LONDON, December 12 (Reuters) – Everything Mike Dolan and the ROI team are excited to read, watch and listen to over the weekend.
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Federal Reserve Chair Jay Powell buoyed markets by executing that most rare of monetary policy moves: the dovish ‘hawkish cut’. But the spectre of AI anxiety threatens to hold off a “Santa Claus” rally.
The Fed hogged most of the spotlight this week, delivering a widely expected 25 basis point rate cut. But Chair Powell also announced a Treasury bill buying program, starting at $40 billion per month, a “surprise” that ROI markets columnist Jamie McGeever suggested might be coming.
The Chair also touted U.S. productivity growth, hinting that it could be the trick to squaring the circle of solid growth, sticky inflation and a soft jobs market.
It wasn’t a total dove-fest, though. The Fed indicated that we’ll only see one 25 bps rate cut next year followed by another in 2027, while markets had been expecting two in 2026.
This speaks to a larger issue: the global easing cycle appears to be over. The Bank of Canada kept rates on hold this week, the Reserve Bank of Australia made it clear rate cuts are done, and European Central Bank hawks hinted that the next move – whenever that may be – could be a hike.
Then, of course, there’s the Bank of Japan. Governor Kazuo Ueda has essentially announced that the BoJ will raise rates next week. He’s now also expected to pledge to keep hiking.
This global shift has major implications for currencies and the debt market.
That’s just one more reason investors are worried about the increasingly debt-financed AI capex binge.
Look at Oracle. Not only did the cloud-computing company’s shares fall 13% on Thursday, after it released underwhelming earnings and upped its projected 2026 spending, but credit-default swaps (CDS), which offer bondholders a hedge against default, for Oracle hit at least a five-year high the same day.
Meanwhile, in energy markets, the U.S. seizure of a sanctioned Venezuelan tanker – and the threat to take more – has caused some modest ripples in crude prices.
Spiking tensions between Washington and Caracas are raising the question of what could happen to Venezuela’s oil industry if President Nicolas Maduro’s regime were to fall. One thing appears clear, no matter what happens, Venezuela will not be leaving OPEC.
Speaking of rising geopolitical tensions, the G7 late last week proposed a plan to bar tankers from hauling Russian oil, intensifying the West’s economic stand-off with Moscow. But the unknown now is whether governments will actually ratchet up punishments on those skirting sanctions.
Over in India, tightening Russian sanctions don’t appear to be having a major impact – at least not yet. India’s crude oil imports from Russia are on track to climb to a six-month high in December.
Meanwhile, the U.S. shale industry is facing a watershed moment this month, with oil production in the Permian basin poised to peak, according to a U.S. Energy Information Administration report. Yet drilling innovations mean output in America’s most prolific oil patch should hold steady for years to come.
In the renewables market, Texas’ main power system looks set to generate more energy from solar farms than coal plants during the 2025 calendar year, marking a key energy transition milestone for the America’s largest power network.
But, despite this, the U.S. has still lost ground to Asia in the clean energy race this year, with Europe also falling behind, setting the stage for an East-West divergence in energy transition momentum going into 2026.
As we head into the weekend, check out the ROI team’s recommendations for what you should read, listen to, and watch to stay informed and ready for the week ahead.Also, check out thelatest episode of the new Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
I’d love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com .
This weekend, we’re reading…
MIKE DOLAN, ROI Financial Markets Editor-at-Large: This piece from Boston University Professor Laurence Kotlikoff, long an advocate of so-called “fiscal gap and generational accounting” – which considers all government spending and revenue, whether or not it’s on the books – reckons the United States is in worse fiscal shape than Italy.
JAMIE MCGEEVER, ROI Finance Columnist: This is an excellent deep-dive into the US-China economic and strategic rivalry by Louis-Vincent Gave, founding partner and CEO of Gavekal. China has been playing the long game, while the US has gone for short-term fixes. The consequences of that may be about to play out.
GAVIN MAGUIRE, ROI Global Energy Transition Columnist: This excellent report from Wired describes the spectacular rise and fall of a carbon offsetting company that convinced U.S. tech giants it could help balance their carbon footprints by dumping woodchips into the ocean. It’s fascinating and infuriating in equal measure, and well worth the read.
We’re listening to…
RON BOUSSO, ROI Markets Columnist: The latest episode of the Cleaning Up podcast features former BP CEO and now energy transition guru John Browne, who argues the world needs to adapt to climate change and develop new technologies.
JAMIE MCGEEVER, ROI Finance Columnist: This is an excellent deep-dive into the US-China economic and strategic rivalry by Louis-Vincent Gave, founding partner and CEO of Gavekal. China has been playing the long game, while the US has gone for short-term fixes. The consequences of that may be about to play out.
And we’re watching…
CLYDE RUSSELL, Commodities and Energy Columnist, ROI: Former Rystad head oil analyst Mukesh Sahdev has started doing some great interviews on his YouTube channel,and this is one. He discusses biofuels with XAnalysts Mukesh Sahdeve and former Shell executive Michael Pope, focusing on the challenge of scaling production.
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Opinions expressed are those of the authors. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
