December 9th Financial Breakfast: The Fed may implement a hawkish rate cut, causing gold prices to fall back below $4200; Iraqi oil fields resume production, leading to a more than 2% drop in oil prices.
2025-12-09 07:29:18
On Tuesday (December 9th, Beijing time) in early Asian trading, spot gold was trading around $4193 per ounce. Gold prices fell slightly on Monday as investors remained cautious ahead of the Federal Reserve's monetary policy meeting, with the market anticipating a hawkish rate cut and awaiting clear signals regarding the future path of interest rates. US crude oil was trading around $58.85 per barrel. Oil prices fell significantly by more than 2% on Monday, mainly due to the resumption of production at a large Iraqi oil field and continued market focus on the peace talks in Ukraine.
U.S. stocks closed lower across the board on Monday, with markets trading cautiously ahead of the Federal Reserve's monetary policy decision. The Dow Jones Industrial Average fell 0.45%, the S&P 500 dropped 0.35%, and the Nasdaq Composite declined 0.14%.
Market focus is entirely on the upcoming Federal Reserve interest rate decision, with traders currently pricing in an approximately 89% probability of a 25 basis point rate cut. Meanwhile, rising yields on 10-year U.S. Treasury bonds are also putting pressure on the stock market.
In terms of sectors, only the technology sector in the S&P 500 bucked the trend, rising 0.9%, mainly driven by heavyweight stocks such as Microsoft and Nvidia. The communication services sector, however, fell 1.8%, performing the worst, primarily dragged down by declines in the share prices of Netflix and Google's parent company, Alphabet.
Individual stocks were active. Paramount Skydance shares jumped 9% after launching a hostile takeover bid for Warner Bros., aiming to overtake Netflix. Confluent surged 29% after IBM announced it would acquire the company for approximately $11 billion. Tesla shares, however, fell 3%, weighed down by Morgan Stanley's pessimistic outlook.
Gold prices edged lower on Monday as investors remained cautious ahead of the Federal Reserve's monetary policy meeting, awaiting clear signals on the future path of interest rates. Spot gold ultimately closed down 0.2% at $4,189.49 per ounce.
The market widely expects the Federal Reserve to announce a 25 basis point rate cut at its meeting on Wednesday, with traders currently betting on an 89% probability of such a cut. Analysts point out that although gold prices are under short-term pressure, the long-term outlook for gold remains positive, supported by strong fundamentals such as continued central bank gold purchases, a potential weakening dollar, and geopolitical safe-haven demand.
Other precious metals showed mixed results, with silver falling 0.5% to $57.98 per ounce, platinum down slightly by 0.1%, and palladium up a small 0.2%.
Oil prices fell sharply by more than 2% on Monday, mainly due to the resumption of production at a major Iraqi oil field and continued market focus on the peace talks in Ukraine. Brent crude futures settled down 1.98% at $62.49 a barrel, while WTI crude futures fell 2% to $58.88 a barrel.
Market analysts point out that the resumption of production at Iraq's West Qurna 2 oil field after a brief shutdown, with a daily output of approximately 460,000 barrels, directly put downward pressure on oil prices.
Meanwhile, investors are also weighing the possibility of progress in the Ukraine negotiations. An end to the conflict could boost Russian oil exports, putting downward pressure on the market. Furthermore, the upcoming Federal Reserve policy meeting, where internal disagreements are likely to be significant, has also exacerbated market caution.
The dollar index rose 0.1% to 99.07 on Monday, supported by widespread market expectations that the Federal Reserve would implement a "hawkish rate cut" this week, potentially signaling a cautious approach to future actions. Meanwhile, the yen weakened across the board following the strong earthquake in Japan.
The market has largely priced in a rate cut by the Federal Reserve this week, but investors believe its policy statement and Chairman Powell's remarks may signal a higher threshold for further rate cuts. This expectation is providing support for the dollar.
The yen weakened after a powerful earthquake struck northeastern Japan on Monday. Markets speculated that the Bank of Japan might postpone its planned interest rate hike next week, depending on the extent of the damage. The dollar rose 0.3% against the yen to 155.97.
This week, central banks in Australia, Canada, Switzerland, and Brazil, among others, will hold meetings, but are expected to keep interest rates unchanged. Australia, in particular, is seeing strong economic data, leading the market to anticipate a potential rate hike next year.
The euro dipped slightly to 1.1639 against the dollar, but European Central Bank officials hinted that the next step could even be an interest rate hike, contrasting with the Federal Reserve's path.
The Australian dollar touched a two-and-a-half-month high on Monday but fell 0.3% to 0.6621 in late New York trading due to a stronger US dollar. The Canadian dollar fell 0.3% to 1.3850 against the US dollar, with the market widely expecting the Bank of Canada to keep rates unchanged this week.
Water overflows from spent fuel pool at Japan's nuclear facility.
According to Japan Nuclear Waste Management Co., Ltd., following the strong earthquake that struck off the coast of Aomori Prefecture late on December 8th, workers at the nuclear waste processing plant in Rokkasho Village, Aomori Prefecture, discovered "at least 100 liters of water" on the ground around the spent fuel pool during an inspection. Analysis suggests this water "may have overflowed from the spent fuel pool due to the earthquake's shaking." However, the overflowed water reportedly "remained inside the building and did not affect the external environment." Japan Nuclear Waste Management Co., Ltd. also stated that because the water level in the spent fuel pool "remained stable" and the cooling system "continued to function normally," there were "no safety issues." It is reported that, as of now, "no other anomalies caused by this earthquake have been detected," and the readings of monitoring instruments used to measure radiation doses around the facility "have not changed." (CCTV International News)
White House: U.S. gasoline prices are falling to multi-year lows
The White House stated that the average price of regular gasoline nationwide is at its lowest level in 1,681 days, and the trend is still downward. Data from GasBuddy shows that the average gasoline price has fallen below $3 per gallon in 37 states, below $2.75 per gallon in 22 states, and below $2.50 per gallon in 5 states. In fact, Americans can even find gasoline for less than $2 per gallon at some gas stations in at least four states.
The United States will provide $12 billion in aid to farmers affected by tariff policies.
U.S. President Donald Trump announced at the White House on the afternoon of March 8 that the federal government would provide $12 billion in aid to American farmers to counter the "backlash" of U.S. tariffs on agriculture. Earlier this year, the Trump administration introduced a wide range of tariffs, disrupting global trade and resulting in obstacles to U.S. export markets. Low prices for agricultural products such as soybeans and corn, coupled with rising costs of fertilizers and agricultural machinery, have made it difficult for U.S. farms to operate profitably, leaving many farmers in dire straits. (Xinhua)
Leading candidates for Federal Reserve Chair: Future path should not be announced prematurely; reiterate reliance on data.
White House National Economic Council Director Hassett said on Monday that it would be "irresponsible" for the Federal Reserve to announce its interest rate path for the next six months in advance, emphasizing that monetary policy should be adjusted flexibly based on economic data. "The Fed Chair's job is to watch the data closely, adjust as needed, and explain why a particular action is taken," Hassett said. "It would be irresponsible to say, 'I'm going to do this over the next six months.'" As a leading candidate to succeed current Chair Jerome Powell, Hassett was asked how many more rate cuts he expected in 2026. He avoided giving specific predictions: "I don't want to disappoint people with their guesses about the number of rate cuts, but I can say that the key is to look at the data." Hassett praised Powell for effectively coordinating opinions within the FOMC before this meeting: "I think he did a great job of 'keeping the cats in the room' and successfully built a consensus on rate cuts. I believe Powell also agrees with my view—we should probably continue to lower interest rates."
Trump: A single rule executive order on artificial intelligence will be issued this week.
US President Trump stated that if we are to continue to lead in artificial intelligence, there must be only one rulebook. So far, we have beaten all the countries in this race, but this advantage will quickly disappear if 50 states are involved in setting the rules and approval processes, and many of those states are likely to violate those rules. There is no doubt about that! Artificial intelligence will be destroyed in its infancy! I will issue a “single rule” executive order this week. You can't expect a company to get approval from all 50 states every time it wants to do something. That will never work!
Ursula von der Leyen reiterated the EU's firm support for Ukraine.
European Commission President Ursula von der Leyen stated that despite ongoing peace negotiations, the EU's support for Ukraine remains unwavering. The goal is to ensure Ukraine maintains a strong position both on the battlefield and at the negotiating table. She emphasized the need to respect Ukraine's sovereignty. In the long term, Ukraine's security is crucial, as it is the EU's first line of defense.
State Taxation Administration: Sales revenue of the national equipment manufacturing industry increased by 8.3% year-on-year in the first 11 months of this year.
The State Taxation Administration held a press conference today, where officials introduced that in the first 11 months of this year, my country's manufacturing industry accelerated its high-quality development, achieving significant results in high-end, intelligent, and green transformation. The latest value-added tax (VAT) invoice data shows that the high-end development of the manufacturing industry accelerated in the first 11 months of this year. Sales revenue of the equipment manufacturing industry increased by 8.3% year-on-year, particularly in the computer and communication equipment manufacturing and instrumentation manufacturing industries, where sales revenue increased by 12.3% and 10.3% year-on-year respectively, reflecting the accelerated pace of high-end transformation in the manufacturing sector. At the same time, the pace of intelligent upgrading in the manufacturing industry is also accelerating. (CCTV News)
General Administration of Customs: my country's foreign trade growth rebounded to 4.1% in November.
Data released by the General Administration of Customs on December 8 showed that in November 2025, my country's total import and export value of goods reached 3.9 trillion yuan, a year-on-year increase of 4.1%, 4 percentage points higher than the previous month. As of November, my country's import and export of goods has maintained year-on-year growth for 10 consecutive months. Cumulatively, in the first 11 months of this year, the total import and export value reached 41.21 trillion yuan, a year-on-year increase of 3.6%, the same growth rate as the first 10 months. (Xinhua News Agency)
Key Focus Today
stock market
U.S. stocks closed lower across the board on Monday, with markets trading cautiously ahead of the Federal Reserve's monetary policy decision. The Dow Jones Industrial Average fell 0.45%, the S&P 500 dropped 0.35%, and the Nasdaq Composite declined 0.14%.
Market focus is entirely on the upcoming Federal Reserve interest rate decision, with traders currently pricing in an approximately 89% probability of a 25 basis point rate cut. Meanwhile, rising yields on 10-year U.S. Treasury bonds are also putting pressure on the stock market.
In terms of sectors, only the technology sector in the S&P 500 bucked the trend, rising 0.9%, mainly driven by heavyweight stocks such as Microsoft and Nvidia. The communication services sector, however, fell 1.8%, performing the worst, primarily dragged down by declines in the share prices of Netflix and Google's parent company, Alphabet.
Individual stocks were active. Paramount Skydance shares jumped 9% after launching a hostile takeover bid for Warner Bros., aiming to overtake Netflix. Confluent surged 29% after IBM announced it would acquire the company for approximately $11 billion. Tesla shares, however, fell 3%, weighed down by Morgan Stanley's pessimistic outlook.
Gold Market
Gold prices edged lower on Monday as investors remained cautious ahead of the Federal Reserve's monetary policy meeting, awaiting clear signals on the future path of interest rates. Spot gold ultimately closed down 0.2% at $4,189.49 per ounce.
The market widely expects the Federal Reserve to announce a 25 basis point rate cut at its meeting on Wednesday, with traders currently betting on an 89% probability of such a cut. Analysts point out that although gold prices are under short-term pressure, the long-term outlook for gold remains positive, supported by strong fundamentals such as continued central bank gold purchases, a potential weakening dollar, and geopolitical safe-haven demand.
Other precious metals showed mixed results, with silver falling 0.5% to $57.98 per ounce, platinum down slightly by 0.1%, and palladium up a small 0.2%.
oil market
Oil prices fell sharply by more than 2% on Monday, mainly due to the resumption of production at a major Iraqi oil field and continued market focus on the peace talks in Ukraine. Brent crude futures settled down 1.98% at $62.49 a barrel, while WTI crude futures fell 2% to $58.88 a barrel.
Market analysts point out that the resumption of production at Iraq's West Qurna 2 oil field after a brief shutdown, with a daily output of approximately 460,000 barrels, directly put downward pressure on oil prices.
Meanwhile, investors are also weighing the possibility of progress in the Ukraine negotiations. An end to the conflict could boost Russian oil exports, putting downward pressure on the market. Furthermore, the upcoming Federal Reserve policy meeting, where internal disagreements are likely to be significant, has also exacerbated market caution.
Foreign exchange market
The dollar index rose 0.1% to 99.07 on Monday, supported by widespread market expectations that the Federal Reserve would implement a "hawkish rate cut" this week, potentially signaling a cautious approach to future actions. Meanwhile, the yen weakened across the board following the strong earthquake in Japan.
The market has largely priced in a rate cut by the Federal Reserve this week, but investors believe its policy statement and Chairman Powell's remarks may signal a higher threshold for further rate cuts. This expectation is providing support for the dollar.
The yen weakened after a powerful earthquake struck northeastern Japan on Monday. Markets speculated that the Bank of Japan might postpone its planned interest rate hike next week, depending on the extent of the damage. The dollar rose 0.3% against the yen to 155.97.
This week, central banks in Australia, Canada, Switzerland, and Brazil, among others, will hold meetings, but are expected to keep interest rates unchanged. Australia, in particular, is seeing strong economic data, leading the market to anticipate a potential rate hike next year.
The euro dipped slightly to 1.1639 against the dollar, but European Central Bank officials hinted that the next step could even be an interest rate hike, contrasting with the Federal Reserve's path.
The Australian dollar touched a two-and-a-half-month high on Monday but fell 0.3% to 0.6621 in late New York trading due to a stronger US dollar. The Canadian dollar fell 0.3% to 1.3850 against the US dollar, with the market widely expecting the Bank of Canada to keep rates unchanged this week.
International News
Water overflows from spent fuel pool at Japan's nuclear facility.
According to Japan Nuclear Waste Management Co., Ltd., following the strong earthquake that struck off the coast of Aomori Prefecture late on December 8th, workers at the nuclear waste processing plant in Rokkasho Village, Aomori Prefecture, discovered "at least 100 liters of water" on the ground around the spent fuel pool during an inspection. Analysis suggests this water "may have overflowed from the spent fuel pool due to the earthquake's shaking." However, the overflowed water reportedly "remained inside the building and did not affect the external environment." Japan Nuclear Waste Management Co., Ltd. also stated that because the water level in the spent fuel pool "remained stable" and the cooling system "continued to function normally," there were "no safety issues." It is reported that, as of now, "no other anomalies caused by this earthquake have been detected," and the readings of monitoring instruments used to measure radiation doses around the facility "have not changed." (CCTV International News)
White House: U.S. gasoline prices are falling to multi-year lows
The White House stated that the average price of regular gasoline nationwide is at its lowest level in 1,681 days, and the trend is still downward. Data from GasBuddy shows that the average gasoline price has fallen below $3 per gallon in 37 states, below $2.75 per gallon in 22 states, and below $2.50 per gallon in 5 states. In fact, Americans can even find gasoline for less than $2 per gallon at some gas stations in at least four states.
The United States will provide $12 billion in aid to farmers affected by tariff policies.
U.S. President Donald Trump announced at the White House on the afternoon of March 8 that the federal government would provide $12 billion in aid to American farmers to counter the "backlash" of U.S. tariffs on agriculture. Earlier this year, the Trump administration introduced a wide range of tariffs, disrupting global trade and resulting in obstacles to U.S. export markets. Low prices for agricultural products such as soybeans and corn, coupled with rising costs of fertilizers and agricultural machinery, have made it difficult for U.S. farms to operate profitably, leaving many farmers in dire straits. (Xinhua)
Leading candidates for Federal Reserve Chair: Future path should not be announced prematurely; reiterate reliance on data.
White House National Economic Council Director Hassett said on Monday that it would be "irresponsible" for the Federal Reserve to announce its interest rate path for the next six months in advance, emphasizing that monetary policy should be adjusted flexibly based on economic data. "The Fed Chair's job is to watch the data closely, adjust as needed, and explain why a particular action is taken," Hassett said. "It would be irresponsible to say, 'I'm going to do this over the next six months.'" As a leading candidate to succeed current Chair Jerome Powell, Hassett was asked how many more rate cuts he expected in 2026. He avoided giving specific predictions: "I don't want to disappoint people with their guesses about the number of rate cuts, but I can say that the key is to look at the data." Hassett praised Powell for effectively coordinating opinions within the FOMC before this meeting: "I think he did a great job of 'keeping the cats in the room' and successfully built a consensus on rate cuts. I believe Powell also agrees with my view—we should probably continue to lower interest rates."
Trump: A single rule executive order on artificial intelligence will be issued this week.
US President Trump stated that if we are to continue to lead in artificial intelligence, there must be only one rulebook. So far, we have beaten all the countries in this race, but this advantage will quickly disappear if 50 states are involved in setting the rules and approval processes, and many of those states are likely to violate those rules. There is no doubt about that! Artificial intelligence will be destroyed in its infancy! I will issue a “single rule” executive order this week. You can't expect a company to get approval from all 50 states every time it wants to do something. That will never work!
Ursula von der Leyen reiterated the EU's firm support for Ukraine.
European Commission President Ursula von der Leyen stated that despite ongoing peace negotiations, the EU's support for Ukraine remains unwavering. The goal is to ensure Ukraine maintains a strong position both on the battlefield and at the negotiating table. She emphasized the need to respect Ukraine's sovereignty. In the long term, Ukraine's security is crucial, as it is the EU's first line of defense.
Domestic News
State Taxation Administration: Sales revenue of the national equipment manufacturing industry increased by 8.3% year-on-year in the first 11 months of this year.
The State Taxation Administration held a press conference today, where officials introduced that in the first 11 months of this year, my country's manufacturing industry accelerated its high-quality development, achieving significant results in high-end, intelligent, and green transformation. The latest value-added tax (VAT) invoice data shows that the high-end development of the manufacturing industry accelerated in the first 11 months of this year. Sales revenue of the equipment manufacturing industry increased by 8.3% year-on-year, particularly in the computer and communication equipment manufacturing and instrumentation manufacturing industries, where sales revenue increased by 12.3% and 10.3% year-on-year respectively, reflecting the accelerated pace of high-end transformation in the manufacturing sector. At the same time, the pace of intelligent upgrading in the manufacturing industry is also accelerating. (CCTV News)
General Administration of Customs: my country's foreign trade growth rebounded to 4.1% in November.
Data released by the General Administration of Customs on December 8 showed that in November 2025, my country's total import and export value of goods reached 3.9 trillion yuan, a year-on-year increase of 4.1%, 4 percentage points higher than the previous month. As of November, my country's import and export of goods has maintained year-on-year growth for 10 consecutive months. Cumulatively, in the first 11 months of this year, the total import and export value reached 41.21 trillion yuan, a year-on-year increase of 3.6%, the same growth rate as the first 10 months. (Xinhua News Agency)
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