Iron Ore Declines After China Moves To License Steel Exports

New Zealand's central bank expects to maintain the Official Cash Rate at current levels for some time if economic conditions evolve as expected, Governor Anna Breman said. The kiwi dollar fell.

"The forward path for the OCR published in the November MPS indicates a slight probability of another rate cut in the near term," Breman said in a statement Monday in Wellington. "However, if economic conditions evolve as expected the OCR is likely to remain at its current level of 2.25% for some time."

The Reserve Bank signaled last month it had likely finished cutting interest rates after 325 basis points of easing. Financial markets have since begun to price a rate hike from the third quarter next year and Westpac Banking Corp. last week raised some home-loan interest rates.

"Financial market conditions have tightened since the November decision, beyond what is implied by our central projection for the OCR," Breman said.

New Zealand's dollar fell after the statement, buying 57.8 US cents at 3:20 p.m. in Wellington from 58.08 cents.

Breman said the economy is evolving "broadly in line" with the RBNZ's expectations, and the central bank is confident that inflation will reach the 2% target by mid-2026.

Economists expect gross domestic product grew 0.8% in the third quarter, twice the pace the RBNZ projected in the November statement. The GDP report is due Dec. 18.

Source: Bloomberg Europe

The Middle Eastern oil market has weakened in recent weeks on concern that regional supplies will outstrip demand, adding to signs of a softening global picture that's weighed on benchmark crude futures.

Among widely watched metrics, the premium of Abu Dhabi's flagship Murban over Brent has declined to the narrowest since early October. The shift signals concern too much crude is being offered in the Middle East than can readily be bought by refiners in Asia at a time of higher, competing worldwide output.

Global benchmark Brent is on pace for a third year of declines, as expectations that worldwide supplies will exceed consumption outweigh geopolitical concerns. Members of OPEC, including Mideast shippers such as Saudi Arabia, have added barrels just as rival drillers in the Americas also bolster output.

Reflecting the abundant availability of near-term supplies, state producer Saudi Aramco recently cut the price of its flagship crude grade for Asia to the lowest level in five years. In addition, the Paris-based International Energy Agency forecasts that there will be a record global crude glut next year.

"The surplus in the oil market is set to grow in 2026, following OPEC+'s decision to unwind supply cuts at a quicker-than-expected pace," said Warren Patterson, head of commodities strategy at ING Groep NV. "Non-OPEC supply is also expected to grow at a healthy clip despite this year's price weakness."

Other markers in the Middle East are also flashing weakness. Among them, the Dubai benchmark's discount to Brent, known as the Brent-Dubai EFS, was recently at its widest in about seven weeks.

Within the region, differentials between some spot crudes and the Dubai benchmark have softened, according to General Index. Upper Zakum and Oman had a 50- to 60-cent premium to Dubai at the end of last week, down from about 90 cents at the start of the month.

On a global basis, ING forecasts supply will rise 2.1 million barrels a day next year, while demand expands about 800,000 barrels. The IEA, meanwhile, projects output will exceed consumption by 3.8 million barrels a day in 2026.

"The scale of the surplus and the expected build in inventory should put the forward curve under additional pressure," said Patterson, referring to the pricing of crude over the coming months.

Source: Bloomberg Europe

The Thai baht climbed to the highest in more than four years, heaping pressure on the central bank to stem the rally ahead of its policy decision this week.

The Bank of Thailand tightened gold traders' foreign exchange forward transactions on Monday after the currency edged higher to 31.523 per dollar, holding at the strongest since June 2021. The baht has advanced more than 8% this year, making it the second best performer in Asia amid record gold prices and a weaker greenback.

The currency's persistent strength is putting pressure on the BOT to signal further easing at its meeting on Wednesday as the nation's exporters feel the added pinch from new US tariffs. While officials have managed to weaken gold's influence on the baht, the current peak tourism season is giving the currency fresh tailwinds.

"We see the excessive baht strength as unwelcome given sluggish growth, disinflation, and political uncertainty," Wee Khoon Chong, a senior strategist at BNY, wrote in a note to clients. "Baht strength is one reason we still see easing risk in 2026."

The baht's rally may lose some steam as an ongoing border clash between Thailand and Cambodia undermines investor confidence. Political risk is also set to weigh ahead of an election to be held as early as January.

The baht is likely to continue to benefit from a softer US dollar environment and positive fourth quarter seasonality, Barclays Bank Plc strategists including Audrey Ong wrote in a note to clients. That said, "baht political risk premium could build into the new year should it take time to form the new government."

Source: Bloomberg Europe

Kevin Hassett, one of the frontrunners to replace the current chair of the US Federal Reserve, has downplayed concerns that US President Donald Trump could sway the Fed, asserting that Trump's views will hold "no weight" on agency decisions.

With an announcement of the new Fed chair expected in mid-January, some hold concerns that Trump is looking to spread his influence across the agency by replacing the majority of people in charge at the FOMC.

Speaking with CBS News' Face the Nation on Sunday, Hassett emphasized that the Fed's role is to remain "independent" and let the 12 Board of Governors in the Federal Market Committee (FOMC) have the final say.

"No, no, he would have no weight. It's just his opinion matters if it's good, you know, if it's based on data," he said, adding:

"And then if you go to the committee and you say, well, the president made this argument and that's a really sound argument, I think, what do you think? If they reject it, then they'll vote in a different way." Hassett speaking on the Fed and Trump. Source: Face The Nation

Race for fed chair may be down to 'two Kevins'

On Friday, Trump indicated the race for the next Fed chair is being led by two out of four finalists being interviewed — former Fed governor Kevin Warsh and Hassett.

In an interview with The Wall Street Journal on Friday, Trump said Warsh was at the top of his list.

"Yes, I think he is," he said, adding, "I think you have Kevin and Kevin. They're both—I think the two Kevins are great," he said.

At the start of this month, odds on prediction markets such as Kalshi and Polymarket had Hassett at an 85% chance of becoming the next Fed chair; however, the odds have now dropped significantly following Trump's latest comments.

At the time of writing, Hassett still leads on Kalshi odds at 50%, with Warsh in second at 39%.

Related: Who's Kevin Hassett, Trump's reported crypto-friendly pick for the Fed?

During the WSJ interview, Trump also said the next Fed chair should consult him for advice on setting interest rates.

"Typically, that's not done anymore. It used to be done routinely. It should be done," he said.

"I don't think he should do exactly what we say. But certainly we're—I'm a smart voice and should be listened to," Trump added.

Crypto market flat despite Fed cutting rates

Last Wednesday, the Fed slashed interest rates by 25 basis points to a target range of 3.5% to 3.75%; however, it hasn't been a boon for crypto markets, with prices remaining flat.

Comments from current Fed chair Jerome Powell suggest that while the Fed isn't being hawkish, it's remaining cautious.

"In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation. There is no risk-free path for policy," Powell said at the Wednesday FOMC meeting.

With the next chair, Trump has indicated he wants further interest rate cuts in 2026, which could spur bullish action in crypto markets.

"He thinks you have to lower interest rates," Trump said of Warsh while speaking to the WSJ.

"And so does everybody else that I've talked to," he added.

Meet the onchain crypto detectives fighting crime better than the cops

Source: COINTELEGRAPH

South Korea's former president Yoon Suk Yeol allegedly sought to prompt a military confrontation with North Korea to create grounds for declaring martial law a year ago, but the plan collapsed when Pyongyang failed to respond, a special counsel said.

"They attempted to create a pretext for declaring martial law by carrying out abnormal military operations designed to provoke a North Korean armed response, but the effort failed because North Korea did not react militarily," Special Counsel Cho Euk-suk told reporters on Monday, wrapping up a six-month investigation into the botched martial law attempt.

The probe team believes Yoon and his officials sent drones into North Korea in October 2024 in an attempt to trigger a military response from the North. The North Korean military put its border units on full alert after reports of the drones flying above its capital, though at that time South Korea denied it had flown unmanned aircraft over the heavily fortified border.

The special prosecutor said Yoon, who was impeached over his martial law attempt, sought to monopolize power by seizing legislative and judicial authority through mobilizing the military.

Yoon, now jailed and facing an insurrection trial, has denied wrongdoing and defended his move as a desperate bid to counter what he claimed were North Korea sympathizers trying to paralyze his administration. Yoon's fall paved the way for the election of Lee Jae Myung as the new president in June. Lee's administration has sought to improve ties with North Korea in a departure from Yoon's hard-line approach.

In total, 24 people — including the former president, sitting lawmakers and past cabinet members — have been indicted over their alleged involvement in the former leader's political gamble, the special prosecutor said.

Source: Bloomberg Europe