Canada Building Permits Climb 14.9% In October

Economic

Summary:

Canadian building permits unexpectedly jumped in October, boosted by residential construction plans in Ontario.

The total value of building permits increased 14.9% from the month before to a seasonally adjusted 13.82 billion Canadian dollars, the equivalent of $10.03 billion, Statistics Canada said Friday.

That was much stronger than the 1.4% drop expected for the month by economists, according to TD Securities, and builds on the upwardly revised 5.9% rise in permits in September.

On a year-over-year basis, the overall value of permits issued last month was up 9.6%.

Building permits provide an early indication of construction activity in Canada and are based on a survey of 2,400 municipalities, representing 95% of the country's population. The issuance of a permit doesn't guarantee that construction is imminent.

Housing starts across Canada slumped 17% in October from a month prior on a seasonally adjusted annualized basis, rolling back a 14% increase in September, Canada Mortgage and Housing Corp. said last month. The six-month moving trend for starts was down 3.0% for the month.

Statistics Canada's data showed construction intentions in the residential sector climbed 14.6% from the previous month to C$8.56 billion, following a 6.6% rise in the value of permits the month before.

Intentions to build multifamily dwellings surged 21.3%, buoyed by the province of Ontario, and specifically the Toronto metropolitan area. Intentions for single-family homes rose a more modest 1.8%, with the gains being primarily attributed to Alberta.

Across Canada, a total of 24,300 multi-family dwellings and 4,100 single-family homes were authorized in October, marking a 13.6% increase from the previous month. Year-to-date, the average number of multi-family dwellings authorized stood at 21,500 a month, up from 19,100 during the same period last year.

Permits for nonresidential buildings were also strongly higher for the month, rising 15.4% to C$5.25 billion, the data agency said. That included a rise in permits for commercial and institutional buildings, more than making up for a dip in industrial plans.

Source: TradingView

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James Whitman

Central Bank

Economic

Federal Reserve Bank of Cleveland President Beth Hammack said she would prefer interest rates to be slightly more restrictive to keep putting pressure on inflation, which is still running too high.

"Right now, we've got policy that's right around neutral," Hammack said Friday during an event in Cincinnati. "I would prefer to be on a slightly more restrictive stance to help continue to put pressure" on the inflation side of the central bank's mandate, she said.

Fed officials delivered a third consecutive rate reduction earlier this week, but a large group of regional bank presidents signaled they opposed the cut. Two officials, Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeff Schmid, officially dissented against the move, saying they preferred to leave rates unchanged. And six policymakers penciled in rate projections suggesting they also opposed a cut.

Hammack didn't vote on monetary policy decisions this year but will vote in 2026. Asked if she supported this week's rate reduction, she didn't directly answer the question but said it was a "complicated decision" since officials are facing pressure on both sides of their mandate.

The Cleveland Fed chief cautioned last month that lower interest rates could prolong the period of above-target inflation. She has previously said that she opposed the rate cut in October and saw little reason for a reduction in December.

Hammack said she is grateful policymakers will receive key data on prices and employment in the coming weeks that should help them understand the trends in the economy — after their publication was delayed by a federal government shutdown. She also said the Fed doesn't have the appropriate tools to address structural changes in the economy.

Inflation has been running above the Fed's 2% target for several years, and has recently been stuck closer to 3%, Hammack said.

Source: Bloomberg

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Gerik

Economic

Commodity

December Decline Reflects Dual Price and Currency Headwinds

According to Reuters calculations based on industry and official data, Russia’s hydrocarbon revenues are expected to fall sharply in December to 410 billion roubles nearly halving from the same month a year earlier. This would bring monthly earnings down to levels not seen since August 2020, when pandemic-related demand collapse drove oil prices to historic lows.

This slump is primarily attributed to two converging factors: weakening global crude prices and a strengthening rouble. The price of Russian oil, converted into roubles for tax purposes, dropped 17.1% from October to 3,605 roubles per barrel in November, sharply compressing government revenue.

Full-Year Shortfall Undermines Fiscal Planning Amid Rising War Costs

The sharp monthly decline adds to a broader trend of fiscal underperformance. Total oil and gas revenues for 2025 are now expected to fall to 8.44 trillion roubles below both the Finance Ministry’s October revision of 8.65 trillion and far short of the original projection of 10.94 trillion roubles. The shortfall underscores the fragility of Russia’s energy-dependent budget at a time when military and security spending continues to rise due to its ongoing conflict in Ukraine.

Hydrocarbon revenues account for roughly a quarter of Russia’s federal budget, meaning the drop will significantly constrain fiscal maneuverability. With Western sanctions limiting financing options and restricting technology imports, the narrowing budget surplus places added pressure on the Kremlin to either curb spending or tap into reserves.

Geopolitical Implications: Economic Leverage as a Tool of Pressure

The deteriorating revenue picture highlights the success of Western strategies aimed at weakening the Russian economy to undermine its war effort. The U.S. and EU have repeatedly stated their goal of cutting off Moscow’s primary revenue streams in order to force de-escalation in Ukraine. The latest figures suggest that sanctions, price caps, and shifts in global oil demand are beginning to bite.

Still, Russia remains the world’s second-largest oil exporter and has found alternative buyers in Asia, particularly China and India, although often at discounted rates. Nonetheless, declining margins from these deals combined with falling global benchmarks are constricting Russia’s fiscal space more than in previous years.

2026 Outlook Clouded by Energy Market Volatility and War Spending

With the Finance Ministry set to publish its final December revenue estimate on January 14, all eyes will be on whether the current revenue slump stabilizes or worsens. Given that crude markets remain under pressure from fears of oversupply and weakening demand, and with the rouble likely to remain firm under limited capital outflows, Russia’s near-term fiscal prospects appear bleak.

Unless energy prices rebound or Russia secures higher-priced contracts outside the Western-dominated financial system, its ability to finance prolonged military operations or sustain domestic spending commitments will face increasing constraints heading into 2026. The Kremlin’s economic resilience is once again being tested not just by sanctions, but by the global market forces reshaping energy economics.

Source: Reuters

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Adam

Commodity

Oil held near its lowest close in almost two months, as concerns about an oversupply offset bullishness in wider financial markets.

Brent traded little changed above $61, reversing an earlier increase. Global stock gauges have record highs in their sights as the Federal Reserve’s interest-rate cut this week and its upbeat assessment of the US economy boosted investor sentiment, but oil markets remain pressured by the prospect of a significant surplus next year.

Concerns about oversupply have helped to push crude toward the lower end of a band it has traded in since mid-October, with Brent futures slowly trending toward $60. The International Energy Agency on Thursday reiterated its prediction for an unprecedented surplus — although slightly below its forecast last month — and said global inventories have swollen to a four-year high.

“Traders are happy to buy a bit of risk across the board, but the fundamental surplus hasn’t gone anywhere,” said Haris Khurshid, Chicago-based chief investment officer at Karobaar Capital LP.

Geopolitical tensions may add some support to oil prices. President Donald Trump announced new sanctions on three of Venezuelan counterpart Nicolas Maduro’s nephews as well as six oil tankers, after the US seized a supertanker off the coast of the Latin American nation on Wednesday.

The ship seizure was just the beginning of a new phase in the Trump administration’s ramped-up pressure campaign against the Venezuelan president, according to people familiar with the operation. The act of economic statecraft is designed to deny Maduro a lifeline of oil revenue and force him to relinquish power, the people said.

Source: Bloomberg

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Michelle

Political

Commodity

Russia-Ukraine Conflict

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.

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.

Source: Reuters

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Adam

Stocks

U.S. artificial intelligence names were in negative territory in premarket trading on Friday, extending losses into their third day.

Oracle was 0.9% lower in premarket trading, paring earlier losses which saw it fall 1.3%. Nvidia shed 0.7%, Micron fell 0.9%, and CoreWeave was down 1.3% at 5:16 a.m. ET.

Broadcom , which reported a strong quarter on Thursday, was last seen down 5%.

The share price of cloud computing and database software maker Oracle plummeted on Thursday, ending the session around 11% lighter after revenue earnings missed analyst expectations on Wednesday.

It dragged other AI-related names down with it despite a record-breaking rally elsewhere on Wall Street, suggesting investors are rotating out of tech into other parts of the market.

The tech-heavy Nasdaq Composite fell 0.26% on Thursday, despite the Dow Jones Industrial Average and S&P 500 hitting fresh records at the end of the session.

Despite booming demand for Oracle's artificial intelligence infrastructure, it posted mixed results this week. Revenue came in at $16.06 billion, compared with $16.21 billion expected by analysts, according to data compiled by LSEG.

It followed widespread speculation around the long-term health of the company, with investors cautious about its reliance on debt to execute its AI infrastructure build-out. The broader industry's circular dealmaking has also raised eyebrows.

"We think recent investor scrutiny on artificial intelligence's potential and circular GPU deals can be overly punitive to key AI suppliers like Oracle," said Morningstar Equity Analyst Luke Yang. "Oracle remains a respectable cloud provider that enjoys strong switching costs across its database, application, and infrastructure lineup."

That said, the firm reduced its fair value estimate for wide-moat Oracle to $286 per share, down from $340. Morningstar's moat rating refers to its assessment of a company's durable competitive advantage.

"We lowered our long-term earnings outlook as delivering Oracle's planned capacity on time now proved to be a harder task. However, we continue to view shares as undervalued," Yang added.

Source: cnbc

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Adam

Commodity

Gold prices rose 1% to a seven-week high on Friday, bolstered by a soft dollar, expectations of interest rate cuts and safe-haven demand prompted by geopolitical turbulence, while silver hit a record high.

Spot gold rose 1% to $4,327.31 per ounce by 1248 GMT, its highest level since October 21, and was set for a 3.1% weekly gain.

U.S. gold futures gained 1.2% to $4,363.20.

The dollar hovered near a two-month low, and was on track for a third straight weekly drop, making bullion more affordable for overseas buyers.

"The sharp rise in U.S. weekly jobless claims as well as U.S.-Venezuela tensions are underpinning gold and keeping haven demand strong," said Zain Vawda, analyst at MarketPulse by OANDA.

U.S. jobless claims rose by the most in nearly 4-1/2 years last week, reversing the sharp drop seen in the previous week.

The U.S. Federal Reserve trimmed rates by 25 basis points for the third time this year on Wednesday, but indicated caution on additional cuts.

Investors are currently pricing in two rate cuts next year, and next week's U.S. non-farm payrolls report could provide further clues on the Fed's future policy path.

Non-yielding assets such as gold tend to benefit in low-interest-rate environment.

On the geopolitical front, the U.S. is preparing to intercept more ships transporting Venezuelan oil following the seizure of a tanker this week.

Meanwhile, India saw widening gold discounts this week as demand remained subdued despite the wedding season, while high spot prices dented demand in China.

Spot silver rose 0.8% to $64.09 per ounce, after hitting a new record high of $64.56/oz, and is headed for a 10% weekly gain.

Prices have more than doubled this year, supported by strong industrial demand, dwindling inventories and its inclusion on the U.S. critical minerals list.

"Silver is supported by industrial demand amid fears of shortages, a continued tight market, and the speculative frenzy, mostly from retail investors which has helped drive inflows to Silver ETFs," said Ole Hansen, head of commodity strategy at Saxo Bank.

Elsewhere, platinum was up 3.2% at $1,750.35, while palladium climbed 2.6% to $1,523.10. Both were headed for a weekly rise.