Japan Confirms Deeper GDP Decline, Backing Stimulus Package

Oil prices hovered at two-week highs on Monday as investors expect a Federal Reserve interest rate cut this week that will lift economic growth and energy demand while eyeing geopolitical risks that threaten oil supplies from Russia and Venezuela.

Brent crude futures rose 4 cents, or 0.06%, to $63.79 a barrel by 0008 GMT, while U.S. West Texas Intermediate crude was at $60.15 a barrel, up 7 cents, or 0.12%.

Both contracts closed Friday's session at their highest levels since November 18.

Markets are pricing in an 84% chance of a quarter-point cut at the Fed meeting on Tuesday and Wednesday, LSEG data show, although it is expected to be one of its most contentious in years and investors are focused on the U.S. central bank's policy direction and internal dynamics.

In Europe, progress in Ukraine peace talks remains slow, with disputes over security guarantees for Kyiv and the status of Russian-occupied territory still unresolved.

"The outcome of current negotiations could have a big impact on the oil market," ANZ analysts said in a note.

"The various potential outcomes from Trump's latest push to end the war could release a swing in oil supply of more than 2 million barrels per day."

In the meantime, the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban, sources familiar with the matter told Reuters, which may curb supplies from the world's second-largest producer.

The U.S. has also ramped up pressure on OPEC member Venezuela, including strikes against alleged drug-smuggling boats and threats of military action to overthrow President Nicolas Maduro's government.

Chinese independent refiners have stepped up purchases of sanctioned Iranian oil from onshore storage tanks using newly issued import quotas, trade sources and analysts said, easing a supply glut.

Source: Reuters

Keir Starmer will host Ukrainian President Volodymyr Zelenskiy in London on Monday as the UK prime minister and other key European leaders seek to steer US-led peace talks toward a resolution that protects Ukraine from the prospect of future Russian aggression.

French President Emmanuel Macron and German Chancellor Friedrich Merz will join in the early-afternoon discussions in Downing Street. UK Foreign Secretary Yvette Cooper, meanwhile, will head to Washington for the first time in her present role to meet with Secretary of State Marco Rubio and other officials.

The discussions on both sides of the Atlantic coincide with European fears that the transatlantic alliance is fracturing after the US last month proposed a 28-point peace plan drafted with Russia that would have barred Ukraine from joining NATO, capped the size of its military and ceded territory to Moscow.

While discussions have since accommodated for Ukrainian demands, European leaders are keen to ensure Russian President Vladimir Putin isn't seen to be rewarded for his aggression.

"The principle behind the talks will be for Ukraine to be able to decide its own future," UK cabinet minister Pat McFadden told Sky News on Sunday. "This is a really pivotal moment. Everybody wants the war to come to an end, but they want it to come to an end in a way that gives Ukraine that freedom of choice in the future. That means a just end to the war, but also security guarantees for Ukraine in the future and not a completely toothless organization which is unable to decide its future."

At the weekend, Russia conducted a massive attack on Ukrainian energy infrastructure involving hundreds of drones and more than 50 missiles that took out power in Kyiv, Odesa and five other regions. Ukraine said it hit Rosneft PJSC's Ryazan oil refinery 120 miles (193 kilometers) southeast of Moscow.

Ukraine's European supporters have been hoping that if they can support Kyiv through the winter, Russia's economic struggles will intensify next year, and Putin will lose his negotiating leverage.

With US aid drying up, European leaders have been working on a plan to use Russian central bank assets frozen in Belgium to fund Ukraine. Belgian Prime Minister Bart De Wever has resisted the idea, arguing Belgium could be on the hook if Russia sues in response.

About €210 billion in Russian assets are immobilized on EU soil, mostly in the Brussels-based securities depository Euroclear. EU leaders aim to reach a consensus on the proposal at a meeting in the Belgian capital on Dec. 18.

Starmer on Sunday spoke with Dutch Prime Minister Dick Schoof, agreeing on "the need for sustained international support for Ukraine's defense," 10 Downing Street said in a readout of the phone call. "The leaders reiterated that Ukraine's security is vital for Europe's security," it said.

Starmer has sought to position himself as the European leader closest to US President Donald Trump, as well as Ukraine's leading ally. That's a tricky proposition given the longstanding friction between the US and Ukrainian leaders that manifested itself in a shouting match in the Oval Office in February.

In Washington, Cooper will convey Britain's support for Trump's "efforts to secure a just and lasting peace," according to a statement from the Foreign Office. She'll also discuss the situation in Gaza and the conflict in Sudan with Rubio, it said.

Source: Bloomberg Europe

South Korean retail investors' $31 billion record purchases of US stocks this year have turned them into scapegoats for the country's weakening currency. They are furious.

Asia's worst performer this quarter, the Korean won came close to hitting a 16-year-low in recent weeks. Officials, including the Bank of Korea governor, have blamed the retail traders' appetite for overseas equities for hurting the currency.

The accusation "stunned" many of the country's estimated 14 million mom-and-pop investors, said office worker Park Eun-hye, who has been buying US stocks for years. People were "absolutely livid" that they were being held responsible for the won's slide, she added.

Small investors are "easy targets" for blame, Park said, when in fact "excessive liquidity and other broader factors could play a much bigger role."

Priced out of Seoul's red-hot real estate and fed up of lackluster returns on the Kospi — which had languished for a decade before 2025's unusual bull run — South Korea's army of retail investors have turned to high-risk options, from crypto to leveraged overseas exchange-traded funds, in a bid to create wealth. But their industriousness is now frustrating Seoul's top financial policymakers.

Korean retail investors have snapped up an unprecedented net $31 billion worth of US equities this year, according to Korea Securities Depository data. That's nearly triple the amount they bought in 2024 and more than 12 times the level in 2019.

One prominent local paper ran a headline decrying a possible "foreign exchange crisis" — which the government has roundly denied. Official data showed equities outflows totaled about $18 billion in October, the bulk of which was linked to retail investors, versus roughly $3 billion coming in.

"If more money flows out of the country than comes in, it can drive the won weaker or limit its strength," said Stephen Lee, economist at Meritz Securities, adding that Koreans' overseas equity investments were "a natural outcome" of the expected returns.

The "trend" of young South Koreans piling into overseas stocks is concerning, BOK Governor Rhee Chang Yong said late last month, and authorities are tightening rules on leveraged buying of ETFs listed offshore.

But Koreans are not buying "foreign stocks just because it is cool," ex-trader and portfolio manager turned YouTube financial influencer Syuka said on his widely-watched channel. Such purchases resulted from a decade of stagnation in the local market, he said.

The outflows have persisted even as the Kospi Index has risen more than 70% to become one of the world's best performers this year, thanks in part to optimism about corporate reforms and President Lee Jae Myung's repeated pledge to boost market value.

Targeted government efforts are key to fixing the won's weakness, said Jung Eui-jung, head of the Korea Stockholders Alliance, adding that officials should "self-reflect" and scrutinize their policies, not "shift blame" to retail investors.

Even some officials have taken a softer line on the issue, with Financial Supervisory Service Governor Lee Chan-jin saying he could "empathize" with Korean traders' desperate hunt for returns.

"Blaming the exchange rate rise solely on retail investors investing overseas is overinterpretation," said 27-year-old retail investor Won Jung Yeon who runs a financial tips YouTube channel.

He started trading stocks after realizing he'd never get rich off a salary alone and said all "retail investors make investment decisions solely for profit."

If the incentives were right, more investors like Park Minyeol, a Seoul-based public official in his 30s who has invested heavily in overseas stocks, said they could be lured home. He's "considering putting about 10–20% of my money into domestic equities," due to his interest in Korean robotics stocks.

Source: Bloomberg Europe

Japan's economy shrank more sharply in the third quarter than previously estimated, according to a revised release from the Cabinet Office of Japan on Monday.

The revised annualised contraction came in at 2.3%, compared with an earlier reading of a 1.8% decline and a median forecast for a 2.0% fall.

On a quarter-on-quarter basis, gross domestic product fell 0.6%, steeper than the initial 0.4% contraction and exceeding a median forecast of a 0.5% decline.

Private consumption -- a key engine of the economy -- managed a modest rebound, rising 0.2% compared with a 0.1% uptick in the preliminary reading. Meanwhile, capital expenditure was revised downward sharply, showing a 0.2% drop instead of the 1.0% rise initially reported.

External demand remained a drain on growth, with net exports subtracting 0.2 percentage points, while domestic demand contributed a 0.4-point drag, worse than earlier estimates.

The deeper contraction reflects lingering headwinds from weak global demand, trade frictions, and subdued private investment. The weaker reading could complicate near-term economic prospects for Japan, even as policymakers weigh fiscal and monetary measures to support growth.

The data could also temper near-term expectations of a Bank of Japan rate hike, as focus remains on new Prime Minister Sanae Takaichi's plans for more fiscal spending.

Source: Investing

U.S. President Donald Trump said on Sunday that he would have a say whether a proposed merger between Netflix and Warner Brothers should go forward, telling reporters the market share of a combined entity could raise concerns.

"I'll be involved in that decision," Trump told reporters as he arrived at the Kennedy Center for its annual awards show.

Netflix on Friday agreed to buy Warner Bros Discovery's TV, film studios and streaming division for $72 billion, a deal that would hand control of one of Hollywood's most prized assets to the streaming pioneer.

Trump did not say whether he favored approval for the deal, but he pointed to a potential concentration of market power in the entertainment industry.

"That's going to be for some economists to tell…. But it is a big market share. There's no question it could be a problem," Trump said.

Source: Investing

Britain's jobs market remained weak last month in the run-up to finance minister Rachel Reeves' budget on November 26 as employers worried about possible new tax increases, an industry report showed on Monday.

Permanent job placements shrank at the slowest rate since July 2024 but the reading was barely up from October, according to the survey by accountants KPMG and the Recruitment and Employment Confederation, a trade body.

The survey's gauge of temporary hiring slipped below the 50.0 no-change level.

"A complex business environment and uncertainty around the budget kept hiring on ice last month, as business leaders weighed potential impacts," said Lisa Fernihough, head of advisory at KPMG.

"There will be relief at the absence of major tax hikes. However that alone is unlikely to be enough to see a marked change in how firms are planning."

Some other recent business surveys have similarly shown downturns in hiring before Reeves' annual budget last month.

It included plans for 26 billion pounds ($35 billion) in tax rises but spared employers from the brunt of the increases.

A Bank of England survey published last week - which was also conducted before Reeves' budget - showed firms expected to reduce staff numbers.

Official data last month showed Britain's jobless rate hit 5.0% in the third quarter, which some economists linked to tax hikes that were announced by Reeves last year and took effect in April. Wage growth cooled slightly.

The REC/KPMG survey showed that a fall in vacancies in November was the least severe in five months. The availability of workers rose at the second-fastest pace since November 2020.

A measure of growth in starting pay for people taken on for permanent roles increased at the fastest pace in five months as employers competed for candidates with in-demand skills.

The survey of around 400 recruitment and employment consultancies was conducted between November 12 and 24.

($1 = 0.7493 pounds)

Source: Investing