Authored by Naveen Athrappully via The Epoch Times,

The United States and Mexico reached an understanding in which Mexico will meet its obligations under the 1944 Water Treaty and provide water to American farmers and ranchers, the U.S. Department of Agriculture (USDA) said in a statement on Dec. 12.

“Under the 1944 Water Treaty, Mexico is obligated to deliver 1.75 million acre-feet over five years to the United States from the Rio Grande River. The United States in turn delivers 1.5 million acre-feet of water to Mexico from the Colorado River,” the USDA said.

However, “Mexico’s persistent shortfalls in deliveries have led to severe water shortages for Rio Grande Valley farmers and ranchers, devastating crops, costing jobs, and threatening the local economy,” it said.

The valley is located in the southernmost part of Texas.

Mexico will begin releasing 202,000 acre-feet of water to the United States, with deliveries scheduled to begin this week, according to the USDA.

Since Mexico had not supplied the agreed-upon water volumes during the previous five-year cycle, the country has agreed to repay the outstanding deficit.

The two nations have reviewed a series of actions to meet treaty obligations and are currently negotiating the matter, with the intention of finalizing a plan by Jan. 31, 2026, the USDA said.

“Farmers across South Texas have been reeling from the uncertainty caused by the lack of water. Now they can expect the resources promised to them, thanks to President Trump’s leadership. I thank Mexico for their willingness to abide by the treaty and return to good standing with their past obligations,” Secretary of Agriculture Brooke Rollins said.

“Mexico has delivered more water in the last year than in the previous four years combined. Although this is a step in the right direction, President Trump has been very clear: if Mexico continues to violate its commitments, the United States reserves the right and will impose 5 percent tariffs on Mexican products.”

A Nov. 20 study published by Springer Nature detailed the water security issue in the Rio Grande-Bravo basin, which the United States and Mexico share.

The basin is experiencing “a severe water crisis demanding urgent attention,” it said, adding that water storage reservoirs, annual streamflow volumes, and aquifers have been “substantially depleted” over recent decades.

The study estimated that only 48 percent of the water directly consumed as a result of human activities is replenished by renewable sources. The remaining 52 percent of consumption has been unsustainable, leading to the depletion of aquifers, reservoirs, and river flows.

“The over-consumption of renewable water supplies is primarily due to irrigated agriculture, which accounts for 87 percent of direct water consumption in the basin,” the study says.

“At the same time, water shortages have contributed to the loss of 18 percent of farmland in the river’s headwaters in Colorado, 36 percent along the Rio Grande in New Mexico, and 49 percent in the Pecos River tributary in New Mexico and Texas.”

Last week, Trump threatened to raise tariffs on Mexican imports by 5 percent if the country failed to swiftly deliver the water it owes. He said the treaty violation was “seriously hurting” Texas agriculture and livestock.

Mexican President Claudia Sheinbaum highlighted the ongoing drought plaguing her country but vowed to help resolve the treaty issue.

In April, Trump threatened Mexico with possible sanctions and additional tariffs over the water treaty violation, and Mexico subsequently agreed to send more water to Texas.

In a Dec. 14 statement, Sid Miller, commissioner of the Texas Department of Agriculture, commended Trump for ensuring that Mexico honors the water treaty.

Producers in the Rio Grande Basin have been deprived of water they are legally owed for the past several years, he said. This has resulted in the loss of crops, industries, jobs, and livelihoods.

Mexico’s “willingness to come to the table speaks volumes about the improved relationship between Mexico and the United States, but sustained accountability will be necessary,” Miller said.

“Let me be clear: Texas farmers expect Mexico to fully meet its obligations—not just today, but for years to come. Water is the lifeblood of agriculture. President Trump understands that without water, there is no farming, no ranching, and no rural economy in the American Southwest,” he added.

By Jane Foley Senior FX Strategist at Rabobank

Perhaps inevitably, the enthusiasm for AI related stocks in the past few years is now being replaced by questions regarding the returns on investment and specifically whether the costs of developing the technology will be matched in terms of the productivity growth it can create [ZH: actually, no: those questions emerged first last summer, but have been swept under the circle-jerking rug every single time].

The tail-end of the week brought further evidence of investors rotating into cyclical stocks. This had pushed the S&P 500 to a fresh record high at Thursday’s close as the market absorbed last week’s ‘as expected’ 25 bps Fed rate cut and its upward revision to US GDP forecasts. The slew of US data releases in the week ahead will be a strong determinate in how sentiment develops in the final weeks of the year.

In an interview with the WSJ on Friday, President Trump indicated that both Warsh and Hassett remain in the running for the job as the next Fed Chair. Trump reportedly commented that he thought the next Fed Chair should consult him on interest rate policy, though Hassett over the weekend remarked that the job of the Fed is to be independent.

The releases of Chinese retail sales, production, investment and home price data have already kicked off a heavy data week. Retail sales have disappointed with a weaker than expected 1.3% y/y upturn in November – the weakest reading since the pandemic. Chinese fixed asset investment also disappointed at -2.6% y/y ytd, which puts it on track to post the first full year drop since 1998. The weakness in property investment and new home prices compounded the weak tone and underpinned concerns about the challenges facing the Chinese economy in 2026.

Ukraine President Zelensky conceded over the weekend that the country would be willing to give up its long-term goal of Nato membership if security guarantees from the US and Europe were a way to prevent future Russian aggression.

US President Trump has issued Kyiv with a Christmas deadline to accept a peace deal. US Special Envoy Witkoff and Kushner, Trump’s son-in-law, arrived in Berlin yesterday for talks with Zelensky and German Chancellor Merz. The EU 27 will sit down for a summit on Thursday to discuss Ukraine, defence and its multiannual financial framework.

Week ahead

While the market consensus sees scope for another 50 bps of Fed rate cuts in 2026, the majority of G10 central banks are now expected to be tightening policy by the end of next year. Alongside the Fed, market pricing is also pointing to a 50-bps reduction in BoE rates by the end of 2026 in addition to 25 bps more easing by the Norges Bank. There is still a slight suspicion in the market that the SNB may return to negative rates next year. By contrast all other G10 central banks are expected to hike policy. At the start of last week, the ECB’s Schnable encouraged market hawks by her suggestion that she was comfortable with market bets on rate hikes. It is hoped that the rhetoric from the December 18 ECB policy meeting will bring some clarity to this view, though in terms of the policy announcement, a steady outcome is universally expected from the ECB this week. Indeed, it is Rabobank’s view that further easing this cycle would require a material downside surprise. For now caution will likely prevail, while policymakers continue to evaluate the impact on the Eurozone economy from US tariffs, France’s budget challenges and the competitive issues faced by Germany – not least this year’s firmer exchange rate. Although we expect steady policy throughout 2026, we have pencilled in two potential rate hikes in 2027 from the ECB.

Steady policy is also expected from the Norges Bank on December 18, although further easing has been signalled by Norwegian policymakers this cycle. Steady policy is also expected to be on the cards from the Riksbank on the same day, though Sweden could be in the running to be the first G10 country to see a rate hike this cycle. A rate cut is widely expected from the BoE on December 18. 

Friday’s release of UK October GDP data disappointed the market with a weaker than expected -0.1% m/m print. The UK has now failed to see any growth for four consecutive months. The data underpinned fears that uncertainty leading up to the UK’s November budget created a drag on confidence and activity levels. At the November 6th BoE policy meeting there was a 5:4 vote in favour of steady rates. Governor Bailey is widely expected to switch sides and vote alongside the doves this week. That said, while UK CPI inflation appears to have peaked, the headline number at 3.6% y/y, is still showing signs of stickiness. This suggests that some element of caution can be expected from the MPC.

The other G10 central bank scheduled to vote on policy this week is the BoJ on December 19. The market now strongly expects a 25-bps hike. This marks a sharp shift in sentiment since, as recently as October, Takaichi’s appointment as PM had sparked widespread fears that she would lean on the central bank not to tighten policy. Last week Governor Ueda remarked that Japan had weathered the shock of US tariffs well and, in an interview with the FT, he expressed some confidence about the rise in underlying inflation towards the BoJ’s 2% target. The overnight release of Japan’s Quarterly Tankan report shows business confidence amongst large manufacturers improving to its best level in four years in Q4 – a reading which will have solidified market hopes for more BoJ rate hikes. Japanese November CPI inflation and December PMI data will be released this week ahead of the BoJ’s policy announcement.

A slew of US data is due out this week as officials continue to make good the absence caused by the government shutdown. The market median points to a 50K gains in Tuesday’s November non-farm payrolls release combined with an unemployment rate of 4.5%. The data follow last week’s robust US export numbers, which had positive implications for US Q3 GDP. Tomorrow will also bring US October retail sales data and December PMIs. Other US releases this week include the December Philly Fed index, initial claims and November existing home sales. Plenty of Fed speakers are also slated this week. UK releases include Labour data and the November CPI inflation report. The latter is expected to show further signs in easing in UK price pressures, which would solidify market expectations for a BoE rate cut on December 18. UK November retail sales are due at the end of the week. PMIs plus Germany’s ZEW and IFO releases will ensure a European theme is included in this week’s data surge, while Canada will see a fresh CPI inflation report. In Australia, PMI data and consumer confidence numbers are due.

Let’s recap what’s unfolded over the past few weeks as America’s space industry prepares to gain momentum:

• Elon Musk confirms SpaceX is going public, with space-based data centers secured.

• Orbital data centers are set to bypass Earth-based infrastructure constraints.

As we declared at the time:

• The orbital data center space race has officially begun.

We’ve highlighted comments from Elon Musk, Jensen Huang, Jeff Bezos, and Sam Altman about space-based data centers, and analyzed a white paper from Nvidia-backed startup Starcloud that makes a compelling case for low Earth orbit data centers operating as a constellation to address Earth’s looming power crunch and land constraints.

Tesla-bull Adam Jonas from Morgan Stanley added more color about the SpaceX IPO and orbital data centers in a recent note to clients.

Jonas noted that an $800 billion valuation, if accurate, would make OpenAI the highest-valued private unicorn, according to PitchBook data.

Compared with companies in the S&P 500, SpaceX ranks 13th by valuation, in between JPMorgan Chase and Oracle, Jonas said. 

He added that it would be valued at more than the combined market capitalizations of the publicly traded military-industrial complex, including contractors such as RTX (Raytheon), Boeing, Lockheed Martin, General Dynamics, Northrop Grumman, and L3Harris.

On the topic of AI data centers in space, Jonas wrote:

Starlink Orbital Compute? Also this weekend, Musk on X commented on SpaceX’s planned future entry into orbital data centers, describing them as “by far the fastest way to scale [compute] within 4 years, because easy sources of electrical power are already hard to find on Earth. 1 megaton/year of satellites with 100 kW per satellite yields 100GW of AI added next year with no operating costs or maintenance costs, connecting via high-bandwidth lasers to the Starlink constellation.”

• Elon Musk recently described the concept as an impending ‘convergence’ of SpaceX and Tesla in an interview with investor Ron Baron. This hypothetical constellation would leverage scaled-up versions of next-gen Starlink V3 connected by high-speed laser links to form an orbital compute cloud of GPU-equipped satellites. He later elaborated that Starship could deliver 100GW/ year within ‘four to five years’ assuming other technical hurdles are solved.

• While space-based datacenters face a number of challenges (orbital debris, data governance, etc.), at-scale orbital compute clouds also have a number of benefits vs. traditional datacenters ranging from power (receive full solar constant in space), to cooling (Space is -270°C), and reduced latency for the growing TAM of edge-devices vs. long-haul terrestrial paths.

Why Build Datacenters in Space?

• Cooling. Space is rather chilly – at ~2.7 Kelvin of -270°C, providing obvious cooling advantages. Although removing heat generated by GPUs can require very large metal radiators (potentially multiple square kilometers for larger datacenters), the cost of radiating heat from GPUs into deep space is argued by those involved to be much more efficient than chilling the same GPUs in a terrestrial datacenter, where cooling can account for up to 40% of total energy usage. For example, Starcloud (private) projects 10x lower energy costs vs. terrestrial alternative for its datacenter.

• Power. Unlike on Earth, solar power in space is effectively uninterrupted and abundant at all times, providing reliable energy without atmospheric losses or weather variability. Space receives a near full solar constant, about 1,361 W/m², roughly 30% more than the best ground-level solar irradiance after atmospheric attenuation.

• Global Edge Connectivity. At scale and when positioned in optimal orbits, space-based datacenters can theoretically improve connectivity for distributed users and edge-compute workloads. By leveraging LEO or mixed-orbit constellations, they can theoretically keep compute resources within milliseconds of most population centers, reducing latency compared to long-haul terrestrial paths.

• Scalability. SpaceX today is 90% of mass-to-orbit capacity per Elon Musk. However, as use of re-usable rockets becomes more widespread and competitors like Blue Origin, Rocket Lab, and other emerging launch providers (including China) ramp up cadence, the falling cost per kilogram to orbit and rising total mass-to-orbit capacity is likely to enable larger, more modular deployments of space-based infrastructure.

• Obstacles: We note that space-based datacenters still face significant challenges, including harsh radiation environments that demand specialized hardened hardware, difficulty of in-orbit maintenance or repair, and orbital debris hazards given the size and scale of currently theorized space-based datacenters. Additionally, regulatory complexities around spectrum, space traffic management, and multinational data governance could pose as substantial hurdles.

Who Else is Involved?

• Starcloud (Private): Starcloud is a Redmond, Washington–based startup founded in 2024 by Philip Johnston (CEO), Ezra Feilden (CTO), and Adi Oltean (Chief Engineer). The company’s mission is to deploy orbital data- centers that leverage abundant solar power, passive radiative cooling and space-scale infrastructure to serve AI and cloud-compute workloads. Backed by accelerator and seed investors such as Y Combinator, NFX, FUSE VC, and major funds from Andreessen Horowitz and Sequoia Capital, they have raised over $20 million in seed funding according to PitchBook.

• Axiom Space (Private): Axiom Space is a Houston-based commercial space infrastructure company founded in 2016 by Michael T. Suffredini and Kam Ghaffarian. The company is developing an “Orbital Data Center” (ODC) product line, with plans to launch its first two free-flying ODC nodes into low Earth orbit by the end of 2025. These nodes aim to provide secure, cloud-enabled data storage and processing for commercial, civil, and national security customers, leveraging partnerships with companies such as Kepler Communications and Spacebilt Inc. for optical inter-satellite links and in- space server systems. According to PitchBook, the company has raised over $700 million to date from investors including Type One Ventures and Deep Tech Fund Advisors.

• Lonestar Data Holdings (Private): Lonestar Data Holdings is a St. Petersburg, Florida-based company founded around 2018 (incorporated in 2021) and led by CEO Christopher Stott. The firm is developing lunar and space-based data center infrastructure (e.g., its “Freedom” payload was launched aboard Intuitive Machines’ Athena lunar lander via a Falcon 9 rocket) to create the first commercial lunar data center.

• Google: Google is actively working on an ambitious “moonshot” initiative called Project Suncatcher, which aims to build constellations of solar- powered satellites carrying its custom TPU hardware to serve as space-based AI/computing data centers. The company plans to launch two prototype satellites by early 2027 to test the feasibility of the system and projects that falling launch costs could bring space-based computing close to cost parity with terrestrial data centers by the mid-2030s.

• NVIDIA: NVIDIA is actively positioning itself for the space / orbital datacenter frontier by supplying high-performance GPUs and other critical infrastructure. Starcloud is a member of NVIDIA’s Inception program with NVIDIA and Starcloud launching an H100 GPU into orbit earlier this month aboard a Starcloud test satellite to validate the feasibility of operating terrestrial-class AI-data-center hardware in space.

Making spaceflight affordable has been SpaceX’s focus with its reusable rockets, and once Starship becomes commercialized, costs should drop even further. This is great news, not just for SpaceX but also for tech startups building container-sized data centers for space.

Let’s remind readers that SpaceX is effectively America’s rocket program – and it leads the world by light-years.

We must add, Musk is uniquely positioned, with SpaceX and xAI…

SpaceX also leads in terms of spacecraft upmass…

Jonas touched on SpaceX’s valuation:

Who owns SpaceX?

So data centers in low-Earth orbit first, then land on the Moon (again?), then explore Mars with Starship? It appears SpaceX’s Starlink will provide communications for the booming space industry.

Update (1123ET):

Nick Reiner, the 32-year-old troubled son of filmmaker Rob Reiner, has been arrested in connection with the deaths of his parents, according to NBC News, citing two law enforcement sources with direct knowledge of the investigation.

Rob Reiner and his wife, Michele Singer Reiner, were found dead Sunday afternoon with stab wounds at their Brentwood home, a source close to the family told the media outlet.

Here are more details about the tragic deaths of the Reiners from a separate report by the Los Angeles Times:

Jail records provide few details but say Nick Reiner was held on $4 million bail. The records do not give any details about the cause for the arrest but said he was taken into custody at 9:15 p.m. Sunday and booked at 5:04 a.m.

Nick Reiner cycled in and out of rehab centers and experienced bouts of homelessness as a teenager. He recounted his struggles in interviews.

He had gotten clean by 2015, when he worked with his father on “Hey Charlie,” a semi-autobiographical film about addiction and recovery. Rob Reiner directed and Nick co-wrote the film about a successful actor with political ambitions and a son addicted to drugs.

. . .

The sources said that some time after the attack, one of the couple’s children found them and law enforcement was called.

*   *   * 

Legendary Hollywood director Rob Reiner and his wife, producer Michele Singer Reiner, were found dead in their Los Angeles home on Sunday afternoon.

RIP Rob Reiner. No one deserves what happened to him! I’m sure he wanted me dead, but I am grateful to him anyway, for these gifts:

1984 – This Is Spinal Tap
1985 – The Sure Thing
1986 – Stand by Me
1987 – The Princess Bride
1989 – When Harry Met Sally…
1990 – Misery
1992 – A… pic.twitter.com/1nwVQ0mcZR

— Peachy Keenan (@KeenanPeachy) December 15, 2025

Multiple sources tell People magazine that Rob Reiner and his wife were killed by their 32-year-old son, Nick, who is being questioned. The sources say no arrests have been made.

Key details so far (via People):

• Rob Reiner and his wife, Michele Singer Reiner, were found dead in their Los Angeles home on Sunday, Dec. 14. Authorities responding to a medical aid call around 3:30 p.m. discovered their bodies.

• Multiple sources tell People that the killer was the couple’s son, Nick Reiner.

• Nick Reiner previously spoke publicly about his long battle with drug addiction and periods of homelessness.

🔗: https://t.co/SCxACOnkHO

A van from the Office of the Medical Examiner was seen arriving to Rob Reiner and his wife’s home after the couple was found dead in their home by their daughter Romy, sources tell PEOPLE.

Nick Reiner is now being questioned by the Los Angeles Police… pic.twitter.com/Rqk8y7oIYK

— People (@people) December 15, 2025

CNN compiled a list of Hollywood stars who are shocked by the killing of Rob and Michele:

• “Shocked by the death of Rob Reiner, a great man,” posted John Cusack, who was first directed by Reiner as a teenager in The Sure Thing, followed by a cameo in Stand by Me.

• “Love you, Rob. Sincerely,” wrote Jerry O’Connell, who played Vern in Stand by Me. Corey Feldman, another star of that film, called it “horrible news.”

• Jamie Lee Curtis sent a statement to Variety on behalf of herself and her husband, Christopher Guest, the co-star and co-writer of This Is Spinal Tap, who also played Count Rugen in The Princess Bride.

• Cary Elwes, star of The Princess Bride, posted a photo of his personalized chair next to Reiner’s on the set, adding, “No words…”

• James Woods, who starred in Reiner-directed Ghosts of Mississippi, mourned the death of his “good” friend. “Political differences never stood in the way of our love and respect for each other,” he said on X.

• Actor Jeremy London said Reiner’s death will “leave a hole in Hollywood that will never be able to be filled,” in a post to X.

• “Nothing but love for ya,” comedian and actor George Wallace wrote in a post to X, alongside a photo of him and Reiner.

• Actor and producer Elijah Wood said he is “horrified to hear of the passing” of Reiner and his “wonderful wife,” Michele, in a post to X.

• Sean Ono Lennon, the son of John Lennon and Yoko Ono, called Reiner “one of the greatest of all time” in a post to X.

• Actor Ben Stiller remembered Reiner as “one of my favorite directors” in a post to X. “I didn’t know him well but was always a fan, and I feel a real sadness for those who did, and his family.”

In addition to his stunning success in Hollywood, Rob was a vocal political activist for the Democratic Party, criticizing President Trump and MAGA at every opportunity.

In the wake of a Sunday mass shooting at Australia’s Bondi Beach that left 15 dead and more than two dozen injured, Prime Minister Anthony Albanese has vowed to strengthen the country’s gun laws. The massacre, which occurred during a Hanukkah event, was reportedly carried out by a father-son pair, Sajid Akram, 50, and Naveed Akram, 24 – with the older gunman having held a gun license for a decade while legally owning six guns. 

“The government is prepared to take whatever action is necessary. Included in that is the need for tougher gun laws,” Albanese said.

Other government leaders also proposed restricting gun ownership to Australian citizens – a measure which would have excluded the older suspected gunman who has lived in Australia since 1998 on a student visa, and became a permanent resident after marrying a local woman, according to authorities – who did not confirm what country he had migrated from. 

Government leaders are also proposing the “additional use of criminal intelligence” in deciding who can obtain a firearms license – which “could hypothetically have meant that a 2019 investigation into the son’s suspicious associates, confirmed Monday by Albanese, would have disqualify the father from owning a gun” CBS News reports.

New South Wales premier Christopher Minns said his state’s gun laws would change, but did not outline how. 

“It means introducing a bill to Parliament to — I mean to be really blunt — make it more difficult to get these horrifying weapons that have no practical use in our community,” he said. “If you’re not a farmer, you’re not involved in agriculture, why do you need these massive weapons that put the public in danger and make life dangerous and difficult for New South Wales Police?”

Of note, Australia enacted a suite of strict gun control laws roughly two weeks after an April, 1996 massacre in Port Arthur, Tasmani in which one man killed 35 people and wounded another 23, prompting then PM John Howard to “significantly strengthen laws relating to gun control in Australia.” Under the National Firearms Agreement (NFA), gun ownership was explicitly made a privilege, while two federally-funded gun buybacks and voluntary surrenders led to the  collection of more than a million firearms which were then destroyed. In order to possess a firearm in Australia, a person must have a firearm license and demonstrate at least one “genuine reason” for ownership that doesn’t include self defense.

Albanese, meanwhile, invoked ‘right-wing extremism’ during a press conference after the Islamic terrorist attack when asked about one of the alleged gunmen. 

JOURNALIST: Prime Minister, Mike Burgess warned you in February that antisemitism was the number one threat to life. Is that still the case and have you taken these threats seriously enough? And Acting Deputy Commissioner, if I may, it’s my understanding that Sajid Akram moved to Australia in the late 90s, I believe from Pakistan. Is that correct?

PRIME MINISTER: On the latter the Minister will respond. We take ASIO’s advice very seriously. We work closely with them. We receive regular updates as well. The Director-General of ASIO has warned about a range of threats, be it antisemitism, the rise of right wing extremist groups as well. And we continue to work closely with our security agencies

Watch:

Prime Minister Anthony Albanese says he takes ASIO’s advice very seriously, whether it relates to the threat of antisemitism and “right-wing extremist groups.” pic.twitter.com/ssl65pRSA8

— Australians vs. The Agenda (@ausvstheagenda) December 15, 2025

So, more gun control and they’re on the lookout for ‘antisemitism’ and ‘right wing extremist groups’ after the Islamic terrorist attack. Right. 

With just days left in 2025, it’s an extremely busy week for global markets, with a dense calendar of economic releases and major central bank decisions, including from the European Central Bank, the Bank of England and the Bank of Japan, which as DB’s Jim Reid writes, all have a chance to be Scrooges or Santas in their meetings this week. Alongside these announcements, the data flow will be heavy: the US will finally publish delayed employment and inflation reports, while flash PMIs for December and will provide clues on global momentum. Meanwhile, overnight, China’ econ data dump came in worse than expected with both fixed investment, IP and Retail sales both missing. 

It’s also an interesting time for global markets with long-end yields at or around multi-month or even multi-year highs (e.g. Japan and 30yr Europe) at the same time as the weakest AI stories are increasingly being punished rather than the pre-September period when AI all went up together. If that wasn’t enough, another notable Fed story came late on Friday, as President Trump suggested that NEC Director Kevin Hassett and former Fed Governor Kevin Warsh were his two favored candidates for the Fed Chair role. Hassett has been viewed as the frontrunner in recent weeks but following Trump’s interview his Polymarket odds fell from around 73% late on Friday to 52% this morning. Warsh has gone from 13% before the interview to 40% this morning. So, it’s fair to say there’s a lot of unfinished business going into the last full trading week of the year.

For this week specifically, in the United States, attention will focus on tomorrow’s twin employment reports for October and November, delayed by the recent government shutdown. October’s headline payrolls are expected to show a decline of around -60k, largely due to federal layoffs with all the early year buy-out offers coming off payroll in October. November should rebound modestly with a gain of +50k (per DB). Private sector hiring is likely to remain steady in both months at around +50k (DB), slightly below the recent trend. The unemployment rate is forecast to rise to 4.5 per cent in November from 4.4 per cent in September (we will never know October), while average hourly earnings should increase by 0.3 per cent in both months, keeping year-on-year nominal compensation growth near 4.4 per cent. Hours worked are expected to stabilise at 34.3. Given the distortions caused by the shutdown, the household survey could be noisy, echoing patterns seen after the 2013 episode. For a cleaner read on labor market conditions, Thursday’s jobless claims will be important and given our economists believe this will come in at around +225k, they believe underlying hiring trends remain intact.

Inflation will also be in focus with Thursday’s US CPI release. Because October data were not collected, the report will center on year-on-year changes. Headline CPI is expected to hold broadly steady at 3.03%, while core inflation remains at 3.02%. Monthly headline gains across October and November should average +0.24%, slightly below September’s pace with core slightly above at +0.26%. Within the details, core goods prices are likely to show modest increases in household furnishings and apparel, while used car prices continue to decline. Core services will attract particular attention, especially rents, which are expected to rebound after September’s anomalous weakness. Airline fares and lodging should soften from their recent highs, though health insurance may surprise on the upside. Beyond jobs and inflation, Tuesday’s retail sales report will offer insight into consumer spending. DB expects a headline decline of -0.3%, driven by autos and lower fuel prices, but retail control — the component used in GDP calculations — should rise by +0.3%, signalling resilience in underlying demand. Friday’s final reading of University of Michigan consumer sentiment is expected at 54.0, with inflation expectations likely to matter more than the headline figure.

On policy, last week’s FOMC meeting delivered a 25bps rate cut and signaled a “wait and see” approach, while also launching $40BN in monthly T-Bill purchases, much sooner than expected. Chair Powell struck a dovish tone, emphasizing labo rmarket risks over inflation. This week’s Fedspeak will reinforce that message, with Governor Miran and New York Fed President Williams speaking today, followed by Governor Waller and Williams again on Wednesday. Atlanta Fed President Bostic closes the week on Friday. Miran, who dissented in favor of a larger cut, is expected to reiterate his view that shelter inflation will collapse in coming quarters.

In Europe, Thursday brings a cluster of central bank decisions. The ECB is expected to keep rates unchanged at 2 per cen , while the Bank of England is forecast to deliver its sixth cut of the cycle, lowering Bank Rate to 3.75 per cent on a narrow 5-4 vote. The Riksbank and Norges Bank will also decide on policy on the same day with both likely to stay on hold. Ahead of the BoE meeting, UK labor market data on Tuesday and CPI on Wednesday will be closely watched. Headline inflation is forecast to ease to 3.51% year-on-year, while core ticks up slightly to 3.46% (see our economist’s preview here). Retail sales and consumer confidence on Friday will round out the UK calendar. In Germany, the Ifo survey on Wednesday and consumer confidence on Friday will provide further insight into regional conditions as fiscal spending starts to ramp up. Across the Atlantic, Canadian inflation is out today which is interesting given the sharp move from pricing in a slightly easing bias earlier this month to almost a full hike by the end of 2026 now.

Across Asia, the Bank of Japan meets on Friday and is expected to raise rates by 25bps to 0.75 per cent, with a 94% probability priced in by markets. See our economist’s thoughts here. Japan’s nationwide CPI for November will also be released on Friday, with core inflation forecast to slow to 2.9% and core-core to 3.0%. Global flash PMIs for December, covering the US, UK, Japan, Germany and France, will be published tomorrow and will offer early signals on fourth-quarter growth trends.

Day-by-day calendar of events

Monday December 15

• Data: US December Empire manufacturing index, NAHB housing market index, China November retail sales, industrial production, investment, home prices, Germany November wholesale price index, Italy October general government debt, Eurozone October industrial production, Canada November CPI, existing home sales, housing starts, October manufacturing sales
• Central banks: Fed’s Miran and Williams speak

Tuesday December 16

• Data: US, UK, Japan, Germany, France and the Eurozone December PMIs, US November and October jobs reports, October retail sales, December New York Fed services business activity, September business inventories, UK October average weekly earnings, unemployment rate, November jobless claims change, Japan November trade balance, October core machine orders, Germany December Zew survey, Italy October trade balance, Eurozone December Zew survey, October trade balance
• Earnings: Lennar

Wednesday December 17

• Data: UK November CPI, RPI, PPI, October house price index, Germany December Ifo survey, Eurozone Q3 labour costs, Canada October international securities transactions, New Zealand Q3 GDP
• Central banks: Fed’s Waller, Williams and Bostic speak
• Earnings: Micron Technology
• Auctions: US 20-yr Bond (reopening, $13bn)

Thursday December 18

• Data: US November CPI, December Philadelphia Fed business outlook, Kansas City Fed manufacturing activity, October total net TIC flows, initial jobless claims, Japan November national CPI, France December business confidence, Eurozone October construction output
• Central banks: ECB, BoE, Riksbank and Norges bank decide on rates
• Earnings: Nike, FedEx, Accenture
• Auctions: US 5-yr TIPS (reopening, $24bn)
• Other: European Council (through December 19)

Friday December 19

• Data: US November existing home sales, December Kansas City Fed services activity, UK December GfK consumer confidence, November retail sales, public finances, Germany November PPI, January GfK consumer confidence, France November PPI, retail sales, Italy October current account balance, industrial sales, December consumer confidence index, economic sentiment, ECB October current account, Eurozone December consumer confidence, Canada October retail sales
• Central banks: BoJ decision, ECB’s Wunsch and Kocher speak

Finally, looking at just the US, the key economic data releases this week are the November employment report and the October retail sales report on Tuesday and the CPI report on Thursday. There are several speaking engagements by Fed officials this week, including events with Governor Miran on Monday and Governor Waller on Wednesday. 

Monday, December 15 

• 08:30 AM Empire State manufacturing survey, December (consensus +10.0, last +28.7)
• 09:30 AM Fed Governor Miran Speaks; Fed Governor Stephen Miran will participate in a moderated conversation with former Fed Vice Chair Richard Clarida at Columbia University’s Institute of Global Politics. On November 21, Miran said, “All the information that we got [between the October and December FOMC meetings] should push one in the dovish direction.” Governor Miran dissented against the Committee’s decision at the December FOMC meeting, preferring to cut the Fed Funds rate by 50bp rather than 25bp. 
• 10:00 AM NAHB housing market index, December (consensus 39, last 38)
• 10:30 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver keynote remarks during an event organized by the New Jersey Bankers Association. Speech text and Q&A are expected. On November 21, Williams said, “My assessment is that the downside risks to employment have increased as the labor market has cooled, while the upside risks to inflation have lessened somewhat.” He also said, “I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions.”
• 11:00 AM Fed Governor Miran speaks: Fed Governor Stephen Miran will appear on CNBC.

Tuesday, December 16 

• 08:30 AM Nonfarm payroll employment, November (GS +55k, consensus +50k, last +22k [September]); Nonfarm payroll employment, October (GS +10k); Private payroll employment, November (GS +50k, consensus +40k, last +83k [September]); Private payroll employment, October (GS +70k); Average hourly earnings (MoM), November (GS +0.35%, consensus +0.3%, last +0.2% [September]); Average hourly earnings (MoM), October (GS +0.30%); Unemployment rate, November (GS 4.5%, consensus 4.5%, last 4.4% [September]): 
  • We estimate nonfarm payrolls increased 10k in October and 55k in November. On the positive side, big data indicators showed a moderate pace of private sector job growth: we forecast private payroll growth of 70k in October and 50k in November. On the negative side, we expect a large drag from the DOGE deferred resignation program. That said, a surprisingly moderate increase in federal government separations in last week’s JOLTS report suggests that the hit to nonfarm payrolls could be more limited than we had previously expected. We now assume a 70k hit to October payrolls and an additional 10k hit to November. After factoring in increases in state and local government employment but a modest additional drag on federal hiring from the ongoing hiring freeze, we expect a 60k decline in government payrolls in October and a 5k increase in November.
  • The BLS did not collect responses for the household survey for October and therefore will not produce an unemployment rate for October. We estimate that the unemployment rate edged up to 4.5% in November, a low bar from the unrounded 4.44% in September. Continuing claims have rebounded slightly, and some furloughed federal workers who did not work during the reference week could be counted as unemployed even though the government shutdown had ended part of the way through the week.
  • We estimate average hourly earnings rose 0.30% month-over-month in October and 0.35% in November, reflecting neutral and positive calendar effects, respectively.
• 08:30 AM Retail sales, October (GS flat, consensus +0.1%, last +0.2%); Retail sales ex-auto, October (GS +0.3%, consensus +0.2%, last +0.3%); Retail sales ex-auto & gas, October (GS +0.4%, consensus +0.4%, last +0.1%); Core retail sales, October (GS +0.5%, consensus +0.4%, last -0.1%): We estimate core retail sales rebounded 0.5% in October (ex-autos, gasoline, and building materials; month-over-month SA), reflecting improvement in alternative measures of consumer spending and a slight tailwind from potential residual seasonality. We estimate headline retail sales were unchanged, reflecting a decline in auto sales and lower gasoline prices.
• 09:45 AM S&P Global US manufacturing PMI, December preliminary (consensus 52.3, last 52.2); S&P Global US services PMI, December preliminary (consensus 54.0, last 54.1)
• 10:00 AM Business inventories, September (consensus +0.2%, last flat)

Wednesday, December 17 

• There are no major economic data releases scheduled. 
• 08:15 AM Fed Governor Waller speaks: Fed Governor Christopher Waller will speak on the economic outlook at Yale University. Q&A and a livestream are expected. On November 17, Waller said, “I worry that restrictive monetary policy is weighing on the economy, especially about how it is affecting lower-and middle-income consumers. A December cut will provide additional insurance against an acceleration in the weakening of the labor market and move policy toward a more neutral setting.”
• 09:05 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver opening remarks during the FX Market Structure Conference organized by the New York Fed. A livestream is expected. 
• 12:30 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will participate in a moderated discussion at the Gwinnett County Chamber of Commerce. Q&A is expected. On November 12, Bostic said, “It’s definitely a close call. But in the final analysis, I view the signals from the labor market as ambiguous and difficult to interpret. They are not clear enough to warrant an aggressive monetary policy response when weighed against the more straightforward risk of ongoing inflationary pressures.” He went on to say, “In these circumstances, moving policy near or into accommodative territory risks pumping fresh blood into the inflation beast and threatening to untether the inflation expectations of businesses and consumers.”

Thursday, December 18 

• 08:30 AM Initial jobless claims, week ended December 13 (GS 225k, consensus 225k, last 236k); Continuing jobless claims, week ended December 6 (consensus 1,938k, last 1,838k)
• 08:30 AM CPI (MoM, two-month average), November (GS +0.20%); Core CPI (MoM, two-month average), November (GS +0.21%); CPI (YoY), November (GS +2.91%, consensus +3.1%, last +3.01% [September]); Core CPI (YoY), November (GS +2.88%, consensus +3.0%, last +3.02% [September]): We estimate that the core CPI increased by 0.21% month-over-month on average across October and November, which would lower the year-over-year rate to 2.9% on a rounded basis in November (vs. 3.1% in September and 3.0% consensus for November). While the BLS will not produce an October core CPI due to the government shutdown and therefore month changes will not be recoverable for October or November, our forecast reflects an estimated 0.25% month over month increase in October and a 0.16% increase in November. Our two-month forecast reflects an increase in used car prices reflecting the signal from auction prices (+0.5% on average across October and November), a slight increase in new car prices (+0.2%) reflecting an increase in dealer incentives, and a slight decline in car insurance prices (-0.1%) based on premiums in our online dataset. We forecast a net increase in airfares (+1%), reflecting a drag from seasonal distortions but an increase in underlying airfares based on our equity analysts’ tracking of online price data. We have penciled in upward pressure from tariffs on categories that are particularly exposed (such as communication, household furnishings, and recreation) worth +0.08pp on core inflation on average across October and November but downward pressure from delayed data collection on categories that typically experience steep holiday discounting in late November (such as apparel, household furnishings, and personal care) worth -0.04pp. We expect a rebound in the shelter components on net after an outlier-driven slowdown in the prior month (primary rent +0.24% on average across October and November vs. +0.20% in September; OER +0.23% vs. +0.13%). We estimate that the headline CPI increased 0.20% month-over-month on average across October (0.14% MoM) and November (0.27% MoM), reflecting higher food prices (+0.3% month-over-month on average across October and November) but lower energy prices (-0.1%).
• 08:30 AM Philadelphia Fed manufacturing index, December (GS 5.0, consensus 3.4, last -1.7)

Friday, December 19 

• 10:00 AM Existing home sales, November (GS +1.5%, consensus +1.2%, last +1.2%)
• 10:00 AM University of Michigan consumer sentiment, December final (GS 53.6, consensus 53.5, last 53.3): University of Michigan 5-10-year inflation expectations, December final (GS 3.2%, last 3.2%)

Source: DB. Goldman

Stocks are set to recoup some of Friday’s tech-driven losses, with a big week of data releases ahead, as the last full week of 2025 comes witgh a bang. Still, sentiment seems a little shaky, with rising signs of skepticism over AI and debate about the extent of rate cuts next year. As of 8:00am ET, S&P 500 futures and Nasdaq 100 contracts both rose 0.5% after Friday’s 1.1% cash market slump in which technology sector fell 2.9%. In premarket trading, Nvidia leads Mag 7 gains, climbing 1.1% with the rest of the group largely in the green. European stocks climbed 0.8%. 10-year Treasury yields ticked lower and the dollar index traded at session lows as the yen surged on renewed bets the BOJ would hike rates this week. Bitcoin rallied 1.3% to $89,652, adding to signs that risk sentiment is steadying. Today’ key events include the December Empire manufacturing (8:30am) and NAHB housing market index (10am). Major releases later this week include November CPI Thursday. Fed speakers include Governor Miran (9:30am, 11am) and New York Fed’s Williams (10:30am).

In premarkt trading, Nvidia climbs 1.1% and is among leaders of a rebound in Magnificent Seven stocks after the group suffered a two-day drop amid concern over elevated spending and delays for projects tied to AI (Tesla +1.4%, Alphabet +0.7%, Amazon +0.4%, Apple +0.1%, Meta little changed, Microsoft is little changed).

• Mining stocks are higher amid a renewed advance in metals prices.
• Adobe (ADBE) slips 1.3% and ServiceNow (NOW) falls 4% after the pair were downgraded to underweight at Keybanc, which sees AI tools bringing a bigger hit to both software firms.
• Dole (DOLE) climbs less than 1% on light trading after the produce company agreed to sell port and port operations in Guayaquil, Ecuador, for $75m in cash.
• Entegris Inc. (ENTG) falls 2% after Goldman Sachs cut its recommendation on the semiconductor materials company to sell from neutral on slow wafer recovery.
• GXO Logistics (GXO) declines 2.2% after the logistics company said Brad Jacobs will step down as non-executive chairman of the board, effective Dec. 31.
• Immunome (IMNM) soars 27% after the biotech company announced positive topline results from its Phase 3 trial of varegacestat.
• iRobot (IRBT) falls 72% after the company filed for bankruptcy and proposed handing over control to its main Chinese supplier.
• Teradyne (TER) gains 3% after Goldman Sachs upgraded its recommendation to buy from sell, seeing an AI-driven demand uplift for the manufacturer of chip-testing equipment.
• ZIM Integrated Shipping (ZIM) rises 4% after Calcalist reported that MSC has submitted a bid to purchase the Israeli shipping company, without saying where it got the information.

In corporate news, Roomba maker iRobot filed for bankruptcy and proposed handing over control to its main Chinese supplier. Korea Zinc plans to build a smelter in the US at an estimated cost of around $7.4 billion, backed by investments from the American government, to produce key materials used in chip-making, defense and aerospace.

Traders are looking to delayed jobs and inflation data this week to help fill the void left by the US government shutdown as they build a picture on the economy and interest rates. Citigroup joined the upbeat chorus on the outlook for US stocks next year, while Morgan Stanley’ Michael Wilson wrote that the “good is bad/bad is good” trade is back, and weak jobs data on Tuesday could boost stocks as it would raise the probability of more rate cuts. The jobs number will also be critical for bond traders, who are betting on two rate cuts next year — one more reduction than the Fed is indicating.

“We are now firmly back into a good is bad/bad is good regime,” Morgan Stanley strategist Michael Wilson wrote in a note. “Moderate” weakness in the labor market weakness “Is likely to be received in a bullish context by equity markets,” he said.

Citi strategists led by Scott Chronert said they expect robust earnings growth will deliver a 13% rally next year for the S&P 500. That implies double-digit gains for a fourth year running, and echoes optimistic forecasts by banks including Morgan Stanley, Deutsche Bank and Goldman. “We anticipate an incremental shift from AI enablers to adopters/users in 2026, setting the stage for increased productivity improvement commentary across corporates,” Chronert wrote. “A generally supportive Fed is a key assumption in our playbook.”

Economists project a 50,000 increase in nonfarm payrolls and a 4.5% unemployment rate, consistent with a sluggish, but not rapidly deteriorating, labor market (our full preview will hit later today). The US data will help answer the question entering 2026 of whether the Fed is close to being done easing, after three straight cuts, or if it has to move more aggressively. 

“We had the debate around closing our equities overweight, but we don’t believe the trend is yet ending,” said Philipp Lisibach, head of strategy and research at LGT Private Banking. “Exposure to AI continues to be rewarded, while rates and credit remain relatively unattractive. Equities still offer the most compelling risk-reward trade.”

As for the AI giants themselves, the debate among investors is whether to rein in exposure ahead of a potential bubble popping or double down on the game-changing technology. One big worry is rising depreciation expenses from the data center binge. Alphabet, Microsoft and Meta combined for about $10 billion in depreciation costs in 4Q 2023. That figure rose to nearly $22 billion in 3Q this year, and it’s expected to be about $30 billion by this time next year.

A final flurry of major central bank policy decisions is also due, with meetings at the Bank of England, the ECB and the Bank of Japan, among others.  National Economic Council head Kevin Hassett said he’d consider Trump’s policy opinions if he’s picked to lead the Fed, but rate decisions would stay independent. And Ukraine and the US are due to hold a second day of talks in Berlin on Monday about a plan aimed at ending Russia’s war, with allied security guarantees for Kyiv a central focus of the negotiations. 

In Europe, Stoxx 600 trades higher by 0.8%. Consumer stocks outperform on signs of better Chinese demand, while the health-care sector underperforms. Here are some of the biggest movers on Monday:

Juventus shares rise as much as 14%, the most in more than a year, after the Agnellis family’s investment vehicle Exor NV rejected an unsolicited bid by Tether Holdings to acquire the Italian football club.

• Kering climbs as much as 4%, leading luxury stocks higher, after China vowed to increase financial support for key consumption areas.
• Puma shares also rise as much as 4% on the news that China will strengthen coordination between the commerce and financial sectors to boost consumption.
• Argenx shares fall as much as 9.7%, the most in more than seven months, after the biotechnology company discontinued its late-stage studies into thyroid eye disease.
• Sanofi shares sink as much as 6.4% after its experimental multiple sclerosis drug got hit with two setbacks: a regulatory delay in the US as well as a failure in a late-stage clinical trial.
• Rheinmetall leads European defense firms down, with its shares as much as 3.1% lower, after Ukrainian President Volodymyr Zelenskiy said he could accept security guarantees from the US and Europe instead of NATO membership amid ongoing peace talks.
• Truecaller shares plummet as much as 29%, the most since 2023 and to a record low, after the Swedish caller ID platform guided for its 4Q ad revenues around 30% lower year-on-year.
• Schweiter Technologies shares fall as much as 14%, hitting their lowest level since 2005, after the maker of composite panels issued a profit warning that Zurcher Kantonalbank says was a surprise.

Elsewhere, Chinese indexes edged lower after the latest data showed retail sales growth was the weakest since Covid, while investment slumped further. Asian shares also dropped, tracking Wall Street’s losses on Friday, with South Korea — a poster child for AI exuberance — slipping 1.8%.

In FX, the Bloomberg Dollar Index is down 0.2% with the yen top of the G-10 leaderboard ahead of an expected BOJ rate hike on Friday. Kiwi lags after RBNZ Governor Breman pushed back on investor bets over a rate hike next year.

In rates, treasury futures held small gains accumulated during European morning as the region’s bonds advanced. Global bond yields also lean lower. Gilt prices outperform 10-year equivalents from the US and Germany with the BOE set to cut rates by 25bps on Thursday. US yields are 1.5bp to 2.5bp richer across the curve with front-end tenors lagging slightly, flattening 2s10s spread by around 1bp. 10-year near 4.16% is 2.3bp lower on the day, slightly outperforming German and UK counterparts. IG dollar bond issuance slate empty, with this week expected to be the final window for any companies looking to raise capital in the debt markets before year-end. Treasury auctions this week include $13 billion 20-year bond reopening Wednesday and $24 billion 5-year TIPS Thursday. The week is packed with US economic data releases, including the delayed November jobs report on Tuesday. 

In commodities, crude oil prices are now lower after failing to hold onto opening gains.  Fed rate-cut bets also helped lift the price of gold on Monday. The yellow metal climbed for a fifth day to around $4,345 an ounce, approaching a record high; silver outperforms, higher by 2.9%. Bitcoin gains 1.5%. 

US economic calendar includes December Empire manufacturing (8:30am) and NAHB housing market index (10am). Major releases later this week include November CPI Thursday. Fed speakers include Governor Miran (9:30am, 11am) and New York Fed’s Williams (10:30am).

Market Snapshot

• S&P 500 mini +0.5%
• Nasdaq 100 mini +0.5%
• Russell 2000 mini +0.7%
• Stoxx Europe 600 +0.8%
• DAX +0.5%
• CAC 40 +1%
• 10-year Treasury yield -2 basis points at 4.16%
• VIX +0.6 points at 16.37
• Bloomberg Dollar Index -0.1% at 1205.59
• euro little changed at $1.1745
• WTI crude -0.2% at $57.35/barrel

Top Overnight News

• Affordability pressures are weighing heavily on the White House heading into next year’s midterm elections. They’re also offering cautious hope in Mexico and Canada that the U.S. won’t abandon its trilateral trade pact as the three countries enter a high-stakes review. Politico
• Trump is reportedly not certain his economic policies will translate to midterm wins, while he said his US investments haven’t fully taken effect and stated that by the time they have to talk about the election, which is in another few months, he thinks their prices are in good shape: WSJ
• White House economic adviser Hassett said he would consider US President Trump’s policy opinions, but added that the central bank would remain independent if he were to become the next Fed chair: BBG
• Apollo Management took bets against technology companies vulnerable to AI, in which it is betting against several large loans to software makers and cutting exposure to the sector, according to FT.
• SpaceX is moving forward with an insider share sale that values it at about $800 billion, setting up what could be the largest initial public offering of all time. WSJ, BBG
• Volodymyr Zelenskiy signaled Ukraine may step back from its long-term goal of joining NATO if it can secure bilateral security agreements with the US, Europe and other states. It’s holding a second day of talks with the US in Berlin. BBG
• Fannie and Freddie have snapped up more than $50 billion of home loans as Trump administration officials seek to drive down mortgage rates. BBG
• The European Commission is expected on Tuesday to reverse the EU’s effective ban on sales of new combustion-engine cars from 2035, bowing to intense pressure from Germany, Italy and European automakers struggling against Chinese and U.S. rivals. EV makers say reneging on ban would yield more ground to China. RTRS
• China’s economic momentum slowed broadly in November, with a marked weakening in consumer spending, adding pressure on Beijing to stabilize household and business demand in the world’s second-largest economy. Retail sales (+1.3% vs. the Street +2.9% and vs. +2.9% in Oct), industrial production (+4.8% vs. the Street +5% and vs. +4.9% in Oct), and investment (both fixed asset investment and property investment deteriorated in Nov). WSJ
• Vanke, one of China’s largest real-estate companies, made a renewed effort to muster bondholder backing for an onshore debt repayment due this week and avoid a default after the state-backed developer’s plan was rejected, rekindling concerns about the nation’s crisis-hit property sector. RTRS
• Japanese companies seem keen to raise wages again next year, despite many bracing for a tariff hit to profits, a central bank report shows days ahead of its next policy meeting. The findings will likely reinforce expectations that the central bank will raise interest rates to 0.75% from 0.5% this week. WSJ
• BoJ officials are likely to start selling the central bank’s pile of exchange-traded funds as early as next month, according to people familiar with the matter, a process expected to take decades to complete. RTRS

Trade/Tariffs

• US and Mexico reportedly struck a deal on Friday to settle the Rio Grande water dispute, which eases the bilateral tensions which had been stoked after US President Trump’s threat of an additional 5% tariff on Mexico if it did not provide additional water to help US farmers.
• China’s Central Financial and Economic Affairs Commission Deputy Director said they will expand exports and increase imports in 2026.
• China’s Customs allows dairy import products from Norway.
• An Indian Trade Official said India is engaging with Mexico on higher tariffs to protect its own trade interests. Said Mexico’s primary target is not to hit Indian exports.
• India has proposed a “preferential trade agreement” with Mexico.
• India’s Trade Secretary said India and the US are close to a “framework” deal but won’t give a timeline.
• EU plans a crackdown on very dangerous Chinese products sold on online platforms, including Alibaba (9988 HK) and Shein, according to FT.
• France said conditions for an EU vote on a Mercosur deal are not yet met, despite recent progress, while France calls for the EU-Mercosur December meeting to be pushed back to continue work on mirror clauses.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly pressured at the start of a risk-packed week and following on from the tech-led declines stateside amid a rotation out of AI, while participants digested economic releases, including the BoJ Tankan and Chinese activity data. ASX 200 retreated with the declines led by mining, materials, resources and tech  sectors, with the mood in Australia also sombre following a terror attack on Bondi Beach targeting a Jewish celebration. Nikkei 225 underperformed ahead of a widely anticipated BoJ rate hike later this week, while the quarterly BoJ Tankan survey showed sentiment of Large Manufacturers was at the highest in four years, which supports the case for a rate  hike. Hang Seng and Shanghai Comp were subdued after the latest Chinese activity data disappointed and house prices continued to contract, with tech and biotech leading the declines in Hong Kong, while losses in the mainland were contained after reports that China is to issue ultra-long-term special government bonds in 2026 to fund major national strategies and security initiatives, as well as large-scale equipment upgrades and consumer goods trade-in programs.

Top Asian News

• China is to issue ultra-long-term special government bonds in 2026 to fund major national strategies and security initiatives, as well as large-scale equipment upgrades and consumer goods trade-in programs.
• China stats bureau spokesperson said China’s economy stabilised and improved in November, but the impact of changes in the external environment has deepened, and the conflict between strong domestic supply and weak demand is prominent. The spokesperson also noted that some industries and firms face difficulties, while authorities will step up counter-cyclical and cross-cyclical adjustments. Furthermore, it was stated that household consumption capability and confidence need to be further improved, with efforts to be made to stabilise jobs, boost income growth, and release consumption potential.
• China Vanke’s (2202 HK) proposal for a one-year delay of repayment for a bond due December 15th was rejected by bondholders, which leaves a five-day grace period to make the CNY 2bln bond payment and avoid a potential default.
• Hong Kong’s Democratic Party voted on Sunday to dissolve amid pressure from Beijing and previous alleged threats of severe consequences, including possible arrest if they did not disband, according to The Guardian.
• BoJ is likely to begin selling its ETF holdings as soon as January, according to Bloomberg.
• RBNZ Governor Breman said the economic outlook has evolved broadly in line with expectations, and the forward path for the Official Cash Rate published in the November monetary policy statement indicates a slight probability of another rate cut in the near term. However, she added that if economic conditions evolve as expected, the official cash rate is likely to remain at its current level of 2.25% for some time. Breman also commented that there continues to be signs that growth is recovering and financial market conditions have tightened since the November decision, beyond what is implied by the central projection for the OCR.
• BoK said NPS agrees to extend its currency swap agreement for another year, with Bloomberg reporting that the NPS is to take a flexible approach to strategic FX hedging.
• China NPC Standing Committee to hold a meeting between December 22-27. NPC Standing Committee to review draft revision to foreign trade law.

European bourses (STOXX 600 +0.7%) opened on a stronger footing and traded at elevated levels throughout the morning. Upside, which comes despite a broadly lower APAC session, where Chinese stocks were subdued after the latest Chinese activity data disappointed. European sectors are broadly in the green, with a cyclical bias as Autos leads whilst Healthcare underperforms; the latter has also been dragged down by losses in Sanofi (-4%) after the Co. flagged delays in an FDA decision for Tolebrutinib.

Top European News

• Swiss SECO forecasts: US Tariff reduction has strengthened outlook 2025. Sees 2025 GDP (sports adj.) at +1.4% (prev. exp. +1.3%). Sees CPI +0.2% (prev. exp. +0.2%). 2026. Sees GDP (sports adj.) +1.1% (prev. exp. +0.9%). Sees CPI at +0.2% (prev. exp. +0.5%) 2027. Sees GDP (sports adj.) +1.7%. Sees CPI at +0.5%.
• UK’s OFCOM launches a probe into BT (BT/ LN) and Three, following UK-wide outages in the summer

FX

• G10s are mixed against the Dollar with clear outperformance in the JPY, whilst the Kiwi lags vs the USD after RBNZ’s Bremen said that the forward path for the official cash rate published in the November monetary policy statement indicates a slight probability of another rate cut in the near term.- DXY is a touch lower on the day, but likely a function of JPY strength (see below). No specific macro catalysts for the greenback as the week kicks off, but late on Friday, US President Trump said he was leaning towards Kevin Warsh or Hassett to lead the Fed. DXY trades within 98.29-98.48 parameters. The session is likely to focus on commentary from Fed’s Miran, expected to explain his dissent in last week’s FOMC meeting, while the influential Williams will speak on economic growth.
• JPY is the clear outperformer in the G10 FX space, where the BoJ is set to raise rates for the first time since January 2025. Japan’s Tankan survey overnight bolstered the case for a hike in Friday’s meeting, where the reading suggested overall business sentiment improved in Q4 and inflation expectations stood pat at 2.4% for the 1, 3, and 5-year horizons. Markets currently assign a c. 80% probability that the BoJ lifts rates by 25bps on Friday. USD/JPY began trundling lower after hitting the psychological 166 level, and 21DMA at 155.96, to a session low of 154.96.
• PBoC set USD/CNY mid-point at 7.0656 vs exp. 7.0569 (Prev. 7.0638)

Fixed Income

• USTs are currently firmer today by a handful of ticks, and reside at the upper end of a 112-06 to 112-12 range. Overnight trade saw US paper saunter higher, but lacked a clear driver – no hints provided from a yield perspective either, with rates lower to a similar magnitude across the board. Markets now await Fed speak from Miran and Williams, and the former is expected to release an explanation of his dovish dissent last week. Then the focus will turn to key US data in the coming days, namely NFP and CPI.
• Bunds are also in the green, albeit to a lesser extent than peers; currently within a 127.45 to 127.64 confine. Earlier, German Wholesale Sales M/M printed in-line with expectations, whilst Y/Y rose from the prior; the inner report pinned the rise to “higher prices of food, beverages and tobacco”. Elsewhere, focus has been on geopolitics whereby Zelensky suggested that Ukraine is willing to drop NATO membership ambitions, in favour of security guarantees. Negotiations between Ukrainian and US officials will continue in Germany later today.
• Gilts also gain in today’s session, in line with peers. Nothing really much from a UK perspective this morning, aside from UK Rightmove House Prices, which continued to show contractions. An exec at the firm said, “with market conditions supporting higher levels of activity, and a hopefully more certain economic environment, we forecast a better year for price growth in 2026 with a strong rebound in activity to kickstart the year”. The docket is very thin from a UK perspective, but will pick up starting from tomorrow, where a slew of key data will precede a BoE rate decision on Thursday.

Commodities

• WTI and Brent initially started the week positively following better Chinese demand, but have failed to sustain a bid higher, as US envoys meet with European and Ukrainian officials in Berlin. Benchmarks dipped to a trough of USD 57.32/bbl and USD 61.07/bbl, respectively, at the start of the APAC session, before gradually bidding higher to a high of USD 57.62/bbl and USD 61.50/bbl. Despite the improved Chinese oil demand and reports of Iran seizing a foreign tanker, benchmarks have fallen into the European open and are currently trading near session lows.
• Spot XAU has started the week on the front foot as ETF flows, central bank buying, and XAG short squeeze continue to support the yellow metal. After Friday’s liquidation selloff to a trough of USD 4257/oz, XAU bounced in the latter part of last week. The yellow metal opened at USD 4304/oz and gradually trended higher throughout the APAC session and thus far, remains at session highs of USD 4350/oz with ATHs just c. USD 30/oz away.
• 3M LME Copper, among most markets, got caught up in the tech-led selloff on Friday but has rebounded as the European session gets underway. Despite the selloff on Friday, ANZ analysts note that “demand for the metal continues to beat expectations despite the fall in China’s economic growth”, adding that the bank is bullish with the expectation that the market will move further into a deficit in 2026.
• India’s November gold imports at USD 4.02bln (prev. USD 14.7bln); oil imports at USD 14.12bln (prev. USD 14.8bln).
• Russia’s Nornickel sees a global nickel surplus at more than 200KT in 2025 and 2026, sees the global Palladium market balanced in 2025, sees a deficit at 0.2 MoZ, including investments.
• The US asks the EU to exempt US gas from methane law obligations until 2035.

Geopolitics: Middle East

• Israel’s military conducted a strike on Gaza, which killed senior Hamas commander Raed Saed, while the Israeli military said it put a planned strike on a southern Lebanon site on hold after the Lebanese Army requested access.
• Two US Army soldiers and a civilian US interpreter were killed in Syria, while the Syrian government said the attacker was a member of Syrian security forces with extremist views. It was later reported that US President Trump said they will retaliate against ISIS and that there will be a lot of damage done to the people who attacked the troops in Syria.

Geopolitics: Ukraine

• US President Trump said a lot of progress is being made on Russia and Ukraine, while he responded that they don’t want it now, and it would be complex when asked about the idea of a free economic zone in the Donbas region.
• Ukrainian President Zelensky said services have been working to restore electricity, heating and water supply to regions following Russian strikes on energy infrastructure. Zelensky also commented that there won’t be a peace plan that everyone will like and there will be compromises, while he also stated that US and European security guarantees, instead of NATO membership, are a compromise from Ukraine’s side and that security guarantees should be legally binding.
• Ukrainian presidential adviser said Ukraine and US teams meeting on peace proposals in Berlin lasted more than five hours on Sunday and will continue on Monday, while US special envoy Witkoff said a lot of progress was made during the talks.
• Ukrainian military said it struck a Russian oil refinery in the Krasnodar region and a Russian oil depot in the Volgograd region, while Ukraine’s Navy said a Russian drone attack hit a Turkish civilian vessel carrying sunflower oil to Egypt on Saturday.
• Russian Defence Ministry said Russian forces captured Varvarivka in Ukraine’s Zaporizhzhia region, according to RIA.
• EU’s Kallas said new sanctions on Russia’s shadow fleet will be decided today. Adds that the EU has delivered 2mln artillery rounds to Ukraine this year. Will not leave the EU summit without a decision on funding for Ukraine.
• Lithuania’s Foreign Minister said he expects the EU to widen the Belarus sanctions regime to include hybrid activity. Ukraine needs something like Article 5 in terms of security guarantees, with a nuclear deterrent.
• Russia’s Kremlin said Ukraine not joining NATO is a key question but subject to special discussion. Expects the US to update Russian officials on the proposals from the Berlin talks.
• Washington reportedly still wants Ukraine to cede the Donbas region to Russia, via Sky News Arabia citing official familiar with the negotiations.

Geopolitics: Other

• US envoy John Coale said Belarusian President Lukashenko agreed to do all he can to stop weather balloons flying into Lithuania, while Coale also stated that the US will remove sanctions on Belarusian potash and that around 1,000 remaining political prisoners in Belarus could be released in the coming months.
• US President Trump said land strikes against Venezuela will start happening and don’t necessarily have to be in Venezuela.
• US President Trump said on Friday that he had a very good conversation with the Thai and Cambodian PMs, while he added that they agreed to cease all shooting effective that evening and go back to the original peace accord. However, it was reported over the weekend that Thailand’s PM Charnvirakul said his country has not reached a ceasefire agreement with Cambodia and the Thai military will continue fighting on the disputed border.
• Philippine Coast Guard said three Filipino fishermen were wounded and two fishing boats suffered significant damage from high-pressure water cannon blasts by Chinese Coast Guard ships in the South China Sea, while it called on China’s Coast Guard to adhere to internationally recognised standards of conduct.
• China sanctioned the former chief of staff of the Japan Self-Defense Forces, in which it froze properties, prohibiting transactions with, and barring visas for former Japanese official Iwasaki.

US Event Calendar

• 8:30 am: Dec Empire Manufacturing, est. 10, prior 18.7
• 10:00 am: Dec NAHB Housing Market Index, est. 39, prior 38
• Central Banks (All Times ET):
• 9:30 am: Fed’s Miran Delivers Talk on Inflation Outlook
• 10:30 am: Fed’s Williams delivers Keynote Remarks
• 11:00 am: Fed’s Miran Appears on CNBC

DB’s Jim Reid concludes the overnight wrap

We’ve launched our big 2026 Global Financial Market Survey with many questions on your views for the year ahead. It includes, after a two-year gap, asking you your favourite Xmas song. Where you think the S&P 500 or Mag-7 ends up creates nothing like the controversy of the announcing your favourite Xmas song. You can complete the survey here. It closes on Wednesday. All help filling in very much appreciated.  

Welcome to the last full week of the year. It’s started with me sneezing, eyes watering and completely bunged up. The flu? No! Just a kids Xmas party last night where unbeknownst to me they had a cat. I’m very allergic to them. The cat actually had the right idea and had already left for the evening due to the noise. Sadly, I had to endure the noise and the cat’s airborne residue.

So not the greatest start to the week for me and just when you thought it was safe to wind down for Christmas, the coming week is shaping up to be a significant one for global markets, with a dense calendar of economic releases and major central bank decisions. The European Central Bank, the Bank of England and the Bank of Japan all have a chance to be Scrooges or Santas in their meetings this week. Alongside these announcements, the data flow will be heavy: the US will finally publish delayed employment and inflation reports, while flash PMIs for December and will provide clues on global momentum.  

It’s also an interesting time for global markets with long-end yields at or around multi-month or even multi-year highs (e.g. Japan and 30yr Europe) at the same time as the weakest AI stories are increasingly being punished rather than the pre-September period when AI all went up together. If that wasn’t enough, another notable Fed story came late on Friday, as President Trump suggested that NEC Director Kevin Hassett and former Fed Governor Kevin Warsh were his two favoured candidates for the Fed Chair role. Hassett has been viewed as the frontrunner in recent weeks but following Trump’s interview his Polymarket odds fell from around 73% late on Friday to 52% this morning. Warsh has gone from 13% before the interview to 40% this morning. So, it’s fair to say there’s a lot of unfinished business going into the last full trading week of the year.

For this week specifically, in the United States, attention will centre on tomorrow’s twin employment reports for October and November, delayed by the recent government shutdown. October’s headline payrolls are expected to show a decline of around -60k (DB forecasts here and below), largely due to federal layoffs with all the early year buy-out offers coming off payroll in October. November should rebound modestly with a gain of +50k (DB). Private sector hiring is likely to remain steady in both months at around +50k (DB), slightly below the recent trend. The unemployment rate is forecast to rise to 4.5 per cent in November from 4.4 per cent in September (we will never know October), while average hourly earnings should increase by 0.3 per cent in both months, keeping year-on-year nominal compensation growth near 4.4 per cent. Hours worked are expected to stabilise at 34.3. Given the distortions caused by the shutdown, the household survey could be noisy, echoing patterns seen after the 2013 episode. For a cleaner read on labour market conditions, Thursday’s jobless claims will be important and given our economists believe this will come in at around +225k, they believe underlying hiring trends remain intact.

Inflation will also be in focus with Thursday’s US CPI release. Because October data were not collected, the report will centre on year-on-year changes. Headline CPI is expected to hold broadly steady at 3.03%, while core inflation remains at 3.02%. Monthly headline gains across October and November should average +0.24%, slightly below September’s pace with core slightly above at +0.26%. Within the details, core goods prices are likely to show modest increases in household furnishings and apparel, while used car prices continue to decline. Core services will attract particular attention, especially rents, which are expected to rebound after September’s anomalous weakness. Airline fares and lodging should soften from their recent highs, though health insurance may surprise on the upside. Beyond jobs and inflation, Tuesday’s retail sales report will offer insight into consumer spending. We anticipate a headline decline of -0.3%, driven by autos and lower fuel prices, but retail control—the component used in GDP calculations—should rise by +0.3%, signalling resilience in underlying demand. Friday’s final reading of University of Michigan consumer sentiment is expected at 54.0, with inflation expectations likely to matter more than the headline figure.

On policy, last week’s FOMC meeting delivered a 25bps rate cut and signalled a “wait and see” approach. Chair Powell struck a dovish tone, emphasising labour market risks over inflation. This week’s Fedspeak will reinforce that message, with Governor Miran and New York Fed President Williams speaking today, followed by Governor Waller and Williams again on Wednesday. Atlanta Fed President Bostic closes the week on Friday. Miran, who dissented in favour of a larger cut, is expected to reiterate his view that shelter inflation will collapse in coming quarters.

In Europe, Thursday brings a cluster of central bank decisions. The ECB is expected to keep rates unchanged at 2 per cent (see our econ preview here), while the Bank of England is forecast to deliver its sixth cut of the cycle, lowering Bank Rate to 3.75 per cent on a narrow 5-4 vote. See our economist’s preview here. The Riksbank and Norges Bank will also decide on policy on the same day with both likely to stay on hold. Ahead of the BoE meeting, UK labour market data on Tuesday and CPI on Wednesday will be closely watched. Headline inflation is forecast to ease to 3.51% year-on-year, while core ticks up slightly to 3.46% (see our economist’s preview here). Retail sales and consumer confidence on Friday will round out the UK calendar. In Germany, the Ifo survey on Wednesday and consumer confidence on Friday will provide further insight into regional conditions as fiscal spending starts to ramp up. Across the Atlantic, Canadian inflation is out today which is interesting given the sharp move from pricing in a slightly easing bias earlier this month to almost a full hike by the end of 2026 now.

Across Asia, the Bank of Japan meets on Friday and is expected to raise rates by 25bps to 0.75 per cent, with a 94% probability priced in by markets. See our economist’s thoughts here. Japan’s nationwide CPI for November will also be released on Friday, with core inflation forecast to slow to 2.9% and core-core to 3.0%. Global flash PMIs for December, covering the US, UK, Japan, Germany and France, will be published tomorrow and will offer early signals on fourth-quarter growth trends.

Asian equity markets have kicked off the week notably lower after a difficult US session on Friday. Across the region, tech-focused exchanges are the poorest performers, with the KOSPI (-1.34%) and the Nikkei (-1.36%) leading the losses, followed by the Hang Seng (-1.15%). Mainland Chinese stocks are outperforming a bit due to less AI exposure and after a series of disappointing economic indicators (details below) may be raising stimulus odds. The CSI (-0.41%) and the Shanghai Composite (-0.31%) registering minor losses due to reduced exposure to the global AI market. The S&P/ASX 200 (-0.72%) is also trading lower. S&P 500 (+0.31%) and NASDAQ 100 (+0.24%) are both bouncing back a bit though.

Returning to China, the economic slowdown intensified in November, with retail sales increasing by only +1.3% last month compared to the same period last year, significantly below Bloomberg’s forecast of +2.9% growth, and a decrease from the +2.9% rise recorded in the previous month. Industrial production rose by 4.8% in November year-on-year, falling short of the anticipated 5% increase and marking the weakest growth since August 2024. Business investment remained weak in November, with fixed asset investment declining by -2.6% year-on-year, exceeding expectations of a -2.3% drop. This decline has worsened from the -1.7% decrease observed from January to October, representing the most significant downturn since the pandemic began in 2020. A separate report indicated that new home prices in China continued to fall, decreasing by -0.39% m/m in November, compared to a -0.5% decline in the previous month, suggesting that we’re still waiting for a recovery in demand even with government assurances that they will stabilise the sector.

Recapping last week now and US equities saw a mixed week, with the S&P 500 reaching a new all-time high on Thursday but slumping by -1.07% on Friday to end the week -0.63% lower. Concerns about the sustainability of AI-related spending weighed on tech with the NASDAQ down by -1.62% (-1.69% Friday) and the Mag-7 by -1.86% (-0.75% Friday). Oracle (-12.69%, -4.47% Friday but rallying off the day’s lows) and Broadcom (-7.77%, -11.43% Friday) plunged after their earnings reports. But there was rotation towards more blue-chip stocks, with the Dow Jones (+1.05%, -0.51% Friday) holding onto a sizeable weekly gain.  

The rates space saw a significant curve steepening as the FOMC delivered a third consecutive 25bp cut. While the Fed signalled a possible pause in early 2026, dovish hints supported 2026 rate cut expectations. Fed fund pricing for December 2026 was little changed over the week but down by -7.4bps from its peak on Tuesday, with 56bps of rate cuts now priced for 2026. The next cut is 54% priced by March. Front-end Treasury yields declined, with the 2yr yield falling by -3.8bps to 3.52% (-1.8bps Friday). By contrast, the 10yr yield (+4.9bps to 4.18%; +2.7bps Friday) and the 30yr yield (+5.3bps to 4.84%; +4.5bps Friday) both posted their highest levels since September, bringing the 2s10s slope to its steepest since January 2022, just before the Fed started its post-Covid hiking cycle. Meanwhile, recent money market tightness eased as the Fed also announced the commencement of reserve-management purchases of Treasury bills.  

In Europe, government bonds sold off amid rising global term premia and hawkish comments by the ECB’s Isabel Schnabel. 10yr bund yields rose +5.9bps to 2.86%, their highest weekly close since March, with OATs (+5.3bps) and BTPs (+6.3bps) similarly higher. The OAT outperformance came as the French parliament approved the social security budget. In the equity space, Friday’s -0.53% decline left the STOXX 600 little changed on the week (-0.09%).

Germany’s DAX (+0.66%, -0.45% Friday) outperformed, in part helped by a Bloomberg report that German lawmakers are set to approve €52bn in defence orders next week, with Rheinmetall climbing +5.66% as a result. In the UK, the FTSE 100 (-0.19%, -0.56% Friday) wasn’t helped  by a soft monthly GDP reading on Friday (-0.1% vs +0.1% expected). Meanwhile, European credit outperformed the US, with HY spreads tightening by -1bps in contrast to a +11bps widening across the Atlantic.

In commodities, Brent crude prices fell -4.13% to $61.12/bbl, to within one dollar of their 2025 lows seen back in May. In contrast, gold rose by +2.43% to $4,300/oz as investors returned to safe haven assets. Bitcoin (+1.12% on the week) managed to reclaim the $90,000 level despite a -2.89% decline on Friday.

Some of us may be old enough to remember when iRobot released its first robot vacuum, the Roomba, in 2002. Nearly 25 years later, the company has ceased to exist, collapsing into bankruptcy, with its remaining assets and intellectual property set to be acquired by a Chinese competitor.

How did iRobot implode, only for a Chinese company to end up cleaning American homes?

It began when European Union competition regulators blocked Amazon’s proposed takeover of iRobot, cutting off what some Wall Street analysts saw as the company’s last realistic path to survival. It is also worth noting that the Biden administration’s FTC Chair, Lina Khan, was aligned with the EU’s position.

A prior Lina Khan special?

Encouraging the DOJ to block JetBlue from buying Spirit.

Spirit has subsequently filed for bankruptcy TWICE in the just over two years since then. https://t.co/HHLmRK7acX

— Compound248 💰 (@compound248) December 15, 2025

Founded in 1990 by MIT engineers, iRobot rose to prominence in the early 2000s with the Roomba. Now, the company has filed for Chapter 11 bankruptcy and agreed to hand control to its leading Chinese supplier, Shenzhen PICEA Robotics, under a court-supervised process in Delaware.

Peering into Shenzhen PICEA Robotics’ latest supply chain. By the way, it has links to companies with “forced labor” risks. This data was generated by the supply chain risk analysis company Sayari.

In New York, iRobot’s shares crashed 68% in premarket trading.

Bankruptcy filings show estimated assets of $100 million to $500 million, with liabilities in the same range.

iRobot said operations will continue without disruption, including its app, customer programs, global partners, supply chain relationships, and product support.

Thanks to the reckless EU regulators and Biden-era mismanagement, America’s iRobot will now be owned by the Chinese and likely present security risks.

Major cities across the Western world are ramping up security around Hanukkah events after a terrorist attack killed 16 people and wounded 38 at a Jewish celebration on Sydney’s Bondi Beach over the weekend. The attack was one of the deadliest terror incidents in Australia in decades and came just days after a Trump administration official warned that the Biden-Harris regime had allowed 18,000 “known and suspected terrorists” into the U.S.

Taken together, from the Bondi Beach terror attack to Christmas market attacks in Europe, and even the Afghan national who killed one U.S. National Guard member and seriously wounded another just blocks from the White House last month, what is unfolding across the West is the dire consequence of nation-killing open border policies (promoted by Democrats) backfiring into colossal security failures.

Authorities in Berlin, London, New York, Warsaw, and across France announced heightened police presence at synagogues, public menorah lightings, and Jewish institutions.

Berlin intensified security at the Brandenburg Gate menorah lighting, New York deployed additional protection citywide, Warsaw increased armed guards at its main synagogue, and France ordered reinforced security at Jewish sites through this week and into next.

“We have long planned comprehensive security for tonight’s Hanukkah event at the Brandenburg Gate — in light of the events in Sydney, we will further intensify our measures and maintain a strong police presence there,” a spokesperson said on X.

London’s Metropolitan Police told The Times of Israel that it had increased security but did not want to provide full details.

“While there is no information to suggest any link between the attack in Sydney and the threat level in London, this morning, we are stepping up our police presence, carrying out additional community patrols, and engaging with the Jewish community to understand what more we can do in the coming hours and days,” a police spokesperson said.

France’s Interior Minister Laurent Nunez told local police to reinforce security around Jewish places of worship from Sunday through next Tuesday, a ministry spokesperson told Reuters.

At Warsaw’s main synagogue in Poland, armed security was doubled for the Sunday evening event.

Meanwhile, in the U.S., New York City Mayor Eric Adams said on X that additional security forces were being deployed for Hanukkah celebrations and synagogues across the metro area.

“We will continue to ensure the Jewish community can celebrate the holiday in safety — including at public menorah lightings across the city. Let us pray for the injured and stand together against hatred,” Adams said.

All of this is a symptom of mass migration failure driven by liberal elites across the West, whose suicidal empathy has jeopardized national security.

Political strategist and analyst from the UAE, Amjad Taha, warned on X:

I said it on 14 December 2024. And it happened on 14 December 2025. Yes, my country, the UAE, banned them. I said it clearly to the Jewish community at a Bondi Beach restaurant in Australia: when a government allows antisemitism, it invites terror. It leads directly to Muslim Brotherhood– and Islamist jihadist–inspired violence.

Today, in Western Sydney, you have glorifiers of the Sudanese Muslim Brotherhood–led army, the same people who celebrated October 7 and who are now justifying terrorist attacks. This did not come out of nowhere. This is the inevitable result of hatred that is tolerated, normalised, and protected.

In Israel, Jews are attacked. In Australia, Jews are attacked. So tell us, honestly: where do you want this nation to go? A society that cannot protect its Jewish citizens is a society losing its soul. Antisemitism is not protest. It is not opinion. It is the gateway to terror.

Humanity MUST STAND with the Jewish community now. Silence is no longer neutrality. It is surrender.

I said it on 14 December 2024. And it happened on 14 December 2025. Yes, my country, the UAE, banned them. I said it clearly to the Jewish community at a Bondi Beach restaurant in Australia: when a government allows antisemitism, it invites terror. It leads directly to Muslim… pic.twitter.com/mUd7ugCTjO

— Amjad Taha أمجد طه (@amjadt25) December 14, 2025

The UAE’s Foreign Minister issued a dire warning to the West in 2017:

7 years ago, the UAE’s Foreign Minister issued a warning to the West.

His words now sound more prophetic than ever. pic.twitter.com/ytKwcngCeP

— Visegrád 24 (@visegrad24) December 14, 2025

Last week, National Counterterrorism Center Director Joe Kent warned the House Homeland Security Committee that the Biden-Harris regime flooded America with 18,000 “known and suspected terrorists”…

.@NCTCKent: “So far, NCTC has identified around 18,000 known and suspected terrorists that the Biden administration let come into our country.” pic.twitter.com/XPrHdKMICK

— Rapid Response 47 (@RapidResponse47) December 11, 2025

Disgust is brewing across the West toward liberal elites, including Democrats in the U.S., who threatened national security by importing large numbers of unvetted migrants in pursuit of a new voting base. The days of anyone challenging open border policies and being dismissed as a “racist” by Democrats are over. Time to ramp up deportations.

Authored by Kimberly Hayek via The Epoch Times (emphasis ours),

Federal immigration authorities have arrested more than 10,000 illegal immigrants living in Los Angeles since June, the Department of Homeland Security said on Dec. 11.

The arrests include aliens with criminal histories, including those convicted of murder, kidnapping, sexual assaults, and other violent crimes, according to officials.

Officials underscored that their operations have been consistently undertaken amid assaults on agents by protesters who have thrown projectiles and firebombs, as well as attempted to interfere with agents in the middle of detaining suspects.

“In the face of violence from rioters and demonization by sanctuary politicians, DHS law enforcement has made over 10,000 arrests in Los Angeles since operations began in June. Some of the most heinous criminal illegal aliens arrested include murderers, kidnappers, sexual predators, and armed carjackers,” Assistant Secretary Tricia McLaughlin said in a statement.

She said that California Gov. Gavin Newsom and Los Angeles Mayor Karen Bass failed the people of California, alleging that the state allows criminals to roam free.

“Thanks to our brave law enforcement, California is safer with these thugs off their streets,” McLaughlin said. “Instead of thanking our law enforcement for removing criminals from their communities, Gavin Newsom and Karen Bass repeatedly demonized our brave law enforcement during these operations.”

Among the criminal illegal aliens arrested are Alireza Hashemi, from Iran, convicted of rape, aggravated assault, domestic violence, burglary, and driving under the influence, according to the statement.

Andres Velasquez-Ocampo, from Mexico, was convicted of armed carjacking, vehicle theft, and vandalism, it said.

Juan Carlos Tamayo, from Mexico, was convicted of homicide, conspiracy to commit homicide, and multiple counts of attempted murder, it stated.

Ambartsoum Pogosium, from Armenia, was convicted of kidnapping, homicide, fraud, burglary, larceny, and forgery, it said.

Rene Reyes-Miranda, from Cuba, was convicted of a sex offense against a child, sex offender registration violation, harassing communication, cocaine possession, robbery, burglary, larceny, probation violation, property crimes, possession of stolen property, and possession of burglary tools, the statement said.

Akop Jack Kantrozyan, from Armenia, was convicted of identity theft, burglary, multiple counts of conspiracy to commit a crime, larceny, multiple counts of fraud, receiving stolen property, shooting at an inhabited dwelling/vehicle, possession of a firearm, grand theft of access cards, violation of parole, battery, and conspiracy to defraud the United States, it said.

Everado Garcia Martinez, from Mexico, was convicted of vehicle theft, armed carjacking, and amphetamine possession, according to the statement.

Jose Manuel Perfecto Hernandez Corrales, from Mexico, was convicted of possession of stolen property and attempting to import methamphetamine into the United States, it said.

Yonic Telles-Sosa, from Mexico, has been previously removed from the United States on five occasions. He received a final order of removal in 2013 and has been convicted three times of knowingly and unlawfully entering the United States, robbery, marijuana possession, and aggravated sexual assault of a child, it said.

Mohamed Chekchekani, from Kenya, was convicted of facilitating interstate commerce in aid of a racketeering enterprise, larceny, stolen property, and drug possession, it continued.

During the operations, civil rights organizations, such as the ACLU Foundation of Southern California, filed a lawsuit in July alleging that raids violated constitutional rights.

A federal judge issued a temporary restraining order in July blocking arrests without probable cause, a ruling upheld by an appeals court in August despite DHS efforts to have it overturned.

California officials announced an online portal earlier this month so that the public can report suspected misconduct by federal agents, with the goals of documenting potential rights violations and providing legal support for illegal immigrants facing arrests and deportation.

A statement from Newsom’s office said that federal agents have broad authority to enforce federal laws, including federal immigration laws, but that they must do so lawfully.

“We’re not going to stand by while anyone—including federal agents—abuses their authority in California,” Newsom said. “This new portal gives Californians an easy and safe way to speak up, share what they see, and help us hold people accountable. No one is above the law.”

Agents faced an 8,000 percent increase in death threats since the start of deportation operations, according to DHS data.

In a June raid on illegal marijuana cultivation sites in Southern California, federal agents arrested as many as 75 illegal aliens, and at least one U.S. citizen was arrested for impeding law enforcement.