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Morning Bid: Just a blip for risk assets, more Fed pain for the dollar

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Morning Bid: Just a blip for risk assets, more Fed pain for the dollar

LONDON, Dec 3 (Reuters) – By Yoruk Bahceli, markets correspondent

What matters in U.S. and global markets today

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Risk assets are showing further signs of recovery on Wednesday from a broad selloff that kicked off the month, but bonds are sitting on their losses for now.

And the dollar is down with focus back to the Federal Reserve, with Trump delaying his pick for the next chair to 2026. Meanwhile, investors are stuck watching the ADP jobs report in the absence of November payrolls.

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I’ll get into all the market news below.

But first check out Mike Dolan’s latest column on why investors should worry less about so-called ‘vigilantes’ and pay more attention to bond-market ‘termites’.
And listen to the latest episode of the new Morning Bid, opens new tab daily podcast. Subscribe to hear Mike and other Reuters journalists discuss the biggest news in markets and finance seven days a week.

Today’s Market Minute

  • Russia and the U.S. did not reach a compromise on a possible peace deal to end the war in Ukraine after a five-hour Kremlin meeting between President Vladimir Putin and Donald Trump’s top envoys, the Kremlin said on Wednesday.
  • An acute global shortage of memory chips is forcing artificial intelligence and consumer-electronics companies to fight for dwindling supplies, as prices soar for the unglamorous but essential components that allow devices to store data.
  • China is likely to stick to its current annual economic growth target of around 5% next year, government advisers and analysts said, a goal that would require authorities to keep fiscal and monetary spigots open as they seek to snap a deflationary spell.
  • It’s been almost 10 months since the Democratic Republic of Congo, the world’s dominant cobalt supplier, halted exports of the battery metal, which has been a booster for the bombed-out cobalt price, writes ROI Mentals Columnist Andy Home.
  • Benchmark U.S. natural gas prices are ending 2025 just as they entered it – with a strong rally. And that’s bad news for people hoping for further cuts to U.S. coal use, writes ROI Global Energy Transition Columnist Gavin Maguire.

Was it all just a blip for risk assets?

The broad selloff that kicked the week off for markets is proving to be a blip for risk assets.

After dropping half a percent on Monday, the S&P 500 rose 0.25% on Tuesday and futures were up in early London trading.

Bitcoin was up another 1.7% after rising nearly 6% on Tuesday. But it remains 26% below an October peak.

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In other signs that it’s not all plain sailing, 10-year Treasury yields dipped on Wednesday but were still up 7 basis points this week, while Japan’s bond yields hit multi-year highs.

But in the absence of a narrative to drive markets, all focus remains on the Fed, its meeting next week where traders are banking on a rate cut, and who will lead it next.

U.S. President Donald Trump said on Tuesday he would announce his pick for the next Fed chair — largely expected to be White House economic advisor Kevin Hassett — early next year, later than previously expected, having previously said he already knows who he’ll pick.

Later on Tuesday, Trump said a potential Fed chair was present as he introduced Hassett at a meeting.

Bets on Hassett as the next Fed chair briefly dipped on betting site Polymarket on Tuesday, but quickly recovered.

Investors reckon Hassett, seen as favoring lower interest rates, could dent the dollar further. The euro and sterling reached their highest in over a month against the dollar on Wednesday as Fed rate cut bets continue to weigh on the dollar.

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Focus turns to economic data, though the prints are unlikely to sway the Fed.

November’s ADP report is expected to show private employers added 10,000 jobs, down from 42,000 in October, another sign of the labor market weakening.

While the ADP doesn’t correlate with the government’s jobs report, markets are watching alternatives more closely as November’s official one will only be released after the Fed meeting, thanks to the U.S. government shutdown.

The ISM services PMI is also due, following data on Monday showing a ninth month of contraction for the manufacturing sector.

Elsewhere, it’s all about geopolitics.

Russia and the U.S. did not reach a compromise on a possible Ukraine peace deal.
The European Union’s executive arm is set to move ahead with a proposal to use frozen Russian assets to fund lending to Ukraine. It’s also leaving open the possibility of raising funding through joint EU borrowing — an option financial markets would also welcome — or a combination of the two.

But Belgium, home to Euroclear where the assets sit and concerned over legal repercussions, was quick to say the new proposals still don’t address its concerns.

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The bloc also agreed to phase out Russian gas imports, which still account for 12% of its total imports, by late 2027.

Chart of the day

Chart shows Kevin Hassett is in the lead to chair the Fed on betting site Polymarket

White House Economic Advisor Kevin Hassett is still overwhelmingly seen as the candidate Trump will nominate to succeed Jay Powell as Federal Reserve Chair, according to betting site Polymarket.

Today’s events to watch

* ADP national employment report (November)

* U.S. industrial production (September)

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* ISM services PMI (November)

* S&P Global services, composite final PMIs (November)

* U.S. corporate earnings: Dollar Tree, Five Below, Macy’s, Thor Industries, PVH Corp, Torrid Holdings, Tillys

Opinions expressed are those of the author. 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.
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By Yoruk Bahceli; Editing by Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles., opens new tab

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Some flu measures decline, but it’s not clear this severe season has peaked

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Some flu measures decline, but it’s not clear this severe season has peaked

NEW YORK (AP) — U.S. flu infections showed signs of a slight decline last week, but health officials say it is not clear that this severe flu season has peaked.

New government data posted Friday — for flu activity through last week — showed declines in medical office visits due to flu-like illness and in the number of states reporting high flu activity.

However, some measures show this season is already surpassing the flu epidemic of last winter, one of the harshest in recent history. And experts believe there is more suffering ahead.

“This is going to be a long, hard flu season,” New York State Health Commissioner Dr. James McDonald said, in a statement Friday.

One type of flu virus, called A H3N2, historically has caused the most hospitalizations and deaths in older people. So far this season, that is the type most frequently reported. Even more concerning, more than 91% of the H3N2 infections analyzed were a new version — known as the subclade K variant — that differs from the strain in this year’s flu shots.

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The last flu season saw the highest overall flu hospitalization rate since the H1N1 flu pandemic 15 years ago. And child flu deaths reached 289, the worst recorded for any U.S. flu season this century — including that H1N1 “swine flu” pandemic of 2009-2010.

So far this season, there have been at least 15 million flu illnesses and 180,000 hospitalizations, the U.S. Centers for Disease Control and Prevention estimates. It also estimates there have been 7,400 deaths, including the deaths of at least 17 children.

Last week, 44 states reported high flu activity, down slightly from the week before. However, flu deaths and hospitalizations rose.

Determining exactly how flu season is going can be particularly tricky around the holidays. Schools are closed, and many people are traveling. Some people may be less likely to see a doctor, deciding to just suffer at home. Others may be more likely to go.

Also, some seasons see a surge in cases, then a decline, and then a second surge.

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For years, federal health officials joined doctors’ groups in recommending that everyone 6 months and older get an annual influenza vaccine. The shots may not prevent all symptoms but can prevent many infections from becoming severe, experts say.

But federal health officials on Monday announced they will no longer recommend flu vaccinations for U.S. children, saying it is a decision parents and patients should make in consultation with their doctors.

“I can’t begin to express how concerned we are about the future health of the children in this country, who already have been unnecessarily dying from the flu — a vaccine preventable disease,” said Michele Slafkosky, executive director of an advocacy organization called Families Fighting Flu.

“Now, with added confusion for parents and health care providers about childhood vaccines, I fear that flu seasons to come could be even more deadly for our youngest and most vulnerable,” she said in a statement.

Flu is just one of a group of viruses that tend to strike more often in the winter. Hospitalizations from COVID-19 and RSV, or respiratory syncytial virus, also have been rising in recent weeks — though were not diagnosed nearly as often as flu infections, according to other federal data.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.

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Russia fires new hypersonic missile in massive Ukraine attack, Kremlin says

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Russia fires new hypersonic missile in massive Ukraine attack, Kremlin says

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Russia said on Friday it used its new hypersonic Oreshnik missile in an attack against Ukraine, according to reports.

The Kremlin said that the strike was carried out in response to what it said was an attempted Ukrainian drone strike on one of Russian President Vladimir Putin’s residences, something Kyiv has denied, according to Reuters. 

The outlet noted that Ukraine and the U.S. have cast doubt on Russia’s claims about the alleged attempted attack on Putin’s residence on Dec. 29, the report said. Ukraine called it “an absurd lie,” while President Donald Trump also doubted the veracity of the claim, saying he did not believe the strike occurred and that “something” unrelated happened nearby.

This is the second time Russia has used the intermediate-range Oreshnik, which Putin has said is impossible to intercept because of its velocity, Reuters reported.

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RUSSIA ALLEGES ATTACK ON PUTIN RESIDENCE AS UKRAINE DENIES CLAIM AHEAD OF TRUMP TALKS

A part of the Russian nuclear-capable hypersonic Oreshnik missile system at the site of the Russian missile strike, amid Russia’s attack on Ukraine, in Lviv region, Ukraine, Jan. 9, 2026. (Security Service of Ukraine/Handout via Reuters)

The Russian Defense Ministry said that the strike targeted critical infrastructure in Ukraine, according to Reuters, which added that Russia said the attack also used attack drones and high-precision long-range land and sea-based weapons.

While Moscow did not say where the missile hit, Russian media and military bloggers said it targeted an underground natural gas storage facility in Ukraine’s western Leviv region, CBS News reported. Lviv Mayor Andriy Sadoviy said the attack hit critical infrastructure but did not give details, the outlet added.

Ukrainian President Volodymyr Zelenskyy addressed the attack on social media, saying that the aftermath was “still being dealt with.”

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“Twenty residential buildings alone were damaged. Recovery operations after the strikes also continue in the Lviv region and other regions of our country. Unfortunately, as of now, it is known that four people have been killed in the capital alone. Among them is an ambulance crew member. My condolences to their families and loved ones,” Zelenskyy wrote.

A resident stands on the balcony of his apartment, damaged during a Russian drone strike, amid Russia’s attack on Ukraine, in Kyiv, Ukraine, on Jan. 9, 2026. (Anatolii Stepanov/Reuters)

PUTIN RESIDENCE ATTACK VIDEO SLAMMED AS US OFFICIALS SAY UKRAINE DID NOT TARGET LEADER

The Ukrainian leader said the attack involved 242 drones, 13 ballistic missiles, one Oreshnik missile and 22 cruise missiles. Zelenskyy added that the ballistic missiles were aimed at energy facilities and civilian infrastructure as the people of Ukraine faced “a significant cold spell.” He said the attack was “aimed precisely against the normal life of ordinary people.” However, he assured that Ukraine was working to restore heating and electricity.

Zelenskyy claimed that in addition to the civilian infrastructure, a building of the Embassy of Qatar was damaged in the attack.

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Apartment buildings hit by a Russian missile strike late yesterday, amid Russia’s attack on Ukraine, in the city of in Kryvyi Rih, Dnipropetrovsk region, Ukraine, on Jan. 9, 2026. (Stringer/Reuters)

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“A clear reaction from the world is needed. Above all from the United States, whose signals Russia truly pays attention to. Russia must receive signals that it is its obligation to focus on diplomacy, and must feel consequences every time it again focuses on killings and the destruction of infrastructure,” Zelenskyy added.

A spokesperson for the State Department told Fox News Digital that the U.S. remains committed to ending the war through diplomatic means, emphasizing that it is the only path toward a durable peace. The spokesperson underscored Trump’s desire to end the war that is approaching its fourth year.

Fox News Digital reached out to the White House for comment.

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Mercosur: How Macron’s domestic weakness undercut his Brussels clout

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The French president’s failure to assemble a blocking minority against the Mercosur deal underscores how his domestic weakness is undermining his clout in Brussels. By contrast, EU Commission President Ursula von der Leyen and Germany have secured an important victory.

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