India rate call in focus, political crises cool

India’s central bank interest rate decision grabs the spotlight in Asia on Friday, as investors digest yet another record high for the Nasdaq and adjust positions ahead of the weekend.

The US employment report for November later in the day is released after Asia closes, so investors across the continent may be inclined to square positions as best they can in preparation for Monday.

The main event in Asia on Friday is in India. The Reserve Bank of India is overwhelmingly expected to hold its key repo rate at 6.50%, after a sharp rise in inflation past the RBI’s 6% tolerance ceiling in October prompted many economists to push back their forecasts for the first cut to early next year.

With the rupee at record lows against the dollar, standing pat makes sense. But economists at Nomura, one of the five out of 67 houses in the Reuters poll predicting a rate cut, argue that weakening growth dynamics must be taken into account now.

Although the rupee has never been weaker, benchmark bond yields are at their lowest in almost four years, Indian stocks are lagging many of their regional peers, and the economy is growing at its slowest pace in nearly two years. Maybe the RBI should start the easing cycle sooner rather than later?

Investors go into the final trading session of the week against a relatively calm global backdrop, all things considered. Any market impact from the political ructions in South Korea and France appears to be fading and contained, and the dollar’s dip on Thursday will be welcomed too.

The dollar fell 0.5% on Thursday. It’s probably too early to read anything too deeply into it, but that was its third down day in a row, a losing streak not seen since September. It will take more than that – perhaps a return to the September lows, around 5% below current levels – to really call into question the dollar’s resilience, but could fatigue be setting in?

Fatigue is something the US economy doesn’t seem to be showing any signs of yet. The Atlanta Fed on Thursday raised its GDPNow model estimate for Q4 growth to a remarkable 3.3%. As investors fret about growth in Europe, China and many other key economies around the world, America appears to be the exception that continues to prove the rule.

This is a double-edged sword for Asia. On the one hand, it’s clearly good news as booming US markets should lift all others. But if it lifts the dollar and Treasury yields, then global financial conditions tighten and capital is sucked towards the US.

Indeed, net selling of Asian equities by foreigners in November was the highest since June 2022.

Here are key developments that could provide more direction to markets on Friday:

– India rate decision

– Japan household spending (October)

– South Korea current account (October)

(Reporting by Jamie McGeever; Editing by Deepa Babington)

US yields fall as markets see high odds of rate cut this month

NEW YORK – US Treasury yields fell on Wednesday, reversing course after softer economic data offset Federal Reserve officials’ comments, and markets continued to price in a 25-basis point interest rate cut in the US central bank’s December meeting.

Yields initially rose after St. Louis Federal Reserve President Alberto Musalem said inflation could take up to two years to get to the central bank’s target and that the pace of future actions has grown less clear.

However, the ADP National Employment Report showed private payrolls rose by 146,000 jobs last month, compared with the 150,000 estimate of economists polled by Reuters. The US services sector activity slowed in November after posting big gains in recent months, according to the Institute for Supply Management survey on Wednesday.

Fed Chair Jerome Powell also said earlier on Wednesday that
the economy is stronger than it had appeared in September, making policymakers potentially more cautious about lowering rates further. His remarks were likely his last before a quiet period for Fed officials prior to the Dec. 17-18 meeting beginning on Saturday.

Fed Governor Christopher Waller said on Monday he was “leaning toward” a cut, but others did not commit to the outcome.

“Markets are still expecting a 25-basis points rate cut in December, but the CPI and nonfarm payrolls will have their say,” said Vail Hartman, analyst at BMO Capital Markets in New York.

The benchmark US 10-year Treasury note yield US10YT=TWEB fell 3.7 basis points to 4.184%. The two-year yield, which typically moves in step with interest rate expectations, fell 3.9 basis points to 4.132%.

The US Treasury yield curve between two and 10-year notes US2US10=TWEB, an indicator of economic expectations, steepened to 4.8 basis points.

Yields extended declines after far-right and left-wing lawmakers
joined forces
to back a no-confidence motion against French Prime Minister Michel Barnier and his government, pushing the European Union’s second-biggest economic power deeper into a political crisis.

Nonfarm payrolls in November will be unveiled on Friday. The consumer price index data will be released next Wednesday. The odds of a 25-basis points rate cut were at 75.7%, according to CME’s FedWatch tool.

Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania, said yields have been volatile over the last week’s sessions, as investors followed comments from Fed officials.

“That said, I thought the ADP data came in somewhat benign; the most important jobs data will come on Friday.”

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.379% after closing at 2.395% on Tuesday.

The 10-year TIPS breakeven rate was last at 2.287%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Tatiana Bautzer and Chuck Mikolajczak; editing by Jonathan Oatis and Richard Chang)

Gold prices tick higher on benign US employment data

Gold edged higher on Wednesday after data showed US private payrolls rose at a moderate pace last month, while investors digested remarks from Federal Reserve Chair Jerome Powell and looked forward to Friday’s non-farm payrolls report.

Spot gold was up 0.4% at USD 2,654.03 an ounce by 02:15 p.m. ET (1915 GMT). US gold futures settled 0.3% higher at USD 2,676.20.

“Gold bounces as ADP disappoints, coming in just short of consensus. Market was looking for a bigger bounce a month after the hurricanes and the Boeing strike,” said Tai Wong, an independent metals trader.

Private payrolls rose by 146,000 last month, the ADP report showed. Economists polled by Reuters had forecast private employment increasing by 150,000 positions.

Powell said the recent performance of the economy will allow the US central bank to be more judicious with the future path of interest rate cuts.

Investors now await Friday’s pivotal US payroll report and next week’s inflation data for clues on the Fed’s policy trajectory.

Gold is seeing a muted reaction today, with a stronger impact expected from the upcoming US nonfarm payrolls and if data points to weakening employment it would support prices, said Everett Millman, chief market analyst with Gainesville Coins.

US central bankers on Tuesday signaled inflation is gradually heading toward the 2% target, hinting at potential interest rate cuts.

Traders are pricing in a 77% chance of a 25-basis-point cut at the Fed’s Dec. 17-18 meeting. Bullion, which does not pay any interest, historically performs well in low-interest rate environments.

Safe-haven gold was also supported by global geopolitical unrest, including South Korea’s political turmoil, France’s government facing collapse, relentless Russian drone strikes in Ukraine and Israel threatening war with Lebanon if its truce with Hezbollah collapses.

Spot silver rose 1% to USD 31.33 an ounce, platinum lost 1.3% to USD 940.6 and palladium was up 0.5% at USD 976.56.

(Reporting by Sherin Elizabeth Varghese in Bengaluru, additional reporting by Brijesh Patel and Swati Verma; Editing by Krishna Chandra Eluri)

Politics prove investors right on the ‘Korea Discount’

SINGAPORE – Global investors have always valued South Korea below other markets for reasons ranging from tensions with the North to the tight structures of its conglomerates – politics this week gave them cause to deepen that discount.

Korean stocks fell and the won plunged to two-year lows on Tuesday after President Yoon Suk Yeol shocked the world by declaring martial law in the export powerhouse.

The impact was short-lived. Parliament overturned the ruling within hours and markets stabilized. Yet, for investors, it was a reminder of the reasons Korean stocks and the currency have underperformed global markets for months.

“In the longer term, the martial law episode would accentuate the ‘Korean Discount’, an elevated risk premium with trading Korea-related assets, equities, FX and bonds,” said Daniel Tan, a Singapore-based portfolio manager at Grasshopper Asset Management.

“Investors could require a bigger risk premium to invest in the won and Korean equities.”

Korea’s legendary “discount” refers to how cheaply stocks in the KOSPI 200 index are priced relative to the assets companies hold, known as the price-to-book (P/B) ratio. A majority of companies listed on the KOSPI trade at a P/B below 1, way below peers. The MSCI world index trades at a ratio of 3.5.

The current political turmoil comes as Yoon and the opposition-controlled parliament clash over the budget and various scandals. By Wednesday morning, opposition lawmakers had vowed to impeach the president while the Chosun Ilbo newspaper reported the cabinet intended to resign en masse.

There are a few reasons for Korea’s perpetual discount.

One is the risk that comes from long-running tensions between North and South Korea.

Another is the nature of its businesses dominated by opaque family-run chaebols that seldom give out generous dividends.

The share price of biggest of them, chipmaker Samsung Electronics, is 9.2 times future earnings versus 18.5 for regional peer Taiwan Semiconductor Manufacturing Co. (TSMC).

The discount deepened this year as investors fretted over how exposed Korea is to China, whose anemic economy now faces fresh US trade tariffs. The won is down 9% this year against the dollar, while the KOSPI has shed 7%, both lagging their emerging market peers.

“Despite the market being cheap and having underperformed —which is usually an enticing factor for investors — there’s not enough to see the won stabilize,” said Sat Duhra, portfolio manager for Asian dividend income at Janus Henderson.

“Investors have been wary of the so-called ‘Korea discount’, and this only reinforces the sentiment. I don’t plan to add to Korea in this uncertainty.”

Foreign money has been leaving Korea’s stock market since August, with outflows in four months topping USD 14 billion.

Money has gone into its high-yielding bonds. Yet investors could now turn cool on those bonds if the political mess morphs into a Yoon impeachment, snap elections or higher spending commitments by the country’s two main political parties.

While authorities scrambled to prop up the won and calm financial markets on Wednesday, investors are still anxious about what comes next for the currency.

“Near term, you’ve got to think that it’s going to be difficult for the won to do particularly well: Terrible structural backdrop, the domestic economy looks weak, you’ve got the central bank likely coming in and doing more (easing) than was previously expected, and on top of that, political malaise,” said Rob Carnell, ING’s regional head of research for Asia-Pacific.

“The fact that just generally the dollar looks stronger than everything else by default (makes it) almost a perfect storm.”

(Additional reporting by Kevin Buckland in Tokyo, Summer Zhen in Hong Kong, and Gaurav Dogra in Bengaluru; Editing by Sam Holmes)

Tentative calm in Seoul, US juggernaut rolls on

As a degree of calm descends on South Korean markets, for now at least, Asia is set for a positive open on Thursday as investors also draw encouragement from another record high on Wall Street and US bond yields falling to the lowest in a month.

Federal Reserve Chair Jerome Powell’s upbeat remarks on Wednesday – that the US economy is in “remarkably” good shape and he feels “very good” about where US monetary policy is – will also support investor sentiment and risk appetite.

The S&P 500 rose for a fourth day on Wednesday for its 55th record high this year, and has now fallen only once in the last 12 trading sessions. The Nasdaq registered its second 1% gain this week.

US bond yields declined across the curve, most notably at the short end where the two-year yield fell to 4.12%. That’s the lowest since the US presidential election on Nov. 5, signaling that this particular leg of the so-called “Trump trade” has fizzled out.

The fall in yields, partly fueled by surprisingly soft US service sector data, was accompanied by a weaker dollar, offering a double dose of relief for Asian and emerging markets.

Investors will also draw comfort from the apparent financial stability in South Korea, even though the political situation remains extremely tense and fluid.

The won has recovered most of the losses that pushed it to a two-year low on Wednesday, and short-term implied won volatility has eased too. On the other hand, Kospi futures are still pointing to a fall of more than 1% for local stocks at Thursday’s open.

Meanwhile, market signals from China are also pointing to relative calm in FX but weakness in stocks. The yuan rebounded from a 13-month low to clock its biggest rise in a month on the onshore spot market, while weak service sector data and trade tensions with the US pushed stocks into the red again.

The Australian dollar remains on the back foot after GDP data on Wednesday showed that Australia’s economy expanded more slowly in the third quarter than was expected. That said, the central bank’s first rate cut is still not fully priced in until April, according to the interest rate swaps market.

The calendar in Asia on Thursday sees the release of revised South Korean GDP data, inflation numbers from Taiwan and the Philippines, retail sales from Singapore, and Australian trade.

As political uncertainty swirls in Seoul, it’s worth noting that Asia’s fourth-largest economy only narrowly avoided what would have been a rare recession, according to initial estimates, contracting 0.2% in Q2 and rebounding 0.1% in Q3.

Here are key developments that could provide more direction to markets on Thursday:

– Reaction to political developments in South Korea

– Fallout from the collapse of France’s government

– Taiwan, Philippines inflation (November)

(Reporting by Jamie McGeever; Editing by Diane Craft)

Nasdaq, S&P 500 post record closing highs

NEW YORK – The S&P 500 and Nasdaq eked out record closing highs on Tuesday, with tech-related shares extending recent gains as investors awaited further jobs data.

The Dow finished slightly lower on the day.

Among S&P 500 sectors, technology, communication services, and consumer discretionary were the only gainers, extending their advance on Monday.

Market watchers also digested reassuring comments from Federal Reserve policymakers. Two policymakers said they see inflation heading down to the US central bank’s 2% target and that the job market is “solid.”

They stayed away from signaling whether they would support another interest rate cut later this month. On Monday, Fed Governor Christopher Waller said he was inclined “at present” to support another rate cut this month.

Investors will pay close attention to the US monthly employment report on Friday. They also are keen to see other data this week, including a November reading of private payrolls and the Institute for Supply Management’s services report.

“The market is kind of waiting for the big data, which would be ISM and the (employment report) on Friday … so people are sitting on their hands a little bit,” said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest in Elmhurst, Illinois.

A report on Tuesday showed US job openings increased solidly in October while layoffs dropped by the most in 1-1/2 years.

Financial markets expect a roughly 72% chance of a 25-basis-point rate cut at the Fed’s Dec. 17-18 policy meeting, CME Group’s FedWatch tool showed.

Shares of Amazon rose 1.3%. The company announced a new slate of artificial intelligence platforms, known as foundation models, at its annual AWS conference.

The Dow Jones Industrial Average fell 76.47 points, or 0.17%, to 44,705.53, the S&P 500 gained 2.73 points, or 0.05%, to 6,049.88 and the Nasdaq Composite gained 76.96 points, or 0.40%, to 19,480.91.

The S&P 500 advanced 5.7% in November as former US President Donald Trump recaptured the White House in the Nov. 5 election and his Republican Party swept both houses of Congress. The index is up roughly 27% for the year to date.

“This is a market that has performed extremely well. You want it to pause, take a breather and wait for another catalyst to push it higher,” said Quincy Krosby, chief global strategist, LPL Financial in Charlotte, North Carolina.

The Dow transportation average fell 2% in its biggest daily percentage drop since September.

US-listed shares of South Korean companies also declined, with iShares MSCI South Korea ETF easing 1.6%.

South Korean President Yoon Suk Yeol said he would move to lift a martial law declaration he had imposed just hours before that unnerved world markets.

Shares of Tesla declined 1.6% after data showed the automaker’s sales of China-made electric vehicles fell 4.3% year-on-year to 78,856 in November.

After the closing bell, Salesforce shares rose about 7% following the release of its results, including stronger-than-expected quarterly revenue. The stock ended the regular session 0.1% higher.

Declining issues outnumbered advancers by a 1.24-to-1 ratio on the NYSE. There were 310 new highs and 50 new lows on the NYSE.

On the Nasdaq, 1,647 stocks rose and 2,732 fell as declining issues outnumbered advancers by a 1.66-to-1 ratio.

Volume on US exchanges was 12.70 billion shares, compared with the 14.81 billion full-session average over the last 20 trading days.

(Reporting by Caroline Valetkevitch; additional reporting by Shashwat Chauhan and Purvi Agarwal in Bengaluru; Editing by Maju Samuel and Richard Chang)

Oil rises on fears about Lebanon, further OPEC+ supply cuts

NEW YORK – Oil prices rose more than 2% on Tuesday as Israel threatened to attack the Lebanese state if its truce with Hezbollah collapses, and as investors positioned for OPEC+ to announce an extension of supply cuts this week.

Brent crude futures posted their biggest gains in two weeks, rising by USD 1.79, or 2.5%, to settle at USD 73.62 a barrel. US West Texas Intermediate crude futures also rose the most since Nov. 18, gaining USD 1.84, or 2.7%, to close at USD 69.94 per barrel.

Israeli forces have continued strikes against what they say are Hezbollah fighters ignoring last week’s truce agreement in Lebanon. Top Lebanese officials have urged Washington and Paris to press Israel to uphold the ceasefire.

The risk to the ceasefire has some oil traders worrying more about tensions in the Middle East, UBS analyst Giovanni Staunovo said.

While the Lebanon conflict has not resulted in oil supply disruptions, traders will closely track tensions between Iran and Israel over the coming months, Staunovo added.

Also supporting oil prices, the Organization of the Petroleum Exporting Countries and allies will likely extend output cuts when OPEC+ meets on Thursday.

The group is likely to extend supply cuts until the end of the first quarter next year, four OPEC+ sources told Reuters.

OPEC+, which accounts for about half of the world’s oil production, has been looking to gradually unwind supply cuts through next year. However, the prospect of a market surplus has pressured oil prices, with Brent trading nearly 6% below its average for December 2023.

An extension of OPEC+ supply cuts will limit the market surplus and provide the oil market a softer landing than most forecasts expected, Scott Shelton, energy analyst at TP ICAP told clients in a note.

“Given a rise in compliance with production cuts from Russia, Kazakhstan and Iraq, the lower Brent price level and indications in press reports, we assume an extension of OPEC+ production cuts til April,” Goldman Sachs analysts said in a note.

The global oil demand outlook remains weak and China’s crude imports are likely to peak as early as next year as demand for transport fuel begins to decrease, researchers and analysts said.

US crude oil inventories rose 1.2 million barrels in the week ended Nov. 29, market sources said citing data from the American Petroleum Institute. Fuel stocks also rose, they said.

Rising inventories typically indicate weak demand.

Official data on oil stocks from the US Energy Information Administration is due Wednesday at 10:30 a.m. ET (1530 GMT). Analysts polled by Reuters expect a 700,000 barrel decline in crude stocks.

“Oil is not going to be in short supply next year,” Francisco Blanch, head of global commodities at BofA Securities told reporters. “Demand growth rates will slow in 2025, and we cannot count on China to account for half the global oil demand,” he said.

“(Oil) prices will roll down a bit,” he said.

(Reporting by Shariq Khan, Robert Harvey, Enes Tunagur, Florence Tan, Colleen Howe; Editing by Jonathan Oatis and Stephen Coates)

Longer-dated US Treasury yields rise on jobs openings

NEW YORK, Dec 3 (Reuters) – Longer-dated US Treasury yields rose on Tuesday after labor market data showed an increasing number of unfilled jobs, but demand remained high at the short end as investors seeking safe haven from geopolitical uncertainty in Asia bought Treasuries.

US job openings increased moderately in October while layoffs declined, suggesting the labor market continued to slow in an orderly fashion. Job openings, a measure of labor demand, rose 7.744 million by the last day of October, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday. Layoffs decreased 169,000 to 1.633 million.

After South Korean President Yoon Suk Yeol on Tuesday declared martial law, the country’s currency tumbled to a two-year low and investors fled to low-risk assets such as Treasuries. The president agreed to lift the martial law decree after parliament rejected it.

The yield on the benchmark US 10-year Treasury note rose 0.5 basis point to 4.199%. The two-year US . Treasury yield, which typically moves in step with interest rate expectations, fell 4.7 basis points to 4.151%.

The part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, steepened to 4.6 basis points.

Two Federal Reserve policymakers on Tuesday said they believe inflation is heading down to the US central bank’s 2% target and the job market is solid, even as neither gave any clear steer on whether they’ll support another interest rate cut later this month.

Fed Governor Adriana Kugler and San Francisco Fed President Mary Daly did not indicate at public events on Tuesday whether they favor a rate cut at the central bank’s Dec. 17-18 policy meeting, but both said they will be looking closely at the release on Friday of the US employment report for November.

The odds of a 25-bp easing this month were at 72% on Tuesday afternoon, slightly down from 75% late on Monday, according to CME’s FedWatch.

On Monday, Fed Governor Christopher Waller said he was leaning toward another rate cut. Fed Chair Jerome Powell on Wednesday will give what are expected to his last public remarks before the meeting. Wednesday will also see additional job market data with the ADP National Employment Report.

“Yields went up a couple of basis points after the JOLTS report, but markets do not think a higher job creation number changes the Fed’s view as expressed by Governor Waller on Monday“, said Angelo Manolatos, macro strategist at Wells Fargo.

Lou Brien, strategist at DRW Trading in Chicago, also noted the safe haven effect. “There might have been a little bit of a bid in Treasuries, sort of a safety play there, because it looks like people are getting out of South Korean ETFs.”

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.383% after closing at 2.351% on Tuesday. The 10-year TIPS breakeven rate was last at 2.292%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Tatiana Bautzer; Editing by Nick Zieminski and Jonathan Oatis)

South Korea’s martial law confusion deepens caution

Dec 4 (Reuters) – A look at the day ahead in Asian markets.

A sudden burst of political chaos in South Korea has put investors in Asia on the defensive, pointing to a cautious market open across the continent on Wednesday despite Wall Street’s resilience the previous day.

South Korea’s President Yoon Suk Yeol declared martial law on Tuesday to thwart “anti-state forces” among his opponents, creating the most serious challenge to the country’s democracy since the 1980s, only to lift it hours later after lawmakers rejected the move and protesters gathered outside parliament.

The initial declaration had an immediate impact on the won, slamming it to a 2-year low against the dollar. At one point, it was down 2% and set for its biggest one-day loss since Nov. 9, 2016, the day after the 2016 US election that swept Donald Trump to power and started the clock ticking on a looming trade war with China.

This cemented the won’s unwanted status as the worst-performing major Asian currency against the dollar this year, bringing its year-to-date losses to nearly 10%. The benchmark Kospi is also one of the worst-performing equity indexes in Asia this year, down nearly 6% year-to-date at Tuesday’s close.

Yoon’s about face, however, appears to have restored a sense of calm. The won is still weaker but reclaimed more than half its losses from earlier on Tuesday. Kospi futures traded on the Eurex exchange are pointing to a fall at the stock market open in Seoul of only around 0.3%.

Elsewhere in Asia, India’s rupee is at a record low, while China’s yuan is at a 13-month low and seemingly poised for a break below 7.30 per dollar, as traders speculate Beijing is allowing it to slide as trade tensions with Washington heat up.

China on Tuesday announced a ban on exports of ‘dual-use items’ related to key minerals gallium, germanium, antimony and superhard materials to the United States. This came 24 hours after the US launched a third crackdown in three years on China’s semiconductor industry, curbing exports to 140 firms.

If volatility in key assets across Asia is spiking, US market volatility right now is pretty subdued. The VIX ‘fear index’ on Tuesday hit its lowest since July, and the MOVE index of implied volatility in US Treasuries has tumbled since the US presidential election to a two-month low.

The Asian calendar on Wednesday sees the release of Australian GDP, Thai inflation, and a raft of purchasing managers index reports for November, including China’s Caixin services PMI.

Australia’s economy is expected to have expanded at a 0.4% pace in the July-September period, twice the rate of the previous quarter, and at a 1.1% year-on-year pace, a marginal uptick from the 1.0% annual growth registered in Q2.

(Reporting by Jamie McGeever; Editing by Bill Berkrot)

Oil steady, traders hopeful on China demand but worried about Fed

HOUSTON – Oil prices were little changed on Monday, as hopes of stronger demand stemming from higher factory activity in China was largely offset by concerns that the US Federal Reserve will not cut interest rates again at its December meeting.

Brent crude futures settled 1 cent lower at USD 71.83 a barrel. US West Texas Intermediate crude rose 10 cents, or 0.15%, to USD 68.10.

A private sector survey showed China’s factory activity expanded in November at the fastest pace in five months, boosting Chinese business optimism just as US President-elect Donald Trump has ramped up trade threats.

Meanwhile, a ceasefire between Israel and Lebanon, which took effect last Wednesday, appeared increasingly fragile. The Israeli military said on Monday it was currently striking “terror” targets in Lebanon amid mutual accusations of ceasefire violations between Israel and the Lebanese armed group Hezbollah.

The Pentagon said that despite some incidents, the ceasefire between Israel and Lebanese armed group Hezbollah was holding.

“Increased geopolitical risks remain. Even though the ceasefire is underway in Israel, it seems evident that there are some misconceptions about the legitimacy of the ceasefire,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Traders also watched developments in Syria, weighing whether recent escalation could widen tensions across the Middle East and affect supply.

Both crude benchmarks fell more than 3% last week, pressured by easing supply concerns from the Israel-Hezbollah conflict and 2025 surplus forecasts, despite expected sustained output cuts.

The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, postponed the group’s next meeting to Dec. 5. It will discuss delaying a planned oil output increase scheduled to start in January, OPEC+ sources told Reuters last week.

“Attention will be on the potential delay of the planned production hike, as an indefinite delay could alleviate downward pressure on prices,” said George Pavel, general manager at Naga.com Middle East.

This week’s meeting will decide policy for the early months of 2025.

“Money managers are sitting on the fence … the market is looking for clarity between the implication of the forthcoming Trump administration and OPEC+ supply policy,” said Harry Tchilinguirian at Onyx Capital Group.

Pressuring oil prices, Atlanta Federal Reserve President Raphael Bostic said he has an open mind about whether to cut interest rates again at the Fed’s December meeting, with upcoming data on jobs important in shaping the decision.

Higher interest rates increase the cost of borrowing, which can slow economic activity and dampen demand for oil.

Also pressuring oil, the dollar pushed higher again, after Trump on Saturday threatened 100% tariffs on BRICS member countries unless they commit to not creating a new currency or supporting another currency that could replace the dollar.

A stronger greenback makes dollar-denominated oil more expensive for investors holding other currencies, hurting demand.

(Reporting by Arunima Kumar in Bengaluru, Enes Tunagur in London and Florence Tan, and Gabrielle Ng in Singapore; Editing by Jason Neely, David Goodman, Jonathan Oatis, and David Gregorio)

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