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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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Exclusive: Article Five not on the table despite Iran missile incident, NATO's Rutte says

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Exclusive: Article Five not on the table despite Iran missile incident, NATO's Rutte says
NATO is vigilant about events in the Middle East and ​the shooting-down of a missile ‌headed for Turkish airspace on Wednesday, but invoking Article Five is not on ​the table right now, the ​military alliance’s chief Mark Rutte told ⁠Reuters on Thursday.
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Iran continues firing missiles, drones at neighboring states, with multiple interceptions reported

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Iran continues firing missiles, drones at neighboring states, with multiple interceptions reported

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Iran launched a new wave of attacks on Thursday, with explosions reported in the region and Tehran threatening that the U.S. would “bitterly regret” sinking an Iranian warship.

Iran’s strikes on Thursday targeted Israel, American bases and countries in the region. Israel announced multiple incoming missile attacks as air raid sirens blared in Tel Aviv and Jerusalem.

Azerbaijan’s Ministry of Defense on Thursday said Iran used unmanned aerial vehicles (UAVs) in an attack on Nakhchivan International Airport and other civilian infrastructure. The ministry said the details of the attack and the capabilities of the UAVs were being investigated.

“The Ministry of Defense of the Republic of Azerbaijan strongly condemns the attacks carried out by the armed forces of the Islamic Republic of Iran against civilian infrastructure on the territory of Azerbaijan in the absence of any military necessity. The Islamic Republic of Iran bears the entire responsibility for the incident,” the ministry’s statement read.

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Explosions seen and heard in Azerbaijan as Iran launches retaliatory attacks across the Middle East. (East2West)

Iran has not acknowledged targeting Azerbaijan, despite the country’s ministry of defense pointing the finger at Tehran.

Qatar evacuated residents near the U.S. Embassy in Doha on Thursday, with its Ministry of Defense confirming that the country was “subjected to a missile attack” and that its air defense systems were able to intercept it. The ministry urged the public to remain calm and avoid unofficial information.

Abu Dhabi announced that its authorities were responding to an incident involving falling debris in ICAD 2, which is part of the Industrial City of Abu Dhabi. Six people, identified by Abu Dhabi as Pakistani and Nepali nationals, suffered minor to moderate injuries.

A plume of smoke rises over buildings in Doha, Qatar, on March 5, 2026. (Mahmud Hams/AFP via Getty Images)

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FORMER TOPGUN PILOT DECLARES IRAN MILITARY ‘OVER WITH’ AMID US AIR SUPERIORITY, BUT WARNS OF ANOTHER DANGER

Iran has carried out retaliatory strikes since the launch of Operation Epic Fury, with the latest wave coming one day after the U.S. sunk an Iranian warship, killing at least 87 Iranian sailors. Sri Lankan navy spokesman Cmdr. Buddhika Sampath said 32 people were rescued from the wreck and were admitted to a hospital.

Secretary of War Pete Hegseth defended the move during a news briefing at the Pentagon.

“An American submarine sunk an Iranian warship that thought it was safe in international waters. Instead, it was sunk by a torpedo — Quiet Death. The first sinking of an enemy ship by a torpedo since World War II. Like in that war, back when we were still the War Department, we are fighting to win,” Hegseth said.

Missile interceptions are seen in the sky on March 5, 2026, in Central Israel. (Alexi J. Rosenfeld/Getty Images)

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ISRAEL’S MILITARY RELEASES VIDEO SHOWING OBLITERATION OF IRAN’S MISSILE LAUNCHERS, DEFENSE SYSTEMS

Iranian leaders condemned the attack, with Foreign Minister Abbas Araghchi accusing the U.S. Navy of committing “an atrocity at sea.” Meanwhile, Ayatollah Abdollah Javadi Amoli appeared on state television and called for the shedding of Israeli and “Trump’s blood.”

“Fight the oppressive America, his blood is on my shoulders,” he said in a rare call for violence from an ayatollah, one of the highest ranks within the clergy of Shiite Islam.

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The U.S. and Israel launched the war on Saturday with strikes targeting Iran’s leadership, including the supreme leader, Ayatollah Ali Khamenei, who was killed. Iran’s missile arsenal and nuclear facilities were also hit.

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The Associated Press contributed to this report.

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Which Kurdish groups is the US rallying to fight Iran?

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Which Kurdish groups is the US rallying to fight Iran?

Iran has launched operations targeting Iranian and Iraqi Kurdish groups in the semi-autonomous Kurdish region in neighbouring Iraq as the regional war ignited by the United States and Israel entered its sixth day, with more than 1,000 people killed across the country.

State television, Press TV, reported early on Thursday that Tehran was striking “anti-Iran separatist forces”, referring to Iranian and Iraqi Kurdish groups believed to be based in mountainous, hard-to-reach areas near the Iran-Iraq border.

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Iranian missiles hit Sulaimaniyah city in the semi-autonomous Kurdistan region, according to local reports.

“We targeted the headquarters of Kurdish groups opposed to the revolution in Iraqi Kurdistan with three missiles,” Iran’s official IRNA news agency reported on Thursday, quoting a military statement. The Iranian military said earlier on Tuesday it used “30 drones” on Kurdish positions.

The attack comes just days after multiple publications reported that US President Donald Trump was in active talks with Iranian and Iraqi Kurdish groups, and that Washington hopes to use them to spur a popular uprising.

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Various Iranian Kurdish groups, which share close ties with Iraqi Kurds, have long opposed Tehran from their bases in northern Iraq and along the Iraq-Iran border. These groups reportedly have thousands of fighters between them.

Here’s what we know so far:

People gather near debris from a drone that fell onto a building near Erbil airport, amid the US-Israeli conflict with Iran, in the Ankawa district of Erbil, Iraq, on March 4, 2026 [Khalid al-Mousily/Reuters]

Why are Kurdish groups cooperating with the US?

US officials said the aim is to stretch Iranian forces and take out the remains of the military-dominated Iranian government, according to reporting by CNN.

There is also speculation that the groups could be supported to take control of northern Iran to create a ground buffer for Israeli forces, possibly streaming in from Iraq.

US-Israeli bombings have heavily targeted areas along the Iraq-Iran border since the start of the war on Saturday, possibly to degrade Iranian defences and allow Kurdish opposition groups to cross fully into Iran, according to a briefing by US-based think tank, the Soufan Center.

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The US has not ruled out sending ground forces, although analysts told Al Jazeera Iran’s rugged territory would make that very difficult.

If the US does support these groups against Tehran, it would mean that Washington is treating them like armed “players on a board,” Winthrop Rodgers, associate fellow at the UK think tank, Chatham House, told Al Jazeera.

INTERACTIVE - WHERE ARE THE KURDS - JAN19, 2026 copy-1768814414
(Al Jazeera)

Which Kurdish groups are there?

Neither the US nor Kurdish groups had confirmed any agreements by Thursday.

However, it is known that Trump has spoken to the leaders of two Kurdish groups in Iraq: Masoud Barzani, leader of the Kurdistan Democratic Party, and Bafel Talabani, leader of the Patriotic Union of Kurdistan (PUK), according to US publication, Axios. Talabani confirmed the call on Wednesday.

Trump also spoke to Mustafa Hijri, head of the Democratic Party of Iranian Kurdistan (KDPI), on Tuesday, CNN reported, quoting a Kurdish official.

Meanwhile, Iranian Kurdish rebel groups, which have thousands of fighters along the Iraq-Iran border, formed the Coalition of Political Forces of Iranian Kurdistan (CPFIK) alliance one week before the war broke out.

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The group issued statements at the start of the conflict, signalling imminent intervention and urging Iranian military members to defect. According to Israel’s I24News, thousands of its fighters were in Iran by Wednesday.

Here are the different groups:

Kurdistan Democratic Party: The ruling party in the semi-autonomous Kurdistan Regional Government (KRG). The party controls the capital city of Erbil as well as Duhok. It has historical ties with Iranian Kurdish groups.

However, the KRG is not eager to be seen as supporting attacks on Iran, even as Iranian drones have hit US assets in Erbil. On Wednesday, Kurdistan region President Nechirvan Barzani spoke with Iranian Foreign Minister Abbas Araghchi and told him his region “will not be part of conflicts” targeting Tehran.

In 2023, the two countries signed a security deal that saw Iraq promise to disarm and relocate Iranian opposition groups on its territory, although it appears many groups are still based there, reflecting the limited influence the government wields over them.

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Iraqi Kurds, who have close ties with both the US and Iran, are in a “difficult position”, said Rodgers.

“They are under tremendous pressure from a wide range of forces, including (pro-Iran) Iraqi militias. They will try to stay out of the conflict as much as they can, but that will likely prove impossible,” he said.

Patriotic Union of Kurdistan (PUK): The PUK is the official opposition in the semi-autonomous Kurdistan region and also nationally relevant as Iraqi President Abdul Latif Rashid is a member. In a statement on Sunday, Rashid urged dialogue and an end to the war. Iraq declared three days of mourning following the killing of Iran’s Ayatollah Ali Khamenei in US-Israeli strikes on Tehran on Saturday.

Coalition of Political Forces of Iranian Kurdistan (CPFIK): Formed on February 22, 2026, the group includes six Iranian Kurdish opposition groups seeking an independent state.

Kurdistan Democratic Party of Iran (KDPI) – Based in the Kurdistan region, the group has about 1,200 members and is proscribed as a “terror” group by Iran.

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Kurdistan Freedom Party (PAK) – Also based in Kurdistan, it has an estimated 1,000 members.

Kurdistan Free Life Party (PJAK) – A close ally of the Turkish opposition armed group, Kurdistan Workers’ Party (PKK), PJAK is proscribed as a “terror” group by Ankara. PJAK’s armed wing, the Eastern Kurdistan Units (YRK), is believed to have between 1,000 and 3,000 members, many of them women. It is based in the rugged Qandil Mountains near the Iran-Iraq border and in the semiautonomous Kurdistan region. It has launched numerous attacks on Iranian forces in the past decade. A recent Iranian strike reportedly killed one fighter.

Organisation of Iranian Kurdistan Struggle (Khabat) – It has an unknown number of fighters.

Komala of the Toilers of Kurdistan – Based in Iraq’s KRG, it has an unknown number of fighters.

Komala Party of Iranian Kurdistan (KPIK) – Also headquartered in the Kurdistan region, it has an estimated 1,000 fighters in 2017.

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PAK
A fighter from the Kurdistan Freedom Party (PAK) carries a rifle and gestures while standing on rocky terrain, at a training session at a base near Erbil, Iraq, on February 12, 2026 [File: Thaier Al-Sudani/Reuters]

What is the history of US involvement with Kurdish resistance groups in the Middle East?

Kurds are an ethnic minority spread across the Middle East with a shared language and culture. They do not have a state of their own and have historically been marginalised across countries – mainly Iran, Iraq, Syria and Turkiye.

For decades, several armed Kurdish groups have sought self-governance in Turkiye, Syria and Iran.

In Iraq, Kurdish nationalist groups gained some success during the 1991 Gulf War by working with the US, which helped establish the self-governing Kurdistan region of Iraq. The US Central Intelligence Agency (CIA) also trained and armed its army, known as the Peshmerga, after the US invaded Iraq in 2003. In 2005, the semiautonomous region was officially recognised in Iraq’s constitution.

Since 2017, Washington has also armed and trained the People’s Protection Units (YPG), a Syrian Kurdish militia that Turkiye lists as a “terror” group because of its links with the proscribed PKK. The group, which successfully resisted ISIL (ISIS), now forms the main component of the Syrian Democratic Forces (SDF). It controlled Raqqa and other ISIL strongholds.

However, when it began military clashes with Syrian forces under the President Ahmed al-Sharaa-led government last August, Washington turned away from the group and backed Damascus instead. In January this year, the SDF signed an agreement with the Syrian government to integrate into the government forces. In return, the Syrian government recognised Kurdish rights.

In Turkiye, meanwhile, the PKK, whose presence in northern Iraq has long been a source of tension with Ankara, declared a ceasefire in March 2025, after a call from its imprisoned leader, Abdullah Ocalan, to disarm.

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How does Kurdish resistance in Iran compare with others?

Iranian Kurds opposed the Iranian government even before the formation of the Islamic Republic in 1979, Rodgers said, and Tehran’s current weakness provides an opportunity for them to advance their political aims in the country.

However, the new coalition of multiple diverse groups is unprecedented, the analyst added, and their internal dynamics will be a key decisive factor in what role Kurdish groups will play in this war.

“Support from the US is helpful, especially in terms of targeting security forces’ infrastructure with air strikes, but they will likely be cautious about relying too much on Washington, especially from an administration as capricious and disorganised as Trump’s,” Rodgers said, noting how Washington abandoned the Kurds in Syria.

Unlike the split Iranian movements, Iraqi Kurds have long united to form a devolved government enshrined in the Iraqi constitution, built an advanced economy, and secured substantive relations with a wide range of foreign countries. That’s something Kurdish groups will also be hoping to establish in a democratic Iran, he said.

“I think it is unlikely that the Trump administration has made any commitments to the Iranian Kurds about supporting their political goals,” Rodgers said, adding that the US’s plan “does not look fully thought through at all”.

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