2025-12-12 10:26

Annual oil and gas revenue to fall short of budget projection Returns hit by cheaper crude and stronger rouble Oil and gas accounts for a quarter of federal budget proceeds MOSCOW, Dec 12 (Reuters) - Russian state oil and gas revenue in December is likely to almost halve from a year earlier to 410 billion roubles ($5.17 billion) as a result of lower crude prices and a stronger rouble, Reuters calculations showed on Friday. Oil and gas revenue is the leading source of cash for the Kremlin, making up a quarter of federal budget proceeds that have been drained by heavy defence and security spending since Russia began its military campaign in Ukraine in February 2022. Sign up here. For the entire year, the revenue is set to fall by almost a quarter to 8.44 trillion roubles, below the Finance Ministry's 8.65 trillion rouble forecast, according to calculations based on data from industry sources and official statistics on production, refining and supplies. Russia reported its lowest monthly oil and gas revenue of 405 billion roubles in August 2020, when oil prices tumbled during the COVID-19 pandemic. Sergei Konygin, a senior analyst at Moscow-based investment bank Sinara, said that the budget deficit of 1.6 trillion roubles expected in December will be covered by state bonds, but 2026 will be more difficult. "Next year is a big challenge to the budget as it was formed under an optimistic scenario of oil at $59 (per barrel) and the rouble at 92 (per dollar)," he said. The Russian oil price used for taxation purposes decreased in November by 16.4% from October to $44.87 a barrel while the rouble strengthened to 80.35 per dollar. Konygin expects amendments to the budget next spring to make use of the National Wealth Fund to address the deficit under a lower assumed price of oil. Ukraine and its Western backers have repeatedly said they want to curb Russian oil revenue to force the world's second-largest oil exporter to end the war in Ukraine. The Finance Ministry had initially expected 10.94 trillion roubles in oil and gas revenue this year but made a downward revision in October to account for global oil prices that have been driven lower by concern over a supply glut. The Finance Ministry will publish its oil and gas revenue estimates for December on January 14. ($1 = 79.3000 roubles) https://www.reuters.com/business/energy/russias-oil-gas-revenue-seen-halving-december-lowest-since-august-2020-2025-12-12/

2025-12-12 07:38

Dec 12 (Reuters) - European Union leaders meet for one last push to secure a deal and fund Ukraine with frozen Russian cash, while the United States releases overdue labour market and retail sales data. Meanwhile, central banks in the euro area, Japan, Britain, Norway, and Sweden hold their last get-together of the year. Sign up here. Here's all you need to know about the coming week in financial markets by Yoruk Bahceli in London, Andy Bruce in Manchester, John O'Donnell in Frankfurt, Kevin Buckland in Tokyo, and Lewis Krauskopf in New York. 1/ A LONG TIME COMING European Union leaders meet on Thursday to thrash out a deal to use frozen Russian cash on the continent to pay for Ukraine. The stakes are high: Frozen assets are Europe's single biggest card to play to get a say in talks chiefly between Washington and Moscow, as they negotiate a settlement of the war in Ukraine. The idea is to tap roughly 210 billion euros ($245 billion) of Russian assets in Europe, the lion's share of which is now cash and locked mainly in Belgium, which has stepped up its opposition to the plan. It's a test of Europe's mettle. Can it overcome its divisions to counter the first major armed conflict in decades? There could be a fallout for Western investors, who still own tens of billions of assets stranded in Russia, from factories to cash. But with Ukraine's money running out and the continent's security on the line, European leaders have few alternatives. 2/ BETTER LATE THAN NEVER The shutdown-delayed U.S. jobs report for November will shed light on the extent of labour market weakening , opens new tab that could help determine the Federal Reserve's next rate move. Tuesday's November non-farm payrolls report is expected to show a tepid 35,000 jobs added, according to a Reuters poll. One of the key critical data reports that had been delayed due to the 43-day federal government shutdown comes after the Fed on Wednesday cut , opens new tab rates by a quarter-point for a third straight meeting. However, prospects for further easing remain unclear. And there is more delayed data due to come out, including retail sales for October, also on Tuesday, while November's consumer price index, on Thursday, will detail inflation trends. 3/HOW MANY HIKES? For market participants, a rate hike from the Bank of Japan on December 19 is all but certain, as evidenced by this month's surge in two-year Japan government bond yields to 18-year peaks. What happens next is less particular. At least one additional quarter-point increase to 1% next year is generally agreed upon by some economists, who say that may be the terminal rate for this cycle. Hawks argue the policy rate needs to rise as high as 1.5% to offset inflationary pressure from the new government's stimulus plan, the biggest since the pandemic. The policy path and the messaging around it will be crucial for the yen, which is still sagging despite historic highs in bond yields. With more G10 peers, such as Canada and Australia, turning hawkish of late, the momentum behind currency-depressing yen carry trades looks likely to build in 2026. 4/ NO CHRISTMAS SLUMBER The European Central Bank's meeting on Thursday was meant to be a pre-Christmas snoozefest. But it just got much more interesting after investors moved to bet on a chance of an ECB rate hike, rather than a cut next year, after policymaker Isabel Schnabel said the next move might be a higher one. Her words weren't too surprising coming from the bank's top policy hawk and she even said a hike wouldn't come anytime soon. But stronger-than-expected growth and inflation data had already eroded bets on further cuts since the ECB last met in October. So, while policymakers will likely keep rates steady at 2% again, markets are ready to seize on whatever ECB chief Christine Lagarde says about the outlook. Sweden and Norway's central banks are also expected to keep rates on hold on Thursday. 5/ MAYBE A NOT SO DONE DEAL A December rate cut from the Bank of England looks a near certainty, according to a Reuters poll, but questions about the trajectory for 2026 are likely to remain after Thursday's announcement. Financial markets currently price in a roughly 90% chance of a rate cut to 3.75% from 4.0%, although a bad inflation reading on Wednesday could still shift the dial. The Monetary Policy Committee voted to hold the key rate last month by a 5-4 margin. Whatever the result is on Thursday, divisions will remain going into 2026, based on comments from deputy governors Clare Lombardelli and Dave Ramsden. While Lombardelli broached the idea of reaching the end of the BoE's easing cycle, Ramsden said gradual cuts to interest rates remained appropriate. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2025-12-12/

2025-12-12 07:07

Domestic gold prices in India at a record high China discounts widen to $20 below global spot prices Investors in Japan look to book profits ahead of holidays Dec 12 (Reuters) - Gold discounts in India widened this week as demand fell despite the wedding season after prices scaled record highs, while Chinese demand remained muted amid volatility and high spot prices. Indian dealers were offering a discount of up to $34 per ounce to official domestic prices this week, inclusive of 6% import and 3% sales levies, wider than last week's discount of up to $22. Sign up here. Jewellers haven't been buying (gold) as store footfalls have dropped sharply due to the price rally, a Mumbai-based bullion dealer with a private bank said. Domestic gold prices hit a record high of 132,776 rupees per 10 grams on Friday. "Rising prices are really killing the wedding-season vibe. Buyers just aren't willing to shop at these highs," a Mumbai-based jeweller said. Weddings are a key driver of gold demand in India, with bullion widely gifted by family and friends. In top consumer China, bullion traded anywhere from discounts of $20 an ounce to premiums of $10, compared with the global benchmark spot price. "Physical demand remains soft and volatile (in China), as gold prices reach record highs and discounts deepen. The recent VAT (value-added tax) adjustment has increased costs for jewellers and further weighed on retail demand," said Bernard Sin, regional director- Greater China, MKS PAMP. On November 1, Beijing cut a VAT exemption for certain gold purchased through the Shanghai Gold and Shanghai Futures exchanges. Gold prices held near a seven-week high on Friday, supported by expectations of more interest rate cuts next year after the U.S. Federal Reserve pushed back against hawkish market bets. In Singapore , gold was sold at premiums of $1.5 to $3.50 this week, while in Hong Kong it traded from a $0.5 discount to a $2.5 premium. In Japan , bullion traded at discounts of up to $5.5 to a $1 premium over spot prices amid slow demand, with retail shops holding smaller quantities and investors booking profits ahead of the New Year holidays. https://www.reuters.com/world/china/asia-gold-india-gold-discounts-widen-prices-hit-record-high-china-demand-muted-2025-12-12/

2025-12-12 06:30

Dollar on pace for third straight weekly decline UK GDP data in focus Fed's less hawkish stance drags dollar Markets diverge from policymakers on rate cuts for next year NEW YORK, Dec 12 (Reuters) - The U.S. dollar rose against major currencies on Friday after falling in recent sessions, but was still on track for its third straight weekly drop amid the prospect of interest rate cuts by the Federal Reserve next year. Sterling also eased after data showed the UK economy unexpectedly shrank in the three months to October. Sign up here. The euro was flat at $1.1735 after hitting a more than two-month high on Thursday. The dollar index , which measures the U.S. currency against six others, rose 0.1% to 98.44, rallying from a two-month low hit on Thursday but still on track for its third weekly decline with a 0.6% fall. For the month of December, the greenback has been 1.1% weaker so far. The index was also down more than 9% this year, on pace for its steepest annual drop since 2017. "It's Friday fatigue. The dollar is down on the week and it's pretty much down the whole month," said Bob Savage, head of markets macro strategy at BNY in New York. "And is it because the Fed cut rates? Yes partially." Against the yen, the dollar rose 0.2% to 155.93 yen ahead of next week's Bank of Japan meeting, where the broad expectation is for a rate hike. Markets are focused on comments from policymakers on how the rate path will look in 2026. Reuters reported that the BoJ would likely maintain a pledge next week to keep raising interest rates, but stress that the pace of further hikes would depend on how the economy reacts to each increase. The pound edged down 0.2% against the dollar to $1.3375, but not far from a seven-week peak hit on Thursday, after economic data that was likely to boost expectations for Bank of England interest rate cuts. Both sterling and the euro are poised for their third straight week of gains against the dollar. UNCERTAINTY OVER U.S. MONETARY POLICY NEXT YEAR The Fed cut rates as expected this week but comments from Chair Jerome Powell and the accompanying statement were viewed by investors as less hawkish than expected and reinforced dollar-selling momentum. "That was a neutral cut," said BNY's Savage, disagreeing with market participants describing the Fed's move last Wednesday as a some form of "hawkish" easing. "Yes, the board is divided and we saw that in the dissents, But it's not fair to say that the Fed is going to raise rates like what the other central banks are talking about like the ECB (European Central Bank) and RBA (Reserve Bank of Australia)." Douglas Porter, chief economist, at BMO wrote in a research note that the dollar index has fallen about 7% from its January peak. He expects it "to soften another 2%-to-3% in 2026, as the Fed eases further—our call is for another 75 bps (basis points)—while many others head the other way." Investors face uncertainty over the path of U.S. monetary policy next year as inflation trends and labor market strength remain unclear, with traders pricing in two rate cuts in 2026 in contrast with policymakers who see only one cut next year and one in 2027. Fed officials who voted against the U.S. central bank's interest rate cut this week said on Friday they are worried that inflation remains too high to warrant lower borrowing costs, particularly given the lack of recent official data about the pace of price increases. How monetary policy evolves will hinge on economic data that is still lagging from the impact of the 43-day federal government shutdown in October and November. The U.S. is heading into a midterm-election year that is likely to focus on economic performance, with President Donald Trump urging sharper rate reductions. Also in the spotlight for markets is the question of who will become the next Fed chair and how that will affect the growing worries about the central bank's independence under Trump. Across the Atlantic, sterling slipped on the back of data showing gross domestic product contracted by 0.1% in the August-to-October period. Economists polled by Reuters had forecast a flat reading. The latest data cemented bets that the BoE will cut rates next week, though such a move has been nearly fully priced in for weeks. In other currencies, the Swiss franc steadied at 0.7951 per U.S. dollar, after rising to an almost one-month high on Thursday after the Swiss National Bank left its policy rate unchanged at 0% and said a recent agreement to reduce U.S. tariffs on Swiss goods had improved the economic outlook, even as inflation has somewhat undershot expectations. https://www.reuters.com/world/asia-pacific/dollar-staggers-third-straight-weekly-drop-investors-ponder-fed-outlook-2025-12-12/

2025-12-12 06:23

Wall Street stocks end down sharply with tech shares Investors brace for BoE, ECB, BOJ rate decisions ahead US yields rise; dollar gains as well NEW YORK, Dec 12 (Reuters) - Major stock indexes fell on Friday, with technology-related shares dropping again as investors were wary of artificial intelligence bets, while the dollar edged higher and U.S. Treasury yields jumped. Yields gained as investors weighed commentary from Federal Reserve officials who voted against the U.S. central bank's interest rate cut this week said on Friday they are worried that inflation remains too high to warrant lower borrowing costs. Rising yields also weighed on stocks. Sign up here. Technology (.SPLRCT) , opens new tab fell 2.9%, the most of the major S&P 500 sectors as tech-related fears lingered. Cloud computing company Oracle (ORCL.N) , opens new tab earlier this week flagged massive spending and weak forecasts. A warning about margins from chipmaker Broadcom (AVGO.O) , opens new tab late on Thursday added to the concerns. Broadcom shares ended 11.4% lower. Oracle fell 4.5% on top of Thursday's almost 11% plunge, while AI leader Nvidia (NVDA.O) , opens new tab was down 3.3%. Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts, said "continued disappointment and uncertainty over the AI trade and technology trade" pressured the market. "I would have thought this choppiness would have ended by now," he said, adding: "We're in a really, really good seasonal period. Typically mid-December through the last trading days of the year is traditionally the Santa Claus rally period." Investors were optimistic about further U.S. interest rate cuts in 2026 after the Fed cut interest rates by 25 basis points on Wednesday, in a 9-3 decision, even though policymakers signalled that it will put further reductions on pause for now. Policymakers have expressed concerns about a cooling labor market as well as inflation that remains too high. U.S. jobless claims data on Thursday showed the number of Americans filing new applications for unemployment benefits increased by the most in nearly 4-1/2 years last week. The Bank of England is expected to cut rates next Thursday. The European Central Bank is expected to keep them steady, although traders are now speculating it could hike rates in 2026. The Bank of Japan is expected to hike rates after strong signals from Governor Kazuo Ueda. The Dow Jones Industrial Average (.DJI) , opens new tab fell 245.96 points, or 0.51%, to 48,458.05, the S&P 500 (.SPX) , opens new tab fell 73.59 points, or 1.07%, to 6,827.41 and the Nasdaq Composite (.IXIC) , opens new tab fell 398.69 points, or 1.69%, to 23,195.17. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab fell 6.39 points, or 0.63%, to 1,008.88. The pan-European STOXX 600 (.STOXX) , opens new tab index ended 0.53% lower. U.S. 10-year Treasury yields rose after two straight sessions of declines. The yield on the benchmark U.S. 10-year Treasury note rose 5.1 basis points to 4.192% and was up more than 5 basis points on the week, set for a second straight weekly climb. Earlier, German government bond yields rose after hitting their highest level since March earlier this week, underscoring how investors have begun pricing in euro zone rate hikes. The divergence comes as traders still broadly expect U.S. rates to fall in the long term, despite Friday's jump in yields. Germany’s 30-year yield , more sensitive to long-term fiscal concerns, climbed to a fresh 14-year high of 3.498%, up 3.5 basis points. DOLLAR GAINS, POUND FALLS SLIGHTLY ON UK DATA The U.S. dollar drifted higher against major currencies, also after falling in recent sessions, but was still set for its third straight weekly drop amid the prospect of interest rate cuts by the Fed next year. Sterling eased after data showed the UK economy unexpectedly shrank in the three months to October. The pound edged down 0.2% against the dollar to $1.3375, but not far from a seven-week peak hit on Thursday. Against the yen, the dollar rose 0.2% to 155.93 yen ahead of next week's BoJ meeting, where the broad expectation is for a rate hike. Reuters reported that the BoJ would likely maintain a pledge next week to keep raising interest rates, but stress that the pace of further hikes would depend on how the economy reacts to each increase. The euro was flat at $1.1735 after hitting a more than two-month high on Thursday, while the dollar index , which measures the U.S. currency against six others, rose 0.1% to 98.44. COPPER PLUNGES FROM RECORD HIGH Copper plunged more than 3%, after hitting a record high earlier in the session, as renewed fears of the AI bubble bursting sparked a broad selloff of riskier assets. Benchmark three-month copper on the London Metal Exchange fell as much as 3.5% to $11,451.50 and was trading down 2.8% at $11,537.50 as of 1700 GMT. Oil prices closed lower and posted a 4% weekly decline as a supply glut and possible Russia-Ukraine peace deal outweighed fears about the impact from the U.S. seizure of an oil tanker near Venezuela. U.S. crude fell 16 cents to settle at $57.44 a barrel and Brent fell 16 cents to settle at $61.12. https://www.reuters.com/world/china/global-markets-wrapup-1-pix-2025-12-12/

2025-12-12 06:03

JAKARTA, Dec 12 (Reuters) - Indonesia expects to complete tariff talks with the United States by the end of the year, its chief negotiator said on Friday, with a delegation set to visit Washington next week to resume them. Talks had appeared at risk of collapse this week after the United States accused Jakarta of backtracking on prior commitments, although Indonesia said their "dynamics" were normal and it was just a matter of "harmonising the language". Sign up here. The timeline for conclusion of talks followed a video call on Thursday between senior economic minister Airlangga Hartarto and U.S. Trade Representative Jamieson Greer on the tariffs. "We agree to complete what has been agreed upon in the leaders' declaration on July 22," Airlangga told an economic forum, adding that a non-disclosure pact kept him from giving details. Asked if the United States had sought inclusion of a requirement for Indonesia to inform it of future trade deals with other countries, Airlangga said, "It is an agreement that is not with Indonesia." It was not immediately clear if Indonesia was open to such a clause, however. Such a provision in the U.S. deal struck with Malaysia , opens new tab allows the United States to end the pact and restore the tariff President Donald Trump announced in April, if new deals endanger key U.S. interests and talks fail to resolve its concerns. Cambodia , opens new tab also has a similar clause in its U.S. deal agreed in October, with some difference in the wording. A U.S. tariff deal is key to ensure Southeast Asia's largest economy can keep up its exports, particularly in textiles, footwear and palm oil. The United States imposed a tariff of 19% on Indonesian products, down from 32% earlier, after Jakarta agreed , opens new tab to scrap tariffs on more than 99% of U.S. goods and drop all non-tariff barriers to its firms. https://www.reuters.com/world/asia-pacific/indonesia-expects-complete-tariff-negotiations-with-us-by-year-end-official-says-2025-12-12/