Venezuela To Send Envoy For US Talks On Same Day Machado Visits

New Zealand's job market is showing clear signs of recovery, with employers adding more positions for the third time in four months this November. This hiring surge is powered by lower interest rates and a significant boost in business confidence, signaling that the nation's economic rebound is building solid momentum.

November Data Reveals Strong Employment Growth

According to figures released by Statistics New Zealand, filled jobs rose by 6,569, or 0.3%, from October to reach 2.35 million. This figure marks the highest level of employment since March and represents a notable turnaround from a two-and-a-half-year low recorded just four months earlier in July.

The data suggests a return to consistent jobs growth in the final three months of 2025, potentially ending a five-quarter period of either contraction or stagnation in the labor market.

Rising Confidence Bolsters Economic Outlook

An improving employment landscape adds weight to the idea that the economy's 1.1% gross domestic product (GDP) surge in the third quarter is sustainable. As households feel more secure about their incomes, their confidence grows, supporting broader economic activity.

A Westpac survey published Wednesday showed that worker confidence climbed to its highest point since early 2024 in the fourth quarter. Michael Gordon, a senior economist at Westpac, noted in the report that this result suggests the national jobless rate may have already peaked at a five-year high of 5.3% in the third quarter.

Business Sentiment Reverses After Prolonged Slump

The recent optimism marks a sharp reversal from a period of stalled employment growth. New Zealand had been struggling to recover from a 2024 recession when business confidence was further shaken by US President Donald Trump's trade policies in mid-2025.

That negative mood has now lifted. A New Zealand Institute of Economic Research (NZIER) opinion survey published yesterday showed business sentiment is now at its highest level in almost 12 years. The report also documented the first quarterly increase in hiring in two years, with a net 22% of businesses planning to increase staff numbers in the three months through March.

Central Bank Stimulus Fuels Momentum

The economic recovery has been significantly supported by the Reserve Bank's monetary policy. The central bank has provided stimulus by cutting interest rates, which helped buoy the 1.1% GDP expansion in the third quarter.

In November, the Reserve Bank lowered the Official Cash Rate to 2.25%. This was the latest step in an easing cycle that has delivered 325 basis points of cuts since August 2024.

Bond traders are increasingly confident the Federal Reserve will lower interest rates by the middle of the year following a weaker-than-expected U.S. inflation reading.

Market data from interest-rate swaps shows traders have almost fully priced in a rate cut by the Fed's June policy meeting. While there's a small chance of an earlier move, the odds of a cut this month on January 28 remain minimal.

"If we cut through the noise, it's a pretty encouraging number," said Dan Carter, a senior portfolio manager at Fort Washington Investment Advisors. "Inflation is drifting lower, which is keeping the Fed cuts on the table. But to get the near-term cuts, you need to see more weakness in the labour market."

Inflation Cools, Supporting Rate Cut Case

The latest inflation report on January 13 signaled a return to normalcy after a six-week U.S. government shutdown in 2025 distorted the data for October and November.

The core consumer price index (CPI), which strips out volatile food and energy costs, rose just 0.2% from November. This was below the median economist forecast of 0.3%. On an annual basis, the core CPI advanced 2.6%, matching a four-year low and providing more room for the central bank to ease policy.

The Federal Reserve has already cut rates three times since September to address signs of weakness in the labor market. These decisions have been contentious, as inflation remains above the central bank’s 2% target. The division was clear in the December meeting, where two Fed officials dissented in favor of holding rates steady, while another argued for an even larger reduction.

Strong Labor Market Complicates the Outlook

Despite softer inflation, economists and traders believe the timing of future Fed rate cuts now hinges primarily on the health of the jobs market.

An unexpected drop in the U.S. unemployment rate in December, reported on January 9, prompted several Wall Street banks to reassess their forecasts. Morgan Stanley, Barclays, and Citigroup all pushed their expectations for Fed rate cuts further into 2026.

Analysts at JPMorgan Chase & Co. went a step further, stating they no longer expect a rate cut at all in 2026 and now foresee a potential rate hike in 2027.

"Our take was that as inflation has taken a back seat to the employment figures, today's data was unlikely to shift the January Fed pause pricing," wrote Ian Lyngen, head of U.S. rates strategy at BMO. "That appears to be the market's response."

Meanwhile, recent political developments, including a Justice Department grand jury investigation into Fed Chair Jerome Powell, have failed to rattle markets. The probe has drawn support for Powell from congressional Republicans and foreign central banks, including the European Central Bank, the Bank of England, and the Bank of Canada.

Unprecedented investment demand has been the key driving force in silver's drive to record highs and the CME Group is planning to capitalize on that momentum with a new futures product.

On Tuesday, the world's largest derivatives exchange announced that it will launch a 100-ounce silver futures contract, targeting retail traders.

"Silver is increasingly appealing to retail traders looking to diversify their exposure across a wider range of metals in the face of geopolitical uncertainty and the energy transition," said Jin Hennig, Managing Director and Global Head of Metals at CME Group. "100-Ounce Silver futures will improve access to a wider range of participants, enabling them to benefit from the liquidity and efficiencies that our futures markets provide."

Currently, investors who want to trade silver must buy either a full 5,000-ounce contract or a Mini Silver Futures contract, which is a 1,000-ounce contract.

However, there is one sharp difference with the CME's silver product: there will be no physical delivery; contracts will be cash settled.

"With silver in high demand, we are pleased that CME Group is expanding its smaller-sized offerings," said Isaac Cahana, CEO, Plus500US. "This new contract will make it easier than ever for our global customers to capture silver opportunities in a flexible, cost-effective way."

The CME noted saw explosive growth in its smaller precious metals futures through the second half of 2025. The exchange said it was a record year for trading both Micro Gold futures (301K ADV) and Micro Silver futures (48K ADV). Clients also traded over 6 million contracts in the 1-Ounce Gold futures contract launched on January 13, 2025.

The new silver product comes as the precious metal continues to see extraordinary demand for physical bullion. Spot silver is currently trading above $86 an ounce, while March silver futures are trading around $83 an ounce.

The premium in spot indicates that investors are willing to pay more for immediate delivery than to wait three months for it.

Analysts have said that the silver supply chain remains extremely fragile, as record industrial demand in the last five years has depleted above-ground stocks. Industrial players are now competing with investment demand for physical supply.

However, because the CME's latest product will be cash settled, investors don't have to worry about delivery issues.

Looking ahead, analysts are expecting demand for hard assets like gold and silver to continue to grow as investors try to protect their wealth in a world faced with escalating geopolitical and economic uncertainty.

With silver prices trading near record levels, some analysts have said that there is very little to stop a run to $100 an ounce.

Source: Kitco

Saudi Arabia is pivoting aggressively toward its vast shale resources, with the giant Jafurah basin at the heart of its strategy. The Kingdom's goals are clear: enhance energy security, free up more crude oil for export under tight OPEC+ quotas, and fuel a growing domestic industrial base. This move is also a direct response to the U.S. shale boom, which fundamentally reshaped global energy markets and diluted OPEC's influence.

Positioned as a cornerstone of a new energy era, the Jafurah field is one of the world's largest unconventional gas reserves. Riyadh recently announced its first condensate exports from the Jafurah gas plant are scheduled for February. However, a significant gap often exists between Saudi Arabia's official projections and on-the-ground reality. A closer analysis of the Jafurah project suggests its ambitious targets may continue this trend.

The Official Vision for the Jafurah Project

The US$100-billion Jafurah development is built on massive resource estimates: approximately 229 trillion standard cubic feet (Tscf) of natural gas and 75 billion barrels of condensate. The plan outlines a phased production increase:

• Phase 1: 200 million standard cubic feet per day (Mscfd)

• By 2030: 2 billion standard cubic feet per day (Bscfd)

Achieving the 2030 target would increase Aramco's total gas output capacity by around 60%, aligning with its broader goal of an 80% boost by the end of the decade.

This new gas supply is primarily intended to satisfy surging domestic power demand, which is growing by 3-4% annually and could be 2.5 times higher by 2050. This forecast is further supported by the explosive growth of artificial intelligence and data centers, which could drive 40-50% of new global gas demand by 2040.

Ultimately, Aramco projects that its unconventional gas program will displace the equivalent of 500,000 barrels per day (bpd) of crude oil currently burned for electricity. A key strategic advantage is that since Jafurah is a gas project, its output will not be subject to Saudi Arabia's OPEC oil production quota.

A History of Questionable Energy Figures

While the Jafurah plan appears solid on paper, Saudi Arabia's historical energy statistics invite scrutiny. The Kingdom's global influence is deeply tied to its oil and gas reserves, creating a powerful incentive to present figures that amplify its geopolitical weight.

The Mystery of Saudi Arabia's Oil Reserves

A historical review of the Kingdom's proven oil reserves reveals puzzling discrepancies.

• In 1989, Saudi Arabia declared 170 billion barrels of proven oil reserves.

• Just one year later, this official figure jumped by 51.2% to 257 billion barrels, without any major new oil discoveries to justify the increase.

• By 2017, the official number had climbed again to 268.5 billion barrels.

Between 1990 and 2017, the country extracted an average of 8.162 million bpd, totaling approximately 80.43 billion barrels permanently removed from the ground. Despite this massive extraction and a lack of new finds, Saudi Arabia's official reserves still managed to grow by 98.5 billion barrels over the period.

Production Capacity vs. On-the-Ground Reality

The Kingdom's claims about its production capacity have also faced challenges. After the September 14, 2019 attacks on its Abqaiq and Khurais facilities, the Energy Minister stated that capacity would be restored to 11 million bpd that month and recover to a full 12 million bpd two months later.

Historical data shows these figures were not reflective of sustained capabilities.

• From 1973 to the day of the attacks, Saudi Arabia's average crude oil production was just 8.151 million bpd.

• It had only briefly averaged 11 million bpd once (November 2018) and has only hit the 12 million bpd mark once (April 2020), failing to sustain it.

Furthermore, it became clear that Saudi Arabia had expanded its definition of "spare capacity" beyond the industry standard set by the Energy Information Administration (EIA), which defines it as production that can be brought online within 30 days and sustained for 90 days. The Kingdom's revised definition appeared to include crude held in storage and barrels purchased from other sources.

Jafurah's Projections Under the Microscope

This pattern of strategic overstatement appears to extend to the Jafurah project. In early 2024, an additional 15 Tscf of gas was declared proven, raising the total to 229 Tscf. But the critical question remains: is the projected output sufficient to meet the Kingdom's goals?

A simple calculation reveals the potential shortfall.

• Jafurah's 2030 production target is 2 billion standard cubic feet per day of gas.

• This is equivalent to approximately 334,000 barrels of oil per day (0.3340 million barrels of oil equivalent).

According to EIA data, Saudi Arabia burned well over 500,000 bpd of crude for power in the second half of 2024, with industry estimates putting the 2025 figure around 470,000 bpd.

The conclusion is stark: the total new gas supply projected from Jafurah by 2030 is not enough to cover even the current volume of crude being burned for power generation. This calculation does not even account for the expected increase in domestic energy demand over the next six years. While Jafurah is a strategic priority, the numbers suggest its impact may be more limited than official forecasts imply.

Source: Reuters

The likelihood of the Federal Reserve cutting interest rates in April has climbed to 42%, driven by the latest Consumer Price Index (CPI) report. This shift has financial markets recalibrating their expectations for U.S. monetary policy.

However, not all forecasts are aligned. Goldman Sachs, for instance, projects a different timeline, anticipating rate cuts in June and September of 2026.

CPI Report Fuels Rate Cut Speculation

The recent CPI data has become a key catalyst for adjusting financial strategies. Following the release, analytics showed the probability of a rate reduction in April hitting 42%, prompting stakeholders to monitor financial conditions closely.

Markets are now actively responding to this revised outlook. A potential policy change by the Federal Reserve reflects its historical responsiveness to evolving economic indicators. If key indices continue to signal a change in conditions, policy adjustments become more likely.

The Fed's Cautious Approach

Despite the market's reaction, Federal Reserve officials, including Chair Jay Powell, continue to emphasize a cautious strategy focused on maintaining economic stability.

Powell recently stated that "the economy is not 'hot' and not generating Phillips curve inflation," providing the rationale behind the central bank's current policy stance. This comment suggests that while the Fed is data-dependent, it is not rushing to alter its course based on a single report.

Impact on Investment and Economic Outlook

An anticipated change in interest rates is already influencing behavior across the economy. Investors and financial institutions may begin to adjust their funding and investment strategies to align with new economic forecasts.

Potential rate cuts could significantly affect asset liquidity and investment flows in the coming months. As a result, market participants are preparing to adapt to a new economic environment potentially shaped by a more accommodative Federal Reserve policy.