Chinese, Japanese Boats In Tense Standoff Near Disputed Islands As Taiwan-Related Feud Escalates

The severe diplomatic standoff which was triggered by last month's words of Japanese Prime Minister Sanae Takaichi wherein she suggested Japan would militarily aid in Taiwan's defense in the event of a Chinese invasion is increasingly becoming a potential military standoff. We earlier detailed that Japan has even deployed medium-range missiles to a remote Japanese island not far from China.

Already there's been a confrontation involving China's coast guard boats, which attempted to run off a Japanese fishing vessel for allegedly being inside claimed Chinese waters. The fresh incident happened near a group of geopolitically sensitive islands in the East China Sea on Tuesday.

Japan and Chinese coast guard vessels have clashed somewhat frequently in the recent past. Illustrative: Kyodo News, via Associated Press

The Japanese boat is accused of entering the waters of the Diaoyu Islands - which Tokyo calls the Senkaku Islands and has long administered. 

But a nearby Japanese Coast Guard ship which had been accompanying the fishing vessel then in turn expelled two Chinese Coast Guard ships as they approached and tried to enforce Beijing's expansive maritime claims over the territory.

The area is already a bit of a flashpoint between the two historic rivals, as Taiwan is located just less than 100 miles southwest of the Senkaku Islands. There are conflicting accounts of the incident, with the Chinese side relating as follows:

China Coast Guard (CCG) spokesperson Liu Dejun said that Chinese vessels on Tuesday approached and warned off a Japanese fishing boat that had "illegally entered the territorial waters of China's Diaoyu Dao", according to a state media report.

Liu added that the CCG took "necessary law enforcement measures", claiming that the islands were Chinese territory and urging Japan to "immediately stop all acts of infringement and provocation in these waters".

However, Japan has countered that its coast guard boats approached the Chinese vessels shortly after they were seen breaching Japanese waters and issued warnings and threats demanding they leave sovereign waters.

The current broader standoff over PM Takaichi's Taiwan comments is now trickling down to the common populations on either side, as events like concerts have been canceled:

The abrupt cancellations of several Japanese music events in Shanghai - one of them midway through a song - have sparked criticism among fans, with some calling the moves "rude" and "extreme".

Maki Otsuki was halfway through the theme of hit anime One Piece on Friday when the lights and music went off, after which she was rushed off stage by two crew members.

On Saturday, pop star Ayumi Hamasaki performed to an empty 14,000-seat stadium after organizers axed her concert in Shanghai, citing "force majeure".

This spate of cancellations come as diplomatic tensions between Beijing and Tokyo fester over Japanese Prime Minister Sanae Takaichi's remarks on Taiwan.

China earlier warned Japan will suffer a "crushing" defeat if it ever decided to directly intervene in the Taiwan dispute. Recent years have also seen Beijing's anger grow after NATO briefly talked about opening an official office in Tokyo, but these plans were soon abandoned for the time being.

Source: VOA

Last month China's foreign ministry warned that "Right-wing forces in Japan are ... leading Japan and the region toward disaster." Foreign ministry spokesperson Mao Ning further told a regular news briefing. Beijing "is determined and capable of safeguarding its national territorial sovereignty."

Tyler Durden Tue, 12/02/2025 - 09:00

Chinese, Japanese Boats In Tense Standoff Near Disputed Islands As Taiwan-Related Feud Escalates

The severe diplomatic standoff which was triggered by last month's words of Japanese Prime Minister Sanae Takaichi wherein she suggested Japan would militarily aid in Taiwan's defense in the event of a Chinese invasion is increasingly becoming a potential military standoff. We earlier detailed that Japan has even deployed medium-range missiles to a remote Japanese island not far from China.

Already there's been a confrontation involving China's coast guard boats, which attempted to run off a Japanese fishing vessel for allegedly being inside claimed Chinese waters. The fresh incident happened near a group of geopolitically sensitive islands in the East China Sea on Tuesday.

Japan and Chinese coast guard vessels have clashed somewhat frequently in the recent past. Illustrative: Kyodo News, via Associated Press

The Japanese boat is accused of entering the waters of the Diaoyu Islands - which Tokyo calls the Senkaku Islands and has long administered. 

But a nearby Japanese Coast Guard ship which had been accompanying the fishing vessel then in turn expelled two Chinese Coast Guard ships as they approached and tried to enforce Beijing's expansive maritime claims over the territory.

The area is already a bit of a flashpoint between the two historic rivals, as Taiwan is located just less than 100 miles southwest of the Senkaku Islands. There are conflicting accounts of the incident, with the Chinese side relating as follows:

China Coast Guard (CCG) spokesperson Liu Dejun said that Chinese vessels on Tuesday approached and warned off a Japanese fishing boat that had "illegally entered the territorial waters of China's Diaoyu Dao", according to a state media report.

Liu added that the CCG took "necessary law enforcement measures", claiming that the islands were Chinese territory and urging Japan to "immediately stop all acts of infringement and provocation in these waters".

However, Japan has countered that its coast guard boats approached the Chinese vessels shortly after they were seen breaching Japanese waters and issued warnings and threats demanding they leave sovereign waters.

The current broader standoff over PM Takaichi's Taiwan comments is now trickling down to the common populations on either side, as events like concerts have been canceled:

The abrupt cancellations of several Japanese music events in Shanghai - one of them midway through a song - have sparked criticism among fans, with some calling the moves "rude" and "extreme".

Maki Otsuki was halfway through the theme of hit anime One Piece on Friday when the lights and music went off, after which she was rushed off stage by two crew members.

On Saturday, pop star Ayumi Hamasaki performed to an empty 14,000-seat stadium after organizers axed her concert in Shanghai, citing "force majeure".

This spate of cancellations come as diplomatic tensions between Beijing and Tokyo fester over Japanese Prime Minister Sanae Takaichi's remarks on Taiwan.

China earlier warned Japan will suffer a "crushing" defeat if it ever decided to directly intervene in the Taiwan dispute. Recent years have also seen Beijing's anger grow after NATO briefly talked about opening an official office in Tokyo, but these plans were soon abandoned for the time being.

Source: VOA

Last month China's foreign ministry warned that "Right-wing forces in Japan are ... leading Japan and the region toward disaster." Foreign ministry spokesperson Mao Ning further told a regular news briefing. Beijing "is determined and capable of safeguarding its national territorial sovereignty."

Tyler Durden Tue, 12/02/2025 - 09:00

Futures Rebound As Bitcoin Halts Plunge

After Monday's dismal start to December, US equity futures are higher (if only for the time being), although lacking conviction with few major catalysts on deck today. As of 8:15am, S&P 500 futures are up 0.3% and Nasdaq 100 contracts add 0.4%. Pre-market, Mag 7 are mostly higher led by META (+0.6%) and AMZN (+0.4%). Bond yields are unchanged and the USD is flat. Commodities are mostly mixed: Oil is flat; base metals are all higher (aluminum +0.9%), while precious metals are lower. After the latest post-BOJ bloodbath, bitcoin has managed to hold a modest bid and was trading above $87,000. The US economic calendar is blank for scheduled data releases.

In premarket trading, Mag 7 stocks are mostly higher (Meta +0.6%, Alphabet +0.5%, Nvidia +0.8%, Amazon +0.7%, Tesla +0.3%, Microsoft +0.05%, Apple -0.1%). 

• Cloudflare Inc. (NET) gains 2% after Barclays launched coverage on the infrastructure software company with an overweight rating and a $235 price target.
• Credo Technology (CRDO) rises 18% after the communications equipment company’s second-quarter results came in much stronger than expected. It also gave a strong forecast. Shares of competitor Astera Labs (ALAB) gain 5%.
• MongoDB (MDB) rallies 23% after the database software company reported stronger-than-expected results. It also raised its full-year forecast.
• Six Flags Entertainment (FUN) gains 3% after Truist Securities upgraded the theme park operator’s stock to buy from hold.
• Solaris Energy Infrastructure Inc. (SEI) rises 4% after the data center power generator was initiated at Morgan Stanley with a recommendation of overweight on power supply demand.
• Warner Bros. Discovery Inc. (WBD) inches 1.1% higher. The company was fielding a second round of bids on Monday, including a mostly cash offer from Netflix Inc., in an auction that could wrap up in the coming days or weeks, according to people familiar with the discussions.

In corporate news, The Information reported that Amazon is planning a new ultrafast grocery delivery offering in major US urban areas, sending shares of Instacart lower. Warner Bros. Discovery was said to be fielding a second round of bids on Monday, including a mostly cash offer from Netflix. The Commerce Department agreed to invest as much as $150 million in xLight, a chip technology startup tied to former Intel CEO Pat Gelsinger. 

With the market stuck in a holding pattern until the next leg higher or lower, investors are awaiting eco data later this week, and the Fed is now in a blackout period. Black Friday and Cyber Monday offered some clues on the economy, with Bloomberg describing “anxious but still active” consumers, and Salesforce data showing Cyber Monday spending grew more slowly in the US than Europe for the first time as tariffs stung American shoppers.

“For long-only investors like we are, I’d say in the absence of any major catalyst, it’s very much wait-and-see until the Fed meeting, while keeping an eye on US jobs and inflation data,” said Karen Georges, a fund manager at Ecofi Investissements in Paris.

Much now depends on the Fed’s decision at next week’s meeting. Disappointment would pose a risk for equities, though confidence in a cut is virtually certain, with market odds of a cut at 100% following softer labor and inflation data and a run of dovish comments from officials.

“Dips continue to present attractive buying opportunities,” wrote Michael Brown, senior research strategist at Pepperstone. “The narrative behind that bull case remains an attractive one, with earnings growth solid, the underlying economy resilient, a calmer tone on trade continuing to prevail, and the monetary backdrop growing looser.”

Bitcoin is steady today after a more than 5% plunge on Monday which saw almost $1 billion of leveraged crypto positions liquidated. Crypto retail investors who piled into exchange-traded funds tracking Strategy’s volatile stock have paid a heavy price. Both MSTX and MSTU - which offer double the daily return - have dropped more than 80% this year, among the 10 worst-performing funds in the entire US ETF market.

While bitcoin longs were hammered again, so were stock short sellers: they were down $80 billion in mark-to-market losses in the final week of November, wiping out the bulk of what had been nearly $95 billion in month-to-date profits prior to last week, per data compiled by S3 Partners. “Being short here requires high confidence in a much weaker economic backdrop or a significant change in the outlook for AI capex,” said Dennis Debusschere, co-founder and chief market strategist at 22V Research.

Ahead of next week’s Fed decision, Barclays strategists noted that S&P 500 implied moves ahead of FOMC meetings have declined since early 2023, with realized moves hovering near zero recently. It’s a trend that underscores the fading influence of monetary policy, they wrote. 

After hitting a record high just shy of $60, silver pulled back modestly with a technical gauge showing that a six-day rally had pushed the metal into overbought territory. Copper also retreated amid signs that softer Chinese demand heading into winter might help to ease a looming global supply crunch.

Elsewhere, Bloomberg found that among the 14 largest markets, the US currently ranks 5th from last in local-currency terms and 4th from last in dollar terms this year. That raises questions about whether the AI theme will lead it to victory or whether volatility tied to nascent tech exposure is doing more harm than good.

European stocks and US equity futures hold modest gains; the Stoxx 600 rises 0.2%, led by gains in banks, utilities and construction. Bayer soars after the Trump administration urged the Supreme Court to take up the company’s appeal of the Roundup case. Here are some of the biggest movers on Tuesday:

• Bayer shares surge as much as 15% after the US solicitor general urged the high court to consider the German company’s appeal targeting thousands of lawsuits blaming its Roundup weedkiller for causing cancer.
• Bilfinger shares rise as much as 6% after the German company said it aims to achieve an advanced average revenue growth of 8% to 10% annually, elevate its Ebita margin to 8% to 9%, and ensure a cash conversion rate of at least 90% until 2030.
• Victrex shares jump as much as 11% after JPMorgan said the thermoplastic maker cleared a low bar by beating expectations in the second half. Jefferies noted that a feared dividend cut hasn’t materialized.
• Biotalys shares rise as much as 8.8% after the Belgian agricultural technology company received regulatory approval from the US Environmental Protection Agency for its first biofungicide, called Evoca.
• Compagnie des Alpes rises as much as 6.9% following 2025 results from the French ski resort and theme park operator, which CIC Market Solutions describes as “excellent.”
• Swissquote shares tumble as much as 8.6% after one of its investors offered shares at a discount to the last closing price. Shares fell below the offer price before paring losses.
• Scandic Hotels drops as much as 8.8% as Morgan Stanley downgrades to underweight from equal-weight, saying the country’s acquisition of Dalata’s hotel operation may not be as profitable as previously expected.
• Foresight Group shares decline as much as 8.2% after the UK infrastructure and private equity investment management services company’s interim results, with Peel Hunt noting impact from margin compression.
• Pantheon Resources shares drop as much as 28% after the company’s update on work at the Dubhe-1 well. Canaccord Genuity said markets are still waiting for representative flow rates and that the cost of the work has come in higher than previously forecast.

Earlier in the session, Asian stocks gained, snapping a two-day decline, helped by a rally in tech-heavy markets of South Korea and Taiwan. The MSCI Asia Pacific Index rose as much as 0.5%, before paring gains. TSMC, Samsung Electronics and SK Hynix were among the biggest boosts to the gauge’s climb. Shares eked out small gains in Japan as banks extended advances on speculation of a Bank of Japan interest-rate hike this month. Growing expectations of an interest rate cut in the US is aiding risk-on in the region. A stabilization in bitcoin also helped sentiment after a selloff in cryptocurrencies led declines in global risk assets on Monday. Shares drop in India, as the rupee hit a record low. Concerns over the lack of a trade deal with the US is weighing on the currency. Benchmarks in China also traded lower. 

In FX, the yen is the weakest of the G-10 currencies, falling 0.4% against the dollar and pushing USD/JPY above 156. The euro loses a few pips with little reaction to a surprise uptick in euro-area CPI. The pound is down 0.2%.

In rates, treasury yields are higher, within two basis points of Monday’s close with 10-year trading around 4.11%. Bund and gilts are little changed. In Asia, JGBs were supported after Tuesday’s 10-year auction drew solid demand. The corporate issuance slate is expected to grow following a heavy day on Monday. The IG dollar bond issuance slate is empty so far. Tuesday is expected to bring more US investment-grade bond issuance after around $16 billion of new deals on Monday, led by Merck’s acquisition-related $8 billion eight-part offering.

In commodities, spot gold falls $45 and back below $4,200/oz. US crude futures are treading water at $59.30 a abrrel. 

The US economic calendar is blank for scheduled data releases. Fed members are in external communications blackout ahead of the Dec. 10 policy announcement

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.3%
• Russell 2000 mini +0.5%
• Stoxx Europe 600 +0.2%
• DAX +0.5%
• CAC 40 +0.2%
• 10-year Treasury yield unchanged at 4.09%
• VIX -0.4 points at 16.85
• Bloomberg Dollar Index little changed at 1219.09
• euro little changed at $1.1604
• WTI crude little changed at $59.34/barrel

Top Overnight News

• Trump's schedule noted he will host a Cabinet meeting on Tuesday at 11:30am and will make an announcement at 2:00pm. Some expect he could announce Kevin Hassett as next Fed Chair (Hassett's odds are up to 79% on Polymarket). 
• Senators have about a week before they’re set to vote on soon-to-expire Affordable Care Act subsidies. Most of them already believe the chances for a bipartisan breakthrough by then are roughly zero. Politico
• US envoy Steve Witkoff is set to meet Vladimir Putin to discuss a Ukraine peace plan as Russia claimed its forces seized Pokrovsk on the Donetsk frontline. A fourth Russia-connected tanker in less than a week was attacked today. BBG
• Officially, the search for a new Federal Reserve chair is still under way. A handful of finalists are scheduled to sit down for interviews beginning this week with Vice President JD Vance and senior White House staff. Unofficially, the process seems to be all but over, with President Trump appearing to favor longtime adviser Kevin Hassett. If Hassett does end up the nominee, it will be because he met Trump’s two key criteria: loyalty, and credibility with the markets. WSJ
• OpenAI Chief Executive Sam Altman told employees Monday that the company was declaring a “code red” effort to improve the quality of ChatGPT and delaying other products as a result. OpenAI plans to launch a new reasoning model next week that the company claims outperforms Gemini 3. WSJ
• The world economy is weathering Trump’s trade tariffs better than expected, the OECD said. It raised its US and euro-area growth forecasts. Still, it continues to predict global growth will slow to 2.9% in 2026, from 3.2% in 2025. BBG
• China is expected to ramp up US soybean purchases this month to meet a pledge to buy at least 12 million tons by year-end, led by state firms like Cofco, traders said. So far, only about 3 million have been booked. BBG
• Strong demand for Japanese government bonds helped to steady Asian markets on Tuesday, a day after hawkish comments from the central bank governor sparked a global selloff. FT
• Europe’s headline CPI for Nov ran a bit warmer than anticipated at +2.2% (vs. the Street +2.1% and up from +2.1% in Oct) while the core number was inline at +2.4% (and steady vs. Oct). BBG
• Members of the House of Representatives are quitting Congress at a record rate, with Republican retirements and resignations outpacing Democrats by a nearly 2-to-1 ratio in the first 11 months of the year. In previous cycles, the party with more departures tends to lose seats — if not the majority. Axios
• Apple plans not to follow the order by the Indian government to preload phones with a state-run cyber safety app, according to Reuters, citing sources; Co. to voice its concerns around privacy and security following new app order

Trade/Tariffs

• Chinese rare-earth magnet companies are reportedly finding workarounds to their government’s export restrictions, as they seek to keep sales flowing to Western buyers, according to WSJ.
• China reportedly issues first rare earth magnet general export licence after the Trump-Xi meeting, according to Reuters sources
• Exxon (XOM) is reportedly in talks with Iraq over purchasing Lukoil's stake in the West Qurna 2 oilfield, via Reuters citing sources.
• Russia's Kremlin Spokesperson Peskov says that Russia continues to be an important supplier of energy to India on a competitive basis. Looking at possibilities to increase imports from India. A decrease in oil trade volumes can be decreased for a brief period of time.

A more detailed look at global markets courtesy of Newsqsuawk

APAC stocks were predominantly in the green as the region shrugged off the weak lead from Wall Street, but with the upside capped amid quiet macro catalysts and in the absence of any tier-1 data. ASX 200 eked mild gains with the help of outperformance in energy, resources and mining, but with gains limited by underperformance in tech and utilities, while data was uninspiring with a larger-than-expected contraction in building approvals. Nikkei 225 nursed some of the prior day's losses but with the rebound contained amid risks of a BoJ December hike. Hang Seng and Shanghai Comp mostly traded mixed as participants reflected on a slew of monthly auto sales updates, while the mainland lagged after the PBoC's open market operations resulted in a net daily drain of CNY 146bln.

Top Asian News

• RBNZ Governor Breman said she will discuss with the MPC the possibility of being more transparent with how members vote, while she added that the mandate is very clear that we should focus on keeping inflation low and stable. Breman said that they aim to support a healthy, strong and growing economy, but keep inflation low and stable. It was separately reported that the RBNZ is to begin weekly open-market operations from December 4th and will update changes to the format in Q1 2026.
• Samsung Electronics (005930 KS) has completed development of its 6th-gen HBM4 and is entering full-scale mass production, via AJUNews.

European bourses (STOXX 600 +0.2%) started the session flat/incrementally firmer before then catching a bid as the morning progressed; no clear driver for the upside, but a move which has sustained as indices reside near peaks. European sectors hold a slight positive bias. Banks take the top spot, with gains broad-based across the UK and Europe, but traders may also be digesting the latest update via the BoE, where it lowered capital requirements for UK banks as they pass stress tests. Media is found at the foot of the pile, joined closely by Travel & Leisure.

Top European News

• Confederation of British Industry said Britain's private sector expects output to decline during the next three months in the gloomiest outlook since May as cautious consumer spending and cost pressures continue to weigh on businesses.
• BoE Financial Policy Committee Record: System-wide level of Tier 1 capital requirements is now around 13% of risk-weighted assets, 1ppt lower than its previous benchmark of around 14%. CCyB maintained at 2%. "The Committee has also identified areas for further work, including on buffer usability, the implementation of the leverage ratio in the UK, and initiatives by the Bank to respond to feedback on interactions, proportionality, and complexity. Committee supports the Bank’s plans for a private markets system-wide exploratory scenario (SWES)".
• OECD sees global growth of 3.2% in 2025 (maintained from prev. forecast), 2.9% in 2026 (maintained), 3.1% in 2027 (new forecast).
• UK OBR's Miles says it was not misleading for Chancellor Reeves to have said that the situation with public finances was very challenging. 
• BoE Governor Bailey says he expects banks to support the economy through lending following recent capital changes. 

FX

• DXY and most G10 FX are uneventful in relatively quiet trade, with a similar lack of macro drivers seen during APAC hours. Specifically, DXY resides in a narrow 99.38-99.52 parameter, with ING calling for a lower dollar this week - "we expect that the remainder of the week will validate the market’s dovish pricing for next week’s Fed meeting". As it stands, the index trades at the upper end of the mentioned ranges, with recent strength thanks to some pressure seen in the GBP.
• EUR traded flat ahead of the EZ HICP metrics, and then was little moved on the release itself. Headline printed a touch above expected at 2.20% (exp. 2.10%) whilst the Services figure also ticked higher from the prior month. Overall, given the figures were near enough in line with expectations, there was little follow-through into the single-currency and held within a 1.1604 to 1.1616 range, before then touching 1.1600 as the USD picked up a touch.
• USD/JPY outperforms amid a pick-up in risk sentiment and after the pair's volatile Monday session, which saw a slump to 154.66 lows before bouncing back up and clear of 155.50 and then 156.00, with the pair eyeing yesterday's 156.15 peak as the near-term resistance level, and thereafter Black Friday's 156.58 high.
• GBP traded flat against the USD, before then moving lower in recent trade. Nothing behind the latest bout of pressure, but it does come after Cable breached 1.3200 to the downside, and then continued to tumble to make a fresh trough at 1.3180 (though it is a moving target).
• AUD outperforms after ANZ removed its call for an RBA cut in H1-2026, now sees the RBA on an "extended pause" through 2026. As a reminder, CBA and NAB also expect the RBA to be on hold for an extended period of time/foreseeable future. Westpac continues to expect two 2026 cuts, touting May and August for those. AUD/NZD marginally eclipsed 1.1450, from a 1.1418 trough.

Fixed Income

• A lack of fresh drivers for USTs. The March contract is near-enough flat in a narrow 112-25 to 112-29 band. Overnight, WSJ's Timiraos wrote that, regarding the search for the next Fed Chair, "Unofficially, the process seems to be all but over, with President Trump appearing to favour longtime adviser Kevin Hassett.".
• Bund Dec'25 is contained in a thin 128.18-35 band this morning. Specifics light. No move in Bunds on the EZ Flash HICP for November, the headline came in hotter-than-expected and ticked up from the prior, while Services lifted from the previous rate. Overall, the hotter-than-expected series chimes with the view that the ECB's easing cycle has likely concluded.
• Gilts underperform. If the move continues, we look to support for the Gilt Mar'26 contract at 90.53, a double-bottom from the session of and before the Budget. Currently, the low is 90.98, taking out Monday's base by a tick. A move that lifted the UK 10yr yield back above the 4.5% mark. However, this pressure proved somewhat fleeting as the benchmark bounced and has made its way back to the unchanged mark. Nothing fresh, though the OBR briefing is underway and we note remarks from BoE officials on the morning's FSR/FPC briefings.
• Saudi National Bank is seeking a USD 1bln syndicated loan, via Bloomberg. Loan is being syndicated to the broader market, incl. Asia, according to sources cited.
• JGB's led overnight after a strong 10yr auction and in a bit of a breather from the largely Ueda-induced selling seen at the start of the week. To a 134.72 peak with gains of just over 20 ticks at best.
• UK sells GBP 1bln 0.125% 2031 I/L Gilt: b/c 3.88x (prev. 3.49x), real yield 0.949% (prev. 0.889%)
• Germany sells EUR 3.563bln vs exp. EUR 4.5bln 2.00% 2027 Schatz: b/c 1.7x (prev. 1.7x), average yield 2.05% (prev. 1.98%), retention 20.82% (prev. 24.68%)

Commodities

• WTI and Brent continue to trade within Monday's post-OPEC range of USD 58.83-59.97/bbl and USD 62.69-63.82/bbl, respectively, as a pause in output hike and rising geopolitical concerns continue to support crude prices in the near term. WTI and Brent peaked at the start of the APAC session at USD 59.67/bbl and 63.36/bbl before falling to troughs of 59.09/bbl and 62.88/bbl.
• XAU and XAG traded muted at the start of the European session. Oscillated in a tight USD 4201-4236/oz and USD 56.60-58/oz band, respectively. More recently, the yellow metal has fallen to make fresh session troughs of USD 4,181/oz - a move which lacked catalysts, but technicians highlight accelerating selling pressure after spot gold slipped below USD 4.2k/oz.
• 3M LME Copper gapped lower and fell to a trough of USD 11.12k/t before rebounding to a session high of USD 11.27k/t as global risk tone slightly turns around following Monday's selloff.

Geopolitics: Middle East

• Arab media reported new Israeli attacks in Khan Yunis and Rafah, according to Iran International.

Geopolitics: Ukraine

• European Commission proposals for the Ukraine reparation loan should be distributed to member states tomorrow, and likely first discussion by EU ambassadors on Friday, according to Radio Liberty journalist
• Russian Foreign Minister Lavrov is to meet with Chinese Foreign Minister Wang Yi on Tuesday.
• Russia's Kremlin Spokesperson Peskov says US Special Envoy Witkoff and President Putin will discuss the understanding reached between the US and Ukraine, in a meeting at 14:00GMT/09:00EST, via TASS. S-400 and SU-57 fighter jets will be on the agenda.

Geopolitics: Other

• Venezuelan President Maduro reportedly asked for sanction removal for more than 100 officials during a previous call with US President Trump. Furthermore, Trump gave Maduro a Friday deadline to leave Venezuela with his family, while the failure to meet the Friday deadline prompted Trump's comments on Saturday about the closure of airspace, according to sources cited by Reuters.
• US Treasury Secretary Bessent said the Treasury is investigating allegations that Minnesota tax dollars may have been diverted to Al-Shabaab.
• China's Coast Guard said it expelled a Japanese vessel in the waters of the Senkaku Islands on Tuesday.
• "Turkey says oil tanker attacked in Black Sea while sailing from Russia to Georgia", according to Sky News Arabia. However, Sky News Arabia later clarifies, "Turkey says cargo ship attacked in Black Sea while sailing from Russia to Georgia".
• Japan's Defence Minister Koizumi is considering a visit to the US as early as mid-January to hold talks with War Secretary Hegseth, via Kyodo.

US Event Calendar

• Nov Wards Total Vehicle Sales, est. 15.4m, prior 15.32m
• 10:00 am: Fed’s Bowman Testifies Before House Committee

DB's Jim Reid concludes the overnight wrap

Markets got December off to a rocky start yesterday, with bonds and equities losing ground, alongside a sharp slump in Bitcoin (-5.19%). The moves gathered pace right from the open, as hawkish remarks from BoJ Governor Ueda had already pushed 10yr JGB yields up to a post-GFC high. But that then cascaded across global markets, with bond yields moving sharply higher in the US and Europe too. In the meantime, matters weren’t helped by the latest data, as the ISM manufacturing print leant in a stagflationary direction, whilst higher oil prices only exacerbated those fears. So with all said and done, the S&P 500 (-0.53%) slipped back, whilst 10yr Treasury yields (+7.2bps) saw their biggest daily jump in nearly four weeks.

Those developments in Japan were critical for yesterday’s moves, because Ueda’s comments had led investors to price in a December rate hike from the BoJ as a near-certainty. So that meant bond yields hit a whole bunch of new records, and by the close in Japan yesterday, the 10yr yield (+5.8bps) was at a post-2008 high of 1.86%, whilst the 30yr yield (+4.1bps) was at 3.37%, and the highest since that maturity was first issued in the late-1990s. Similarly at the front end, the 2yr yield closed above 1% for the first time since the GFC. This morning yields on 2yr and 10yr JGBs are both down a basis point after a decent 10yr auction has provided some respite to the bond sell-off. The bid-to-cover ratio was recorded at 3.59, compared to 2.97 at the previous sale in November, and a 12-month average of 3.20.

US futures are also fairly flat, indicating that the sell-off has paused for now. The KOSPI (+1.81%) is leading the way in Asia after rebounding from yesterday and after the US announced that the general tariff rate on imports from South Korea, including automobiles, will decrease to 15% retroactively effective from November 1. In other markets, the Nikkei (+0.24%) is recovering a little this morning after a near two percent decline yesterday, while the S&P/ASX 200 (+0.11%) is also experiencing modest gains. Meanwhile, the Hang Seng (+0.13%) is maintaining small gains, in contrast to the CSI (-0.61%) and the Shanghai Composite (-0.55%), which are lower after a stronger session on Monday.  

The moves in Japan echoed around the world yesterday, with a sharp bond selloff on both sides of the Atlantic. For instance, Treasury yields rose across the curve, with the 2yr yield (+4.0bps) up to 3.53%, the 10yr yield (+7.2bps) rose to 4.09%, and 30yrs (+7.4bps) to 4.74%. Moreover, those moves got further support from several inflationary indicators, including the ISM manufacturing survey. Admittedly, the headline index unexpectedly fell back to 48.2 (vs. 49.0 expected), but the prices paid component ticked up to 58.5 (vs. 57.5 expected) after a run of 4 consecutive monthly declines. So that exacerbated concerns about tariff-driven inflation persisting. And with oil prices rising (+1.27% for Brent) after Ukraine’s weekend attack against an oil terminal in the Black Sea, the 1yr inflation swap (+1.7bps) also posted a 4th consecutive increase to 2.64%.

That downbeat tone was seen for equities too, where the S&P 500 (-0.53%) fell back after a run of 5 consecutive gains, and the small-cap Russell 2000 (-1.25%) saw an even bigger slump. Nearly three quarters of the S&P constituents were lower on the day, though the index did recover some ground after futures in Asia had suggested an even larger fall. The Mag-7 (-0.10%) outperformed as Nvidia (+1.65%) rebounded from Friday’s -1.81% decline. By contrast, crypto assets suffered, with Bitcoin (-5.19%) falling to $86,446 by the close, and trading below $84k intra-day. Unsurprisingly, that meant there were sizeable losses for crypto-related stocks like Coinbase (-4.76%). Overnight Bitcoin has bounced a little.

Earlier in Europe, markets had followed a very similar pattern, with bonds and equities selling off together. So the STOXX 600 (-0.20%) also fell back after 5 consecutive gains, and there was a particularly sharp decline for the German DAX (-1.04%). And there wasn’t much data capable of boosting the mood either, with the Euro Area manufacturing PMI revised down a tenth from the flash reading to 49.6, so still in contractionary territory. Meanwhile, yields on 10yr bunds (+6.1bps), OATs (+7.5bps) and BTPs (+6.9bps) all moved higher.

Here in the UK, we also heard yesterday that the head of the OBR budget watchdog had resigned, which comes after their analysis of the budget’s contents went live on its website ahead of the Chancellor’s announcement. However, that wasn’t a market moving story, and the rise in 10yr gilt yields (+4.1bps) was more muted than in other countries yesterday, whilst the FTSE 100 (-0.18%) largely matched the STOXX 600. We did get a bit of UK data too, with October mortgage approvals down to 65.0k (vs. 64.5k expected), but that very much kept them within their 60-70k range that they’ve been in for the last 18 months.

Looking forward to today, we’ll see some focus on geopolitics as Trump’s envoy Witkoff is due to meet Russia’s President Putin in Moscow to discuss US proposals to end the war in Ukraine. The visit comes as US-led peace talks intensified over the past couple of weeks with “productive” meetings between US and Ukrainian officials but Kyiv staying resistant to territorial demands that have been made by Moscow.

In terms of the rest of the day ahead, data releases include the Euro Area flash CPI print for November, with Friday’s country-level releases suggesting that headline and core inflation should be unchanged at 2.1% and 2.4% respectively. We'll also see the Euro area unemployment rate for October. Otherwise, central bank speakers include the Fed’s Bowman but with the blackout on it won't be about monetary policy.

Tyler Durden Tue, 12/02/2025 - 08:43

Futures Rebound As Bitcoin Halts Plunge

After Monday's dismal start to December, US equity futures are higher (if only for the time being), although lacking conviction with few major catalysts on deck today. As of 8:15am, S&P 500 futures are up 0.3% and Nasdaq 100 contracts add 0.4%. Pre-market, Mag 7 are mostly higher led by META (+0.6%) and AMZN (+0.4%). Bond yields are unchanged and the USD is flat. Commodities are mostly mixed: Oil is flat; base metals are all higher (aluminum +0.9%), while precious metals are lower. After the latest post-BOJ bloodbath, bitcoin has managed to hold a modest bid and was trading above $87,000. The US economic calendar is blank for scheduled data releases.

In premarket trading, Mag 7 stocks are mostly higher (Meta +0.6%, Alphabet +0.5%, Nvidia +0.8%, Amazon +0.7%, Tesla +0.3%, Microsoft +0.05%, Apple -0.1%). 

• Cloudflare Inc. (NET) gains 2% after Barclays launched coverage on the infrastructure software company with an overweight rating and a $235 price target.
• Credo Technology (CRDO) rises 18% after the communications equipment company’s second-quarter results came in much stronger than expected. It also gave a strong forecast. Shares of competitor Astera Labs (ALAB) gain 5%.
• MongoDB (MDB) rallies 23% after the database software company reported stronger-than-expected results. It also raised its full-year forecast.
• Six Flags Entertainment (FUN) gains 3% after Truist Securities upgraded the theme park operator’s stock to buy from hold.
• Solaris Energy Infrastructure Inc. (SEI) rises 4% after the data center power generator was initiated at Morgan Stanley with a recommendation of overweight on power supply demand.
• Warner Bros. Discovery Inc. (WBD) inches 1.1% higher. The company was fielding a second round of bids on Monday, including a mostly cash offer from Netflix Inc., in an auction that could wrap up in the coming days or weeks, according to people familiar with the discussions.

In corporate news, The Information reported that Amazon is planning a new ultrafast grocery delivery offering in major US urban areas, sending shares of Instacart lower. Warner Bros. Discovery was said to be fielding a second round of bids on Monday, including a mostly cash offer from Netflix. The Commerce Department agreed to invest as much as $150 million in xLight, a chip technology startup tied to former Intel CEO Pat Gelsinger. 

With the market stuck in a holding pattern until the next leg higher or lower, investors are awaiting eco data later this week, and the Fed is now in a blackout period. Black Friday and Cyber Monday offered some clues on the economy, with Bloomberg describing “anxious but still active” consumers, and Salesforce data showing Cyber Monday spending grew more slowly in the US than Europe for the first time as tariffs stung American shoppers.

“For long-only investors like we are, I’d say in the absence of any major catalyst, it’s very much wait-and-see until the Fed meeting, while keeping an eye on US jobs and inflation data,” said Karen Georges, a fund manager at Ecofi Investissements in Paris.

Much now depends on the Fed’s decision at next week’s meeting. Disappointment would pose a risk for equities, though confidence in a cut is virtually certain, with market odds of a cut at 100% following softer labor and inflation data and a run of dovish comments from officials.

“Dips continue to present attractive buying opportunities,” wrote Michael Brown, senior research strategist at Pepperstone. “The narrative behind that bull case remains an attractive one, with earnings growth solid, the underlying economy resilient, a calmer tone on trade continuing to prevail, and the monetary backdrop growing looser.”

Bitcoin is steady today after a more than 5% plunge on Monday which saw almost $1 billion of leveraged crypto positions liquidated. Crypto retail investors who piled into exchange-traded funds tracking Strategy’s volatile stock have paid a heavy price. Both MSTX and MSTU - which offer double the daily return - have dropped more than 80% this year, among the 10 worst-performing funds in the entire US ETF market.

While bitcoin longs were hammered again, so were stock short sellers: they were down $80 billion in mark-to-market losses in the final week of November, wiping out the bulk of what had been nearly $95 billion in month-to-date profits prior to last week, per data compiled by S3 Partners. “Being short here requires high confidence in a much weaker economic backdrop or a significant change in the outlook for AI capex,” said Dennis Debusschere, co-founder and chief market strategist at 22V Research.

Ahead of next week’s Fed decision, Barclays strategists noted that S&P 500 implied moves ahead of FOMC meetings have declined since early 2023, with realized moves hovering near zero recently. It’s a trend that underscores the fading influence of monetary policy, they wrote. 

After hitting a record high just shy of $60, silver pulled back modestly with a technical gauge showing that a six-day rally had pushed the metal into overbought territory. Copper also retreated amid signs that softer Chinese demand heading into winter might help to ease a looming global supply crunch.

Elsewhere, Bloomberg found that among the 14 largest markets, the US currently ranks 5th from last in local-currency terms and 4th from last in dollar terms this year. That raises questions about whether the AI theme will lead it to victory or whether volatility tied to nascent tech exposure is doing more harm than good.

European stocks and US equity futures hold modest gains; the Stoxx 600 rises 0.2%, led by gains in banks, utilities and construction. Bayer soars after the Trump administration urged the Supreme Court to take up the company’s appeal of the Roundup case. Here are some of the biggest movers on Tuesday:

• Bayer shares surge as much as 15% after the US solicitor general urged the high court to consider the German company’s appeal targeting thousands of lawsuits blaming its Roundup weedkiller for causing cancer.
• Bilfinger shares rise as much as 6% after the German company said it aims to achieve an advanced average revenue growth of 8% to 10% annually, elevate its Ebita margin to 8% to 9%, and ensure a cash conversion rate of at least 90% until 2030.
• Victrex shares jump as much as 11% after JPMorgan said the thermoplastic maker cleared a low bar by beating expectations in the second half. Jefferies noted that a feared dividend cut hasn’t materialized.
• Biotalys shares rise as much as 8.8% after the Belgian agricultural technology company received regulatory approval from the US Environmental Protection Agency for its first biofungicide, called Evoca.
• Compagnie des Alpes rises as much as 6.9% following 2025 results from the French ski resort and theme park operator, which CIC Market Solutions describes as “excellent.”
• Swissquote shares tumble as much as 8.6% after one of its investors offered shares at a discount to the last closing price. Shares fell below the offer price before paring losses.
• Scandic Hotels drops as much as 8.8% as Morgan Stanley downgrades to underweight from equal-weight, saying the country’s acquisition of Dalata’s hotel operation may not be as profitable as previously expected.
• Foresight Group shares decline as much as 8.2% after the UK infrastructure and private equity investment management services company’s interim results, with Peel Hunt noting impact from margin compression.
• Pantheon Resources shares drop as much as 28% after the company’s update on work at the Dubhe-1 well. Canaccord Genuity said markets are still waiting for representative flow rates and that the cost of the work has come in higher than previously forecast.

Earlier in the session, Asian stocks gained, snapping a two-day decline, helped by a rally in tech-heavy markets of South Korea and Taiwan. The MSCI Asia Pacific Index rose as much as 0.5%, before paring gains. TSMC, Samsung Electronics and SK Hynix were among the biggest boosts to the gauge’s climb. Shares eked out small gains in Japan as banks extended advances on speculation of a Bank of Japan interest-rate hike this month. Growing expectations of an interest rate cut in the US is aiding risk-on in the region. A stabilization in bitcoin also helped sentiment after a selloff in cryptocurrencies led declines in global risk assets on Monday. Shares drop in India, as the rupee hit a record low. Concerns over the lack of a trade deal with the US is weighing on the currency. Benchmarks in China also traded lower. 

In FX, the yen is the weakest of the G-10 currencies, falling 0.4% against the dollar and pushing USD/JPY above 156. The euro loses a few pips with little reaction to a surprise uptick in euro-area CPI. The pound is down 0.2%.

In rates, treasury yields are higher, within two basis points of Monday’s close with 10-year trading around 4.11%. Bund and gilts are little changed. In Asia, JGBs were supported after Tuesday’s 10-year auction drew solid demand. The corporate issuance slate is expected to grow following a heavy day on Monday. The IG dollar bond issuance slate is empty so far. Tuesday is expected to bring more US investment-grade bond issuance after around $16 billion of new deals on Monday, led by Merck’s acquisition-related $8 billion eight-part offering.

In commodities, spot gold falls $45 and back below $4,200/oz. US crude futures are treading water at $59.30 a abrrel. 

The US economic calendar is blank for scheduled data releases. Fed members are in external communications blackout ahead of the Dec. 10 policy announcement

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.3%
• Russell 2000 mini +0.5%
• Stoxx Europe 600 +0.2%
• DAX +0.5%
• CAC 40 +0.2%
• 10-year Treasury yield unchanged at 4.09%
• VIX -0.4 points at 16.85
• Bloomberg Dollar Index little changed at 1219.09
• euro little changed at $1.1604
• WTI crude little changed at $59.34/barrel

Top Overnight News

• Trump's schedule noted he will host a Cabinet meeting on Tuesday at 11:30am and will make an announcement at 2:00pm. Some expect he could announce Kevin Hassett as next Fed Chair (Hassett's odds are up to 79% on Polymarket). 
• Senators have about a week before they’re set to vote on soon-to-expire Affordable Care Act subsidies. Most of them already believe the chances for a bipartisan breakthrough by then are roughly zero. Politico
• US envoy Steve Witkoff is set to meet Vladimir Putin to discuss a Ukraine peace plan as Russia claimed its forces seized Pokrovsk on the Donetsk frontline. A fourth Russia-connected tanker in less than a week was attacked today. BBG
• Officially, the search for a new Federal Reserve chair is still under way. A handful of finalists are scheduled to sit down for interviews beginning this week with Vice President JD Vance and senior White House staff. Unofficially, the process seems to be all but over, with President Trump appearing to favor longtime adviser Kevin Hassett. If Hassett does end up the nominee, it will be because he met Trump’s two key criteria: loyalty, and credibility with the markets. WSJ
• OpenAI Chief Executive Sam Altman told employees Monday that the company was declaring a “code red” effort to improve the quality of ChatGPT and delaying other products as a result. OpenAI plans to launch a new reasoning model next week that the company claims outperforms Gemini 3. WSJ
• The world economy is weathering Trump’s trade tariffs better than expected, the OECD said. It raised its US and euro-area growth forecasts. Still, it continues to predict global growth will slow to 2.9% in 2026, from 3.2% in 2025. BBG
• China is expected to ramp up US soybean purchases this month to meet a pledge to buy at least 12 million tons by year-end, led by state firms like Cofco, traders said. So far, only about 3 million have been booked. BBG
• Strong demand for Japanese government bonds helped to steady Asian markets on Tuesday, a day after hawkish comments from the central bank governor sparked a global selloff. FT
• Europe’s headline CPI for Nov ran a bit warmer than anticipated at +2.2% (vs. the Street +2.1% and up from +2.1% in Oct) while the core number was inline at +2.4% (and steady vs. Oct). BBG
• Members of the House of Representatives are quitting Congress at a record rate, with Republican retirements and resignations outpacing Democrats by a nearly 2-to-1 ratio in the first 11 months of the year. In previous cycles, the party with more departures tends to lose seats — if not the majority. Axios
• Apple plans not to follow the order by the Indian government to preload phones with a state-run cyber safety app, according to Reuters, citing sources; Co. to voice its concerns around privacy and security following new app order

Trade/Tariffs

• Chinese rare-earth magnet companies are reportedly finding workarounds to their government’s export restrictions, as they seek to keep sales flowing to Western buyers, according to WSJ.
• China reportedly issues first rare earth magnet general export licence after the Trump-Xi meeting, according to Reuters sources
• Exxon (XOM) is reportedly in talks with Iraq over purchasing Lukoil's stake in the West Qurna 2 oilfield, via Reuters citing sources.
• Russia's Kremlin Spokesperson Peskov says that Russia continues to be an important supplier of energy to India on a competitive basis. Looking at possibilities to increase imports from India. A decrease in oil trade volumes can be decreased for a brief period of time.

A more detailed look at global markets courtesy of Newsqsuawk

APAC stocks were predominantly in the green as the region shrugged off the weak lead from Wall Street, but with the upside capped amid quiet macro catalysts and in the absence of any tier-1 data. ASX 200 eked mild gains with the help of outperformance in energy, resources and mining, but with gains limited by underperformance in tech and utilities, while data was uninspiring with a larger-than-expected contraction in building approvals. Nikkei 225 nursed some of the prior day's losses but with the rebound contained amid risks of a BoJ December hike. Hang Seng and Shanghai Comp mostly traded mixed as participants reflected on a slew of monthly auto sales updates, while the mainland lagged after the PBoC's open market operations resulted in a net daily drain of CNY 146bln.

Top Asian News

• RBNZ Governor Breman said she will discuss with the MPC the possibility of being more transparent with how members vote, while she added that the mandate is very clear that we should focus on keeping inflation low and stable. Breman said that they aim to support a healthy, strong and growing economy, but keep inflation low and stable. It was separately reported that the RBNZ is to begin weekly open-market operations from December 4th and will update changes to the format in Q1 2026.
• Samsung Electronics (005930 KS) has completed development of its 6th-gen HBM4 and is entering full-scale mass production, via AJUNews.

European bourses (STOXX 600 +0.2%) started the session flat/incrementally firmer before then catching a bid as the morning progressed; no clear driver for the upside, but a move which has sustained as indices reside near peaks. European sectors hold a slight positive bias. Banks take the top spot, with gains broad-based across the UK and Europe, but traders may also be digesting the latest update via the BoE, where it lowered capital requirements for UK banks as they pass stress tests. Media is found at the foot of the pile, joined closely by Travel & Leisure.

Top European News

• Confederation of British Industry said Britain's private sector expects output to decline during the next three months in the gloomiest outlook since May as cautious consumer spending and cost pressures continue to weigh on businesses.
• BoE Financial Policy Committee Record: System-wide level of Tier 1 capital requirements is now around 13% of risk-weighted assets, 1ppt lower than its previous benchmark of around 14%. CCyB maintained at 2%. "The Committee has also identified areas for further work, including on buffer usability, the implementation of the leverage ratio in the UK, and initiatives by the Bank to respond to feedback on interactions, proportionality, and complexity. Committee supports the Bank’s plans for a private markets system-wide exploratory scenario (SWES)".
• OECD sees global growth of 3.2% in 2025 (maintained from prev. forecast), 2.9% in 2026 (maintained), 3.1% in 2027 (new forecast).
• UK OBR's Miles says it was not misleading for Chancellor Reeves to have said that the situation with public finances was very challenging. 
• BoE Governor Bailey says he expects banks to support the economy through lending following recent capital changes. 

FX

• DXY and most G10 FX are uneventful in relatively quiet trade, with a similar lack of macro drivers seen during APAC hours. Specifically, DXY resides in a narrow 99.38-99.52 parameter, with ING calling for a lower dollar this week - "we expect that the remainder of the week will validate the market’s dovish pricing for next week’s Fed meeting". As it stands, the index trades at the upper end of the mentioned ranges, with recent strength thanks to some pressure seen in the GBP.
• EUR traded flat ahead of the EZ HICP metrics, and then was little moved on the release itself. Headline printed a touch above expected at 2.20% (exp. 2.10%) whilst the Services figure also ticked higher from the prior month. Overall, given the figures were near enough in line with expectations, there was little follow-through into the single-currency and held within a 1.1604 to 1.1616 range, before then touching 1.1600 as the USD picked up a touch.
• USD/JPY outperforms amid a pick-up in risk sentiment and after the pair's volatile Monday session, which saw a slump to 154.66 lows before bouncing back up and clear of 155.50 and then 156.00, with the pair eyeing yesterday's 156.15 peak as the near-term resistance level, and thereafter Black Friday's 156.58 high.
• GBP traded flat against the USD, before then moving lower in recent trade. Nothing behind the latest bout of pressure, but it does come after Cable breached 1.3200 to the downside, and then continued to tumble to make a fresh trough at 1.3180 (though it is a moving target).
• AUD outperforms after ANZ removed its call for an RBA cut in H1-2026, now sees the RBA on an "extended pause" through 2026. As a reminder, CBA and NAB also expect the RBA to be on hold for an extended period of time/foreseeable future. Westpac continues to expect two 2026 cuts, touting May and August for those. AUD/NZD marginally eclipsed 1.1450, from a 1.1418 trough.

Fixed Income

• A lack of fresh drivers for USTs. The March contract is near-enough flat in a narrow 112-25 to 112-29 band. Overnight, WSJ's Timiraos wrote that, regarding the search for the next Fed Chair, "Unofficially, the process seems to be all but over, with President Trump appearing to favour longtime adviser Kevin Hassett.".
• Bund Dec'25 is contained in a thin 128.18-35 band this morning. Specifics light. No move in Bunds on the EZ Flash HICP for November, the headline came in hotter-than-expected and ticked up from the prior, while Services lifted from the previous rate. Overall, the hotter-than-expected series chimes with the view that the ECB's easing cycle has likely concluded.
• Gilts underperform. If the move continues, we look to support for the Gilt Mar'26 contract at 90.53, a double-bottom from the session of and before the Budget. Currently, the low is 90.98, taking out Monday's base by a tick. A move that lifted the UK 10yr yield back above the 4.5% mark. However, this pressure proved somewhat fleeting as the benchmark bounced and has made its way back to the unchanged mark. Nothing fresh, though the OBR briefing is underway and we note remarks from BoE officials on the morning's FSR/FPC briefings.
• Saudi National Bank is seeking a USD 1bln syndicated loan, via Bloomberg. Loan is being syndicated to the broader market, incl. Asia, according to sources cited.
• JGB's led overnight after a strong 10yr auction and in a bit of a breather from the largely Ueda-induced selling seen at the start of the week. To a 134.72 peak with gains of just over 20 ticks at best.
• UK sells GBP 1bln 0.125% 2031 I/L Gilt: b/c 3.88x (prev. 3.49x), real yield 0.949% (prev. 0.889%)
• Germany sells EUR 3.563bln vs exp. EUR 4.5bln 2.00% 2027 Schatz: b/c 1.7x (prev. 1.7x), average yield 2.05% (prev. 1.98%), retention 20.82% (prev. 24.68%)

Commodities

• WTI and Brent continue to trade within Monday's post-OPEC range of USD 58.83-59.97/bbl and USD 62.69-63.82/bbl, respectively, as a pause in output hike and rising geopolitical concerns continue to support crude prices in the near term. WTI and Brent peaked at the start of the APAC session at USD 59.67/bbl and 63.36/bbl before falling to troughs of 59.09/bbl and 62.88/bbl.
• XAU and XAG traded muted at the start of the European session. Oscillated in a tight USD 4201-4236/oz and USD 56.60-58/oz band, respectively. More recently, the yellow metal has fallen to make fresh session troughs of USD 4,181/oz - a move which lacked catalysts, but technicians highlight accelerating selling pressure after spot gold slipped below USD 4.2k/oz.
• 3M LME Copper gapped lower and fell to a trough of USD 11.12k/t before rebounding to a session high of USD 11.27k/t as global risk tone slightly turns around following Monday's selloff.

Geopolitics: Middle East

• Arab media reported new Israeli attacks in Khan Yunis and Rafah, according to Iran International.

Geopolitics: Ukraine

• European Commission proposals for the Ukraine reparation loan should be distributed to member states tomorrow, and likely first discussion by EU ambassadors on Friday, according to Radio Liberty journalist
• Russian Foreign Minister Lavrov is to meet with Chinese Foreign Minister Wang Yi on Tuesday.
• Russia's Kremlin Spokesperson Peskov says US Special Envoy Witkoff and President Putin will discuss the understanding reached between the US and Ukraine, in a meeting at 14:00GMT/09:00EST, via TASS. S-400 and SU-57 fighter jets will be on the agenda.

Geopolitics: Other

• Venezuelan President Maduro reportedly asked for sanction removal for more than 100 officials during a previous call with US President Trump. Furthermore, Trump gave Maduro a Friday deadline to leave Venezuela with his family, while the failure to meet the Friday deadline prompted Trump's comments on Saturday about the closure of airspace, according to sources cited by Reuters.
• US Treasury Secretary Bessent said the Treasury is investigating allegations that Minnesota tax dollars may have been diverted to Al-Shabaab.
• China's Coast Guard said it expelled a Japanese vessel in the waters of the Senkaku Islands on Tuesday.
• "Turkey says oil tanker attacked in Black Sea while sailing from Russia to Georgia", according to Sky News Arabia. However, Sky News Arabia later clarifies, "Turkey says cargo ship attacked in Black Sea while sailing from Russia to Georgia".
• Japan's Defence Minister Koizumi is considering a visit to the US as early as mid-January to hold talks with War Secretary Hegseth, via Kyodo.

US Event Calendar

• Nov Wards Total Vehicle Sales, est. 15.4m, prior 15.32m
• 10:00 am: Fed’s Bowman Testifies Before House Committee

DB's Jim Reid concludes the overnight wrap

Markets got December off to a rocky start yesterday, with bonds and equities losing ground, alongside a sharp slump in Bitcoin (-5.19%). The moves gathered pace right from the open, as hawkish remarks from BoJ Governor Ueda had already pushed 10yr JGB yields up to a post-GFC high. But that then cascaded across global markets, with bond yields moving sharply higher in the US and Europe too. In the meantime, matters weren’t helped by the latest data, as the ISM manufacturing print leant in a stagflationary direction, whilst higher oil prices only exacerbated those fears. So with all said and done, the S&P 500 (-0.53%) slipped back, whilst 10yr Treasury yields (+7.2bps) saw their biggest daily jump in nearly four weeks.

Those developments in Japan were critical for yesterday’s moves, because Ueda’s comments had led investors to price in a December rate hike from the BoJ as a near-certainty. So that meant bond yields hit a whole bunch of new records, and by the close in Japan yesterday, the 10yr yield (+5.8bps) was at a post-2008 high of 1.86%, whilst the 30yr yield (+4.1bps) was at 3.37%, and the highest since that maturity was first issued in the late-1990s. Similarly at the front end, the 2yr yield closed above 1% for the first time since the GFC. This morning yields on 2yr and 10yr JGBs are both down a basis point after a decent 10yr auction has provided some respite to the bond sell-off. The bid-to-cover ratio was recorded at 3.59, compared to 2.97 at the previous sale in November, and a 12-month average of 3.20.

US futures are also fairly flat, indicating that the sell-off has paused for now. The KOSPI (+1.81%) is leading the way in Asia after rebounding from yesterday and after the US announced that the general tariff rate on imports from South Korea, including automobiles, will decrease to 15% retroactively effective from November 1. In other markets, the Nikkei (+0.24%) is recovering a little this morning after a near two percent decline yesterday, while the S&P/ASX 200 (+0.11%) is also experiencing modest gains. Meanwhile, the Hang Seng (+0.13%) is maintaining small gains, in contrast to the CSI (-0.61%) and the Shanghai Composite (-0.55%), which are lower after a stronger session on Monday.  

The moves in Japan echoed around the world yesterday, with a sharp bond selloff on both sides of the Atlantic. For instance, Treasury yields rose across the curve, with the 2yr yield (+4.0bps) up to 3.53%, the 10yr yield (+7.2bps) rose to 4.09%, and 30yrs (+7.4bps) to 4.74%. Moreover, those moves got further support from several inflationary indicators, including the ISM manufacturing survey. Admittedly, the headline index unexpectedly fell back to 48.2 (vs. 49.0 expected), but the prices paid component ticked up to 58.5 (vs. 57.5 expected) after a run of 4 consecutive monthly declines. So that exacerbated concerns about tariff-driven inflation persisting. And with oil prices rising (+1.27% for Brent) after Ukraine’s weekend attack against an oil terminal in the Black Sea, the 1yr inflation swap (+1.7bps) also posted a 4th consecutive increase to 2.64%.

That downbeat tone was seen for equities too, where the S&P 500 (-0.53%) fell back after a run of 5 consecutive gains, and the small-cap Russell 2000 (-1.25%) saw an even bigger slump. Nearly three quarters of the S&P constituents were lower on the day, though the index did recover some ground after futures in Asia had suggested an even larger fall. The Mag-7 (-0.10%) outperformed as Nvidia (+1.65%) rebounded from Friday’s -1.81% decline. By contrast, crypto assets suffered, with Bitcoin (-5.19%) falling to $86,446 by the close, and trading below $84k intra-day. Unsurprisingly, that meant there were sizeable losses for crypto-related stocks like Coinbase (-4.76%). Overnight Bitcoin has bounced a little.

Earlier in Europe, markets had followed a very similar pattern, with bonds and equities selling off together. So the STOXX 600 (-0.20%) also fell back after 5 consecutive gains, and there was a particularly sharp decline for the German DAX (-1.04%). And there wasn’t much data capable of boosting the mood either, with the Euro Area manufacturing PMI revised down a tenth from the flash reading to 49.6, so still in contractionary territory. Meanwhile, yields on 10yr bunds (+6.1bps), OATs (+7.5bps) and BTPs (+6.9bps) all moved higher.

Here in the UK, we also heard yesterday that the head of the OBR budget watchdog had resigned, which comes after their analysis of the budget’s contents went live on its website ahead of the Chancellor’s announcement. However, that wasn’t a market moving story, and the rise in 10yr gilt yields (+4.1bps) was more muted than in other countries yesterday, whilst the FTSE 100 (-0.18%) largely matched the STOXX 600. We did get a bit of UK data too, with October mortgage approvals down to 65.0k (vs. 64.5k expected), but that very much kept them within their 60-70k range that they’ve been in for the last 18 months.

Looking forward to today, we’ll see some focus on geopolitics as Trump’s envoy Witkoff is due to meet Russia’s President Putin in Moscow to discuss US proposals to end the war in Ukraine. The visit comes as US-led peace talks intensified over the past couple of weeks with “productive” meetings between US and Ukrainian officials but Kyiv staying resistant to territorial demands that have been made by Moscow.

In terms of the rest of the day ahead, data releases include the Euro Area flash CPI print for November, with Friday’s country-level releases suggesting that headline and core inflation should be unchanged at 2.1% and 2.4% respectively. We'll also see the Euro area unemployment rate for October. Otherwise, central bank speakers include the Fed’s Bowman but with the blackout on it won't be about monetary policy.

Tyler Durden Tue, 12/02/2025 - 08:43

Costco Sues For Refunds Before Supreme Court Rules On Tariff Legality

Authored by Rob Sabo via The Epoch Times,

Retail giant Costco Wholesale Corporation filed a lawsuit against the U.S. government on Nov. 28 in an effort to lay the groundwork for refunds of tariffs collected since President Donald Trump enacted global tariff policies under the International Emergency Economic Powers Act (IEEPA).

The complaint filed in the U.S. Court of International Trade in Manhattan argued that the president’s invocation of the act beginning in February illegally imposed tariffs on goods imported from Mexico, Canada, and China. Trump has said that tariffs were justified as a matter of national emergency because of the amount of fentanyl making its way into the United States from those countries, and that the global levies are a necessary tool to negotiate trade deals that level the playing field between the United States and key global trade partners.

The U.S. Supreme Court heard oral arguments regarding Trump’s authorization to invoke the IEEPA in early November. The issue has been fast-tracked, but the justices have not announced when they intend to make a ruling. Costco’s complaint requests a complete refund of duties it has already paid if the Supreme Court decides that the tariffs are unlawful.

Additionally, Costco is seeking “an injunction preventing Defendants from imposing further duties on it under the executive orders challenged in this lawsuit; and full refund from Defendants of all IEEPA duties Plaintiff has already paid to the United States as a result of the executive orders challenged in this lawsuit, as well as those it will continue to pay,” its lawyers wrote.

The complaint was filed after Costco was denied a request for additional time to finalize its tariff calculations assessed on imported goods. That decision could impact the company’s ability to collect a refund in full if the tariffs are invalidated, the company’s lawyers argue.

The lawsuit does not say how much Costco has paid in tariffs; however, revenue from tariffs has soared throughout the year. For fiscal year 2025, the federal government collected nearly $196 billion in duties, taxes, and fees—a 122 percent increase from the prior fiscal year.

On Aug. 29, the U.S. Court of Appeals for the Federal Circuit ruled in a 7-4 decision that Trump’s global tariff policies were illegal, sending the case to the nation’s highest court. The tariffs remain in place while the justices consider the case.

More than a dozen states have sued the Trump Administration over the president’s tariff policies. In April, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon, and Vermont filed suit against the president, arguing that only Congress has the power to enact tariff policies. California filed a similar suit.

The states join a growing list of companies that have filed similar suits, including Revlon Consumer Products LLC, Kawasaki Motors Manufacturing Corporation, Bumble Bee, Yokohama Tire, and EssilorLuxottica.

Costco did not immediately respond to a request for comment by The Epoch Times.

Kush Desai, White House spokesperson, said in a statement sent to The Epoch Times: “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact.

“The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter.”

Tyler Durden Tue, 12/02/2025 - 08:40

Costco Sues For Refunds Before Supreme Court Rules On Tariff Legality

Authored by Rob Sabo via The Epoch Times,

Retail giant Costco Wholesale Corporation filed a lawsuit against the U.S. government on Nov. 28 in an effort to lay the groundwork for refunds of tariffs collected since President Donald Trump enacted global tariff policies under the International Emergency Economic Powers Act (IEEPA).

The complaint filed in the U.S. Court of International Trade in Manhattan argued that the president’s invocation of the act beginning in February illegally imposed tariffs on goods imported from Mexico, Canada, and China. Trump has said that tariffs were justified as a matter of national emergency because of the amount of fentanyl making its way into the United States from those countries, and that the global levies are a necessary tool to negotiate trade deals that level the playing field between the United States and key global trade partners.

The U.S. Supreme Court heard oral arguments regarding Trump’s authorization to invoke the IEEPA in early November. The issue has been fast-tracked, but the justices have not announced when they intend to make a ruling. Costco’s complaint requests a complete refund of duties it has already paid if the Supreme Court decides that the tariffs are unlawful.

Additionally, Costco is seeking “an injunction preventing Defendants from imposing further duties on it under the executive orders challenged in this lawsuit; and full refund from Defendants of all IEEPA duties Plaintiff has already paid to the United States as a result of the executive orders challenged in this lawsuit, as well as those it will continue to pay,” its lawyers wrote.

The complaint was filed after Costco was denied a request for additional time to finalize its tariff calculations assessed on imported goods. That decision could impact the company’s ability to collect a refund in full if the tariffs are invalidated, the company’s lawyers argue.

The lawsuit does not say how much Costco has paid in tariffs; however, revenue from tariffs has soared throughout the year. For fiscal year 2025, the federal government collected nearly $196 billion in duties, taxes, and fees—a 122 percent increase from the prior fiscal year.

On Aug. 29, the U.S. Court of Appeals for the Federal Circuit ruled in a 7-4 decision that Trump’s global tariff policies were illegal, sending the case to the nation’s highest court. The tariffs remain in place while the justices consider the case.

More than a dozen states have sued the Trump Administration over the president’s tariff policies. In April, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon, and Vermont filed suit against the president, arguing that only Congress has the power to enact tariff policies. California filed a similar suit.

The states join a growing list of companies that have filed similar suits, including Revlon Consumer Products LLC, Kawasaki Motors Manufacturing Corporation, Bumble Bee, Yokohama Tire, and EssilorLuxottica.

Costco did not immediately respond to a request for comment by The Epoch Times.

Kush Desai, White House spokesperson, said in a statement sent to The Epoch Times: “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact.

“The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter.”

Tyler Durden Tue, 12/02/2025 - 08:40

Copper Hits Record High; Goldman Warns A "Circular Melt-Up" Is Now Driving Global Market

Copper futures on the London Metal Exchange broke out of the post-Thanksgiving trading range and into record-high territory on a massive tariff-driven scramble for supply.

Copper jumped nearly 1% on the LME to $11,294.50/ton, while Comex futures surged 1.6%, blowing out the US-London spread as traders scramble to rush metal into the U.S. ahead of potential Trump-era import tariffs.

The arbitrage continues to pull supply from the rest of the world into the U.S., compounding a year already plagued with unexpected mine outages and tightening fears.

Goldman's commodity specialist, James McGeoch, commented on this dynamic, calling it a "circular melt-up":

Post Thanksgiving – breakout in Copper: Have been watching LME, that $11,100 level, now 3 times, it's felt like a coiled spring, we have seen it in precious this year (Gold, Silver, PGM's), so why not pivot to the Doctor. As we do just remember commodities are highly emotive, basis the touch point at all levels of life, they rarely move in linear fashion, overreact up and overreact down, look at the awakening in Rare Earths in 2025. Whilst the CESCO feedback from a bottom-up perspective was kinda meh (China -8% QTD, y/y, worth noting YTD +7% y/y to end Oct), it's the balances that matter. This wasn't a conference about mine supply, or Chinese Q4 demand, this was dominated by the traders and the desire to purchase and ship into the Comex (U.S.) arb. GS commods sales were on the ground (feedback link), outside China they note EUR demand <2019 and they suggest positioning is 5/10….

I liken this to a "circular melt-up." The tighter LME gets tighter basis US (CMX arb) pull, the stronger the LME backwardation, which in turn tightens the CMX arb as the forward curve is underpinned by stock builds….. Circular motion – LME stock contraction, CMX arb strengthens…. Those watching supply have for some time been looking at 1H26: Grasberg tightness, Kakalua stockpiles rundown, Codelco friction, Collahuasi weakness, QB sustains lower rates. China smelter utilisation rates at record lows, copper premiums at record highs, TC settlement structures are breaking… there is nothing the Chinese can do about it, and in the meantime the U.S. is sitting whistling Dixie as stocks get onshored, it's a strategic stockpile, basis the "threat" of tariffs, that they so desperately need and the traders are providing the balance sheet. Who would have thought 12 months ago that the U.S. would be the only game in town when it comes to copper. By luck or by design, Uncle Sam holds all the aces…. I think last week's move was the hangover of CESCO washing off and traders realising that near term the asymmetry is higher. … Colleagues gone reminded us daily, commodities are spot assets, they are not traded in Excel models, they are art as much as science. Go back to summer, the same traders that owned CMX at 500, sold it at 550/575, the guys that got slammed as the unwind happened were machines. It's these same buyers today stepping in.

Year-to-date, copper is up 30% on the LME as investors pile in - both on the lucrative U.S. arbitrage trade that is fueling shortages elsewhere, and on long-term structural demand from the "Next AI Trade" and major power-grid buildouts.

Commenting on copper markets, super-bull Kostas Bintas of Mercuria told Bloomberg that the U.S. tariff arbitrage is draining global inventories and is about to ignite another leg higher in prices.

"This is the big one," Bintas told the media outlet in an interview during an industry conference in Shanghai. "If the world keeps going like this we will be left without copper cathodes in the rest of the world."

Bintas continued, "Just looking at the facts, mathematically… What is going to happen if all of this continues? There's only one answer: there will be tightness and a higher price."

Last March, Bintas forecasted that copper prices could reach $12,000 or $13,000 a ton, driven by U.S. import drawdowns.

"China is, for now at least, not the marginal buyer," said Nick Snowdon, Mercuria's head of metals and mining research. "That role has now shifted to the US."

Bintas noted, "If we run to $12,000 or $15,000 or whatever it is, the SHFE will take time to catch up. You're going to see a lot of Chinese copper cathodes coming out. And then when the Chinese will come back from Chinese New Year, there will not be enough copper cathodes." He said more than half a million tons could arrive in the U.S. in the first quarter of 2026.

Related:

• Goldman: $10,000 Is New Price Floor For Copper

Earlier this year, Jeff Currie, who led commodities research at Goldman for nearly three decades and now serves as the chief strategy officer of the energy pathways team at Carlyle Group, told Bloomberg's Odd Lots that copper is the "most compelling trade I've seen in my 30-year trading career."

Tyler Durden Tue, 12/02/2025 - 08:20

Copper Hits Record High; Goldman Warns A "Circular Melt-Up" Is Now Driving Global Market

Copper futures on the London Metal Exchange broke out of the post-Thanksgiving trading range and into record-high territory on a massive tariff-driven scramble for supply.

Copper jumped nearly 1% on the LME to $11,294.50/ton, while Comex futures surged 1.6%, blowing out the US-London spread as traders scramble to rush metal into the U.S. ahead of potential Trump-era import tariffs.

The arbitrage continues to pull supply from the rest of the world into the U.S., compounding a year already plagued with unexpected mine outages and tightening fears.

Goldman's commodity specialist, James McGeoch, commented on this dynamic, calling it a "circular melt-up":

Post Thanksgiving – breakout in Copper: Have been watching LME, that $11,100 level, now 3 times, it's felt like a coiled spring, we have seen it in precious this year (Gold, Silver, PGM's), so why not pivot to the Doctor. As we do just remember commodities are highly emotive, basis the touch point at all levels of life, they rarely move in linear fashion, overreact up and overreact down, look at the awakening in Rare Earths in 2025. Whilst the CESCO feedback from a bottom-up perspective was kinda meh (China -8% QTD, y/y, worth noting YTD +7% y/y to end Oct), it's the balances that matter. This wasn't a conference about mine supply, or Chinese Q4 demand, this was dominated by the traders and the desire to purchase and ship into the Comex (U.S.) arb. GS commods sales were on the ground (feedback link), outside China they note EUR demand <2019 and they suggest positioning is 5/10….

I liken this to a "circular melt-up." The tighter LME gets tighter basis US (CMX arb) pull, the stronger the LME backwardation, which in turn tightens the CMX arb as the forward curve is underpinned by stock builds….. Circular motion – LME stock contraction, CMX arb strengthens…. Those watching supply have for some time been looking at 1H26: Grasberg tightness, Kakalua stockpiles rundown, Codelco friction, Collahuasi weakness, QB sustains lower rates. China smelter utilisation rates at record lows, copper premiums at record highs, TC settlement structures are breaking… there is nothing the Chinese can do about it, and in the meantime the U.S. is sitting whistling Dixie as stocks get onshored, it's a strategic stockpile, basis the "threat" of tariffs, that they so desperately need and the traders are providing the balance sheet. Who would have thought 12 months ago that the U.S. would be the only game in town when it comes to copper. By luck or by design, Uncle Sam holds all the aces…. I think last week's move was the hangover of CESCO washing off and traders realising that near term the asymmetry is higher. … Colleagues gone reminded us daily, commodities are spot assets, they are not traded in Excel models, they are art as much as science. Go back to summer, the same traders that owned CMX at 500, sold it at 550/575, the guys that got slammed as the unwind happened were machines. It's these same buyers today stepping in.

Year-to-date, copper is up 30% on the LME as investors pile in - both on the lucrative U.S. arbitrage trade that is fueling shortages elsewhere, and on long-term structural demand from the "Next AI Trade" and major power-grid buildouts.

Commenting on copper markets, super-bull Kostas Bintas of Mercuria told Bloomberg that the U.S. tariff arbitrage is draining global inventories and is about to ignite another leg higher in prices.

"This is the big one," Bintas told the media outlet in an interview during an industry conference in Shanghai. "If the world keeps going like this we will be left without copper cathodes in the rest of the world."

Bintas continued, "Just looking at the facts, mathematically… What is going to happen if all of this continues? There's only one answer: there will be tightness and a higher price."

Last March, Bintas forecasted that copper prices could reach $12,000 or $13,000 a ton, driven by U.S. import drawdowns.

"China is, for now at least, not the marginal buyer," said Nick Snowdon, Mercuria's head of metals and mining research. "That role has now shifted to the US."

Bintas noted, "If we run to $12,000 or $15,000 or whatever it is, the SHFE will take time to catch up. You're going to see a lot of Chinese copper cathodes coming out. And then when the Chinese will come back from Chinese New Year, there will not be enough copper cathodes." He said more than half a million tons could arrive in the U.S. in the first quarter of 2026.

Related:

• Goldman: $10,000 Is New Price Floor For Copper

Earlier this year, Jeff Currie, who led commodities research at Goldman for nearly three decades and now serves as the chief strategy officer of the energy pathways team at Carlyle Group, told Bloomberg's Odd Lots that copper is the "most compelling trade I've seen in my 30-year trading career."

Tyler Durden Tue, 12/02/2025 - 08:20

The US Manufacturing Sector Wins While Net Zero Destroys Industry Elsewhere

Authored by Daniel Lacalle,

The US manufacturing sector clearly outperforms all its G7 peers, especially Germany, France, and the UK.

The main reason is that the United States never implemented the aggressive net zero emissions policy that has destroyed the industry by giving the reins of industrial policy to activists. In the latest S&P Global/HCOB PMI readings, the United States manufacturing sector is clearly expanding, while the UK is only slightly expanding, and Germany and France remain in contraction after years of decline.

The US also shows much stronger momentum in new orders and has better pricing power, margins, and investment plans than its European peers. Furthermore, the US has reduced CO₂ emissions and protected the environment without destroying its industrial fabric.​ According to the EIA, the United States has reduced its GHG/energy‑related CO₂ by 18% between 2010 and 2024, while the European Union is at a similar level, reducing emissions by 18–22%.

The latest flash S&P Global US Manufacturing PMI stands at 51.9 for November 2025, marking the tenth expansion reading in the past eleven months. On the other hand, Germany’s Manufacturing PMI has fallen back to 48.4, while France remains below 50, signalling a contraction and indicating disastrous manufacturing performance in the past three years. The UK has only just edged back to 50.2, barely into growth after months of contraction. There is a clear structural difference: the US is in a continued, broad-based expansion phase, while the euro area’s industry remains stuck in stagnation, and the UK has stabilised after years of a negative trend.

New orders show the trend in a clear way. In the US survey, new orders are in positive territory, supporting output and employment. In Germany, new orders are falling again, with reports of a sharp decline in export demand and renewed drops in backlogs and jobs, and France’s manufacturers continue to report falling new business after more than three years of demand weakness, according to SP Global. The UK is seeing some modest improvement in domestic orders but still faces a drag from exports, whereas US factories benefit from a large internal market and reshoring‑related demand that is largely absent in the European Union.

If we analyse prices, the US manufacturing sector is in a much better position to defend its margins. The S&P Global US survey shows a moderate input cost increase, stable margins and no negative impact on demand. In Germany and France, the PMI reports describe a context where manufacturers face weaker pricing power, with output prices often under pressure and a fragile demand environment. It is undeniable that there is evidence of a profitability and cash‑flow advantage for US manufacturers.

European business surveys and experts frequently highlight that high energy prices, complicated regulations, and climate-related policies are hurting orders, investments, and pricing, while US producers benefit from lower energy costs and more flexible regulations. Thus, US manufacturers can maintain investment and job creation plans despite slower global growth, whereas most German, UK and French firms are trying to survive in an environment of rising regulatory and tax burdens, focusing on cost cuts and capacity control.

Europe’s approach to net zero has clearly damaged the competitiveness of its energy‑intensive industries. The combination of carbon pricing, a hidden tax with no discernible positive final impact, renewable‑support surcharges, increasing regulated costs in electricity bills, and increasingly stringent wrongly called environmental restrictions are raising operating expenses for manufacturers that already face higher baseline energy prices than their US counterparts. Germany’s chemical, metal, and glass sectors are often highlighted as examples of industries whose margins and investment plans have been damaged by expensive electricity and gas, aggravated by climate-related surcharges, and the rapid phase-out of nuclear and conventional generation.

In France, industrial firms have benefited from nuclear power and face lower energy costs than their German or UK competitors, but they still suffer from high network charges, environmental taxes, and regulatory uncertainty related to future climate policy, all of which weigh on long-term investment decisions. UK think tanks and strategy firms point out the same points, stressing that carbon prices, green levies, and planning barriers have made energy costs structurally higher than in the US, pushing some producers to relocate or scale back capacity. Across the three countries, leading business groups warn that accelerated decarbonisation timetables, combined with insufficient support for industrial transformation, have widened the gap in input costs, making some multinationals shift incremental investments to North America or other regions, according to PWC studies. ​

The net zero‑related burdens are direct causes of a weak PMI picture. When demand is weak and new orders are falling, as in Germany and France, higher regulatory and energy costs cannot be offset by higher selling prices, so firms respond by cutting investments, reducing capacity, and, in some cases, closing plants. In the UK, climate‑policy‑related costs and uncertainty add another layer of concern. The US has followed a tax-cut-driven approach to energy transition without destroying cheap alternatives, which helps PMI readings and explains stronger investment intentions than in Europe.

In the US, firms have announced ongoing investment increases related to reshoring, supply chain diversification and technology. In Germany and France, repeated references to prolonged downturns in new orders mean weaker investment plans, delays in large projects and a continued focus on efficiency rather than expansion.

US firms invest in capacity and drive productivity‑enhancing spending in digitalisation and robotics, supported by a combination of fiscal incentives, more competitive energy costs and a clearer policy environment for industrial decarbonisation, according to PWC.

The US manufacturing sector is “clearly winning” relative to Germany, France and the UK on all fronts: volume, pricing, technology, and future capacity. The US has focused its industrial policy in leaders of alternatives and proactive improvement, rather than giving all the power to ideologically motivated activists obsessed with regulation, limits, and taxes.

Unfortunately, nothing seems to be changing. Europe and the UK seemed to be handing the future of industry, automation and manufacturing investment to China and other nations under a misguided view of environmental protection based on “not in my backyard”, while other countries grow and improve their environmental protection measures without abandoning key strategic sectors.

The US manufacturing sector is winning because its future was not left in the hands of PowerPoint activist politicians. This is a warning for Americans: if you copy Germany, France or the UK, you will face the stagnation and decline they are suffering.

Tyler Durden Tue, 12/02/2025 - 08:05

The US Manufacturing Sector Wins While Net Zero Destroys Industry Elsewhere

Authored by Daniel Lacalle,

The US manufacturing sector clearly outperforms all its G7 peers, especially Germany, France, and the UK.

The main reason is that the United States never implemented the aggressive net zero emissions policy that has destroyed the industry by giving the reins of industrial policy to activists. In the latest S&P Global/HCOB PMI readings, the United States manufacturing sector is clearly expanding, while the UK is only slightly expanding, and Germany and France remain in contraction after years of decline.

The US also shows much stronger momentum in new orders and has better pricing power, margins, and investment plans than its European peers. Furthermore, the US has reduced CO₂ emissions and protected the environment without destroying its industrial fabric.​ According to the EIA, the United States has reduced its GHG/energy‑related CO₂ by 18% between 2010 and 2024, while the European Union is at a similar level, reducing emissions by 18–22%.

The latest flash S&P Global US Manufacturing PMI stands at 51.9 for November 2025, marking the tenth expansion reading in the past eleven months. On the other hand, Germany’s Manufacturing PMI has fallen back to 48.4, while France remains below 50, signalling a contraction and indicating disastrous manufacturing performance in the past three years. The UK has only just edged back to 50.2, barely into growth after months of contraction. There is a clear structural difference: the US is in a continued, broad-based expansion phase, while the euro area’s industry remains stuck in stagnation, and the UK has stabilised after years of a negative trend.

New orders show the trend in a clear way. In the US survey, new orders are in positive territory, supporting output and employment. In Germany, new orders are falling again, with reports of a sharp decline in export demand and renewed drops in backlogs and jobs, and France’s manufacturers continue to report falling new business after more than three years of demand weakness, according to SP Global. The UK is seeing some modest improvement in domestic orders but still faces a drag from exports, whereas US factories benefit from a large internal market and reshoring‑related demand that is largely absent in the European Union.

If we analyse prices, the US manufacturing sector is in a much better position to defend its margins. The S&P Global US survey shows a moderate input cost increase, stable margins and no negative impact on demand. In Germany and France, the PMI reports describe a context where manufacturers face weaker pricing power, with output prices often under pressure and a fragile demand environment. It is undeniable that there is evidence of a profitability and cash‑flow advantage for US manufacturers.

European business surveys and experts frequently highlight that high energy prices, complicated regulations, and climate-related policies are hurting orders, investments, and pricing, while US producers benefit from lower energy costs and more flexible regulations. Thus, US manufacturers can maintain investment and job creation plans despite slower global growth, whereas most German, UK and French firms are trying to survive in an environment of rising regulatory and tax burdens, focusing on cost cuts and capacity control.

Europe’s approach to net zero has clearly damaged the competitiveness of its energy‑intensive industries. The combination of carbon pricing, a hidden tax with no discernible positive final impact, renewable‑support surcharges, increasing regulated costs in electricity bills, and increasingly stringent wrongly called environmental restrictions are raising operating expenses for manufacturers that already face higher baseline energy prices than their US counterparts. Germany’s chemical, metal, and glass sectors are often highlighted as examples of industries whose margins and investment plans have been damaged by expensive electricity and gas, aggravated by climate-related surcharges, and the rapid phase-out of nuclear and conventional generation.

In France, industrial firms have benefited from nuclear power and face lower energy costs than their German or UK competitors, but they still suffer from high network charges, environmental taxes, and regulatory uncertainty related to future climate policy, all of which weigh on long-term investment decisions. UK think tanks and strategy firms point out the same points, stressing that carbon prices, green levies, and planning barriers have made energy costs structurally higher than in the US, pushing some producers to relocate or scale back capacity. Across the three countries, leading business groups warn that accelerated decarbonisation timetables, combined with insufficient support for industrial transformation, have widened the gap in input costs, making some multinationals shift incremental investments to North America or other regions, according to PWC studies. ​

The net zero‑related burdens are direct causes of a weak PMI picture. When demand is weak and new orders are falling, as in Germany and France, higher regulatory and energy costs cannot be offset by higher selling prices, so firms respond by cutting investments, reducing capacity, and, in some cases, closing plants. In the UK, climate‑policy‑related costs and uncertainty add another layer of concern. The US has followed a tax-cut-driven approach to energy transition without destroying cheap alternatives, which helps PMI readings and explains stronger investment intentions than in Europe.

In the US, firms have announced ongoing investment increases related to reshoring, supply chain diversification and technology. In Germany and France, repeated references to prolonged downturns in new orders mean weaker investment plans, delays in large projects and a continued focus on efficiency rather than expansion.

US firms invest in capacity and drive productivity‑enhancing spending in digitalisation and robotics, supported by a combination of fiscal incentives, more competitive energy costs and a clearer policy environment for industrial decarbonisation, according to PWC.

The US manufacturing sector is “clearly winning” relative to Germany, France and the UK on all fronts: volume, pricing, technology, and future capacity. The US has focused its industrial policy in leaders of alternatives and proactive improvement, rather than giving all the power to ideologically motivated activists obsessed with regulation, limits, and taxes.

Unfortunately, nothing seems to be changing. Europe and the UK seemed to be handing the future of industry, automation and manufacturing investment to China and other nations under a misguided view of environmental protection based on “not in my backyard”, while other countries grow and improve their environmental protection measures without abandoning key strategic sectors.

The US manufacturing sector is winning because its future was not left in the hands of PowerPoint activist politicians. This is a warning for Americans: if you copy Germany, France or the UK, you will face the stagnation and decline they are suffering.

Tyler Durden Tue, 12/02/2025 - 08:05

Three Years On, How Accurate Are AI Chatbots?

Three years ago, on November 30, 2022, the official release of ChatGPT marked a turning point in artificial intelligence, propelling AI chatbots (or large language models) into the mainstream.

Since then, progress has been undeniable: LLMs' ability to process complex queries, summarize vast amounts of information and even assist in coding has improved considerably.

Yet, as Statista's Tristan Gaudiat details below, hallucinations, misinterpretations of context and inaccuracies continue to plague even the most sophisticated of currently available models.

A study from the European Broadcasting Union and the BBC reveals that while the rate of inaccurate responses has declined since the end of last year, errors continue to be widespread.

You will find more infographics at Statista

Data collected between May and June 2025 and analyzed by a cohort of journalists revealed that almost half of the responses (48 percent) from popular chatbots - free versions of ChatGPT, Gemini, Copilot and Perplexity - contained accuracy issues.

17 percent were significant errors, mainly regarding sourcing and missing context.

In December 2024, the rate of inaccurate responses (observed using a smaller answers sample) was significantly higher: 72 percent for all four LLMs. 31 percent were major issues in that case.

Despite gradual improvements, these shortcomings raise critical questions about reliability, especially in high-stakes applications like healthcare, legal advice or education. While AI developers keep pushing boundaries, users must remain aware of the technology's current limitations.

Tyler Durden Tue, 12/02/2025 - 07:45

Three Years On, How Accurate Are AI Chatbots?

Three years ago, on November 30, 2022, the official release of ChatGPT marked a turning point in artificial intelligence, propelling AI chatbots (or large language models) into the mainstream.

Since then, progress has been undeniable: LLMs' ability to process complex queries, summarize vast amounts of information and even assist in coding has improved considerably.

Yet, as Statista's Tristan Gaudiat details below, hallucinations, misinterpretations of context and inaccuracies continue to plague even the most sophisticated of currently available models.

A study from the European Broadcasting Union and the BBC reveals that while the rate of inaccurate responses has declined since the end of last year, errors continue to be widespread.

You will find more infographics at Statista

Data collected between May and June 2025 and analyzed by a cohort of journalists revealed that almost half of the responses (48 percent) from popular chatbots - free versions of ChatGPT, Gemini, Copilot and Perplexity - contained accuracy issues.

17 percent were significant errors, mainly regarding sourcing and missing context.

In December 2024, the rate of inaccurate responses (observed using a smaller answers sample) was significantly higher: 72 percent for all four LLMs. 31 percent were major issues in that case.

Despite gradual improvements, these shortcomings raise critical questions about reliability, especially in high-stakes applications like healthcare, legal advice or education. While AI developers keep pushing boundaries, users must remain aware of the technology's current limitations.

Tyler Durden Tue, 12/02/2025 - 07:45

Tether CEO Slams S&P Ratings Agency And Influencers Spreading USDt FUD

Authored by Vince Quill via CoinTelegraph.com,

Tether CEO Paolo Ardoino and market analysts pushed back against S&P Global’s downgraded rating of USDt’s ability to maintain its US dollar peg, saying that the ratings agency did not account for all of Tether’s assets and revenues.

The Tether Group’s total assets at the end of Q3 2025 totaled about $215 billion, while its total stablecoin liabilities were about $184.5 billion, according to Ardoino, who referenced Tether’s Q3 attestation report. He added:

“Tether had, at the end of Q3 2025, about $7 billion in excess equity, on top of the about $184.5 billion in stablecoin reserves, plus about another $23 billion in retained earnings as part of our Tether Group equity. 

"S&P made the same mistake of not considering the additional Group Equity, nor the roughly $500 million in monthly base profits generated by US Treasury yields alone,” Ardoino continued.

Source: Paolo Ardoino

S&P Global downgraded USDt’s dollar-peg rating to “weak”  on Wednesday, the lowest score on its scale, prompting fear, uncertainty, and doubt from some analysts about the company, which has become a critical piece of crypto market infrastructure.

Analysts debate Tether’s balance sheet fundamentals

Arthur Hayes, a market analyst and founder of the BitMEX crypto exchange, speculated that Tether is buying large quantities of gold and BTC to compensate for income shortfalls produced by falling US Treasury yields.

As the Federal Reserve slashes interest rates, the gold and BTC should go up in value, Hayes said, but he also warned that a steep correction in these assets could spell trouble for Tether.

“A roughly 30% decline in the gold and BTC position would wipe out their equity, and then USDt would be, in theory, insolvent,” he said.

Source: Arthur Hayes

Joseph Ayoub, the former lead digital asset analyst at financial services giant Citi, said he spent “hundreds” of hours researching Tether as an analyst for the company, and rebuffed Hayes’ analysis.

Tether has excess assets beyond what it reports, has an extremely lucrative business that generates billions of dollars in interest income with only 150 employees, and is better collateralized than traditional banks, Ayoub said. 

Tyler Durden Tue, 12/02/2025 - 07:20

Tether CEO Slams S&P Ratings Agency And Influencers Spreading USDt FUD

Authored by Vince Quill via CoinTelegraph.com,

Tether CEO Paolo Ardoino and market analysts pushed back against S&P Global’s downgraded rating of USDt’s ability to maintain its US dollar peg, saying that the ratings agency did not account for all of Tether’s assets and revenues.

The Tether Group’s total assets at the end of Q3 2025 totaled about $215 billion, while its total stablecoin liabilities were about $184.5 billion, according to Ardoino, who referenced Tether’s Q3 attestation report. He added:

“Tether had, at the end of Q3 2025, about $7 billion in excess equity, on top of the about $184.5 billion in stablecoin reserves, plus about another $23 billion in retained earnings as part of our Tether Group equity. 

"S&P made the same mistake of not considering the additional Group Equity, nor the roughly $500 million in monthly base profits generated by US Treasury yields alone,” Ardoino continued.

Source: Paolo Ardoino

S&P Global downgraded USDt’s dollar-peg rating to “weak”  on Wednesday, the lowest score on its scale, prompting fear, uncertainty, and doubt from some analysts about the company, which has become a critical piece of crypto market infrastructure.

Analysts debate Tether’s balance sheet fundamentals

Arthur Hayes, a market analyst and founder of the BitMEX crypto exchange, speculated that Tether is buying large quantities of gold and BTC to compensate for income shortfalls produced by falling US Treasury yields.

As the Federal Reserve slashes interest rates, the gold and BTC should go up in value, Hayes said, but he also warned that a steep correction in these assets could spell trouble for Tether.

“A roughly 30% decline in the gold and BTC position would wipe out their equity, and then USDt would be, in theory, insolvent,” he said.

Source: Arthur Hayes

Joseph Ayoub, the former lead digital asset analyst at financial services giant Citi, said he spent “hundreds” of hours researching Tether as an analyst for the company, and rebuffed Hayes’ analysis.

Tether has excess assets beyond what it reports, has an extremely lucrative business that generates billions of dollars in interest income with only 150 employees, and is better collateralized than traditional banks, Ayoub said. 

Tyler Durden Tue, 12/02/2025 - 07:20

Another Russian Shadow-Fleet Tanker Hit By Drones

A fourth Russia-linked tanker was attacked in less than a week, marking a sharp escalation in strikes on commercial vessels tied to Moscow as the war in Eastern Europe nears its fourth year.

⚡️Photos from the Russian tanker MIDVOLGA-2, which was hit by a drone this morning near the Turkish coast

Preliminary reports suggest the strike was carried out by a fixed-wing drone, likely an FP-1. https://t.co/2k8jTmWGPR pic.twitter.com/bkhdVO7TWh

— NEXTA (@nexta_tv) December 2, 2025

Bloomberg reports that the Midvolga-2, a Russian-flagged tanker hauling sunflower oil from Russia to Georgia, was hit by Ukrainian kamikaze drones about 80 miles off Turkey's northern coast. Turkish officials said the crew of 13 was unharmed in the attack.

Russian tanker 'Midvolga 2' carrying sunflower oil ATTACKED by drones in the Black Sea — Turkish officials

All 13 crew members on board are safe. The ship is reportedly en route to Georgia pic.twitter.com/VegeZT5pvF

— RT (@RT_com) December 2, 2025

The incident is part of Ukraine's intensifying and broadening attack on Moscow's oil/gas infrastructure and shadow tanker fleet. 

On Sunday, the Russian paper Kommersant reported that the M/T Mersin tanker, hauling Russian oil, was attacked by Ukrainian drones off the west coast of Africa. This marks the first incident of its kind in the region and suggests a further broadening of the battlefield.

• Moscow Paper Claims Ukrainian Drones Hit Russia-Linked Oil Tanker Off West Africa

Last week, two Russia-linked tankers were hit by kamikaze drone boats. Here's our reporting:

• Ukraine Releases Footage Of Kamikaze Drone Boats Striking Russian Shadow-Fleet Tankers

• Sanctioned Russia-Bound Oil Tanker At Risk Of Sinking After Mine Strike

Ukraine and its Western allies have spent the past several years targeting Russia's oil and gas infrastructure with kamikaze drones and naval drones in an effort to pressure Moscow's finances. This campaign, accompanied by sanctions, has yet to collapse Russia financially.

Attacks on Russia's oil/gas infrastructure jumped to a record last month as the Trump administration rushes to end the four-year war.

With U.S. special envoy Steve Witkoff coming off negotiations with Ukrainian officials this past weekend in Miami and now in Moscow to meet Russian President Vladimir Putin about a possible peace deal, it appears Ukraine is making one final push to inflict maximum damage on Moscow.

Tyler Durden Tue, 12/02/2025 - 06:55

Another Russian Shadow-Fleet Tanker Hit By Drones

A fourth Russia-linked tanker was attacked in less than a week, marking a sharp escalation in strikes on commercial vessels tied to Moscow as the war in Eastern Europe nears its fourth year.

⚡️Photos from the Russian tanker MIDVOLGA-2, which was hit by a drone this morning near the Turkish coast

Preliminary reports suggest the strike was carried out by a fixed-wing drone, likely an FP-1. https://t.co/2k8jTmWGPR pic.twitter.com/bkhdVO7TWh

— NEXTA (@nexta_tv) December 2, 2025

Bloomberg reports that the Midvolga-2, a Russian-flagged tanker hauling sunflower oil from Russia to Georgia, was hit by Ukrainian kamikaze drones about 80 miles off Turkey's northern coast. Turkish officials said the crew of 13 was unharmed in the attack.

Russian tanker 'Midvolga 2' carrying sunflower oil ATTACKED by drones in the Black Sea — Turkish officials

All 13 crew members on board are safe. The ship is reportedly en route to Georgia pic.twitter.com/VegeZT5pvF

— RT (@RT_com) December 2, 2025

The incident is part of Ukraine's intensifying and broadening attack on Moscow's oil/gas infrastructure and shadow tanker fleet. 

On Sunday, the Russian paper Kommersant reported that the M/T Mersin tanker, hauling Russian oil, was attacked by Ukrainian drones off the west coast of Africa. This marks the first incident of its kind in the region and suggests a further broadening of the battlefield.

• Moscow Paper Claims Ukrainian Drones Hit Russia-Linked Oil Tanker Off West Africa

Last week, two Russia-linked tankers were hit by kamikaze drone boats. Here's our reporting:

• Ukraine Releases Footage Of Kamikaze Drone Boats Striking Russian Shadow-Fleet Tankers

• Sanctioned Russia-Bound Oil Tanker At Risk Of Sinking After Mine Strike

Ukraine and its Western allies have spent the past several years targeting Russia's oil and gas infrastructure with kamikaze drones and naval drones in an effort to pressure Moscow's finances. This campaign, accompanied by sanctions, has yet to collapse Russia financially.

Attacks on Russia's oil/gas infrastructure jumped to a record last month as the Trump administration rushes to end the four-year war.

With U.S. special envoy Steve Witkoff coming off negotiations with Ukrainian officials this past weekend in Miami and now in Moscow to meet Russian President Vladimir Putin about a possible peace deal, it appears Ukraine is making one final push to inflict maximum damage on Moscow.

Tyler Durden Tue, 12/02/2025 - 06:55

Visualizing The Declining Purchasing Power Of The US Dollar

The U.S. dollar has steadily lost value over the past century. According to Federal Reserve data, the purchasing power of one dollar today is equal to just a few cents in 1913 (the year the Fed was created).

In this graphic, Visual Capitalist's Marcus Lu tracks the decline in the purchasing power of the U.S. dollar since the early 1900s, illustrating how inflation has eroded its value.

Data & Discussion

The data for this visualization comes from Federal Reserve Economic Data (FRED). It measures the “Purchasing Power of the Consumer Dollar” across all U.S. city averages, indexed to consumer prices.

The higher the index, the more purchasing power the dollar has. As the index declines, goods and services become relatively more expensive.

Date Purchasing Power of the Consumer Dollar in U.S. City Average 1913-01-01 1017.8 1914-01-01 994.2 1915-01-01 987.6 1916-01-01 956.2 1917-01-01 855 1918-01-01 715.9 1919-01-01 604.5 1920-01-01 517.7 1921-01-01 524.9 1922-01-01 590.2 1923-01-01 595 1924-01-01 578.8 1925-01-01 577.9 1926-01-01 557.3 1927-01-01 570.1 1928-01-01 578.8 1929-01-01 584.5 1930-01-01 584.5 1931-01-01 628.8 1932-01-01 699.1 1933-01-01 775.4 1934-01-01 755.7 1935-01-01 733.5 1936-01-01 722.8 1937-01-01 709.3 1938-01-01 702.4 1939-01-01 715.9 1940-01-01 717.7 1941-01-01 709.3 1942-01-01 638.1 1943-01-01 591.4 1944-01-01 574.3 1945-01-01 561.4 1946-01-01 549.2 1947-01-01 464.8 1948-01-01 421.4 1949-01-01 415.7 1950-01-01 424.4 1951-01-01 393.2 1952-01-01 377.4 1953-01-01 375 1954-01-01 370.8 1955-01-01 373.5 1956-01-01 372.6 1957-01-01 361.5 1958-01-01 349.3 1959-01-01 344.8 1960-01-01 340.6 1961-01-01 335.2 1962-01-01 332.8 1963-01-01 328.6 1964-01-01 323.2 1965-01-01 319.6 1966-01-01 313.6 1967-01-01 303.5 1968-01-01 293.3 1969-01-01 280.4 1970-01-01 264.3 1971-01-01 251.1 1972-01-01 243 1973-01-01 234.3 1974-01-01 214.3 1975-01-01 191.8 1976-01-01 179.6 1977-01-01 170.6 1978-01-01 159.8 1979-01-01 146.3 1980-01-01 128.4 1981-01-01 114.9 1982-01-01 105.9 1983-01-01 102.1 1984-01-01 98.2 1985-01-01 94.6 1986-01-01 91.3 1987-01-01 89.9 1988-01-01 86.4 1989-01-01 82.6 1990-01-01 78.5 1991-01-01 74.3 1992-01-01 72.4 1993-01-01 70.1 1994-01-01 68.4 1995-01-01 66.5 1996-01-01 64.8 1997-01-01 62.8 1998-01-01 61.9 1999-01-01 60.8 2000-01-01 59.2 2001-01-01 57.1 2002-01-01 56.5 2003-01-01 55 2004-01-01 54 2005-01-01 52.4 2006-01-01 50.4 2007-01-01 49.4 2008-01-01 47.4 2009-01-01 47.4 2010-01-01 46.1 2011-01-01 45.4 2012-01-01 44.1 2013-01-01 43.4 2014-01-01 42.8 2015-01-01 42.8 2016-01-01 42.2 2017-01-01 41.2 2018-01-01 40.3 2019-01-01 39.7 2020-01-01 38.8 2021-01-01 38.2 2022-01-01 35.6 2023-01-01 33.4 2024-01-01 32.4 2025-01-01 31.5 2025-09-01 30.8 Inflationary Eras and Economic Shocks

Major inflationary periods can be identified by looking at the steepest drops in the chart. For example, World War I and World War II strained government finances, leading to massive increases in public spending and money creation, which pushed prices sharply higher.

Similarly, the oil shocks of the 1970s caused energy costs to spike throughout the world, feeding into broad-based inflation. In each case, rising prices significantly eroded the purchasing power of the U.S. dollar.

From Gold Standard to Fiat Currency

Until 1971, the U.S. dollar was backed by gold.

This system was ended by President Nixon because the U.S. was creating more dollars than it had gold to support. Furthermore, foreign countries were increasingly demanding gold in exchange for their dollar reserves.

While ending this system gave policymakers more flexibility to manage the economy, money creation became easier, as shown by this chart of the M2 money supply. M2 comprises the most liquid forms of U.S. money, including physical currency, checking deposits, plus near-liquid assets like small-value time (CD) deposits, retail money-market funds, and other readily convertible savings vehicles.

An expanding money supply can be healthy when it grows in line with factors like population, economic output, and demand for credit, but becomes inflationary when it outpaces real economic growth.

If you enjoyed today’s post, check out Gold Production by Region in 2024 on Voronoi, the new app from Visual Capitalist.

Tyler Durden Tue, 12/02/2025 - 05:45

Visualizing The Declining Purchasing Power Of The US Dollar

The U.S. dollar has steadily lost value over the past century. According to Federal Reserve data, the purchasing power of one dollar today is equal to just a few cents in 1913 (the year the Fed was created).

In this graphic, Visual Capitalist's Marcus Lu tracks the decline in the purchasing power of the U.S. dollar since the early 1900s, illustrating how inflation has eroded its value.

Data & Discussion

The data for this visualization comes from Federal Reserve Economic Data (FRED). It measures the “Purchasing Power of the Consumer Dollar” across all U.S. city averages, indexed to consumer prices.

The higher the index, the more purchasing power the dollar has. As the index declines, goods and services become relatively more expensive.

Date Purchasing Power of the Consumer Dollar in U.S. City Average 1913-01-01 1017.8 1914-01-01 994.2 1915-01-01 987.6 1916-01-01 956.2 1917-01-01 855 1918-01-01 715.9 1919-01-01 604.5 1920-01-01 517.7 1921-01-01 524.9 1922-01-01 590.2 1923-01-01 595 1924-01-01 578.8 1925-01-01 577.9 1926-01-01 557.3 1927-01-01 570.1 1928-01-01 578.8 1929-01-01 584.5 1930-01-01 584.5 1931-01-01 628.8 1932-01-01 699.1 1933-01-01 775.4 1934-01-01 755.7 1935-01-01 733.5 1936-01-01 722.8 1937-01-01 709.3 1938-01-01 702.4 1939-01-01 715.9 1940-01-01 717.7 1941-01-01 709.3 1942-01-01 638.1 1943-01-01 591.4 1944-01-01 574.3 1945-01-01 561.4 1946-01-01 549.2 1947-01-01 464.8 1948-01-01 421.4 1949-01-01 415.7 1950-01-01 424.4 1951-01-01 393.2 1952-01-01 377.4 1953-01-01 375 1954-01-01 370.8 1955-01-01 373.5 1956-01-01 372.6 1957-01-01 361.5 1958-01-01 349.3 1959-01-01 344.8 1960-01-01 340.6 1961-01-01 335.2 1962-01-01 332.8 1963-01-01 328.6 1964-01-01 323.2 1965-01-01 319.6 1966-01-01 313.6 1967-01-01 303.5 1968-01-01 293.3 1969-01-01 280.4 1970-01-01 264.3 1971-01-01 251.1 1972-01-01 243 1973-01-01 234.3 1974-01-01 214.3 1975-01-01 191.8 1976-01-01 179.6 1977-01-01 170.6 1978-01-01 159.8 1979-01-01 146.3 1980-01-01 128.4 1981-01-01 114.9 1982-01-01 105.9 1983-01-01 102.1 1984-01-01 98.2 1985-01-01 94.6 1986-01-01 91.3 1987-01-01 89.9 1988-01-01 86.4 1989-01-01 82.6 1990-01-01 78.5 1991-01-01 74.3 1992-01-01 72.4 1993-01-01 70.1 1994-01-01 68.4 1995-01-01 66.5 1996-01-01 64.8 1997-01-01 62.8 1998-01-01 61.9 1999-01-01 60.8 2000-01-01 59.2 2001-01-01 57.1 2002-01-01 56.5 2003-01-01 55 2004-01-01 54 2005-01-01 52.4 2006-01-01 50.4 2007-01-01 49.4 2008-01-01 47.4 2009-01-01 47.4 2010-01-01 46.1 2011-01-01 45.4 2012-01-01 44.1 2013-01-01 43.4 2014-01-01 42.8 2015-01-01 42.8 2016-01-01 42.2 2017-01-01 41.2 2018-01-01 40.3 2019-01-01 39.7 2020-01-01 38.8 2021-01-01 38.2 2022-01-01 35.6 2023-01-01 33.4 2024-01-01 32.4 2025-01-01 31.5 2025-09-01 30.8 Inflationary Eras and Economic Shocks

Major inflationary periods can be identified by looking at the steepest drops in the chart. For example, World War I and World War II strained government finances, leading to massive increases in public spending and money creation, which pushed prices sharply higher.

Similarly, the oil shocks of the 1970s caused energy costs to spike throughout the world, feeding into broad-based inflation. In each case, rising prices significantly eroded the purchasing power of the U.S. dollar.

From Gold Standard to Fiat Currency

Until 1971, the U.S. dollar was backed by gold.

This system was ended by President Nixon because the U.S. was creating more dollars than it had gold to support. Furthermore, foreign countries were increasingly demanding gold in exchange for their dollar reserves.

While ending this system gave policymakers more flexibility to manage the economy, money creation became easier, as shown by this chart of the M2 money supply. M2 comprises the most liquid forms of U.S. money, including physical currency, checking deposits, plus near-liquid assets like small-value time (CD) deposits, retail money-market funds, and other readily convertible savings vehicles.

An expanding money supply can be healthy when it grows in line with factors like population, economic output, and demand for credit, but becomes inflationary when it outpaces real economic growth.

If you enjoyed today’s post, check out Gold Production by Region in 2024 on Voronoi, the new app from Visual Capitalist.

Tyler Durden Tue, 12/02/2025 - 05:45

How A Generation of Women Was Misled About Hormone Therapy

Authored by Jingduan Yang via The Epoch Times (emphasis ours),

“Was I misled?”

That’s the question I hear most from my patients lately—asked with anger, exhaustion, and the quiet devastation of women who wonder if they lost years of their lives to menopause symptoms they were told were untreatable.

Getty image/MoMo Productions

The answer came earlier this month when the U.S. Food and Drug Administration announced it would remove “black box” warnings from hormone therapy products after 23 years. For many women, the reversal is an admission that arrives decades too late.

What Happened in 2002

In July 2002, preliminary data from the Women’s Health Initiative (WHI) were published in JAMA, showing that combined hormone therapy (estrogen and progestin) increased the risk of breast cancer, stroke, and pulmonary embolism. Major media outlets interpreted early signals from the study as definitive danger, and the announcement led to an instant and dramatic decline in the use of hormone therapy.

Women who had been sleeping well for the first time in years suddenly poured their medications into the trash. Pharmacies fielded calls from panicked patients demanding immediate discontinuation. Primary care doctors, most of whom had never been trained deeply in menopause management, told their patients to “stop now and ask questions later.”

Women did stop, and many suffered in silence for the next 20 years.

The FDA’s Historic Reversal

On Nov. 10, the FDA announced that it is initiating the removal of broad “black box” warnings referencing risks of cardiovascular disease, breast cancer, and probable dementia from hormone replacement therapy products for menopause.

When FDA Commissioner Dr. Marty Makary spoke publicly about the shift, he didn’t mince words. He said the media had frightened women away from a potentially life-changing therapy, and he noted the difference between estrogen-only therapy and synthetic combination regimens. He acknowledged, openly, that the “fear machine” had begun long before the scientific data had been fully understood.

He also said something that struck many women deeply: “After 23 years of dogma, the FDA is stopping the fear that has steered women away from this life-saving treatment.”

For many of my patients, that sentence felt like a validation they had waited half a lifetime to hear.

The Devil Is in the Details

The details that matter most sat quietly in the medical literature for years—in the 2002 article and the two follow-up studies published in 2011 and 2020 in JAMA.

The Study Population Was Older

Women recruited in the WHI study were all postmenopausal, aged 50 to 79 years, with an average age of 63—more than a decade past the onset of menopause. Most had not used hormones before, and many had cardiovascular risk factors.

The Hormones Were Synthetic

The adverse results found among older women taking combined conjugated equine estrogen and medroxyprogesterone acetate—both older, synthetic formulations developed in a different era—were generalized to all hormone therapy types and all age groups.

Estrogen-Only Therapy Showed Different Results

The estrogen-only group in the WHI study—women who had hysterectomies and therefore received estrogen without synthetic progestins—had a lower rate of breast cancer.

In the storm of fear that followed, no one wanted to hear nuance.

The Critical Factor

Yet even in the early 2000s, there were physicians who paused, confused because something about the reporting didn’t align with what they were seeing clinically. The hormones used in the WHI study weren’t the bioidentical estradiol and progesterone that many clinicians were already prescribing with good results. More importantly, the women who seemed to benefit most from hormone therapy were those who began it near menopause—not in older age.

Timing is critical. The body responds to estrogen very differently pre-menopause versus a decade post-menopause. After years of low estrogen, the blood vessels lose their flexibility, plaque accumulates, and metabolic changes settle in. The risk-benefit balance is fundamentally different for women who initiate hormone therapy at different ages.

This is what we in medicine now call the “timing hypothesis”—a concept that should have been central to every headline but was lost entirely.

And for two decades, women lived inside that headline and endured the consequences of fear and misinformation.

What Women Lost

The point is not that hormone therapy is perfect or appropriate for everyone. It’s that women were never given the chance to make an informed choice.

Women who begin hormone therapy earlier—ideally within 10 years of menopause—tend to experience improved sleep, reduced anxiety and irritability, and protection against bone loss.

Many report better cognition, improved cardiovascular markers, and enhanced sexual health and relationship well-being. Although spoken about more quietly, perhaps the most profound benefit is the simplest one: the return of themselves.

Takeaways

The new FDA guidelines do not signal a new fad or a sudden reversal. They mark a return to evidence-based medicine—the kind that millions of women should have received all along.

Hormone therapy is not appropriate for every woman, and it is not a cure-all. However, it is a powerful tool, and for the right woman at the right moment, it can restore a quality of life she thought she’d lost forever.

Our job now—as clinicians, as journalists, as a society—is to give women back what fear took from them: clarity, choice, and control.

Everything that follows in this series of columns will build on that mission.

Tyler Durden Tue, 12/02/2025 - 05:00

Which Countries Prescribe The Most & Least Antibiotics?

World Antimicrobial Resistance (AMR) Awareness Week ended last week.

Antimicrobials are medicines used to prevent and treat infectious diseases. These can be used on humans, animals and plants and come in the forms of antibiotics, antivirals, antifungals and antiparasitics.

Although resistance to these medicines occurs naturally, due to genetic changes in pathogens over time, this process can be exacerbated when humans use antimicrobials too frequently or do not finish a course fully. The result can be deadly, with dangerous strains of bacteria endangering lives and threatening the ability to treat common infections and, as a result, to perform life-saving procedures from cancer chemotherapy to caesarean sections.

As Statista's Anna Fleck details below, a recent report by the OECD highlights significant disparities in antibiotic prescribing practices across countries.

You will find more infographics at Statista

Among those providing data, Greece had the highest prescription rate in 2023, with 26.7 defined daily doses (DDDs) per 1,000 people.

This is well above the OECD average of 16 DDDs and nearly three times the level seen in Sweden and the Netherlands, where the rates were 8.7 and 8.8 DDDs per 1,000 people, respectively.

While the volume of antibiotics prescribed has generally decreased across most OECD countries, Finland (-5.8 DDDs/1,000) and Canada (-5.6 DDDs/1,000) have shown the greatest reductions since 2013.

The OECD states that antibiotics should only be prescribed when supported by clear evidence.

Antibiotic resistance can also build up through more indirect means, such as via eating the meat of live feed that has been treated with antibiotics, or consuming meat or dairy products contaminated with antibiotic resistant pathogens. 

Data from 2020 shows that countries such as Thailand, China and Australia rely on the practice of giving animals antibiotics far more heavily than nations including Norway, Sweden and the United Kingdom.

Tyler Durden Tue, 12/02/2025 - 04:15