Australia Household Spending Surges, Boosting RBA Hike Bets

Summary:

Australia's household spending handily surpassed expectations in October to post its biggest increase since January 2024, boosting the case for an interest-rate hike next year.

Spending advanced 1.3% from September to exceed economists' expectations for a 0.6% gain, Australian Bureau of Statistics data showed on Thursday. From a year earlier, consumption climbed 5.6% versus estimates for a 4.6% increase.

In response, yields on three-year government bonds jumped above 4% for the first time since January, climbing as much as 6 basis points, while the currency gained. Money market traders boosted bets for a rate hike next year, with the odds for a May move climbing to 55%, from 18% seen Wednesday.

"Discretionary spending surged this month led by goods as promotional events saw households spend more on clothing, footwear, furnishings and electronics following months of weaker spending in these categories," said Tom Lay, head of business statistics at the ABS.

"Services spending also rose in October, as major concerts and cultural festivals drove up demand for catering, hospitality and hotel stays in major cities."

While the Reserve Bank cut rates three times since February to 3.6%, it's expected to keep borrowing costs unchanged at next week's meeting amid signs that inflation pressures may be rebuilding. Money markets are wagering the RBA's next move will be a hike in 2026.

Gross domestic product data released on Wednesday showed Australia's household savings ratio climbed to 6.4% from 6% three months earlier, underpinned by higher incomes.

RBA Governor Michele Bullock said Wednesday that the board is closely watching inflation to see whether recent pressures are transitory or more persistent and will act if necessary, in a signal that further policy easing is unlikely.

Household spending accounts for more than half of Australia's economic output and, as a result, is closely watched by policymakers.

Source: Bloomberg Europe

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

James Whitman

Political

Donald Trump's aides and allies are discussing the possibility of making Treasury Secretary Scott Bessent the top White House economic adviser — in addition to his current job — should the president pick Kevin Hassett as the next chair of the Federal Reserve, according to people familiar with the matter.

Tapping Bessent to lead the White House's National Economic Council would allow him to consolidate oversight of Trump's economic policies if Hassett — the current NEC director — becomes the next leader of the US central bank, an announcement Trump has hinted at in recent days. The people spoke on the condition of anonymity to discuss potential moves that have not been finalized.

If Bessent is also named to the NEC, he would become the chief arbiter of the administration's economic portfolio spanning the purview of both the Treasury Department and White House. It would also give Bessent a West Wing office, granting him even more physical proximity to the president.

A White House official said any personnel changes should be considered speculation until announced by the president. A representative for the Treasury Department did not respond to a request for comment.

Trump is known to make surprise personnel decisions, meaning that any potential moves for Hassett or Bessent aren't final until they're made public.

Still, having multiple titles is a hallmark in the Trump administration. The Treasury secretary is also already serving as the acting Internal Revenue Service commissioner. Having Bessent take on the NEC role would mirror Secretary of State Marco Rubio's multi-faceted job. Rubio also leads the National Security Council, serves as the acting archivist of the United States and was the acting head of the US Agency for International Development before it was abolished.

It's not clear if Trump will want to continue to appoint senior people to multiple roles. Several top economic jobs within the administration are currently unfilled or without permanent leadership.

Earlier: Trump's Economy Team Is Short Some Key Players Amid Staff Churn

The National Economic Council works on all economic issues out of the White House including taxes, health care and energy and serves as a key policy coordinator for those ideas and plans across the federal government.

But the NEC has played a diminished role in Trump's second term, with the office focusing less on developing policy than was the case under prior presidents. Hassett has largely served as an advocate for Trump's policies, giving public speeches and routinely appearing on TV.

Trump said he's made his decision on a Fed pick, narrowing a list of roughly 10 candidates down to one. The president called Hassett a "potential Fed chair," but also said he would wait until early 2026 to make an official announcement.

"He's a respected person that I can tell you. Thank you, Kevin," Trump said on Tuesday.

Other finalists for central bank chair have included Fed Governors Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh and BlackRock's Rick Rieder.

Fed chair and governor picks typically represent the most direct way for presidents to influence the central bank. Trump has been vocal in criticizing the Fed for moving too slowly to cut borrowing costs and for expensive renovations of its campus.

Whomever Trump picks for Fed will require Senate confirmation as chair, and to the board itself if they're not already a governor. The NEC job does not require Senate approval.

Source: Bloomberg

Risk Warnings and Disclaimers

Add to Favorites

James Whitman

Economic

The U.S. Census Bureau said on Wednesday it was adopting several strategies, including shortening the window for Principal Federal Economic Indicators collection, to get economic data back to their original release schedule "as quickly as possible."

"For our PFEIs to return to their original release schedules, processing stages must be accelerated and condensed where possible while still adhering to established quality standards," the Census Bureau said in a statement posted on its website.

A record 43-day shutdown of the government has delayed economic releases. The October employment and consumer price reports have been canceled because the shutdown prevented the collection of data, which could not be done retroactively.

"For example, if the typical process allows 10 business days to obtain response, narrow it to seven days," the agency said. "For construction indicators that use field representatives, there may be an opportunity to collect two reference periods simultaneously."

It was also temporarily reallocating resources to prioritize high-value review and correction while ensuring the shorter analysis period would not negatively impact data quality. While there were no changes to the treatment of nonresponses as the process was automated, the Census Bureau said more attention was being paid to "mitigate any negative effects of reduced response stemming from a shorter collection window."

There was minimal change to the seasonal adjustment process, which is mostly automated. The agency, however, said "there may be an opportunity to readjust resources to help fast-track review and validation component of seasonal adjustment."

Seasonal adjustment is used to strip out seasonal fluctuations from economic data. The Census Bureau is also temporarily reallocating resources to fast-track review, approval and dissemination processes.

"By leveraging the strategies above, a Census Bureau PFEI such as monthly wholesale trade could temporarily reduce its total processing time from 30 to 20 days," the agency said.

"If the indicator is starting 40 days behind schedule due to the lapse (in government funding), it could return to its original release cadence within four reference periods after implementing the acceleration strategy."

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Stocks

Nvidia (NVDA.O) on Wednesday published new data showing that its latest artificial intelligence server can improve the performance of new models - including two popular ones from China - by 10 times.

The data comes as the AI world has shifted its focus from training AI models, where Nvidia dominates the market, to putting them to use for millions of users, where Nvidia faces far more competition from rivals such as Advanced Micro Devices (AMD.O) and Cerebras.Nvidia's data focused on what are known as mixture-of-expert AI models.

The technique is a way of making AI models more efficient by breaking up questions into pieces that are assigned to "experts" within the model. That exploded in popularity this year after China's DeepSeek shocked the world with a high-performing open source model that took less training on Nvidia chips than rivals in early 2025.

Since then, the mixture-of-experts approach has been adopted by ChatGPT maker OpenAI, France's Mistral and China's Moonshoot AI, which in July released a highly-ranked open source model of its own.Meanwhile, Nvidia has focused on making the case that while such models might require less training on its chips, its offerings can still be used to serve those models to users.

Nvidia on Wednesday said that its latest AI server, which packs 72 of its leading chips into a single computer with speedy links between them, improved the performance of Moonshot's Kimi K2 Thinking model by 10 times compared to the previous generation of Nvidia servers, a similar performance gain to what Nvidia has seen with DeepSeek's models.

Nvidia said the gains primarily came from the sheer number of chips it can pack into servers and the fast links between them, an area where Nvidia still has advantages over its rivals.

Nvidia competitor AMD is working on a similar server packed with multiple powerful chips that it has said will come to market next year.

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Cryptocurrency

Stocks

Strategy, formerly known as MicroStrategy, is considering a pivot that would fundamentally alter the risk profile of the world’s largest corporate Bitcoin treasury.

For a decade, the company sold Wall Street on a singular thesis: it was a digital vault, offering unencumbered exposure to Bitcoin without the risks of custody or counterparty risk. That stand is changing as it is now exploring an entry into the crypto lending market.

On Dec. 2, Strategy CEO Phong Le told Bloomberg the firm was in talks with banks about lending out its holdings. However, he cautioned that the firm was still waiting for major financial institutions to enter the space before making any decision.

He said: “We’ve had a lot of constructive discussions. They have primarily been: we are thinking about offering Bitcoin services—custody, exchange, lending, etc. You are the largest corporate holder of Bitcoin in the world; what is your advice to us, and should we work together?”

While framed as a maturation of the business, the move exposes the company to re-hypothecation risks that contradict the “cold storage” ethos that built its $55 billion reserve.

Nonetheless, the pivot signals that Strategy is moving from a passive holding company to an active credit desk.

This shift is driven by the need to justify its valuation premium in a market where spot ETFs have commoditized Bitcoin access.

The yield trap

Strategy currently holds 650,000 BTC. Historically, this stockpile has sat idle in the firm’s coffers.

So, lending it out would generate revenue. However, it introduces a paradox as the primary institutional demand for borrowing Bitcoin comes from market makers and hedge funds looking to short the asset.

To understand the risk, one must look at the mechanics of the trade.

In the institutional market, demand for borrowing Bitcoin is rarely for holding, as it is almost exclusively for selling to hedge derivative exposure.

By injecting its massive reserves into the lending market, Strategy would effectively lower the “cost to borrow,” a key friction that typically discouraged short sellers.

Consequently, Strategy would effectively be supplying the inventory used to bet against the price appreciation of its own reserve by opening a lending desk.

Moreover, the move introduces counterparty risk to a balance sheet that had previously been defined by its simplicity.

Notably, the crypto credit market collapsed spectacularly in 2022 after lenders like BlockFi and Celsius mispriced the risk of lending to opaque borrowers.

While Le insists that Strategy will partner only with top-tier banks, the core premise remains that Bitcoin will leave its vault.

So, in the event of a banking failure or a credit seizure, Strategy would transition from an owner of property to an unsecured creditor.

Defending the premium

Meanwhile, Strategy’s search for yield appears tied to its compressing stock valuation.

The company’s model relies on trading at a premium to its Net Asset Value (NAV), allowing it to issue equity at inflated prices to buy more Bitcoin. That premium, once as high as 2.5x, has cooled. As of Dec. 3, Strategy’s multiple to NAV (mNAV) stood at 1.15. Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_1

Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_1

In a candid admission, the firm recently admitted that it would consider selling Bitcoin if the mNAV falls below 1.

This creates a potential “reflexivity loop” in the market: if Strategy’s share price falters, the company could be forced to liquidate Bitcoin, driving spot prices down and further depressing the share price.

To prevent this, the Michael Saylor-led firm needs to offer investors something the ETFs cannot: yield.

Moreover, the company recently raised $1.44 billion in equity to cover dividend obligations on its preferred shares, stressing the cash-flow strain of maintaining its current capital structure.

Considering this, lending the Bitcoin stack is one of the only ways to fund these payouts without diluting common shareholders or selling the underlying asset.

A crowded trade

If Strategy enters the lending arena, it faces a market significantly different from the uncollateralized “Wild West” of 2021.

According to Galaxy Digital, stablecoin issuer Tether currently dominates centralized lending with a $14.6 billion book.

However, Tether lends stablecoins (USDT), fueling leverage for buyers. Strategy would be lending Bitcoin, fueling supply for borrowers. Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_2

Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_2

In a candid admission, the firm recently admitted that it would consider selling Bitcoin if the mNAV falls below 1.

To prevent this, the Michael Saylor-led firm needs to offer investors something the ETFs cannot: yield.

Moreover, the company recently raised $1.44 billion in equity to cover dividend obligations on its preferred shares, stressing the cash-flow strain of maintaining its current capital structure.

Considering this, lending the Bitcoin stack is one of the only ways to fund these payouts without diluting common shareholders or selling the underlying asset.

A crowded trade

If Strategy enters the lending arena, it faces a market significantly different from the uncollateralized “Wild West” of 2021.

According to Galaxy Digital, stablecoin issuer Tether currently dominates centralized lending with a $14.6 billion book.

However, Tether lends stablecoins (USDT), fueling leverage for buyers. Strategy would be lending Bitcoin, fueling supply for borrowers.

The sheer size of Strategy’s 650,000 BTC reserve significantly dwarfs the collateral pools of competitors like Nexo and Galaxy and could potentially distort the market. If even a fraction of that supply hits the lending desks, the cost to borrow Bitcoin could collapse, crushing yields across the sector.

Essentially, Strategy is betting that it can transform itself from a passive wrapper into a sophisticated financial operator. But in doing so, it risks trading the clarity of “digital gold” for the opacity of structured credit.

For investors who bought Strategy as a proxy for pristine collateral, the vault door is beginning to look worryingly open.

Source: Cryptoslate

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Political

Economic

President Trump rolled back fuel economy rules that he claims created an “EV mandate” after former President Joe Biden imposed stricter fuel economy standards last year.

Trump said the administration was officially terminating Biden’s “ridiculous” CAFE (corporate average fuel economy) rules, claiming car prices would come down in response to today’s action. Automakers are now required to meet an average of 34.5 mpg across their model fleet by 2031, a dramatic drop from the average of 50.4 mpg across 2031 that the Biden administration had proposed.

Trump said the action would allow automakers to produce cheaper cars, saving consumers “[at] least $1,000” off the price of a car.

Ford (F) CEO Jim Farley, Stellantis (STLA) CEO Antonio Filosa, and other auto industry executives were in attendance.

“Today is a victory for common sense and affordability,” Farley said at the event. “This is the right move … We will invest more in affordable vehicles.”

Earlier this year, the Transportation Department and Secretary Sean Duffy paved the way for looser US fuel economy standards by declaring the Biden administration exceeded its authority, assuming increasing EV sales in calculating fleet mile per gallon rules. The prior rules assumed the fuel economy averages for the “fleet” of vehicles available by specific automakers would rise due to the higher uptake of EVs.

Trump also signed legislation this year that ended fuel economy penalties for automakers, with the National Highway Traffic Safety Administration (NHTSA) claiming the industry faced no fines dating back to the 2022 model year. Automakers like Tesla make billions by selling emission credits for these penalties, a source of revenue that will now disappear.

Wednesday’s action furthers Trump’s moves to weaken environmental regulations and aid automakers.

“We’re reviewing NHTSA’s announcement, but we’re glad the agency has proposed new fuel economy standards,” said John Bozzella, president and CEO of the Alliance for Automotive Innovation, the industry’s top trade group.

“We’ve been clear and consistent: The current CAFE rules finalized under the previous administration are extremely challenging for automakers to achieve given the current marketplace for EVs."

Bozzella added, “What’s good for consumers and the auto industry? A stable regulatory environment and balanced, reasonable, achievable standards that continue to reduce emissions and improve fuel economy.”

Public advocacy groups countered the industry’s position.

“The previous fuel economy standards — which the Trump administration has now said it will not enforce — would have saved Americans $23 billion in fuel costs and reduced our national fuel consumption by 70 billion gallons,” said Will Anderson, zero-emission vehicles policy advocate at Public Citizen. “Americans support strong fuel economy standards… [with] two-thirds saying that fuel economy is very important or extremely important.”

Anderson added that the new policy diverts money to “Trump’s oil and gas cronies” at the expense of the American public.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Commodity

Central Bank

Gold prices held steady on Wednesday, buoyed by weak private payrolls data that reinforced expectations of a U.S. interest rate cut next week, while silver hit a fresh record high.

Spot gold was little changed at $4,202.06 an ounce by 2:03 p.m. ET (1903 GMT), after hitting a session high of $4,241.29 earlier in the session.

U.S. gold futures for February delivery settled 0.3% higher at $4,232.50.

Silver steadied after touching a record high of $58.98 earlier in the session.

"This morning's miss on ADP data, combined with silver hitting all-time highs overnight," is supportive for gold, said RJO Futures senior market strategist Bob Haberkorn.

"Gold is following silver at the moment, with silver pulling back a little bit here."

U.S. private payrolls fell by 32,000 jobs in November, Wednesday's ADP employment report showed, missing economists' expectations for a 10,000-job increase.

CME's FedWatch tool now shows an 89% chance that the U.S. central bank will cut rates next week, while major brokerages also forecast an interest rate cut at the December 9-10 policy meeting.

Markets are still awaiting the delayed September Personal Consumption Expenditures data, the Fed's preferred inflation gauge, due on Friday.

Lower interest rates tend to favor non-yielding assets such as gold.

Silver is up 102% so far this year due to concerns about the market liquidity after outflows to the U.S. stocks, its inclusion in the U.S. critical minerals list and a structural supply deficit.

"The strength in silver is due to supply concerns at the exchange levels," Haberkorn said, adding that the metal could touch the $60/oz milestone shortly.

Copper prices also hit a record high on Wednesday on a weaker dollar, supply concerns and tighter availability of metal in warehouses registered with the London Metal Exchange.

Elsewhere, platinum gained 0.9% to $1,652.03 an ounce and palladium rose 0.4% to $1,466.98.