Asia-Pacific markets climbed Monday as investors parsed China’s central bank’s decision to keep its loan prime rates steady. The People’s Bank of China kept its 1-year and 5-year loan prime rates unchanged at 3% and 3.5% respectively, holding them for a seventh straight meeting, in line with a Reuters survey. The one-year rate influences most new and outstanding loans, while the five-year benchmark affects mortgages. Hong Kong’s Hang Seng index rose 0.55%, while the mainland CSI 300 advanced 0.55%. Australia’s S&P/ASX 200 rose 0.54% in early trade. Japan’s Nikkei 225 rose 1.58%, while the Topix was 0.86% higher. The Bank of Japan raised its policy rate by 25 basis points to 0.75% —a three-decade high— last Friday.
U.S. stocks rose on Friday, lifted by Oracle, as the artificial intelligence trade regained its footing after experiencing volatility. The Nasdaq Composite gained 1.31%, closing at 23,307.62. The S&P 500 climbed 0.88% to end at 6,834.50, while the Dow Jones Industrial Average advanced 183.04 points, or 0.38% and settled at 48,134.89. It was the second winning day in a row for all three indexes. Oracle shares were up 6.6% after TikTok agreed to sell its U.S. operations to a new joint venture that includes the software giant and private equity investor Silver Lake.
Gold prices climbed to an all-time high of $4,390 per ounce on Monday, driven by expectations of further US interest rate cuts and escalating geopolitical tensions. Markets are currently pricing in two rate cuts by the Federal Reserve next year, amid signs of easing inflation and a weakening labor market. Investors will closely watch this week’s release of the advance estimate for Q3 GDP, which could provide more clues on the timing of the Fed's next rate move. On the geopolitical front, the US is reportedly monitoring another vessel near Venezuela after having seized two tankers this month, while Ukraine struck a Russian tanker in the Mediterranean Sea for the first time. rally is also supported by strong central bank buying and sustained ETF inflows.
WTI crude oil futures rose toward $57 per barrel on Monday, extending Friday’s gains as mounting tensions between the US and Venezuela fuelled concerns over supply disruptions. The US is reportedly pursuing another vessel near Venezuelan waters, intensifying President Trump’s blockade of the country. Washington has already seized two oil tankers this month, one of them on Saturday. Attention is also on Eastern Europe, where Ukraine struck a Russian tanker in the Mediterranean Sea for the first time, following prior attacks on Lukoil facilities in the Caspian Sea. These attacks come amid ongoing efforts to end the war between the two nations. On Sunday, US and Ukrainian officials said their talks in Miami was “productive and constructive,” though no apparent breakthrough was announced.
China’s central bank kept its loan prime rates steady on Monday, even as the world’s second largest economy has seen weak economic data and an extended slump in its property sector. The People’s Bank of China kept its 1-year and 5-year loan prime rates unchanged at 3% and 3.5% respectively, holding them for a seventh straight meeting, in line with a Reuters survey. The 1-year rate acts as a benchmark for new loans, while the 5-year helps peg mortgage rates. The PBOC’s decision comes amid downbeat economic data from China in November, including lower-than-expected retail sales and industrial output. Retail sales rose 1.3% last month from a year earlier, sharply missing Reuters’ median forecast for a 2.8% growth, and slowing from 2.9% rise in the prior month.
Federal Reserve Bank of Cleveland President Beth Hammack said she saw no need to change U.S. interest rates for months ahead after the central bank cut borrowing costs at its last three meetings, The Wall Street Journal reported on Sunday. Hammack opposed recent rate cuts as she is more worried about elevated inflation than the potential labour-market fragility that prompted officials to lower rates by a cumulative 75 basis points over the past few months, the report added. Hammack told the Journal that the Fed didn’t need to change its benchmark interest rate, currently in a range between 3.5% and 3.75%, at least until the spring. By then, Hammack said, it would be able to better assess whether recent goods price inflation was receding as U.S. President Donald Trump’s tariffs are more fully digested through the supply chain, the report said.
Russian President Vladimir Putin’s top foreign policy aide said on Sunday that changes made by the Europeans and Ukraine to U.S. proposals for an end to the war in Ukraine did not improve prospects for peace. The U.S.-drafted proposals for an end to the nearly four-year-old war, leaked to the media last month, raised European and Ukrainian concerns that they were tilted too far in Russia’s favour and that U.S. President Donald Trump’s administration could push Kyiv into conceding too much. Since then, European and Ukrainian negotiators have met with Trump envoys in an attempt to add their own proposals into the U.S. drafts, though the exact contents of the current proposal have not been disclosed. Kremlin foreign policy aide Yuri Ushakov told reporters in Moscow that the European and Ukrainian changes would not improve the chances of peace.
The United States has intercepted an oil tanker off the coast of Venezuela in international waters, U.S. Homeland Security Secretary Kristi Noem confirmed Saturday, a move that comes just days after U.S. President Donald Trump announced a "blockade" of all sanctioned oil tankers entering and leaving Venezuela. It’s the second time in recent weeks that the United States has gone after a tanker near Venezuela amid a large U.S. military build-up in the region. Noem confirmed the Coast Guard intercepted a tanker that was last docked in Venezuela. "The United States will continue to pursue the illicit movement of sanctioned oil that is used to fund narco terrorism in the region," she said in a statement posted to social media. "We will find you, and we will stop you." Three U.S. officials earlier Saturday had told Reuters that the vessel had been intercepted.
Ukraine thanked the European Union on Friday for deciding to provide it with 90 billion euros ($105.46 billion) of support over the next two years - even if the bloc failed to agree on an ambitious plan to finance it using frozen Russian assets. Russian President Vladimir Putin said the EU had backed away from the plan to use its frozen assets because it would have faced serious repercussions. The stakes for finding money for Kyiv were high because without the EU’s financial help, Ukraine would run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring the threat of Russian aggression against the bloc closer.
White House economic advisor Kevin Hassett, who is on a shortlist to potentially become Federal Reserve leader, said on Fox Business Friday that President Donald Trump is right when he says inflation is low, even as the data, public opinion and most economists stand at odds with this view. Hassett said that the widespread practice of evaluating inflation on a year-over-year basis is off base and it’s better to look at price pressures on a three-month moving average. That means that instead of price pressures outstripping the Fed’s 2% target by a lot, they’re actually below target, Hassett said, adding “that’s the way the president is thinking about it, too.” On Thursday, the government reported that in November, the Consumer Price Index, a key inflation barometer, rose 2.7% versus a year ago, down from the 3% reported in September.
UnitedHealth said on Friday that audits by outside consulting firms of its health services and pharmacy benefit units would result in operational changes including more automation and increased standardization of internal processes. UnitedHealth Group Inc CEO Stephen Hemsley promised the review of the company’s businesses earlier this year after the company missed its own profit expectations for the first time since 2008. During a first-quarter earnings conference call, executives attributed the shortfall to government reimbursement pressures and an unfavourable mix of new patients in Optum Health. UnitedHealth provides clinical services through Optum Health and also operates pharmacy benefit manager OptumRx and insurer UnitedHealthcare. "The work is already well underway. Several action plans have already been completed," Hemsley said in a letter sent to stakeholders on Friday, saying there were 23 such plans.
SoftBank Group is racing to close a $22.5 billion funding commitment to OpenAI by year-end through an array of cash-raising schemes, including a sale of some investments, and could tap its undrawn margin loans borrowed against its valuable ownership in chip firm Arm Holdings, sources said. The "all-in" bet on OpenAI is among the biggest yet by SoftBank CEO Masayoshi Son, as the Japanese billionaire seeks to improve his firm’s position in the race for artificial intelligence. To come up with the money, Son has already sold SoftBank’s entire $5.8 billion stake in AI chip leader Nvidia, offloaded $4.8 billion of its T-Mobile US stake, and slashed staff. Son has slowed most other dealmaking at SoftBank’s Vision Fund to a crawl, and any deal above $50 million now requires his explicit approval, two of the sources told Reuters.