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US yields remain elevated.

US yields remain elevated, set for the biggest weekly jump since early October, while European bond futures signal fresh declines after they sold off following a less dovish than expected ECB. Bonds slid even with European central banks lowering rates to shield economies against potential disruption from Donald Trump’s second term.

Chinese shares slumped as authorities left investors guessing on the specifics of a fiscal stimulus plan. The benchmark index snapped a two-week winning streak while bond yields plumb record lows on the promise of easier monetary policy.

Pimco and Fidelity are among investors who say the darkening economic outlook in Europe may force policymakers to cut interest rates more than the market expects.

Stocks tumble across Asia amid a lack of details about stimulus from a key policy meeting in Beijing. Bonds were happier, with China’s 10-year yield hitting a record low. South Korean stocks buck the trend as the country’s opposition filed a second impeachment motion against President Yoon.

Treasuries fell, and the yield curve steepened after data showed US wholesale inflation unexpectedly accelerated in November and applications for unemployment benefits rose last week. Demand for a 30-year auction was weak, and the dollar rose for a fifth session.

Weaker private debt borrowers to see more hurt

Lower-rated private credit borrowers are expected to “remain stuck in the mud” next year as they stare down declining sales, weakened margins, and high borrowing costs, according to a Morningstar report. Defaults and downgrades are expected to increase in 2025, albeit at a more gradual pace compared to this year, Morningstar said in its Thursday report. In 2024, about 1.4% of the more than 400 middle-market borrowers in Europe and North America rated by Morningstar saw downgrades, outpacing upgrades by about 2.5 times. (Bloomberg Markets | Dec 12)

Treasuries volatility slumps near 3-year low as Fed bets align

Swings in the US Treasury market have cooled off with the presidential election in the rearview mirror and as investors become more convinced that the Federal Reserve will cut interest rates. A closely watched measure of expected volatility in Treasuries fell to levels last seen in February 2022 as easing inflation reinforced bets for a Fed rate cut next week. Still, US jobless claims and producer price data later on Thursday are on the radar for traders as they gauge the US central bank’s next steps. (Bloomberg Markets | Dec 12)

Wall Street’s complex debt bonanza hits fastest pace since 2007

Structured finance transactions have surged to $380 billion this year, the highest level since 2007, fueled by strong investor demand for high-yield opportunities. These deals include bonds backed by revenues from Wingstop, ExxonMobil, and music catalogs. While some investors raise concerns about risk assessment, analysts argue that the market's size remains insufficient to threaten systemic stability. "We have seen standout years with relentless investor appetite, and that is what is going on right now," said Jay Steiner, Deutsche Bank. (Financial Times | Dec 10)

Wall Street is perplexed by Fed's motivation to tweak key tool

The Federal Reserve is seen likely to lower the rate on one of its tools to help control the main policy benchmark, though some on Wall Street are skeptical about the motivation behind the move. A plurality of strategists expect the Fed to lower the offering rate on its overnight reverse repo facility, or RRP, by 5 basis points, potentially as soon as next week when officials are widely expected to cut their benchmark by a quarter of a percentage point. The current RRP rate is 4.55%, which is five basis points above the bottom of the Fed’s policy target range of 4.5% to 4.75%. (Bloomberg Markets | Dec 10)

Fiscal debt binge is world's biggest stability threat, BIS says

Government borrowing habits pose the biggest danger to world economic stability, and recent shifts in market sentiment should serve as a warning, the Bank for International Settlements said. Presenting the final quarterly report of his career at the Basel-based institution, senior official Claudio Borio delivered a parting shot to nations, saying that public finance repair should be prioritized before any alarm among bond investors takes hold. (Bloomberg Economics - Tax & Spend | Dec 10)

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The editors’ note of a new magazine reads, “The next century is going to be impossibly cool or unimaginably catastrophic.” Illustration: Ege Soyuer | The New Yorker

Their job is to push computers toward AI doom

In a glass-walled conference room in San Francisco, Newton Cheng clicked a button on his laptop. He launched a thousand copies of an artificial intelligence program, each with specific instructions: Hack into a computer or website to steal data. It’s largely up to companies to determine whether their AI is capable of superhuman harm. At Anthropic, the Frontier Red Team looks for the danger zone.

— The Wall Street Journal

Cyber risk cited as one of DTCC's top 2025 events of significance

Sixty-nine percent of respondents identified cyber risk as a top threat, making it the second most significant risk to the industry. Cyber risk was the top advancer across all risk categories this year, up from 50% in last year’s Survey, with some respondents highlighting that concerns in this area are compounded by the geopolitical environment, the rise in the use of emerging technology, and the evolution of cyber-attacks.

— FX News Group

Russia, BRICS societies create AI development alliance: TASS

The Russian Direct Investment Fund (RDIF) and 20 companies from six BRICS countries are creating an alliance to develop artificial intelligence, RDIF’s head Kirill Dmitriev says, according to Tass. More than 20 companies from Russia, Brazil, India, China, Iran, and the UAE joined the project’s first stage, according to Dmitriev.

— Bloomberg Government

A partially destroyed poster featuring UnitedHealth Group Inc.’s Brian Thompson. Photo: Colin Mixson | New York Daily News/Tribune News Service/Getty Images

Police investigate NYC 'Wanted' posters of finance chiefs

The New York Police Department is investigating a number of ‘WANTED’ posters of senior executives plastered over parts of Manhattan. The posters included images of insurance leaders, including UnitedHealth Group Inc.’s Brian Thompson, who was murdered last Wednesday, as well as executives from financial firms. The pictures of Thompson were crossed out with a red X. 

— Bloomberg Business

Wealthy Americans are now paying for their own personal fire hydrants

The latest sought-after home amenity? Personal fire hydrants. Real-estate agents say mentioning a personal fire hydrant in the marketing materials now helps sell homes. Having a fire hydrant on the property can also help an insurance company look more favorably at coverage options and prices.

— The Wall Street Journal

You can buy a car on Amazon now

Today, for the first time, you can buy a car — yes, a whole car — on Amazon. Same-day delivery not guaranteed. The e-commerce giant’s first foray into car shopping is called Amazon Auto. The company is partnering with Hyundai dealers in 48 cities in the US to list vehicles on the site. Customers can browse, order, find financing, and arrange delivery — all within the familiar confines of Amazon’s online ecosystem. Of course, if you’re looking for anything other than a Hyundai, you’re out of luck. At least for now.

— The Verge