Aurelia Butler

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After the bonanza of recent central bank decisions, this week is much quieter with only the minutes of a few of those meetings due. There are no Federal Reserve speeches and U.S. data is of secondary importance.Otherwise the themes were largely the same, with the dollar underpinned by a relatively strong economy and higher bond yields, which in turn is a burden for commodities and gold.It is also a headache for emerging market countries, which are having to intervene to stop their currencies from falling too far and stoking domestic inflation.For now, the afterglow from the U.S. inflation report was enough to lift MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%.Japan’s Nikkei gained 0.7% and South Korea firmed 0.9%.S&P 500 futures added 0.3%, while Nasdaq futures firmed 0.4%. The S&P 500 fell almost 2% last week and the Nasdaq 1.8%, though the latter is still up 30% for the year.Analysts at BofA noted the S&P 500 was up 23% for the year, but if the 12 largest companies were excluded the gain was only 8%. They cautioned such extreme concentration was a vulnerability going into 2025.Wall Street had rallied on Friday when a key gauge of core U.S. inflation printed lower than expected at 0.11%, providing a partial antidote to the Fed’s hawkishness earlier in the week.Fed funds futures rallied to imply a 53% chance of a rate cut in March and 62% for May, though they only have two quarter-point easings to 3.75-4.0% priced in for all of 2025. A few months ago, the market had hoped rates would bottom around 3.0%.The prospect of fewer cuts has combined with expectations of more debt-funding government spending to pressure bond markets, with 10-year yields surging almost 42 basis points in just two weeks for the biggest such increase since April 2022.”The recent firming in core inflation has interacted with a rising threat of tariffs and immigration restrictions to temper the Fed’s inflation optimism,” noted JPMorgan economist Michael Feroli.”Given our inflation and unemployment rate forecasts, we continue to look for 75bp of cuts next year with a hold in January and a quarterly cadence thereafter.”In currency markets, the dollar index held near two-year highs at 107.970 having climbed 1.9% for the month so far. The euro looked vulnerable at $1.0432 having again tested support around $1.0331/43 last week. [USD/] The dollar was firm at 156.44, having gained 4.5% so far in December, but faces more threats of Japanese intervention should it challenge the 160.00 barrier.The strong dollar combined with high bond yields to weigh on gold, which stood at $2,624 an ounce after slipping 1% last week. [GOL/]The high dollar is also a burden for oil, already hampered by concerns over Chinese demand following dismal retail sales figures last week. [O/R]Brent was up 4 cents at $73.00 a barrel, while U.S. crude gained 12 cents to $69.58 per barrel. More

The Lloyds (LON:LLOY) Bank Business Barometer measure of confidence among companies fell by 2 points to 39%, still above its long-run average of 29%.Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said the fall extended a drift down since the summer.”The key difference in this month’s results is that the fall in confidence is driven by firms’ own trading prospects,” he said. “There was, however, more positivity regarding the wider economy and, going into 2025, this offers some hope if companies continue to feel confident about the economy.” Britain’s economy contracted in September and October – the first consecutive monthly falls in output since the COVID-19 pandemic – as employers worried about the new government’s first budget which was announced on Oct. 30.The Bank of England last week forecast zero growth in gross domestic product in the final quarter of 2024 but it kept interest rates on hold as it awaited more clarity on the impact on inflation from the budget’s tax increases for employers.Lloyds’ gauge of price intentions increased slightly in December and remained well above the long-run average.A separate survey suggested the labour market was recovering some of its momentum in the run-up to the Christmas holidays.Online jobs website Adzuna said its measure of growth in vacancies rose by the most in 2024 so far in November, up by 2.3% from October, driven in part by the logistics sector.Average salaries advertised on Adzuna last month rose by 6.5% from a year earlier, the biggest increase since April 2021.Official data last week showed unexpectedly fast pay growth across the economy of 5.2%, well above the rate of around 3% which the BoE views as consistent with stable inflation. However, Andrew Hunter, co-founder of Adzuna, said employment trends were soon likely to reflect the impact of the budget as well as the slowdown in the economy.”Right now we are seeing a very competitive hiring landscape,” Hunter said. “Yet we expect that the wider macroeconomic environment may begin to impact hiring figures early next year.” More

Miller, wife of Trump’s designated homeland security adviser Stephen Miller, will join Trump’s Department of Government Efficiency (DOGE), an informal advisory body that Trump has said will enable his administration to “slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.””Katie Miller will soon be joining DOGE! She has been a loyal supporter of mine for many years, and will bring her professional experience to Government Efficiency,” Trump posted in a message on his social media platform Truth Social.Musk and Ramaswamy recently revealed plans to wipe out scores of federal regulations crafted by what they say is an anti-democratic, unaccountable bureaucracy, but have yet to announce members of the DOGE team. Musk has said he wants to slash the number of federal agencies from over 400 to 99.Katie Miller had served in the first Trump adminstration as deputy press secretary for the Department of Homeland Security and as press secretary for former Vice President Mike Pence.She is currently a spokesperson for the transition team for Trump’s designated Health and Human Services secretary, Robert Kennedy Jr. More

By Arathy SomasekharHOUSTON (Reuters) – Oil prices settled little changed on Friday as markets weighed Chinese demand and interest rate-cut expectations after data showed cooling U.S. inflation. Brent crude futures closed up 6 cents, or 0.08%, at $72.94 a barrel. U.S. West Texas Intermediate crude futures rose 8 cents, or 0.12%, at $69.46 per barrel. Both benchmarks ended the week down about 2.5%. The U.S. dollar retreated from a two-year high, but was heading for a third consecutive week of gains, after data showed cooling U.S. inflation two days after the Federal Reserve cut interest rates but trimmed its outlook for rate cuts next year.A weaker dollar makes oil cheaper for holders of other currencies, while rate cuts could boost oil demand.Inflation slowed in November, pushing Wall Street’s main indexes higher in volatile trading. “The fears over the Fed abandoning support for the market with its interest rate schemes have gone out the window,” said John Kilduff, partner at Again Capital in New York.”There were concerns around the market about the demand outlook, especially as it relates to China, and then if we were going to lose the monetary support from the Fed, it was sort of a one-two punch,” Kilduff added. Chinese state-owned refiner Sinopec (OTC:SHIIY) said in its annual energy outlook on Thursday that China’s oil consumption would peak by 2027, as demand for diesel and gasoline weakens. OPEC+ needed supply discipline to perk up prices and soothe jittery market nerves over continuous revisions of its demand outlook, said Emril Jamil, senior research specialist at LSEG. OPEC+, the Organization of the Petroleum Exporting Countries and allied producers, recently cut its growth forecast for 2024 global oil demand for a fifth straight month. JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day in 2025, as the bank forecasts non-OPEC+ supply increasing by 1.8 million barrels per day in 2025 and OPEC output remaining at current levels. U.S. President-elect Donald Trump said the European Union may face tariffs if the bloc does not cut its growing deficit with the U.S. by making large oil and gas trades with the world’s largest economy.In a move that could pare supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported on Thursday. Russia has circumvented the $60 per barrel cap imposed in 2022 following the invasion of Ukraine through the use of its “shadow fleet” of ships, which the EU and Britain have targeted with further sanctions in recent days.Money managers raised their net long U.S. crude futures and options positions in the week to Dec. 17, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

The alleged misconduct reported by the whistleblower related to several employees who worked in the company’s international e-commerce logistics parcels business, the company said in a statement, without giving further details.It said CEO Vincent Phang, along with the chief of the company’s international business unit, Li Yu, and Chief Financial Officer Vincent Yik had been dismissed after the company found they had been “negligent” in handling the case and misrepresented it before an audit committee.The company said it planned to announce a new CEO in due course. More