Oil declines on Trump’s comments – Russian submarine?

Asia market update: The dynamic geopolitical situation keeps traders cautious; Oil declines on Trump’s comments; Russian submarine?; Big earnings seen out of Asia on Thurs (Samsung, LG Energy, Fast Retailing).

General trend and developments

- Overall mixed price action seen.

- US President Trump: pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America. This Oil will be sold at its Market Price.
[NYT]: US said to be pushing Venezuela to expel, China, Russia and Cuba advisers.

- Meta [META]: China reviews the co's acquisition of Manus on concerns about whether export controls were 'breached' – FT [**Reminder Dec 29th 2025: The co. said Manus will cut China ties after acquisition – Nikkei].

- Baidu [BIDU]:*Follow Up: AI Chip arm [Kunlunxin] said to seek to raise up to $2.0B in IPO - US financial press.

- China Commerce Ministry: Stepping up control of exports of dual-use items to Japan, effective immediately [from Jan 6th].

- Divergence seen with JGBs again: Short-end supported by some safe haven-related demand; Japan MOF due to sell 30-year bonds on Thurs; Strong sell interest seen at BOJ bond buying operation.

- Weaker Yuan fix cited for CNH decline, geopolitics also remain focal point.

- AUD and Iron Ore FUTs gain.

- Nickel miners rally after surge in prices; Shanghai Nickel FUTs +8%.

- Precious metals take a breather after recent gains.

- Kospi erases ~2% rise, Samsung is reportedly due to report prelim Q4 results on Thurs [press]; With respect to Samsung Electronics, the preliminary figures generally do not include details.

- Aussie energy names decline on Trump comments related to oil supplies.

- AU CPI seen as a non-event as traders look ahead to the quarterly data [Jan 28th].

- Shanghai Composite continues to trade at the 2015 highs.

- (US) Supreme Court names Fri (1/09) as Opinion day as tariff case pending.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.4% at 8,715.

- Australia NOV CPI M/M: 0.0% V 0.0% prior; Y/Y: 3.4% V 3.6%E; CPI Trimmed Mean Y/Y: 3.2% v 3.2%e.

-Australia Nov Building Approvals M/M: 15.2% v 2.0%e.

- (NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +3.6% v -4.4% prior.

China/Hong Kong

- Hang Seng index opens -0.4% at 26,601- Shanghai Composite opens flat at 4,083.

- US SAID TO ASK VENEZUELA TO 'SEVER' TIES WITH CHINA, RUSSIA AND IRAN - ABC; Trump said to also tell Venezuela to 'expel' Cuba and sever economic ties.

- [NYT]: US said to be pushing Venezuela to expel, China, Russia and Cuba advisers.

- China PBOC sets Yuan reference rate: 7.0187 v 7.0173 prior.

- China PBOC Open Market Operation (OMO): Injects CNY28.6B; Net drain CNY500.2B v CNY296.3B drain prior.

- China Taiwan Affairs Office: Names 2 people to be punished for 'Taiwan independence activities'.

- China issues measures for live streaming e-commerce: to prohibit false advertising claims.

- China announces management measures for online platforms: plans to place ban on the act of platform cos. forcing merchants to join promotions; effective Feb 1st.

- China automakers said to again cut prices despite comments from local regulators - US financial press.

- Lenovo [992.HK]: Teams with NVIDIA on Gigawatt AI Factories Program to Accelerate Enterprise AI.

- PBOC-backed Financial News reiterates 'moderately loose' monetary policy stance.

- China has extended its policy which allows banks to sell bad personal loans - US financial press.

Japan

- Nikkei 225 opens -0.7% at 52,144.

- Japan Chief Cabinet Sec: Will consider necessary response as the China export curbs are assessed; details remain unclear on whether rare earths are impacted.

- Japan Ministry of Foreign Affairs official Kanai spoke with the US Assistant Sec Desombre, views were exchanged on the 'regional situation' - US financial press.

- China govt said to consider tightening rare earth exports to Japan - Chinese press.

- Japan Dec Final PMI Services: 51.6 v 52.5 prelim (confirms 14th month of expansion).

- BOJ releases results to scheduled Outright bond buying operation: [1-3 year]: Total bids at ¥615.2B v ¥270.3B in accepted bids.; [3-5 year]: Total bids ¥762.5B vs ¥245.4B in accepted bids; [10-25 year]: Total bids ¥241.2B, accepted bids ¥95.1B.

- Idemitsu Kosan [5019.JP]: Chairman: Notes Venezuela oil is 'difficult to use' in Japan refineries - Nikkei.

South Korea

- Kospi opens +0.9% at 4,566.

- South Korea President Lee: No need to unnecessarily confront China; most important task is restoration of trust; Relations with Japan is as important as those with China.

- China Premier Li: Willing to strengthen market connections with South Korea - Chinese press; Welcome South Korean firms to boost investment; Willing to promote cooperation in high-end manufacturing, AI and new energy.

- South Korea Finance Min: Reiterates to focus on the stabilization of food prices, employment and welfare.

Other Asia

-Thailand Central Bank (BOT): Stronger Baht (THB) currency is tightening liquidity for SME exporters; monetary policy must factor in financial imbalances.

-Thailand Dec CPI M/M: 0.0% v 0.0%e; Y/Y: -0.3% v -0.3%e.

North America

- (US) President Trump to sign executive orders on Wed at 2:30 PM ET - Press.

- Fed’s Barkin (voter): Fed policy now in the range of estimates for neutral; Both sides of Fed mandate bear watching - speech text; Long-term rates today being driven by supply and demand of US Treasuries, with the supply rising due to larger deficits.

- (US) Fed's Miran (dovish dissenter): Expects data to support more rate cuts; Should cut by >100bps in 2026; Fiscal policy will support growth this year.

- (US) Fed Discount Minutes: 8 of 12 Fed banks vote to keep rate unchanged in Dec; Several directors commented on improved labor availability and modest wage pressures; Most directors anticipated tariff-related and other cost increases in 2026.

- Newmont [NEM]: Notes bushfire impact Boddington operations has been contained; expects the damaged infrastructure to be restored through Feb; sees Q1 impact on production at approx 60.0K ozs . - Press.

Europe

- (RU) Russia said to send submarine to Escort Bella 1 tanker that the us tried to seize off Venezuela - WSJ.

- (DK) US Sec State Rubio said to inform lawmakers that Trump intends to buy Greenland, downplaying any potential military action - WSJ.

- France, UK, Ukraine sign declaration of intent for future deployment of multinational forces in Ukraine.

- Ukraine Pres Zelenskiy: Had concrete discussions with US on ceasefire monitoring; Ukraine counting on security guarantees to be signed soon; Ukraine delegation to remain in Paris for further discussions.

- Ukraine Pres Zelenskiy: Documents agreed by participants are a signal of how seriously Europe and the coalition are willing to work to ensure safety.

- Saudi-backed Coalition: Yemen Southern Transitional Council Leader Aidarous Al-Zubaidi said to have 'fled' to unknown destination and did not board the plane to Riyadh; the Saudi-led forces said to conduct 'limited' preemptive strikes in Yemen - financial press.

Levels as of 00:20 ET

- Nikkei 225 -1% ; ASX 200 +0.2% ; Hang Seng -1.2% ; Shanghai Composite +0.1% ; Kospi flat.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.1%; DAX +0.3%; FTSE100 flat.

- EUR 1.1702-1.1684 JPY 156.80-156.41 ; AUD 0.6766-0.6717 ; NZD 0.5800-0.5776.

- Gold -0.4% at $4,478/oz; BTC -1% at $92.7K; Crude Oil -1.6% at $56.23bbl; Copper -1% at $6.0038/lb.