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Stocks rise after US inflation data, but US dollar remains flat
On Friday, major stock indexes rose with U.S. shares reaching record highs on the news that U.S. Inflation rose less than anticipated last month. The U.S. Dollar Index was almost flat. After a 0.4% increase in August, the U.S. Consumer Price Index increased by 0.3%, which was slightly below the 0.4% expected. This reinforced expectations that Federal Reserve will reduce interest rates during its policy meeting next Monday. "Today's data on inflation shows that we are not in crisis like 2022. Prices are rising, but in a controlled manner. Callie Cox is the chief market strategist for Ritholtz in Charlotte, North Carolina. The Fed is expected to reduce rates two more times this year, with a quarter-percentage-point cut baked in for the October 28-29 meeting, according to LSEG calculations using rate futures. The Canadian dollar barely responded to the announcement by U.S. president Donald Trump on social media, that he would end all trade negotiations with Canada. The Canadian dollar last fell 0.28% against the greenback, at C$1.4. Intel shares rose by 0.3% on Friday after the company's results beat expectations. The Dow Jones Industrial Average rose by 562.73 points or 1.21% to 47,297.34. The S&P 500 rose 66.16 or 0.98% to 6,804.60, and the Nasdaq Composite gained 297.83 or 1.30% to 23,239.63. Apple and Microsoft are among the five of the seven U.S. firms at the heart of the artificial-intelligence boom. The U.S. stock market has soared this year and some analysts are predicting a bubble. The MSCI index of global stocks rose by 7.63 points or 0.77% to 1,002.72. The STOXX 600 Index rose by 0.23%. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) was unchanged at 98.94. Meanwhile, the euro rose 0.08%, reaching $1.1626. The dollar gained 0.16% against the Japanese yen to reach 152.85. Data showed that the business activity in the Eurozone grew more rapidly than expected in October. Euro zone government bond yields rose. The 10-year Treasury yield was briefly lower after the CPI report. The yields on longer-dated U.S. bonds increased after a University of Michigan consumer sentiment survey showed a decrease in the index but an increase in inflation expectations for the next five years. The benchmark 10-year U.S. note yield increased 1.4 basis points, to 4.003% from 3.989% at the end of Thursday. Oil prices After a 5% rise on Thursday, after the U.S. imposed sanctions against major Russian oil companies. U.S. crude oil fell 29 cents, settling at $61.50 per barrel. Brent crude eased 5 cents, settling at $65.94. Spot gold dropped 0.32%, to $4111.97 per ounce. Reporting by Caroline Valetkevitch and Elizabeth Howcroft, both in New York, with additional reporting from Laura Matthews, also in New York, and editing by Toby Chopra and Joe Bavier in New York, Alison Williams in New York, Edmund Klamann, Richard Chang, and Toby Chopra.
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The FOREX-US Dollar is set to gain modestly after the soft inflation data
The U.S. Dollar was almost flat Friday, after it had dipped following new inflation data showing that U.S. consumer price increases were lower than expected in September. This kept the Federal Reserve on course to reduce interest rates next week. Consumer Price Index increased by 0.3% in September and by 3.0% over the past 12 months. The economists surveyed by predicted that the CPI would rise by 0.4% this month, and by 3.1% on an annual basis. The U.S. Dollar Index was down last by 0.021%, at 98.934. It had fallen as high as 0.2% earlier. Still on track to a modest gain for the week. Marc Chandler, Bannockburn Capital Markets' chief market strategist said that the headline was less rosy than expected. The dollar was sold by the news even though the market believed that the Fed will cut rates not only in the next week but also in December. The CPI report has been published despite the lack of economic data due to the shutdown. The Social Security Administration used this figure to calculate the cost of living adjustment for millions upon millions of retirees, and other benefit recipients. It was originally due on October 15th. The euro was up by 0.06% and closed at $1.163. A survey released on Friday showed that the services sector led the growth in business activity in the Euro Zone in October. All Eyes on Trade The trade war fears returned after U.S. president Donald Trump announced that all trade negotiations with Canada had been terminated due to an Ontario advertisement featuring a recording by Ronald Reagan, the former US President who spoke negatively about tariffs. The Canadian dollar last weakened slightly at 1.40 to the U.S. Dollar, but overall market reaction was relatively subdued. Investors' attention remained focused on the upcoming meeting between Trump and Chinese president Xi Jinping. Some people have hoped that the Trump-Xi summit in South Korea will bring an end to the trade war which has been on and off between the two world's largest economies. Ben Bennett, the head of Asia investment strategy at L&G Asset Management, said: "I believe expectations for the Trump-Xi summit are high, and there is a risk that the situation will de-escalate significantly following the face to face meeting." Oil prices rose due to U.S. sanctions against Russian suppliers Rosneft & Lukoil for their involvement in the war in Ukraine. This weighed heavily on currencies linked to oil imports including the yen. The performance of the yen is also tied to policies of Japan's newly appointed Prime Minister Sanae Takaichi. Takaichi is widely considered a fiscal dove and a monetary dove. The yen fell to its lowest level in two weeks and was last trading at 152.85 US dollars. The data released earlier on Friday indicated that Japan's core consumer price index remained above the central banks 2% target. This kept expectations alive of a rate hike in the near future. Government sources informed on Wednesday that Takaichi was preparing a package of economic stimulus likely to surpass last year's $92billion to help families combat inflation. Sterling was down 0.15% at $1.33, after stronger-than-expected retail sales that were boosted by demand for gold from online jewellers. This week, it was down 1% after investors added to expectations of a rate reduction from the Bank of England in this year. Hannah Lang reported from New York, with additional reporting by Samuel Indyk and Ankur Banerjee from London. Nick Zieminski and Peter Graff edited the story.
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Santee Cooper and Brookfield move forward to complete nuclear reactors
Santee Cooper, a public utility company in South Carolina, said Friday that it had approved a letter from Brookfield Asset Management indicating its intention to resume talks about the construction of two AP1000 reactors. The two companies will begin a six week feasibility period, during which they will choose a project manager and evaluate construction providers. They will also engage potential buyers of the carbon-free electricity that the reactors can generate. The project was cancelled in July 2017, after Santee Cooper and South Carolina Electric and Gas Co. (SCE&G) spent $9 billion on its development. Peter McCoy said that Brookfield presented a proposal to Santee cooper outlining the steps to reverse our previous nuclear investment. The company stated that the decision to maintain equipment for the past eight-years has allowed the Fairfield units to be completed faster and at a lower cost. The company began looking for buyers in January to purchase the two nuclear units that were still partially constructed at V.C. Summer Nuclear Station, Jenkinsville. The Wall Street Journal had reported this news earlier that day. (Reporting and editing by Shash Kuber in Bengaluru, with Sumit Saha reporting from Bengaluru)
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EU Wheat ticks up as China is in focus
European wheat futures rose in line with Chicago on Friday as traders looked forward to U.S. - Chinese trade talks and assessed reports that Chinese buyers are inquiring about imported wheat. The Paris-based Euronext wheat market closed 0.3% higher at 190.25 Euros ($221.87) per metric ton. It has remained within its small trading range this month. Chicago wheat was also slightly higher, moving away from the five-year low it reached last week. Euronext volumes were low as attention was focused on Donald Trump's upcoming trip to Asia, where he will hold a highly-anticipated meeting with China's Xi Jinping amid their trade war. The U.S. soybean market in China, the main export market for this crop, has been stalled. This is one of the topics discussed. A lack of evidence also limited the price support. There were rumors about possible Chinese imports of wheat from Europe and Argentina. A German trader stated that "this would be very welcomed for the west EU, after we lost export sales to Black Sea. But we need to see actual buying", a German said. French wheat was again overlooked in an Algerian imported tender this week amid ongoing diplomatic tensions, and traders are now watching to see if EU wheat at competitive prices can attract demand from elsewhere. According to traders, the Russian 11.5% protein grain for shipment in November was the least expensive at $248 per ton, including freight and cost. French, Ukrainian, and Romanian wheat was very close behind, at around $249 to $250 a ton, c&f Egyptian port, depending on Euronext, and currency movements. The traders noted that there was interest from within the EU to purchase feed wheat coming out of Spain and Ireland. A Spanish buyer wanted to buy 8,000 tons at 203 euros per ton, c&f North Spain, for delivery in November. A buyer in Ireland was also willing to pay around 203 Euros per ton for 7,000 tons of feed wheat for delivery in November/December. Prices were held back by the prospect of a large global wheat harvest. Favorable sowing conditions for the harvest of next year in Europe increased supply pressure. According to FranceAgriMer, by October 20th, the farmers in France had already sown more than half of the soft wheat expected area. This was ahead of the pace average for the last five years.
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The Russian rouble has surged after a symbolic rate cut
The Russian rouble gained against the U.S. Dollar and the Chinese yuan after the central banks cut their key interest rate 50 basis points and increased inflation forecasts both for this year and in 2025. By 1620 GMT the rouble had risen 1.9% to 79.74 US dollars in the over-the counter market, and almost 2% to 11.15 yuan at the Moscow Stock Exchange where the Chinese currency is the most actively traded. The statement's hawkish language on inflation and the small cut that some analysts called "symbolic" supported the rouble. It benefits from the high interest rates because keeping money in assets denominated in roubles becomes more appealing. The rouble strengthened during the week leading up to the meeting of the central bank despite the new U.S. sanctions aimed at Russian oil companies Lukoil & Rosneft due to Ukraine. Elvira Nabiullina, the Governor of the Russian Central Bank, said at a press conference held after the meeting that the rouble's stronger exchange rate was due to the lower demand for foreign currencies and the shrinking imports. She said, "We must admit our exchange rate is more volatile." (Reporting and Editing by Marguerita Chôy)
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Usiminas, a Brazilian steel company, expects a slowdown in imports and warns against China shipments
Executives at Brazilian steelmaker Usiminas said that they are confident in the anti-dumping laws of their country and expect a reduction in metal imports in the fourth quarter. In a recent earnings call, CEO Marcelo Chara stated that the company is "attentive" and "concerned" about the increase in imports coming from China. Usiminas posted a net loss for the third quarter of 3.5 billion reals ($647.68m) after taking an impairment loss of more than 2 billion dollars from revaluing its steelmaking assets. It said that without the impairment loss, it would have reported a net income of 108 millions reais as opposed to 185 million in the previous year. The quarter saw an increase of 9% in volume for iron ore, to 2.5 million metric tonnes. Steel sales dropped 2%, to 1.1 millions tons. The company expects lower sales of steel in the fourth quarter due to seasonality, but prices are expected to remain stable. The executives said that they are expecting positive cash flow for the next quarter, and are confident in further cost savings. Earnings were 434 millions reais for the quarter. This was up 2% compared to a year ago, but lower than the 458.7million reais that an LSEG survey had predicted. Analysts from BTG Pactual stated that the results were in line with the expectations but noted the "very challenging" environment for the steel division. Usiminas shares traded in Sao Paulo pared losses by more than 8%, to be about 1% lower at midday, underperforming Brazil’s benchmark Bovespa, which rose 0.3%.
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Carney is ready to resume US Canada trade talks that were halted by Trump due to Reagan's ad
Mark Carney, the Prime Minister of Canada, said that Canada is ready to resume talks with the United States after President Donald Trump suspended them over an anti-tariff ad issued by Ontario’s provincial government. Trump ended the talks Thursday after the video was released in which Ronald Reagan, a Republican icon and former president, said that tariffs lead to trade wars, economic disaster, and Republican icons. In a social media post made late at night, Trump branded the ad as fraudulent. Carney, since becoming Prime Minister, has made two trips to the White House to try to reach a deal on lowering import tariffs for steel and aluminum as well as autos that were imposed by Trump. These tariffs have hurt Canada's economic growth. CARNEY SAYS THAT HE WANTS 'CONSTRUCTIVE NEGATIONS' Carney, who is on his first official trip to Asia to diversify trade relations away from the United States, said that "my colleagues have worked with their American counterparts on detailed, constructive negotiations and discussions on specific sectors." Carney removed the majority of Canada's retaliatory duties on U.S. Imports that were imposed by his predecessor. However, White House advisor Kevin Hassett stated that Trump is frustrated with Canada because trade negotiations have not gone well. Hassett told reporters in the White House that "I think frustration has grown over time." The Canadians were very difficult to deal with. When asked for details, Hassett mentioned a "lack" of flexibility. In a separate Friday post, Trump accused Canada in trying to influence U.S. Supreme Court when it is preparing to hear arguments about the legality Trump's sweeping tariffs on the global market next month. Ronald Reagan Presidential Foundation stated that the ad was "selective audio or video." The company said that it was looking into legal options. The voiceover of the ad is Ronald Reagan, who is a hero for many U.S. Republicans. He criticizes tariffs on imported goods, saying that they lead to job losses and trade conflicts. The video is made up of five sentences, which are spliced out of order from the five minute weekly address. The Foundation said that the ad "misrepresents" the Presidential Radio Address of Reagan (in 1987) and that the Government of Ontario had not sought nor received permission to use or edit the remarks. The advertisement does not mention the fact that Reagan used the speech to explain to the Japanese people that the tariffs that his administration imposed upon them were a tragically unavoidable deviation from his belief that free trade was the key to prosperity. Ontario Premier Doug Ford stated this week that an ad by his government's provincial, which was more than a month old, caught Trumps attention. Ford has repeatedly urged Carney for a more aggressive approach to Trump. Reagan said in the broadcast: "When someone declares, Let us impose tariffs against foreign imports', it appears that they are doing the patriotic act by protecting American products, and jobs." "And sometimes it works for a while - but for only a brief time." He says that: "...such trade barriers harm every American worker, consumer and business in the long-run. Trade wars also cause "markets to shrink and collapse. Businesses and industries close down. And millions of people are out of work." Canada reduced the tariff-free imports quotas on Thursday for General Motors, Stellantis, and cited their decision to reduce manufacturing in Canada. Trump's trade conflict has raised U.S. Tariffs to the highest level since the 1930s. He has also regularly threatened additional duties, causing concern amongst businesses and economists. The U.S. and Canada will review the 2020 continental free trade agreement next year. Carney acknowledged that the U.S. Trade Policy has fundamentally changed. The United States and Canada will benefit from the discussions. This is for the workers and families of both countries. (Reporting and writing by Kevin Liffey, Caroline Stauffer, Doina Chiacu and Steve Holland in Washington, and editing by Tom Hogue and Chizu Nomiyama)
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Reliance, India's largest oil buyer from Russia, says it will adhere to Western sanctions
Reliance Industries Ltd, the largest Indian buyer of Russian crude oil, said it would adhere to Western sanctions against Moscow, while maintaining its relationships with its current oil suppliers. Reliance is owned by Mukesh Ambani, a billionaire who operates the largest refining facility in the world at Jamnagar, in western Gujarat. The company has signed a long-term agreement to purchase nearly 500,000 barrels per day of crude oil, from Russian oil giant Rosneft. The European Union (EU), United Kingdom (UK) and the United States imposed a number of sanctions against Russia for its involvement in Ukraine. On Thursday, new US sanctions were imposed on Russia's top two oil producers, Lukoil & Rosneft. The U.S. gave companies until November 21, 2018 to end their business with Russian oil producers. The EU adopted its 19th set of sanctions, after previously stating that it would not accept fuel produced by refineries which received or processed Russian crude oil 60 days before the bill of lading. As is standard in the industry supply contracts are updated to reflect changes in market and regulatory conditions. Reliance will maintain its relationships with its suppliers while addressing these conditions," said the spokesperson in an email statement. The contract with Rosneft was not mentioned. On Thursday, it was reported that Reliance intends to stop importing Rosneft oil. Refiners also purchase Russian oil via intermediaries. Reliance previously stated that it would comply with EU guidelines regarding the importation of refined products. The refiner stated that its diverse crude purchases would help it navigate European Sanctions without specifying whether it would stop purchases of Russian oil at its 1.4 million barrels a day refining facility in western Gujarat. The spokesperson stated that Reliance was confident in the ability of its diversified crude-sourcing strategy to continue to provide stability and reliability to its refinery operations to meet the needs for domestic and international exports, including Europe. (Reporting and editing by Nidhi verma, Elaine Hardcastle, Joe Bavier)
Stocks stumble as Tesla weighs, dollar hits 2-yr high
Global stocks fell on Thursday as early gains faded, continuing the yearend downdraft into the first trading day of the new year, while the dollar struck a twoyear high after financial data showed the U.S. labor market stayed on solid ground.
On Wall Street, U.S. stocks closed broadly lower after initial gains failed to hold, with the S&P 500 and Nasdaq notching their 5th straight daily decline, the longest skid given that April.
The U.S. Labor Department reported that the number of Americans filing brand-new applications for unemployment benefits dropped to an eight-month low of 211,000 last week, listed below the 222,000 quote of economists surveyed .
The labor market has been incredibly resilient and we've. seen that continue, said Keith Buchanan, senior portfolio. supervisor at Globalt Investments in Atlanta. Overall, the labor. market is truly what's fueled the consumer, which has actually held this. economy together for the last three years of this battle we've. had with inflation.
Wall Street declines were led by the customer discretionary. sector, which dropped 1.27% and was dragged lower by a. 6.08% fall in Tesla after the electric automobile maker. reported its very first decline in yearly deliveries.
The Dow Jones Industrial Average fell 151.95 points,. or 0.36%, to 42,392.27, the S&P 500 fell 13.08 points, or. 0.22%, to 5,868.55 and the Nasdaq Composite dipped 30.00. points, or 0.16%, to 19,280.79.
European stocks closed higher after a slow start to the. session, buoyed by a dive in energy names.
MSCI's gauge of stocks around the world. lost 1.72 points, or 0.20%, to 839.70. Europe's STOXX 600. index acquired 0.6%.
The dollar jumped to a two-year high on Thursday, building. on the strong gains from 2024 as expectations remained undamaged. that financial development in the U.S. will surpass that of its peers,. keeping the Federal Reserve on a slower interest rate-cut course.
The dollar index, which measures the greenback. versus a basket of currencies consisting of the yen and the euro,. rose 0.67% to 109.27, after climbing to 109.54, its greatest. considering that Nov. 10, 2022.
In regards to 2025 financial growth, there's no rival to the. dollar, Adam Button, chief currency expert at ForexLive in. Toronto, said.
Capital streams dominate the turn of the year and the U.S. stock market has actually truly put to shame every other worldwide market,. Button stated. The dollar is the only game in the area till there is. an authentic stumble in the U.S. economy.
The euro was down 0.89% at $1.0263 after plunging to. $ 1.0223, its most affordable level since Nov. 21, 2022.
Against the Japanese yen, the dollar reinforced. 0.47% to 157.60. Sterling dropped 1.12% to $1.2377 and. was on rate for its biggest day-to-day percentage drop considering that Nov. 6.
Stocks had actually stumbled heading in to the end of the year,. denting a year-long rally sustained by growth expectations. surrounding artificial intelligence, expected rate cuts from. the Federal Reserve, and more recently, the probability of. deregulation policies from the incoming Trump administration.
Nevertheless, the current financial projection from the Fed, along. with worries that President-elect Donald Trump's policies such. as tariffs may show to be inflationary, has sent yields higher. and developed a stumbling block for equities.
The yield on benchmark U.S. 10-year notes. slipped 1.6 basis indicate 4.563%, but stayed above the 4.5%. mark that analysts view as a bothersome level for stocks.
Oil rates advanced, with U.S. crude settling up. 1.97% at $73.13 a barrel and Brent reaching settle at. $ 75.93 per barrel, up 1.73%, on optimism over China's economy. and fuel demand after a promise by President Xi Jinping to. promote growth.
(source: Reuters)