The Overnight News Roundup
PiQ and Zack Eiseman provide you with a consolidated roundup of the overnight news that matters most to markets.
MACRO:
Bitcoin soared above $105,000 for the first time, buoyed by signs President-elect Donald Trump will go ahead with a potential strategic bitcoin reserve. (RTRS)
WSJ's Timiraos "Investors widely expect a third-in-a-row [Fed] rate cut this week. Officials are ready to slow—or even stop—lowering rates after that." (WSJ)
Trump allies are worried that a shift in rhetoric from the president-elect could portend a watered-down deportation effort and are urging him not to scale back his plans. (WSJ)
President Biden plans to take action on land protections, clemency, and AI in the final weeks of his administration as he looks to codify his legacy before Donald Trump’s inauguration. (BBG)
Slumping office property values are rippling through US banks, with smaller lenders in particular ramping up the use of loan modifications in their commercial real estate books. (BBG)
Wall Street is starting to sour on the dollar as President-elect Donald Trump’s policies and the Federal Reserve’s interest-rate cuts will likely put pressure on the greenback in the latter portion of 2025. (BBG)
Bank Strategists expect the continued flow of option selling to generally keep a lid on volatility in 2025, with JPMorgan seeing the Cboe Volatility Index averaging around 16, compared with around 15.5 across 2024. (BBG)
China's industrial output growth quickened slightly in November, while retail sales disappointed, keeping alive calls for Beijing to ramp up consumer-focused stimulus. (RTRS)
China's home prices fell at the slowest pace in 17 months in November, with the crisis-hit property market showing signs of stabilising in some major cities amid government efforts to revive the real estate sector. (RTRS)
China's Stats Bureau said after the data that the trend of recovery in consumption has not changed, saying more policies will be implemented to expand domestic demand. Said it is necessary to stabilize employment and increase incomes to boost consumption capacity. (RTRS)
China’s 10-year sovereign yield slumped to a fresh record low Monday, as a string of sluggish economic data boosted demand for haven assets. (BBG)
China’s regulators on Saturday pledged to boost efforts to stabilize the housing and equity markets, as well as conduct more effective fiscal policies, in the wake of a meeting of top leaders that called for greater stimulus. (BBG)
China will promote stable growth in household income next year by increasing direct fiscal support to consumers and improving social security, as well as issuing more government bonds in 2025, a government panel said on Monday. (RTRS/Xinhua)
China has room to further cut the reserve requirement ratio, with the average RRR now at 6.6%, a central bank official said on Saturday, according to state broadcaster CCTV. (RTRS)
China’s macroeconomic policies need to focus on expanding domestic demand, as maintaining economic growth requires further policy efforts, according to economists in China Securities Journal. (CSJ)
Chinese local governments' revenue from land sales fell 22.4% year-on-year in the first 11 months of 2024, slightly improving from a 22.9% decline in January-October, as the property market
Analysts have become bullish about China’s stock market after the Central Economic Work Conference set the stage for loose macroeconomic environment. (Shanghai Securities News)
Faced with rising social frustrations and public unrest, China’s leaders are ramping up security measures and squelching discordant views on the country’s economic health. (WSJ)
Japan October machinery orders rise on strong manufacturing sector. (RTRS)
Analysts see the yen strengthening to 147.4 against the U.S. dollar by end-2025 from around 154 currently. (CNBC)
Moody's unexpectedly downgraded France's rating on Friday to Aa3 from Aa2, adding pressure on the country's new prime minister to corral divided lawmakers into backing his efforts to rein in the strained public finances. (RTRS)
German leader Olaf Scholz is expected to lose a confidence vote in parliament on Monday, a defeat the Social Democratic chancellor is counting on to trigger early elections after calling an end to his three-way coalition last month. (FT)
Germany’s opposition conservatives said they’ll maintain the country’s constitutional borrowing limits and oppose joint European Union debt issuance if they win next year’s federal election. (BBG)
Germany is heading into 2025 facing a snap election, trade tensions with the US and a possible recession. For debt investors that’s a perfect recipe for another strong year of returns. (BBG)
Italy Prime Minister Giorgia Meloni’s government is racing to push through a budget that fulfils tax-cutting pledges while trimming its deficit, as Rome seeks to maintain the market’s confidence in Italy’s fiscal rectitude. (FT)
ECB's Lagarde said more rates are to come and the direction of travel is clear. (BBG)
ECB's Kazaks said the ECB should lower interest rates further but probably won’t need to take them to levels that would stimulate economic expansion. (BBG)
ECB policymaker Peter Kazimir advocated for continued 25 basis point rate cuts, warning against aggressive easing despite weak euro zone growth and inflation risks.
The EU fears divisions between member states will hamper its ability to combat a potential flood of cheap goods from China — dumped by Beijing in response to the prospect of higher US tariffs — with sanctions of their own. (FT)
EU nations on Monday will discuss preparations for the winter with the gas transit agreement between Russia and Ukraine set to expire and the bloc trying to phase out reliance on fossil fuels from Moscow. (BBG)
Manufacturers’ confidence in the UK economy fell after Rachel Reeves’ tax-raising Budget at the sharpest rate since the start of the Covid-19 pandemic, according to a BDO/Made UK survey, in another setback for the chancellor. (FT)
UK Chancellor Reeves will not hold an emergency tax-raising Budget next spring in the event low growth or other setbacks blow a hole in her fiscal plans, the Treasury has insisted, pointing to a spending squeeze if action was needed. (FT)
The London Stock Exchange is on course for its worst year for departures since the financial crisis, as fears mount that more FTSE 100 businesses will quit the UK in favour of New York. (FT)
Australian Treasurer Jim Chalmers has appointed Marnie Baker, a financial services executive and an academic, to the newly formed monetary policy board of the RBA. (WSJ)
South Korean MPs have successfully voted to impeach President Yoon in their second attempt. Yoon was suspended from official duties on Saturday while PM Han is to continue as acting president, according to Yonhap. (Newsquawk)
Brazil’s interest rates are too high, and responsibility for the growing fiscal problems lies with policymakers at the central bank, President Luiz Inacio Lula da Silva said Sunday. (BBG)
India’s economic activity gained pace in December, as demand for goods and services continued to improve, driven by new orders, a flash survey by HSBC Holdings Plc showed. (BBG)
Emerging Asian governments are set to boost bond issuance by as much as 68% next year as they refinance Covid-era debt, sapping potential returns for investors. (BBG)
Iranian crude exports to China have been disrupted by broader US sanctions on tankers, according to Vortexa Ltd., squeezing oil flows to the OPEC producer’s most important customer. (BBG)
A Russian tanker broke apart during a heavy storm in the Black Sea on Sunday, spilling some of its 4,300 tonne-cargo of fuel oil in what could potentially be one of the region’s largest environmental disasters in several years. (FT)
Libya’s NOC declared a state of emergency and force majeure at the Zawiya refinery after clashes between armed groups caused a fire. (BBG)
An oil spill has occurred at the Shell loading terminal in Nigeria's Delta region after a pipeline ruptured. (RTRS)
Speculators turned the most bullish on gasoline futures in eight months, with low prices potentially offering a buying opportunity ahead of possible supply tightness next year. (BBG)
Spot rates for hauling crude on the largest vessels from the Middle East to China, a benchmark route, have sunk by a third this year as demand in the top importer slows and OPEC+ delays the restart of idled supply. (BBG)
GEOPOLITICS:
The U.S. will empower companies like Google and Microsoft to act as gatekeepers worldwide for highly sought-after access to AI chips. New rules aim to prevent Chinese access to AI chips. (RTRS)
Last week's large Chinese naval exercise has left Taiwan and the US struggling for a response, with Taipei and Washington drawing different conclusions over the meaning of the unannounced military deployment. (FT)
Bashar al-Assad’s central bank airlifted around $250mn in cash to Moscow in a two-year period when the then-Syrian dictator was indebted to the Kremlin for military support and his relatives were secretly buying assets in Russia. (FT)
Hezbollah lost its most important supply route from Iran through Syria, Naim Qassem said, the first time the chief of the Lebanese militia has publicly acknowledged how the fall of Bashar al-Assad’s regime has hurt the group’s ability to rearm after a punishing Israeli campaign. (WSJ)
Ukraine claimed that North Korean units fighting for Russia suffered at least 30 casualties near several villages in the Kursk region over the weekend.
Norway will provide 2.7 billion crowns ($242 million) to strengthen Ukraine's navy, aiming to counter Russian naval forces in the Black Sea and protect critical infrastructure.
EQUITIES:
MicroStrategy, Palantir, and Axon Enterprise will be added to the Nasdaq-100, replacing Illumina, Super Micro Computer, and Moderna. (RTRS)
MicroStrategy shares jumped 7.4% (on their Frankfurt listing) after news of its entry into the Nasdaq 100, further boosting the stock, which has surged 550% this year amid a Bitcoin rally.
Super Micro Computer has tapped Evercore to raise debt and equity. (BBG)
Meta has urged the California Attorney General to stop OpenAI from becoming for-profit. (WSJ)
Apple is preparing a series of major design and format changes to its lineup of iPhones, including thinner and foldable models, and potentially other products in a bid to revive growth. (WSJ)
Tesla raised the prices of its Model S cars in the United States by $5,000. The Model S base variant All-Wheel Drive (AWD) will now cost $79,990, while the performance "Plaid" variant will cost $94,990. (RTRS)
Tesla has vowed to press on with its fight to restore Elon Musk’s historic pay package, and failure could have a high cost: the potential for more than $100bn in tax and accounting charges for the company and its chief executive. (FT)
Arm and Qualcomm’s bitter legal feud over licensing of chip design is heading to trial on Monday. (FT)
Western Union announced a $1bln share buyback programme. (RTRS)
The U.S. Treasury has informed Japan's Nippon Steel that the panel reviewing its proposed $14.9 billion purchase of U.S. Steel has not yet come to an agreement on how to address security concerns. (FT)
Starbucks hired its first-ever chief growth officer in China, tasked with luring back young coffee drinkers as the US chain struggles with cheaper local rivals in its biggest international market. (BBG)
Volkswagen AG’s stalemate with labor leaders looks increasingly likely to drag into 2025, denying Chief Executive Officer Oliver Blume the fresh start he’s seeking to turn around Europe’s biggest carmaker. (BBG)
Vonovia reached an agreement with its majority-owned subsidiary Deutsche Wohnen on the terms of an offer for full control. (WSJ)
Novo Nordisk plans to invest $1.2 billion in a new production site for rare-disease medicines in Denmark. (WSJ)
Revolut staff and early investors have offloaded almost $1bn of stock since August, after the fintech’s UK banking licence galvanised support from big financial institutions and secured it a $45bn valuation. (FT)
The UK government has agreed to compensate BP and Equinor over their £8bn gas-fired power station and carbon capture project if much of the scheme is blocked in court by an environmental campaigner. (FT)
Australia’s corporate watchdog is suing the local unit of HSBC Holdings over allegations that the bank failed to protect customers from criminal scams. (WSJ)
Australian regulator sues Ladbrokes owner, Entain, over money laundering risks. (FT)
TSMC could see a quarterly sales record in its traditionally slow Q1 due to a rush of Chinese orders ahead of the Trump administration. (UDN)
TSMC is expanding its 2nm production site in Kaohsiung, south Taiwan to include a 4th and 5th fab next to its planned 3rd fab due to strong demand. (UDN)
LG Electronics Inc. is considering increasing the valuation of its Indian unit to as much as $15 billion in a planned listing in Mumbai next year after initial feedback from analysts and investors. (BBG)
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This Week’s Major Economic Data
That's all for today's digest. Happy trading, and keep it tight!
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