Articles

• Trump on Venezuela: It’s going to be starting on land pretty soon
• Trump: Probably only one winner in AI, China or the USA
• Japan October industrial production +1.5% y/y vs +1.6% prelim
• Canada’s Carney inches closer to a majority as Conservative switches parties
• Magnitude 6.7 earthquake leads to 1m tsunami in Japan
• GPT-5.2 is looking like another leap forward

Markets:

• Gold down $15 to $4267
• US 10-year yields up 1.6 bps to 4.15%
• WTI crude up 44-cents to $58.04
• Nikkei up 0.7%
• GBP leads, JPY lags

Flows were light to wrap up the week in Asia but stocks were lively. The Nikkei gapped higher at the open and continued above 51,000 and a test of the monthly high. It failed though and there was some profit taking as the 1.7% gain was cut in half.

Gold also saw some selling after the big rally in US trade. It’s under some mild pressure while silver is flat after hitting a record earlier.

The FX market was struggling to find a reason to get going during a light day of news flow.

The most-meaningful headline was Trump talking about an escalation to ground attacks in Venezuela. That’s led to some moderate bids in crude but had little effect on the overall risk mood. It’s something to keep an eye on.

This article was written by Adam Button at investinglive.com.

• Prior was +2.0%
• Prelim was +1.6%
• Capacity utilization +3.3% vs +2.5% prelim

Japanese factory data this week has been firm, showing that the trade war isn’t a problem so far.

This article was written by Adam Button at investinglive.com.

An earthquake shook up the Pacific coast of Japan approximately 130 km NE of Kuji.

There is no damage expected but a tsunami warning has been issued.

This article was written by Adam Button at investinglive.com.

The US dollar is down on most fronts this year but it came after years of gains. The team at Scotiabank says don’t get too comfortable with USD longs as the worst is yet to come.

In their Focus On 2026 outlook, Scotia’s Shaun Osborne and Eric Theoret are sticking to their guns: they see broad USD weakness playing out through 2026 and into 2027.

The core thesis here is simple: Divergence.

Scotia expects the Fed to cut rates significantly—taking the target rate down to 3% by the first half of 2026. Meanwhile, other major central banks are expected to make few policy changes or even tighten.

It’s the classic rate differential trade and erodes the two pillars that have held the dollar up for so long: higher relative growth and those juicy yield differentials. We’ve been hearing about the “end of US exceptionalism” for a while, but Scotia thinks the real pain point for the USD hits in Q2/Q3 of 2026 as the US labour market slows down and the Fed stays dovish.

The Euro and Yen: The quiet climbers

For the euro, the ECB is expected to leave rates unchanged, which should boost EUR/USD higher. Scotia is targeting a medium-term move into the 1.22-1.24 range (spot at 1.17).

For the yen, with the BoJ expected to tighten modestly in 2026, the currency finally gets some love. The forecast sends USDJPY down to 140 by late 2026 and 130 by the end of 2027. (spot at 155.68)

The Contrarian Trade: Buy the Loonie

If you’re looking for a non-consensus trade, this is it. The market is overwhelmingly short CAD right now, but Scotia sees a massive reversal incoming.

While the Fed is cutting to 3%, Scotia expects the Bank of Canada to actually start hiking rates in the second half of 2026.

They see the spread between the Fed and the BoC—which is currently a massive 175 bps—collapsing to just 25 bps by the end of next year. As that compression happens, their forecast puts USDCAD to 1.35 by year-end 2026, dropping to 1.30 by 2027. (spot at 1.3775)

Emerging Markets: Caution on the Peso

For the carry traders, the outlook on the Mexican Peso (MXN) is a lot less rosy. Scotiabank is bearish here despite the yield.

Why? Banxico is cutting rates just as volatility is picking up. The narrowing spread with the US, combined with trade uncertainty around the CUSMA review, makes the risk-reward look poor. They see USDMXN grinding higher to 19.00 next year and 20.40 by 2027.

Scotiabank FX Forecasts at a Glance

Here are the key levels they are watching for the majors by December 2026:

• EURUSD: 1.21
• USDCAD: 1.35
• USDJPY: 140
• GBPUSD: 1.38
• USDMXN: 19.00

If Scotia is right, the “higher for longer” US yields trade is dead, and the rotation out of the dollar is the big macro play for 2026.

This article was written by Adam Button at investinglive.com.

Leaked internal benchmarks for GPT-5.2 “Thinking” have been posted by Sam Altman, and quite frankly, the numbers are ridiculous. We aren’t talking about incremental gains here.

For some reference:

• AIME 2025: 100.0%. It solved it. This is a big math test and it means that competition math is effectively “completed” for this model.

• ARC-AGI-2: This is the big one for the AGI purists. It jumped from 17.6% (GPT-5.1) to 52.9%. That is a massive leap in abstract reasoning and generalization—historically the Achilles’ heel of LLMs.

• GDPval (Knowledge Work): This is the metric that matters for the economy. It flew from 38.8% to 70.9%.

It’s also worth noting that this highlights that scaling and reasoning are both advancing as this is a model that uses maximum reasoning efforts. Lately, it looked like OpenAI got caught with its pants down because Gemini scaled and it worked but this shows that reasoning is doing things that looked impossible.

For users, the thinking models aren’t that popular because they’re slow for every day tasks to replace Google but for innovation, this is huge. What the dual-releases show is that both tracks are still working. Ultimately, there will be a ‘best of both’ that unlocks something beyond this.

This is also big for the economy. GDPval tests well-specified knowledge work tasks spanning 44 occupations.

At the moment, this release is being rolled out and we’re going to see if the use cases match the numbers. What we aren’t seeing is what the lesser models do. This release includes 5.2 Thinking but also GPT‑5.2 Instant and Pro.

What OpenAI says:

“Overall, GPT‑5.2 brings significant improvements in general
intelligence, long-context understanding, agentic tool-calling, and
vision—making it better at executing complex, real-world tasks
end-to-end than any previous model.”

That’s exciting but this screenshot is also making the rounds:

This article was written by Adam Button at investinglive.com.

When Mark Carney pulled off an improbable election win this year, he didn’t earn a majority in parliament. That means his government could fall at any time, but he came very close.

The Liberals won 169 seats, just three short of a 172 seat majority. In early November, Conservative MP Chris d’Entremont crossed the floor to join the Liberals. That got them to 170. Just now, Michael Ma (MP for Markham-Unionville) announced that he is switching from the Conservatives to the Liberals.

That gets them to 171, just one seat shy.

There are rumors they are courting others and if they get there, that will give Carney enough votes to survive another three years, at minimum. Even without that, now he just needs the support of one other voter to get any legislation passed.

This move will also raise the stakes in any future by-elections as that could flip the numbers.

This article was written by Adam Button at investinglive.com.

• Will make a signing related to AI
• Forget trying to get approval for 50 different states
• Sacks: Order gives tools to push back on most onerous state regulations
• We are taking steps for a single national standard on AI

The idea of dominance is that AI will be iterative, so the latest generation of AI designs the following one and that also maps to the physical world. I have a hard time believing that it won’t be diffuse as the stakes are so high and the information nearly impossible to protect. Moreover, the world can only accept change so quickly.

At the same time, there is a limit in real world applications. Once a car learns to drive a car, it’s learned. Maybe you can refine it and make it more efficient but in time — and probably not a long time — others catch up. Perhaps you could ‘dominate’ for a time but only if you’re essentially giving it away or using some kind of regulator capture that’s hard to push across borders.

Moreover, I continue to believe that the black swan of this century will be the collapse of the intellectual property system.

This article was written by Adam Button at investinglive.com.

The US is clearly trying to provoke some kind of conflict, if not a war. Trump wants regime change in Venezuela for some reason.

That said, Trump likes to make threats so he could be trying to bluff Maduro into leaving the country.

Yesterday, the US seized an oil tanker carrying Venezuelan crude.

On Ukraine, Trump said he thought they were ‘very close’ to a deal. Again, it’s hard to take what he says literally and get excited about peace in Ukraine or war in Venezuela.

This article was written by Adam Button at investinglive.com.

After the fireworks from the Australian jobs report yesterday, the schedule for the Friday Asian session (Thursday evening US time) is looking decidedly thin. We are scraping the bottom of the barrel for data, so don’t expect too many idiosyncratic catalysts to drive the majors.

The action kicks off early in the session at 02:00 GMT with a look at the Australian consumer via the LSEG IPSOS PCSI. While not as closely watched as the Westpac sentiment numbers, it gives us another data point on how the Aussie consumer is holding up under the weight of current rates. The prior read sat at 52.82.

Later on, while Tokyo is lunching, we get the final reads on Japanese Industrial Production at 04:30 GMT.

• Industrial Output (MoM): The preliminary read was 1.4%.

• Capacity Utilization: Prior read was 2.5%.

Unless we see a massive revision here, this is likely to be a non-event for the USD/JPY, which will continue to take its cues from Treasury yields and the broader risk tone.

With a calendar this light, watch for month-end flows or profit-taking as traders square up positions ahead of the weekend.

Here is the schedule for the session (All times GMT):

02:00 GMT

• AU: LSEG IPSOS PCSI (Dec) — Prior: 52.82

04:30 GMT

• JP: Industrial Production Revised (MoM) (Oct) — Prelim: 1.4%

• JP: Industrial Production Revised (YoY) (Oct) — Prelim: 1.6%

• JP: Capacity Utilization (MoM) (Oct) — Prior: 2.5%

The central bank and political speaker list is also bare.

This article was written by Adam Button at investinglive.com.

• Major stock indices end mixed as Dow and S&P hit new records.NASDAQ falls on tech weakness
• Federal Reserve announces reappointment of regional Presidents
• Silver Skyrockets to Record Highs Over $64; Gold Chases $4,300
• WH Trump on Fed: More should be done.
• The US treasury auctioned $22B of 30 year bonds at a high yield of 4.773%
• Atlanta Fed GDPNow Upgrade: Q3 Growth Hits 3.6% as Net Exports Surge
• Financial sector strides amid technology slump
• Dow Jones Technical Analysis after Last Night’s FOMC. Bulls Holding.
• US initial jobless claims 236K versus 220K estimate. US trade deficit narrows to -$52.8B
• USD is moving lower the day after the FOMC decision. What are the technicals forecasting?
• investingLive European FX news wrap: SNB keeps rates unchanged, sounds more optimistic

Key Takeaways:

• USD Weakness: The dollar fell against European majors and the Yen as US yields retreated.

• Jobless Claims: Initial claims normalized to 236K, confirming last week’s drop was a holiday outlier.

• AUD Volatility: Soft internal jobs data undermined RBA hawkishness, though the pair bounced off key technical support.

• Commodities: Silver and Gold posted massive gains, while Crude Oil successfully tested critical support from November.

USD Closes Mixed as Claims Data Weighs on Yields

The US Dollar finished the session on the back foot, giving back recent gains against most major counterparts. The greenback struggled to find demand as US Treasury yields softened across the curve, driven by a “normalization” in labor market data.

The Closing Scoreboard:
The Dollar fell against the defensive and European currencies:

• CHF: -0.69%

• EUR: -0.43%

• JPY: -0.32%

• CAD: -0.16%

• GBP: -0.05%

However, the greenback managed to hold onto gains against the antipodal currencies:

• AUD: +0.16%

• NZD: +0.10%

US Jobless Claims: The “Holiday Noise” Fades

The primary catalyst for the dollar’s intraday weakness was the release of the weekly US Initial Jobless Claims.

Last week, the market was momentarily confused when claims dropped sharply to 191K, well below the 200K psychological level and the 220K estimate. However, analysts warned that the data was heavily distorted by the Thanksgiving holiday seasonality.

That caution proved correct today. Claims rebounded to 236K, coming in above the 220K estimate and testing the upper end of the recent 205K–240K range. The “weaker” jobs picture (higher claims) was welcomed by bond bulls, helping to push yields lower and, by extension, weighing on the USD.

AUDUSD: Soft Jobs Data Undercuts RBA Hawks

The Australian Dollar saw two-way volatility following a domestic jobs report that was weaker than the headline suggested. While the unemployment rate came in at 4.3% (beating the 4.4% expectation), the internal details painted a picture of a softening labor market:

• Full-time jobs: Plunged by –56.5K (erasing the prior month’s +55.3K gain).

• Participation Rate: Dropped to 66.7% (from 67.0%), which artificially suppressed the unemployment rate.

The RBA Impact:
This report comes just 24 hours after Reserve Bank of Australia Governor Bullock sounded notably hawkish, leading markets to price in a 33% chance of a March rate hike. Today’s data dampens that speculation. The sharp drop in full-time employment suggests the “cooling” the RBA has been waiting for is arriving, likely pushing rate hike expectations off the table.

Technical Outlook:
Despite the fundamental headwind, the AUDUSD showed resilience. The pair sold off to a low of 0.6627, testing a key swing area defined by the lows between 0.66247 and 0.6635. Buyers stepped in at this support zone, and the price bounced roughly 16 pips off the lows heading into the close.

Treasury Yields: The Short End Leads the Way Down

US Treasury yields moved lower on the back of the jobless claims report, with the curve steepening slightly as the short end outperformed.

• 2-Year Yield: 3.525% (–4.0 bps)

• 5-Year Yield: 3.715% (–4.0 bps)

• 10-Year Yield: 4.142% (–2.1 bps)

• 30-Year Yield: 4.793% (–0.2 bps)

30-Year Auction Results:
The Treasury’s auction of 30-year bonds was solid, earning a grade of “B.” While there was no disaster, the auction failed to spark a significant follow-through rally in the long bond, leaving the 30-year yield essentially flat on the day.

Commodities & Crypto: Precious Metals Shine

Crude Oil Tests Support
Crude oil prices remained under pressure, falling $0.65 (–1.12%) to settle at $57.77. Critically, the price tested the major support level from November 25 at $57.10, hitting a low of $57.01 before bouncing. Holding this level is vital for the bulls to prevent a deeper breakdown.

Gold & Silver Surge
Precious metals were the standout performers of the day, capitalizing on lower yields and a softer dollar:

• Gold: Rallied sharply by $45.41 (+1.08%) to close at $4,273.

• Silver: Continued its parabolic run, surging to $63.47. (For a deep dive into the technical breakout on metals, [CLICK HERE]).

Bitcoin Consolidates
Bitcoin remained relatively quiet amidst the volatility in traditional assets, dipping slightly by $135 (–0.15%) to trade at $91,921, as it consolidates recent gains.

This article was written by Greg Michalowski at investinglive.com.

Trump news today:

• Administration sanctions Maduro’s nephews and 6 ships carrying Venezuelan oil
• Bessent commented that Maduro group in criminal associations are flooding the US with drugs that is poisoning the American people
• Maduro and cronies have a choice: stop the drug trafficking stop the corruption, stop the dictatorship and leave the country.

ON Ukraine:

• The administration continues to talk with both sides.
• If there is a real chance to a peace agreement, the US will send representatives for talks, meetings would need to be productive.

On the Fed:

• Trump thinks the Fed should do more.

On Nvidia H200 chips:

• Chips will be shipped to approved customers in China. (Nvidia shares are down at $-3.80 or more is 2.06% at $179.99)

Trump on TruthSocial said: prices are coming down fast, energy, oil, and gasoline marketing 5 year lows, and the stock market today just it and all-time high. Tariffs are bringing in hundreds of billions of dollars.

On China and Japan :

• Trump has a good relationship with leaders of China and Japan

Trump is fighting declining approval ratings although they may be coming after after the dip due to the shutdown. Nevertheless, Trump’s approval rating varies by pollster, generally ranging between 36% and 45% as of mid-December 2025.

Most major polling averages show his approval rating in the low-to-mid 40s, while disapproval ratings are consistently above 50%.

Here is a breakdown of the most recent data from reputable sources:

Polling Averages (Aggregated Data)

These sources combine multiple polls to smooth out outliers and provide a broader picture of public sentiment.

• RealClearPolitics (RCP) Average:

  • Approval: 43.9%

  • Disapproval: 52.9%

  • As of December 11, 2025

• FiveThirtyEight (Silver Bulletin):

  • Approval: 42.4%

  • Disapproval: 54.2%

  • As of December 11, 2025

• Decision Desk HQ:

  • Approval: 43.1%

  • Disapproval: 52.8%

  • As of December 11, 2025

Individual Major Polls

Individual polls can show more variance depending on their methodology (e.g., registered voters vs. all adults).

• Gallup:

  • Approval: 36%

  • Disapproval: 60%

  • Polling dates: Nov 3–25, 2025

  • Note: Gallup highlighted this as a “new second-term low” for President Trump.

• Reuters / Ipsos:

  • Approval: 41%

  • Disapproval: 58%

  • Released: Dec 9, 2025

  • Note: This marked a slight increase from a previous low of 38%.

• Rasmussen Reports:

  • Approval: 45%

  • Disapproval: 52%

  • Released: Dec 10, 2025

• AP / NORC:

  • Approval: 36%

  • Disapproval: 62%

  • Polling dates: Nov 6–10, 2025

This article was written by Greg Michalowski at investinglive.com.

The US treasury has auctioned off $22Bof 30 year bonds at a high yield of 4.773%

The WI (when-issued) level at the time of the auction was 4.774%

The results of a US Treasury auction act as a real-time “report card” on the market’s appetite for US government debt. Because US Treasuries are the risk-free benchmark for the entire global financial system, the results ripple across all asset classes—stocks, currencies, and commodities.

Given the auction result, my AUCTION GRADE: B

Reasons for the B grade.

• The tails was -0.1 basis points lower than the WI level. Positive.
• The Bid to cover was on the screws vs the 6 month average. Average.
• Indrect bidders were higher than the 6 month average. Slight positive for international buyers
• DIrect bidders were near the 6 month average. Average
• Dealers were saddled with slightly less than average. Slight positive.

Yields are little changed after the completion of the coupon auctions.

US Treasury Auction Process: Key Components

The US Treasury auction process determines the yield (interest rate) the government pays on its debt. The market effectively “votes” on the price of US debt through this mechanism.

1. The “WI” Level (When-Issued) was 4.774%

• Definition: “When-Issued” refers to trading that occurs in the time between the announcement of an auction and the actual auction itself.

• Significance: It serves as the market’s “price consensus” or expected yield leading up to the deadline. It anchors the market’s expectations.

2. The Tail -0.1 basis point vs the 6 month average of 0.3 basis points

• Definition: The Tail is the difference between the High Yield (the actual yield determined at the auction) and the WI Yield (the expected yield right before the auction closes).

  • Tail = High Yield – WI Yield

• Interpretation:

  • Positive Tail (Weak Demand): If the auction yields higher than the WI level (e.g., WI was 4.00% but the auction stopped at 4.02%), it indicates that demand was softer than expected. Dealers had to lower prices (raise yields) to sell the entire issue.

  • Stopping Through (Strong Demand): If the auction yields lower than the WI level (e.g., 3.98% vs. 4.00%), it indicates aggressive buying.

3. Bid-to-Cover Ratio 2.36X vs the 6 month average of 2.36X

• Definition: The total dollar amount of bids received divided by the amount of debt being sold.

• Significance: This is the primary metric for demand.

  • Higher is better: A ratio of 2.5x means for every $1 of debt offered, $2.50 was bid. Ratios below average suggest weak demand and can spook markets.

4. The Bidders

The Treasury breaks down buyers into three categories to show who is buying the debt:

• Indirect Bidders 65.4% vs the 6 month average of 63.7%

  • Who they are: Foreign central banks, international investors, and some domestic investment managers placing bids through a primary dealer.

  • Significance: Often viewed as a proxy for foreign demand. High indirect participation is generally seen as bullish (strong global confidence in US debt).

• Direct Bidders 23.5% vs the 6 month average of 23.9%:

  • Who they are: Domestic money managers, insurance companies, hedge funds, and individuals placing bids directly with the Treasury (bypassing dealers).

  • Significance: Represents “real money” domestic demand.

• Primary Dealers 11.2% vs the 6-month average of 12.5%

  • Who they are: Large banks (e.g., Goldman Sachs, JPMorgan) designated by the NY Fed. They are required to bid in every auction.

  • Significance: They act as the “backstop.” They buy whatever supply the Directs and Indirects don’t take. A high Dealer award is generally bearish (bad), as it means the banks are stuck holding excess inventory they must now try to sell into the secondary market.

Debt Statistics & This Week’s Auction Data

Total US Public Debt Outstanding:

As of early December 2025, the total public debt outstanding is approximately $38.4 trillion.

Treasury Auctions for the Week of December 8, 2025:

The Treasury issued the following amounts in the 3, 10, and 30-year maturities this week:

This article was written by Greg Michalowski at investinglive.com.