Why Japan's Weak Yen Is a Bullish Signal, Not a Crisis

Cubans are bracing for severe shortages and widespread blackouts as a critical lifeline of Venezuelan oil has been cut off, a direct result of U.S. policy under President Donald Trump. The island nation is now confronting a siege-like scenario, compounding an already fragile economy.

Shipping data and internal documents from Venezuelan state oil company PDVSA confirm that no crude oil or fuel has been sent to Cuba for approximately a month. This halt in shipments began even before the U.S. capture of Venezuelan leader Nicolas Maduro in early January, as an American blockade tightened its grip on the trade route.

The last oil delivery intended for refining in Cuba departed from PDVSA's Jose port in mid-December. The tanker, carrying around 600,000 barrels of Venezuelan crude, sailed with its transponder turned off to avoid detection.

A "Catastrophic" Outlook for Cuba's Energy Supply

The sudden stop in Venezuelan oil deliveries represents a massive shock to Cuba's energy system. In 2025, Venezuela was the island's primary supplier, providing 26,500 barrels per day (bpd), which accounted for roughly one-third of the nation's daily consumption. Mexico was a distant second, supplying around 5,000 bpd.

Energy experts are sounding the alarm about the potential consequences. "I just don't see any light at the end of the tunnel for Cuba to survive the next few months facing zero deliveries of oil from Venezuela," said Jorge Pinon, an energy researcher at the University of Texas at Austin. "The situation is going to be catastrophic."

President Trump has openly stated his goal of using the U.S. intervention in Venezuela to destabilize Cuba. He recently intensified his rhetoric, urging the island nation on Sunday to negotiate a deal "before it is too late."

Caught Between US Pressure and Government Defiance

The critical question now is how long Cuban President Miguel Diaz-Canel's government can withstand the pressure of dwindling fuel imports. For the island's residents, who already struggle to find food, medicine, and fuel, the uncertainty is palpable.

"It's very stressful because we don't know what decision the Cuban government will make or what actions the United States government will take," commented Victor Romero, a 75-year-old retired state worker from Havana.

President Diaz-Canel has responded with defiance. "Nobody tells us what to do," he declared on Sunday following Trump's threats. "Cuba is...prepared to defend the homeland until the last drop of blood."

Daily Life Under Strain: From Charcoal Stoves to Horse Carts

Outside the capital, much of rural Cuba already operates with minimal modern infrastructure. Horse-drawn carriages and bicycles are common modes of transportation, internet access is unreliable, and electricity is often off for more hours than it is on.

Deyanira Gonzalez, a 57-year-old housewife living in the countryside near Havana, says she already cooks with charcoal due to inconsistent electricity and the high cost or unavailability of liquefied gas. "What will happen now? If Donald Trump doesn't let fuel into Cuba we'll be in the dark with our kids suffering," she said.

So far, the capital city of Havana has been partially insulated from the immediate impact of the fuel cutoff. Many residents report that blackouts have eased slightly in early January as power demand fell from its December peak. Gasoline and diesel remain available at service stations, though they are rationed in the local peso currency.

Few Allies and Limited Options for Fuel Imports

It remains unclear how much oil Cuba has in its strategic reserves. Furthermore, the island's traditional political allies appear unwilling to risk angering the United States by providing significant aid.

"We have not seen any support whatsoever from Cuba's political allies, who are also exporters of oil, like Angola, Algeria, Brazil," noted energy expert Pinon. "No one is coming to Cuba's aid, with the exception of maybe Mexico, in limited amount, and also Russia, in limited amount."

A tanker from Mexico, the Ocean Mariner, did arrive in Havana on Friday with approximately 85,000 barrels of fuel from the state-owned Pemex terminal. However, this shipment is a small fraction of what Venezuela once supplied and is insufficient to power the island of 10 million people.

This reality leaves many Cubans in a state of anxiety. "It's the uncertainty of not knowing what's going to happen," said Ivet Rodriguez, a 39-year-old entrepreneur in Havana. "I try not to even think about it."

Central banks across the globe are preparing a coordinated statement to publicly support U.S. Federal Reserve Chair Jerome Powell, according to two sources familiar with the matter. The move comes in response to the Trump administration threatening Powell with a criminal indictment.

The joint declaration, expected on Tuesday, will feature signatures from international central bankers. Its core message is a firm endorsement of Powell and a defense of the critical principle of central bank independence.

Federal Reserve Chair Jerome Powell is at the center of a dispute that has triggered a global response from monetary policymakers.

A Coordinated International Response

While the statement has been revised extensively over the past day and is still being finalized, it aims to present a united front. One source indicated that it remains unclear how many central banks will sign the initial release, but others will be welcome to join later.

The U.S. administration's probe is officially centered on the renovation of the Federal Reserve's headquarters. However, Powell has reportedly described this investigation as a "pretext" designed to exert presidential influence over interest rate decisions. This action has already drawn sharp criticism from the financial world and from prominent members of the Republican Party.

Fears of Political Influence and Global Risk

The international support for Powell is rooted in a fundamental economic concern: that political interference could shatter trust in the Federal Reserve's commitment to its inflation target. Such a loss of confidence could trigger higher inflation and significant volatility in global financial markets.

Because the United States is the world's dominant economy, any resulting inflation would likely spread through international financial channels. This "exported inflation" would complicate the efforts of other central banks to maintain price stability in their own countries, creating a ripple effect across the global economy.

United States greenhouse gas emissions climbed 2.4% in 2025, marking the first increase in two years and outpacing the nation's economic growth, according to a new report from the Rhodium Group. The analysis highlights a reversal of the recent trend where economic expansion was decoupled from emissions growth.

The primary drivers behind the surge were increased energy consumption in buildings and a significant uptick in power sector emissions. The U.S. economy, measured by real GDP, expanded by a projected 1.9% during the same period, meaning emissions intensity rose for the first time since 2022.

Power Sector Demand Revives Coal Generation

The power industry was a major contributor to the emissions increase, with its output rising by 3.8%. This was largely a consequence of soaring electricity demand from data centers powering artificial intelligence and bitcoin mining operations.

This surge in demand pushed natural gas prices higher, making coal a more economically viable alternative for power generation. As a result, coal-fired generation jumped by 13% in 2025. This marks only the second year in the past decade that the use of this carbon-intensive fuel has increased, interrupting a long-term decline that has seen coal generation fall by 64% since its 2007 peak.

Heating and Transportation Emissions Trends

Beyond the power grid, direct fuel use for heating buildings also drove emissions higher, rising by 6.8% from the previous year.

Meanwhile, transportation emissions were contained, partly due to the growing adoption of electric vehicles. However, the report cautions that the repeal of federal tax credits in 2025 could slow the growth of the EV market and apply upward pressure on emissions in this sector.

Future Outlook and Policy Impact

According to the Rhodium Group, the 2025 emissions increase does not yet reflect the full impact of policy shifts under the Trump administration, which has moved to roll back environmental regulations and reduce incentives for renewable energy.

The report warns that the situation could change in the coming years, particularly if electricity demand from data centers continues to surge and is met by existing fossil fuel plants rather than new clean energy sources.

This policy landscape represents a departure from the previous administration's climate goals. The Biden administration had set a target under the Paris climate agreement to cut greenhouse gas emissions by 61%-66% below 2005 levels by 2035. The Trump administration subsequently withdrew the United States from the Paris agreement and abandoned that target.

President Donald Trump has announced a 25% tariff on goods from any country doing business with Iran, a move that places China and the United Arab Emirates at the forefront of economic risk.

The new policy, which Trump stated would be effective "immediately," aims to intensify pressure on the regime of Supreme Leader Ayatollah Ali Khamenei. The threat comes as Iranian authorities crack down on over two weeks of nationwide protests, which have received vocal support from the U.S. president.

China and UAE: Iran's Top Trading Partners

According to data from the International Monetary Fund, China is Tehran's largest trading partner, with their commerce totaling $17.8 billion in 2024. The relationship is critical for Iran, which sends nearly 90% of its oil exports to China. This trade activity now exposes Beijing to significant U.S. tariffs, despite a trade truce agreed upon with Washington in October.

The United Arab Emirates follows closely, with $16.1 billion in trade with Iran. The exposure drops off significantly after the top two, with Turkey in third place at $8.8 billion.

Broader Impact on Europe and Asia

The tariff threat extends beyond the Middle East and Asia, implicating several of Washington's European allies. Germany and Switzerland, for instance, have combined trade with Iran amounting to nearly $3.5 billion.

Other major economies also face potential consequences. India, which has previously navigated trade disputes with the U.S., is Iran's fourth-largest partner. Uzbekistan, a nation that signed a new trade and economic deal with the Trump administration in November, recorded $1.3 billion in trade with Iran in 2024.

Tariffs Fueled by Unrest in Iran

The political backdrop for these measures is the widespread unrest within Iran. The protests originally erupted late last year following a sharp devaluation of the Iranian currency, a direct result of severe sanctions tied to the country's nuclear program.

These demonstrations have since evolved into the most significant and violent challenge to Khamenei's authority, drawing global attention and contributing to a rise in oil prices. The sentiment was echoed by German Chancellor Friedrich Merz, who on Tuesday became the first G7 leader to predict the Iranian regime was in its "final days."

Uncertainty Surrounds Implementation

Despite the announcement, crucial details about the tariffs remain unspecified. The Trump administration has not clarified which specific transactions, goods, or entities would be targeted, nor how the policy would be enforced.

Tracking compliance is further complicated by the opacity of Iran's official trade data, as the country often limits statistical releases and uses third-country channels to circumvent sanctions. So far, China, the UAE, Turkey, and India have not issued public comments on the proposed tariffs.

Capital flows into gold amid rising geopolitical and broader market risks, together with Jerome Powell's remarks about potential criminal prosecution, have not only driven XAU/USD to record highs (as discussed earlier today) but have also put pressure on the US Dollar Index (DXY).

Markets are also digesting the latest Non-Farm Payrolls data released on Friday. The figures pointed to a slowdown in the US economy, with actual job growth at 50K versus expectations of 66K. This reinforces the case for interest-rate cuts and acts as a bearish factor for the US dollar.

As a result, the dollar index is moving lower today.

Technical Analysis of DXY

In the final days of 2025, when reviewing the DXY chart, we:
→ reaffirmed the descending channel (highlighted in red);
→ suggested that it would remain a key technical guide into early 2026.

This view has been confirmed, as the upper boundary of the channel is acting as strong resistance. Today's decline appears to be a reversal from this level. In this context, it is reasonable to assume that:

→ the recent move represents an intermediate A–B–C corrective rise within a broader downtrend, with point C coinciding with RSI overbought conditions;
→ the short-term upward trajectory (marked by blue lines) may soon be broken by sellers. If the broader downtrend resumes, DXY could slide towards the median of the descending channel.

Source: FXOpen

President Donald Trump is launching a new populist economic message, using social media and high-profile interviews to address voter frustration ahead of the midterm elections. His next stop is a key battleground state where he will make his case directly to workers and business leaders.

On Tuesday, Trump will visit a Ford Motor Co. factory that builds F-150 trucks and speak at a Detroit Economic Club event, promoting his tariff and manufacturing policies as solutions to rising costs.

This visit is his third to a bellwether state since early December, signaling a new push from the administration to combat inflation and high gas prices. "With a little bit of patience, the American people are going to continue to see that the best is yet to come," White House Press Secretary Karoline Leavitt told Fox News.

A Flurry of New Policy Proposals

With the November midterms approaching, the Trump administration is accelerating efforts to convince voters it is focused on their financial well-being. Since the start of the year, the administration has proposed a series of populist measures, including:

• Capping credit card charges.

• Banning institutional investors from purchasing rental homes.

• Buying mortgage-backed securities to lower interest rates.

• Intensifying pressure on the Federal Reserve.

In a recent social media post, Trump also stated he wants to prevent "big Technology Companies" from passing higher utility bills to consumers, a consequence of the energy demand from new AI-linked data centers.

Democratic strategist Jim Manley sees this as a sign of desperation. "It reinforces the idea that he understands that he's in a bad place right now and he's throwing everything but the kitchen sink at it," he said.

An Unexpected Call to Elizabeth Warren

In a surprising move demonstrating the political weight of "affordability," Trump called longtime critic Senator Elizabeth Warren on Monday. The call came just after the Democratic senator gave a speech criticizing her own party for not fully embracing a populist economic agenda.

"I'm not going to talk about details of a conversation, but I just want to say it was all about costs, about how we reduce costs for American families," Warren said on Bloomberg Television.

While critical of the president's broader economic policies, Warren said she would "absolutely" work with him on issues she supports, such as passing legislation to cap credit card rates, "if he will actually fight for it."

A White House official confirmed the two had a productive conversation about credit card interest rates and housing affordability.

Polling Headwinds and GOP Anxiety

Despite the focus on pocketbook issues, many Republican lawmakers worry that headlines about foreign policy—from Venezuela to Iran and Greenland—are overshadowing the administration's economic message.

Recent polling reflects this challenge. A Quinnipiac University poll last month showed Trump's approval at 40%, with 54% disapproving. Only a third of voters rated the economy as "excellent" or "good," while 65% described it as "not so good" or "poor."

Michigan: A Battleground's Economic Reality

Trump's visit to Michigan is his second this term, underscoring the state's importance. Michigan was a key part of the "blue wall" that narrowly fell to him in 2024, and this year its governor's race, a Senate seat, and several close House races could be pivotal.

The state's economy under Trump presents a mixed picture. While Michigan's unemployment rate fell from 5.5% in April to 5% in November, the improvement was partly due to a shrinking labor force, with over 55,000 fewer people working or looking for work.

Michigan's economy is also uniquely exposed to Trump's tariff policies. Automakers have seen profits squeezed and costs rise, though they have so far managed by focusing on more expensive trucks and SUVs and getting some tariff relief on parts from Canada and Mexico. Forecasters at the University of Michigan project the state will lose 2,000 jobs this year, with unemployment expected to rise to 5.6% by the second quarter.

Strategy and Outlook for November

It remains unclear if Trump will increase his travel to battleground states. With ten months until the midterms, a Republican source close to the White House expressed confidence in holding the Senate but was more skeptical about the House. The source noted that the administration should have been more attuned to cost-of-living issues, which drove many voters to Trump in 2024.

After limited domestic travel in 2025, Trump held two campaign-style events in December in Pennsylvania and North Carolina. Advisers reportedly want him on the campaign trail more often to sell his policies.

Republican pollster Greg Strimple noted that Trump has a significant financial advantage. "I think that they are going to have money to define the race economically earlier in the cycle than normal," he said. Strimple also suggested that Trump's own anxieties could be a powerful motivator, pointing to the president's warning to lawmakers that he could face impeachment if Democrats retake the House. "I think that's animating," Strimple said.