Authored by Tsvetana Paraskova via OilPrice.com,

The majority of India’s biggest refiners are buying Russian oil from non-sanctioned sellers and traders as widening discounts of Russia’s crudes to benchmarks are tempting the price-sensitive Indian importers, sources involved in the purchases told Bloomberg on Wednesday. 

Before the latest sanctions on Russian oil producers Rosneft and Lukoil, India bought from Russia around one-third of all the crude it imported, as it sought cheaper oil.

Amid tense trade negotiations with the United States, India earlier this year was singled out by U.S. President Donald Trump as the main financier of the Kremlin’s oil revenues.

At the time, India remained adamant that it would buy the cheapest oil available, regardless of whether it came from Russia or elsewhere.    

However, the U.S. sanctions on Rosneft and Lukoil upended all previous plans by Indian refiners, who hastened to withdraw from the spot market for Russian crude in December.

But Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation (IndianOil) have bought Russian crude from non-sanctioned companies for January delivery, at a discount of $6-$7 to Brent crude, reports emerged last week.

Combined, IndianOil and Bharat Petroleum have purchased in recent days 10 cargoes of non-sanctioned Russian crude, including Urals, according to Bloomberg’s sources.

Another state-owned Indian refiner, Hindustan Petroleum Corporation Limited (HPCL), is seeking non-sanctioned Russian oil for January delivery, the sources said. 

Private refiner Reliance Industries, the owner of the world’s biggest integrated refining complex at Jamnagar, is a notable absence among Indian refiners in the market for non-sanctioned Russian crude, according to Bloomberg. 

Reliance, which operates the 1.4 million barrels per day (bpd) Jamnagar complex, has a long-term deal with Rosneft to buy almost 500,000 bpd.

Reliance was India’s single biggest buyer of Russian crude, until now, but it halted all purchases of oil from Russia last month, after the sanctions on Rosneft and Lukoil. 

Russia has rejected a new Zelensky proposal for an “energy ceasefire.” Kremlin spokesman Dmitry Peskov has explained that Russia wants a “long-term peace” and not a just a temporary ceasefire. Zelensky has offered a mutual halt to strikes on energy infrastructure if Russia agreed, mirroring something which had only briefly been in effect at the start of this year.

This ‘offer’ comes at a moment that Ukraine is suffering perhaps its worst energy crisis of the war, with lengthy blackouts not just being experienced in the country’s east and south – but long outages in and around the capital as well.

Oleksandr Kharchenko, director of the Ukrainian Energy Research Center, has in recent comments confirmed that resources for repairing damaged energy facilities have almost run out. 

“Now I don’t see the resources from either Ukrenergo, the generating or distribution companies to purchase the equipment they already need and will need in two or three months,” he said in televised remarks.

“Ukraine may run out of equipment to restore its energy system if Russia continues to launch attacks,” he has explained.

The new proposal for a fresh energy ceasefire comes as Moscow is still livid at recent attacks on tankers transporting Russian oil. And now a cargo vessel carrying grain from Crimea has been detained at Odessa port:

Ukrainian security officials have detained a cargo vessel in the port of Odesa that authorities say is part of Russia’s so-called “shadow fleet,” the Security Service of Ukraine (SBU) said Wednesday.

The ship, whose name was not disclosed, arrived under the flag of an African country to load a shipment of steel pipes. The captain and 16 crew members holding passports from unspecified Middle Eastern countries were on board at the time of the seizure.

According to the SBU, the vessel illegally transported nearly 7,000 tons of Russian grain from annexed Crimea to North Africa in January 2021.

The SBU claims it found evidence of “illegal operations in ports on temporarily occupied Ukrainian territory” after a search of the ship.

Apparently Ukrainian authorities intend to seize the ship’s cargo altogether, and transfer them Ukraine’s Asset Recovery and Management Agency (ARMA), a government entity which deals with property linked to corruption or other crimes. So naturally, Moscow is not going to look kindly on fresh offers to mutually stop attacks on energy infrastructure.

Oil prices extended their recent decline this morning as concerns about global oversupply continued to weigh on sentiment.

Crude has been trapped in a tight $4-a-barrel range since the start of November, as oversupply concerns vie with geopolitical risks surrounding the flow of sanctioned Russian barrels into nations including India.

“I’m increasingly becoming a bit of a contrarian here, given the limited selling response to all the negative news,” said Ole Hansen, head of commodities strategy at Saxo Bank AS.

“The biggest risk to prices could be to the upside if next year’s oversupply is already priced in,” he added.

Overnight saw API report a large crude draw but sizable product builds…

API

• Crude -4.78mm (-1.7mm exp)

• Cushing

• Gasoline +3.14mm

• Distillates +2.88mm

DOE

• Crude -1.812mm

• Cushing +308k

• Gasoline +6.397mm – biggest build since Dec 2024

• Distillates +2.5mm

US crude stocks fell last week but products saw notable builds (4th straight week) as Cushing inventories hover near ‘tank bottoms’…

Source: Bloomberg

US Crude production picked up again to a new record high as rig counts remain near cycle lows…

Source: Bloomberg

Oil prices have stuck within a tight range in recent weeks as rising geopolitical risks amid Ukrainian attacks on Russian oil infrastructure and shipping counter rising global inventories of the fuel.

In its monthly Short-Term Energy Outlook released Tuesday, the EIA warned rising global production has outpaced demand and it expects inventories to continue rising by two-million barrels per day in 2026, pressuring prices.

By Michael Every of Rabobank

The RBA rates hold decision generated two notable headlines from the Australian Financial Review: ‘RBA is worried it cut interest rates too far’; and ‘RBA is caught in Ray Dalio’s Doom Loop’.

The Bank of England says Chancellor Reeves’ budget will lower inflation by 50bps in 2026, backing the view that they will give the public an Xmas rate cut next week. Of course, note that the Australian government used similar state spending deliberately targeted at certain sections of the CPI index to help persuade the RBA to cut three times… only for it to then worry it went too far and get caught in a ‘doom loop’.

The RBNZ ‘s new Governor Brennan stated rates are not on a preset course, implying that they could go either up or down. Who knew? Not those who think they can’t go back up, for one.

Today, sees the Bank of Canada, the Fed, and the BCB in Brazil – which in Asia means a day of fiddling. The BCB is seen on hold at 15%. So is the BoC at 2.25% (see here for more from our cross-asset strategists Molly Schwartz and Christian Lawrence). At the Fed, a 25bps cut to 3.75% is priced in (see here for the take from our US Strategist Philip Marey) – but so is disagreement on what next. As Reuters headlines it, ‘Investors warm up for long spell of discordant Fed’. That’s putting it mildly.

The Financial Times reports Trump and Treasury Secretary Bessent will start final interviews for the new Fed Chair this week, with a trio of names still in the ring alongside favorite Kevin Hassett. He just said he wouldn’t bow to pressure over cutting rates, but he agrees with Trump there’s “plenty of room” for cuts in the coming months. So, that’s one tricky interview question in his pocket. However, ‘Where do you see yourself in five years?’ might be harder given the FT claims Hassett could be appointed for a shorter than usual term, allowing “Bessent to move to the Fed later.” Moreover, at a campaign-style rally, Trump just stated “It could be” that all four Biden-era Fed appointments, including “too late” Powell, “may have been signed by the autopen”, so are “maybe” invalid, “but we’ll take two.”

The RBA fiddled. The BOE may fiddle. The RBNZ may fiddle. The BoC are taking a rest from fiddling. The Fed is still fiddling – and the Fed is being fiddled with. Yet Nero-liberal markets don’t fret about getting burned as the music deafens them to what’s going on.

Trump just gave Ukraine’s Zelenskyy “days” to respond to his peace proposal: he reportedly wants things wrapped up by Xmas having failed to do so for Thanksgiving. Ukraine is preparing to unveil its updated peace proposal to the US, and Zelenskyy also claims to be “ready for elections.”

Trump thrashed EU leaders, stating “I think they’re weak,” and their countries are “decaying” – the accompanying article states “The Most Influential Man in Europe Thinks Europe is Full of Losers.” Trump also denied pledging any Argentina-style bailout for Hungary’s embattled leader Orbán, even if he praised central and eastern Europe vs the west.

European leaders have, typically, responded weakly for fear of losing US support. Indeed, the US denied a German request to integrate American artillery rockets into its armed forces, which could make it more difficult for the German military to cooperate with the US and other NATO allies. For an overview of the geostrategic dilemma Europe is in, see ‘A Grand Strategy for Europe in the New Cold War’. For now, there is Romanesque rhetoric but Nero-style fiddling going on.

Against this backdrop, the FT also argues ‘Why the world should worry about stablecoins’, concluding that “Dollar-based digital currencies offer benefits for the US, but Britain and the EU are better off resisting them.” Really? How? Is that also fiddling as things get hotter?

The Politico interview also touched on the “Trump Corollary” to the US Monroe Doctrine, where he refused to rule out boots on the ground in Venezuela, or moves vs Colombia or Mexico. That’s as CNN reports the Trump admin is quietly building plans for what would happen if Maduro were ousted – as if this is in the passive rather than active sense.

In geoeconomics, Trump’s controversial decision to allow Nvidia to sell H200 AI chips to China is seen by Bloomberg as spurred by Huawei’s AI Gains; the Wall Street Journal states those chips will have to undergo an unusual US security review before being exported to China; and the FT claims China will (again) limit access to them anyway, as it aims for its domestic production. That’s what a push for strategic autonomy looks like – not lots of grand speeches about strategic autonomy.

The EU has announced stricter food import controls to reassure EU farmers and address French conditions for supporting the EU-Mercosur deal: will it therefore replace tariffs with non-tariff barriers? It’s also considering further tariffs on China. Meanwhile, EU Industry Commissioner Séjourné admitted: “Last month, I was supposed to go to Brazil to discuss a rare earth mine. Three days beforehand we were told that the Americans had come, put money on the table, and bought all production until 2030.” By contrast, China claims to have pulled off a critical mineral production tech revolution in 10 months, leaving it further ahead. And in the UK, a token vote in favor of rejoining the customs union with the EU passed Parliament.

The FT also reports July’s US-Indonesia trade deal is at risk of collapse, with D.C. believing that Jakarta is reneging on terms of agreement. Watch this space to see how the US reacts when a country doesn’t stick to a deal.

In political economy, France’s National Assembly narrowly approved a contentious 2026 social security budget. At the same time, the leading French (presumed) presidential candidate Bardella claims “Together, Nigel Farage and I will restore Europe’s borders” via a ‘patriotic alliance’ between the National Rally and Reform UK to reshape Europe. Not coincidentally, the UK’s PM Starmer, a former Human Rights lawyer, urged Europe’s leaders to curb (or can we say, ‘fiddle with’?) the European Court of Human Rights in order to halt the rise of the far right.

In key data, China’s CPI inflation was unchanged y-o-y at 0.7%, but PPI deflation deepened further to -2.2% from -2.1%. Of course, that shows some economic problems, even if the West would kill for 0.7% CPI. So do reports that major Chinese EV firms are losing money on every vehicle that they sell. But when the quid pro quo is global domination of supply chains now close the point of no return for other countries’ established industries such that no future recovery is then possible, it’s arguably still a tune worth squeezing out of all the instruments of economic statecraft… even if Neo-liberalism burns.

Against that kind of backdrop, the Fed meeting today is just one little note.

Chinese AI startup DeepSeek has been using ‘several thousand’ banned Nvidia Blackwell chips to develop its next major model, The Information reports, citing six people with knowledge of the matter. 

The chips in question were smuggled into China through a complex scheme that involves sending them to data centers in countries that are allowed to purchase them – then dismantling the servers and importing the components to China. 

Doing so allowed DeepSeek to remain competitive in the AI race, as Chinese AI chips are still not sufficient to train AI models – a process in which the models ‘learn’ from mountains of data. While Beijing has pushed for domestic companies to use homegrown alternatives, the Nvidia chips are currently the only ones that can get the job done.

Nvidia’s Blackwell, which shipped in the fourth quarter of 2024, have been used by companies including xAI, Google, Microsoft and OpenAI – which all use hundreds of thousands of B200 chips, along with the prior “hopper” generation H100 / H200 models – to train and operate. 

DeepSeek made headlines in January, when its R1 deep-reasoning model displayed high performance vs. what the company claimed was very minimal cost to train it. Since then, the startup has only made incremental upgrades to their model – which uses a method called ‘sparse attention’ in which only certain parts of the model are used to answer questions vs. the entire model, according to the report. This technique could significantly reduce the costs of ‘inference’ (when AI models send your power bills higher to create cat videos) – which lowers the overall cost to adopt AI. 

Blackwell chips are perfect for this approach, as they include specialized hardware designed to silo various processes and accelerate sparse computing, which can run such calculations nearly twice as fast as traditional methods. 

DeepSeek’s focus on the sparse attention technique has made its model development more challenging and time-consuming, according to the person. The company in September released the V3.2-Exp, which it described as an experimental model serving as “an intermediate step” toward its next-generation model. But applying sparse attention to bigger models is proving to be more complicated, the person said.

Some DeepSeek employees are hoping to roll out the next-generation model by the Lunar New Year holiday in mid-February, according to the person. However, DeepSeek founder Liang Wenfeng, who prioritizes performance over the timeline, hasn’t set a hard deadline for the new model, the person said. –The Information

DeepSeek originally trained its models with older Nvidia A100 chips which launched in 2020 – 10,000 of which were stockpiled by its hedge fund parent, High-Flyer Capital Management before US export restrictions kicked in in 2022. The A100 is two generations older than Blackwell. DeepSeek also used Hopper chips, the generation just before Blackwell, according to company research papers from 2024. 

When Blackwell was unveiled, Nvidia released a design that combines 72 chips in connected server racks weighing 3,000 pounds (1.5 tons) each when fully assembled – taller than the average household refrigerator. While this has been the go-to option for US companies, it’s impossible for smugglers to move it around in suitcases. Instead, they smuggle Blackwell hardware into China in eight-chip servers that are much lighter (about the size of a large suitcase), which are easier to install and repair. 

On Monday, President Trump announced that he would allow the sale of Hopper (H200) chips to China, while Beijing is still deliberating over whether to permit companies to use them. Doing so could reduce demand for smuggled Blackwell chips. 

As The Information notes, DeepSeek’s models are custom-tailored to work with Nvidia hardware and software, making the use of Chinese chips less than ideal. After US export controls kicked in, DeepSeek followed Beijing’s policy priorities and began using Huawei Technologies’ chips instead to train smaller models – while continuing to rely on Nvidia processors for larger and more powerful models. 

In April, the House Select Committee on the Chinese Communist Party called DeepSeek a “profound threat” to US national security – and accused the company of circumventing export controls and potentially stealing intellectual property from US companies. In February, legislation was introduced to prohibit DeepSeek’s chatbot app on federal devices. 

(Is the ‘profound threat’ that the US government can’t control what DeepSeek tells people?)

How They’re Smuggled

In this instance: 

First, chip dealers usually line up non-Chinese data center companies, typically in Southeast Asia, to procure Nvidia chips through authorized sellers. After the chips and accompanying servers are installed in those data centers outside China, Nvidia or its distributors, such as Dell Technologies and Super Micro Computer, dispatch personnel to inspect the equipment on location and make sure it complies with technical standards and export regulations, the people said.

Once the inspection is completed, dealers dismantle the servers and ship them into China. After passing Chinese customs, usually under a false declaration, the chips and servers are installed in data centers that already have leasing agreements with Chinese AI companies, the people added.

The elaborate scheme means the chips can only be ordered and delivered in batches, but it also ensures no paperwork can be traced to the end user.

Last month we noted a WSJ investigation which detailed a different method that keeps the chips physically out of China, but under Chinese control:  

1. Nvidia sells chips to a U.S. partner partly owned by a Chinese firm: Nvidia supplies advanced AI chips to Aivres, a Silicon Valley server builder whose parent company is one-third owned by Inspur—a Chinese tech firm placed on a U.S. national-security blacklist in 2023. While Nvidia is barred from dealing with Inspur or its blacklisted subsidiaries, the restrictions don’t extend to U.S.-based entities like Aivres, allowing the business relationship to continue.

2. Aivres finds an overseas buyer for high-end Nvidia servers: In mid-2024, Aivres negotiated a $100 million deal to sell 32 Nvidia GB200 server racks – containing roughly 2,300 Blackwell-generation chips – to Indosat Ooredoo Hutchison’s cloud-computing division in Indonesia. Indosat is jointly owned by Qatar’s Ooredoo and Hong Kong’s CK Hutchison.

3. The Indonesian buyer lines up a Chinese AI startup as the end user: Indosat agreed to purchase the servers only after securing a major client facilitated by Aivres: Shanghai-based AI startup INF Tech. Negotiations also included representatives from Fudan University, where INF’s founder, Qi Yuan, directs an AI institute.

4. The Chinese startup intends to use the chips for finance and medical AI: By October, the servers had arrived in Indonesia and were being set up. INF plans to use the computing power to train AI models for financial analytics and scientific research, including drug-discovery applications.

According to attorneys familiar with export-control rules, as long as the Chinese company isn’t directly using the chips to help China with military intelligence or weapons of mass destruction, the arrangement doesn’t violate any laws set by the Trump administration. 

Nvidia has responded to The Information, telling the outlet in a written statement: “We haven’t seen any substantiation or received tips of ‘phantom data centers’ constructed to deceive us and our [server manufacturing] partners, then deconstructed, smuggled and reconstructed somewhere else. While such smuggling seems farfetched, we pursue any tip we receive.“

Meanwhile, the company has developed a software feature to track the location of its chips – which could help the company combat chip smuggling, Reuters reported Wednesday. If this feature becomes live, it could ‘severely cripple’ the use of smuggled chips in China. 

USA Rare Earth shares were up more than 3% heading into the cash open on news that the company is accelerating commercialization of its Round Top rare earth project in Texas, a move that could bring U.S. production online years ahead of most competing efforts.

The cash open prompted selling pressure which dragged USAR down 3%

USAR now expects commercial production at Round Top in late 2028—two years ahead of its prior schedule. The deposit is regarded as the richest known U.S. source of heavy rare earth elements, as well as gallium and beryllium. These materials are vital for defense technologies, electric vehicles, renewable energy infrastructure, aerospace components, and advanced electronics, positioning Round Top as the foundation of USAR’s fully integrated “mine-to-magnet” supply chain.

That supply chain also includes:

• a 310,000 sq. ft. magnet manufacturing plant in Stillwater, Oklahoma, expected to become the largest metal-and-alloy-making and strip-casting facility outside China, and

• a processing and separation laboratory in Wheat Ridge, Colorado, supporting domestic mineral refinement and separation.

CEO Barbara Humpton said the accelerated production schedule reflects the company’s growing technical edge and its commitment to strengthen U.S. supply chains amid rising global demand for permanent magnets and heightened geopolitical risk. She called the new timeline an “exciting milestone” made possible by the team’s process engineering, scientific capabilities, and operational ingenuity.

The revised schedule stems from strong solvent-extraction piloting. USAR plans to launch its Hydromet demonstration facility in Colorado in early 2026, where five extraction circuits will run continuously for 2,000–4,000 hours to generate final commercial design data. These circuits will isolate high-value heavy rare earths—especially dysprosium (Dy) and terbium (Tb), essential for high-strength magnets—while also producing other strategic minerals such as hafnium and zirconium.

This parallel-processing approach is projected to save tens of millions of dollars and enable completion of a definitive feasibility study by early 2027. With those milestones accelerated, USAR anticipates entering commercial production in 2028, creating earlier cash flow opportunities while bolstering a secure domestic supply chain.

The news also intersects with rising political emphasis on reshoring strategic minerals. During the Trump administration, rare earth supply security became a national priority amid escalating trade tensions with China, which dominates global processing. Trump issued executive actions directing agencies to reduce U.S. dependence on foreign minerals, opened pathways for funding domestic mining projects, and prioritized rare earths in defense procurement. Continued focus on critical mineral independence in a second Trump term will likely further support companies like USAR as they work to build a fully domestic mine-to-magnet ecosystem.

For the first time, two US Navy F/A-18 fighter jets flew deep into the Gulf of Venezuela, the body of water bordered by Venezuelan territory on three sides, in what appears to be the latest ultra-provocative show of force from Washington. Some reports say the jets lingered long in the airspace, circling the gulf for some 40 minutes.

The flyover happened Tuesday and appears the closest known approach by American aircraft to Venezuela’s coastline since the Pentagon began a major buildup in the Caribbean several months ago, which has also seen over 20 deadly drone and aerial strikes on alleged drug smuggling boats.

The F/A-18s only increased their presence in the southern Caribbean region following the arrival of the USS Gerald R. Ford carrier group. US B-52 bombers have also been flying over the area, deploying from deep within the United States.

A US defense official confirmed to the Associated Press that the jets entered the Gulf of Venezuela, dubbing the maneuver a “routine training mission” – but didn’t disclose whether the jets were armed.

According to Military Times, “Public flight tracking websites showed a pair of U.S. Navy F/A-18 fighter jets fly over the Gulf – a body of water bounded by Venezuela and only about 150 miles at its widest point – and spend more than 30 minutes flying over water.”

The Navy fighters were accompanied by electronic warfare jets, and the group were broadcasting their positions, and so they were intended to be seen:

In addition to the F/A-18s, a pair of Navy EA-18G Growler electronic warfare jets, with the callsigns Grizzly 1 and Grizzly 2, were also tracked flying orbits in the Caribbean just north of the Gulf of Venezuela. One of the Navy’s MQ-4C Triton maritime surveillance drones also flew a mission further out in the Caribbean opposite Venezuela’s coastline at around the same time. It is highly probable that other U.S. military aircraft were also operating in the same broad area, but were not visible online.

The War Zone writes that “the pairing of F/A-18s with EA-18Gs positioned at a distance is precisely the configuration expected in real strike operations against targets in Venezuela.”

Meanwhile, Pentagon chief Pete Hegseth informed congressional leaders Tuesday that he’s still mulling whether to release the complete footage of a Sept. 2 strike on a suspected drug-smuggling vessel that left two survivors dead, despite mounting pressure from lawmakers demanding transparency.

Topping our most track flights list right now: a pair of US Navy F/A-18s over the Gulf of Venezuela. https://t.co/pCIB1qQdSg pic.twitter.com/8Nt548B0mB

— Flightradar24 (@flightradar24) December 9, 2025

Hegseth delivered a classified briefing to top members of Congress alongside Secretary of State Marco Rubio and other senior national security officials. When pressed over whether all Congressional members will be able to view the footage, Hegseth replied that the matter “still needs to be reviewed.”

US equity futures are flat ahead of a Fed meeting where a rate cut is assured (the only question is whether it will be hawkish or dovish) and Oracle results later. As of 8:00am ET, S&P and Nasdaq 100 futures are unchanged, with Mag 7 stocks mixed in premarket trading (TSLA +0.5%, META -0.5%, AAPL -0.3%, NVDA -0.2%). Bond yields are mostly unchanged and the USD is flat ahead of the Fed. Commodities are mixed: oil added 0.2%; base metals are lower (copper -1.1%); silver added 0.6% this morning.  It’s a big day for capital markets, with SpaceX said to be moving ahead with plans for potentially the biggest IPO of all time and South Korean chipmaker SK Hynix exploring a possible New York share listing. US economic calendar includes 3Q employment cost index at 8:30am and the FOMC decision at 2:00pm.

In premarket trading, Mag 7 stocks are mixed (Tesla +0.3%, Nvidia +0.1%, Amazon -0.01%, Apple +0.08%, Microsoft -1.6%, Alphabet -0.7%, Meta -0.8%)

• Aegon ADRs (AEG) fall 7% following the insurer’s capital markets day statement. Morgan Stanley says group operating profit and capital generation targets look a little underwhelming.
• AeroVironment (AVAV) drops 4% after the maker of drones cut its fiscal year adjusted earnings-per-share outlook.
• Biogen (BIIB) dips 3% after HSBC cut the drugmaker to reduce — its lone sell-equivalent rating — from hold, citing limited near-term earnings improvement as well as a risk to long-term earnings power.
• Cracker Barrel Old Country Store (CBRL) declines 6% as it expects sales to fall faster than it previously forecast, showing the country-themed restaurant chain is still struggling following a backlash to its failed logo change earlier this year.
• EchoStar (SATS) is up 4% after Morgan Stanley upgraded the stock to overweight from equal-weight, noting that the satellite company stands to benefit from rising competition among US wireless carriers.
• GameStop (GME) slides 6% after the video-game retailer reported net sales for the third quarter that declined nearly 5% year-over-year.
• GE Vernova (GEV) rallies 11% after the electric power company boosted its buyback to $10 billion, doubled its dividend to 50c, affirmed some aspects of its 2025 guidance and presented its 2026 financial guidance.
• PepsiCo (PEP) rises 1% after JPMorgan upgrades to overweight, citing an “accelerated agenda of innovation and marketing spending fueled by strong productivity savings.”
• Photronics (PLAB) gains 15% after the semiconductor supplier forecast revenue for the first quarter that beat the average analyst estimate.

In other corporate news, Aegon, the Netherlands-based insurer which generates the majority of its profit from the US, confirmed that it will move its headquarters there and rename itself Transamerica. Netflix and Paramount Skydance’s battle to buy Warner Bros. Discovery will probably stretch well into 2026. Money manager Mario Gabelli signaled support for Paramount and sees the bidding war as being “in the early rounds.”

Traders are holding off until after the Fed, which as we discussed in our preview, has the tough task of messaging about its next move without all the data and amid deep division among policymakers. Some analysts are betting on as many as four (if not more) dissents, and the Fed has to “walk a fine line,” said Diane Swonk, chief economist at KPMG.

In the US, recent economic data have shown that the economy is cooling in a manner consistent with what the Fed wants, but not weak enough to accelerate rate cuts, wrote Linh Tran, market analyst at XS.com. Inflation is easing but still above target, while the labor market continues to show some resilience.

“This combination provides little incentive for investors to continue buying at elevated valuations, yet does not offer sufficient reason for them to sell aggressively,” Tran said. “What the market needs at this moment is a clearer policy signal from the Fed.” Our full Fed preview note is here.

Oracle’s earnings will also help set the tone for the final few weeks of 2025: The stock is down about 33% in three months, with investors increasingly concerned about its high leverage and an AI bubble. Still, Andrew Cole, head of multi-asset investing at Pictet Asset Management, said he doesn’t think the AI trade is over-owned and that he’s “happy” to be overweight US stocks. Eslewhere, Bloomberg reported that Elon Musk’s SpaceX is said to be pushing on with plans for an IPO that would seek to raise significantly more than $30 billion, targeting a valuation of about $1.5 trillion for the entire company. AI memory chipmaker SK Hynix, meanwhile, could close its valuation gap with Micron via a potential New York listing. 

There’s a bit more action in fixed income than stocks, with yields on a Bloomberg gauge of long-dated government bonds at a 16-year high. Traders are now pricing virtually no more rate cuts from the ECB, an all-but-certain hike this month in Japan and two quarter-point increases next year in Australia.

In government news, Trump said he will be looking at a couple of candidates to chair the Fed. The US is proposing that foreign visitors provide their social media history over the last five years to enter the country. Canada’s ambassador to Washington and chief trade negotiator with the US, Kirsten Hillman, will leave office in the new year, and a former BlackRock senior executive is said to be the leading contender for the job.

And in the bigger picture on AI, Oaktree’s Howard Marks cautioned that AI has created a “terrifying” outlook for employment. A Bloomberg Intelligence survey showed that two-thirds of financial services companies will likely see staff numbers rise initially as they adopt AI. The long term is less clear.

European equities are mostly lower with the Stoxx 500 down 1.3%. The FTSE 100 is bucking the trend, higher by 0.2% amid gains in HSBC. The energy sector outperforms, while automakers lag. Here are some of the biggest movers on Wednesday:

• Abivax shares jump as much as 19% to their highest level on record amid speculation around a takeover of the biotechnology company.
• Nordex shares rise as much as 7.1% after the wind turbine maker announced a new conditional order in the US, which analysts at Metzler Capital Markets said represents the firm’s re-entry into the large and important US market.
• Delivery Hero shares climb as much as much as 9% as the firm weighs options to improve its finances and operations, pressured by major shareholders to conduct a strategic review.
• Ocado shares climb as much as 6.3% after a report by consumer intelligence company NielsenIQ showed the online grocer remains the fastest growing food retailer in the UK.
• KAP rises as much as 13% in Johannesburg, the most since August, after the logistics company said the effects of issues affecting group performance have eased.
• Vestas Wind Systems shares rise as much as 5.1% to their highest level since August after Kepler Cheuvreux upgrades the Danish wind turbine maker to buy from reduce and doubles its price target.
• Aegon shares drop as much as 9.7% after sharing group operating profit and capital generation targets which Morgan Stanley says look a little underwhelming.
• Cicor shares slump as much as 29%, the most since 2001, after it cut its guidance, citing lower-than-expected demand in Germany and adverse currency effects.
• Clas Ohlson falls as much as 17%, the most since 2022, after its current trading statement implied a ““modest slowdown from previous exceptionally strong growth,” in DNB Carnegie’s words.
• Mr Price shares slump as much as 12%, the most on record, amid market concerns that the South African clothing chain is overpaying for the retail business of NKD Group to expand in central and eastern Europe.

Earlier in the session, Asian equities edged higher, as investors stay cautious ahead of the Federal Reserve’s final interest rate decision of the year. The MSCI Asia Pacific Index rose as much as 0.3% after trading in a range for most of the session. SK Hynix provided a boost after the Korean chipmaker said it’s exploring the possibility of listing shares in New York. Benchmarks gained in Taiwan, while those in South Korea fell. Sentiment remains muted as traders await policy signals from the Fed for the coming year. Chinese onshore and offshore stocks narrowed earlier losses as property shares gained in the afternoon on speculation of new policy stimulus and bets on progress in China Vanke Co.’s debt-restructuring talks. Widespread deflationary pressures in the world’s second-biggest economy also weighed on China shares despite data showing consumer price growth accelerated in November. China’s stocks have been losing steam after a stellar run earlier this year, dragged by concerns over valuations, weak economic data and lack of stimulus signals from government leaders. The MSCI China Index is now less than 2% away from entering a technical correction. 

In FX, the dollar is softer versus all peers-ex the loonie with the BOC expected to hold; traders are expecting a third consecutive Fed rate cut on Wednesday, while the focus will be on the central bank’s latest dot plot, economic projections and comments from Chair Jerome Powell.

In rates, ten-year Treasuries are down but to a lesser extent as traders await a widely-expected 25bps FOMC. European fixed income has remained pressured as traders continued to ramp up ECB interest-rate hike bets amid comments from ECB’s Simkus and Lagarde, with the latter flagging potential upgrades to growth forecasts. A 25bps increase by end-2026 is now seen at around 50%. Bunds are down 20 ticks. OATs are lower by 27 ticks and unable to gain any reprieve from Tuesday’s passage of the French social security bill as lawmakers still need to vote on the full budget. rate cut.

In commodities, there’s diverging fortune for precious metals, with spot gold down 0.4%, spot silver up 0.5% and continuing to eke out all-time highs. WTI oil futures are higher by 0.5%. 

US economic calendar includes 3Q employment cost index at 8:30am and the FOMC decision at 2:00pm.

Market Snapshot

• S&P 500 mini -0.1%
• Nasdaq 100 mini -0.2%
• Russell 2000 mini -0.3%
• Stoxx Europe 600 -0.2%
• DAX -0.5%
• CAC 40 -0.3%
• 10-year Treasury yield +2 basis points at 4.21%
• VIX +0.5 points at 17.44
• Bloomberg Dollar Index little changed at 1214.25
• euro little changed at $1.1637
• WTI crude +0.2% at $58.39/barrel

Top Overnight News

• Trump will soon launch a final round of interviews for Fed Reserve chair, pitting White House economic advisor Kevin Hassett against a trio of other candidates to replace Jay Powell. The decision to carry on with the additional interviews shows Hasset’s selection is not guaranteed. FT
• White House Economic Adviser Hassett said as Fed chair, he would be apolitical, according to a Fox Business interview.
• Senate Majority Leader John Thune (R., S.D.) said he would hold a vote later this week on a Republican measure aimed at controlling healthcare costs, amid party division over how best to head off big price increases next year for millions of households. The measure aims to provide an alternative to a Democratic proposal that extends the ACA subsidies for three more years. It is not expected to pass. WSJ, NBC
• The FOMC is widely expected to deliver a third consecutive 25bp interest rate cut to 3.5-3.75% at what will likely be a contentious December meeting. Most investors expect a hawkish cut, though this could be interpreted in a number of ways. It is not realistic to expect the FOMC to box itself in too much by signaling a very strong bias toward a pause in January because if the labor market is still actively softening at that point, a cut might be appropriate. In fact, participants will be even more uncertain than usual about what will be appropriate at the next meeting because we are now two employment reports behind schedule. Goldman
• Money markets see a 50% chance of a 25bps ECB rate increase by the end of 2026 as traders continue to price a tightening scenario after hawkish remarks by policymaker Isabel Schnabel earlier this week. BBG
• Ukraine and its European partners will soon present the U.S. with “refined documents” on a peace plan to end the war with Russia, President Volodymyr Zelenskiy said on Tuesday. Kyiv is under pressure from the White House to secure a quick peace but is pushing back on a U.S.-backed plan proposed last month that many see as favorable to Moscow. RTRS
• Chinese property stocks surged on speculation of new policy stimulus and bets on progress in China Vanke Co.’s debt-restructuring talks. BBG
• China’s consumer inflation gained pace in November but was slightly below expectations, benefiting from a low base while factory deflation worsened. CPI for Nov was inline at +0.7% (a sharp jump from +0.2% in Oct) while PPI deflation worsened to -2.2% (vs. the Street -2% and softer than -2.1% in Oct). WSJ
• Indonesia’s trade deal with Washington is in danger of collapsing as US officials become increasingly frustrated at what they view as Jakarta reneging on the terms of the agreement reached in July. FT
• Amazon pledged to invest $35 billion in India over the next five years.

Trade/Tariffs

• US Manufacturers are reportedly pulling back “harder” on orders of parts and raw materials due to uncertainty on the US Administration’s tariff policy and SCOTUS ruling, according to WSJ, citing a survey.
• US President Trump said they have taken in hundreds of billions of dollars from tariffs, but added shortly after that it is actually trillions.
• US-Indonesia trade deal is at risk of collapse as USTR Greer believes Indonesia is backtracking on several commitments it made, while Indonesian officials have told Greer that Jakarta cannot agree to some binding commitments in the deal, according to FT. However, an Indonesian government source said Indonesia’s tariff negotiation with the US is on track as per the leaders’ joint statement, while an official also said that the trade negotiation with the US is still ongoing, with no specific issues arising during the negotiations.
• US Trade Representative Greer said the Trump administration has made it clear to South Africa that they need to address trade barriers if they want a better tariff situation with the US, while he is open to different treatment and possible exclusion of South Africa if the US renews the African Growth and Opportunity Act.
• US Trade Representative Greer said China’s rare earths continue to flow and expects to sign more trade deals over the coming weeks.
• China added domestic AI chips to its official procurement list for the first time, according to FT.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued amid cautiousness ahead of today’s Fed policy decision and dot plots, while the region also digested the latest Chinese inflation data. ASX 200 was flat as weakness in tech, industrials, energy, health care and financials was counterbalanced by  resilience in miners, materials and resources. Nikkei 225 initially rallied to above the 51,000 level following recent currency weakness, but then reversed course as yields briefly edged higher on BoJ rate hike risks. Hang Seng and Shanghai Comp retreated following mixed inflation data, which showed CPI Y/Y accelerated to its highest in almost two years, but PPI was softer-than-expected and showed a worsening deflation in factory gate prices. There were also several trade-related dampeners, including reports that China’s US soybean purchases are falling short of targets, while it was also reported that China is set to limit access to NVIDIA’s H200 chips despite export approval from US President Trump, and that chips exported to China will undergo a special security review.

Top Asian News

• Japanese PM Takaichi said they are closely watching market moves when asked about rising yields. Takaichi also commented that it is important for currencies to move in a stable manner reflecting fundamentals and will take appropriate action for excessive and disorderly FX moves, while she added that a weak yen has both merits and demerits. The Government are working closely with the BoJ, expects the BoJ to conduct appropriate monetary policy to achieve a stable 2% price target
• RBNZ Governor Breman said the RBNZ has achieved a great deal towards the delivery of its mandated functions, while she added they are keeping a close look at data, including inflation and GDP. Breman also said there is no preset course for monetary policy and will adjust if they see the outlook for inflation change.
• Japan’s Government is considering expanding the tax bracket for the ultra-rich to increase tax revenues, according to NHK.

European bourses (STOXX 600 -0.1%) slipped at the open, with all major European indices in negative territory amidst a lack of “good” macro news, an unfavourable yield environment and key risk events ahead. European sectors continue to hold the negative bias they opened with. At the top of the pile is Basic resources, as the copper rally, which stalled on Tuesday, gains legs once again. Media also does well with WPP +3.2% extending on recent gains after receiving a significant government contract. To the downside, Autos underperforms with the largest constituent Ferrari -2.5% after being initiated Equal Weight at Morgan Stanley.

Top European News

• ECB’s Villeroy said he is in favour of a 4.8% budget deficit for 2026, but it will not be reached. Suspending pension reforms does not solve of financing pensions issue. The Bank of France will upgrade France’s GDP forecasts. It would be wise to maintain ECB rates at the current level.
• ECB’s Simkus said interest rates do not need to be lowered further, via Bloomberg.
• ECB President Lagarde says we remain in a good place and may upgrade projections again in December.
• UK Chancellor Reeves said she can rule out capital gains tax on primary residences in this parliament. Can rule out scrapping the pension triple lock in this parliament.
• Morgan Stanley no longer expects the BoE to cut rates in March 2026; continues to see a cut in February, April and June to take the terminal rate to 3%.

FX

• DXY has been choppy within a 99.017-99.258 range with focus now on today’s FOMC meeting; the central bank is expected to announce a 25bps rate cut, though dissent from several policymakers is anticipated. A full preview is available in the Newsquawk Research Suite. Overnight attention has centred on trade developments, with CNBC noting that China has resumed purchases of US soybeans, though it remains behind the targets outlined in the Trump trade deal. On the Fed front, the FT reported that President Trump is set to begin the final round of interviews for the next Fed Chair, with senior officials still viewing White House NEC Director Hassett as the leading candidate.
• G10s have been moving in tandem with the USD. EUR was unreactive to earlier remarks from ECB’s Villeroy and Simkus, with Villeroy concentrating on the French economy, while Simkus indicated that further rate cuts are unnecessary — a view echoed by market pricing, which suggests rates will remain unchanged through 2026. Further for the EUR, on Tuesday, the French National Assembly approved the social security budget in a narrow vote, passing by just 13 votes — a close outcome in line with analysts’ expectations. Notably, all of President Macron’s Renaissance lawmakers backed the bill, while Les Républicains showed a more divided stance. For GBP, recent BoE commentary has offered little new for UK rates. EUR/USD is choppy within a 1.1622-1.1658 range, with GBP/USD in a 1.3296-1.3327 band.
• USD/JPY is flat after Tuesday’s rise to just below the 157.00 level, which prompted the usual round of verbal intervention from Japanese officials. Meanwhile, PPI figures overnight came in as expected and had minimal effect on the currency. USD/JPY trades in a narrow 156.56-156.94 range vs Tuesday’s 156.96 high.
• Antipodeans trade in tandem with the USD in a quiet FX session, with overall risk sentiment muted ahead of the Fed decision. Chinese inflation data overnight were mixed — CPI rose to its fastest pace in nearly two years, while a softer-than-expected PPI reading pointed to deeper deflation at the factory gate.

Fixed Income

• USTs started the European session flat, but have since slipped marginally into the red, alongside global peers. Currently trading at the bottom end of a 111-30 to 112-04+ range – the trough marks a new weekly low and is now trading at levels not seen since early September. From a yield perspective, rates are higher across the curve, with the belly leading. Focus overnight has been on trade developments, with CNBC reporting that China is buying US soybeans again, but is reportedly falling short of the goal set by the Trump trade agreement. Turning to the Fed, the FT reported that President Trump will begin the final round of Fed Chair interviews – but senior officials still expect the White House NEC Director Hassett as the frontrunner. Now attention turns to the FOMC later today.
• Bunds are also on the back foot and underperforming vs peers, but nothing really behind the underperformance in EGBs. Bunds Mar’26 is currently trading towards the lower end of a 127.05 to 127.49 range, with the trough marking a contract low. Earlier, there was some commentary via ECB’s Villeroy and Simkus, where the former focused on the French economy, whilst the latter suggested that the policy rate does not need to be lowered further – a move also concurred by market pricing, which sees rates steady through 2026. Elsewhere, Gilts also hold a negative bias and hold at the bottom end of a 90.71 to 91.04 range. Recent BoE speak has been non-incremental for UK paper.
• OATs are also in the red, and to a similar magnitude as peers. French political developments on Tuesday saw the National Assembly approve the social security budget. The bill narrowly passed with 13 votes, with analysts expecting a tight decision; interestingly, all of President Macron’s Renaissance voted in favour, whilst the Les Republicans were a little more mixed. OATs have not really celebrated the approval, with price action near enough following peers, not all too surprising as traders now turn their attention to the state budget.
• UK sells GBP 4.5bln 4.75% 2035 Gilt: b/c 3.05x (prev. 2.84x), average yield 4.613% (prev. 4.608%), tail 0.3bps (prev. 0.6bps)

Commodities

• Crude benchmarks trade in tight ranges as the European session gets underway, following the selloff in Tuesday’s session. WTI and Brent oscillate in a USD 58.08-58.47/bbl and USD 61.76-62.16/bbl band as markets await a clear catalyst to drive oil prices.
• Spot XAU remains mid-range of the wider USD 4163-4265/oz band that has been forming over the past 8 days as markets await a Fed rate decision. A view of price action so far in today’s session shows a peak of USD 4219/oz in the early hours of the APAC session before gradually dipping back below USD 4200/oz as the European session gets underway. Newsflow has been light ahead of the FOMC rate announcement.
• 3M LME Copper started the APAC session on the front foot has continued to hold onto earlier gains as the European session gets underway, despite cooler-than-expected Chinese CPI and PPI. The red metal drove higher straight from the open from USD 11.5k/t to a peak of 11.64k/t, before pulling back to a low of USD 11.58k/t. 3M LME Copper still remains within parameters set earlier in the day but is currently crawling back to session highs.
• Iraq’s Oil Minister said 13mln oil barrels have been exported from Kurdistan region via the Iraqi-Turkish pipeline so far.

Geopolitics: Ukraine

• Ukraine President Zelensky sees leader-level talks with the US next week, and said Ukraine is ready for an energy ceasefire if Russia agrees, while he wants to discuss restoration of Ukraine as part of peace plan preparation with the US. Zelensky also said they are ready to hold elections and ask US and European partners to guarantee security during the process, as well as noted that if security is guaranteed, elections could be held in the next 60-90 days.
• Russia’s Foreign Minister Lavrov said Russia has no intention of fighting a war with Europe, via Al Arabiya; adds that Russia will respond if European forces are deployed in Ukraine. Agree to work on a settlement in Ukraine with the US. The efforts from US President Trump are appreciated to resolve the crisis in Ukraine.

Geopolitics: Other

• US President Trump said he will have to make a call on Wednesday about Thailand and Cambodia, while he commented that the two countries are at it again.
• Japanese Defence Minister Koizumi said there is no truth that Japan also aimed radar at Chinese aircraft, while he added that China did not provide specific details about naval training exercises in communication with Japan’s Maritime Self-Defense Force. Furthermore, he said Japan demands that China prevent the recurrence of dangerous acts which exceed the necessary range for safe aircraft operations.

US Event Calendar

• 7:00 am: Dec 5 MBA Mortgage Applications, prior -1.4%
• 8:30 am: 3Q Employment Cost Index, est. 0.9%, prior 0.9%
• 2:00 pm: Dec 10 FOMC Rate Decision 
• 2:00 pm: Nov Federal Budget Balance, est. -195b, prior -366.76b

DB’s Jim Reid concludes the overnight wrap

Markets were in a holding pattern yesterday, with equities posting small moves as investors awaited the FOMC decision and Chair Powell’s press conference tonight. So the S&P 500 (-0.09%) posted a modest decline, and futures for the index (-0.01%) remain flat this morning. However, the bond selloff continued in several places, with 10yr Treasury yields (+2.4bps) drifting up to a three-month high as investors kept dialling back their expectations for rate cuts next year. In fact in Australia overnight, their 10yr yield (+3.7bps) has just hit its highest level since late-2023, so that momentum has shown few signs of letting up. To be fair it wasn’t all bad news, with the Franco-German 10yr spread closing at its tightest since August, shortly before lawmakers went on to back the social security budget. But as investors have pivoted to expect rate hikes next year for many countries, sovereign bonds have struggled across the board.

When it comes to the Fed’s decision tonight, it’s widely expected that they’ll deliver another 25bp rate cut, which would be the third consecutive rate cut since the September meeting. At their last meeting in late-October, Chair Powell had said that a December cut was “not a foregone conclusion – far from it.” But since then, the subsequent jobs report for September showed a further uptick in the unemployment rate, to 4.4%, which strengthened the dovish arguments and led markets to price back in another cut for today. So futures are pricing in a 90% chance of a cut as we go to press.  
Beyond the immediate policy decision, our US economists also expect there to be dissents in both a hawkish and dovish direction. So to forge a consensus behind a rate cut today, they anticipate the statement and press conference will signal that the hurdle is relatively high for another cut in early 2026. Remember as well that we’ll also get the latest Summary of Economic Projections, containing the dot plot for where officials expect rates to move in the years ahead. Our economists think the median dots will stay unchanged, consistent with one further 25bp cut in each of 2026 and 2027. See their full preview here for more details. 

Beyond today however, there’s been mounting speculation more broadly that central banks are increasingly finished with their rate cutting cycles. Indeed, those moves got further support after the latest batch of US data, which showed that job openings rose to a 5-month high of 7.670m in October (vs. 7.117m expected). So that pushed back against fears of a deteriorating labour market and helped push front-end Treasury yields higher. Admittedly, there were some less positive details, and the quits rate of those voluntarily leaving their job fell to a 5-year low of 1.8%. But overall, investors were reassured by the rise in openings, with the amount of Fed cuts priced by December 2026 down by -5.7bps to 72bps. And in turn, the 2yr Treasury yield (+3.8bps) moved up to 3.61%, whilst the 10yr yield (+2.4bps) rose to 4.19%.

Staying on the Fed, the FT reported yesterday that Trump would soon conduct a final round of interviews with the candidates for Fed Chair. The article said that officials thought NEC Director Kevin Hassett was still “in pole position”, and Trump separately said to reporters on Air Force One that “I have a pretty good idea of who I want”. Interestingly though, the article floated that there had been discussion about Hassett serving a shorter term, potentially by moving into Powell’s seat on the Board of Governors, which expires in January 2028. So that would leave the option of nominating a different Fed Chair later in Trump’s term. We did hear from Hassett as well yesterday, who said there was “plenty of room” for more cuts, although markets didn’t have too much reaction given that was in line with his previous comments for more easing. However, the FT report saw Hassett’s odds of becoming chair move a bit lower on Polymarket, and they currently stand at 71% as we go to press this morning. 

In the meantime, equities didn’t see too much of a reaction to all this, with the S&P 500 (-0.09%) posting a marginal decline, whilst the NASDAQ (+0.13%) and small-cap Russell 2000 (+0.21%) both moved higher. In terms of the outperformers, the Magnificent 7 (+0.26%) did see a stronger gain, but traditional blue chip stocks underperformed amid higher rates, leaving the Dow Jones down -0.38%. Meanwhile, JPMorgan (-4.66%) was the third-worst performer in the S&P 500 after warning of higher-than-expected costs.   

Over in Europe, the spotlight was on France yesterday, where lawmakers backed the social security budget with a narrow 247-234 margin in the final vote. However, achieving this majority came at the cost of a higher underlying deficit for 2026 because of the pension reform suspension and increased health spending. Nevertheless, the signs of progress were met positively by markets, and the Franco-German 10yr spread reached its tightest since late-August yesterday, at 71bps. However, the political fragmentation is still clear, and attention will now turn to the State budget, which is due to be approved no later than December 23 and where agreement remains distant.  

Elsewhere in Europe, sovereign bonds rallied across the board, with yields on 10yr bunds (-1.2bps), OATs (-2.8bps) and BTPs (-1.8bps) all falling back. However, for equities it was more mixed, with the STOXX 600 (-0.10%) narrowly losing ground. That came amidst an outperformance in Germany, with the DAX up +0.49% after Bloomberg reported that lawmakers were set to approve €52bn in defence orders next week. The news saw defence stocks outperform, with the STOXX Aerospace & Defense Index up +0.79%, whilst Rheinmetall was up +3.56%.  

Overnight in Asia, we’ve seen losses across the major equity indices before the Fed’s decision. Chinese equities have struggled, with the CSI 300 (-0.88%) and the Shanghai Comp (-0.76%) posting declines, but we’ve also seen losses for the KOSPI (-0.27%) and the Nikkei (-0.44%) as well. Staying on China, the latest data overnight has shown that CPI inflation moved up to +0.7% in November, an increase from +0.2% in October. The move was in line with consensus, but also marks the fastest pace since February 2024. However, PPI inflation remained in deflationary territory for a 38th consecutive month, coming in at -2.2% (vs. -2.0% expected).   

To the day ahead, the biggest event will be the FOMC’s decision and Chair Powell’s press conference. Other central bank events will be the Bank of Canada’s decision, and we’ll also hear from ECB President Lagarde.  In terms of economic releases, we’ll see the US Q3 employment cost index, and Italy’s industrial production for October. Finally, earnings releases include Oracle and Adobe.

Authored by Stephen Katte via oinTelegraph.com,

The US Commodity Futures Trading Commission has issued updated guidance for tokenized collateral in derivatives markets, paving the way for a pilot program to test how cryptocurrencies can be used as collateral in derivatives markets.

Collateral in derivatives markets serves as a security deposit, acting as a guarantee to ensure that a trader can cover any potential losses. 

The digital asset pilot, announced by CFTC acting chairman Caroline Pham on Monday, will allow futures commission merchants (FCM) – a company that facilitates futures trades for clients – to accept Bitcoin, Ether and Circle’s stablecoin USDC for margin collateral.

The CFTC pilot is another step toward integrating crypto into regulated markets, and Circle CEO Heath Tarbert said it will also protect customers, reduce settlement frictions and assist with risk reduction. 

Pham said in a statement that the pilot program “establishes clear guardrails to protect customer assets and provides enhanced CFTC monitoring and reporting.”

As part of the pilot, participating FCMs will be subject to strict reporting criteria, which require weekly reports on total customer holdings and any significant issues that may affect the use of crypto as collateral. 

Source: Caroline Pham

Updated CFTC guidance for tokenized assets

The CFTC’s Market Participants Division, Division of Market Oversight, and Division of Clearing and Risk also issued updated guidance on the use of tokenized assets as collateral in the trading of futures and swaps.

The guidance covers tokenized real-world assets, including US Treasury’s money market funds, and topics such as eligible tokenized assets, legal enforceability, segregation and control arrangements.

Pham said in an X post on Monday that the “guidance provides regulatory clarity and opens the door for more digital assets to be added as collateral by exchanges and brokers, in addition to US Treasurys and money market funds.”

At the same time, the Market Participants Division issued a “no-action position” on specific requirements regarding the use of payment stablecoins as customer margin collateral and the holding of certain proprietary payment stablecoins in segregated customer accounts.

A CFTC Staff Advisory that restricted FCMs’ ability to accept crypto as customer collateral, Staff Advisory 20-34, was also withdrawn because it is “outdated and no longer relevant,” in part due to the GENIUS Act.

Crypto execs back CFTC move

Several crypto executives applauded the move by the CFTC.

Katherine Kirkpatrick Bos, the general counsel at blockchain company StarkWare, said the use of “tokenized collateral in the derivatives markets is MASSIVE.”

“Atomic settlement, transparency, automation, capital efficiency, savings. Feels abrupt but who recalls the tokenization summit in 2/24, a glimmer of hope in the darkness,” she said.

Coinbase chief legal officer Paul Grewal also supported the action, calling Staff Advisory 20-34 a “concrete ceiling on innovation.”

“It relied on outdated info, went well beyond the bounds of regulation and frustrated the goals of the PWG.”

Source: Paul Grewal 

Salman Banaei, the general counsel at layer-1 blockchain the Plume Network, said it was a “major move” by the CFTC, and another push toward wider adoption.

“This is a step toward the use of onchain infra to automate settlement for the biggest asset class in the world: OTC derivatives, swaps,” he added.

At a rally in Pennsylvania on Tuesday night, President Trump told the crowd he will be “making a phone call” to the leaders of Thailand and Cambodia to urge peace and help resolve their ongoing border dispute.

“Who else could say, ‘I’m going to make a phone call and stop a war of two very powerful countries. We’re making peace through strength,” Trump told the audience.

Trump Says He’ll Ring Cambodia, Thailand Over Return of Border Skirmishes

President Donald Trump said he intends to contact the leaders of Thailand and Cambodia following the renewed border clashes, which he listed among eight disputes he claims to have defused using tariff… pic.twitter.com/9ZmeqPAAjy

— Cambodianess (@TTNEnglish) December 10, 2025

Heavy fighting has erupted again earlier this week along the 500-mile Thailand-Cambodia border, leaving at least a dozen people dead and forcing more than half a million to flee.

Footage of the chaos:

#Breaking: That was huge! This footage shows Royal Cambodian Army using precision guided artillery rockets and ballistic missiles to target a Thai border post on the #Cambodia–#Thailand borderline. These 300mm rockets were launched by a Chinese made PHL-03 self-propelled 12-tube… pic.twitter.com/mDr01v0Sol

— Babak Taghvaee – The Crisis Watch (@BabakTaghvaee1) December 9, 2025

🇹🇭🇰🇭 Cambodian forces are using residential areas to launch rockets

The Cambodian military has been shelling Thai Army positions with multiple‑rocket launchers throughout the morning.

Reports also indicate that Cambodia is moving tanks and additional fire systems toward the… pic.twitter.com/mLW6pi5uNS

— Visegrád 24 (@visegrad24) December 10, 2025

Forces of the Royal Thai Army, supported by M1126 “Stryker” Infantry Fighting Vehicles, advance into a residential area near the border in Northern Cambodia as fighting escalates between the two countries, with a soldier seen laying down suppressing fire using an M2 Browning… pic.twitter.com/GqBbP70t9n

— OSINTdefender (@sentdefender) December 10, 2025

In July, Trump pressured both countries with potential trade restrictions, which helped produce a temporary peace deal over the summer, but the conflict has since spiraled out of control in recent days.

“Bangkok’s resistance is a test for Trump’s tariff play, but the tariff has always been a blunt instrument,” Chong Ja Ian, a political science professor at the National University of Singapore, told Reuters, adding, “Whether it can get a lasting ceasefire over longstanding and deep-seated animosities has been and is doubtful.”

Trump has recently positioned himself as a mediator in several international disputes as part of his pursuit of a Nobel Peace Prize. The US also signaled to Kyiv this week that reaching a peace agreement by Christmas Day is crucial.