Australia To Require Up To A Quarter Of New Gas For Local Market

Commodity

Economic

Summary:

Australia will require natural gas exporters to reserve as much as a quarter of new production for domestic use, as the major supplier seeks to tackle high prices and a forecast shortfall on its more populated east coast.

The policy, which is set to commence in 2027, will affect supply contracts signed from Monday and won't affect any existing agreements, Energy Minister Chris Bowen said Monday in Canberra. The final percentage to be reserved will be between 15% and 25% and finalized after a consultation next year, he said.

"From today any new contracts will be covered by the regime," Bowen said. "Gas is important to calibrate and support renewables."

Australia is the world's third-largest shipper of liquefied natural gas, but its 10 export terminals are all located in western or northern areas. Meanwhile, demand for the fossil fuel on the more populated east coast is expected to exceed supply from 2028, the Australian Energy Market Operator forecasts.

Western Australia, which has some of the biggest LNG plants but no pipeline links to the rest of the country, already requires producers to reserve as much as 15% of output for local use.

Source: Bloomberg Europe

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Winkelmann

Stocks

Economic

India's Adani Group will be "aggressive" in building out artificial intelligence data centers as well as the energy infrastructure that will run them, potentially setting up nuclear power plants, the youngest son of Asia's second-richest man said.

"Data centers is very, very big. What we had assumed we would do in 2030, we have already crossed, and the amount of demand that's coming in keeps rising," Jeet Adani told Nikkei Asia, adding that a mix of low costs and shifts in energy regulations gave India a "natural advantage" when it comes to building out AI data centers.

The group, which is building such infrastructure in India for tech giants such as Google, sees itself as "one of the biggest investors" in the Indian nuclear energy space, said Adani, who oversees the digital and airports divisions. A law opening up the closely controlled sector to private companies was passed by the country's parliament last week.

Adani is among the four family members -- brother Karan and cousins Pranav and Sagar -- who are expected to take over the sprawling media-to-ports conglomerate when his 63-year-old father Gautam retires.

Adani was speaking ahead of the start of operations at Mumbai's newly constructed airport. He said the group is looking to invest about 1 trillion rupees ($11 billion) over the next five years into the unit to support a series of new airports and upgrades to existing facilities.

The group's wider infrastructure gambit includes an investment of up to $5 billion into building out Google's AI data center projects in India. In October, Google said it was going to invest $15 billion to build such facilities in India over the next five years.

The Adani Group is looking to eventually build AI data centers larger than 1 gigawatt in capacity across the country, including in cities like Vizag, Navi Mumbai, Noida and Hyderabad, Adani said.

The company will only focus on providing the infrastructure and other facilities for the data centers.

"We're not in the neo-cloud business," Adani said. "Let's say Google is getting in their TPUs (tensor processing units) in Vizag. We won't invest in the said TPUs."

On the energy side, Adani said the group is ready to use its vast renewables capacity to support the power-hungry data centers. Subsidiary Adani Green Energy is already the country's largest renewable energy company, with expansive solar and wind power generation capabilities.

"We have the ability to give as much renewable electricity as any of the hyperscalers would want," Adani said. "We have the ability to develop [infrastructure] fast, and develop [them] modularly."

However, Adani said a foray into nuclear energy would be closely tied to the demand for power from the data centers.

"Nuclear [energy] is something that we have been very, very actively looking at," Adani said. "I think it was tabooed for too long."

The company will look to build and own the power plants, but would outsource the reactors, he added.

India's parliament passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) bill on Friday, which will replace current laws on atomic power and increase privatization of the sector by allowing Indian companies to build, own or operate nuclear plants and reactors, among other things.

The new law is aimed at helping expand India's nuclear power generation from the current 8 GW to 100 GW by 2047. Currently, only 3% of India's electricity comes from nuclear power.

The Adani Group's data center moves parallel investments by India's biggest conglomerates including Reliance Industries and the Tata Group, which are also set to build out AI data centers in collaboration with the likes of Canada's Brookfield and U.S.-based TPG.

India has 1.4 GW of data center capacity under construction and another 5 GW in the planning stage, with current operational capacity at 1.4 GW, according to a report from Macquarie Research.

"If India plays its cards right, it can easily convince the hyperscalers to build 10 GW of data center capacity in the next five years," Adani said. "I see [demand for] 50 GW of renewable electricity coming just from the data centers."

Source: Asia_Nikkei

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Samantha Luan

Stocks

Signage is pictured in the main lobby of GSK offices in London, Britain, February 20, 2025. REUTERS/Chris J. Ratcliffe/File Photo

South Korea's Samsung Biologics (207940.KS), said on Monday it is acquiring its first U.S. drug production facility from GSK (GSK.L),for $280 million to respond to long-term U.S. market demand.

The company's U.S. unit, Samsung Biologics America, is acquiring a 100% stake in Human Genome Sciences Inc of Rockville, Maryland, the South Korean contract drug manufacturer said in a statement.

Samsung Biologics plans additional investments to expand the site's capacity, currently a combined 60,000 liters of drug substance capacity, and to upgrade technology, it said.

It added that the acquisition value may change when the deal closes, likely around the end of the first quarter of 2026.

South Korea's Celltrion (068270.KS), opens new tab is also planning to produce drugs in the United States, where the Trump administration has threatened to levy tariffs on pharmaceuticals.

Under a deal with the United States, tariffs on U.S. imports of South Korean pharmaceuticals will be no greater than 15%, while generic drugs will be tariff-free.

Samsung Biologics shares were down 0.4% on Monday, lagging the wider market's (.KS11), opens new tab 2% gain.

Source: Reuters

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Justin

Political

Economic

BEIJING, CHINA - NOVEMBER 11: The national flag of China flies in front of the headquarters of the People's Bank of China (PBOC) on November 11, 2025, in Beijing, China. The PBOC serves as the country's central bank, overseeing monetary policy, financial regulation, and currency issuance. (Photo by Cheng Xin/Getty Images)

China's central bank kept its loan prime rates steady on Monday, even as the world's second largest economy has seen weak economic data and an extended slump in its property sector.

The People's Bank of China kept its 1-year and 5-year loan prime rates unchanged at 3% and 3.5% respectively, holding them for a seventh straight meeting, in line with a Reuters survey.

The 1-year rate acts as a benchmark for new loans, while the 5-year helps peg mortgage rates.

The PBOC's decision comes amid downbeat economic data from China in November, including lower-than-expected retail sales and industrial output.

Retail sales rose 1.3% last month from a year earlier, sharply missing Reuters' median forecast for a 2.8% growth, and slowing from 2.9% rise in the prior month.

Industrial production also missed expectations, climbing 4.8% in November from a year earlier compared with estimates for a 5% jump, and marking its weakest growth since August 2024.

China continues to reel from a protracted slump in its real estate sector. Investment in fixed assets, which includes property, contracted 2.6% over the January through November period compared with a year earlier, sharper than the 2.3% drop estimated by economists.

Prices of new homes also also continued to decline in November, showing persistent weakness in China's property sector.

New home prices fell 1.2% in tier-1 cities including Beijing, Guangzhou and Shenzhen while resale home prices dropped 5.8% from a year earlier.

Earlier this month, China's finance ministry said it planned to issue ultra-long-term special government bonds next year to fund construction of key projects and new infrastructure projects.

The country has been contending with deflationary pressures, and policymakers have vowed to "vigorously support the implementation of special actions to boost consumption."

An interim trade deal with the Washington that saw a suspension of prohibitive levels of tariffs on Chinese exports, however, could boost shipments to the U.S. and help the country realize its "around 5%" economic growth target for 2025.

Source: CNBC

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George Anderson

China left benchmark lending rates unchanged for the seventh consecutive month in December on Monday, matching market expectations.

The one-year loan prime rate (LPR) was kept at 3.00%, while the five-year LPR was unchanged at 3.50%.

In a Reuters survey of 25 market participants conducted last week, all participants predicted no change to either of the two rates.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

Reporting by Shanghai Newsroom; Editing by Christopher Cushing

Source: Reuters

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Gerik

Forex

Economic

Market Optimism Turns to Disappointment After BOJ’s Cautious Messaging

On December 19, the Bank of Japan (BOJ) raised its short-term interest rate from 0.5% to 0.75% its second hike in 2025 and the highest policy rate since 1995. While this move ended decades of ultra-loose monetary policy and was widely anticipated by analysts, it failed to bolster the yen. Instead, the currency plummeted to a four-week low of 157.75 JPY/USD, reflecting growing investor disillusionment over the central bank’s cautious stance.

The BOJ’s post-meeting statement reiterated that core inflation would align with the 2% target in the second half of its forecast period through FY2027. However, it emphasized that real interest rates remain “significantly low” and provided no concrete timeline or pace for further hikes. This vagueness proved pivotal in driving bearish momentum on the yen, as markets had been hoping for stronger forward guidance.

Ueda’s Press Conference Lacked Hawkish Signals

The downward pressure on the yen intensified after BOJ Governor Kazuo Ueda’s press conference, which reinforced the bank’s reserved posture. His comments, which stated only that “the door remains open” for future tightening, were perceived as indecisive and insufficient to counteract global inflationary dynamics or narrowing rate differentials.

Traders reacted quickly. The yen weakened across the board, hitting record lows against several major currencies. The euro rose to an all-time high of 184.69 JPY/EUR, the Swiss franc surged to 198.3 JPY/CHF, and the British pound reached 210.99 JPY/GBP its strongest level against the yen since 2008. These dramatic moves highlighted the yen’s vulnerability to speculative positioning in the absence of clear BOJ policy signals.

Why a Rate Hike Failed to Strengthen the Yen

The primary reason the rate hike failed to support the yen lies in market perception of the BOJ’s resolve. Despite nominally raising rates, the BOJ’s dovish tone signaled that future increases would be gradual and highly conditional. Marc Chandler, chief market strategist at Bannockburn Global Forex, summarized the mood: “The BOJ didn’t sound tough enough. They delivered the hike, but not the conviction.”

In contrast, other major central banks remain either on pause at much higher levels or, in some cases, still contemplating further tightening. The Fed, for instance, maintains its target rate at 5.25–5.5%, creating a stark yield gap that continues to drive capital away from yen-denominated assets. As a result, the yen remains a favored funding currency in global carry trades.

Speculation Rises on Potential Currency Intervention

With the yen once again nearing intervention levels having dropped past 155 JPY/USD in November and previously triggering government action at 161.96 in July 2024 speculation is mounting that Tokyo could re-enter the market. Finance Minister Satsuki Katayama warned on Friday that the government is prepared to act against “excessive volatility,” particularly those driven by speculative activity.

Such statements, however, are losing their deterrent power. Without coordinated fiscal or monetary policy shifts, verbal intervention alone may be insufficient to halt speculative trends.

Structural Weaknesses and Policy Constraints Remain

Beyond immediate rate dynamics, the yen’s weakness also reflects deeper concerns about Japan’s long-term economic resilience. Elias Haddad, global market strategist at BBH, noted that the BOJ’s own assessments suggest a low threshold for future hikes. The central bank believes wage inflation remains contained and real policy rates are still well below neutral. This reinforces the market’s belief that Japan will not match the hawkish trajectories seen in other developed economies.

Moreover, Japan’s aging demographics, stagnant productivity, and low trend growth continue to act as structural headwinds. These factors limit the BOJ’s appetite for aggressive normalization, especially with the economy teetering between low growth and rising cost pressures.

Rate Hike Without Commitment Weakens Policy Credibility

The yen’s sharp decline following the BOJ’s rate hike underscores the importance of forward guidance and policy conviction in modern monetary strategy. Markets no longer react solely to rate decisions but scrutinize central banks’ messaging, intent, and perceived resolve.

Without clearer communication on future tightening or more aggressive action to close the rate gap with global peers, the yen may continue to face downward pressure. Japan’s policymakers must now weigh the costs of inaction against the risks of currency instability, especially as import-driven inflation threatens to erode household spending and undermine the fragile post-pandemic recovery.

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Gerik

Economic

Policy Easing in Line with Expectations, but Below Market Hopes

On December 19, the Central Bank of Russia (CBR) reduced its benchmark interest rate from 16.5% to 16%, a move widely anticipated by analysts following signs of slowing inflation. However, the magnitude of the cut disappointed some market participants who had priced in a deeper reduction, reflecting frustration over the current sluggish pace of economic recovery.

This 50 basis point cut comes after a period of monetary tightening that had seen rates rise to suppress inflationary pressures in a volatile fiscal environment. Although inflation slowed in November, consumer expectations remain elevated, adding complexity to the central bank’s balancing act between economic stimulus and price stability.

Inflation Trajectory Remains Volatile and Politically Sensitive

The CBR acknowledged that while core price growth has decelerated, inflation expectations have edged higher in recent months—a sign that public sentiment has yet to align with official metrics. This divergence is especially concerning in light of planned tax hikes in early 2026, which are expected to reignite upward price pressures.

Despite projecting inflation to fall to its 4% target by 2027, the bank emphasized that "geopolitical factors" continue to introduce major uncertainty. These could include prolonged sanctions, currency volatility, or trade disruptions that would directly impact supply chains and input costs. As a result, the CBR is approaching the current disinflationary trend with caution.

Governor Nabiullina Signals Cautious Optimism, Not Victory

CBR Governor Elvira Nabiullina reiterated the cautious tone, warning that it is far too early to declare victory over inflation. Using a marathon analogy, she emphasized that "the second half of the race is harder than the first," highlighting the risk of complacency after a single month of low inflation. Her remarks reflect a reluctance to ease policy too aggressively, given the fragile credibility of inflation management amid geopolitical instability.

From a growth perspective, Russia’s economy remains underwhelming. GDP is growing at only 1% annually, a rate considered insufficient by both domestic businesses and international economists. Analysts such as Evgeny Kogan argue that interest rates need to drop to at least 12–13% to meaningfully stimulate investment and consumer demand.

This sentiment is echoed in corporate circles, where high borrowing costs are hampering capital expenditures and deterring credit expansion, especially for small and medium-sized enterprises that are vital to Russia’s domestic resilience.

Geopolitical Risks and Structural Constraints Complicate Outlook

Even as inflation eases in the short term, the broader macroeconomic environment remains constrained by sanctions, restricted access to global capital markets, and subdued trade prospects. These structural limitations continue to weigh on Russia’s potential growth rate, meaning that monetary easing alone may have limited impact without parallel fiscal and structural reforms.

Moreover, the upcoming fiscal tightening in 2026, including higher taxes, may further suppress demand, reducing the effectiveness of lower interest rates. In this context, analysts are watching for signs of more aggressive rate cuts in future meetings, though any such decisions will depend heavily on the geopolitical landscape and fiscal execution.

A Tactical Adjustment, Not a Strategic Shift

The Central Bank of Russia’s latest rate cut represents a cautious pivot amid fragile disinflation and stagnant economic momentum. While it offers modest relief to borrowers, the decision falls short of addressing deeper growth constraints. Without a stronger monetary response or broader policy coordination, the economy risks drifting in a low-growth, high-uncertainty environment.

Going forward, the CBR will need to navigate a narrow policy corridor—stimulating the economy without reigniting inflation, maintaining financial stability without undermining currency credibility, and adapting to unpredictable geopolitical pressures that continue to shape Russia’s economic trajectory.

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