The Overnight News Roundup

Jan 08, 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:

German industrial orders and retail sales unexpectedly fell in November, reigniting recession fears after the euro zone's largest economy barely grew in the third quarter. Industrial orders declined 5.4% from the previous month
China announced it has added more home appliances to the list of products that can be used in its consumer trade-in scheme and will offer subsidies for additional digital goods this year. The subsidies were more limited for items such as phones, tablets, and smart watches. (RTRS)
China stepped up its support for the yuan as the managed currency weakened toward the edge of its allowed trading range against the dollar. The central bank set a daily reference rate that was stronger than analyst estimates by the most since April on Wednesday. (BBG)
Shanghai Securities News sees a chance for forceful Chinese monetary policy moves and a report also reiterated that more steps are ‘afoot’ to support the property sector. (Newsquawk)
Chinese investors’ demand for better returns overseas is so strong that even an expanded purchase quota for some funds is selling out fast. (BBG)
China has been ramping up its suppression internally against those who cast doubt on its growth figures and outlook, with Xi himself ordering the muzzling of certain economists. (WSJ)
Bank of America said the PBoC may expand its net purchases of government bonds this year. (ZeroHedge)
More Chinese regions are cutting electricity prices to help out their embattled industries, which is likely to worsen the squeeze on profits at power suppliers. (BBG)
Former BoJ Governor Kuroda said the Bank will likely keep raising interest rates in the coming years as inflation appears on track to sustainably hit its 2% target. (RTRS)
Bond traders who have been mired in a Treasury market slump are bracing for more of the same as Donald Trump’s inauguration approaches, with options indicating the potential for a spike in US 10-year yields to 5% — a level not seen since October 2023. (BBG)
President Joe Biden’s administration plans to streamline permitting for geothermal energy development as part of a broader executive order to boost infrastructure for AI data centers. (BBG)
The Australian dollar saw pressure, which has since faded, as data showed a slowdown in core inflation, keeping alive the prospect of a cut in interest rates as early as February. (RTRS)
Job vacancies in Australia rebounded in the November quarter to break nine straight quarters of declines, in a further sign of resilience in the labour market. (RTRS)
New Zealand house prices may show a modest recovery this year after failing to respond to falling interest rates in the final months of 2024, according to CoreLogic New Zealand. (BBG)
UK Chancellor Reeves could be forced to make fresh cuts to public spending at her March “spring forecast” as a rise in government borrowing costs risks the chancellor breaking her own fiscal rules. (Guardian)
The UK’s grid operator issued a power-market warning saying there is an insufficient buffer between predicted supply and demand on Wednesday as wind output falls at the same time as temperatures plunge. (BBG)
Canadian PM Trudeau said on X, "There isn't a snowball's chance in hell that Canada would become part of the United States" after U.S. President-elect Trump that he might use "economic force" to make Canada the 51st U.S. state. (RTRS)
The EU must be ready to defend itself against protectionist trade measures by other countries, including any new steps taken by Trump, the bloc’s industry chief said. (BBG)
South Korea’s bond yields have been sinking to a succession of record lows versus those on US Treasuries, piling further pressure on the won already battered by a political crisis. (BBG)
Brazil’s government is weighing additional spending cuts after a much-anticipated package of reductions failed to soothe investor worries about President Luiz Inacio Lula da Silva’s commitment to fiscal responsibility. (BBG)
Citigroup Inc. is anticipating a 10th straight year of gains for India’s $5 trillion stock market, driven by a recovery in economic growth as well as robust corporate earnings. (BBG)
India is considering revoking a three-year ban on futures trading in seven farm commodities, including wheat and unprocessed rice, after studies found the steps were counterproductive. (BBG)
The weekly private sector inventory data showed a larger-than-expected draw in headline crude and with Cushing stockpiles also at a draw, while gasoline and distillate both showed greater-than-expected builds. (Newsquawk)
Iran is pushing to recoup 25mln barrels of oil from China that has been stuck for six years in Chinese ports due to sanctions imposed by then-U.S. President Donald Trump ahead of his second term. (RTRS)
A persistent lithium glut and the prospect that some mines could be restarted if prices rise means the battery metal is unlikely to mount a significant recovery this year, according to analysts. (BBG)

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GEOPOLITICS:

An Israel-Lebanon cease-fire that calmed months of cross-border bloodshed is being strained as the two sides accuse each other of violations and the U.S. races to make sure the deal holds. (WSJ)

EQUITIES:

Amazon plans to spend at least $11 billion to expand its cloud and AI infrastructure in the state of Georgia. (WSJ)
The shares of IonQ Inc. and other companies linked to quantum computing tumbled in extended trading on Tuesday after Nvidia Corp. Chief Executive Officer Jensen Huang said “very useful” quantum computers are likely decades away. (BBG)
Apple still cannot sell its iPhone 16 in Indonesia despite striking a deal to build a local production facility, as it has not met domestic content rules, the industry minister said. (RTRS)
ExxonMobil expects falling oil prices to drag on fourth-quarter earnings, while higher gas prices will provide a boost. (WSJ)
Shell trimmed its LNG production outlook for the fourth quarter on Wednesday and said oil and gas trading results are expected to be significantly lower than in the previous three months. (RTRS)
Nippon Steel and US Steel are betting Trump can be persuaded to back their $15bn deal, accusing President Biden of blocking the transaction to win union support in last year’s election. (FT)
Wall Street analysts are betting Citigroup will miss its critical long-term target of ROTCE of 11-22% by 2026, instead expecting just 9%, heaping pressure on chief executive Jane Fraser to prove her sweeping overhaul will succeed. (FT)
The aviation industry is bracing for another year of difficulties, as delivery delays at Boeing and supply chain problems are set to continue into 2025, say aviation consultants. (CNBC)
OpenAI CEO Sam Altman denies sexual abuse allegations made by his sister in lawsuit. (CNBC)
Goodyear Tire & Rubber plans to sell its Dunlop brand to Japan’s Sumitomo Rubber Industries for about $700 million. (WSJ)
TrendForce predicts that the total value generated by the server industry this year is expected to reach $413.3 billion. Of this amount, AI servers will account for $297.6 billion, representing 72% of the total. This marks a 5% increase compared to last year’s 67%. AI server shipments are expected to maintain their growth trajectory, with a projected 28% increase. (TrendForce)
Samsung Electronics forecast a continued slowdown in quarterly earnings growth that widely missed market expectations, admitting that its core memory-chip and smartphone businesses remained lackluster in the fourth quarter. (WSJ)
Samsung Electronics Co.’s shares rose after Nvidia Corp. founder Jensen Huang expressed confidence in the Korean company’s ability to resolve technical issues dogging its highest-end memory, offsetting disappointing quarterly results. (BBG)
Samsung is set to introduce a subscription model next month for mobile devices, such as smartphones and tablets, combining existing installment sales with maintenance services. (ET News)
LG Electronics forecast a 53% drop in fourth-quarter operating profit, missing market expectations for earnings growth, as its television and auto-component businesses remained sluggish while it continued to struggle with higher logistics costs. (WSJ)
Tencent Holdings Ltd., which extended losses on Wednesday, repurchased the most shares in nearly two decades on Tuesday after a selloff sparked by the tech firm’s addition to a US blacklist for alleged links to the Chinese military. (BBG)
CATL's proposed Hong Kong listing has become a riskier affair this week for Wall St banks, having initially been one of the more lucrative deals in the pipeline, after it was added to the US's list of companies deemed to have links to China's military. (FT)
China’s three biggest state-owned airlines are rapidly expanding routes and capacity to Europe as their ability to fly over Russian airspace gives them a cost advantage over regional rivals. (FT)
Fast Retailing will raise wages for full-time headquarters and sales staff by as much as 11% starting in March. Earnings are due on Thursday. (RTRS)
Japan’s state-backed TSMC-rival, Rapidus, is expected to show it can produce 2nm chips in April (test production), otherwise it could face headwinds raising more funds. (Nikkei)
Renesas Electronics will cut less than 5% of its global workforce, amounting to fewer than 1,000 positions, as it grapples with sluggish demand for its chips. (RTRS)