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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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Israel, Russia among new additions on UN sexual violence ‘blacklist’

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Israel, Russia among new additions on UN sexual violence ‘blacklist’

The United Nations has confirmed it placed Israel on a blacklist of countries suspected of committing sexual violence against civilians, and pushed back on accusations made by Israel regarding its inclusion.

The list, part of a “conflict-related sexual violence” report released on Friday, prompted Israel’s foreign ministry to say it would sever all ties with UN Secretary-General Antonio Guterres.

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list of 3 itemsend of list

Last August, the UN cited “credible information” regarding sexual violence committed by Israeli security forces against Palestinian detainees in prisons and other detention centres, and said UN inspectors had been denied access to the facilities.

“We invited the representative of the UN to come to Israel to check those ridiculous allegations. They chose not to come,” Israel’s UN Ambassador Danny Danon posted on X on Thursday.

“I never received an iota of information on measures taken by the government of Israel on implementation of the preventive measures,” Pramila Patten, the UN official who authored the report, told reporters on Friday at a briefing at the UN’s New York headquarters.

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“I have made several requests in writing, and sometimes during meetings, for details about initial steps, including the issuance of orders of command information on access and information on accountability measures, but I did not get any response on the substantive aspect of the preventive measures,” she added.

Patten did confirm that there had been an invitation from Israel, but referred also to disagreements about the scope of the visit and related issues of access and cooperation, and said it ultimately had to be suspended due to Israel’s war on Gaza.

‘Multiple incidents’ in Gaza and occupied West Bank

This year’s report ⁠said that in 2025 “the United Nations verified multiple incidents of conflict-related sexual violence, including as a form of torture, inflicted against 14 men, seven women, nine boys and one girl from the Gaza Strip and the [occupied] West Bank.”

It said 13 of the attacks happened last year, and 18 in 2023 and 2024.

“Violations consisted ⁠of rape, including with objects, gang rape, attempted rape, physical violence to the genitals, instances of targeted shooting of the genitals, touching ⁠of breasts and genitals, strip and cavity searches conducted without apparent security justification, forced nudity and threats of rape,” it said.

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“Rape and gang rape, in some cases repeated, were perpetrated against nine victims, the majority Palestinians from Gaza,” it said, adding that perpetrators included Israeli armed and security forces. The assaults occurred primarily during detention and interrogation in several sites, including military camps, at checkpoints and during Israeli military operations in the Occupied Palestinian Territory.

It said survivors included journalists and human rights defenders and in some cases, the violations were filmed or photographed, including one case of rape.

The report added that sexual violence against female detainees included mostly threats of rape, forced nudity, unwanted touching, and humiliating or degrading strip searches without justification, while men and boys were targeted with rape, attempted rape and violence to the genitals.

This resulted in five male victims suffering severe rectal bleeding or swelling for multiple days or ‌weeks, ‌it added.

Russia added to list alongside Israel

The latest UN report also contains harrowing descriptions of abuses at the hands of Russia’s military after “findings of continued patterns of sexual violence documented”.

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The UN human rights monitoring mission in Ukraine had verified 310 cases of conflict-related sexual violence perpetrated by Russian armed and security forces.

It said the cases, including rape, gang rape, genital mutilation, electric shocks and beatings to the genitals, injured 280 men, 26 women and four girls.

The report’s annex lists 77 parties deemed responsible for patterns of conflict-related sexual violence, including 62 non-state actors.

New additions include three non-state armed groups operating in the Democratic Republic of the Congo.

Nearly 10,000 cases of conflict-related sexual violence were recorded worldwide last year – more than double the previous year’s figure, the report said.

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Being added to the list does not automatically carry specific punitive measures such as sanctions, although public naming and shaming can cause significant reputational damage for the ‌states involved, and those repeatedly listed are barred from UN peacekeeping operations.

Patten said the increase in cases of conflict-related sexual violence verified by the United Nations marks a very disturbing trend that was still only the “very tip of the iceberg”.

“This number can ⁠be attributed to the fact that we are going through a time when we have a record number of extremely violent conflicts, and the fact that perpetrators are feeling emboldened by a context of impunity, where this crime is almost cost-free,” she said.

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How Japan Lost 3 Million People in Five Years

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How Japan Lost 3 Million People in Five Years

Japan’s population fell by more than 3 million over the past five years, according to official statistics released on Friday, a drop that underscores the depths of the country’s accelerating demographic crisis.

The population stood at 123 million in 2025, according to preliminary census results, down from 126.1 million in 2020. It is the biggest decrease since the government began collecting census data in 1920.

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Japan’s population loss is accelerating

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Change in population every five years

Source: Statistics Bureau of Japan

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Japan’s population peaked in 2008 at 128 million, and it is projected to fall to 87 million by 2070. The country is now roughly the same size it was in 1989.

For decades, the Japanese authorities have tried to make up for the rapidly aging population by encouraging young people to have more children. But the effort has fallen short, leaving the country with one of the world’s lowest birth rates. For each new birth, there are two deaths.

Japan is a harbinger of the demographic headwinds that will soon buffet other developed countries. The shrinking population is already constraining Japan’s economic growth, putting pressures on its health care system and causing labor shortages.

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The census data shows that the demographic crisis has now reached almost every part of Japan. All but two of the country’s 47 prefectures reported population decreases in 2025, and the rate of decline is accelerating.

Among the hardest hit areas were the northern prefectures of Akita and Aomori, where the population shrank by about 8 percent from 2020 to 2025. Those areas are home to some of Japan’s oldest residents, and young people have left at a rapid rate because of stagnant wages and harsh winters.

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Most of Japan is losing population

The Japanese countryside is hollowing out as the population ages and young people leave to seek jobs in Tokyo, Osaka, Nagoya and other cities. In some rural areas, schools are being converted into nursing homes and community centers. Millions of homes are vacant; government offices and hospitals are downsizing; and train lines are shutting down.

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Opening Japan’s doors more widely to foreigners could help offset the declines. But the government has long taken a cautious approach to immigration, and nationalist politicians and commentators have gained influence recently with a “Japan First” agenda.

“Japan has now reached a level where this kind of decline is not reversible in the short- or medium-run,” said James Raymo, a professor of sociology at Princeton University who studies Japan. “It simply will not happen in the absence of mass immigration.”

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There were a few bright spots in the census, including Okinawa, a subtropical chain of islands in the south, where the population grew slightly. Okinawa has Japan’s highest fertility rate, with women there giving birth to an average of 1.5 children in their lifetimes, compared with 1.1 nationally.

Japan’s biggest cities are managing to stave off demographic decline — for now. The population of the Tokyo metropolitan area, which includes Tokyo and the surrounding prefectures of Kanagawa, Saitama and Chiba, rose slightly to 37 million in 2025. The area now accounts for roughly 30 percent of Japan’s total population.

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Source: Statistics Bureau of Japan

Tokyo, a vibrant hub of business, politics and culture, is now about 20 times denser than the rest of Japan — and one of the world’s densest cities. (Tokyo’s population rose more than 1 percent to 14.2 million in 2025.) The growth has been fueled in large part by an influx of students and young workers looking for jobs and educational opportunities.

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Japan’s woes are likely to worsen in the coming decades. It will probably become increasingly difficult to find workers to staff schools, hospitals, police departments and train stations. And the country could lack enough young people to pay the taxes necessary to support retirees.

Professor Raymo said the Japanese government’s efforts to promote fertility had “not really moved the needle.” He said that ultimately Japan could provide lessons for other governments.

“More and more countries in Asia and elsewhere will experience similar levels of demographic decline,” he said. “Japan is just at the forefront and has been at it much longer.”

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Drone strikes apartment building in NATO member Romania as Russia attacks neighboring Ukraine

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Drone strikes apartment building in NATO member Romania as Russia attacks neighboring Ukraine

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A drone struck an apartment building Friday in Romania, a NATO member, causing an explosion and fire that injured multiple people, local authorities said.

According to Romania’s Ministry of Defense, the incident occurred as Russia carried out an overnight drone attack in neighboring Ukraine near the Romanian border.

“A drone entered Romanian airspace, was tracked by radar systems as far as the Southern area of Galați municipality, and crashed onto the roof of a residential apartment building,” the ministry said.

Romania — a member of both NATO and the European Union — has reported more than two dozen incidents involving Russian drones entering its airspace since Moscow launched its invasion of Ukraine.

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NATO SCRAMBLES WARPLANES AS RUSSIA HITS NEAR ROMANIAN BORDER IN UKRAINE

A fire burns on the roof of a 10-story block of flats after a drone crashed into the building, causing an explosion and injuring two people, near the border with Ukraine, in Galati, Romania. (Romanian Department for Emergency Situations/Handout via REUTERS)

Friday’s incident marked the first time a drone struck a populated area in Romania, resulting in injuries.

Romania’s state news agency reported that a woman and her child were hospitalized with minor injuries, while two other people were treated at the scene for panic attacks.

Following the incident, Romania requested additional anti-drone capabilities from NATO and described the drone’s flight path as a serious violation of international law, according to The Associated Press.

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RUSSIAN DRONES TEST NATO’S ARTICLE 5 DEFENSE GUARANTEE AHEAD OF FRIDAY SANCTIONS DEADLINE

Russian servicemen prepare to launch an interceptor drone for an action in an undisclosed location in Ukraine. (Russian Defense Ministry Press Service via AP)

Romania’s emergency response agency said the drone struck the apartment building and exploded, sparking a fire on the 10th floor.

The agency said the drone’s entire explosive payload detonated upon impact.

Seventy people were evacuated from the building, authorities said. The fire has since been brought under control.

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NEW ROMANIAN LAW MAY HAVE AVERTED NATO CLASH WITH RUSSIA AFTER BORDER STRIKES

Ukrainian President Volodymyr Zelenskyy has urged the United States and its allies to provide additional air defense systems as Russia intensifies drone and missile attacks. (Javier SORIANO / AFP via Getty Images)

The defense ministry said two F-16 fighter jets and a military helicopter were deployed to monitor the Russian attack. The pilots were authorized to shoot down any drones that posed a threat.

The incident came after Ukrainian President Volodymyr Zelenskyy said earlier this week that he was pressing the United States to provide additional Patriot air defense missiles to help counter Russian attacks.

He warned that deliveries to Ukraine were falling dangerously short as the conflict with Iran strains U.S. military resources and stockpiles.

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“I believe [the U.S.] must act quicker. We are being very persistent,” Zelenskyy told reporters during a visit to Sweden.

Reuters and The Associated Press contributed to this report.

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