06 Jan

Week Ahead: Gold to retest record highs?

By ForexTime 

  • Gold ↑ 1% YTD, adding to 27% gain in 2024
  • Less than 5% away from all-time high
  • Over past year NFP has triggered moves of ↑ 0.8% & ↓ 0.9%
  • Bloomberg FX model: 73% chance of $2611.66 – $2703.68 range next week
  • Technical levels: $2620 & $2670

Gold is already up 1% in 2025 after securing its biggest annual gain since 2010.

The precious metal ended last year 27% higher thanks to central bank buying, falling US rates, and geopolitical risk.

Prices touched a three-week high on Friday morning, supported by a softer dollar and cautious market mood.

Nevertheless, the US December nonfarm payrolls report may shape gold’s outlook for January.

Watch out for other key data releases that could spark market volatility:

Monday, 6th January

  • CN50: China Caixin services and composite PMI
  • EUR: Eurozone HCOB services and composite PMI,
  • GER40: Germany CPI, HCOB services and composite PMI
  • USDInd: S&P Global PMI’s, Fed Governor Lisa Cook speech

Tuesday, 7th January

  • AU200: Australia building approvals
  • EU50: Eurozone CPI, unemployment
  • TWN: Taiwan CPI
  • US500: US job openings, ISM services, Richmond Fed President Thomas Barkin speech

Wednesday, 8th January

  • AU200: Australia CPI
  • EUR: Eurozone PPI, consumer confidence
  • GER40: Germany factory orders
  • USDInd: US ADP employment, FOMC minute

Thursday, 9th January

  • AU200: Australia retail sales, trade
  • CN50: China CPI, PPI
  • EUR: Eurozone retail sales
  • GER40: Germany industrial production, trade
  • RUS2000: Speeches by Philadelphia Fed President Patrick Harker, Richmond Fed President Thomas Barkin and Kansas City Fed President Jeff Schmid

Friday, 10th January

  • CAD: Canada unemployment
  • JP225: Japan household spending, leading index
  • US500: University of Michigan consumer sentiment
  • XAUUSD: US nonfarm payrolls

Gold is respecting a bullish channel on the weekly timeframe with prices trading above the 50, 100 and 200 week SMA.

gold weekly

At the current price of $2654, the precious metal is less than 5% away from it’s all-time high at $2790.17.

But do bulls have what it takes to push prices back to records this month?

 

Here are 3 reasons why gold could see significant prices swings:

    1) US December NFP report – Friday 10th January

The US economy is expected to have created 153,000 new jobs in December 2024. This is much lower than November’s 227,000 headline figure. However, the unemployment is expected to remain unchanged at 4.2%.

Traders are currently pricing in a 54% probability of a 25-basis point cut by March with this jumping to 76% by May.

  • Gold prices could appreciate if a weaker-than-expected NFP reports rekindles bets around aggressive US interest rate cuts.
  • A stronger-than-expected NFP report may drag gold prices lower, as rate cut bets fade further.

Note: Gold cold see heightened volatility before Friday’s NFP due to the FOMC meeting minutes on Wednesday and speeches by Fed officials throughout the week.

Over the past 12 months, the 6 hours after the US NFP release has seen upwards moves for Gold as much as 0.8% or declines as much as 0.9%.

    2) Geopolitical risk

Russia’s recent drone strike on Kyiv and ongoing tensions in the Middle East could spark risk aversion.

Escalating global tensions may send investors toward safe-haven assets like gold.

 

    3) Technical forces

Despite the recent jump in prices, gold remains in a range on the daily charts. Support can be found at $2560 and resistance at $2725.

  • A solid breakout and daily close above $2670 may open a path toward $2700 and $2725.
  • Should prices slip below the 100-day SMA at $2620, this may open the doors toward $2610 and $2600.

golddd

Currently, Bloomberg’s FX model points to a 73% chance that Gold will trade within the $2611.66 – $2703.68 range next week.

Forex-Time-LogoArticle by ForexTime

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Financial News Metals
02 Jan

What does 2025 hold for interest rates, inflation and the American consumer?

By D. Brian Blank, Mississippi State University and Brandy Hadley, Appalachian State University 

Brian Blank is a finance scholar and Fed watcher who researches how companies navigate downturns and make financial decisions, as well as how markets process information. Brandy Hadley is a finance professor who leads a student-managed investment fund and studies corporate decision-making and incentives. Together, they’re also the resident economic oracles at The Conversation U.S., and their forecast for 2024 held up notably well. Here, they explain what to expect from 2025.

New year, new questions

Heading into 2024, we said the U.S. economy would likely continue growing, in spite of pundits’ forecast that a recession would strike. The past year showcased strong economic growth, moderating inflation, and efficiency gains, leading most economists and the financial press to stop expecting a downturn.

But what economists call “soft landings” – when an economy slows just enough to curb inflation, but not enough to cause a recession – are only soft until they aren’t.

As we turn to 2025, we’re optimistic the economy will keep growing. But that’s not without some caveats. Here are the key questions and risks we’re watching as the U.S. rings in the new year.

The Federal Reserve and interest rates

Some people expected a downturn in 2022 – and again in 2023 and 2024 – due to the Federal Reserve’s hawkish interest-rate decisions. The Fed raised rates rapidly in 2022 and held them high throughout 2023 and much of 2024. But in the last four months of 2024, the Fed slashed rates three times – most recently on Dec. 18.

While the recent rate cuts mark a strategic shift, the pace of future cuts is expected to slow in 2024, as Fed Chair Jerome Powell suggested at the December meeting of the Federal Open Market Committee. Markets have expected this change of pace for some time, but some economists remain concerned about heightened risks of an economic slowdown.

When Fed policymakers set short-term interest rates, they consider whether inflation and unemployment are too high or low, which affects whether they should stimulate the economy or pump the brakes. The interest rate that neither stimulates nor restricts economic activity, often referred to as R* or the neutral rate, is unknown, which makes the Fed’s job challenging.

However, the terminal rate – which is where Fed policymakers expect rates will settle in for the long run – is now at 3%, which is the highest since 2016. This has led futures markets to wonder if a hiking cycle may be coming into focus, while others ask if the era of low rates is over.

Inflation and economic uncertainty

This shift in the Federal Reserve’s approach underscores a key uncertainty for 2025: While some economists are concerned the recent uptick in unemployment may continue, others worry about sticky inflation. The Fed’s challenge will be striking the right balance — continuing to support economic activity while ensuring inflation, currently hovering around 2.4%, doesn’t reignite.

We do anticipate that interest rates will stay elevated amid slowing inflation, which remains above the Fed’s 2% target rate. Still, we’re optimistic this high-rate environment won’t weigh too heavily on consumers and the economy.

While gross domestic product growth for the third quarter was revised up to 3.1% and the fourth quarter is projected to grow similarly quickly, in 2025 it could finally show signs of slowing from its recent pace. However, we expect it to continue to exceed consensus forecasts of 2.2% and longer-run expectations of 2%.

Fiscal policy, tariffs and tax cuts: risks or tailwinds?

While inflation has declined from 9.1% in June 2022 to less than 3%, the Federal Reserve’s 2% target remains elusive.

Amid this backdrop, several new risks loom on the horizon. Key among them are potential tariff increases, which could disrupt trade, push up the prices of goods and even strengthen the U.S. dollar.

The average effective U.S. tariff rate is 2%, but even a fivefold increase to 10% could escalate trade tensions, create economic challenges and complicate inflation forecasts. Consider that, historically, every 1% increase in tariff rates has resulted in a 0.1% higher annual inflation rate, on average.

Still, we hope tariffs serve as more of a negotiating tactic for the incoming administration than an actual policy proposal.

Tariffs are just one of several proposals from the incoming Trump administration that present further uncertainty. Stricter immigration policies could create labor shortages and increase prices, while government spending cuts could weigh down economic growth.

Tax cuts – a likely policy focus – may offset some risk and spur growth, especially if coupled with productivity-enhancing investments. However, tax cuts may also result in a growing budget deficit, which is another risk to the longer-term economic outlook.

Count us as two financial economists hoping only certain inflation measures fall slower than expected, and everyone’s expectations for future inflation remain low. If so, the Federal Reserve should be able to look beyond short-term changes in inflation and focus on metrics that are more useful for predicting long-term inflation.

Consumer behavior and the job market

Labor markets have softened but remain resilient.

Hiring rates are normalizing, while layoffs and unemployment – 4.2%, up from 3.7% at the start of 2024 – remain low despite edging up. The U.S. economy could remain resilient into 2025, with continued growth in real incomes bolstering purchasing power. This income growth has supported consumer sentiment and reduced inequality, since low-income households have seen the greatest benefits.

However, elevated debt balances, given increased consumer spending, suggest some Americans are under financial stress even though income growth has outpaced increases in consumer debt.

While a higher unemployment rate is a concern, this risk to date appears limited, potentially due to labor hoarding – which is when employers are afraid to let go of employees they no longer require due to the difficulty in hiring new workers. Higher unemployment is also an issue the Fed has the tools to address – if it must.

This leaves us cautiously optimistic that resilient consumers will continue to retain jobs, supporting their growing purchasing power.

Equities and financial markets

The outlook for 2025 remains promising, with continued economic growth driven by resilient consumer spending, steadying labor markets, and less restrictive monetary policy.

Yet current price targets for stocks are at historic highs for a post-rally period, which is surprising and may offer reasons for caution. Higher-for-longer interest rates could put pressure on corporate debt levels and rate-sensitive sectors, such as housing and utilities.

Corporate earnings, however, remain strong, buoyed by cost savings and productivity gains. Stock performance may be subdued, but underperforming or discounted stocks could rebound, presenting opportunities for gains in 2025.

Artificial intelligence provides a bright spot, leading to recent outperformance in the tech-heavy NASDAQ and related investments. And onshoring continues to provide growth opportunities for companies reshaping supply chains to meet domestic demand.

To be fair, uncertainty persists, and economists know forecasting is for the weather. That’s why investors should always remain well-diversified.

But with inflation closer to the Fed’s target and wages rising faster than inflation, we’re optimistic that continued economic growth will pave the way for a financially positive year ahead.

Here’s hoping we get even more right about 2025 than we did this past year.The Conversation

About the Author:

D. Brian Blank, Associate Professor of Finance, Mississippi State University and Brandy Hadley, Associate Professor of Finance and Distinguished Scholar of Applied Investments, Appalachian State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Economics & Fundamentals Opinions
02 Jan

Inflationary pressures are easing in Indonesia. Oil prices rise amid falling inventories

By JustMarkets

On the last day of 2024, the Dow Jones Index (US30) was down 0.07% (for 2024 +12.80%). The S&P 500 Index (US500) fell by 0.43% (for 2024 +24.01%). The Nasdaq Technology Index (US100) decreased by 0.87% (for 2024 +27.01%). In the US, markets are awaiting Friday’s US Manufacturing Activity Index data for December to determine the market’s direction and assess the health of the US manufacturing sector. The December manufacturing sector business activity index is expected to decline by 0.2 to 48.2.

The Mexican peso faced negative factors related to the strength of the US dollar, which was supported by rising yields and demand for the safe-haven currency. In addition, low liquidity during the holidays further exacerbated losses, leaving the peso among the worst-performing emerging market currencies in 2024, with a year-to-date decline of nearly 19%.

European markets were not trading on Tuesday. Germany’s DAX (DE40) gained +18.72% over 2024, France’s CAC 40 (FR40) closed down 1.99% for the year, Spain’s IBEX 35 (ES35) gained 13.88% for the year, and the UK’s FTSE 100 (UK100) added 5.85% over the past year.

WTI crude oil prices rose above $72 a barrel on Thursday, in the first session after the New Year’s break, following the release of a report on a decline in US crude inventories. The API data showed a 1.4 million barrel decline in US crude inventories for the week ended December 27. If the official data is confirmed today, it would mark the third consecutive weekly decline.

Asian markets were mostly up on Tuesday, December 31. Japan’s Nikkei 225 (JP225) was not trading (+19.85% for 2024), China’s FTSE China A50 (CHA50) was down 1.03% (+19.50% for the year), Hong Kong’s Hang Seng (HK50) added 0.09% (up +19.49% for the year), and Australia’s ASX 200 (AU200) was also not trading on December 31 (up +7.18% for 2024).

China’s central bank (PBoC) injected 1.7 trillion yuan ($233 billion) into the economy and financial markets in December, boosting liquidity at the end of the year. This followed 800 billion and 500 billion yuan injections in the past two months, with a new instrument introduced in October. The cash injections underscore the PBOC’s accommodative stance after the country’s top leaders pledged to provide additional “moderately loose” policy support for an economy facing the threat of escalating trade tensions.

The Australian dollar (AUD) climbed above US$0.62 on Thursday, recovering from two-year lows as higher commodity prices lent support, favoring Australia’s position as a net exporter of basic resources.

The New Zealand dollar (NZD) strengthened slightly as traders anticipated a recovery in China, New Zealand’s main trading partner, following President Xi Jinping’s pledge last Tuesday to implement more active policies to stimulate growth. However, private data showed an unexpected slowdown in factory activity growth, coinciding with a growth slowdown indicated by official data released earlier this week. The currency remained near two-year lows under pressure from dovish expectations from the Reserve Bank of New Zealand.

Indonesia’s annual inflation rate for December 2024 was 1.57%, little changed from November’s three-year low of 1.55%. The latest result was slightly below market expectations of 1.6% but remained within the central bank’s target range of 1.5% to 3.5%. Core inflation, excluding managed and volatile food prices, held steady at 2.26%, remaining at a 16-month high but slightly short of the expected 2.28%.

Singapore’s GDP grew at an annualized rate of 4.3% in the fourth quarter of 2024, slowing from the 5.4% growth in the third quarter but beating market expectations of 3.8%. For the full year, the economy grew by 4%, exceeding the 1.1% growth seen in 2023 and beating forecasts of 3.5%.

S&P 500 (US500) 5,881.63 −25.31 (−0.43%)

Dow Jones (US30) 42,544.22 −29.51 (−0.07%)

DAX (DE40) 19,909.14 −75.18 (−0.38%)

FTSE 100 (UK100) 8,173.02 +52.01 (+0.64%)

USD index 108.48 +0.35 (+0.32%)

News feed for: 2025.01.02

  • Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
  • China Caixin Manufacturing PMI (m/m) at 03:45 (GMT+2);
  • Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+2);
  • Germany Manufacturing PMI (m/m) at 10:55 (GMT+2);
  • Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
  • UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
  • US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • Canada Manufacturing PMI (m/m) at 16:30 (GMT+2);
  • US Manufacturing PMI (m/m) at 16:45 (GMT+2);
  • US Crude Oil Reserves (w/w) at 18:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
31 Dec

An AI system has reached human level on a test for ‘general intelligence’. Here’s what that means

By Michael Timothy Bennett, Australian National University and Elija Perrier, Stanford University 

A new artificial intelligence (AI) model has just achieved human-level results on a test designed to measure “general intelligence”.

On December 20, OpenAI’s o3 system scored 85% on the ARC-AGI benchmark, well above the previous AI best score of 55% and on par with the average human score. It also scored well on a very difficult mathematics test.

Creating artificial general intelligence, or AGI, is the stated goal of all the major AI research labs. At first glance, OpenAI appears to have at least made a significant step towards this goal.

While scepticism remains, many AI researchers and developers feel something just changed. For many, the prospect of AGI now seems more real, urgent and closer than anticipated. Are they right?

Generalisation and intelligence

To understand what the o3 result means, you need to understand what the ARC-AGI test is all about. In technical terms, it’s a test of an AI system’s “sample efficiency” in adapting to something new – how many examples of a novel situation the system needs to see to figure out how it works.

An AI system like ChatGPT (GPT-4) is not very sample efficient. It was “trained” on millions of examples of human text, constructing probabilistic “rules” about which combinations of words are most likely.

The result is pretty good at common tasks. It is bad at uncommon tasks, because it has less data (fewer samples) about those tasks.

Until AI systems can learn from small numbers of examples and adapt with more sample efficiency, they will only be used for very repetitive jobs and ones where the occasional failure is tolerable.

The ability to accurately solve previously unknown or novel problems from limited samples of data is known as the capacity to generalise. It is widely considered a necessary, even fundamental, element of intelligence.

Grids and patterns

The ARC-AGI benchmark tests for sample efficient adaptation using little grid square problems like the one below. The AI needs to figure out the pattern that turns the grid on the left into the grid on the right.

Several patterns of coloured squares on a black grid background.
An example task from the ARC-AGI benchmark test.
ARC Prize

Each question gives three examples to learn from. The AI system then needs to figure out the rules that “generalise” from the three examples to the fourth.

These are a lot like the IQ tests sometimes you might remember from school.

Weak rules and adaptation

We don’t know exactly how OpenAI has done it, but the results suggest the o3 model is highly adaptable. From just a few examples, it finds rules that can be generalised.

To figure out a pattern, we shouldn’t make any unnecessary assumptions, or be more specific than we really have to be. In theory, if you can identify the “weakest” rules that do what you want, then you have maximised your ability to adapt to new situations.

What do we mean by the weakest rules? The technical definition is complicated, but weaker rules are usually ones that can be described in simpler statements.

In the example above, a plain English expression of the rule might be something like: “Any shape with a protruding line will move to the end of that line and ‘cover up’ any other shapes it overlaps with.”

Searching chains of thought?

While we don’t know how OpenAI achieved this result just yet, it seems unlikely they deliberately optimised the o3 system to find weak rules. However, to succeed at the ARC-AGI tasks it must be finding them.

We do know that OpenAI started with a general-purpose version of the o3 model (which differs from most other models, because it can spend more time “thinking” about difficult questions) and then trained it specifically for the ARC-AGI test.

French AI researcher Francois Chollet, who designed the benchmark, believes o3 searches through different “chains of thought” describing steps to solve the task. It would then choose the “best” according to some loosely defined rule, or “heuristic”.

This would be “not dissimilar” to how Google’s AlphaGo system searched through different possible sequences of moves to beat the world Go champion.

You can think of these chains of thought like programs that fit the examples. Of course, if it is like the Go-playing AI, then it needs a heuristic, or loose rule, to decide which program is best.

There could be thousands of different seemingly equally valid programs generated. That heuristic could be “choose the weakest” or “choose the simplest”.

However, if it is like AlphaGo then they simply had an AI create a heuristic. This was the process for AlphaGo. Google trained a model to rate different sequences of moves as better or worse than others.

What we still don’t know

The question then is, is this really closer to AGI? If that is how o3 works, then the underlying model might not be much better than previous models.

The concepts the model learns from language might not be any more suitable for generalisation than before. Instead, we may just be seeing a more generalisable “chain of thought” found through the extra steps of training a heuristic specialised to this test. The proof, as always, will be in the pudding.

Almost everything about o3 remains unknown. OpenAI has limited disclosure to a few media presentations and early testing to a handful of researchers, laboratories and AI safety institutions.

Truly understanding the potential of o3 will require extensive work, including evaluations, an understanding of the distribution of its capacities, how often it fails and how often it succeeds.

When o3 is finally released, we’ll have a much better idea of whether it is approximately as adaptable as an average human.

If so, it could have a huge, revolutionary, economic impact, ushering in a new era of self-improving accelerated intelligence. We will require new benchmarks for AGI itself and serious consideration of how it ought to be governed.

If not, then this will still be an impressive result. However, everyday life will remain much the same.The Conversation

About the Author:

Michael Timothy Bennett, PhD Student, School of Computing, Australian National University and Elija Perrier, Research Fellow, Stanford Center for Responsible Quantum Technology, Stanford University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Opinions Programming
30 Dec

NASA’s micro-mission Lunar Trailblazer will make macro-measurements of the lunar surface in 2025

By César León Jr., Washington University in St. Louis 

NASA’s upcoming Artemis II mission is slated to return astronauts to the Moon no sooner than April 2026. Astronauts were last on the Moon in 1972 during the Apollo 17 mission.

Artemis II will utilize NASA’s Space Launch System, which is an extremely powerful rocket that will enable human space exploration beyond Earth’s atmosphere. The crew of four will travel in an Orion spacecraft, which the agency launched around the Moon and successfully returned during the Artemis I mission.

But before Artemis II, NASA will send two missions to scout the surface of the lunar south pole for resources that could sustain human space travel and enable new scientific discoveries.

Planetary geologists like me are interested in data from Lunar Trailblazer, one of these two scouting missions. The data from this mission will help us understand how water forms and behaves on rocky planets and moons.

Starting with scientific exploration

PRIME-1, or the Polar Resources Ice Mining Experiment, will be mounted on a lunar lander. It’s scheduled for launch in January 2025.

Aboard the lander are two instruments: The Regolith and Ice Drill for Exploring New Terrain, TRIDENT, and the Mass Spectrometer for Observing Lunar Operations, MSOLO. TRIDENT will dig down up to 3 feet (1 meter) and extract samples of lunar soil, and MSOLO will evaluate the soil’s chemical composition and water content.

Joining the lunar mining experiment is Lunar Trailblazer, a satellite launching on the same Falcon 9 rocket.

Think of this setup as a multimillion-dollar satellite Uber pool, or a rideshare where multiple missions share a rocket and minimize fuel usage while escaping Earth’s gravitational pull.

Bethany Ehlmann, a planetary scientist, is the principal investigator of Lunar Trailblazer and is leading an operating team of scientists and students from Caltech’s campus. Trailblazer is a NASA Small, Innovative Mission for PLanetary Exploration, or SIMPLEx.

These missions intend to provide practical operations experience at a lower cost. Each SIMPLEx mission is capped at a budget of US$55 million – Trailblazer is slightly over budget at $80 million. Even over budget, this mission will cost around a quarter of a typical robotic mission from NASA’s Discovery Program. Discovery Program missions typically cost around $300 million, with a maximum budget of $500 million.

Building small but mighty satellites

Decades of research and development into small satellites, or SmallSats, opened the possibility for Trailblazer. SmallSats take highly specific measurements and complement data sourced from other instruments.

A diagram showing four small satellites scanning Earth's science and taking layers of science data.
Missions like NASA’s TROPICS use a network of small satellites to take more data than one satellite would be able to do alone.
NASA Applied Sciences

Multiple SmallSats working together in a constellation can take various measurements simultaneously for a high-resolution view of the Earth’s or Moon’s surface.

SIMPLEx missions can use these SmallSats. Because they’re small and more affordable, they allow researchers to study questions that come with a higher technical risk. Lunar Trailblazer, for example, uses commercial off-the-shelf parts to keep the cost down.

These low-cost, high-risk experimental missions may help geologists further understand the origin of the solar system, as well as what it’s made of and how it has changed over time. Lunar Trailblazer will focus specifically on mapping the Moon.

A brief timeline of water discoveries on the Moon

Scientists have long been fascinated by the surface of our closest celestial neighbor, the Moon. As early as the mid-17th century, astronomers mischaracterized ancient volcanic eruptions as lunar mare, derived from the Latin word for “seas.”

Nearly two centuries later, astronomer William Pickering’s calculations suggested that the Moon had no atmosphere. This led him to conclude the Moon could not have water on its surface, as that water would vaporize.

However, in the 1990s, NASA’s Clementine mission detected water on the Moon. Clementine was the first mission to completely map the surface of the Moon, including the lunar poles. This data detected the presence of ice within permanently shadowed regions on the Moon in low resolution.

Scientists’ first water detection prompted further exploration. NASA launched the Lunar Prospector in 1998 and the Lunar Reconnaissance Orbiter in 2009. The India Space Research Organization launched its Chandrayaan-1 mission with the Moon Mineralogy Mapper, M3, instrument in 2008. M3, although not designed to detected liquid water, unexpectedly did find it in sunlit areas on the Moon.

These missions collectively provided maps showing how hydrous minerals – minerals containing water molecules in their chemical makeup – and ice water are distributed on the lunar surface, particularly in the cold, dark, permanently shadowed regions.

Novel mission, novel science

But how does the temperature and physical state of water on the Moon change from variations in sunlight and crater shadows?

Lunar Trailblazer will host two instruments, the Lunar Thermal Mapper, LTM, and an evolution of the M3 instrument, the High-resolution Volatiles and Minerals Moon Mapper, HVM3.

The LTM instrument will map surface temperature, while the HVM3 will measure how lunar rocks absorb light. These measurements will allow it to detect and distinguish between water in liquid and ice forms.

In tandem, these instruments will provide thermal and chemical measurements of hydrous lunar rock. They’ll measure water during various times of the lunar day, which is about 29.5 Earth days, to try to show how the chemical composition of water varies depending on the time of day and where it is on the Moon.

These results will tell researchers what phase – solid or liquid – the water is found in.

Scientific significance and what’s next

There are three leading theories for where lunar water came from. It could be water that’s been stored inside the Moon since its formation, in its mantle layer. Some geologic processes may have allowed it to slowly escape to the surface over time.

Or, the water may have arrived on asteroids and comets that collided with the lunar surface. It may even have been created by interactions with the solar wind, which is a stream of particles that comes from the Sun.

Lunar Trailblazer may shed light on these theories and help researchers make progress on several other big science questions, including how water behaves on rocky bodies like the Moon and whether future astronauts will be able to use it.The Conversation

About the Author:

César León Jr., Ph.D. Student of Planetary Geology, Washington University in St. Louis

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Economics & Fundamentals Opinions
30 Dec

Language AIs in 2024: Size, guardrails and steps toward AI agents

By John Licato, University of South Florida 

I research the intersection of artificial intelligence, natural language processing and human reasoning as the director of the Advancing Human and Machine Reasoning lab at the University of South Florida. I am also commercializing this research in an AI startup that provides a vulnerability scanner for language models.

From my vantage point, I observed significant developments in the field of AI language models in 2024, both in research and the industry.

Perhaps the most exciting of these are the capabilities of smaller language models, support for addressing AI hallucination, and frameworks for developing AI agents.

Small AIs make a splash

At the heart of commercially available generative AI products like ChatGPT are large language models, or LLMs, which are trained on vast amounts of text and produce convincing humanlike language. Their size is generally measured in parameters, which are the numerical values a model derives from its training data. The larger models like those from the major AI companies have hundreds of billions of parameters.

There is an iterative interaction between large language models and smaller language models, which seems to have accelerated in 2024.

First, organizations with the most computational resources experiment with and train increasingly larger and more powerful language models. Those yield new large language model capabilities, benchmarks, training sets and training or prompting tricks. In turn, those are used to make smaller language models – in the range of 3 billion parameters or less – which can be run on more affordable computer setups, require less energy and memory to train, and can be fine-tuned with less data.

No surprise, then, that developers have released a host of powerful smaller language models – although the definition of small keeps changing: Phi-3 and Phi-4 from Microsoft, Llama-3.2 1B and 3B, and Qwen2-VL-2B are just a few examples.

These smaller language models can be specialized for more specific tasks, such as rapidly summarizing a set of comments or fact-checking text against a specific reference. They can work with their larger cousins to produce increasingly powerful hybrid systems.

What are small language model AIs – and why would you want one?

Wider access

Increased access to highly capable language models large and small can be a mixed blessing. As there were many consequential elections around the world in 2024, the temptation for the misuse of language models was high.

Language models can give malicious users the ability to generate social media posts and deceptively influence public opinion. There was a great deal of concern about this threat in 2024, given that it was an election year in many countries.

And indeed, a robocall faking President Joe Biden’s voice asked New Hampshire Democratic primary voters to stay home. OpenAI had to intervene to disrupt over 20 operations and deceptive networks that tried to use its models for deceptive campaigns. Fake videos and memes were created and shared with the help of AI tools.

Despite the anxiety surrounding AI disinformation, it is not yet clear what effect these efforts actually had on public opinion and the U.S. election. Nevertheless, U.S. states passed a large amount of legislation in 2024 governing the use of AI in elections and campaigns.

Misbehaving bots

Google started including AI overviews in its search results, yielding some results that were hilariously and obviously wrong – unless you enjoy glue in your pizza. However, other results may have been dangerously wrong, such as when it suggested mixing bleach and vinegar to clean your clothes.

Large language models, as they are most commonly implemented, are prone to hallucinations. This means that they can state things that are false or misleading, often with confident language. Even though I and others continually beat the drum about this, 2024 still saw many organizations learning about the dangers of AI hallucination the hard way.

Despite significant testing, a chatbot playing the role of a Catholic priest advocated for baptism via Gatorade. A chatbot advising on New York City laws and regulations incorrectly said it was “legal for an employer to fire a worker who complains about sexual harassment, doesn’t disclose a pregnancy or refuses to cut their dreadlocks.” And OpenAI’s speech-capable model forgot whose turn it was to speak and responded to a human in her own voice.

Fortunately, 2024 also saw new ways to mitigate and live with AI hallucinations. Companies and researchers are developing tools for making sure AI systems follow given rules pre-deployment, as well as environments to evaluate them. So-called guardrail frameworks inspect large language model inputs and outputs in real time, albeit often by using another layer of large language models.

And the conversation on AI regulation accelerated, causing the big players in the large language model space to update their policies on responsibly scaling and harnessing AI.

But although researchers are continually finding ways to reduce hallucinations, in 2024, research convincingly showed that AI hallucinations are always going to exist in some form. It may be a fundamental feature of what happens when an entity has finite computational and information resources. After all, even human beings are known to confidently misremember and state falsehoods from time to time.

The rise of agents

Large language models, particularly those powered by variants of the transformer architecture, are still driving the most significant advances in AI. For example, developers are using large language models to not only create chatbots, but to serve as the basis of AI agents. The term “agentic AI” shot to prominence in 2024, with some pundits even calling it the third wave of AI.

To understand what an AI agent is, think of a chatbot expanded in two ways: First, give it access to tools that provide the ability to take actions. This might be the ability to query an external search engine, book a flight or use a calculator. Second, give it increased autonomy, or the ability to make more decisions on its own.

For example, a travel AI chatbot might be able to perform a search of flights based on what information you give it, but a tool-equipped travel agent might plan out an entire trip itinerary, including finding events, booking reservations and adding them to your calendar.

AI agents can perform multiple steps of a task on their own.

In 2024, new frameworks for developing AI agents emerged. Just to name a few, LangGraph, CrewAI, PhiData and AutoGen/Magentic-One were released or improved in 2024.

Companies are just beginning to adopt AI agents. Frameworks for developing AI agents are new and rapidly evolving. Furthermore, security, privacy and hallucination risks are still a concern.

But global market analysts forecast this to change: 82% of organizations surveyed plan to use agents within 1-3 years, and 25% of all companies currently using generative AI are likely to adopt AI agents in 2025.The Conversation

About the Author:

John Licato, Associate Professor of Computer Science, Director of AMHR Lab, University of South Florida

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Opinions Programming
30 Dec

Oil and gas prices are rising on the back of another decline in inventories.

By JustMarkets

As of Friday, the Dow Jones (US30) decreased by 0.77% (for the week +1.65%). The S&P500 Index (US500) was down 1.11% (for the week +2.21%). The Nasdaq Technology Index (US100) fell by 1.36% (for the week +2.55%). The major Wall Street indices fell sharply in afternoon trading, led by a technological stock sell-off. Nevertheless, all 3 major indices remained positive at the end of the week.

The US trade deficit widened to $102.9 bln in November from $98.3 bln in October, more than expectations of $101.2 bln. This is negative for Q4 GDP and bearish for stocks.

Tesla (TSLA) fell more than 3% amid reports that car rental company Hertz is so desperate to get rid of its inventory of Tesla vehicles that it is aggressively sending out cheap buyback options to customers. Broadcom (AVGO) is down more than 2% on signs of insider selling after the CFO sold $2.89 million shares last Friday.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) rose by 0.68% (for the week -1.43%), France’s CAC 40 (FR40) closed 1.00% higher (for the week +0.91%), Spain’s IBEX 35 (ES35) gained 0.50% (for the week +0.60%), and the UK’s FTSE 100 (UK100) closed up 0.16% (for the week -0.60%) on Friday.

WTI crude oil prices rose 1.4% to $70.6/bbl on Friday amid another decline in US crude inventories. Increasingly pessimistic economic signals from China supported bets that fuel demand from the world’s main oil importer will slow. In turn, rising supply from Canada, the US, and Brazil may offset prolonged production cuts by OPEC+ members. Nevertheless, uncertainty remains as US President-elect Trump may support domestic production and tighten sanctions on energy exports from Iran.

The US natural gas prices rose to $3.36/MMBtu after the EIA reported a smaller-than-expected 93 billion cubic feet decline in storage inventories for the week ended Dec. 20, which was below forecasts for a 99 bcf decline, bringing inventories to 3,529 bcf.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) rose by 3.18%, China’s FTSE China A50 (CHA50) gained 2.03%, Hong Kong’s Hang Seng (HK50) added 2.45%, and Australia’s ASX 200 (AU200) was negative 0.57% for the week.

On Friday, Bank of Japan (BoJ) Governor Kazuo Ueda reiterated the need to monitor economic risks but refrained from giving clear guidance on future rate hikes. As for the data, Japan’s retail sales rose the most in three months in November, while industrial production fell less than expected.

The Australian dollar rose to around $0.62 but remained near two-year lows, reflecting its continued troubles amid subdued holiday trade. Earlier in December, the Reserve Bank of Australia (RBA) adopted a dovish tone, introducing an explicit easing bias. Weaker-than-expected trends in consumer spending, wage growth, and housing-related inflation drove the shift. As a result, markets have come to view the probability of a rate cut as early as February as 50/50.

S&P 500 (US500) 5,970.84 −66.75 (−1.11%)

Dow Jones (US30) 42,992.21 −333.59 (−0.77%)

DAX (DE40) 19,984.32 +135.55 (+0.68%)

FTSE 100 (UK100) 8,149.78 +12.79 (+0.16%)

USD index 108.01 (−0.11%)

News feed for: 2024.12.30

  • Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
  • Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+2);
  • US Chicago PMI (m/m) at 16:45 (GMT+2);
  • US Pending Home Sales (m/m) at 17:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
27 Dec

The RBA may go for a rate cut in February. New Zealand dollar is falling amid recession in the economy and RBNZ’s dovish stance

By JustMarkets

At Thursday’s close, the Dow Jones Index (US30) was up 0.07%. The S&P 500 Index (US500) was down 0.04%. The Nasdaq Technology Index (US100) lost 0.13%. The three major indices closed subdued on the day after the Christmas holiday. Markets remained subdued as they assessed the potential impact of the Federal Reserve’s interest rate hike on corporate earnings next year. New labor market data showed a slight decline in jobless claims, down 1k to 219k instead of the expected increase of 4k.

Equity markets in Europe have not traded for the last 2 days due to the Christmas holidays.

CEBR projections that Britain will narrow the gap with the more lagging German economy over the next 15 years. Europe’s largest economy is expected to be 20% larger than the UK’s in 2039, up from 31% now. Similarly, the UK will overtake France and be 25% larger in terms of output by 2039.

WTI crude oil prices are holding near the $70 per barrel mark, supported by stimulus measures in China and a US industry report of lower crude inventories. In China, local authorities have been given more leeway to use funds from government bonds to stimulate growth. In the United States, the American Petroleum Institute reported a 3.2 million barrel drop in commercial crude inventories, which would be the fifth consecutive decline if confirmed by official data. Usually, the US inventories fall in December and then rise in the early months.

Asian markets rose steadily yesterday. Japan’s Nikkei 225 (JP225) rose by 1.12%, China’s FTSE China A50 (CHA50) jumped 1.27%, Hong Kong’s Hang Seng (HK50) gained 1.08%, and Australia’s ASX 200 (AU200) was not trading due to the Christmas holiday. Japanese stocks rose on Thursday thanks to comments from Bank of Japan (BoJ) Governor Kazuo Ueda, who stopped short of signaling an interest rate hike next month, emphasizing the need to monitor economic risks. In addition, the report said the country is planning a record $735 billion budget for fiscal 2025, driven by higher spending on social security and debt service.

The World Bank raised China’s economic growth projection for 2024 and 2025, but warned that low Household and Business Confidence and unfavorable factors in the real estate sector will continue to weigh on the economy next year. An expected increase in US tariffs on its goods when US President-elect Donald Trump takes office in January could also weigh on growth. Beijing has set its growth target for this year at “around 5%” and said it is confident it will meet that target.

On Thursday, the New Zealand dollar remained steady at around $0.565 on low trading volumes due to the holiday break. Rising expectations of more aggressive monetary policy easing by the Reserve Bank of New Zealand (RBNZ) continued to weigh on the currency. Data released last week showed that the New Zealand economy contracted by 1% quarter-on-quarter in the third quarter, following a revised 1.1% contraction in the previous period. This was worse than the 0.4% contraction expected by the market, officially putting the country into recession. As a result, investors fully priced in an excessive 50bp rate cut at the next RBNZ meeting in February.

This week, the Reserve Bank of Australia (RBA) released the minutes of its December meeting, emphasizing the need to maintain restrictive monetary policy for the time being. Earlier this month, the RBA kept its key interest rate at 4.35%, which was in line with market expectations. However, taking many by surprise, the RBA suggested the possibility of a rate cut as early as February next year.

S&P 500 (US500) 6,037.59 −2.45 (−0.04%)

Dow Jones (US30) 43,325.80 +28.77 (+0.07%)

DAX (DE40) 19,848.77 −35.98 (−0.18%)

FTSE 100 (UK100) 8,136.99 +34.27 (+0.42%)

USD Index 108.10 −0.16 (−0.14%)

News feed for: 2024.12.27

  • Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
  • Japan Unemployment Rate (m/m) at 01:30 (GMT+2);
  • Japan Industrial Production (m/m) at 01:50 (GMT+2);
  • US Natural Gas Storage (w/w) at 17:30 (GMT+2).
  • US Crude Oil Inventories (w/w) at 18:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
26 Dec

Flashpoint Friday: Bitcoin and Yen traders brace for Dec. 27 volatility

By ForexTime

  • Dec 27th: Japan set to release key economic data and BoJ summary of opinions
  • Bloomberg model: USDJPY to trade between 155.5 – 159.0 through Jan 2nd
  • Dec 27th: Bitcoin faces historic options expiry event, worth over US$14.5 billion
  • Some Bitcoin bulls betting on $110k BTC by end-January 2025

 

Bitcoin and Yen traders may not be done with 2024 just yet.

Even as various asset classes are experiencing thinned-out trading during this seasonally sluggish year-end period, these 2 major instruments could see sizeable trading opportunities tomorrow.

 

Here’s what’s happening on Friday, December 27th:

1) Japan data dump and release of Bank of Japan (BoJ) summary of opinions

Here are the predictions from economists:

  • Tokyo CPI (December):  2.9% rise year-on-year (December 2024 vs. December 2023).
    (higher than November 2.6% headline inflation figure)
  • Tokyo CPI excluding fresh food and energy prices (December):  1.9% rise year-on-year
    (matching November’s core inflation figure)
  • Jobless rate (November): 2.5%
    (matching October’s figure
  • Retail sales (November): 1.5% rise year-on-year
    (slightly lower than October’s 1.6% figure)
  • Industrial production (November): 3.2% drop year-on-year
    (an about turn from October’s 1.4% year-on-year growth)

Also, the BoJ is due to release the summary of opinions from last week’s policy meeting.

 

POTENTIAL SCENARIOS:

  • BULLISH: USDJPY may break above the stern psychological resistance of 158.00 if the incoming economic data allows the BoJ to pause for longer before its next rate hike.

    The Yen could further weaken (higher USDJPY) if the summary of opinions support the dovish undertones conveyed by BoJ Governor Kazuo Ueda after the Dec. 19th rate decision, echoed during his Christmas Day speech.

  • BEARISH: USDJPY may fall towards 155 if Friday’s economic data releases, especially higher-than-expected CPI prints, support the case for a sooner-than-later BoJ rate hike (by Jan 2025?), coupled with more hawkish signals out of the BoJ’s summary of opinions, contrasting Governor Ueda’s dovish rhetoric of late.

USDJPY set to trade between 155 and 159 next week

 

 

2) Bitcoin’s historic US$14.57 billion options expiry date

Tomorrow is a day of reckoning for many crypto investors and traders who have made forecasts on Bitcoin’s future price via the options market.

NOTE: Options are financial contracts that give traders the right, but not the obligation, to buy or sell the underlying asset at a specific price by a specific date.

According to the latest data on Deribit – the crypto exchange with the largest market share in crypto options:

More than US$14.5 billion – a Deribit record high – worth of Bitcoin options are due to expire tomorrow (Friday, Dec. 27th).

Without going into the mechanics of how options contracts can influence the underlying asset’s price …

Overall, Bitcoin prices may see heightened volatility around this major expiry date.

Already, Bitcoin is seeing a sharp drop at the time of writing, on the eve of the December 27th expiration date.

Yet, prices remain rangebound between $92k and $100k which it has adhered to for much of the past month (barring its spike to the current all-time high above $108,000).

Bitcoin could become more volatile on December 27, 2024

 

What’s next for Bitcoin after December 27th?

After this Friday’s closely-watched options expiration event, Bitcoin bulls may then wrest back control and push prices back above $100,000, assuming the upward momentum remains intact.

From a fundamental perspective:

  • Crypto fans remain hopeful that US President-Elect Donald Trump would roll out crypto-friendly policies, especially given the pro-crypto stances of several of Trump’s already-nominated officials, including his nominee for SEC Chair, Paul Atkins.
  • MicroStrategy – a software maker turned Bitcoin stockpiler – is looking to buy up more Bitcoin over the next 3 years by issuing more shares in raising about US$42 billion.

    MicroStrategy has already been buying Bitcoin for the past 7 weeks straight.

    More hefty buying in the market could drive prices higher, or at least put a floor below BTC prices.

 

Going back to the options market and looking beyond December 27th …

Deribit’s data show the largest concentration of “call options” at the $110,000 strike price, expiring on 31st January 2025.

If such speculative bets prove true, that could spell further gains for Bitcoin in the month ahead.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Economics & Fundamentals Financial News
24 Dec

Canadian dollar declines after weak GDP data. Qatar threatens EU to halt natural gas exports

By JustMarkets

At Monday’s close, the Dow Jones Index (US30) was up 0.16%. The S&P 500 Index (US500) added 0.73%. The Nasdaq Technology Index (US100) jumped by 1.01%. Stocks rose on Monday thanks to gains in technology and chip companies’ share prices, with Nvidia up 3% and TSMC, Broadcom, and AMD up nearly 5%, confirming their role as key drivers of market growth in 2024. Congress passed a temporary funding bill and averted a shutdown of the US government, which would have negatively impacted the US economy. Under this bill, the government will be funded until mid-March 2025.

The US durable goods orders report released on Monday was weaker than expected, although capital goods orders were slightly stronger than expected. US Durable Goods Orders for November fell by 1.1% m/m, weaker than expectations of 0.3%, although October’s figure was revised upward to 0.8% from 0.3%. November’s US New Home Sales report came in at 5.9% to 664,000 on Monday, weaker than expected for a rise to 669,000. The Conference Board’s US Consumer Confidence Index for December came in at 8.1 to 104.7, significantly weaker than expectations of an increase to 113.2. Markets are pricing in a 25 bps chance of a rate cut at the January 28–29 FOMC meeting at 9%.

The Canadian dollar weakened to 1.44 per US dollar, nearing its lowest level since March 2020, as investors digested weak GDP data while the US dollar strengthened. Canada’s GDP is estimated to have contracted by 0.1% month-on-month in November, the first decline this year and coinciding with Central Bank warnings and recently lowered growth estimates. The Canadian government revised down its GDP prognoses, cutting economic growth in 2025 to 1.7% from 1.9% and in 2026 to 2.1% from 2.2%. Growing expectations that the Bank of Canada may continue easing rates to support growth could widen the interest rate gap with the US, reducing the attractiveness of the Canadian dollar.

Equity markets in Europe were mostly down on Monday. Germany’s DAX (DE40) fell by 0.18%, France’s CAC 40 (FR40) closed down 0.03%, Spain’s IBEX 35 (ES35) lost 0.28%, and the UK’s FTSE 100 (UK100) closed positive 0.22%. European government bond yields rose after ECB President Lagarde said ECB officials remain vigilant on lingering price pressures in the services sector, but remain confident that the Consumer Price Index is approaching the ECB’s target level. Swaps rate the odds of a -25bp ECB rate cut at the January 30 meeting as 100%, while the odds of a 50bp rate cut at that meeting are 9%.

WTI crude oil prices fell by 0.3% to settle at $69.2 a barrel on Monday as concerns about a possible supply glut in 2025 and a strengthening US dollar pressured markets in pre-holiday trading. Analysts noted the likelihood of a growing supply glut next year, while the dollar’s rise to two-year highs put further pressure on prices by increasing spending by foreign buyers. Geopolitical tensions also intensified, with Donald Trump calling on the EU to increase imports of US energy or the EU will face tariffs.

Qatar has warned it will stop exporting gas to the European Union if the bloc’s countries impose sanctions under recently passed environmental review legislation. The EU directive on environmental impact assessments of businesses, which came into force in July, imposes fines of up to 5% of a company’s annual global revenue if management fails to address negative impacts on human rights or the environment. Qatar has become a crucial LNG supplier to Europe as countries reduce their dependence on Russian supplies.

Asian markets rose steadily yesterday. Japan’s Nikkei 225 (JP225) rose by 1.19%, China’s FTSE China A50 (CHA50) jumped 0.91%, Hong Kong’s Hang Seng (HK50) gained 0.82%, and Australia’s ASX 200 (AU200) added 1.67%. Foreign institutions remain optimistic about China’s capital market in 2025 as the economy will gradually stabilize.

The minutes of the December meeting of the Reserve Bank of Australia (RBA) showed that there is a need to maintain restrictive monetary policy for the time being. The Board emphasized that future rate decisions will be data-dependent, noting that while inflation risks have eased, uncertainty remains due to global conditions and elevated service inflation.

S&P 500 (US500) 5,974.07 +43.22 (+0.73%)

Dow Jones (US30) 42,906.95 +66.69 (+0.16%)

DAX (DE40) 19,848.77 −35.98 (−0.18%)

FTSE 100 (UK100) 8,102.72 +18.11 (+0.22%)

USD Index 108.09 +0.47 (+0.43%)

News feed for: 2024.12.24

  • Japan Monetary Policy Meeting Minutes (m/m) at 01:50 (GMT+2);
  • Australia Monetary Policy Meeting Minutes (m/m) at 02:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
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