US crude futures down on Trump plan to boost fossil fuel output

BEIJING – U.S oil prices were down by more than USD 1 a barrel in early Asian trading on Tuesday from Friday’s close after President Donald Trump took office and announced a plan to maximize U.S. oil and gas production by declaring a national emergency.

The most actively traded WTI crude March contract CLc2 fell by USD 1.02 to USD 76.37 a barrel by 2356 GMT on Monday.

There was no settlement in the U.S. market for Jan 20 due to the Martin Luther King public holiday.

(Reporting by Colleen Howe; Editing by Jamie Freed and Sonali Paul)

Dollar drops, European stocks jump on Trump tariff delay

LONDON – The dollar fell broadly on Monday, while European stocks jumped, after an official for the incoming US administration said President-elect Donald Trump would stop short of imposing tariffs at his inauguration, which takes place later in the day.

European equity markets were firmly in positive territory in afternoon trading after the Wall Street Journal reported Trump would not impose import tariffs immediately after he’s sworn in later on Monday.

The pan-European STOXX 600 rose 0.3%, with the region’s main indices all up roughly 0.5%. MSCI’s All-World index was last up 0.4%.

The dollar tumbled by as much as 1.3% at one point, falling particularly hard against the currencies of the United States’ largest trading partners, such as the Canadian dollar, the Mexican peso, the euro and China’s yuan.

Trump takes the oath of office at noon Eastern Time (1700 GMT), and promised a “brand new day of American strength” at a rally on Sunday.

He has stoked expectations of an immediate slew of executive orders and, in a reminder of his unpredictability, launched a digital token on Friday, which soared above USD 70 before sliding to around USD 50 as traders turned uneasy.

Monday is a U.S. holiday, so the first responses to his inauguration in financial markets may be felt in foreign exchange and then during Asian trade on Tuesday.

Euro zone bond yields steadied by 1518 GMT.

“In the last two weeks we have seen two conflicting views from the new administration – the hard-liners on tariffs and those who favour a more market-friendly approach,” Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, said.

“So, this perception that the door is open to negotiations is important. But it doesn’t tell us where we will end and I will be waiting for details on the scope of tariffs, which sectors will be impacted,” he said, adding: “The fact that he might be choosing a gradual approach is an encouraging sign.”

The dollar fell 1.15% against the Canadian dollar to CAD 1.4319 and dropped 1.4% against the Mexican peso.

Trump has threatened tariffs of as much as 10% on global imports and 60% on Chinese goods, plus a 25% import surcharge on Canadian and Mexican products, duties that trade experts say would upend trade flows, raise costs and draw retaliation.

The yuan itself strengthened sharply in the offshore market, leaving the dollar down almost 1% on the day at 7.274.

The Australian dollar, which can serve as a more liquid proxy for the Chinese currency, rose 1.2% on the day. The euro, meanwhile rose 1.3% on the day, set for one of its largest one-day rally since late 2023.

Bitcoin hit an all-time high of USD 109,071.86 in early European trading before falling back to trade around USD 106,030.10, still a 1.2% gain for the day. The world’s largest cryptocurrency has surged more than 10% so far this month.

Trump’s new cryptocurrency launched on Friday – known as $TRUMP – soared to nearly USD 12 billion in market value, drawing billions in trading volume. First Lady Melania Trump’s cryptocurrency launched on Sunday hit a market cap of USD 1.9 billion.

In commodities, gold rose 0.2% to USD 2,708 an ounce and Brent crude futures Fell 1.2% to USD 79.82, while US crude dropped 1.6% to USD 76.62, on expectations that Trump may ease curbs on Russia’s energy sector in return for a truce in Ukraine.

(Reporting by Nell Mackenzie and Dhara Ranasinghe; Editing by Amanda Cooper and Sharon Singleton)

Oil prices dip but post 4th straight weekly gain on US sanctions

HOUSTON – Oil prices settled lower on Friday but notched their fourth straight weekly gain, as the latest US sanctions on Russian energy trade added to worries about oil supply disruptions.

Brent crude futures dipped 50 cents, or 0.6%, at USD 80.79 per barrel, but gained 1.3% this week. US West Texas Intermediate crude futures lost 80 cents, or 1%, at USD 77.88 a barrel, having climbed 1.7% for the week.

“Sanctions on Russia are causing tightness of supply in Europe, India, and China,” said Phil Flynn, senior analyst with Price Futures Group.

The Biden administration unveiled broader sanctions last week targeting Russian oil producers and tankers.

Investors are also assessing the potential implications of President-elect Donald Trump’s return to the White House on Monday. Trump’s pick for Treasury secretary said he was ready to impose tougher sanctions on Russian oil.

Money managers raised their net long US crude futures and options positions in the week up to Jan. 14, data from the US Commodity Futures Trading Commission showed on Friday. Speculators raised combined futures and options positions in New York and London by 8,038 contracts to 215,193 over that period.

However, weighing on oil prices were expectations of a halt in attacks by Yemen’s Houthi militia on ships in the Red Sea following a Gaza ceasefire deal.

The Houthis’ attacks have disrupted global shipping, forcing ships to make longer and more expensive journeys around southern Africa for more than a year.

The Israeli security cabinet approved the ceasefire deal on Friday, paving the way for the return of the first hostages from Gaza as early as Sunday. The accord was still conditional on approval by the full cabinet, which was meeting on Friday afternoon.

Expectations for increased demand lent some support to the oil market earlier on Friday. Data this week showed inflation easing in the US, the world’s biggest economy, bolstering expectations of interest-rate cuts.

Traders are also assessing fresh data from China, the world’s top oil importer. Its economy fulfilled the government’s ambitions for 5% growth last year.

However, China’s oil refinery throughput in 2024 fell for the first time in more than two decades barring the pandemic year of 2022, government data showed on Friday, as plants tempered operations in response to stagnant fuel demand and depressed margins.

Meanwhile, the US oil rig count, an indicator of future output, fell by two to 478 this week, energy services firm Baker Hughes said.

A blast of Arctic air is set to cover much of the United States with temperatures below freezing starting on Friday and into next week, and is set to drive up heating oil demand and likely impact some productionoperations.

(Reporting by Enes Tunagur in London, Yuka Obayashi in Tokyo, and Siyi Liu in Singapore;
Editing by Clarence Fernandez, Jason Neely, Paul Simao, Frances Kerry, Rod Nickel, and David Gregorio)

Global equity funds see drop in demand on rising US Treasury yields

Demand for global equity funds declined sharply in the week through Jan. 15, as US Treasury yields rose and expectations for the Federal Reserve’s interest rate cuts fell following a robust jobs report.

Global equity funds witnessed just USD 37.79 million worth of net purchases during the week, the smallest weekly buying since Dec. 18, 2024, as per LSEG Lipper data.

Last week, investors pondered possibility that the Fed may have finished cutting rates as data from the Labor Department showed US job growth accelerated in December, while the unemployment rate fell to 4.1% from 4.2% in November.

The benchmark 10-year yield climbed to 4.805% following the report, its highest level since November 2023.

However, the core US inflation reading for December came in below expectations on Wednesday, reigniting hopes for further cuts.

During the week ended Jan. 15 , investors withdrew a net USD 8.23 billion from US equity funds, the largest outflow since December 18, 2024, while investing USD 5.07 billion and USD 1.62 billion in Asian and European funds, respectively.

Sectoral equity funds saw USD 447 million in inflows, driven by a USD 1.08 billion investment into the financial sector.

Meanwhile, global bond funds attracted USD 8.88 billion, a sharp decline from the previous week’s USD 19.67 billion.

Short-term global bond funds received USD 5.02 billion and loan participation funds drew USD 1.39 billion, but government bond funds only saw USD 137 million in inflows, the lowest in three weeks.

Money market funds faced USD 94.13 billion in net sales, a reversal from the prior week’s USD 158.68 billion in purchases.

Precious metal funds ended a two-week selling streak with USD 327.55 million in purchases, while energy funds saw outflows for the sixth week, losing USD 54 million.

Emerging market data for 29,634 funds showed equities witnessed USD 4.06 billion worth of divestment, the largest weekly outflow in seven weeks. Bond funds, however, garnered a net USD 798 million worth of net purchases.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Varun H K)

Yen gets glimpse of choppy trading ahead

Friday’s price action could provide a glimpse of what to expect in USD/JPY trading in 2025.

The pair surged following reports of a phone conversation between US President-elect Donald Trump and Chinese President Xi Jinping. The discussion was described by Trump as “a very good one for both China and the USA.”

Markets are likely to focus on headlines after Trump’s inauguration on Monday, as key decisions will increasingly come from the top. This could result in choppy markets, though the expectation that agreements will eventually be reached might limit significant volatility and weaken the yen as risk tone improves.

Yen traders, in particular, may choose to capture moves in USD or CNH until US-Japan relations take center stage. Reports indicate that Japanese Prime Minister Shigeru Ishiba could visit the US as early as the first half of February, though a meeting with Trump has not been confirmed.

USD/JPY posted a session high of 156.20 following the Xi-Trump headline though modest turnover prevented a break of 156.53, relieving bearish pressure from a series of lower highs and lower lows. Large option expiries near 156.95-157.05 and concerns over potential intervention above 158 could also hinder further gains.If USD/JPY fails to extend higher, it risks falling back below the key 155 psychological level. Further declines could test the 38.2% Fibonacci retracement of its December to January rise at 154.97, the 55-day moving average at 154.66, the Dec. 19 low at 154.45, and an ascending trend line from the September low near 154.08.

(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

Gold poised for third weekly gain as markets look to Trump inauguration

Gold prices were pressured by an uptick in the US dollar on Friday, but remained on track for a weekly gain as uncertainties around incoming President Donald Trump’s policies and renewed bets of further rate cuts lifted bullion above the key USD 2,700 level.

Spot gold eased 0.4% to USD 2,701.03 per ounce by 03:10 p.m. ET (2010 GMT), while US gold futures settled 0.1% lower to USD 2,748.70.

“The pullback today is not significant, but more of a profit-taking move than anything else, maybe helped by the dollar being a little higher in the day, adding some light pressure,” said David Meger, director of metals trading at High Ridge Futures.

Gold hit over one-month high on Thursday, USD 65.6 away from its all-time high of USD 2,790.15 hit in October. Prices have gained 0.5% so far for the week, their third straight weekly gain after softer-than-expected US core inflation figures on Wednesday intensified speculation of more than a single rate cut from the Fed.

Traders are pricing in two rate cuts by year-end, with Fed Governor Christopher Waller hinting at the possibility of more cuts should economic data weaken further.

Markets now keenly await Trump’s inauguration on Jan. 20, and his broad trade tariffs are expected to further ignite inflation and trigger trade wars, potentially increasing bullion’s safe-haven appeal.

“The uncertainty in regard to the policies that President Trump is going to put in place has been one of the supportive factors for gold,” Meger added.

Non-yielding gold, often seen as a hedge against inflation and political uncertainty, benefits from lower interest rates.

“There are question marks about the state of tariffs, how they’ll be implemented. Many investors are looking to gold as a way of hedging some of the downside risks, should these new policies be damaging to growth,” said Nitesh Shah, commodity strategist at WisdomTree.

Spot silver slipped 2% to USD 30.17 per ounce, palladium rose 1% to USD 949.99 while platinum added 0.9% to USD 940.28.

(Reporting by Anjana Anil, Daksh Grover, and Anushree Mukherjee in Bengaluru, additional reporting by Swati Verma; Editing by Shreya Biswas, Vijay Kishore, and Shailesh Kuber)

Corporate hedging to save debt costs may have worsened 10yr sell-off

A sell-off in US Treasury markets in recent weeks was likely made worse by corporate plans to borrow nearly USD 190 billion in the bond market this month, bankers and analysts said, highlighting a risk for markets that is likely to persist this year.

The spillover from the corporate to the government bond market happened as many companies bought protection against future interest rate increases, called a pre-issuance hedge, by short selling Treasuries in advance of their bond offerings, these people said.

The pressure on Treasury yields from corporate borrowing adds a new dimension to an intense market focus on the likely trajectory of bond yields this year. Rising bond yields can have a dampening effect on economic growth and spill over into other assets, such as stocks and currencies.

These hedges are essentially a bet against US government bonds, or a short trade that profits if Treasury yields rise. Yields move inversely to bond prices. Corporate bonds are priced as a spread, or additional interest rate, over the yield on Treasury bonds.

So, if yields rise by the time the company issues its bond, the hedge would pay out and offset its interest costs. The company can also lose money on the hedge if yields fall.

Yields have been rising in the USD 28 trillion Treasury market since September, as the market factored in expectations of growth, inflation, the supply of bonds, and the potential impact of President-elect Donald Trump’s policies. That gave them reason to expect yields would keep going up.

Amol Dhargalkar, managing partner of advisory firm Chatham Financial, said “hedging these future bond issuances was intense in the last few weeks.” Typically, companies hedge close to half the size of a future bond issuance, he said.

The first 16 days of January saw new corporate bonds worth USD 127 billion. Another USD 63 billion on average are expected to be priced over the remainder of the month, according to Informa Global Markets data.

Overall, syndicate bankers, on average, are expecting around USD 1.65 trillion of new investment-grade bonds in 2025, making it the second-most prolific year ever for such offerings, according to Informa Global Markets.

Pre-issuance hedges tend to be used more frequently during periods of volatility in Treasury markets, something that many market experts expect would also be a feature this year, in part due to the uncertainty around Trump’s policies.

HEDGING ACTIVITY

Pre-issuance hedges are done as trades between companies and their banks and are typically disclosed later, making it impossible to know the extent of the activity.

But bankers and analysts said the hedges were a noticeable factor in recent weeks.

“Corporate deal flow remains topical as issuers continue to bring deals to market and hedging needs provide incremental activity and trading direction,” BMO Capital Markets strategists wrote in a note this week.

In a sign pre-issuance hedging activity was having an impact, the yield on the benchmark 10-year Treasury bond climbed to 4.8% on Jan. 13 from 4.38% on Dec. 17, coinciding with corporate issuance activity.

At the same time, net short positions of dealers on 10-year Treasury futures 1043602DNET increased over the past few weeks, hitting a record high in the week ending on Jan. 7, data from the Commodity Futures Trading Commission shows.

The influence of the hedging activity was also magnified as the Treasury competed for investor dollars, some of the market experts said.

In the first eight days of 2025, US Treasury sold 3-year, 10-year and 30-year bonds in back-to-back auctions to raise over USD 100 billion, at the same time as companies offered some USD 79 billion in investment-grade bonds.

“The Treasury bond markets were primed up for a sell-off,” said Guneet Dhingra, head of US rates strategy at BNP Paribas.

(Reporting by Shankar Ramakrishnan and Davide Barbuscia; Editing by Paritosh Bansal and Anna Driver)

China, HK stocks end the week higher on better-than-expected economic data

SHANGHAI – China and Hong Kong stocks closed higher on Friday and ended the week with gains as a slew of better-than-expected Chinese economic data lifted sentiment.

** China’s blue-chip CSI300 Index closed up 0.3%, while the Shanghai Composite Index gained 0.2%. Hong Kong benchmark Hang Seng added 0.3%.

** The CSI300 and Hang Seng closed the week 2.1% and 2.7% higher, respectively.

** China’s economy ended 2024 on better footing than expected, helped by a flurry of stimulus measures. The economy grew 5.4% in the fourth quarter from a year earlier, significantly beating analysts’ expectations and marking the quickest rise since the second quarter of 2023.

** Meanwhile, industrial output grew 6.2% from a year earlier in December, beating expectations and marked the fastest growth since April.

** Technology and semiconductor shares led gains in China and Hong Kong as investors traded around themes of independent innovation amid the threat of a new trade war with the United States.

** China’s tech and semiconductor indexes rose 1.4% and 2.4%, respectively.

** In Hong Kong, China’s top chip foundry Semiconductor Manufacturing International Corp (SMIC) surged nearly 10%, hovering near its highest since July 2020.

** Real estate stocks were roughly flat after official data showed China’s new home prices stopped falling month-on-month in December for the first time in 18 months.

** China Vanke fell as much as 9% on Friday following reports that authorities had detained its chief executive. However, the stock pared some losses later in the day.

(Reporting by Shanghai Newsroom; Editing by Sumana Nandy and Savio D’Souza)

Oil settles lower on expected halt to Houthi shipping attacks

HOUSTON – Oil prices settled lower on Thursday with Yemen’s Houthi militia expected to halt attacks on ships in the Red Sea, and investors weighing strong US retail sales data.

Brent crude futures settled down 74 cents, or 0.9%, at USD 81.29 per barrel, after rising 2.6% in the previous session to their highest price since July 26.

US West Texas Intermediate crude futures settled down USD 1.36, or 1.7%, to USD 78.68 a barrel, after gaining 3.3% on Wednesday to their highest price since July 19.

US crude futures fell more than USD 2 at times during the session.

Maritime security officials said they were expecting the Houthi militia to announce a halt in its attacks on ships in the Red Sea, after a ceasefire deal in the war in Gaza between Israel and the militant Palestinian group Hamas.

The attacks have disrupted global shipping, forcing firms to make longer and more expensive journeys around southern Africa for more than a year.

“The Houthi development and the ceasefire in Gaza help the region stay calmer, taking some of the security premium out of oil prices,” said John Kilduff, a partner at Again Capital in New York.

“It’s all about oil flows,” Kilduff added.

But investors remained cautious, as the leader of the Houthis said his group would monitor the implementation of the ceasefire deal, and continue its attacks on vessels or Israel if the deal is breached.

The ceasefire in the Gaza Strip should start on Sunday as planned, despite the need for negotiators to tie up a “loose end,” US Secretary of State Antony Blinken said.

Earlier on Thursday, the US Commerce Department reported US retail sales increased in December as households bought more motor vehicles and a range of other goods, pointing to strong demand in the economy.

US crude futures extended losses after investors interpreted the data as bolstering the Federal Reserve’s cautious approach to cutting interest rates this year.

But prices regained some ground after Fed Governor Christopher Waller said inflation is likely to continue to ease and possibly allow the US central bank to cut interest rates sooner and faster than expected.

“Waller’s comments really offset the economic data this morning, in terms of making it look like there is room for the Fed to cut,” Again Capital’s Kilduff said.

Lower interest rates can stimulate economic growth and increase oil demand.

NEW SANCTIONS ON RUSSIA

Investors also continued to weigh the Biden administration’s latest round of sanctions targeting Russia’s military industrial base and sanctions-evasion efforts, after earlier levying broader sanctions on Russian oil producers and tankers. Moscow’s top customers are now scouring the globe for replacement barrels, while shipping rates also have surged.

With US President-elect Donald Trump being sworn in for his second term on Monday, “the market is approaching the ‘wait-and-see’ phase and awaits the reaction from the incoming US administration on the issue” of sanctions, said Tamas Varga at oil broker PVM.

Pricier oil may lead to clashes between Trump and the Organization of the Petroleum Exporting Countries, if the incoming US president follows his previous playbook.

During his first term, Trump demanded the producer group rein in prices whenever Brent climbed to around USD 80 a barrel.

OPEC and its allies, collectively known as OPEC+, have been curtailing output over the past two years and are likely to be cautious about increasing supply despite the recent price rally, said Rory Johnston, the founder of Commodity Context.

“The producer group has had its optimism dashed so frequently over the past year that it is likely to err on the side of caution before beginning the cut-easing process,” Johnston said.

(Reporting by Georgina McCartney in Houston, Paul Carsten in London, Siyi Liu in Singapore, and Shariq Khan in New York; Editing by Elaine Hardcastle, Emelia Sithole-Matarise, David Evans, Paul Simao, and Rod Nickel)

Gold climbs to over one-month high on weaker yields after US data

Gold prices rose to a more-than-one-month high on Thursday after the latest US economic data pressured the Treasury yields further, following a soft core inflation reading this week that increased bets for a more dovish Federal Reserve policy.

Spot gold gained 0.8% to USD 2,716.91 per ounce as of 01:40 p.m. ET (1840 GMT), hitting its highest since Dec. 12. Prices hit an all-time high of USD 2,790.15 on Oct. 31, 2024.

US gold futures settled 1.2% higher at USD 2,750.90.

Initial claims for state unemployment benefits rose to a seasonally adjusted 217,000 for the week ended Jan. 11, the Labor Department said on Thursday. A Reuters poll had forecast 210,000 claims.

“The initial jobless claims were more than expected, so that signals some weakening in the labor market,” said Alex Ebkarian, chief operating officer at Allegiance Gold.

“We also saw the US Treasury yields dropping, so we’re seeing the attractiveness of gold re-invigorating.”

The benchmark 10-year Treasury yields trimmed gains and were trading at an over one-week low after retail sales, jobless claims and import prices data.

Gold prices extended gains on Wednesday after data showed core US inflation increased 0.2% in December after rising 0.3% for four straight months, also giving hopes for easing monetary policy.

Markets now expect the Fed to deliver 37 basis points (bps) worth of rate cuts by year-end, compared with about 31 bps before the inflation data.

“Gold should find itself in a supportive environment, so long as market participants can hold on to expectations for Fed rate cuts in 2025,” said Exinity Group chief market analyst Han Tan.

Elsewhere, Israel airstrikes killed at least 77 people in Gaza, hours after a ceasefire deal was announced to bring an end to 15 months of war.

Gold is seen as a hedge against inflation and geopolitical uncertainty, but higher interest rates tarnish non-yielding bullion’s allure.

Spot silver rose 0.5% to USD 30.80 per ounce and platinum added 0.4% to USD 934.20, while palladium fell 2.1% to USD 940.60.

(Reporting by Anjana Anil and Anushree Mukherjee in Bengaluru; Editing by Vijay Kishore, Mohammed Safi Shamsi, and Alan Barona)

2024 Mid-Year Economic Briefing: Navigating the Easing Cycle

Investing with Love: A Mother’s Guide to Putting Money to Work

Investor Series: An Introduction to Estate Planning

Inflation Update: Weak demand softens shocks

Monthly Economic Update: Fed cuts incoming