- Global markets traded cautiously following the Fed's hawkish stance on 2025 rate cuts, with most Asian indices nursing steep weekly losses. The Fed's signal of only two potential rate cuts next year, down from earlier expectations of four, triggered a broad risk-off sentiment. U.S. futures extended losses after Congress rejected a Trump-backed spending bill, raising shutdown concerns.
- Japan's Nikkei and TOPIX bucked the regional trend, rising 0.2% despite stronger-than-expected November CPI data. BOJ Governor Ueda maintained a dovish tone, suggesting rate hikes may come later in 2025. Core inflation remained above the 2% target, but the central bank emphasized watching spring wage negotiations before any policy shifts.
- China's central bank left benchmark lending rates unchanged, with the one-year LPR at 3.1% and five-year at 3.6%. Chinese markets showed resilience, posting smaller weekly losses than regional peers amid growing confidence in Beijing's plans to boost fiscal spending in 2025. The PBOC's limited monetary policy space due to yuan weakness reinforces expectations of increased fiscal stimulus.
- The dollar surged to a two-year high of 108.43, benefiting from higher U.S. rates. The yen weakened to 157.11 per dollar, prompting "alarmed" responses from Japanese officials who warned of potential intervention. Finance Minister Kato explicitly cited concerns over "one-sided and sharp moves" driven by speculators.
- Oil prices headed for weekly losses of over 2%, with Brent at $72.47 and WTI at $68.99. Sinopec's forecast that China's crude imports could peak by 2025 added to demand concerns. JPMorgan predicts an oil market surplus of 1.2 million bpd in 2025, citing strong non-OPEC+ supply growth.
- Gold steadied near one-month lows at $2,596, set for a 2% weekly decline as markets digest the Fed's hawkish outlook. The precious metal faced pressure from dollar strength and reduced rate cut expectations, with futures now pricing just one quarter-point reduction in 2025.
- Congress faces a potential government shutdown after rejecting a Trump-backed spending bill in a 174-235 vote. The bill, which would have suspended debt limits for two years, faced opposition from fiscal conservatives within the Republican Party. Government funding expires at midnight Friday, threatening disruptions to holiday travel and federal services.
- Starbucks faces escalating labor action as Workers United announced strikes across major U.S. cities, potentially affecting hundreds of stores by December 24. The union, representing over 10,000 baristas, cites unresolved issues over wages, staffing, and schedules despite nine bargaining sessions since April.
- Berkshire Hathaway increased its stake in Occidental Petroleum with a $409 million purchase over three days, reinforcing Warren Buffett's bet on the energy sector. The Bank of Japan released a critical review of former Governor Kuroda's stimulus policies, noting their limited effectiveness in changing consumer psychology and warning of potential lasting side effects.
- Cryptocurrencies are to end the week in red. Bitcoin is down less than 2% to $96,600, while Ethereum losses 3% to $3368.
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