In a surprise move, Republican New York Rep. Elise Stefanik has not only pulled the plug on her recently-launched gubernatorial campaign, but will also refrain from seeking reelection to the US House. The decisions cap a year in which the ardent backer of Donald Trump has been through a hot-and-cold relationship with the mercurial president that’s seen him first cancel her nomination to serve as UN ambassador and then fail to endorse her in the governor’s race. 

Stefanik dropped the big news in a lengthy afternoon post on X. Key excerpts:  

“While spending precious time with my family this Christmas season, I have made the decision to suspend my campaign for Governor and will not seek re-election to Congress… While we would have overwhelmingly won this primary, it is not an effective use of our time or your generous resources to spend the first half of next year in an unnecessary and protracted Republican primary, especially in a challenging state like New York… 

While many know me as Congresswoman, my most important title is Mom. I believe that being a parent is life’s greatest gift and greatest responsibility… I will feel profound regret if I don’t further focus on my young son’s safety, growth, and happiness — particularly at his tender age.”  

The 41-year-old Stefanik was first elected to Congress in 2014, after her campaign as a moderate helped her flip her upstate New York seat back into the GOP column — taking it from a Democrat who’d ruined a Republican winning streak in the district that spanned a century. As Trump’s first term unfolded, Stefanik strayed from the moderation of her campaign and increasingly aligned herself with Trump, calling herself “ultra MAGA.” 

Stefanik’s national profile surged in December 2023 with her heated grilling of the presidents of Harvard, Penn and MIT, who she accused of tolerating antisemitism on their campuses amid protests over Israel’s devastation of Gaza following the Oct 7 Hamas invasion of Israel. Critics contended that Stefanik wielded a false definition of “antisemitism,” equating common pro-Palestinian slogans — such as “Palestine will be free from the river to the sea” — with “calling for the genocide of Jews.” Regardless, Stefanik’s questioning of the university presidents was enormously impactful: Video of her histrionic performance went viral, and Penn president Liz Magill and Harvard president Claudine Gay both announced their resignations within weeks. 

She was poised to rise to even greater visibility when Trump nominated her to serve as ambassador to the UN in his second term. Stefanik’s Zionist credentials made her a perfect fit for that role, which, even more so in a Trump administration, disproportionately centers on advancing the Israeli agenda. However, in March, Trump yanked her nomination over concerns that pulling her from Congress would endanger the GOP’s thin House majority. Compounding the gut-punch, by that time, Stefanik had already resigned as chair of the House GOP caucus — the fourth-ranked Republican slot in the House.  

More indignities awaited. When socialist New York mayor-elect Zohran Mamdani visited the Oval Office in November, a reporter referenced Stefanik’s condemnation of Mamdani as a “jihadist” and asked Trump if he agreed. Trump disagreed, praising Mamdani as a “very rational person…a man who really wants to see New York be great again.” 

Q: Stefanik has called Mamdani a ‘jihadist.’ Do you think you’re standing next to a jihadist right now?

TRUMP: No, I don’t. I met with a man who’s a very rational person pic.twitter.com/DrdUFhwNHX

— Aaron Rupar (@atrupar) November 21, 2025

Next came an in-person White House embarrassment. Last month, Stefanik announced her candidacy for governor, in a bid to oust Democratic incumbent Kathy Hochul. Long Island Republican Bruce Blakeman, also a Trump ally, then announced his own candidacy. Last week, with Stefanik standing next to Trump, reporters asked him about the contest. Trump merely said Stefanik has “got a hell of a shot at it...she’s got a little competition with a very good Republican, but she’s a great Republican, so we’ll see what happens.” Earlier in the month, when asked if he had a preference, he merely said, “They’re both great people.” 

A December Siena College poll had Stefanik trailing Hochul by 19 points. Stefanik’s favorability rating was a lousy 22% against 33% unfavorable. Her departure from the governor’s race comes after she raised more than $12 million for the bid. It’s not clear what she’ll do with that cash horde. She could refund it to her donors, but under federal law, she has other options, like reallocating money to other candidates or PACs, or keeping it for a possible future run at another office.  

Authored by Matt Lamb via The College Fix,

Every year, The College Fix likes to remind readers of what higher education declared racist in the past 12 months.

From Taylor Swift, to liking Mozart, our scholars and so-called “experts” never cease to find racism hiding under every rock and in every tree.

The list is grouped as reasonably as possible.

Some things are presumed “racist” if they require an “equity lens.”

For example, Minnesota State Mankato requires that assistant football coaches view their jobs through an “equity lens.”

This implies coaching football suffers from racism and needs a DEIntervention.

The full list of articles can be found here.

Activities:

Coaching football

Concepts:

Capitalism

Colonialism

Merit

Events:

Kamala Harris losing 2024 presidential election

Groups:

Immigration and Customs Enforcement

National Football League

Police

Pro-life Christians

Turning Point USA

University of Oklahoma Sigma Alpha Epsilon fraternity members

“White churches”

Medicine:

Dark green acne masks

Healthcare in general

Pediatric cancer care

Pregnancy care (sometimes)

White doctors

People:

American pioneers

Charlie Kirk

Conservatives

Elon Musk

Indiana Governor Mike Braun

Israeli actress Noa Tisby

John Winthrop

President Donald Trump

Rush Limbaugh

Stonewall Jackson

Voters who didn’t support Kamala Harris (majority of the country)

White men

White people in general

White students

White women

Places

The British countryside

Schools

University of Chicago

University of South Carolina dance school

Hofstra University 

Policies:

Arresting illegal immigrants

Asking black students to write positively about themselves

Asking students for update on work

Bonuses for having babies

Depicting Jesus as white

Keeping men out of women’s prisons

Localization

Not funding a tiny black college with a subpar graduation rate

Opposing DEI

Portraying a black mom using marijuana

Prohibitions on abortion

Trump creating a lot of news stories

Subjects:

Art

Chemistry

Culinary arts

English/grammar

Marine Science

Math

Social Work

Literature

Things:

James Bond novel “Dr. No.”

Mars rover

Michelin restaurant guide

Monuments to American pioneers

Tesla Cybertruck

Words and phrases:

‘Carrot top’ (when directed at a Latino)

‘Carrot cake’ (when directed at a Latino)

‘Field’

‘Mob rule’

Disgraced DC Police Chief Pamela Smith appeared completely unhinged during her exit speech at Metropolitan Police Department headquarters on Friday, shouting, “To all my haters, f*ck you.”

“Never would I compromise my integrity. Never would I compromise 28 years in law enforcement for a few folk who couldn’t stand to be held accountable. And if I had to do it all over again… so I’m going to the Bible when I say this: to my haters, F you,” Smith emphasized.

She continued, “The same folks who said in that report that they changed their numbers and I did not. The report is very clear. I did not direct anyone. You should investigate those folks.”

🚨 WTF?! DC’s DEI police chief Pamela Smith just had a SCREAMING MELTDOWN while giving her resignation speech, after she was caught fudging crime stats

“I’m going to the BIBLE when I say this: TO MY HATERS, F YOU!”

This person should’ve NEVER been in ANY position of power.… pic.twitter.com/KqHLVqoRkL

— Nick Sortor (@nicksortor) December 19, 2025

Smith’s erratic behavior is totally unacceptable at such a high level and only raises questions about whether she was ever fit to be DC’s top cop.

Earlier this month, she stepped down after the Department of Justice uncovered a “massive scandal” involving manipulated crime statistics.

A recent report from the House Oversight Committee alleged that Smith played a considerable role in the overall Democratic effort to hide true crime statistics from the general public.

Remember when the propaganda narrative by Democratic leaders and left-wing mainstream media puppets asserted that conservative red states were the greatest source of criminal activity in the US, not violent crime-plagued Democratic-run cities. That narrative was merely part of a disinformation campaign by Democrats to distract the public from the nation-killing crisis caused by the ongoing problem of progressive, soft-on-crime policies.

I’m so glad we’re winning this battle and exposing the rampant DEI.

Average Americans are waking up.

— Nick Sortor (@nicksortor) December 19, 2025

Time to bring back meritocracy. DEI has failed.

Authored by Annemarie Ward via DailySceptic.org,

There are moments in public life when you read something and genuinely wonder if someone is having you on. 

The briefing on the supposed rise of far Right activity by the Educational Institute of Scotland (EIS), the leading teachers’ union in Scotland, is one of those moments. 

Scotland’s far Right is so tiny it could hold its AGM in the disabled toilet at Wetherspoons and still have room left for a flipchart. Yet here is the country’s largest and most influential union producing a 16-page political field manual that treats this microscopic fringe as if it is marching on Holyrood with flaming torches and matching armbands.

None of this resembles safeguarding. It is not professionalism. It is certainly not education. It is politics in fancy dress, and it insults the intelligence of teachers, parents and pupils alike.

The briefing begins with what looks like a perfectly sensible academic definition of the far Right. That lasts for all of two minutes.

Then the definition begins to stretch and swell until it covers almost anything that does not suit the worldview of whomever wrote the document. Real extremists do exist, and nobody sensible denies that. Every society has a small fringe of people who are vulnerable to rigid identities and destructive beliefs, usually because they are looking for certainty in a chaotic world.

But the EIS manages to take this small and unpleasant fringe and stretch it to breaking point.

Suddenly people who are pro-business, parents who worry about asylum hotels, anyone concerned about collapsing public services, women raising safeguarding issues, and every adult in the country who thinks biological sex corresponds to reality are all apparently drifting towards radicalisation.

And just to round things off, every Reform UK voter is thrown into the same pot.

By this logic, if you have ever eaten a Sunday roast or nodded politely to a small business owner, you may soon end up on a watch list.

The serious point here is that when everything is described as far Right, nothing is. Real extremism – the sort that harms communities – becomes blurred and unrecognisable when the definition has been inflated like a bouncy castle in a gale. And while all this stretching and redefining is going on, certain issues are conspicuously absent. There is no mention of the Iranian bot activity that the security services have warned about, which has been actively stoking constitutional division in Scotland. Apparently that does not merit 16 pages of alarm. No, the real danger, as framed by the EIS, is not organised extremism but the parent who simply asked whether a Gender Unicorn worksheet belonged in the classroom. This is not safeguarding. It is political hygiene dressed up as moral duty.

Meanwhile, teachers across Scotland are dealing with some of the most challenging conditions we have seen in decades. Violence in classrooms has become routine. Literacy is collapsing in large parts of the country. Additional support provision is drowning under impossible caseloads. Staffing is stretched to its limits. Burnout is everywhere. Yet the leadership of the EIS has decided the top priority is to turn a handful of Facebook loudmouths into an existential Reichstag fire.

It mirrors what David Chalmers highlighted in England only last month. University of Leicester students were shown lecture slides comparing Margaret Thatcher to Putin and Hitler. When higher education starts behaving like that, you know something has gone badly wrong. Several English schools have reportedly taught pupils that Reform UK sits on the same political spectrum as the BNP, despite having as much in common as a wet teabag and a nuclear reactor. Clarity and proportion always seem to be the first casualties of a good moral panic.

The real danger in all this is not the far Right. It is the collapse of democratic norms. Real extremists exist, but they are not the looming threat the EIS pretends they are. What should concern anyone serious about civic life is the way our democratic foundations are being eroded from above while everyone is busy scanning playgrounds for imaginary fascists. In recent years, trial by jury has been quietly pared back. Elections have been cancelled for millions of voters. 

Ordinary citizens have been arrested for social media posts that would not have raised an eyebrow a decade ago. Executive power has expanded to the point where abnormality now passes for routine. None of this is the work of shadowy extremists lurking on encrypted messaging channels. These decisions are being taken in broad daylight by governments who congratulate themselves on defending democracy while chipping away at its pillars.

Yet the EIS can spot authoritarianism in a parent’s Facebook comment but somehow miss the steady centralisation of state power. It is the political equivalent of opening the broom cupboard to check for ghosts while the roof quietly collapses from above. If we are genuinely serious about resisting authoritarian drift, we need to look at where authority is actually expanding, not where it is easiest to manufacture a scare.

If the EIS wants to teach pupils something useful about authoritarianism, it might start by explaining how such systems work in real life. They come from above, not below. They justify themselves through the language of safety rather than through overt threats. They arrive quietly through admin, layers of bureaucracy, policy and guidance rather than boots marching. Authoritarian drift does not look like online caricatures of flag-waving oddballs. It looks like officials wearing a badge promising one more policy for your own good. Danger seldom arrives banging on the door. It appears quietly, disguised as reassurance.

Scotland has made itself particularly vulnerable to this sort of drift because we have no statutory safeguards on political impartiality in education. In England, teachers operate under clear legal duties and detailed professional guidance. There is oversight. There is accountability. Parents have recourse. Scotland has none of that. Scots rely on vague non-binding guidance interpreted wildly differently from one local authority to the next. Into that vacuum walks the EIS, presenting an ideological blueprint as though it were a professional handbook.

Imagine the reaction if the biggest teaching union in England published a manual branding Reform UK voters as extremists, casting gender critical women as reactionaries and placing small business owners somewhere on the spectrum of political radicalism. 

The Department for Education would have called a press conference before breakfast. Yet in Scotland, the EIS has gone further still. In its own words, this briefing “could be a collective CPD offer for members”, as though a partisan political narrative were simply another piece of professional learning. When professional development is treated this casually, the line between education and indoctrination is not blurred, it is being erased.

The combination of moral panic and a complete absence of structural safeguards is not a small administrative quirk. It is precisely how politicisation slides into classrooms unnoticed while the public is preoccupied with other things.

At its heart, this is a story of mission drift. Trade unions exist to defend their members’ material interests. Bread and butter solidarity. Pay. Safety. Conditions. Professional dignity. The EIS seems to have wandered so far from that mission it can no longer see it. It now treats safeguarding questions as misogyny, political disagreement as radicalisation, parental concern as the first step towards fascism, and mainstream views as contamination. 

This is not professional support. When an organisation forgets why it exists, it stops helping and starts preaching. There is a simple moral truth at the centre of this. Political neutrality in education does not exist to spare the feelings of politicians. Most of them struggle to protect their own feelings on the best of days. Neutrality exists to protect the public. It protects the right to disagree. It protects children from having their moral world narrowed by ideology masquerading as virtue. 

Once a union decides that whole sections of the electorate are too dangerous to debate, it stops being a guardian of education and becomes something much darker. In addiction recovery I teach that no one is beyond redemption and that a person should not be defined by his or her worst day or worst idea. The EIS is running the opposite programme, treating ordinary people as pathologies rather than neighbours.

Teachers deserve better than this. Pupils deserve better. A school system rooted in the common good cannot survive when its leading union treats ordinary people as if they are beyond dialogue. The EIS claims to be fighting extremism, yet extremism always begins with the belief that some voices are unworthy of being heard. That is the seed of every authoritarian impulse.

Anyone who has watched a life unravel knows how that impulse grows. Harm does not begin with dramatic gestures. It begins with denial, the quiet conviction that the problem is always someone else. That is exactly where the EIS has positioned itself. If it truly wants to protect Scotland’s young people, it will need to rediscover humility, remember its purpose and step out of denial. Because authority without humility does not safeguard a community; it wounds it.

Strong winds swept across the Western U.S. last week, knocking out power to hundreds of thousands of customers across the Pacific Northwest, and even toppling a double-stacked freight train in Wyoming.

Wyoming-based media outlet Cowboy State Daily reported that a BNSF Railway train carrying dozens of double-stacked freight cars derailed early Friday morning northwest of Cheyenne due to extreme winds exceeding 144 mph.

This entire train was blown over this morning. Northwest of Cheyenne, Wyoming #wywx pic.twitter.com/NHib8Tixub

— brendon (@brendonme) December 19, 2025

Cowboy State Daily meteorologist Don Day said the peak wind gusts in the area of the derailment incident were as much as 78 mph.

“That’s a notoriously windy area,” Day said. “My grandfather used to work for the Union Pacific Railroad, and I was always spun yarns about what it was like getting through that route, whether it was blizzards or windstorms. It’s really nasty.”

Retired Union Pacific Railroad employee and former Wyoming legislator Stan Blake told the local outlet that wind speeds recorded between Cheyenne and Laramie could “definitely” derail a train.

“From what I saw, they were intermodal cars, which are overseas shipping containers they double stack,” Blake said. “It’s like a giant billboard going down the rails.”

Last week, widespread warnings for winter weather or high winds were in place for millions across the West and Midwest.

Hurricane-like winds…

A gust of 142 mph was reported in Coldwater Ridge, Washington, as a storm brought powerful winds to the Pacific Northwest, causing power outages across the region. pic.twitter.com/WHn5JtuWiV

— AccuWeather (@accuweather) December 17, 2025

#BREAKING Over half a million are waking up without power in the Pacific Northwest
The showers are pushing down some of the winds aloft, prompting Destructive Severe Thunderstorm Warnings at times pic.twitter.com/zCdXF8FK5Y

— WeatherNation (@WeatherNation) December 17, 2025

Residents of the Pacific Northwest can expect a long-duration atmospheric river to continue.

Long-duration atmospheric river pattern expected to continue across much of the West. https://t.co/UxC7DZQPmE https://t.co/1N4GaHhqwK https://t.co/ZyQxYYjJIo pic.twitter.com/DrVWfRwTfC

— NWS Climate Prediction Center (@NWSCPC) December 19, 2025

The rest of the Lower 48 can expect above-average temperatures through Christmas.

Authored by Steve Watson via Modernity.news,

The Trump administration has delivered a major blow to UK-US relations by suspending a massive $40 billion Tech Prosperity Deal, citing Britain’s aggressive censorship regime as a direct threat to American tech giants and their ability to operate freely.

This move underscores Trump’s zero-tolerance stance on foreign policies that undermine US interests, especially when they involve stifling free speech and handing advantages to global competitors like China.

The White House paused the tech prosperity deal amid concerns the UK government’s draconian Online Safety Act, which regulates online speech, will stifle American artificial intelligence companies, the Telegraph reports.

⏸️ Donald Trump suspended a landmark tech deal with the UK amid concerns the Online Safety Act will stifle American artificial intelligence companies, the Telegraph understands.

Read more here 👇https://t.co/c8LrpPDoY4 pic.twitter.com/sQzjZsr3L0

— The Telegraph (@Telegraph) December 16, 2025

The law allows the British government to levy large fines on tech giants it deems have facilitated ‘hate speech’.

After the rise of artificial intelligence, companies like OpenAI or xAI can face huge fines – harming their growth and giving China an edge in the AI race.

On Tuesday, it was revealed that the £31bn agreement has been suspended as the White House seeks to improve terms on a wider UK-US trade deal agreed in May.

BREAKING: President Trump has suspended the £31 billion ‘tech prosperity’ deal with Britain. GB News’ Political Editor Christopher Hope reacts, calling it ‘a disaster.’ pic.twitter.com/j0ZTCfvENb

— GB News (@GBNEWS) December 16, 2025

On Dec 3, Liz Kendall, the Technology Secretary, said the government planned to impose new restrictions on chatbots to ensure AI companies do not benefit from loopholes in the law.

“The perception is that Britain is way out there on attempting to police what is said online, and it’s caused real concern”, a source with knowledge of the decision to suspend the deal stated.

“Americans went into this deal thinking Britain were going to back off regulating American tech firms but realised it was going to restrict the speech of American chatbots,” the source added.

The deal, announced in September during Trump’s state visit to the UK, included pledges of £22bn from Microsoft and £5bn from Google to create an AI growth zone in north-east England, potentially generating £30bn in economic value and 5,000 jobs. 

Leftist UK Prime Minister Keir Starmer hailed it as “a generational stepchange in our relationship with the US,” while Trump described it as a path to “dominate” in AI and lead the technological revolution “side by side.”

Beyond censorship, Washington has raised issues with the UK’s digital services tax on US tech firms and food safety rules blocking certain agricultural exports, framing the pause as part of hard-nosed negotiations to eliminate trade barriers.

A British government source downplayed the suspension as “the usual bit of hardball negotiations by the Americans,” adding that US Commerce Secretary Howard Lutnick “is a tough guy. We understand that the Americans negotiate incredibly hard but we’ll stand our ground. They want what’s best for their country, we want what’s best for ours.” 

Another source labeled it “part of the shape of the negotiations” with Washington.

This latest escalation highlights the ongoing free speech crisis in the UK, where authorities have ramped up arrests for online expression. As we reported earlier, the latest insane case has seen a man jailed for 18 months over two anti-immigration tweets viewed just 33 times combined—a stark example of the regime’s overreach.

The broader pattern is alarming: nearly 10,000 arrests in 2024 alone for “grossly offensive” social media posts, equating to 30 per day, while violent crimes like knife attacks and burglaries are sidelined.

Trump has long been attuned to Britain’s erosion of rights, dispatching a “free speech squad” from the State Department in May to investigate cases of activists arrested for silent protests and online dissent. 

He’s even offered political asylum to UK “thought criminals,” including those prosecuted for gender-critical views or immigration criticism, positioning America as a haven for those fleeing authoritarian overreach.

With the US now leveraging economic deals to push back against censorship, this suspension sends a clear message: alliances come with strings attached when basic freedoms are at stake. As Britain doubles down on policing speech, Trump is ensuring American innovation—and expression—won’t pay the price.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Via Remix News,

As the EU moves to crush protesting farmers demonstrating in Brussels, Hungarian Prime Minister Viktor Orbán offered full backing to the farmers and their efforts to stop the EU’s Mercosur free trade deal, which threatens to destroy food security in Europe.

“Farmers are 100 percent right,” said Orbán, who is currently in Brussels attending the EU Summit.

He added that the farmers have obvious issues with the Mercosur package, a free trade agreement with Latin American countries, because it “kills the farmers.”

“Hungary is one of the countries that does not support the Mercosur agreement. There were serious professional debates about this in Hungary, and the Hungarian position was that we do not support this,” said the prime minister.

🇧🇪JUST IN: Police fire tear gas at protesting farmers in Brussels.

10,000 farmers are in Brussels to protest the South American Mercosur free trade agreement, which will destroy food security in Europe and lead to harmful pesticides in EU supermarkets. pic.twitter.com/WA1MVDfQOt

— Remix News & Views (@RMXnews) December 18, 2025

Viktor Orbán reminded that the agreement would require a qualified majority, and according to his expectations, there is not enough support.

“Mercosur opponents make it impossible for this agreement to be signed. The plan is that the President of the European Commission wants to sign this later this week. I think this needs to be stopped here now, and we can prevent it,” he said.

He also said that another problem for farmers is the Green Deal, which leads to expensive overregulation in agricultural work in such a way that it represents a serious cost and competitive disadvantage for European food producers. 

“So I have to say that with the Mercosur agreement, they are shooting European farmers in the foot, but before that, they tie their legs together so that they have no chance in the global competition,” he stated.

“That is why the farmers are absolutely right, the Hungarian government is 100 percent with the farmers,” said the Hungarian leader.

Farmers met with force

The use of force against farmers in Brussels is drawing criticism from Hungarian journalists, including Dániel Deák, the senior analyst of the Század Institute.

He published a video report showing the European Commission building, or Ursula von der Leyen’s workplace, surrounded by barbed wire. 

According to him, with these measures, they are trying to prevent farmer protesters from getting close to the president of the European Commission. 

In the report, he also drew attention to the fact that if they tried to limit a demonstration in Hungary in a similar way, by placing barbed wire, it would provoke significant protests from the left, and the European Union would also talk about the use of “dictatorial means.”

In his opinion, all this once again points to the hypocrisy that is often used against Hungary. He also emphasized that demonstrations in Hungary can be held and that no attempt is made to make them impossible with barbed wire.

Read more here…

Voters are delivering Democrats in Congress a brutal verdict heading into the 2026 midterm cycle, with just 18 percent approving of their performance and a staggering 73 percent disapproving, the worst rating Quinnipiac has recorded for them since it began asking the question in 2009. 

Even Democrats themselves are in open revolt: only 42 percent of Democratic voters approve of how their own party’s members in Congress are doing, while 48 percent now disapprove, a sharp slide from October when approval stood at 58 percent.

Among independents, things descend from terrible to apocalyptic for the Democrats. The gap between approval and disapproval is a huge 61 points, leaving Democrats almost universally despised among this key demographic. But the more shocking revelation came from within their own ranks: for the first time in Quinnipiac’s history, even Democrats themselves are giving congressional Democrats a thumbs down. Support among party voters has cratered 28 points since October—swinging from a positive 22 to a negative 6 in just two months. 

“A family squabble spills over into the holidays. Democratic voters want their party to hold the reins of the House but are not the least bit happy about what they are doing at the moment,” Quinnipiac University Polling Analyst Tim Malloy said in a statement.

Meanwhile, Republican voters are much more satisfied with how their party’s members in Congress are doing, with 77 percent expressing approval, and only 18 percent expressing disapproval.

The numbers are so bad for the Democrats that CNN’s chief data analyst, Harry Enten, couldn’t favorably spin this for the party. 

 “Democrats, in the minds of the American public, are lower than the Dead Sea,” Enten put it, twisting the knife with a geological metaphor that unfortunately fits. According to new Quinnipiac polling data, congressional Democrats are languishing at a net approval rating of -55 points, an almost comical nosedive that marks their worst showing in over twenty years of tracking. “They have never found Democrats, at least those in Congress, in worse shape than they are right now.”

Enten tried to diagnose how it all went so wrong so fast. He pointed back to October’s government shutdown, when Democrats saw what turned out to be their last flicker of momentum. “I think during the shutdown, there was a bit of a boost for Democrats, right? There was a rallying around the flag effect going on,” he said. “But Democrats did not like how that shutdown turned out.” In short, they got the brief sugar high, then the crash—and now they’re nursing a severe case of political hangover.

The fallout is already reaching individual lawmakers.

“One of the reasons that Dan Goldman is in trouble right now and a potential primary against Brad Ladner is because at this point, the Democratic base is so upset with Democrats,” Enten explained, adding his parting shot: “So even if the Democrats take back Congress, don’t be surprised if Dan Goldman ain’t there because of numbers like this one.”

Translation: victory might come, but not without casualties.

Even the supposedly good news isn’t really all that good. Democrats currently hold a four-point lead on the generic congressional ballot with a Republican president in office, a figure Enten conceded was “pathetically weak” by historical standards. For example, when they won back control of Congress in 2008 and 2018, Democrats led by double digits. Now, their advantage is less than half the normal cushion they’ve enjoyed in similar cycles.

Enten, ever the numbers guy, encouraged some patience while gently deflating any premature triumphalism.

“Yes, you’re on your way to a congressional majority… but it’s still a long time,” he cautioned.

“And with numbers like this, considerably weaker than historically speaking, it might be a tougher road to hoe than normally you would think.”

The data paints an unflattering portrait: a party so strategically dependent on Donald Trump’s unpopularity that it’s ignoring its own. Democrats appear to be counting on Trump’s toxicity to do the heavy lifting, but if their own negatives stay this high, his may not be enough to carry them over the finish line in next year’s midterm elections.

Stocks look set toclose out a choppy week on a steady note, building on Thursday’s gains, spurred by cooler inflation that backs the case for lower borrowing costs. As of 8:00am, S&P 500 futures were 0.1% higher while Nasdaq 100 contracts were up 0.2% after the WSJ reported that OpenAI is set to raise $100BN in fresh capital (from sov wealth funds) removing near-term funding pressures across the AI sector. In premarket trading Oracle is up 6%, off session highs, with the rest of the Mag 7 complex mostly higher. In a risk-on set-up, bitcoin is also higher, while Treasuries are down. Gold is hovering near its highest ever, and a separate Goldman team reckons its record-setting rally still has legs, and could push the yellow metal above $5000. US economic calendar includes November existing home sales, December University of Michigan sentiment (10am), and Kansas City Fed services activity (11am). Fed’s Williams is scheduled to appear on CNBC at 8:30am.

In premarket trading, Mag 7 stocks are mostly higher (Nvidia +1%, Tesla +1%, Amazon +0.4%, Alphabet (GOOGL) +0.2%, Microsoft +0.1%, Apple -0.2%, Meta Platforms -0.1%). Cloud infrastructure stocks including CoreWeave (CRWV) are staging a rebound after the sector sold off on financing concerns in the AI supply chain. CoreWeave climbs 5%.

• AGCO (AGCO) slips 1% after Barclays cut the recommendation on the agriculture equipment company to underweight, saying that tariffs threaten its ability to meet margin estimates.
• Defense stocks remain in focus after European Union leaders reached an agreement to loan Ukraine €90b ($105b) for the next two years, aiming to strengthen Kyiv’s hand at the negotiating table and keep the war-torn country afloat. 
• KB Home (KBH) falls 5% after the company’s fiscal fourth-quarter profit missed analysts’ estimates. The mid-point of the outlook range for fiscal 2026 housing revenue also lagged expectations
• Nike (NKE) slumps 11% after the sportswear retailer’s third-quarter guidance disappointed investors, with its turnaround hampered by weak sales in China and the Converse brand.
• Oracle (ORCL) is 5.6% higher after TikTok told employees that its parent company, ByteDance, had signed binding agreements to create a US joint venture majority owned by American investors, led by the cloud computing giant. 
• WhiteFiber (WYFI) gains 20% following the announcement of a 10-year co-location agreement between its subsidiary Enovum Data Centers Corp. and Nscale Global Holdings.

As noted yesterday, individual stock prices could be erratic on Friday during the largest options expiry day ever, with $7.1 trillion of notional open interest rolling off across the US options market, according to data from Citigroup. Trading volumes may be inflated by index rebalances at the close. 

The December opex tomorrow will be the largest ever with over $7.1 trillion of notional options exposure expiring, including $5.0 trillion of SPX options and $880 billion notional of single stock options. pic.twitter.com/amb3HDbcwX

— zerohedge (@zerohedge) December 18, 2025

Oracle, which in recent months emerged as a fulcrum point of concerns that the AI rally had become overheated, rose more than 5% in premarket trading. The company is leading a group of investors that signed binding agreements to bring TikTok’s US operations under an American-controlled venture. It would also be a direct beneciciary of OpenAI tapping Abu Dhabi sovereign wealth funds. 

Stocks have swung in recent weeks as optimism over the outlook for Fed rate cuts and a robust economy have clashed with fears that the AI-driven rally is vulnerable to a correction. Some strategists warn that while the broader backdrop remains favorable, volatility may persist. “While the conditions for a Santa rally are broadly in place, markets may need a fresh catalyst,” said Francisco Simón, European head of strategy at Santander Asset Management. “In that context, a renewed positive trigger — potentially linked to encouraging news in the AI space — could help reignite momentum.”

Global stocks that rose higher than ever in 2025 are set for further gains next year, according to Goldman Sachs strategists; but don’t expect returns to be quite as strong. Company earnings should drive dollar returns of 13% from a broadening bull market in 2026, rising to 15% if you include dividends, according to a Goldman team led by Peter Oppenheimer. Fed rate cuts and positive growth should extend the economic cycle and support risk assets, though the rally’s next phase may be choppier.

Still, investors are showing little sign of losing their appetite for equities, with the US seeing a 14th week of inflows, at $77.9 billion, in the week ended Dec. 17, according to Bank of America. Tech contributed to inflows for the first time in three weeks, suggesting that fears over potentially overblown AI stock valuations have diminished. Michael Hartnett said investors are positioned for “run-it-hot” acceleration in PMIs and EPS on easing rates, drops in tariffs and tax cuts (more on that later). 

At the same time, gold is hovering near its highest ever, and a separate Goldman team reckons its record-setting rally still has legs. Commodities analysts including Daan Struyven and Samantha Dart also forecast weakness in oil prices to persist next year.

In the biggest central bank decision overnight, the BOJ lifted its key rate to the highest level in more than three decades – as expected – and signaled that further hikes could be in the offing. Japan’s 10-year yield climbed to the highest level since 1999, with the BOJ making clear that the tightening cycle will continue if the economy performs as expected. 

“The market had expected a hawkish hike from the BOJ, with the expectation of clarifying its stance on narrowing the neutral rate range and future rate hike path,” ING Bank’s Min Joo Kang and Chris Turner wrote in a note. “However, both the BOJ and Ueda remained quite vague on this matter, which likely caused disappointment in the market.”

European equities tread water, with the Stoxx 600 flat despite solid gains in Asia, including a 1% advance in the Nikkei. European markets hover near a record on Friday, as optimism around further monetary policy easing buoyed sentiment in the final full trading week of the year. Utilities stocks outperform while consumer stocks lag after US peer Nike warned of weak China sales. Here are some of the biggest movers on Friday:

• Semapa shares rises as much as 25%, the most in more than three years, after the Portuguese conglomerate agreed to sell its cement unit Secil to Spain’s Cementos Molins.
• DCC shares climb as much as 4%, the most since October, after the company said it successfully completed a £600 million tender offer.
• Puma shares dip as much as 3.5%, leading sportswear stocks lower, after US giant Nike warned sales will decline this quarter, partly due to weakness in China and its Converse brand.
• WH Smith shares drop as much as 6.2% after pretax profit guidance for 2026 came in below analysts’ expectations and the the travel retailer said it was under investigation in the UK over an accounting error in its North American business.
• Ipsen shares fall as much as 3.8% after the company said a mid-stage trial evaluating its experimental oral drug for an ultra-rare bone disease did not meet its primary endpoint.
• Computacenter shares tumble as much as 1.5% after the IT company was downgraded at Peel Hunt, with analysts saying the current valuation already bakes in much of the upside potential over the next 12 months.

Earlier in the session, Asian equities rose, paring weekly losses, as cooling US inflation data reinforced bets on Federal Reserve interest-rate cuts and lifted technology stocks. The MSCI Asia Pacific Index rose as much as 0.8% on Friday, on course for its biggest gain since Dec. 12, as markets across the region advanced. Tencent Holdings, SoftBank Group Corp. and Toyota Motor Corp. led the gains. For the week, the gauge was down 1.9%, marking its worst five-day period in a month. Meanwhile, the Bank of Japan hiked borrowing costs to 0.75%, the highest level since 1995, as expected. Stocks rose.

In FX, the yen slid to the bottom of the G-10, with dollar-yen at 157, as the BOJ’s 25-bps rate hike and Ueda’s presser failed to deliver the stronger tightening message traders expected. The Bloomberg Dollar index is up 0.2%.

Rates follow Japan, where the 10-year yield broke above 2% for the first time since 1999. US 10-year rates climb 3bps with the curve bear steepening, while gilts lag bunds after the BOE’s hawkish cut.  US yields cheaper by 1.5bp to 3bp across the curve in a bear steepening move, with 2s10s and 5s30s spreads wider by 1.2bp and 1bp on the day. US 10-year yields trade up to around 4.15%, with bunds and gilts cheaper by an additional 1.5bp and 2bp in the sector. Elsewhere, French 30-year yields hit their highest level since 2009 after budget talks were pushed into 2026. There were more losses seen across bunds and gilts after a flood of European data which included France and Germany PPIs and UK retail sales

In commodities, oil climbs on reports that Ukraine has hit a Russian shadow fleet oil tanker. Spot gold falls roughly $6 to near $4,327/oz. Silver climbs 0.8% to ~$66. Bitcoin ekes out more gains, up some 3.2% to around $88,000. 

US economic calendar includes November existing home sales, December University of Michigan sentiment (10am), and Kansas City Fed services activity (11am). Fed’s Williams is scheduled to appear on CNBC at 8:30am

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini +0.5%
• Russell 2000 mini +0.3%
• Stoxx Europe 600 +0.1%
• DAX +0.2%
• CAC 40 +0.1%
• 10-year Treasury yield +2 basis points at 4.14%
• VIX -0.7 points at 16.17
• Bloomberg Dollar Index +0.2% at 1209.44
• euro little changed at $1.1715
• WTI crude -0.6% at $55.84/barrel

Top Overnight News

• What will 2026 bring? Goldman economists expect another year of 2.8% growth, above the Bloomberg consensus of 2.5% and with individual forecasts that are at or above consensus for most major economies. As has typically been the case since the pandemic, the bank is most optimistic (relative to consensus) in the US. Growth is likely to average 2.6% in 2026, well above the consensus of 2.0% and up from an estimated 2.1% in 2025. Just under 0.2pp of the pickup reflects the mechanical impact of the government shutdown, which depresses the level of GDP in 2025 Q4 and boosts 2026 Q1 growth. GS also expects a fundamental acceleration because of three forces: Reduced tariff drag, tax cuts, and easier financial conditions.
• Homeland Security Secretary Noem said at President Trump’s direction, she is immediately directing the USCIS to pause the DV1 program.
• Trump to make an announcement at 13:00ET on Friday and deliver remarks on the economy at 21:00ET.
• OpenAI is seeking up to $100 billion in new funding at a valuation as high as $830 billion, above earlier estimates. WSJ
• Trump’s administration has launched a review that could result in the first shipments to China of Nvidia’s second-most powerful AI chips. Trump this month said he would allow sales of Nvidia’s H200 chips to China, with the U.S. government collecting a 25% fee, and that the sales would help keep U.S. firms ahead of Chinese chipmakers by cutting demand for Chinese chips. RTRS
• The BOJ raised its benchmark rate to 0.75%, the highest in 30 years, and said more increases are in the pipeline if conditions allow. Former BOJ official Kazuo Momma said rates may hit 1.5% in 2027. Ten-year JGB touched their highest since 1999, and the yen weakened. BBG
• UK government borrowing fell in November, with the budget deficit standing at £11.7 billion — £1.9 billion less than a year earlier. Separately, retail sales fell for a second straight month. BBG
• EU leaders committed to lend Ukraine 90 billion euros, or around $105 billion, to help the country keep fighting Moscow’s invasion but failed to agree on a plan to use frozen Russian assets for the loan. WSJ
• Americans seeking jobs face another tough year in 2026, with unemployment staying high despite solid growth, according to economists’ predictions. The unusual mix probably reflects AI-driven investment that isn’t adding jobs. BBG
• The world is awash with oil, and prices are poised to keep falling. Producers are ramping up output, putting a record 1.3 billion barrels in open seas. The glut may push average WTI down to $52 next year. BBG
• TikTok’s long-delayed split from ByteDance is underway, with the company saying it signed binding deals to form a US joint venture controlled by American investors led by Oracle. ORCL +475bps premkt. BBG
• Nike shares slumped premarket (-10.5% premkt) after the company projected a sales decline this quarter amid persistent weakness in China and at its Converse brand. BBG

BOJ

• BoJ raised rates by 25bps to 0.75%, as expected, with the decision unanimous, while it stated interest rates are expected to remain at significantly low levels and will continue to raise policy rate if the economy and prices move in line with forecasts.
• BoJ Governor Ueda (post-policy press conference) said Japan’s economy is recovering moderately, albeit with some weakness. Will make a decision on rate hike after checking the impact on the economy. Will conduct market operations swiftly, under exceptional circumstances in market. Delaying a rate hike could force a significant hike later. There is still some distance to lower the limit of neutral rate estimate. Several BoJ members mentioned that recent JPY weakness may affect prices going forward, and warrants attention. Members suggested that the weak JPY is possibly affecting underlying inflation.
• Japanese Economy Minister Kiuchi said they respect the BoJ’s decision but they need to be mindful of economic outlook.
• Japanese Economy Minister Kiuchi said FX is affected by various factors, determined at markets. Important for currencies to move in stable manner reflecting fundamentals. Closely watching market moves with a high sense of urgency, including long-term yields.

Other Central Banks

• BoE Governor Bailey said he is confident that inflation will be close to target by late spring, giving a good reason to expect a bit more downward path on rates.
• ECB’s Escriva says there are no reasons for any change in interest rates in any direction.
• ECB’s Sleijpen says policy is in a good place but we must maintain a data-dependent and meeting-by-meeting approach.
• ECB’s Muller said it is too early to speculate what will happen in six months, imagines a scenario that weaker growth and further disinflation could justify more easing but the opposite could also be imagined, via Econostream.
• ECB’s Kocher said they have not decided what course to take on rates, when asked if there are no more rate cuts coming. Rates could be cut or raised, depending on developments.
• ECB’s Rehn said outlook for growth and inflation remains highly uncertain due to trade war and geopolitical tensions. Reiterates meeting-by-meeting approach and ECB maintains full freedom of action and optionality.
• ECB’s Kocher said there are many risks to growth and inflation to the up and downside. said they want to keep all options open to be able to react to the volatile situation. They are where they want to be on rates.
• ECB Wage tracker suggests lower wage growth and gradual normalisation of negotiated wage pressures in 2026. ECB wage tracker with unsmoothed one-off payments at 3.0% in 2025 and 2.7% in 2026.

Trade/Tariffs

• US President Trump told NBC “We’re making so much money with tariffs”, people would start getting the payments “very soon”. “Within the next few days, it’ll all be out”.
• US President Trump administration initiated multi-agency review of NVIDIA (NVDA) H200 licenses for sales to China, according to sources cited by Reuters.
• China’s Commerce Ministry urges India to correct wrong practice on Telecom tariffs. China files WTO case against India over ICT tariffs and Photovoltaic subsidies.
• China’s Commerce Ministry has launched an investigation into some rubber products from the US, South Korea and the EU. Adds to keep anti-dumping duty rate of up to 222%. Will terminate anti-dumping measures against UK rubber imports from December 20th.
• EU’s von der Leyen said “we have reached out to our Mercosur partners and agreed to postpone slightly the signature”, adds she is confident EU has sufficient majority to approve the Mercosur trade deal.
• French President Macron said work must continue on EU-Mercosur deal after delay, adds safeguards clause must be adopted by EU Parliament and accepted by Mercosur nations. He said, with new safeguard and mirror clauses to be implemented in January, it would be a “new” Mercosur-EU deal. France asked for CAP budget to be maintained.
• Chinese auto parts company Wangxiang agrees to pay USD 53mln to resolve US Justice Department lawsuit over imported components.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as the region took impetus from the positive handover from Wall Street, where the major indices gained following softer CPI data and strong Micron earnings, while the attention overnight turned to the BoJ, which unsurprisingly hiked rates for the first time since January. ASX 200 was underpinned by outperformance in tech and financials, but with gains capped as mining, resources and materials sat at the other end of the spectrum. Nikkei 225 rallied amid tech strength and with some banks supported as yields gained amid the widely-expected BoJ rate hike, in which the central bank raised its key rate by 25bps to 0.75%, which is the highest in 30 years. Hang Seng and Shanghai Comp conformed to the upbeat mood amid tech strength, and after the PBoC continued to opt for a double-pronged liquidity operation, while it was also reported that TikTok signed a deal to sell its US entity to a joint venture controlled by American investors.

Top Asian News

• Japanese Finance Minister Katayama said will consider fiscal sustainability to some extent in compiling next fiscal year’s budget, adds aim to boost market confidence by lowering debt to GDP ratio.

European bourses (STOXX 600 U/C) opened around the unchanged mark, and have remained on either side of the mark since. European sectors hold a slight positive bias. Autos leads, followed by Insurance whilst Consumer Products lags; the latter pressured in tandem with post-earning losses in Nike (-10.5%).

Top European News

• Bundesbank cuts growth forecast for 2026 to 0.6% (prev. 0.7%) and raises 2026 inflation forecast for Germany to 2.2% (prev. 1.5%). Nagel: “Starting in the second quarter of 2026, economic growth will strengthen markedly, driven mainly by government spending and a resurgence in exports.” and adds that “….while progress will be subdued initially, it will then slowly pick up.”.
• French Prime Minister Lecornu said parliament will be unable to vote on a budget for France before the end of the year. Starting on Monday, he will meet with key political leaders to consult with them on the steps to be taken.
• Joint Committee from French National Assembly and Senate cannot reach compromise text on 2026 budget, according to a Committee member.
• Swedish Think Tank NIER sees 2025 GDP at 1.6% (sept. fcst. +0.9%), 2026 GDP 2.9% (sept. fcst. 2.6%).

FX

• DXY is mildly firmer and trades at the upper end of a 98.41 to 98.70 range. Really not much driving things for the USD this morning, and with the upside largely facilitated by the JPY weakness. On that note, the BoJ raised rates by 25bps to 0.75% as expected. The decision was unanimous, and it stated that interest rates are expected to remain at significantly low levels, and the bank will continue to raise the policy rate if the economy and prices move in line with forecasts. The presser thereafter, spurred another bout of pressure in the JPY where Ueda avoided explicitly guiding markets towards another rate hike. Though he did highlight that the BoJ will conduct market operations swiftly, under exceptional circumstances in market. Interesting comments from the Governor came as he stated that several BoJ members mentioned that recent JPY weakness may affect prices going forward, adding that this warrants attention, given some believe that it could be affecting inflation. This spurred some very slight strength in the JPY at the time, which later pared.
• EUR is essentially flat and trades within a 1.1704 to 1.1728 range. Markets have had a slew of ECB speakers to digest this morning, but really not adding much to the agenda. ECB’s Kocher suggested that they are where they want to be on rates, a comment reiterated by Sleijpen.
• GBP is also flat, within a 1.3364 to 1.3387 range. Traders seemingly taking breather following the upside seen in the prior session, following a hawkish cut at the BoE. Since, Governor Bailey has provided some commentary. On Thursday he said that he is “very” encouraged by the process in returning inflation to target; comments which were largely reiterated once again earlier this morning.

Fixed Income

• JGBs began the overnight session on a slightly firmer footing, but then came under marked pressure after the BoJ policy decision, where the Bank hiked rates by 25bps as expected. The decision was unanimous, with the accompanying commentary reiterating that it will continue to raise the policy rate if the economy and prices move in line with forecasts. Bond traders appear to be focused on the BoJ’s comments related to higher wages heading into the new year – and ultimately on remarks that the Bank will continue to raise rates in line with expectations. Perhaps focus for JGBs focus on the fiscal side of things, with the BoJ seemingly waiting for economic developments, which will be subject to volatility under PM Takachi’s cabinet.
• USTs traded rangebound throughout the overnight session and have continued to trade sideways throughout the European morning. Currently lower by a handful of ticks and within a 112-17+ to 112-23 range. Ahead, US President Trump is scheduled to make an announcement at 13:00EST/18:00GMT on Friday and will deliver remarks on the economy at 21:00EST/02:00GMT.
• Bunds and Gilt action has also been exceptionally lacklustre; currently holding a slight downward bias, within a 127.16 to 127.52 and 90.94 to 91.20 range, respectively. A few ECB speakers this morning, but not really any pertinent commentary thus far; Kocher reiterated that interest rates are at a good place. Back to the UK, Gilts mildly underperform – continuing the post-BoE hawkish move seen in the prior session. Some remarks from BoE Governor Bailey earlier who suggested that he is confident that inflation will be close to target by late spring, giving a good reason to expect a bit more downward path on rates. Ultimately, no move in Gilts on the remarks.

Commodities

• Crude benchmarks remain contained in tight ranges as the European session gets underway amid a lack of crude-specific newsflow. WTI oscillates in a USD 55.67-55.99/bbl range while Brent holds below USD 60/bbl comfortably as European trade continues. Recent comments via US President Trump, who said that “I do not rule out a war with Venezuela”, according to NBC, had little impact on the complex.
• Spot XAU saw initial downside at the start of the APAC session, continuing the reversal lower after failing to hold beyond USD 4350/oz during Thursday’s US session. XAU fell to a trough of USD 4310/oz and since, remains in a c.USD 40/oz band throughout the European morning.
• 3M LME Copper lead the gains across the metals complex as the risk tone stateside rebounded, which boosted Asia-Pac equities. The red metal opened unchanged but gradually rose, in line with APAC equities. This helped 3M LME Copper break Thursday’s high of USD 11.79k/t and continue to a peak of USD 11.83k/t as the European session gets underway.
• Phillips 66 (PSX) reported emissions event at Sweeney refinery and petrochemical complex in Texas on December 17th.

Geopolitics

• Russian President Putin said we do not see Ukraine being ready for talks, ready and want to end the conflict via peaceful means. Continue to create a safe zone on the border with Ukraine.
• Belarus said “We are preparing to start the combat shift of the Russian Oryshnik missile system”, via Al Arabiya.
• Russia’s Dmitriev said regarding EU summit decision that it was a ‘major blow to EU warmongers led by failed Ursula’ and voices of reason in the EU blocked the illegal use of Russian reserves to fund Ukraine.
• EU’s Costa said leaders agreed to roll over sanctions against Russia, adds Ukraine will only repay EU loan once Russia pays reparations and the EU reserves its right to make use of the immobilized assets to repay loan.
• German Chancellor Merz said Ukraine will receive an interest-free loan of EUR 90bln with these funds sufficient to cover military and budgetary needs for the next two years, and the EU will keep Russian assets frozen until Russia has compensated Ukraine. said: We expressly reserve the right to use Russian assets for repayment if Russia fails to pay compensation in full compliance with international law.
• EU’s Costa said we have a deal to finance Ukraine, and the decision to provide EUR 90bln of support to Ukraine for 2026-2027 was approved.
• EU official said it seems there is the possibility of unanimity to use headroom of EU budgets to provide funding for Ukraine. EU leaders want work to continue on the technical and legal aspects of the instruments establishing a reparations loan.
• EU considers using joint debt to loan up to USD 106bln dollars to Ukraine, according to Bloomberg.
• European Council President Costa proposed to EU leaders to address Ukraine’s immediate pressing financial needs through an EU borrowing solution, according to two EU diplomats.
• Russia’s President Putin says US President Trump is making frank efforts to end the conflict in Ukraine. Says Russia has been asked to make compromise on Ukraine, in which Russia agreed to. The ball is on the West and Ukraine’s court.
• Ukraine has hit Russian shadow fleet tanker in the Mediterranean sea for the first time, according to Reuters citing SBU source. SBU’s aerial drones hit the Qendil vessel, causing critical damage. However, vessel was empty at the time of the attack.
• Contacts between Israel and Syria have not made much progress, according to Al Arabiya quoting US sources.
• Germany’s Competition Authority approves the merger of Palo Alto (PANW) and Israel’s Cyberark software.
• US ambassador to Israel said the US is not considering supplying Turkey with F-35 jets (LMT), which is not on the table under current US laws, via Sky News Arabia.

US Event calendar

• 8:30 am: Fed’s Williams Appears on CNBC
• 10:00 am: Nov Existing Home Sales, est. 4.15m, prior 4.1m
• 10:00 am: Nov Existing Home Sales MoM, est. 1.22%, prior 1.2%
• 10:00 am: Dec F U. of Mich. Sentiment, est. 53.5, prior 53.3

DB’s Jim Reid concludes the overnight wrap

This is my last EMR of 2025, but Henry will keep it going for a couple of days next week. Thank you for reading and interacting this year and for all the votes in the Extel survey which went well for us again when results were published last week. See you in 2026 for another fun-packed ride through markets. As is tradition, I’ve listed my favourite TV shows of the year at the end alongside my film and album of the year. My wife and I try to watch an hour’s TV when I’m not travelling. It’s getting more difficult as the kids get older and have to be taxied around in the evening, a trend I fear will only get worse. I look forward to hearing your disagreements with the list! 

Before I sign off for the year, it’s fair to say that it’s been an incredibly eventful 24 hours in markets, and overnight there’s been no let-up as the Bank of Japan have just delivered a 25bp hike that’s taken rates to a 30-year high of 0.75%. That follows a decision from the ECB to hold rates yesterday, which cemented expectations that they’d finished cutting, along with a hawkish BoE cut that led investors to dial back the prospect of rapid rate cuts next year. But even as those central banks had various hawkish elements, it was a completely different story for the US, as the CPI print was beneath all expectations, leading to a decent Treasury rally as investors priced in faster rate cuts for 2026, even if there were huge doubts about the data’s validity given the shutdown. So it was a day of competing narratives, but for risk assets, the prospect of more Fed cuts and the reaction to Micron’s earnings helped the S&P 500 (+0.79%) rebound after 4 consecutive declines, whilst Europe’s STOXX 600 (+0.96%) hit a new record.

We’ll start with that overnight news from Japan, where the BoJ delivered the 25bp rate hike that was widely expected, and pointed to more ahead. For instance, their statement said that real interest rates were “at significantly low levels”, and if their outlook was realised, they would “continue to raise the policy interest rate”. So that’s pushed Japanese bond yields higher this morning, with the 10yr yield (+4.8bps) currently at 2.01%, which would be its highest closing level since 1999. Indeed, we also had the latest CPI print overnight for November, which showed headline CPI at 2.9% as expected, having now been above 2% consistently since April 2022. That landscape of above-target inflation has provided the BoJ the space to deliver multiple rate hikes now, and they said that “it is highly likely that the mechanism in which both wages and prices rise moderately will be maintained”.

Nevertheless, equities in Asia have still rallied overnight, given the BoJ hike was expected and investors think Fed cuts are more likely following the CPI print. So that’s supported gains across the major indices, including for the Nikkei (+1.11%), the KOSPI (+1.07%), the Hang Seng (+0.66%), the CSI 300 (+0.51%) and the Shanghai Comp (+0.50%). And looking forward, US equity futures are stable, with those on the S&P 500 down just -0.01%. 

All that follows a hugely eventful session yesterday, with a big boost thanks to that weak US CPI report, which featured the lowest year-on-year core CPI print since early 2021. However, it’s worth noting that there were several pieces of missing data because of the shutdown, and the methodological issues meant that investors treated it with some caution. For instance, a lot of people looked at the shelter numbers with serious doubt, as they saw a huge drop-off that’s more usually consistent with recessions. For instance, the 2-month annualised change for Owners’ Equivalent Rent (so accounting for the missing October report and this November print) came in at just +1.6%, the lowest since the Covid-19 pandemic. Similarly, the 2-month annualised change for rents of +0.8% was the weakest since the aftermath of the GFC in 2010. 

However, even with those data issues, the print was still viewed as soft enough to make Fed rate cuts more likely next year. Indeed, headline CPI was still down to +2.7% year-on-year (vs. +3.1% expected), whilst core CPI was at +2.6% (vs. +3.0% expected). The weak print meant investors priced in more Fed rate cuts, with the amount expected by the December 2026 meeting up +1.6bps on the day to 62bps. So that helped Treasuries to rally across the curve, with the 2yr yield (-2.3bps) down to 3.46%, whilst the 10yr yield (-3.1bps) fell to 4.12%.

Moreover, that offered a big support to equities, with a further boost from Micron (+10.21%) after its earnings announcement the previous day, making it the top performer in the S&P 500. So collectively, that saw the S&P 500 (+0.79%) bounce back from its recent selloff, alongside gains for the NASDAQ (+1.38%) and the small-cap Russell 2000 (+0.62%). Just over 50% of the S&P’s constituents traded higher on the day, with gains led by consumer cyclical subsectors like Autos (+3.2%), Media (+1.6%), and Consumer Discretionary Retail (+1.6%). The laggards were the more defensive names that had a bid in recent days like Consumer Products (-1.5%) and Staples (-0.7%). Finally, Energy (-1.4%) also saw a pullback as oil prices fell nearly -1.4% intraday to finish flat after opening higher on more Venezuela headlines. By the close, Brent crude was only slightly higher (+0.23%) at $59.82/bbl.

Earlier in Europe, the main headlines came from the ECB, who left their deposit rate at 2% as expected. Nevertheless, there was a hawkish tone, and the updated forecasts showed stronger growth and stickier core inflation (at 2.2% for 2026), so that was seen as outweighing the expected undershoot of headline inflation, which wasn’t mentioned at all by President Lagarde. Yet despite recent speculation around an ECB hike next year, this shifting macro tone didn’t translate into a more hawkish policy signal, with Lagarde repeating the line that they were keeping all policy options open. And later in the day, Bloomberg reported that ECB officials expected that the cycle of rate cuts was most likely done, with talk of rate hikes seen as premature. So the decision reaffirmed our economists’ view that the easing cycle is likely over, and they see the Governing Council as determined to retain a neutral policy signal for now. Looking forward, they maintain their view that the ECB’s next move will be a hike, but they don’t see that as likely to materialise in 2026

Against this backdrop, European bonds rallied across the continent, thanks to the soft US CPI print and the absence of more hawkish ECB rhetoric. So that helped yields on 10yr bunds (-1.4bps), OATs (-1.6bps) and BTPs (-2.9bps) move lower. And for equities there was also a strong performance, with both the STOXX 600 (+0.96%) and Spain’s IBEX 35 (+1.15%) at new records, alongside gains for the DAX (+1.00%) and the CAC 40 (+0.80%) as well.

Shortly before the ECB, the Bank of England delivered a 25bp cut as expected, taking their own policy rate down to 3.75%. Yet even though the decision was a cut, it was interpreted in a hawkish light by markets. First, because it was only passed on a narrow 5-4 vote, with the rest wanting to leave rates unchanged. And second, in the statement they added that “further policy easing will become a closer call.” So that suggested the bar was rising to further cuts, and front-end gilt yields sold off in response, with the 2yr gilt yield up +4.2bps, whilst the 10yr yield saw a smaller increase of +0.6bps. See our economist’s review here. 

To the day ahead now, and US data releases include existing home sales for November, and the University of Michigan’s final consumer sentiment index for December. Meanwhile in Europe, there’s UK retail sales for November, and the European Commission’s preliminary consumer confidence indicator for the Euro Area in December. Otherwise from central banks, we’ll hear from the Fed’s Williams, and the ECB’s Wunsch, Kocher, Rehn, Simkus, Kazaks, Sleijpen, Pereira, Cipollone and Lane.