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December 17, 2025 at 1:41 AM IST
GLOBAL MOOD: Risk-Off
Drivers: Venezuela Oil Blockade, US Policy Uncertainty, Mixed US Data
Asian markets opened in a risk-off mood, tracking Wall Street lower as US jobs data cooled without strengthening expectations of early Fed rate cuts. Rising oil prices on Venezuela supply risks added caution, with investors awaiting US inflation data for clearer policy direction.
TODAY’S WATCHLIST
- Eurozone Inflation Data
- US Retail Sales
- Fed Waller Speech
- Fed Williams Speech
- Fed Bostic Speech
THE BIG STORY
US President Donald Trump has ordered a “total and complete” blockade of all sanctioned oil tankers entering and leaving Venezuela, sharply escalating tensions between Washington and Caracas. The move follows last week’s seizure of a Venezuelan-linked tanker and comes amid a heavy US military buildup in the region, including thousands of troops and multiple warships. While details on enforcement remain unclear, markets reacted swiftly, with US crude futures rising more than 1% on supply risk concerns.
Trump justified the action by accusing Venezuela of asset theft and linking the Maduro government to terrorism, drug smuggling and human trafficking, formally designating it a foreign terrorist organisation. Caracas has yet to respond officially, but the move raises the risk of further geopolitical escalation in energy markets.
Separately, Trump signed an executive order classifying fentanyl as a “weapon of mass destruction”, intensifying pressure on Latin American countries over drug trafficking. The designation could unlock additional homeland security funding and signals a tougher US stance on narcotics enforcement alongside its hardline energy and sanctions policy.
Data Spotlight
US job growth rebounded in November, with payrolls rising by 64,000, compared with a revised 105,000 decline in October and above expectations of a 50,000 increase. Hiring was driven by healthcare (+46,000) and construction (+28,000), while federal government employment continued to contract. However, the unemployment rate rose to 4.6%, the highest since September 2021, signalling a cooling labour market even as total employment levels remained broadly stable. ADP data showed private employers added an average of 16,250 jobs per week in late November, suggesting hiring momentum may be stabilising after earlier weakness.
Economic activity sent mixed signals. The S&P Global US Flash Manufacturing PMI slipped to 51.8 in December, a five-month low, reflecting softer production growth and a decline in new orders. Meanwhile, retail sales were flat in October, but the GDP-relevant control group surged 0.8%, pointing to underlying resilience in consumer demand despite pressures from higher rates and uncertainty.
Takeaway:
WHAT HAPPENED OVERNIGHT
- US stocks mixed as Nasdaq recovers, policy outlook in focus
- Nasdaq closed higher, while the S&P 500 and Dow ended lower, weighed down by declines in healthcare and energy stocks.
- Investors assessed delayed US economic data to gauge the Federal Reserve’s monetary policy path for 2026.
- Pfizer fell 3.4% after warning of a challenging 2026 outlook, while Humana dropped 6% following the announcement of leadership changes.
- Nasdaq closed higher, while the S&P 500 and Dow ended lower, weighed down by declines in healthcare and energy stocks.
- US Treasury yields ease as jobs data fuels Fed cut expectations
- The 10-year US Treasury yield fell 3.5 bps to 4.147%, extending losses for a second session.
- An unexpected rise in the unemployment rate supported bond buying, reinforcing expectations of further Fed easing.
- Investors remain cautious as labour data is distorted by delays linked to the recent government shutdown.
- The 10-year US Treasury yield fell 3.5 bps to 4.147%, extending losses for a second session.
- US Dollar slides to two-Month low as Fed cut bets persist
- The dollar index fell below 98.1, touching its weakest level in over two months as markets continued to price in further Fed easing next year.
- Investors remain positioned for up to two additional rate cuts in 2026, with delayed US data failing to materially shift that outlook.
- US jobs data provided mixed signals while retail sales offer little support.
- The dollar index fell below 98.1, touching its weakest level in over two months as markets continued to price in further Fed easing next year.
- Crude oil prices slide to multi-year low
- Brent crude prices fell 2.7% to $58.92 a barrel, while WTI dropped 2.7% to $55.27, marking their lowest settlement levels since February 2021.
- Persistent fears of excess global supply continued to weigh on prices, keeping downside pressure intact.
- Growing optimism around a potential Russia–Ukraine peace deal raised expectations that sanctions on Russian energy exports could be eased, potentially adding more oil to global markets.
- Brent crude prices fell 2.7% to $58.92 a barrel, while WTI dropped 2.7% to $55.27, marking their lowest settlement levels since February 2021.
Day’s Ledger
Economic Data
- Japan Balance of Trade
- Eurozone Inflation Data
- US Retail Sales
Corporate Actions
- Banganga Paper board to consider fund raising
- GMR Urban board to consider fund raising
- KPI Green board to consider fund raising
- Spandana Sphoorty board to consider fund raising
- Sadbhav Engg board to consider fund raising
Policy Events
- Fed Waller Speech
- Fed Williams Speech
- Fed Bostic Speech
Tickers to Watch
- Six private sector candidates apply for Canara Bank MD & CEO role
- RBI gives nod to HDFC Bank's arms to acquire up to 9.5% in IndusInd Bank
- Loan growth, lower cost targets positive for M&M Financial Services
- Saregama India to invest ₹3.25 billion in Bhansali Productions to boost business
- Vedanta's demerger plan gets NCLT nod; can now split business into 5 units
- Govt reappoints Ashwini Tewari as SBI managing director till December 2027
- B Sairam takes charge as Coal India chairman and managing director
- Tata Power to finalise ₹65 billion wafer-ingot project by Jan, says CEO
Must Read
- SEBI board to review mutual fund fee structure, stock broker rules
- Insurance industry flags concerns over proposed Insurance Amendment Bill
- RBI swap auction sees strong demand; bids twice the notified amount
- Crude drops below $60 as Russia-Ukraine peace hopes weigh on prices
- US banking giant JP MorganChase to set up Asia's largest GCC in India
- Centre proposes removing 50% cap on coal sales from captive mines
- Apple exports record $2 billion worth of iPhones from India in November
- US pauses $40 bn tech deal with UK over digital rules, food standards
- Ford to take $19.5 bn hit as it scales back EV push, shifts to hybrids
- US Unemployment Rose in November Despite Job Gains
- CoreWeave’s Staggering Fall From Market Grace Highlights AI Bubble Fears
See you tomorrow with another edition of The Morning Edge.
Have a great trading day
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