Oil Hits $65 as Geopolitical Risks Swirl From Iran to Black Sea

Police officers leave the "Le Constellation" bar, following a deadly fire during a New Year's Eve party, in the upscale ski resort of Crans-Montana in southwestern Switzerland, January 9, 2026. REUTERS/Umit Bektas/File Photo

Switzerland's criminal investigation into a fire in a bar in the ski town of Crans-Montana should be broadened to include local authorities, a lawyer acting for some of the victims said, adding he would seek millions in compensation.

The fire killed 40 people, most of them teenagers, and injured 116. Romain Jordan, who represents more than 20 burn victims from the New Year's blaze, said he would claim damages of up to several million for each injury and up to 100,000 Swiss francs ($125,390) for each death.

"For me, there is absolutely no doubt that the municipality must be put on the list of those responsible and it should be asked to give answers," Jordan said in an interview late on Monday, saying he expected total claims in the hundreds of millions of francs.

"What is certain is that we will request for (officials) to be heard (by prosecutors), to obtain the documents, for the full correspondence, to understand how so many errors, so many safeguards that are normally in place in a risk management system, could all fail."

The mayor's office for Crans-Montana did not immediately respond to a request for comment.

ANNUAL SAFETY CHECKS MISSED

Prosecutors believe sparkling candles set the soundproof foam on the basement ceiling of "Le Constellation" bar alight early on New Year's Day. Panicked crowds then fled up a narrow staircase to a narrow exit, which became a fatal choke point as the inferno spread, witnesses said.

The town's mayor said last week that the venue had missed multiple annual safety checks, and expressed regret.

For now, only the French owners are under investigation for crimes including suspected negligent homicide. The couple, Jacques and Jessica Moretti, say they are cooperating with the investigation and have voiced grief over the tragedy. The husband has been detained.

Jordan called it a "bad joke" that the upscale town sought to be a party in the case - a request that has not been granted. "That cynicism hurt the families."

Jordan's clients are Swiss, French and Italian and most were injured, with all but two of them in artificial comas or unresponsive in European hospitals.

"They (the families) feel like they are in a nightmare from which they will never wake up, and what they ask me for is answers about who is responsible," he said.

Under Swiss law, victims of a criminal act can seek emergency financial assistance, but Jordan said a state fund was needed to cover further expenses until a ruling.

"Ideally there should be direct compensation for victims - no double punishment."

($1 = 0.7975 Swiss francs)

Source: Reuters

Source: Reuters

Above: GBP/JPY at monthly intervals.

Above: USD/JPY at monthly intervals.

Source: Poundsterlinglive

OPENING CALL

MARKET WRAPS

Source: morningstar

A Department of Justice criminal investigation into Federal Reserve Chair Jerome Powell's testimony is creating new risks for U.S. monetary policy, according to an analysis by Bank of America. While the development introduces a fresh layer of uncertainty, markets have so far absorbed the news without significant volatility.

Markets Remain Calm Despite Investigation

Bank of America economist Aditya Bhave noted that markets have "essentially looked through the news." The 30-year Treasury yield, a key indicator of market sentiment on long-term Fed policy, rose by only about 2 basis points. Bhave pointed out that such a move is minimal compared to what might typically express "concerns about Fed independence."

This muted reaction stands in stark contrast to market behavior last summer. When then-President Trump hinted he might remove Powell from his post, the 30-year yield saw a much sharper response. According to BofA, the yield jumped 8 basis points on July 11 and another 11 basis points during intraday trading on July 16 before pulling back.

Shifting Odds on Powell's Future at the Fed

Powell’s own firm response to recent speculation may have altered investor expectations about his tenure. BofA analysts believe his actions have increased the perceived probability that he will remain on the Fed Board as a Governor even after his term as chair concludes in May.

Citing data from Polymarket, the bank highlighted that the probability of Powell leaving the board by the end of the year has dropped from 83% to 57%.

New Headwinds for Monetary Policy

Despite the market's calm, Bhave warned that the investigation could have significant policy implications. The situation "might also galvanize the hawks on the FOMC," making it more challenging for a future, more dovish Fed chair to justify rate cuts based purely on economic data.

Looking ahead, Bank of America suggested that a separate event has become even more critical for the Fed's future. The Supreme Court's hearing on Governor Lisa Cook's case, scheduled for January 21, is now viewed as "more important for the policy trajectory than the identity of the next Fed Chair." A ruling against Cook, the bank concluded, would "significantly raise the probability" that Powell could also face removal.

The era of synchronized monetary policy is ending. After years of moving in lockstep to combat post-pandemic inflation, the world's major central banks are now entering a period of significant divergence, creating a complex and uncertain outlook for the global economy.

According to forecasts from Bloomberg Economics, the next year will see a wide spectrum of interest rate policies across advanced economies as central bankers navigate mixed economic signals and rising political volatility, particularly from the United States.

The Federal Reserve: A Lone Path to Easing?

All eyes are on the U.S. Federal Reserve, which faces a unique set of challenges. Policymakers must interpret conflicting economic data while contending with the potential for a new chair appointed by a president openly demanding rate cuts and applying legal pressure on the institution.

Bloomberg Economics projects the Fed will ease more aggressively than the market consensus, which currently anticipates just two cuts in 2026. This view is based on the expectation that a weakening labor market will soften the Fed's hawkish stance.

Jamie Rush, director of global economics at Bloomberg Economics, notes that this U.S. policy shift won't be mirrored elsewhere. "The world's most important central bank is likely to cut by more than markets expect," he said. "Deep U.S. rate cuts won't be replicated by other major central banks."

A Fragmented Global Policy Landscape

Stripping out the U.S., the combined interest rate gauge for advanced economies is expected to end the year with little change, highlighting the growing split in policy trajectories. The forecast for key central banks reveals a fractured approach:

• Bank of England (BOE): Expected to cut rates far less than the Fed.

• European Central Bank (ECB): Believed to be finished with its rate-cutting cycle.

• Bank of Japan (BOJ): Moving in the opposite direction, toward tightening.

• Potential Hikes: Canada, Japan, and Switzerland may see rate increases.

• Holding Steady: The euro zone is projected to keep borrowing costs stable.

• Further Cuts: Australia and New Zealand are likely to lower rates.

Meanwhile, central banks in emerging markets from Brazil to Nigeria are expected to implement significant rate reductions. Geopolitics, trade disputes, and political developments in the U.S. remain key variables that could easily disrupt these forecasts.

Is the US Productivity Surge a Statistical Mirage?

While monetary policy is a key focus, a debate is also brewing over the strength of the U.S. economy itself. Official data showed U.S. productivity growth accelerating to annualized rates of 4.1% and 4.9% in the second and third quarters of last year, sparking talk of an AI-driven boom.

However, Neil Dutta, head of economic research at Renaissance Macro, urges caution. He argues that productivity is a "residual" figure derived from GDP growth and total hours worked. Since GDP appeared to jump in mid-2025 while payroll growth slowed and work hours stagnated, productivity automatically surged in the data. Dutta suspects the GDP figure may be overstated.

He points to two reasons for his skepticism. First, genuine productivity booms are typically accompanied by strong growth in real, inflation-adjusted incomes, which is not currently happening. Second, major technological investments usually take time to translate into productivity gains, suggesting it may be too early to see an AI-driven surge.

Dutta's conclusion is that observers "are conflating a short-run data disconnect with a longer-run productivity story."