2nd December 2025

MACRO

Chinese Rare Earth Magnet Exports Resume

At least three Chinese rare-earth magnet producers have been granted export licenses that will enable them to accelerate shipments following a trade truce between the US and China. WSJ reports Chinese rare-earth magnet companies are finding workarounds to their government’s onerous export restrictions, tweaking magnet formulas to avoid using certain restricted rare-earth elements and devising other strategies like embedding them in motors to get powerful magnets out of the country. Europe’s defense companies are scrambling for rare earth minerals as the US is scooping up supplies, and European rare earths supplies may begin running dry in months. (Reuters, Wall Street Journal, Bloomberg)

Hassett Winning Fed Chair Race

A Wall Street Journal Timiraos article notes interviews for the position are still under way, though Hassett offers what other candidates don’t: the president’s trust and credibility with markets. (Wall Street Journal)

US Energy Department Rebrands National Lab

The US Energy Department is renaming its National Renewable Energy Laboratory to the National Laboratory of the Rockies, a symbolic rebranding of the storied institution to align it with the Trump administration’s focus on fossil fuels. (Wall Street Journal)

Japanese Bond Market Stabilizes

Japanese sovereign bonds rebounded after Tuesday’s 10-year auction drew solid demand, bringing temporary relief following a steep selloff triggered by Bank of Japan Governor Kazuo Ueda’s unexpectedly hawkish turn. Japanese Finance Minister Satsuki Katayama said on Tuesday she sees no gap between the government and the BOJ on their assessment of the economy, after the central bank chief voiced confidence in the outlook and hinted at a rate hike. (Bloomberg, Reuters)

Japan Fiscal Policy Debate Continues

Japan should still keep an eye on its primary balance, according to a Finance Ministry advisory panel, even after PM Sanae Takaichi signaled a shift away from a long-standing ministry target of achieving a surplus. (Bloomberg)

China-Japan Flight Cancellations Mount

Some 40% of scheduled flights from China to Japan in December have been scrapped, according to Chinese state media, as the fallout for air travel and tourism from a deepening dispute between two of Asia’s largest economies grows. (Bloomberg)

China Industrial and Social Policy Updates

China started a power plant using an advanced gas turbine that’s been locally manufactured for the first time, paving the way for the country to eventually reduce reliance on imported technology amid a global shortage of equipment. China will impose a value-added tax on contraceptive drugs and devices—including condoms—for the first time in three decades, its latest bid to reverse plunging birth rates that threaten to further slow its economy. The China Iron and Steel Association urged local ore producers to speed up key projects, as the world’s biggest consumer grapples with its dependence on imported supplies from top miners such as BHP Group. (Bloomberg)

Bank of England Cuts Capital Requirements

The Bank of England has cut its estimate of how much capital the UK’s banking sector needs for the first time in a decade, and signaled a consultation that could free up extra lending and higher payouts to shareholders. (Bloomberg)

UK Business Outlook Deteriorates

Britain’s private sector expects output to slide over the next three months in their gloomiest outlook since May, as cautious consumer spending and cost pressures continue to weigh on businesses, a CBI survey showed on Tuesday. UK house prices rose for a third consecutive month, according to Nationwide, in a sign that the market defied the looming threat of tax hikes ahead of the Labour government’s November 26 budget. (Reuters, Bloomberg)

Australia Economic Activity Rebounds

Australia’s government spending jumped in the third quarter to add to a long-awaited rebound in business investment, setting the stage for a solid economic performance. (Reuters)

New Zealand Central Bank Governor’s Priorities

New Zealand’s new central bank governor, Anna Breman, said on Tuesday the bank’s top priority would remain keeping inflation low and stable while supporting economic growth, as she pledged greater transparency around the bank’s monetary policy decisions. (Reuters)

South Korea Inflation Stable, Tariff Cut Confirmed

South Korea’s headline inflation held steady in November and stayed above the central bank’s 2% target for a third straight month. US Commerce Secretary Lutnick confirmed that the general tariff rate on imports from South Korea, including on autos, would drop to 15% retroactive to November 1 because South Korea has introduced legislation in parliament to implement the country’s strategic US investment commitments. (Wall Street Journal)

Thailand Floods Disrupt Tech Supply Chains

Thailand said the floods that have devastated much of the country’s south, claiming at least 181 lives, have “paralyzed” the flow of high tech components and car parts from Hat Yai, potentially benefiting rival exporters in Indonesia and Vietnam. (Bloomberg)

GEOPOLITICAL

ECB Refuses to Backstop Ukraine Loan

The European Central Bank has refused to backstop a 140 billion euros payment to Ukraine, undermining an EU plan to raise a “reparations loan” backed by frozen Russian assets. (Financial Times)

US Envoy Witkoff Travels to Moscow

US envoy Steve Witkoff is traveling to Moscow to meet with President Vladimir Putin, who claimed a key Ukrainian city had fallen to Russia on the eve of the talks about a potential peace plan to end his war. (Bloomberg)

Japan-China Lawmakers Meet Amid Tensions

A coalition of Japanese lawmakers promoting friendship with China met with Chinese Ambassador to Japan Wu Jianghao in Tokyo, signaling efforts to ease tensions while the two nations also sparred over disputed islands. The dispute between China and Japan could drag on for a year, Taiwanese Foreign Minister Lin Chia-lung said, adding Taipei hoped the two sides can find a way to resolve their differences. (Bloomberg)

Russia-Flagged Tanker Attacked in Black Sea

A Russia-flagged tanker came under attack in the Black Sea, Turkish authorities said, the fourth such incident in a week. (Bloomberg)

EQUITIES

OpenAI Declares “Code Red” on ChatGPT Quality

OpenAI Chief Executive Sam Altman told employees Monday that the company was declaring a “code red” effort to improve the quality of ChatGPT and delaying other products as a result. Of particular concern to Altman is Google, but he said that a new reasoning model that OpenAI is planning to release next week is ahead of Google’s latest Gemini model. Altman said OpenAI would be pushing back work on other initiatives, such as advertising, AI agents for health and shopping, and a personal assistant called Pulse. (Wall Street Journal)

Coalition Seeks to Limit OpenAI’s Power in California

A coalition, which is seeking funding from Elon Musk, is proposing a California ballot initiative aimed at limiting OpenAI’s power. The initiative aims to review and potentially reverse conversions to nonprofit organizations engaged in scientific and technological research that occurred since January of 2024. (Wall Street Journal)

Apple Shakes Up AI Leadership

Apple is shaking up its AI ranks, poaching a Microsoft executive and reorganizing after announcing the retirement of its top AI leader, whose tenure was defined by the company’s artificial-intelligence struggles. (Wall Street Journal)

Trump Administration Invests in xLight Semiconductor Startup

The Trump administration will invest up to $150 million in xLight, a startup chaired by former Intel CEO Pat Gelsinger that is trying to develop advanced semiconductor manufacturing techniques. XLight is trying to improve the critical chip-making process known as extreme ultraviolet lithography. (Wall Street Journal)

Intel Expands Malaysia Operations

Intel will invest an additional 860 million ringgit ($208 million) to make Malaysia its assembly and testing operations center, according to Prime Minister Anwar Ibrahim, giving a boost to the Southeast Asian nation’s critical role in the global semiconductor supply chain. (Bloomberg)

Netflix Sweetens Warner Bros. Discovery Bid

Netflix has sweetened its offer for Warner Bros. Discovery in a second round of bids as it tries to outdo rival Paramount. (Wall Street Journal)

Costco Sues Trump Administration Over Tariffs

Costco became the latest and one of the biggest companies to sue the Trump administration over tariffs in an effort to secure a full refund should the Supreme Court rule the sweeping duties illegal. (Wall Street Journal)

Samsung Galaxy Z TriFold US Launch Planned

Samsung Electronics’ Galaxy Z TriFold is expected to hit the shelves in the US as early as the first quarter of 2026, after it goes on sale in South Korea and elsewhere this month. (Wall Street Journal)

Banco Santander Reduces Polish Stake

Banco Santander said it is selling part of its stake in its Polish subsidiary for $473.1 million, after its decision to divest around half of Santander Bank Polska to Erste Group earlier this year. (Wall Street Journal)

Swiggy Prepares $1.1 Billion Raise

Indian food deliverer Swiggy is preparing to raise as much as 100 billion rupees ($1.1 billion) from institutional investors as early as next week. (Bloomberg)

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