Morning headlines: Fed slows down, China tightens silver exports, oil prices fall

The Federal Reserve is signaling a possible pause in rate cuts due to persistently high inflation. Oil ends the year with its biggest drop since the start of the pandemic amid an expected global surplus, rising inventories, and OPEC+'s cautious stance. These and other topics are covered in our review of key events as of the morning of December 31.

Warner Bros. Discovery's board of directors is leaning toward rejecting Paramount Skydance's takeover bid again, even though the company has revised the terms of the deal, Bloomberg has learned. According to sources, Paramount has not raised the price, which Warner Bros. previously considered less attractive than Netflix's offer to buy only the group's studio and streaming business.

Additional concerns relate to the fact that the Paramount deal could limit Warner Bros.' debt management without the consent of Larry and David Ellison and does not include guarantees to cover the penalty for breaking the agreement with Netflix. Warner Bros. considers Netflix's offer more reliable, pointing to Paramount's high debt burden and possible staff cuts, while Netflix remains the most valuable player in the industry.

China is tightening controls on silver exports from January 1, effectively raising the metal's status to that of a strategic resource comparable to rare earth metals, CNBC reports. The new rules, announced in the fall, will affect supply chains in the US and EU: silver is widely used in the defense industry, electronics, solar energy, and medicine, and China remains one of the world's largest producers and holders of metal reserves, the TV channel notes.

Against the backdrop of these measures, silver prices rose sharply: by 2025, the price had more than doubled and approached record levels, with buyers from China and India offering a premium to the market price for physical deliveries.

The Fed had a hard time lowering the rate in December: some of the governors considered the decision premature and admitted that it might take "some time" before the next step, Yahoo Finance reports, citing the minutes of the meeting. According to the document, most participants in the meeting were prepared to further ease policy only if inflation slowed steadily, while others would have preferred to keep rates unchanged due to weak progress in returning inflation to the 2% target.

As a result, the rate was cut by 25 basis points to a range of 3.5-3.75%, which was the third cut this fall. At the same time, the Fed expects inflation to remain elevated in the near term, with the effect of Trump's tariffs gradually fading away with an uncertain timeline. The Fed chair made it clear that the regulator may pause to assess incoming data before deciding on further cuts at the beginning of the new year.

Oil prices are heading for their sharpest annual decline since 2020 amid fears of oversupply, which is expected to dominate the market in the new year, Bloomberg reports. Brent is holding just above $61 per barrel, having lost about 18% since the beginning of the year.

The increase in production by OPEC+ and its competitors, coupled with slowing demand, has heightened expectations of a surplus, which the IEA estimates will be significant next year. Pressure on the market is intensified by rising US inventories and uncertainty surrounding the OPEC+ meeting on January 4, where the alliance is expected to maintain a pause in production increases.

— The Tokyo Stock Exchange is closed for holidays.

— Hong Kong's Hang Seng Index fell 0.9%. Mainland China's CSI 300 Index fell 0.5%.

— The Korean stock exchange is closed for holidays.

— Australia's S&P/ASX 200 remained virtually unchanged.

— S&P 500 futures fell 0.2%, Nasdaq Composite futures fell 0.4%, and Dow Jones Industrial Average futures fell 0.1%.

This article was AI-translated and verified by a human editor