Hello Morning Bid readers!
The end of the U.S. government shutdown may be an example of “buying the rumor and selling the news”, as Wall Street tumbled on Thursday after rallying earlier in the week. Though with Nvidia and other AI leaders recording meaningful losses yesterday, and bets on Federal Reserve cuts getting pared back, the major market-moving issues clearly remain “AI bubble” fears and the trajectory for policy easing.
One reason the end of the longest-ever government shutdown – 43 days, if you were counting – had only a modest impact on markets is that economic clarity – one of investors’ biggest concerns related to the closure – is unlikely to clear up, even with Washington DC open, as ROI markets columnist Jamie McGeever and ROI editor-at-large Mike Dolan both explained this week.
That lack of clarity is bad news for Fed Chair Jay Powell, and can help explain why the U.S. central bank may pause next month, as Mike Dolan argues.
Over in Asia, the yen fell to its weakest level in nine months on Wednesday, brushing up against the crucial 155 level. Jamie McGeever argues that government intervention to prop up the yen may not yet be a given, but investors should still remain on high alert.
Staying in Japan, a peculiar similarity is emerging between new Prime Minister Sanae Takaichi and U.S. President Donald Trump. They both appear set on using fiscal stimulus to combat cost-of-living concerns – which, as Jamie McGeever argues, is a bit like trying to bring a fire under control by dousing it with gasoline.
Meanwhile, in energy markets, the International Energy Agency on Wednesday published its World Energy Outlook, which introduced a new scenario showing that, given current government policies, oil demand will not plateau in 2030 as previously expected, but will instead keep rising through mid-century. It’s sobering reading for world leaders meeting in Brazil for COP30, explains ROI energy columnist Ron Bousso examines.
Speaking of the climate summit, ROI energy transition columnist Gavin Maguire looks at what has – and what hasn’t – changed since the landmark COP21 Paris agreement ten years ago.
The growing bullishness about the outlook for oil and gas demand was certainty apparent in energy giant Chevron’s latest strategy update, also released on Wednesday. Ron Bousso argues that it shrugs off long-term anxieties about the transition toward low-carbon energy as well as near-term concerns about a potential looming oversupply.
On the topic of oversupply, ROI Asia commodities columnist Clyde Russell wrote this week that the LNG market is bracing for a surge in supply next year, with significant uncertainty about how low spot prices will have to drop to clear the additional volumes.
Finally, over in the metals markets, ROI metals columnist Andy Home notes that copper has been added to the U.S. government's list of critical minerals, even though the U.S. has the world's second largest copper stockpile.
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.
I’d love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com.
