban on new offshore oil and gas development across some 625 million acres of US coastal territory, ruling out the sale of drilling rights in Atlantic and Pacific waters as well as the eastern Gulf of Mexico. (BBG)
WSJ have an article looking at historical market returns during times of policy uncertainty, warning that if uncertainty stays where it is now, it may be smart to avoid stocks in favour of short-term bonds. (WSJ)
The number of unemployed Americans searching for work for at least six months has increased by more than 50% to 1.6mln since the end of 2022 amid a slowing in hiring, with risks of a faster unemployment spike if layoffs pick up. That is largely in high-paying white-collar jobs, including in tech, law and media. (WSJ)
A winter storm brought snow, ice and freezing temperatures to a broad swath of the U.S. on Sunday, with some 60mln people across more than a dozen states from Kansas to New Jersey under winter weather warnings and advisories. (Reuters)
CAD has strengthened on reports Canadian PM Trudeau is increasingly likely to announce he intends to step down, though he has not made a final decision. Expected to announce resignation before caucus meeting on Wednesday. (Reuters)
Chinese equity benchmarks hit three-month lows and the Yuan hit 16-month lows on Monday, whilst CGB yields moved lower, in a continuation of the bearish trend.
China's main stock exchanges asked some large mutual funds to restrict stock selling at the start of the year. (RTRS)
China's Caixin services activity expanded at the fastest pace in seven months in December, driven by a surge in domestic demand, but orders from abroad declined, reflecting growing trade risks to the economy. (RTRS)
China reaffirmed its support for the yuan via a stronger fixing after a sudden drop in the currency late last week fanned speculation that policymakers will greenlight a sharper depreciation. (BBG)
A PBOC-backed newspaper wrote in a commentary on Monday that the central bank showed a clearer and stronger resolution to stabilize the yuan in a statement released late last week. (BBG)
PBoC is expected to ramp up offshore yuan bill sales in Hong Kong in January, with the scale far exceeding previous issuance, state-owned news outlet Yicai reported on Monday. (RTRS)
The Shanghai and Shenzhen stock exchanges said they have recently held meetings with foreign institutions, vowing to further open up China's capital markets. (RTRS)
China’s central bank said it will step up financial support for technology innovation and consumption stimulation as part of a continued effort to revive economic growth. (BBG)
Japan's Nikkei share average slipped more than 1% on the first trading day of 2025 on Monday as investors sold stocks after the index's year-end rally, overshadowing gains in chip-related stocks. (RTRS)
Japan's service activity expanded for a second straight month in December, buoyed by solid demand and business expansion, the private-sector Jibun Bank survey showed on Monday. (RTRS)
BoJ Governor Ueda said on Monday the bank must be vigilant to various risks in deciding when to raise interest rates, saying the timing for adjusting policy "will depend on economic, financial and price developments in the future." (RTRS)
The chief executives of two of Japan’s biggest brokerages are expecting further advances in the nation’s shares after two years of strong gains. (BBG)
The number of businesses planning to raise prices in the coming months has jumped sharply as increases in the UK Budget in tax and wage costs caused confidence to “slump”, the BCC has warned. The proportion of companies planning to increase prices was equal to levels last seen at the beginning of 2023, when official inflation was still more than 10%. (FT)
Elon Musk has called for Nigel Farage to be replaced as leader of Reform UK, just weeks after reports the multi-billionaire was in talks to donate to the party. (BBC)
The ECB has been too slow to cut interest rates to help the Eurozone’s stagnating economy, many of the economists polled by the FT have warned. Majority expect rates to be cut to 2% from 3% in 2025, with only a fifth expecting further cuts in 2026. Very few expect bond market intervention. (FT)
France's budget deficit for 2025 "will not be much above 5%," the country's budget minister Amelie de Montchalin reaffirmed on Sunday. Later on Monday, Montchalin said she is hopeful the budget will get done in February and that the government could get a majority backing. (RTRS)
Italian PM Meloni had dinner with Trump at his Mar-a-Lago resort on Saturday, as the Italian prime minister seeks to strengthen ties with the US president-elect ahead of his swearing in. (FT)
The incoming leader of Austria’s centre right People’s party (ÖVP) has signalled his openness to sharing power with the far right, just a day after Chancellor Karl Nehammer resigned after failing to form a centrist governing coalition. (FT)
Strategists warn of a further slide in the Australian dollar, potentially beneath 60 US cents, amid expectations the RBA will be compelled to cut and the growing global trade frictions. (BBG)
Saudi Arabia raised oil prices for buyers in Asia next month, in a sign the world’s largest crude exporter may see tighter supply in its largest market after OPEC+ recently delayed plans to ramp up production. (BBG)
European gas storage has depleted at the fastest rate since 2018. Storage at 70% full on January 4th vs the 5yr seasonal average of 76%. (BBG)
Goldman Sachs said it no longer sees gold reaching $3,000 an ounce by the end of the year, pushing the forecast to mid-2026 on expectations the Federal Reserve will make fewer rate cuts. (BBG)
Money managers are seeing plenty of reasons to remain bullish on gold, following a stellar 2024 that saw the precious metal post its biggest annual gain since 2010. (BBG)
Shipowners have ordered a record number of container vessels on the back of soaring profits, prompting warnings of profligate spending into an uncertain global economy, risking overcapacity. (FT)

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GEOPOLITICAL:

The Biden administration plans to impose more sanctions on Russia over its war on Ukraine, taking aim at its oil revenues with action against tankers carrying Russian crude. (RTRS)
North Korea fired what appeared to be an intermediate-range ballistic missile out to sea on Monday, coinciding with a visit by U.S Secretary of State Antony Blinken to Seoul during a period of political turmoil in South Korea. (RTRS)
The DoJ asked the Supreme Court late on Friday to reject Trump's request to delay implementation of a law that would ban TikTok or force its sale by Jan. 19th. (RTRS)
Chinese hacking operations have transitioned from corporate espionage to military-focused objectives, embedding themselves in critical U.S. infrastructure and telecom networks to disrupt and gather intelligence in preparation for potential conflicts, particularly over Taiwan. (WSJ)
A Chinese hack compromised even more U.S. telecoms than previously known, including Charter Communications, Consolidated Communications, and Windstream. (WSJ)
China is signing growing numbers of Taiwanese people up for local resident or even identity cards, in a drive to incorporate them into its society that is setting off alarm bells in Taipei. (FT)
Ukraine’s forces are pushing forward in multiple directions in Russia’s southern Kursk region, even as its troops are struggling to hold the line elsewhere along the frontline. (FT)
The US Department of State has notified Congress of a planned $8bn arms sale to Israel. (BBC)

EQUITIES:

Foxconn beat expectations to post its highest-ever revenue for the fourth quarter on continued strong demand for AI servers. The company also forecast “significant growth” in first-quarter sales. (WSJ/RTRS)
Foxconn is ramping up production of Nvidia GB200 AI servers, with sizeable shipments slated for the 2nd half of January. Nvidia will introduce the next-gen GB300 AI server platform at its GTC conference in March, with a launch expected in the 1st half of 2025. (UDN)
Nvidia and TSMC are working together on silicon photonics and optical component packaging called CPO (co-packaged optics) aimed at boosting AI by enabling higher speeds and improving power efficiency. (UDN)
Global tech companies should expect to pay a premium for access to energy and water to serve data centres in Malaysia, the country’s environment minister has said, as booming demand for AI infrastructure puts pressure on resources. (FT)
Investment banks are bracing for a crunch year in which they must deliver a step-change in deal fees to justify record share prices and expensive hires made during a two-year downturn. (FT)
Uber and Lyft, after giving up on developing their own autonomous vehicles, are now gearing up for competition to be the platforms on which robotaxi technology developed by others will operate on. (WSJ)
Amazon’s satellite operation, Project Kuiper, is pushing ahead with plans to launch a broadband service in the UK, as the tech group founded by Jeff Bezos attempts to take on Elon Musk’s Starlink. (FT)
The Biden administration issued the final mining permit for Perpetua Resources' Idaho antimony and gold project, a move aimed at spurring U.S. production of a critical mineral (antimony) at the center of a widening trade war between Washington and Beijing. (RTRS)
TDK Corp., one of the main suppliers of batteries for Apple's iPhones, will this year roll out an improved version of its most advanced product to help mobile devices keep up with the rising power demands of built-in AI. (BBG)
Samsung Electronics' foundry division is in talks with a Chinese fabless company to manufacture custom semiconductors (ASICs), including AI chips, amid TSMC's reluctance to do so, according to sources. (Digital Daily)
ArcelorMittal South Africa will shut down its long-steel production operations, potentially affecting 3,500 jobs. (BBG)
Xpeng Motors and Volkswagen have agreed to expand their partnership to cooperate on ultra-fast electric vehicle charging networks in China, the automakers said on Monday. (RTRS)
Geely Holding said it aims to sell more than 5mln vehicles annually by 2027, a big jump from 2023, which it hopes to achieve by accelerating consolidation of its sprawling brands and improving efficiency. (RTRS)