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Morning Bid: ‘Tis the season for macro forecasts

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Morning Bid: ‘Tis the season for macro forecasts

LONDON, December 5 (Reuters) – Everything Mike Dolan and the ROI team are excited to read, watch and listen to over the weekend.

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Hello Morning Bid readers!

We’ve entered the final month of the year, and that means one thing: 2026 market outlooks. While it’s tough to find many U.S. equity bears, forecasts are arriving with quite a few qualifiers – which is understandable given that so much is riding on an artificial intelligence boom that’s shrouded in uncertainty.
AI adoption might truly take off next year, but as ROI editor-at-large Mike Dolan argues, U.S. GDP growth is likely still going to be constrained by a 150-year 2% trendline, especially if technological innovation runs up against supply chain or labor market bottlenecks.
Speaking of the U.S. labor market, the picture there is once again clear as mud. On Wednesday, U.S. private payrolls for November came in at negative 32,000 – well below consensus and the biggest drop in more than two and a half years. Yet Thursday brought news that the number of Americans filing new applications for unemployment benefits had slid to the lowest level in a more than three years.
And despite all the talk of a K-shaped economy, a slice of consumer delinquency figures suggests the U.S. economic picture might not be so grim.
On top of that, fears about foreign investors souring on U.S. stocks may also be misplaced. Overseas private sector inflows into U.S. stocks are running at record-high levels, having re-accelerated in recent months. The big question now is whether this can be sustained next year.
Over in Asia, Japan’s 10-year yield jumped to its highest point since 2007 on Friday, shooting up over 25 bps in four weeks, even as the government of Prime Minister Sanae Takaichi has sought to soothe investor concerns about her $137 billion spending plan.
The battered yen continues to hover around 155 to the dollar, near the higher end of its multi-decade range. The currency’s seemingly excessive weakness may be a ticking time bomb, argues Eurizon SLJ CEO Stephen Jen.
In energy markets, the week started off with OPEC+ announcing that it would keep production levels unchanged through the first quarter. But uncertainty surrounding sanctioned volumes complicates the market outlook.
Staying with OPEC+, changes its making to its oil production quota system could spark a wave of upstream investments.
Meanwhile, in the gas market, Europe is preparing to phase out Russian imports by 2027. ROI energy transition columnist Gavin Maguire explains which countries will be most affected.
Over in metals, copper continues its bull run, but this boom does not mean global manufacturing is firing up commensurately heading into 2026.
Looking to next week, the main event is the Federal Reserve meeting. A 25 bps cut is all but guaranteed, but Fed-watchers will pay close attention to the number of dissents, as this may speak to the growing divisions in a body long known for consensus.
The real Fed story, however, remains Present Donald Trump’s selection of the next Chair. Mike Dolan argues that if White House adviser Kevin Hassett is selected – as Trump has hinted – he will effectively serve as a “shadow Fed Chair” for five months – with markets hanging on his every word.

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.

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I’d love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com, opens new tab ., opens new tab
This weekend, we’re reading…CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist: You don’t need to be a chess player to appreciate the story of Sarwagya Singh Kushwaha, the youngest player in chess history to earn an official FIDE rating before the age of four.RON BOUSSO, ROI Energy Columnist: A picture is worth a thousand words. That’s why I recommend looking at this exquisite collection of the Reuters’ top photographs of 2025, selected from the 1.6 million photos released to clients this year. And what a year it’s been…GAVIN MAGUIRE, ROI Global Energy Transition Columnist: This updated high-def map of U.S. Data Center infrastructure created by the chief cartographer at the recently renamed National Renewable Energy Laboratory (NREL) is a thing of beauty. It really highlights the enormous scale of the activity taking place across the country as transmission lines and server farms get up at running to power the AI revolution: https://docs.nrel.gov/docs/gen/fy26/98020.jpg, opens new tabJAMIE MCGEEVER, ROI Markets Columnist: The U.S. – and the world – is experiencing an intense speculative AI boom. To get a sense of where it might lead, economics professors Simon Johnson and Piero Novelli look back and Charles Kindleberger’s “Manias, Panics and Crashes”. The book, published in 1978, raises three fundamental questions relevant to today., opens new tabWe’re listening to…MIKE DOLAN, ROI Editor-at-Large: It’s not often you get a podcast on ‘r*’! With the Fed meeting up next week, this Brookings podcast on the theoretical ‘neutral’ rate of interest shows how the shocks of recent years may see this rate creeping higher after years of decline., opens new tabJAMIE MCGEEVER, ROI Markets Columnist: Michael Burry of ‘The Big Short’ fame doesn’t really do media beyond his often cryptic posts on X – and interviews are even rarer. But fast forward through about 6-7 minutes of ads and intro, and you get one here on the ‘Against the Rules’ podcast with author Michael Lewis., opens new tab

And we’re watching…

ANNA SZYMANSKI, ROI Editor-in-Charge: We’ve just launched the Morning Bid daily podcast, opens new tab, which will be available in audio and video. Subscribe to hear and see ROI editor-at-large Mike Dolan and other Reuters journalists discuss the biggest news in markets and finance seven days a week.
Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, opens new tab, and you can follow us on LinkedIn, opens new tab and X., opens new tab
Opinions expressed are those of authors. 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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US, Mexico agree to begin talks on USMCA reforms, timing unclear

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US, Mexico agree to begin talks on USMCA reforms, timing unclear
  • Greer, Ebrard discuss stronger rules of origin for trade pact
  • US, Mexico, Canada face July 1 review to decide future of USMCA
  • Canada’s role in talks unclear as US-Canada relations sour

WASHINGTON, Jan 28 (Reuters) – U.S. Trade Representative Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard agreed on Wednesday to begin formal discussions on possible reforms to the United States-Mexico-Canada trade agreement, Greer’s office said.

Possible reforms for the USMCA Joint Review include stronger rules of origin for industrial goods, more collaboration on critical minerals, increasing efforts to defend workers and producers, and U.S.-Mexican efforts to combat “the relentless dumping of manufactured goods in our region,” the USTR’s office said in a statement.

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USTR gave no details on timing for the talks and its statement did not say whether Canada would be involved. A USTR spokesperson did not immediately respond to a request for clarification.

Under the trilateral trade deal that took effect in 2020, the U.S., Mexico and Canada must launch a joint review of the trade pact by July 1, its sixth anniversary, to confirm their intention to renew it for a 16-year period or make modifications, in what USTR has described as a “sunset clause.”
Greer told lawmakers, opens new tab in December the USMCA’s “shortcomings are such that a rubberstamp of the agreement is not in the national interest” of the U.S. He has said the pact is not equipped to deal with surges of exports and investment from non-market economies such as China into the region.
U.S. President Donald Trump has been more blunt, saying this month that the trilateral trade pact was “irrelevant” for the U.S. despite a highly integrated North American economy.

After Wednesday’s meeting, Ebrard called the discussion positive in a social media video, and said the two sides talked about next steps for the USMCA and covered new U.S. tariffs, including those affecting Mexico’s auto exports to the U.S.

“This year it has to be reviewed, as you know,” Ebrard said of USMCA. “We have already moved forward on many issues so that the review goes as quickly and as well as possible.”

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USMCA has shielded Mexico from the bulk of President Trump’s tariffs, as goods that comply with its rules of origin can enter the U.S. duty-free.

Mexico’s Economy Ministry on Wednesday reported that the country’s exports reached a record high of nearly $665 billion in 2025, growing 7.6% from the previous year, citing data from the national statistics institute. The United States accounted for 83% of the exports, followed by Canada at 3%, China at 2%, Germany at 1% and South Korea at 1%, according to the report.

THREATS TO CANADA

U.S. trade relations with Canada have worsened over the past week with President Trump last weekend threatening to slap 100% duties on Canadian goods if Ottawa proceeds with a limited trade deal with China that is expected to allow imports of up to 49,000 Chinese-made electric vehicles.

U.S.-Canada trade relations had already soured even before Canadian Prime Minister Mark Carney made a speech at the World Economic Forum that angered Trump.

Carney on Wednesday in comments to lawmakers denied that he has retreated from his speech in Davos, Switzerland, in which he urged nations to accept the end of the rules-based global order that Washington had once championed.

This drew criticism from U.S. Treasury Secretary Scott Bessent, who cautioned Carney against picking a fight with the U.S. as the USMCA review approaches.

Bessent said on CNBC television that Carney “rose to power on an anti-American, anti-Trump message, and that’s not a great place to be when you’re negotiating with an economy that is multiples larger than you are and your biggest trading partner.”

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Reporting by David Lawder in Washington, Costas Pitas in Los Angeles and Brendan O’Boyle; Additional reporting by Iñigo Alexander in Mexico City; Writing by David Lawder and Ryan Patrick Jones; Editing by Tom Hogue

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UK reopens Chagos Islands talks with US following Trump criticism of deal: reports

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UK reopens Chagos Islands talks with US following Trump criticism of deal: reports

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Talks between the U.K. and the U.S. over the future of the Chagos Islands in the Indian Ocean have reportedly reopened after President Donald Trump’s comments cast doubt over an agreement that would see Britain hand sovereignty of the strategically vital archipelago to Mauritius.

British Prime Minister Keir Starmer confirmed Wednesday that the U.K. had reopened discussions after the president had panned the deal and branded it an “act of great stupidity,” GB News reported.

“Shockingly, our ‘brilliant’ NATO Ally, the United Kingdom, is currently planning to give away the Island of Diego Garcia, the site of a vital U.S. Military Base, to Mauritius, and to do so FOR NO REASON WHATSOEVER,” Trump had posted on Truth Social. “There is no doubt that China and Russia have noticed this act of total weakness.”

He added: “The UK giving away extremely important land is an act of GREAT STUPIDITY, and is another in a very long line of National Security reasons why Greenland has to be acquired.”

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TRUMP WARNS US CAN NO LONGER THINK ‘PURELY OF PEACE’ AS HE PUSHES FOR GREENLAND CONTROL

Diego Garcia, the largest island in the Chagos archipelago and site of a major United States military base in the middle of the Indian Ocean, was leased from the UK in 1966. (Reuters)

The Chagos Islands were separated from Mauritius during Britain’s decolonization process, a move the International Court of Justice ruled unlawful in 2019. 

The U.K. later agreed to transfer sovereignty while leasing Diego Garcia back for at least 99 years at a cost of at least $160 million annually.

Diego Garcia is a hub for long-range bombers, logistics and power projection across the Middle East, the Indo-Pacific and Africa. 

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Around 2,500 military and civilian personnel, mostly American, are stationed there. The base serves as a critical operation point for the U.S. and plays a central role in intelligence gathering and securing military communications.

Speaking aboard a flight to China, Starmer said he had “discussed Chagos with Donald Trump a number of times,” but declined to confirm whether the issue had been raised during a phone call between the two leaders on Sunday, The Financial Times reported.

TRUMP’S ‘SMALL ASK’ FOR GREENLAND WOULD BE THE REAL ESTATE DEAL OF A LIFETIME

British Prime Minister Keir Starmer says he “discussed Chagos with [President] Donald Trump a number of times.”  (Leon Neal/Getty Images)

Starmer also said the matter “has been raised with the White House at the tail end of last week, over the weekend and into the early part of this week.”

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Starmer also added that when the Trump administration took office, the U.K. paused the agreement for three months to allow the U.S. time to assess the deal at the agency level.

“Once they’d done that, they were very clear in the pronouncements about the fact that they supported the deal, and there were announcements made,” he said.

A Downing Street spokesperson also confirmed London was working to “allay any concerns” in Washington, according to GB News.

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“We will continue to engage with the U.S. on this important matter and the importance of the deal to secure U.S. and U.K. interests and allay any concerns, as we’ve done throughout the process,” the spokesperson said.

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Trump’s comments on the Chagos deal had been welcomed by Reform UK leader Nigel Farage, who wrote on X: “Thank goodness Trump has vetoed the surrender of the Chagos islands.”

Fox News Digital has reached out to the White House and Downing Street for comment.

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Syria grants immediate citizenship to Kurds in wake of gains against SDF

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Syria grants immediate citizenship to Kurds in wake of gains against SDF

Interior Minister Anas Khattab’s order includes all listed as stateless and sets February 5 as deadline for its rollout.

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Syria’s Ministry of Interior has ordered the immediate implementation of a new decree granting citizenship to Kurdish minorities, as government forces continue to consolidate control of the country after a rapid offensive against the Kurdish-led Syrian Democratic Forces (SDF) in the north of the country.

Interior Minister Anas Khattab issued the decision on Wednesday, mandating that the decree applies to all Kurds residing in Syria and explicitly includes those listed as stateless, the Anadolu news agency reported, citing the Syrian television station Alikhbariah.

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The ministry has set a February 5 deadline for finalising the measures and their rollout, the report said.

Two weeks ago, Syrian President Ahmed al-Sharaa had declared the recognition of Kurdish as one of the country’s national languages and the restoration of citizenship to all Kurdish Syrians, as he announced a ceasefire between Syrian and Kurdish forces.

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The rapid advance of Syrian forces forced the SDF to withdraw from more cities, including Raqqa and Deir Az Zor, allowing the government in Damascus to unite the country after a nearly 14-year-long ruinous civil war.

The development has drawn praise from United States President Donald Trump, who told al-Sharaa that he was “very happy” about the Syrian army offensive despite the previous US backing of the SDF.

Still, there have been reports of Kurdish civilians facing a shortage of food and displacement as a standoff between Syrian forces and the SDF continues in the country’s northern region.

According to the Anadolu report, the authorities in charge of rolling out al-Sharaa’s order have been asked to draft instructions and guidelines for the decree’s implementation at once.

Under al-Sharaa’s decree, the state has also been instructed to safeguard the culture and language of Syrian Kurds, as well as the teaching of the Kurdish language in public and private schools in Kurdish-majority areas.

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The decree has also designated March 21 as the date of the Newroz festival, a nationwide celebration welcoming spring that is widely observed, not just in Syria.

On Wednesday, al-Sharaa met Russian President Vladimir Putin in Moscow to discuss the future of Syria and the presence of Russian troops in the country.

At the meeting, Putin praised his Syrian counterpart’s ongoing efforts to stabilise his country.

Since al-Sharaa’s forces toppled Russian ally Bashar al-Assad in December 2024, Moscow has been working to build relations with him and ensure a continued military foothold in the country to bolster its influence in the Middle East.

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