2025-12-19 12:00

Key rate cut is in line with expectations Inflation expected below 6% in 2025, hit target in 2027 Putin says he did not interfere in bank's decision Phone-in shows some Russians question inflation figures MOSCOW, Dec 19 (Reuters) - The Russian central bank cut its key rate by 50 basis points to 16% on Friday, in line with analysts' expectations, as inflation slows down and the economy, focused on military action in Ukraine, struggles to grow. The central bank made the announcement as President Vladimir Putin was giving a press conference where he said the economic slowdown was the result of monetary tightening by the central bank to bring down the inflation rate. Sign up here. "Underlying measures of current price growth declined in November. However, inflation expectations have edged up in recent months," the central bank said in a statement. It said that after an expected spike in inflation at the start of 2026, due to an increase in taxes, the inflation rate would continue to fall to hit the target of 4% in 2027. The bank said "geopolitical factors" remained an uncertainty. Central bank governor Elvira Nabiullina said it was too early to declare victory over inflation, adding that any marathon runner knows the second half of the race is harder than the first. "One month of low inflation is not enough," she said. The Russian rouble, which has been buoyed by high interest rates and shrinking imports this year, strengthened by 0.8% against the U.S. dollar and by 0.5% against China's yuan on Friday. PUTIN SAID CENTRAL BANK OPERATING 'QUITE RESPONSIBLY' Most analysts in a Reuters poll had expected the central bank to cut the key rate by 50 basis points to 16%, but some had been reviewing their forecasts in favour of a bigger cut in light of Putin's phone-in event. "For the market, this decision is negative, many were hoping for a larger move," said economist Evgeny Kogan. Economists and business leaders argue that a rate of 12% or 13% is needed to boost economic growth from the current 1%. The central bank's board meeting, which was planned long in advance, took place during the annual phone-in by coincidence. Reacting to the rate announcement Putin said he did not interfere in the decision-making process. "The central bank operates independently. I try not to interfere in the decisions it makes, and I try to shield it from any outside influence and pressure. Overall, the central bank is not only coping, it is acting quite responsibly," Putin said. MANY RUSSIANS DO NOT TRUST FIGURES, PHONE-IN HOSTS SAY Putin predicted that inflation may fall to 5.6% in 2025 from 9.5% last year. The central bank estimated inflation at 5.8% as of December 15. However, the phone-in hosts said questions from people indicated that many Russians did not trust the numbers. They quoted a question from Maxim Volkov from Samara region, who said that his 50,000 roubles ($621) monthly salary was not enough to feed his family with three children. Volkov said the price of poultry meat had grown two-fold this year. The hosts also quoted a message from a child in the southern Rostov region, whose name was not given, as asking: "Why are prices for food and buns in the cafeteria going up, but my parents' salaries aren't?" Putin said inflation data showed average figures while prices for some foods could grow faster. "It depends on the food basket a person consumes. If this food basket consists mainly of protein products like meat, chicken meat, then of course this affects the family budget. And there is certainly nothing good about that," Putin said. ($1 = 80.5000 roubles) https://www.reuters.com/markets/europe/russian-central-bank-cuts-key-rate-16-putin-speaks-2025-12-19/

2025-12-19 11:30

KYIV, Dec 19 (Reuters) - Ukrainian aerial drones struck a Russian shadow fleet tanker in the Mediterranean Sea for the first time, an official at Ukraine's SBU security service told Reuters on Friday. The official said that the drones hit the vessel - the Qendil - in waters more than 2,000 kilometres (1,243 miles) from Ukraine, causing critical damage. The vessel was empty at the time of the attack. Sign up here. https://www.reuters.com/business/aerospace-defense/ukraine-hits-russian-shadow-fleet-tanker-mediterranean-first-time-sbu-source-2025-12-19/

2025-12-19 11:27

Maersk vessel navigated Red Sea for first time in nearly two years Says it is considering a 'stepwise' approach to Red Sea route resumption Ceasefire in Gaza raises hopes for normal shipping traffic COPENHAGEN, Dec 19 (Reuters) - Danish shipping company Maersk (MAERSKb.CO) , opens new tab said on Friday that one of its vessels successfully navigated the Red Sea and Bab el-Mandeb Strait for the first time in nearly two years, as shipping companies consider returning to the key trading route. Maersk said that while it had no plans yet to fully reopen the route it was considering continuing a "stepwise approach towards gradually resuming navigation" via the Suez Canal and the Red Sea. Sign up here. It declined to further elaborate on its plans. Maersk, along with other global shipping companies including Hapag Lloyd (HLAG.DE) , opens new tab, rerouted vessels around Africa's Cape of Good Hope from December 2023 after Yemen's Houthi rebels attacked ships in the Red Sea, citing solidarity with Palestinians in Gaza. The Suez Canal is the fastest route between Asia and Europe. The potential return of Maersk to the Suez Canal could ripple through the shipping sector, where freight rates have risen because the alternative route added weeks to transit times between Asia and Europe. However, a ceasefire in the Gaza war has since raised expectations that traffic may return to normal. Maersk said in a statement that one of its vessels, Maersk Sebarok, had made the transit on Thursday and Friday. No additional sailings were currently planned, it said. "Whilst this is a significant step forward, it does not mean that we are at a point where we are considering a wider East-West network change back to the trans-Suez corridor," Maersk said. Niels Rasmussen, chief shipping analyst at ship-owner association BIMCO, said that a return of regular transits via the route could result in a 10% reduction in ship demand. "The possibility of a return to Suez Canal routings looms large over the market outlook," he said in a note published on Thursday. French container shipping company CMA CGM, which has made limited Suez passages when security conditions allow, will use the passage for its India–U.S. INDAMEX service from January, according to a schedule published on its website. https://www.reuters.com/world/middle-east/maersk-completes-first-red-sea-voyage-nearly-two-years-2025-12-19/

2025-12-19 11:26

AI jitters, Fed interest rate path among key year-end factors GDP, consumer confidence reports to shed more light on economy S&P 500 set for double-digit percentage gains in 2025, despite shaky December NEW YORK, Dec 19 (Reuters) - Investors hoping for traditional holiday cheer for the U.S. stock market are encountering turbulence that could keep markets on edge into year-end. Despite stock indexes remaining on track for solid performance in 2025, the benchmark S&P 500 (.SPX) , opens new tab has edged lower so far in December, bucking historical trends that have shown it to be a strong month on average. Sign up here. Two themes have sparked swings in U.S. equities in recent weeks: Scrutiny on massive corporate spending for the artificial intelligence buildout, and shifting expectations about further interest rate cuts by the Federal Reserve in 2026. This week, questions about a data-center project from Oracle (ORCL.N) , opens new tab weighed on tech and other AI-related stocks, while tame inflation data on Thursday gave stocks a lift. "This week's economic data solidifies expectations that the Fed will have a rate-cutting bias," said Angelo Kourkafas, senior global investment strategist at Edward Jones. While investors in the coming days may look to lock in profits after a solid year, causing some selling pressure, the latest data "likely provide a green light for the Santa Claus rally to take place this year," Kourkafas said. Since 1950, the "Santa Claus rally" has seen the S&P 500 rise an average 1.3% over the last five trading days of the year and the first two in January, according to the Stock Trader's Almanac. This year, that period starts Wednesday and runs through Jan. 5. INVESTORS REACT TO DELAYED ECONOMIC DATA, FED Investors this week digested a heavy batch of data that had been delayed due to the 43-day federal government shutdown. Employment data showed job growth rebounded in November but the unemployment rate stood at 4.6%, its highest level in over four years. Another delayed report on Thursday showed the U.S. consumer price index increased less than expected in the year to November. Optimism from the cooling inflation data may be tempered by distortions, including data collection being delayed late into November, when retailers offered holiday season discounts. The Fed has cut interest rates at three consecutive meetings, leaving investors now to parse data for insight into when the central bank might be able to ease again in 2026. "Going into next week ... there's going to be a big question around what is the path ahead for the Fed," given the shutdown-related data distortions, said Trevor Slaven, global head of asset allocation and multi-asset portfolio solutions at Barings. "There's this unsettled argument between the direction of travel for these major central banks, the direction of travel for inflation at a time when it does look like there's (more) softness" in the labor market data, Slaven said. Economic reports in the coming week include third-quarter gross domestic product, durable goods orders and consumer confidence. Focus during the holiday-shortened trading week also will likely remain on the AI trade that has helped lift stocks this year. The S&P 500 is up more than 15% so far 2025, on track for its third consecutive year of gains of at least 10%. More recently, however, AI-related worries -- including when massive infrastructure spending will generate returns -- have dented the high-flying tech sector, which carries by far the largest weighting in major indexes such as the S&P 500. "You're starting to just see this skepticism around the AI spend becoming more prominent," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. For the tech and tech-related stocks, "obviously their disproportionate representation in the cap-weighted index at large is helping to put some pressure on the tape." Other sectors that had lagged this year have helped pick up the slack. Those include economically sensitive areas such as transportation, financial and small-cap groups, which are all higher so far in December. "We've seen money move away from tech," Kourkafas said. "Other areas have stepped up and have helped keep markets mostly range-bound." https://www.reuters.com/business/wall-st-week-ahead-santa-rally-investors-hope-year-end-gains-cap-strong-2025-2025-12-19/

2025-12-19 11:25

LONDON, Dec 19 (Reuters) - British retailers have reported a pre-Christmas slump in sales and they are gloomier about their prospects for the start of 2026, according to a survey published on Friday. The Confederation of British Industry said its gauge of how retail sales compared with a year earlier worsened to -44 in December from -32 in November. Sign up here. The CBI's gauge of expected sales for the month ahead deteriorated to -57 from -24, the weakest reading since expectations for the month of March 2021, when Britain was still in the midst of the COVID-19 pandemic. Official data published earlier on Friday showed retail sales fell last month, the latest in a string of data suggesting a slowdown in the broader economy ahead of finance minister Rachel Reeves' budget at the end of November. The CBI's survey was conducted between November 24 and December 11. Of 161 respondents, 60 were retailers and 85 were wholesalers. https://www.reuters.com/business/retail-consumer/uk-retailers-report-fall-sales-ahead-christmas-cbi-says-2025-12-19/

2025-12-19 11:04

Everything Mike Dolan and the ROI team are excited to read, watch and listen to over the weekend. From the Editor Sign up here. Hello Morning Bid readers! The last full trading week of 2025 was a rocky one, but it looks to end on a positive note – just like the year itself – as central bankers, deal makers and some head-scratching U.S. inflation data keep everyone from putting on their out-of-office messages just yet. Wall Street's main indexes closed higher on Thursday, as Micron Technology soared 16% on a blockbuster profit forecast, and core U.S. CPI inflation in November rose by only 2.6% year-over-year, the slowest pace since March 2021. This soft report increased expectations for Federal Reserve interest rate cuts early next year. However, almost no economists think this inflation figure is accurate, with some dubbing it a “Swiss Cheese” report, due to data collection issues caused by the government shutdown. Investors also received U.S. November payrolls numbers this week. The economy added 64,000 jobs, above consensus expectations, after the massive drop in October, and the unemployment rate ticked up to a four-year high of 4.6%. But, again, caveats abound, as the 43-day government shutdown forced the Bureau of Labor Statistics to alter its methodology for this calculation. Central banks were in the spotlight once again this week. The Bank of Japan on Friday lifted interest rates 25 basis points to 0.75%, the highest level in thirty years, with a hawkish steer from Governor Kazuo Ueda. The yen weakened, however, as it will take far more than modest tightening to guarantee the Japanese currency escapes the intervention "danger zone." The Bank of England moved in the opposite direction on Thursday, cutting its policy rate to 3.75% from 4% – the sixth cut since August 2024. However, with a surprisingly large drop in UK inflation last month and the economy appearing to stagnate, the BoE is arguably behind the curve and may need to play catch-up to offset tightening real rates. While the European Central Bank kept rates steady at 2.0% on Thursday, it signalled a likely end to its easing cycle. Dealmaking certainly doesn't look to be easing anytime soon. Warner Brothers Discovery on Wednesday rejected Paramount’s $108.4 billion “hostile takeover” bid. Then on Thursday came the announcement of a $6 billion all-stock deal for a merger between Trump Media and Google-backed TAE Technologies. That was followed by news that TikTok's Chinese owner, ByteDance, has signed binding agreements to give control of U.S. operations to a group of investors, including Oracle. Meanwhile, global benchmark Brent crude futures plunged by nearly 3% on Tuesday to below $59, their lowest since early 2021, amid growing optimism that a peace deal was in sight in Ukraine. Prices then briefly rebounded after President Donald Trump said on Wednesday in a post on his Truth Social platform that he had ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela. But crude was trading lower again early on Friday. Despite all this geopolitical drama, the real driver of prices in the months ahead is likely to be far more prosaic: a spike in global oil supplies, both on land and at sea. Speaking of drama, BP surprised energy industry-watchers with the announcement that Meg O'Neill would replace current CEO Murray Auchincloss, becoming the company’s first outsider chief executive. This appointment offers the bruised $90 billion British oil company three clear strategic choices for moving forward: build, buy or be bought. Staying in energy markets, Asia's imports of U.S. crude oil, coal and liquefied natural gas are on track to decline this year despite President Trump's efforts to boost shipments as part of his trade strategy. At the same time, Japan has cut fossil fuel electricity generation to the lowest levels in more than a decade in 2025, thanks in large part to an ongoing recovery in nuclear power output. For more commodities news, check out Reuters Open Interest to find out what is the real star on the London Metals Exchange right now (hint, it’s not copper) and which agricultural trends to watch out for next year. Morning Bid will be off for the next two weeks, but we’ll be back in January. In the meantime, check out some reading, listening and watching recommendations from the ROI team. I’d love to hear from you, so please reach out to me at [email protected] , opens new tab . , opens new tab This weekend, we're reading... MIKE DOLAN, ROI Financial Markets Editor-at-Large: The Dawn of Everything: The New History of Humanity , opens new tab by David Graeber and David Wengrow challenges much of what we think we know about the origins of civilization, including the creation of farming, cities and democracy. Definitely worth a read over the holidays! RON BOUSSO, ROI Energy Columnist: I highly recommend Andrew Ross Sorkin’s latest book, 1929: The Inside Story of the Greatest Crash in Wall Street History. , opens new tab It’s a brilliantly written and thrilling account of the historic crash and its causes. The story has a lot of disconcerting similarities with what we’re seeing in markets today. ANDY HOME, ROI Metals Columnist: "The War Below" , opens new tab by my Reuters colleague Ernest Scheyder is a great primer on what makes some metals "critical" and how the West lost out to China in the race to develop them. Ernie also does a deep-dive on the green-on-green environmental clash between those who see critical minerals as a vital route to decarbonisation and those who resist the new mines needed to produce them. We're listening to... JAMIE MCGEEVER, ROI Markets Columnist: TS Lombard economists Dario Perkins and Freya Beamish, who are always worth paying attention to, discuss their off-consensus views for 2026 , opens new tab and give their takes on who will replace Federal Reserve Chair Jerome Powell in May. And we're watching... ANNA SZYMANSKI, ROI Editor-in-Charge: If your New Year’s resolution is to be more productive, make sure to subscribe to the newMorning Bid video podcast , opens new tab. Mike Dolan and other Reuters journalists will fill you in on all the key stories moving markets in roughly five minutes every day. Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the authors. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-12-19/