[TrueZhuo Finance] Fed officials expect economic acceleration next year; US non-farm payroll data to be released soon
Senior Federal Reserve officials stated that monetary policy is fully prepared for next year, with economic growth expected to accelerate. Markets await the release of Tuesday's non-farm payroll data.
Overnight Highlights
l Wall Street stocks closed lower on Monday as investors prepared for a series of economic data later in the week while assessing reports on Fed chair candidates and policymakers' remarks. The dollar weakened against the yen amid a busy week of central bank decisions and U.S. data that could influence the Fed's near-term policy outlook. Oil prices fell as investors weighed disruptions from escalating U.S.-Venezuela tensions, oversupply concerns, and the potential impact of a Russia-Ukraine peace deal. Spot gold erased intraday gains to close flat after progress in key talks between U.S. officials and Ukrainian President Zelensky aimed at ending the war.
International News
l The New York Fed president said monetary policy is fully prepared for 2026, with economic growth expected to accelerate to around 2.25% next year, inflation to dip slightly below 2.5%, and reach the Fed's 2% target by 2027.
l Fed Governor Milan, who voted against policy three times, said core inflation is nearing the target. He is likely to remain in office until a successor is confirmed after his term expires at the end of January.
l CNBC: Some Trump allies are backing former Fed Governor Kevin Warsh, not National Economic Council Director Hassett, to replace Powell.
l New York state's December manufacturing activity unexpectedly contracted as orders stalled and shipments declined.
l Nomura: The Tankan survey and wage reports show Japanese firms are prepared for a central bank rate hike.
l The EU resisted U.S. pressure, refusing to amend tech regulations to lower steel and aluminum tariffs.
l The U.S. proposed more substantial security guarantees for Ukraine, but territorial issues remain a key sticking point. Trump said Russia and Ukraine have never been closer to ending the war.
l Bitcoin fell below $86,000 for the first time in two weeks, sliding further toward its yearly low amid weak market sentiment.
l JPMorgan (JPM.US) launched its first Ethereum-based tokenized money market fund.
l Dutch pension fund PME ended its partnership with BlackRock over climate policy disagreements, with BlackRock no longer managing its €5 billion equity mandate.
Greater China News
l China's State Administration of Foreign Exchange said it will strengthen macro-prudential management and guidance in the forex market.
l Singapore and China signed 27 agreements to deepen cooperation in areas like financial and capital market connectivity.
l Vanke (2202.HK) proposed optimizing bond extension terms, seeking to extend grace periods and add credit enhancement measures. Its subsidiary Lieyang secured a one-year extension on a HK$1.05 billion loan from UOB.
l FT: The EU plans to crack down on "highly dangerous" Chinese parcels sold on platforms like Shein and Alibaba (BABA.US/9988.HK).
l The EU said China has started issuing rare earth general licenses to European firms but needs more detailed information to assess the process.
l Fosun Pharma's (2196.HK) subsidiary plans to invest ¥1.41 billion to acquire controversial Alzheimer's drug developer Green Valley Pharma.
Commodities & Forex
l The dollar index weakened ahead of non-farm payroll data, with rate hike expectations driving the yen to outperform among G-10 currencies.
l Onshore and offshore yuan both rose to fresh 2025 highs, inching closer to breaking 7.
l WTI fell to its lowest since February 2021 as traders assessed Ukraine deal prospects. Gold hovered near record highs.
Earnings & Data Focus
l U.S. November unemployment rate (forecast: 4.4%)
l U.S. November non-farm payrolls (forecast: 40K)
Source: Golden Horse Capital Management (HK) Ltd.
Author: Terry Chow
Proofreader: Gloria Guo
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