US Urged Europeans To Oppose EU Plan For Loan To Support Ukraine

Political

Economic

Summary:

The US lobbied several countries in the European Union in an effort to block EU plans to use frozen Russian central bank assets to back a massive loan to Ukraine, according to European diplomats familiar with the matter.

US officials argued to member states that the assets are needed to help secure a peace deal between Kyiv and Moscow and should not be used to prolong the war, said the diplomats, who spoke on the condition of anonymity.

The EU put forward a proposal this week to use the immobilized assets to back a €90 billion ($105 billion) loan to cover Ukraine's economic and military needs for the next two years. There are about €210 billion of frozen Russian assets on EU soil and more of those could be used from 2028 on.

The US State Department's press office didn't respond to a request for comment.

The discussions come at a critical time for Ukraine, with the US pressuring Kyiv to agree to a potentially lopsided peace deal with Russia. Ukraine risks running out of money early next year and President Donald Trump's administration has cut off most US aid, putting the onus on Europe.

Washington has also been eyeing the Russian assets as part of its proposals to enable peace talks with Moscow, and had suggested they could be used to fund US-led postwar investments.

A US 28-point peace plan has been modified since it first emerged last month, but assets remain one of the key sticking points, along with the status of Ukrainian territories and providing Kyiv with robust security guarantees, some of the people said.

European leaders have been adamant that how to use the assets is a European matter as the frozen funds are mostly held in Europe.

There is "no possibility of leaving the money we mobilize to the US," German Chancellor Friedrich Merz said on Thursday.

"The American government knows this, and this is also the German government's negotiating position," he said. "This is also the consensus at the European level. There are absolutely no differences of opinion on this. This money must flow to Ukraine — it must help Ukraine."

The EU's plan to use the assets faces domestic opposition as well, particularly from Belgium, where most of the funds are held.

Merz will travel to Brussels Friday for talks with Belgian Prime Minister Bart De Wever and European Commission President Ursula von der Leyen in an effort to break down Belgian resistance to the EU plan.

Merz, who has been a strong advocate of using the Russian assets to aid Ukraine, told reporters that he takes the Belgian premier's concerns "very seriously" and that he would try to address them at Friday's meeting.

"I don't want to persuade him, but rather convince him," he said at a news conference Thursday evening in Berlin after talks with German regional leaders. "If we take this path, we will do so to help Ukraine, possibly for the next two to three years."

Belgium argues that it has yet to receive sufficient guarantees that it won't be left on the hook alone to foot any future bill should Moscow win any future claims on recovering the assets. It also says that using the frozen funds would open Europe, and it's companies, to Russian retaliation.

Belgium's national budget has received hundreds of millions of euros in tax revenue from the immobilized funds, though it argues that the money is being used to provide aid to Ukraine.

Belgium's current rejection of the plan remains the main stumbling block to its approval ahead of an EU leaders' summit later this month, where the bloc will be aiming to sign off on the proposals.

The EU has proposed backing the loan using the bloc's budget or through bilateral guarantees from member states. The assets would remain frozen and Kyiv would only have to pay the loan back if Russia agrees to finance the country's reconstruction and compensate it for the damage the war has inflicted.

In addition to Belgium, Hungary is against the plans and Slovakia has said it will not back proposals that provide Ukraine with military support. Approval would only require a qualified majority of member states.

The commission has also floated the option of issuing joint debt in the event they can't reach an agreement to use the immobilized assets. But member states including Germany reject that idea, and the fact that it requires unanimity makes it improbable.

Source: Bloomberg Europe

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Winkelmann

Forex

Technical Analysis

Key Points:

· The US Dollar holds near a five-week low as traders prioritize Fed rate-cut expectations over strong labor data.

· Markets price an 85–86% chance of a December Fed cut, keeping downward pressure on the dollar despite resilient jobs numbers.

· A delayed flow of key economic reports from the shutdown leaves dollar traders navigating incomplete macro signals.

US Dollar Price Forecast: Drops Amid 85% Fed Cut Probability – GBP/USD And EUR/USD_1

Market Overview

The US dollar remained soft against major peers during European trading, holding near a five-week low. Even with solid labor data released Thursday, the greenback failed to gain traction as investors continued to price in a more accommodative Federal Reserve.

Labor Strength Offers Limited Support

Initial jobless claims fell to their lowest level in more than three years, underscoring resilience in the US labor market. The reaction in currency markets, however, was muted.

Traders focused less on weekly improvements and more on the Fed's policy direction. Some analysts also noted that the Thanksgiving period may have distorted the data.

Fed Cut Expectations Keep Pressure on the Dollar

Markets now assign roughly an 85–86% probability of a quarter-point rate cut at the December 9–10 FOMC meeting, with expectations for several additional cuts next year. Anticipation of easier policy continues to weigh on the dollar, reducing its appeal even as economic indicators remain firm.

Data Gaps Add to Market Uncertainty

The extended government shutdown has delayed several key economic releases, including monthly payroll figures. With incomplete data, investors have been forced to navigate the outlook with limited visibility, increasing uncertainty around near-term dollar direction.

While the dollar still offers defensive appeal during periods of risk aversion, Fed communication in December and upcoming employment updates will likely determine its next move.

US Dollar Index (DXY) – Technical Analysis

Dollar Index Price Chart – Source: Tradingview

The Dollar Index (DXY) trades near $98.92, moving inside a well-defined descending channel that has guided price lower since late November. Recent candles show rejection at the mid-channel trendline near $99.06, signaling persistent selling pressure. The index remains below both the 50-EMA and 200-EMA, reinforcing a bearish structure.

Immediate support sits at $98.76, followed by $98.56 and $98.38 if downside momentum continues.

A break below these levels would extend the channel toward the lower boundary. On the upside, resistance stands at $99.22, and a close above that level would be required to challenge the broader downtrend.

GBP/USD Technical Analysis

GBP/USD Price Chart – Source: Tradingview

GBP/USD trades near $1.3353, holding inside a rising channel that has guided the pair higher since mid-November. Recent candles show buyers defending the mid-channel support at $1.3326, keeping the short-term structure intact. Immediate resistance sits at $1.3375, where multiple rejection wicks indicate supply.

Below current levels, support stands at $1.3287, followed by $1.3248 and $1.3190 if sellers extend pressure. Price remains above the 50-EMA, while the 200-EMA below confirms broader bullish momentum.

RSI is recovering toward 55 after easing from overbought, suggesting stabilizing momentum. A breakout above $1.3375 could open $1.3424, while losing the channel floor risks a deeper pullback toward $1.3287.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

EUR/USD trades near $1.1659, holding inside a rising channel that has guided price higher since late November. Recent candles show buyers defending the mid-channel trendline around $1.1653, keeping the short-term bias constructive. Immediate resistance stands at $1.1688, where multiple rejection wicks show supply.

On the downside, support sits at $1.1623, followed by stronger levels at $1.1591 and $1.1566 if sellers pressure the trend. The pair remains above the 50-EMA and 200-EMA, reinforcing broader bullish structure.

RSI is recovering from mid-range toward 55, indicating improving momentum but not stretched conditions. A close above $1.1688 could open $1.1716, while losing the channel floor risks a deeper pullback toward $1.1591.

Source: FX Empire

Risk Warnings and Disclaimers

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Gerik

Economic

India’s “Goldilocks” Moment: Growth Steady, Inflation Slumps

In a widely anticipated decision, the Reserve Bank of India (RBI) lowered its benchmark repo rate by 25 basis points to 5.25%, citing a rare “goldilocks” economic scenario marked by robust growth and sharply cooling inflation. The move, unanimously approved by the central bank’s six-member Monetary Policy Committee (MPC), is the fifth rate cut since February, totaling 125 basis points of easing in 2025.

Governor Sanjay Malhotra described the current conditions as “rare,” with inflation falling below the RBI’s target range while economic output remains resilient. “Policy space exists,” Malhotra noted, suggesting the central bank has ample room for further cuts if global or domestic conditions warrant additional support.

Liquidity Push: $11 Billion in Bonds, $5 Billion in Forex Swaps

Alongside the rate cut, the RBI announced aggressive liquidity injections, including a ₹1 trillion ($11.14 billion) open market bond purchase and $5 billion in foreign exchange swaps. These measures aim to ensure the lower policy rates quickly translate into cheaper credit and financial market stability.

Following the announcement, India’s 10-year bond yield dropped to 6.4581%, reflecting easing borrowing costs. The rupee depreciated slightly to 89.87, while stock markets edged up 0.1%, indicating moderate investor optimism.

Forecast Revisions Reflect Confidence

The RBI upgraded its GDP growth forecast for the current fiscal year to 7.3%, up from a prior 6.8% estimate, after the economy surprised with 8.2% expansion in the July–September quarter. Meanwhile, inflation projections were slashed to 2% from 2.6% a reflection of October’s extraordinary drop in retail inflation to just 0.25%.

Such a low inflation print well below the RBI’s 4% midpoint target and even the 2% lower tolerance threshold gives the central bank a strong mandate to continue stimulating the economy, especially in the face of global headwinds.

Risks Linger: U.S. Tariffs and Global Uncertainty

Despite upbeat domestic data, risks persist. New U.S. tariffs of up to 50% on Indian exports threaten growth in sectors like textiles and chemicals. Malhotra acknowledged that external uncertainties could pose “downside risks,” emphasizing the need for flexible and proactive policy.

With inflation falling faster than expected and external trade pressures rising, India appears poised for further rate cuts in early 2026. The RBI’s neutral stance gives it the option to act as needed without alarming markets or signaling inflation complacency.

India’s rate cut and liquidity boost reflect a central bank attuned to both domestic disinflation and international turbulence. By maintaining a “neutral” policy stance, the RBI is striking a balance between nurturing economic growth and preparing for global volatility. The move bolsters India’s position as a standout performer among emerging markets in 2025, with a flexible, forward-looking monetary strategy to match.

Source: Reuters

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Risk Warnings and Disclaimers

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Andrew Korybko

Energy

Zelensky announced last month that Ukraine will import American LNG from Greece via the “Vertical Gas Corridor” pipeline. This project complements Poland’s joint LNG plans with the US and to a lesser extent Croatia’s to lay the basis for American LNG completely replacing Russian gas in Central & Eastern Europe (CEE) one day. Although it’s much more expensive, policymakers on the continent are going along with this on energy security pretexts, but US pressure upon them likely played a major role in their decision.

The US’ latest energy power play could also put an end to Russia’s Turkish gas hub plans. These were announced in late 2022 after talks between Putin and Erdogan, but Bloomberg reported last June that they’d been shelved due to technical difficulties in supplying CEE from Turkiye as well as disagreements between it and Russia. Neither party confirmed their report, but now that the US captured more of the CEE market through the “Vertical Gas Corridor” pipeline, the odds of this hub being built have declined.

The Duran’s Alex Christoforou wrote an insightful post on X about this, which importantly noted that the “Eastern Mediterranean (Israel and Cyprus) is watching the start of this vertical corridor closely as it can be utilized to sell future EastMed gas into Europe.” The “EastMed” refers to the proposed underwater pipeline of the same name for exporting Israel’s enormous offshore gas reserves to the EU. Its completion would likely eliminate the need for Russian gas in CEE for good when combined with US LNG.

To make matters even more concerning for Russia, Reuters reported last month that “Turkey's gas shift threatens Russia and Iran's last big European market”, which drew attention to how increased domestic production and LNG imports could greatly reduce Turkiye’s future need for Russian gas via TurkStream. Trump’s threatened sanctions on all those who continue importing Russian energy without provably weaning themselves off of it, which could take the form of up to 500% tariffs, could accelerate this trend.

Russia wouldn’t just lose tens of billions of dollars’ worth of yearly revenue if all the aforementioned American plans succeed, but tensions with Turkiye might become unmanageable if the complex energy interdependence that tied them together till now is broken. It’s already expected that Turkiye will inject Western influence into Central Asia through the new TRIPP corridor, thus posing challenges along Russia’s entire southern periphery, which will further complicate Turkish-Russian ties.

If their complex energy interdependence weakens by then, such as if their gas hub plans essentially remain frozen or are officially canceled and Turkiye begins importing less Russian gas from TurkStream, then Turkiye might be emboldened to more aggressively challenge Russia on this front. After all, the scenario of Russia cutting off gas exports in order to coerce concessions from Turkiye during a crisis would be less effective, which could result in more hardline Turkish positions that raise the risk of war.

Russia should therefore seek to revive their gas hub plans and reach an agreement with the US, perhaps as part of the grand deal that they’re trying to negotiate right now, to secure Russia’s gas market share in Turkiye and possibly restore part of it in CEE. That would almost certainly require Russia compromising on some of its maximalist goals in Ukraine, and the US’ word can’t be taken for granted since future presidents could rubbish any deal, but Russia should still consider this possibility instead of ruling it out.

Risk Warnings and Disclaimers

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Gerik

Economic

Strategic Hospitality in Chengdu Signals France’s Elevated Role

In a rare diplomatic gesture, President Xi Jinping joined French President Emmanuel Macron on a trip outside Beijing to Chengdu, capital of Sichuan province. This level of personal engagement, rarely extended to foreign leaders, underscores China’s strategic pivot toward France as its key interlocutor in Europe. France’s economic size and diplomatic autonomy, particularly its nuanced stance in transatlantic affairs, may be why Beijing is elevating Macron’s role in its European outreach.

The two leaders, accompanied by their spouses, visited the Dujiangyan irrigation system a UNESCO World Heritage Site with symbolic significance, representing China’s ancient ingenuity in water management. The inclusion of this site in the itinerary serves both cultural diplomacy and soft power objectives.

Macron Begins Day Jogging, Ends with Subtle Diplomacy

Macron’s visit began on an informal note, with footage of him jogging in Chengdu’s Jincheng Lake Park circulating widely on Chinese social media. This added a personable dimension to the visit, contrasting with the highly choreographed formal meetings that usually define state visits in China.

Later, in a formal meeting in Beijing, the two nations signed 12 cooperation agreements. These span areas like population aging, nuclear energy development, and panda conservation topics that reflect shared long-term interests but did not involve any major economic transactions or figures. Notably absent was a highly anticipated $50+ billion order for 500 Airbus jets, long discussed between China and France.

Airbus Order Withheld Amid U.S.–China Trade Dynamics

While Macron is accompanied by top executives from leading French corporations, including Airbus, China appears to be withholding a major aircraft order to retain leverage in parallel trade negotiations with the United States. Beijing is currently under pressure from Washington to purchase more Boeing aircraft as part of ongoing trade diplomacy.

Approving a large Airbus deal now would risk further straining U.S.–China economic relations. By delaying the decision, China retains bargaining power, using aircraft purchases as a strategic economic lever between the two Western powers.

Xi’s Chengdu meeting with Macron reflects a dual-track strategy: signaling openness and cultural warmth toward Europe while carefully calibrating economic moves to maintain leverage in broader geopolitical contests, particularly with the U.S. Macron’s visit his fourth to China reaffirms France’s role as a preferred dialogue partner, but also highlights the limited room for major deliverables when great power rivalry constrains global trade diplomacy.

Source: Reuters

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Risk Warnings and Disclaimers

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Gerik

Economic

Commodity

Market Overview

Silver markets rebounded strongly on Friday, recovering from a previous session's 2% drop to trade near $57.68 an ounce. This resurgence is largely driven by significant inflows into silver-backed exchange-traded funds (ETFs), indicating sustained investor appetite despite technical signs that the metal may be nearing overbought levels. The 14-day Relative Strength Index (RSI) is nearing the 70 mark, typically viewed as a threshold for potential correction, but demand continues to defy such indicators.

Total inflows into silver ETFs over the past four days have already exceeded any full week's net additions since July 2025, highlighting strong investor conviction. This comes despite concerns that silver’s 100% price rally year-to-date may be overstretched. However, these ETF inflows show no signs of slowing, suggesting market participants are positioning for further gains, potentially fueled by monetary policy shifts.

Structural Supply Crunch and Industrial Demand

Beyond speculative flows, silver is increasingly supported by fundamental constraints. A historic short squeeze in the London bullion market earlier this quarter triggered an aggressive price spike, and though conditions have eased there, new bottlenecks are emerging. China, a major consumer of silver for both electronics and solar panels, is seeing inventories near decade lows, reinforcing concerns of structural scarcity.

According to Vantage Markets analyst Hebe Chen, the current rally “signals [silver is] no longer gold’s quiet sidecar.” Instead, silver is gaining prominence due to its dual role in industrial production and as a hedge against macroeconomic uncertainty.

Rate Cut Expectations Remain a Key Driver

Expectations that the Federal Reserve will lower interest rates next week continue to underpin silver’s strength. Lower borrowing costs tend to favor non-yielding assets like silver and gold. Despite Thursday’s strong US jobless claims data – the lowest in over three years – market pricing still reflects a near-certainty of a rate cut, suggesting that Fed policy is now focused on countering slowing inflation rather than overheating labor markets.

While silver takes the spotlight, gold also edged higher by 0.2% to $4,215.91 per ounce, buoyed by the weaker dollar (Bloomberg Dollar Spot Index down 0.1%). Platinum and palladium followed suit with modest gains, as overall sentiment across the precious metals complex remains upbeat ahead of next week’s key Fed announcement.

Outlook and Strategy

Silver’s short-term trajectory appears bullish as strong ETF inflows and structural constraints continue to overshadow technical warnings. Investors should watch for signs of cooling momentum if RSI breaches 70. However, with Chinese inventories tightening and industrial demand rising, any pullback may be temporary. If the Fed confirms a dovish pivot, silver could push decisively above $58, with $60 as the next psychological resistance level.

Risk remains tied to unexpectedly hawkish Fed commentary or a rebound in dollar strength, but barring such surprises, silver’s upside potential remains supported by both macro trends and supply-side realities.

Source: Bloomberg

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Risk Warnings and Disclaimers

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Daniel Carter

Political

Indian Prime Minister Narendra Modi and Russian President Vladimir Putin held a bilateral meeting in New Delhi, as the two leaders look to deepen economic cooperation in the face of pressure from US President Donald Trump.

The meeting on Friday comes a day after Putin's arrival in India — his first to the country since Russia's full-scale invasion of Ukraine — and is expected to showcase the longstanding partnership between the two nations that dates back to the Cold War. Those ties have centered on defense, but Modi and Putin want to broaden cooperation to include deeper trade, migration and economic links.

During the two-day visit, India and Russia are expected to finalize a mobility agreement that would allow Indian professionals to relocate to Russia, a first for the two countries.

Also expected is an agreement on the shipment to Russia of Indian marine products and agricultural goods, exports of which have been hit following Trump's 50% tariffs on Indian goods, which took effect Aug. 1.

Putin is expected to showcase oil and defense ties as well, with officials working to finalize a deal for India to lease a $2 billion submarine from Russia, Bloomberg News reported.

India's share of Russian imports is now less than 2%. New Delhi and Moscow intend to increase trade to $100 billion by the end of the decade.

The US doubled tariffs on Indian goods to 50% to punish New Delhi for buying Russian oil and has pressed India to purchase more American weapons. Despite that pressure, Modi's government remains in trade talks with the Trump administration, with a negotiating team from Washington expected in India next week.

The broadening of ties comes despite heavy criticism from both the US and the European Union, with the meeting underscoring India's eagerness to keep links with traditional partners warm and look for alternate markets to offset US tariffs.

From direct purchases of military weapons, India and Russia are increasingly moving to joint development and production of weapons, collectively designing and manufacturing missiles and guns.