Silver Doubles and Sets a Record; Bank of Japan Sounds Interest Rate Hike Horn

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Summary:

Silver's year-to-date gain exceeds 100%; the Bank of Japan signals an interest rate hike, shaking global markets. Dovish heavyweight emerges as top candidate for Fed chair…

[Quick Facts]

1. Silver's year-to-date gain exceeds 100%.

2. Bank of Japan sounds interest rate hike horn.

3. Hassett becomes the top contender for new Fed chair.

[News Details]

Silver's year-to-date gain exceeds 100%

On Monday, spot silver hit another record high, briefly approaching the $59 mark, bringing its year-to-date gain to 100%. However, some analysts warn that with the gold–silver ratio falling to multiyear lows, recent silver gains are largely driven by "fast money short squeezes." The key factors behind silver's recent surge include supply tightness, speculative short squeezes, and safe-haven demand stemming from macro conditions.

As background, in October this year, large quantities of silver flowed into London to ease historic supply shortages at the world's largest silver trading center. This also put pressure on other global futures exchanges—Shanghai Futures Exchange data show that silver inventories in its affiliated warehouses recently fell to their lowest level in nearly a decade. In addition, silver was added last month to the U.S. Geological Survey's list of critical minerals, and tariff concerns have discouraged traders from shipping silver out of the United States.

Meanwhile, the cost spread between call options (allowing investors to bet on price rises) and put options (betting on declines) in silver futures has recently jumped to its highest level since 2022, indicating a sharp rise in the capital cost of betting on a silver price spike. Furthermore, expectations of Federal Reserve rate cuts and uncertainty over the Fed chair appointment are also helping sustain speculative heat in precious metals.

Bank of Japan sounds interest rate hike horn

On Monday, Bank of Japan Governor Kazuo Ueda said that with Japan having recently reached a trade agreement with the Trump administration, the economic outlook has improved. As uncertainties around U.S. tariffs gradually fade, the likelihood that the BoJ's economic and inflation forecasts will be met is increasing. At the same time, he gave his clearest signal yet—hinting at a possible rate hike later this month. This raised concerns that a new wave of "carry trades" may be forced to unwind, sending Japanese government bond yields sharply higher. The two-year yield broke above 1% for the first time since 2008, after which sovereign bond yields quickly followed suit across the U.S., Europe, and other parts of Asia.

Hassett becomes the top contender for new Fed Chair

On Monday, U.S. President Trump said he already has someone in mind for the next Fed chair but has not yet announced it. Although the identity is expected to be revealed in the coming weeks, it remains highly uncertain what environment the new central bank leader will face at a potential turning point for the U.S. economy. National Economic Council Director Kevin Hassett is seen as the clear frontrunner. Prediction markets have been racing to assign strong probabilities to Hassett landing the job. As of Monday afternoon, traders on the Kalshi platform gave him a 79% chance, PredictIt showed 75%, and Polymarket just 63%.

Hassett is viewed as dovish on Fed policy and closely aligned with the Trump administration's preference for lower interest rates. If appointed, he could reinforce market expectations of a more aggressive rate-cutting cycle, putting further downward pressure on the dollar.

[Today's Focus]

UTC+8 15:00 UK November Nationwide House Price Index MoM

UTC+8 18:00 Eurozone November CPI MoM preliminary

UTC+8 18:00 Eurozone October unemployment rate

UTC+8 23:00 Fed Governor Bowman testifies before the House Financial Services Committee

UTC+8 5:30(next day) US API crude oil inventories for week ending Nov 28th (thousand barrels)

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Winkelmann

Stocks

Economic

The US Commerce Department has agreed to invest as much as $150 million in xLight Inc., a chip technology startup tied to former Intel Corp. Chief Executive Officer Pat Gelsinger.

The department's Chips Research and Development Office — a part of the National Institute of Standards and Technology — has signed a nonbinding letter of intent to provide the funding, according to a statement on Monday.

The move is part of Trump administration efforts to bring more chipmaking capabilities back to domestic soil. xLight, where Gelsinger serves as executive chairman, is developing technology that would compete with one part of the extreme ultraviolet lithography systems offered by the Netherlands' ASML Holding NV, which currently sources many of its lasers from a German company, Trumpf.

The deal extends the US government's reach into the chip industry. Earlier this year, the administration signed a deal with Intel to acquire a roughly 10% stake. The Silicon Valley pioneer, now dwarfed in size by Nvidia Corp., has been attempting a comeback under new CEO Lip-Bu Tan.

The letter of intent was reported earlier by the Wall Street Journal.

Gelsinger was ousted from Intel last year after the board decided that his own turnaround bid had not achieved results quickly enough.

The xLight investment is meant to help the company construct, build and demonstrate a laser prototype that could be used as an alternative light source for extreme ultraviolet lithography.

The hope is to help accelerate semiconductor advancements and restore what's known as Moore's Law — the notion that the number of transistors on a chip doubles approximately every two years.

"Reviving Moore's Law and restoring American leadership in light is a once-in-a-generation opportunity and with the support of the federal government, xLight will turn opportunity into reality," Gelsinger said in his company's statement.

Source: Bloomberg Europe

To stay updated on all economic events of today, please check out our Economic calendar

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Justin

Forex

Stocks

A rebound in Asian stocks on Tuesday — after a crypto-led selloff — seems unlikely to lift the mood in Indian markets, where a struggling rupee and fading expectations of an RBI rate cut later this week are right now driving sentiment. After three straight months of gains, stocks are also likely to move into consolidation mode as traders wait for clearer signals on the RBI's rate-cut trajectory and how trade negotiations are shaping up. On the global front, nearly $1 billion in leveraged crypto positions were wiped out during Monday's sharp price drop. Back home, all eyes will remain on the rupee, with that 90-per-dollar mark uncomfortably close.

Surprise GDP number deepens worries

The head-turning economic growth figures didn't prevent Indian markets from starting the new month on the back foot. Systematix Institutional Equities noted that the robust print may still conceal underlying weaknesses: growth appears heavily reliant on public-spending-led construction and strong private consumption, even as government consumption expenditure has contracted in some quarters. Adding to the broader conversation, the data release came just days after the International Monetary Fund assigned India's national accounts a C-grade on its A–D scale, prompting questions about how accurately the numbers capture economic reality.

Meesho turning inward for logistics

As questions linger over the quality of economic data, some investors are also watching how companies tweak their own cost structure. E-commerce player Meesho is increasingly using its own logistics platform, Valmo, for shipments, according to its IPO documents. That trend could pose a risk for Delhivery, says Jefferies, which estimates that Meesho contributes about 16% of Delhivery's sales. For a value-focused platform like Meesho, looking for the cheapest option is only natural — and insourcing comes with a 1%-11% lower cost per shipment compared with third-party logistics players, the brokerage said. While Meesho hasn't given out any guidance for how far it intends to take insourcing, that number will be crucial for Delhivery's earnings.

Landmark for pharma industry

This pressure shows up elsewhere too, including in pharma's push toward new drug development. The US FDA's acceptance of Wockhardt's new drug application for a novel antibiotic is a much needed boost for India's pharma industry, which has long been trying to move beyond its image as a generic-only player. Shares of local drugmakers have underperformed the broader market over the past five years, mainly due to price erosion in US generics space, and their limited participation in fast-growing segments like weight-loss drugs. With the first-ever NDA acceptance for Indian firm, investors may hope to see more companies focus on new molecule development and expand their presence in the highly-competitive global market. After Monday's 19% jump, Wockhardt shares are now up 4% for the year.

The rupee's plunge to a record low against the dollar and the recent spurt in volatility is starting to drag on local stocks. On Monday, the benchmark NSE Nifty 50 Index scaled a new intraday peak, but surrendered the gains as the currency suddenly nosedived. Market participants aren't quite sure what's behind the tight move, but the uncertainty is weighing on both stocks and the currency.

Source: Bloomberg Europe

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Gerik

Economic

States Step In as Trump Administration Rolls Back BNPL Oversight

Amid a sharp rise in the use of installment loans, state attorneys general from seven Democratic-led states have sent letters to six prominent Buy Now, Pay Later (BNPL) providers, demanding detailed disclosures on loan structures, consumer repayment ability, and compliance with federal lending laws. The move comes in response to the Trump administration’s rollback of key federal regulations, which had previously brought BNPL services under rules akin to those governing credit cards.

The letters, sent on Cyber Monday a peak shopping day were signed by officials from Connecticut, North Carolina, California, Colorado, Illinois, Minnesota, and Wisconsin. Targeted firms include Klarna, Affirm, Afterpay, PayPal, Sezzle, and Zip. The companies now have 30 days to respond with information on their lending practices, customer interaction procedures, and consumer protection measures.

Consumer Debt Risks Rise as BNPL Market Booms

Connecticut Attorney General William Tong emphasized that BNPL firms’ marketing strategies often downplay the risks involved, especially during the holiday season when consumer spending spikes. “Buy now, pay later may appear to be a convenient way to afford a purchase, but shoppers need to watch out for debt traps,” he warned.

BNPL services offer consumers short-term installment loans at checkout, often advertised as interest-free. However, critics argue that late fees, lack of transparent disclosures, and limited borrower vetting can result in unmanageable debt and financial stress especially for lower-income or younger consumers. Tong and his colleagues are particularly concerned about the absence of clear safeguards on borrowers’ ability to repay.

Federal Rollback Sparks State-Led Consumer Protection Efforts

The letters follow the Consumer Financial Protection Bureau’s (CFPB) revocation earlier this year of an interpretive rule that classified BNPL services under the same legal framework as credit cards. The change, part of broader deregulatory efforts under Trump, removed important consumer safeguards and left states to fill the regulatory vacuum.

“As Trump rescinds critical protections for buy-now-pay-later consumers, it’s up to states now to ensure shoppers know what they are getting into,” Tong said.

With federal oversight fading, state-level scrutiny may be the last line of defense for consumers vulnerable to the rapid expansion of fintech lending.

Industry Responds as BNPL Market Set to Double

Spokespersons for Klarna and Affirm expressed support for consumer protection and regulation. Klarna stated it is “committed to protecting consumers,” while Affirm emphasized its history of backing “thoughtful regulation.” Other firms, including PayPal, Afterpay, Sezzle, and Zip, did not immediately respond to Bloomberg’s requests for comment.

The BNPL sector is growing rapidly. According to Juniper Research, global BNPL transaction volume is projected to more than double from $334 billion in 2024 to $687 billion by 2028. This rapid expansion has triggered both investor enthusiasm and regulatory concern.

With federal protections receding, state attorneys general are intensifying efforts to ensure that BNPL firms do not exploit consumers through opaque lending practices or insufficient repayment safeguards. The unfolding inquiry signals a new phase of scrutiny for an industry that has, until now, enjoyed relatively light oversight. The results of these investigations could shape the future of consumer finance in the United States and determine how much risk shoppers face when they “buy now and pay later.”

Source: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

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Samantha Luan

Stocks

Bond

Cryptocurrency

· Anticipated rate hike in Japan triggers global bond selloff

· Cryptocurrency slump unsettles, bitcoin down 30% from October peak

· Dollar set to struggle as Fed prepares for rate cut - Deutsche Bank

Stocks made muted gains and traders were wary on Tuesday, following a slide in cryptocurrencies and a global bond selloff triggered by a looming interest rate hike in Japan.

S&P 500 futures were steady in early trade, after falls on Wall Street overnight, while Japanese government bonds remained under pressure ahead of a 10-year auction after a weeks-long tumble on concern about the nation's fiscal outlook.

Ten-year JGB yields ticked up 1.5 basis points to a 17-year top of 1.88% in morning trade. Bitcoin , which has been a talisman for sentiment, had an unsettling 5.2% slump on Monday and at $87,000 is down 30% from an October peak.

"The mood (in cryptocurrencies) is ranging between fearful and resigned," said Jehan Chu founder at Kenetic Capital, a blockchain venture capital firm, with the latest drop catching investors by surprise.

"The next couple months are crucial but even the most bullish may be settling in to hibernate for the winter."

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab rose 0.6% while Tokyo's Nikkei (.N225), opens new tab crept 0.5% higher after logging a sharp drop on Monday.

JAPAN TO HIKE, FED TO CUT

Expectations that Japan will hike interest rates later this month had surged on Monday when Bank of Japan Governor Kazuo Ueda laid the groundwork for tightening policy.

Ten-year Japanese government bond yields shot six bps higher and perhaps on the view that could lure home some of Japan's vast international investments, traders sold global bonds and pushed ten-year Treasury yields up 7.7 bps to 4.08%.

The yen caught a boost and has stood firmest in foreign exchange markets over the past 24 hours, holding at 155.75 per dollar on Tuesday.

The move helped hoist the euro briefly above $1.165 and left the dollar on the back foot more broadly. It traded at $1.16 while markets waited on eurozone inflation data due later in the session.

Some investors, however, are starting to expect a more durable turn lower for the greenback as the U.S. shapes to cut interest rates further and faster than many peers.

Data on Monday supported expectations for a December rate cut by the Federal Reserve, with manufacturing contracting for a ninth straight month in November - though consumers did beat analyst expectations with a $23.6 billion online shopping spree.

"The U.S. data remains decent enough – but the rest of world is on a firmer footing," said Deutsche Bank strategist Tim Baker, who sees scope for the dollar to fall towards year end.

"December has easily been the worst month for the dollar in the past decade. It's fallen 80% of the time, and by a median of more than 1%."

Gold hung on to recent gains at just above $4,200 an ounce. Oil prices had also climbed following drone attacks on Russian supply and Brent crude futures were eight cents higher at $63.26 a barrel on Tuesday.

Source: Reuters

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Samantha Luan

Political

· US military has struck at least 19 vessels since September

· Law professor says killing of survivors would likely be a war crime

· Hegseth says admiral has his '100% support'

· Trump has authorized covert operations in Venezuela

The White House on Monday defended a U.S. admiral's decision to conduct multiple strikes on an alleged Venezuelan drug-smuggling vessel in September, saying he had Defense Secretary Pete Hegseth's authorization, even as critics questioned the legality of a strike on survivors.

The Washington Post had reported that a second strike was ordered to kill two survivors from the initial strike and to comply with an order by Hegseth that everyone be killed.

President Donald Trump said on Sunday that he would not have wanted a second strike on the boat and said Hegseth denied giving such an order.

But White House spokeswoman Karoline Leavitt said on Monday that Hegseth had authorized Admiral Frank Bradley to conduct the strikes on September 2.

"Secretary Hegseth authorized Admiral Bradley to conduct these kinetic strikes. Admiral Bradley worked well within his authority and the law directing the engagement to ensure the boat was destroyed and the threat to the United States of America was eliminated," Leavitt said.

Leavitt said the strike was conducted in "self defense" to protect U.S. interests, took place in international waters and was in line with the law of armed conflict.

"This administration has designated these narco terrorists as foreign terrorist organizations," Leavitt said.

Starting in September, the U.S. military has carried out at least 19 strikes against suspected drug vessels in the Caribbean and off the Pacific coasts of Latin America, killing at least 76 people.

Critics have questioned the legality of the strikes, and both Republican and Democratic lawmakers have pledged to look into them.

International humanitarian law prohibits attacks on incapacitated combatants. The Defense Department's Law of War Manual states that shipwrecked persons cannot be knowingly attacked and must receive medical care unless they act with hostility or attempt escape.

George Washington University law professor Laura Dickinson said most legal experts do not believe the boat strikes qualify as armed conflict, so lethal force would only be allowed as a last resort.

"It would be murder outside of armed conflict," she said. Even in war, the killing of survivors "would likely be a war crime."

A group of former military lawyers, the JAGs Working Group, called the order "patently illegal," saying service members have a duty to disobey it and that anyone who complies should be prosecuted for war crimes.

On X, Hegseth defended Bradley, calling him "an American hero" and saying he has his "100% support." Hegseth said he stands by Bradley's combat decisions "on the September 2 mission and all others since."

Trump on Monday discussed with top advisers the

pressure campaign against Venezuela, among other topics, a senior U.S. official said.

US OPTIONS INCLUDE EFFORT TO OUST MADURO

Trump has flagged the possibility of U.S. military intervention in Venezuela. On Saturday, he said the airspace above and surrounding Venezuela should be considered "closed in its entirety," but gave no further details, stirring anxiety and confusion in Caracas.

Trump confirmed on Sunday that he had spoken to Venezuelan President Nicolas Maduro, whom the U.S. considers an illegitimate leader, but Trump declined to provide details of the conversation.

The Trump administration has been weighing options to combat what it has portrayed as Maduro's role in supplying illegal drugs that have killed Americans. Maduro has denied having any links to the illegal drug trade.

Reuters has reported the options under U.S. consideration include an attempt to overthrow Maduro, and that the U.S. military is poised for a new phase of operations after a massive military buildup in the Caribbean and nearly three months of strikes on suspected drug boats off Venezuela's coast. Trump also has authorized covert CIA operations in the country.

Source: Reuters

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Gerik

Economic

Trump Signals Break from Powell as Fed Leadership Transition Looms

President Donald Trump revealed over the weekend that he has made a final decision on who will lead the Federal Reserve after Jerome Powell’s term ends in May 2026. While the nominee's name has not yet been disclosed, Treasury Secretary Scott Bessent has confirmed that Trump has been reviewing a five-person shortlist and is expected to announce his choice by the end of the year.

Trump’s decision signals a pivotal moment for the U.S. central bank, one that could fundamentally reshape the institution’s policy direction. The Fed chair is widely regarded as the most powerful figure in the global economy, with the ability to influence interest rates, inflation, job creation, and financial stability through even the subtlest of signals.

A Highly Personal Decision Rooted in Longstanding Criticism

Trump’s relationship with Powell has been fraught with public tension. Since appointing Powell in 2018, Trump has frequently criticized the Fed chair for not cutting rates aggressively enough, accused him of undermining economic growth, and even suggested removing him despite legal ambiguity over whether a president can unilaterally fire a sitting Fed chair.

With Powell’s term nearing its end and the Republican Party now in full control of the Senate, Trump is seizing the opportunity to appoint someone more closely aligned with his economic vision. This pick could mark a strategic turning point as the Fed navigates a complex macroeconomic landscape shaped by high public debt, tariff policies, labor market cooling, and growing concerns over inflationary pressures.

The Stakes: A Central Bank Under Political Influence?

Trump’s desire to leave a lasting mark on the Fed coincides with heightened concern over the politicization of monetary policy. Some observers fear that replacing Powell with a loyalist could compromise the Fed’s independence, which has historically been viewed as a cornerstone of its credibility and effectiveness.

The next chair will have to steer the central bank through a delicate balancing act: supporting growth without reigniting inflation, maintaining dollar stability amid trade frictions, and preserving financial market confidence as Trump’s administration accelerates supply-side reforms and reevaluates global trade relationships.

Confirmation Likely, But Policy Direction Remains Uncertain

Given the Republican-controlled Senate, Trump’s nominee is likely to be confirmed without significant resistance—especially if the pick has established monetary credentials or prior government experience. However, the exact implications for interest rates, inflation targeting, and financial regulation will depend heavily on who is chosen.

While speculation continues around possible contenders—including former Trump advisers, monetary policy hawks, or even pro-crypto or gold standard sympathizers what is clear is that the Fed is poised for a transformation that could extend well beyond Powell’s departure.

Trump’s Fed Pick to Cement Economic Legacy

President Trump’s forthcoming nomination for Fed chair will be one of the most consequential economic decisions of his second term. It offers the chance to align monetary policy more tightly with his broader economic agenda and place a trusted figure at the helm of the central bank just as it faces rising inflation risks and global volatility.

Should the announcement come before Christmas as Bessent hinted it would mark the earliest selection of a Fed chair nominee in modern history, underscoring the urgency Trump places on shaping the post-Powell era. Financial markets, already sensitive to Fed signals, will be watching closely to gauge whether this leadership change will bring continuity, disruption or a full strategic reset.