US stocks shrugged off early choppyness and mostly climbed higher in the aftermath of the Fed rate cut - Newsquawk Asia-Pac Market Open

• US stocks were choppy on Thursday with the initial post-FOMC optimism fading the night before after Oracle (ORCL) earnings elicited concerns on its data centre build-out and debt after it raised its CapEx outlook. However, throughout the US session, there was a reversal of the overnight weakness with stocks grinding higher throughout the day to return to post-FOMC levels as Fed dovishness kept the markets going. Note, NDX still closed red as ORCL earnings weighed, but both the SPX and DJIA notched fresh record closes.
• USD continued to soften in the aftermath of the Fed cutting rates more decisively than many had thought, with further pressure seen after the latest weekly claims print, which confirmed the recent drop was due to seasonal effects over the Thanksgiving period.
• Looking ahead, highlights include Malaysian Industrial Production, Japanese Industrial Production Final Reading for October.

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LOOKING AHEAD

• Highlights include Malaysian Industrial Production, Japanese Industrial Production Final Reading for October.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks were choppy on Thursday with the initial post-FOMC optimism fading the night before after Oracle (ORCL) earnings elicited concerns on its data centre build-out and debt after it raised its CapEx outlook. However, throughout the US session, there was a reversal of the overnight weakness with stocks grinding higher throughout the day to return to post-FOMC levels as Fed dovishness kept the markets going. Note, NDX still closed red as ORCL earnings weighed, but both the SPX and DJIA notched fresh record closes.
• SPX +0.21% at 6,901, NDX -0.35% at 25,687, DJI +1.34% at 48,704, RUT +1.21% at 2,591.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Commerce Secretary Lutnick said the NVIDIA (NVDA) H200 deal was between US President Trump and NVIDIA CEO Huang, according to CNBC TV.
• China leads objections to Trump reprieve on global minimum tax, as China and a clutch of EU countries have objected to planned exemptions for big US multinationals from global tax obligations, raising the risk of Trump resurrecting a “revenge tax” on foreign investment.
• Major automakers urge Congress to prevent Chinese government-backed auto and advanced battery manufacturers from increasing entry into the US.

NOTABLE HEADLINES

• US President Trump posted that "Prices are coming down FAST, Energy, Oil and Gasoline, are hitting five year lows, and the Stock Market today just hit an All Time High. Tariffs are bringing in Hundreds of Billions of Dollars".
• US President Trump said the WSJ has another ridiculous story that China is dominating us, and the world, in the production of electricity related to AI.
• US Commerce Secretary Lutnick said he wanted a deeper rate cut from the Fed and that US interest rates should be "much lower", while he added that there is no inflation and energy prices are coming down. Furthermore, he commented that Fed Chair Powell is "too late" and "afraid".
• US Treasury Secretary Bessent is to propose a major overhaul of the financial stability oversight council and will push for looser regulation and a freer approach, according to CNBC.
• US Treasury Department is reportedly planning more access to corporate tax breaks for R&D, and an announcement may come as soon as next week.
• US Republican Healthcare bill failed to win enough votes to advance in the Senate, while Senate Republicans blocked a Democratic healthcare bill to extend Obamacare subsidies through 2028.

DATA RECAP

• US Wholesale Sales MM (Sep) -0.2% (Prev. 0.1%)
• US Wholesale Inventories MM (Sep) 0.5% vs. Exp. 0.1%
• US International Trade (USD)(Sep) -52.8B vs. Exp. -63.3B (Prev. -59.6B, Rev. -59.3B)
• US Initial Jobless Claims w/e 236.0k vs. Exp. 220.0k (Prev. 191.0k, Rev. 192k)
• US Continued Jobless Claims w/e 1.838M vs. Exp. 1.947M (Prev. 1.939M, Rev. 1.937M)

FX

• USD continued to soften in the aftermath of the Fed cutting rates more decisively than many had thought, with further pressure seen after the latest weekly claims print, which confirmed the recent drop was due to seasonal effects over the Thanksgiving period.
• EUR benefitted from the dollar weakness, which helped EUR/USD regain a firmer footing at the 1.1700 territory.
• GBP was choppy and finished with marginal gains after failing to sustain a brief reclaim of the 1.3400 handle heading into monthly GDP data.
• JPY strengthened with USD/JPY briefly testing the 155.00 level to the downside amid softer US yields and BoJ rate hike expectations.
• CBRT cut its Weekly Repo Rate by 150bps to 38.00% (vs exp. 100bps cut, prev. 39.50%).
• SNB maintained its Policy Rate at 0.00%, as expected, while SNB reiterated it remains willing to be active in the foreign exchange market as necessary.

FIXED INCOME

• T-notes settled higher after the curve continued to steepen post-Fed, supported by a jump in jobless claims.

COMMODITIES

• Oil prices were sold as markets shrugged off souring US-Venezuela relations and placed optimism on the Ukraine-Russia conflict.
• OPEC MOMR maintained 2025 and 2026 world oil demand growth forecasts at 1.3mln BPD Y/Y and 1.4mln BPD Y/Y, respectively.
• IEA OMR raised the 2025 world oil demand growth forecast to 830k BPD (prev. forecast 790k BPD) and raised the 2026 average oil demand growth forecast to 860k BPD (prev. forecast 770k BPD), while it lowered its global oil supply growth forecasts by 100k BPD for 2025, and by 20k BPD for 2026.

GEOPOLITICAL

MIDDLE EAST

• White House said a lot of quiet planning is underway for the next phase of the Gaza peace plan, and they will make announcements at an appropriate time.

RUSSIA-UKRAINE

• Ukraine's military hit two Russian chemical plants in Novgorod and Smolensk regions used for weapon production.
• Ukrainian President Zelensky said the framework envisages a 20-point peace plan, security guarantees, and agreement on rebuilding Ukraine. Zelensky also stated that Ukraine handed over the updated version of the peace plan to the US on Wednesday and the US wants understanding on the status of peace proposals by Christmas, while he said they would discuss security guarantees in a phone call on Thursday. Furthermore, Zelensky commented that there is no firm deadline from the US on peace proposals.
• US, Ukrainian and European officials are reportedly to meet on Saturday, to discuss US President Trump's plan, according to Axios.
• Russian Foreign Minister said the UK is helping Kyiv carry out "terror attacks", and the presence of UK troops in Ukraine should not be a secret.
• Russian Foreign Ministry spokeswoman said any manipulation with Russian reserves by the EU and its peers will not go without an answer.
• EU is looking to reach an agreement by Friday to lengthen the freeze on Russian assets using emergency powers, according to Bloomberg.
• Danish Presidency of the EU said EU governments agreed to launch a written procedure to freeze Russian assets long term, while Belgium’s Deputy PM said that hopefully a conclusion will be reached on Russian frozen assets at the EU summit next week.
• NATO Secretary General Rutte said "we are Russia's next target" and too many NATO allies do not feel the urgency of a Russian threat, while he added that allied defence spending and production must rise rapidly, and he is positive that the US and Europe can get on the same page on Ukraine.

OTHER

• Russian President Putin held a phone call with Venezuelan President Maduro, while Putin confirmed support for Venezuela and they expressed their intentions to carry out joint projects on the economy and energy.
• US Treasury issued fresh Venezuela-related sanctions, while it was separately reported that President Trump’s administration sanctioned Venezuelan Maduro's nephews and six ships carrying Venezuelan oil, according to Axios.
• US is reportedly preparing to seize more ships transporting Venezuelan oil, in which action would target tankers that may have transported other sanctioned crude such as Iranian, while the seizure has led to a suspension of at least three shipments, according to Reuters sources.

ASIA-PAC

NOTABLE HEADLINES

• China held its annual Central Economic Work Conference on December 10-11th and stated that China is to make use of RRR and rate cuts flexibly, while it will continue to expand domestic demand and build a strong domestic market, as well as consolidate and stabilise the economy. China will also implement an appropriately loose monetary policy, implement more proactive fiscal policy, and will stabilise the property market with city-specific measures.
• Japan's Lower House passed a supplementary budget bill for FY2025 to fund a new economic policy package under PM Takaichi, according to Jiji.
• White House said US President Trump had good relationships with leaders of China and Japan.
• Indian PM Modi said India and the US will continue to work together for global peace, stability and prosperity.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said the BoE should not have interest rate risk on its balance sheet, and the question is how fast to remove it.
• Portugal’s former central-bank Governor Mario Centeno is a potential contender to become the European Central Bank’s next vice president, while Portugal’s finance minister said Centeno "is a possible candidate, but there is no official confirmation".