**Markets Today: Crude Oil, Equities, FX, and Key Economic Updates**

**Oil Markets Slide on Venezuela Deal**

Oil prices dropped after U.S. President Trump announced Venezuela’s interim government would hand over 30–50 million barrels of high-quality crude to the U.S. This oil will be sold at market price, with proceeds managed by the U.S. for mutual benefit. The move tightens Washington’s grip on Venezuelan oil exports and could influence global supply dynamics. Meanwhile, natural gas prices bounced back after a steep fall, helped by weather forecasts indicating cooler conditions ahead.

**China Targets Japan in Trade Probe**

China’s Commerce Ministry launched an anti-dumping investigation into imports of Dichlorosilane from Japan—a chemical critical in semiconductor manufacturing. The probe begins January 7 and could last up to 18 months. Japan called the move “regrettable” and is considering its response. Tensions between the two nations continue to build over trade and technology.

**Global Equities Mixed; AI Chip Demand in Focus**

European and U.S. stock futures are trading mixed. Despite choppy markets, NVIDIA’s CEO highlighted strong demand from China for its AI chips, giving a boost to tech sentiment. In Asia, stocks were uneven—Japan’s Nikkei slipped due to worsening relations with China, while Australia’s ASX 200 saw slight gains after soft inflation data.

**Currency Markets Hold Steady Ahead of U.S. Jobs Data**

Currency markets are quiet but watching closely for upcoming U.S. labor market reports, including ADP employment, JOLTS job openings, and ISM Services PMI. The U.S. Dollar Index (DXY) remains flat within a tight range as traders await clarity on economic momentum.

– **EUR/USD** dipped initially but bounced back after Eurozone inflation data met expectations.
– **AUD/USD** showed volatility; while inflation was softer than forecasted, it still sits above the RBA’s 2-3% target.
– **USD/JPY** faced resistance and stayed within its recent range.
– China’s central bank set the yuan midpoint higher than expected, signaling some resistance to currency weakening.

**Bond Markets Firm as Risk Appetite Wanes**

Global bond markets started stronger as investors moved away from riskier assets. U.S. Treasuries and German Bunds both gained early in European trading. The moves came despite limited news flow but followed a weaker tone in Asian equities.

– Eurozone inflation numbers came in as expected, easing fears of a hotter print.
– Germany’s latest Bund auction showed tepid demand.
– UK Gilts led gains in fixed income after a solid 5-year auction with strong demand.

**Commodity Update: Gold, Silver, Copper Struggle for Direction**

Gold prices retreated after a recent surge, with traders now focused on U.S. economic data instead of geopolitical risks. Bullion faced resistance at $4,500/oz and is now trading near $4,441/oz. Silver also slid below $80/oz after touching highs earlier this week.

Copper prices remain volatile but are holding above the $13,000/ton mark, with traders watching for a possible U.S. Supreme Court decision on Trump-era tariffs this Friday.

**Geopolitical Risks: Russia, Ukraine & the Middle East**

Tensions remain high globally:

– Ukrainian drones hit oil facilities in Russia’s Belgorod region.
– Russia sent a submarine to escort a tanker the U.S. tried to seize.
– In the Middle East, Iran is responding to Western comments about protests inside the country.
– U.S. President Trump urged Venezuela to remove foreign agents from China, Russia, Iran, and Cuba.

**U.S.-Venezuela Oil Deal Details**

Trump’s full statement emphasized that Venezuelan oil will be transported directly to the U.S., sold at market price, and funds will be controlled by the U.S. administration to benefit both nations. Energy Secretary Chris Wright has been tasked with executing this plan immediately.

**U.S. Inventory Data Shows Mixed Trends**

Private inventory data showed:

– Crude oil inventories fell by 2.8 million barrels (vs expected +0.5 million).
– Distillates rose by 4.9 million barrels (vs expected +2.1 million).
– Gasoline rose by 4.4 million barrels (vs expected +3.2 million).
– Cushing storage increased by 0.7 million barrels.

**European Economic Snapshot**

Key Eurozone and country-level data:

– Core inflation in the EU came in at 2.3% YoY (slightly below expectations).
– Headline inflation met expectations at 2.0% YoY.
– Construction PMIs show some recovery across Germany and Italy.
– German retail sales missed expectations but saw prior data revised higher.
– Italian inflation held steady; UK construction activity remained weak.

**Asia-Pacific Market Recap**

Asia-Pacific markets were mixed despite Wall Street hitting record highs:

– Australia’s ASX 200 rose modestly on tech gains and softer inflation.
– Japan’s Nikkei dropped as tensions with China grow.
– Hong Kong and mainland Chinese stocks struggled amid regulatory announcements targeting online platforms.

**Notable Corporate and Trade Headlines from Asia**

– Baidu’s AI chip unit Kunlunxin plans a $2 billion IPO in Hong Kong.
– Maersk sees cautious optimism for Asia-Pacific freight markets heading into 2026.
– China tightened rules on livestreaming e-commerce and online trading platforms.

**Crypto Market Update**

Bitcoin is trading slightly lower just below $92,000, while Ethereum is also under mild pressure.

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**Key Events Ahead**

Investors are watching for:

– U.S. ADP Employment Report
– JOLTS Job Openings
– ISM Services PMI
– Comments from Federal Reserve Governor Michelle Bowman

These data points will shape expectations ahead of Friday’s crucial nonfarm payrolls report and guide market sentiment into next week.