Yemen Separatists Accuse Saudi Arabia of Launching Airstrikes Against Their Forces

Political

Economic

Summary:

Separatists in southern Yemen accused Saudi Arabia on Friday of targeting their forces with airstrikes.

Separatists in southern Yemen accused Saudi Arabia on Friday of targeting their forces with airstrikes, something not immediately acknowledged by the kingdom after it warned the force to withdraw from governorates it recently took over.

The Southern Transitional Council said the strikes happened in Yemen’s Hadramout governorate. It wasn’t immediately clear if there were any injuries from the strikes.

The Council’s satellite channel AIC aired what appeared to be mobile phone footage it described as showing the strikes. In one video, a man speaking could be heard blaming the strike on Saudi aircraft.

Officials in Saudi Arabia did not immediately respond to a request for comment from The Associated Press. On Thursday, the kingdom called on Emirati-backed separatists in southern Yemen to withdraw from the two new governorates they now control, a move that has threatened to spark a confrontation within a fragile coalition that has been battling the Iran-backed Houthi rebels in the country’s north for a decade.

Source：AP News

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Economic

Commodity

Silver Tops $75, Outpaces Gold and Platinum in 2025 Performance

Spot silver soared 3.6% to $74.56 per ounce during early trading in Asia, after touching a new record high of $75.14. The white metal has now gained 158% year-to-date, eclipsing gold’s 72% rise and outpacing sister metals platinum and palladium, which are up approximately 165% and over 90%, respectively. The speed and scale of silver’s climb signal both a speculative influx and a shift in long-term investor positioning.

The current rally is not merely correlated with general market momentum but is being causally driven by a combination of factors: structural supply deficits, its designation as a U.S. critical mineral, and accelerating demand from the green energy and electronics sectors.

Fed Policy Outlook and Dollar Weakness Fuel Momentum

Traders are increasingly pricing in at least two interest rate cuts by the U.S. Federal Reserve in 2026, creating a favorable macroeconomic backdrop for non-yielding assets like silver and gold. A weaker U.S. dollar and expectations of prolonged monetary easing have added further fuel to the metal’s upward trajectory.

According to OANDA senior analyst Kelvin Wong, speculative and momentum-driven investors have been a key force behind the rally since early December. Thin holiday trading volumes have amplified price movements, while fear-of-missing-out (FOMO) sentiment has drawn more capital into silver and other precious metals.

Analysts Eye Silver at $90 and Gold at $5,000 in H1 2026

Looking ahead, analysts forecast further upside. Wong suggests that silver could reach $90 per ounce and gold may touch $5,000 in the first half of 2026. These projections reflect not only monetary policy dynamics but also sustained investor skepticism toward overvalued equities and potential financial market instability.

Silver’s dual role as both a monetary and industrial asset enhances its strategic appeal. While gold is largely driven by central bank purchases and geopolitical hedging, silver benefits from rising demand in solar panels, battery technologies, and 5G infrastructure, adding a strong fundamental underpinning to its recent price action.

Platinum and Palladium Also Rally on Supply Constraints

Platinum surged 7.8% to $2,393.40 per ounce, after hitting an all-time high of $2,429.98. Palladium climbed 5.2% to $1,771.14, extending its rally after a three-year high earlier this week. Both metals are being supported by a combination of tightening supply, tariff-related uncertainties, and capital rotation from gold into undervalued precious metals.

Jigar Trivedi, senior research analyst at Reliance Securities, noted that U.S. stockpiling and sanctions-related concerns have added further upside pressure to platinum. As with silver, speculative activity and geopolitical uncertainty are compounding underlying supply-demand imbalances.

Silver’s breakthrough above $75 represents more than just a technical milestone it is the culmination of macroeconomic trends, industrial demand expansion, and speculative momentum. With all major precious metals posting record or near-record highs, and rate cut expectations firmly embedded in investor pricing models, the market’s shift into hard assets appears durable. As 2026 approaches, silver may continue to lead the charge in a commodities cycle defined by inflation hedging, policy divergence, and structural resource scarcity.

Source: Reuters

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Daniel Carter

Political

Pakistan has reached an agreement worth more than $4 billion to supply conventional weapons to military authorities in control of the eastern part of Libya, making it potentially the South Asian country's biggest defense export deal ever.

It was finalized last week when Field Marshal Asim Munir, Pakistan's chief of Defense Forces, paid an official visit to Benghazi in Libya.

The deal, however, may face potential hurdles due to United Nations sanctions on the North African country.

Libya is currently governed through a fragmented power arrangement. In the west, the U.N.-recognized Government of National Unity in Tripoli runs the government. In the east, territorial control rests with the Libyan National Army, with headquarters in Benghazi. Libya, including the two territories, has been subject to a U.N. arms embargo since 2011, requiring approval from the global body for transfers of weapons and related material.

According to the agreement, Pakistan will sell over two dozen jets -- including JF-17 fighter jets, a multi-role combat aircraft jointly developed by Pakistan and China -- and 12 Super Mushak trainer aircraft used for basic pilot training to Libya, among other equipment, over the course of three years, two government officials familiar with the development told Nikkei Asia on condition of anonymity.

Spokespersons for Pakistan's Ministry of Foreign Affairs and military mouthpiece Inter Services Public Relations did not respond to Nikkei's requests for comment.

Experts said that Islamabad's renewed confidence, after May's conflict with India, helped secure the agreement.

In three days of fighting, Pakistan shot down Indian fighter jets, a point that has repeatedly been mentioned by U.S. President Donald Trump.

"Pakistan's performance in May has certainly bolstered its confidence and shown how skillful the Pakistan Air Force is and how well-made Chinese weapons are, especially the JF-17s," Sahar Khan, an independent national security analyst based in Washington, DC, told Nikkei.

Qamar Cheema, executive director of the Sanober Institute, an Islamabad-based think tank, says the combat paved the way for the Libya deal. "Pakistan wants to emerge as a supplier of conventional weapons, and in this context, the post-May military posture helps a lot," he said.

Bilal Zubair, director of research at the Center for International Strategic Studies (CISS) in Islamabad, looks to other recent defense-related deals that the country concluded after the brief conflict with India. "Pakistan's fighter jet exports to Azerbaijan, a defense agreement with Saudi (Arabia) and high-level defense talks with Qatar show Pakistan's defense clout expanding beyond South Asia," he said.

As for the U.N. arms embargo, Cheema said that it is in reality largely a paper one. "Many countries are already supplying military hardware and maintain strong diplomatic and military ties with the Libyan National Army," he told Nikkei.

Khan, on the other hand, said that despite its ineffectiveness, the proscription can still create legal problems. "The embargo increases the likelihood of delays. Pakistan risks getting slapped with secondary sanctions if the U.N. views the arms deal as a direct violation of the embargo," she said.

According to the Stockholm International Peace Research Institute (SIPRI), Pakistan's combined major arms sales from 2021 to 2024 amount to $64 million. If realized, the $4 billion arms deal with Libya would be an unprecedented achievement for Pakistan's defense industry.

Cheema said that defense exports are not only a security matter but also an economic strategy. "Becoming a conventional arms supplier is a way to boost Pakistan's defense exports and generate much-needed foreign exchange," he said.

Zubair, from CISS, said that Pakistan has not just arms but also infrastructure and expertise in training foreign military forces. "This attracts the procurement of Pakistan's military hardware," he said.

Source: Asia_Nikkei

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Economic

Commodity

Historic Rally Marks Supply-Demand Rebalance

Platinum has officially entered historic territory, jumping 8% in early Asian trading to a new record of $2,413.62 per ounce. This surge places the metal on track for its largest annual gain on record, fueled by a rare combination of structural supply shortages and shifting policy frameworks that could reinvigorate industrial demand.

The rally is causally linked to both constrained production and unexpected demand revival signals. Supply tightness has been building through 2025, exacerbated by output disruptions in South Africa the world’s largest platinum producer amid power shortages and labor unrest. Refinery maintenance delays and logistical bottlenecks in Russia have also contributed to shrinking global inventories.

EU Reversal Spurs Demand Shock

The most immediate demand-side catalyst was the European Union’s reversal of its planned 2035 ban on combustion-engine vehicles. While previously slated to eliminate new internal combustion engine (ICE) sales in favor of electric vehicles (EVs), the policy shift reportedly driven by lobbying from Germany’s powerful auto sector reopens the door for prolonged use of hybrid and fuel-efficient ICE vehicles.

This decision has significant implications for platinum. The metal is a key component in catalytic converters, particularly for diesel-powered engines. The reversal signals a potential extension of platinum's industrial demand lifecycle, which had previously been expected to decline over the next decade.

This marks a clear causal relationship: the policy reversal directly extends the projected utility of platinum in automotive manufacturing, triggering a sharp repricing by markets.

Investor Rotation Amplifies Momentum

Investor flows have also shifted in platinum’s favor, partly due to the meteoric rise in gold and silver prices. With gold hitting a record above $4,500 per ounce and silver gaining over 150% year-to-date, some speculative capital has rotated into platinum in search of relative value.

This capital inflow is not merely correlated but functionally supportive: as investors diversify across precious metals, platinum benefits from increased inflows into exchange-traded funds and direct physical purchases.

Implications and Market Outlook

The platinum rally is likely to have ripple effects across industrial commodities. The metal’s traditional use in automotive, chemical, and even green hydrogen applications means the price surge could pressure manufacturing margins and prompt substitution strategies over time.

However, with physical supply unlikely to respond quickly given the capital intensity and regulatory hurdles associated with mine expansion near-term prices may remain elevated.

Analysts are now revising 2026 price forecasts upward, with several expecting the metal to average above $2,200 in the first half of the year. Any further geopolitical disruptions, particularly in southern Africa or Russia, could exacerbate the rally.

Platinum’s record-setting rise reflects a potent mix of shrinking global supply, unexpected policy shifts in the EU, and strong investor interest fueled by volatility in the broader precious metals market. As structural fundamentals tighten and sentiment swings in favor of hard assets, platinum may continue to outperform its peers in early 2026 reshaping expectations for the metal’s role in both legacy industries and emerging clean energy applications.

Source: Reuters

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Economic

Commodity

Venezuelan Quarantine Triggers Fresh Supply Anxiety

Brent crude futures edged up 0.4% to $62.48 per barrel, while U.S. West Texas Intermediate (WTI) also climbed 0.4% to $58.58 in early Friday trading. The gains follow a U.S. directive intensifying economic restrictions on Venezuelan oil, including what has been described as a "quarantine" policy lasting at least two months. While not a military blockade, the effort aims to curb Venezuela’s oil exports through non-military means, marking a strategic escalation in U.S. pressure on the Maduro government.

The causal link between U.S. policy and market movement is clear. Venezuela is a significant source of heavy crude in the Atlantic basin, and any disruption to its exports particularly amid broader Latin American supply dynamics tends to elevate short-term price risk premiums in global markets.

Geopolitical Tensions in Nigeria Add to Supply-Side Uncertainty

Simultaneously, U.S.-led airstrikes on Islamic State targets in northwest Nigeria, conducted at the request of the Nigerian government, have introduced another layer of geopolitical uncertainty. While Nigeria’s main oil-producing regions lie in the south, the broader instability raises concerns over national security and production continuity.

Though not immediately impactful on physical supply, these events contribute to a rise in perceived geopolitical risk, supporting modest price gains. However, the correlation between conflict zones and supply risk is often asymmetrical only sustained threats near key oil infrastructure materially affect long-term prices.

Supply Disruption in Kazakhstan Compounds Risk

Further complicating the global supply picture, shipments through the Caspian Pipeline Consortium (CPC) from Kazakhstan are expected to drop by one-third in December the lowest volume since October 2024. The reduction follows a Ukrainian drone attack on the primary export terminal, highlighting the vulnerability of energy infrastructure even in regions not directly involved in major conflicts.

Although Kazakhstan’s exports form a relatively small portion of global supply, the disruption underscores a growing theme of supply chain fragility and infrastructure risk. These isolated disruptions, while not individually transformational, cumulatively increase upward pressure on prices, especially when inventory levels are low.

Despite Short-Term Gains, Oil Heads for Steep Annual Decline

Despite Friday’s uptick, both major crude benchmarks are on track for double-digit losses in 2025. Brent is set to fall by roughly 16%, and WTI by around 18%, marking the sharpest annual drop since 2020 when the COVID-19 pandemic led to a global collapse in oil demand.

This year’s price decline reflects structural market shifts. Global supply is projected to outpace demand in 2026 as production growth particularly from the U.S. and non-OPEC+ countries outstrips consumption. Additionally, concerns about slowing economic growth, uncertain Chinese demand recovery, and accelerated energy transition efforts have all capped oil’s upside.

Market Awaits U.S. Inventory Data for Demand Signals

Investors are now looking ahead to official U.S. Energy Information Administration (EIA) inventory data, delayed until Monday due to the Christmas holiday. The figures will provide updated insight into crude stockpiles and demand trends in the world’s largest oil consumer.

If the data reveals stronger-than-expected drawdowns, it may support prices in the near term. Conversely, any evidence of weakening demand could accelerate downward pressure heading into early 2026.

Oil prices have gained on the back of Venezuelan export constraints and geopolitical tensions in Nigeria and Kazakhstan, but these short-term catalysts are overshadowed by broader bearish fundamentals. As 2025 ends, the market remains focused on excess supply risks and macroeconomic headwinds. Without a structural disruption or sustained demand rebound, oil is likely to remain subdued in early 2026 despite episodic volatility.

Source: Reuters

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Economic

Tokyo CPI Slows, Yet Inflation Remains Above Target

Japan’s core consumer price index (CPI) for Tokyo rose 2.3% year-on-year in December, slowing from 2.8% in November and missing the market forecast of 2.5%. The deceleration was partly due to base effects from prior utility bill increases and softer food cost inflation. However, inflation still remains above the Bank of Japan’s (BOJ) 2% target, marking nearly four consecutive years of elevated core inflation in the capital.

A more refined gauge of underlying demand-led inflation, which excludes both fresh food and fuel, registered a 2.6% increase in December. Though slightly below November’s 2.8%, this figure remains crucial for the BOJ, as it offers insight into persistent pricing dynamics tied to domestic consumption rather than external cost shocks.

Policy Implications: BOJ Faces Delicate Balancing Act

While the CPI data indicates a temporary easing in headline inflation, it does not represent a structural shift away from inflationary trends. The BOJ, under Governor Kazuo Ueda, has been signaling that Japan is gradually transitioning toward sustainable inflation supported by wage growth and stronger consumption. The central bank raised interest rates to a three-decade high of 0.75% earlier this month, marking a significant departure from its ultra-loose monetary regime.

Ueda reinforced this view in a recent speech, stating that Japan is "making steady progress" in reaching its 2% target durably, with wage gains playing a key supporting role. Therefore, while December’s moderation might reduce the urgency of aggressive hikes, it does not eliminate the causal momentum driving policy normalization.

The BOJ’s next meeting, scheduled for January 22–23, will weigh this latest inflation data alongside updated growth and inflation projections. If economic fundamentals remain stable, the BOJ could opt for another rate increase later in 2026.

Yen Weakness Could Trigger Renewed Price Pressures

The Japanese yen’s depreciation currently hovering around ¥155 to the U.S. dollar adds another layer of complexity. As noted by Dai-ichi Life economist Yoshiki Shinke, the weak yen could provide companies with justification to raise prices again, especially on imported food and consumer goods, thereby creating a secondary wave of cost-push inflation.

This introduces a feedback loop where currency weakness triggers inflation persistence, even as headline figures decline. The BOJ must now navigate between tightening policy to contain imported inflation and preserving economic momentum amid weak factory output and uncertain global demand.

Mixed Economic Data Paints a Nuanced Picture

Beyond inflation, Japan’s broader economic indicators send mixed signals. Industrial production fell 2.6% in November worse than expected due to declining automobile and lithium battery output. However, manufacturers expect a rebound in December and a significant 8.0% rise in January, suggesting temporary disruptions rather than long-term contraction.

Retail sales rose 1.0% year-on-year in November, slightly above expectations, indicating stable domestic demand. Meanwhile, the government has approved a record fiscal budget of $785 billion for 2026, which may bolster short-term consumption but risks adding pressure to Japan’s already strained public finances.

Tokyo’s slowing core inflation in December offers some evidence of moderating cost pressures, particularly in food, but does not derail the Bank of Japan’s tightening trajectory. Persistent demand-driven inflation, a weak yen, and policy confidence in wage-supported growth suggest the BOJ remains on track for gradual rate hikes. As Japan enters 2026, monetary policy will continue to walk a tightrope between stabilizing inflation and nurturing economic recovery.

Source: Reuters

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Winkelmann

Political

Economic

China's solar installations in November surged to the highest in six months, extending an end-of-year recovery.

Nationwide, about 22 gigawatts of solar power were installed last month, according to data released by the National Energy Administration on Friday. That's the highest since May when additions hit a record, but lower than the 25 gigawatts added in the same period a year earlier.

Installations tend to rise near the end of the year as developers aim to complete projects within the calendar year. However, activity peaked much earlier this year, when installations rose to a record 93 gigawatts in May ahead of policy changes. That front-loaded demand led to a slump in capacity additions in the subsequent months, with numbers only beginning to recover in September.

The November figures are likely also due to state-owned enterprises rushing to finish projects before the end of the nation's 14th five-year plan. Beijing is expected to announce a new national plan in March.

BloombergNEF has lowered its 2025 forecast installations for China by 9% to 372 gigawatts, followed by a 14% contraction in 2026, as the nation deals with a range of policy shifts that have cooled demand growth.

China also added 12.5 gigawatts of wind power in November, according to the NEA.