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Bill Gates, billionaire Bill Gates, calls for a climate strategy pivot before COP30
Bill Gates, philanthropist and billionaire investor, called on world leaders to focus on improving health outcomes and not temperature reduction targets in advance of the COP30 Climate talks in Brazil. COP30 is scheduled to take place in Belem, a port city in Brazil's Lower Amazon Region from November 10-21. The countries are expected to update their national climate commitments, and evaluate progress made on the renewable energy targets set at previous summits. In the last decade, the world has been working to achieve the Paris Agreement goals. This includes limiting global warming below 2 degrees Celsius over the pre-industrial level by the mid-century. However, this goal is still far off track. While climate change was serious, it was "not civilization-ending", Gates posted on his personal blog. Gates wrote that instead of focusing on temperature as a measure of progress, it would be better to build climate resilience by strengthening health. He called for an increase in investments in energy, healthcare and agricultural resilience, especially in regions that are vulnerable. He argued that these areas offered more equitable benefits than temperatures goals and should be at the center of climate strategies discussed during COP30. Gates, whose Breakthrough Energy venture network has invested billions in clean technology innovation, challenged donors and policymakers to examine whether climate aid is being spent efficiently. He called for them to maximise their impact by using data and urged investors to support companies that develop high-impact, clean technologies to lower costs more quickly. He said that direct deaths due to natural disasters had fallen by 90% in the last century, to between 40,000-50,000 per year. This is largely because of better warning systems and a more resilient infrastructure. Last week, the U.N. Secretary General Antonio Guterres, and the World Meteorological Organization urged countries implement disaster warning systems in order to protect people from extreme weather. WMO reported that weather, water, and climate-related hazards killed over 2 million people in the last five decades. 90% of these deaths occurred in developing countries. (Reporting and editing by Simon Jessop, Nia Williams and Sharon Kimathi)
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Japan PM uses golfing gifts to invoke Abe's legacy and forge Trump-Japan bond
Sanae Takaichi, the new Japanese premier, gave a putter that Shinzo Abe used to use. Shinzo was his friend and former leader of Japan. The club, displayed in a case with a gold-leaf ball and bag autographed by Japanese major champion Hideki Matsuzaya, was one of many references to Trump’s bond with Abe which underpinned relations between the two countries during Trump's first term. Analysts say that Takaichi will want to rekindle the bond with Abe's protegee Takaichi who was killed by a single gunman in 2022 to help her minority government navigate any thorny matters that may arise, such as defense spending. Masahiko shibayama, who was Abe's assistant during Trump's initial term, said that the shared relationship between the two leaders and the murdered prime minister had "significant meaning". He said, "I am certain that the trust relationship between these two leaders will lead to the strengthening the alliance." The long-awaited trial for the man accused in the fatal shooting of Abe, Takaichi, began Tuesday in Nara, Takaichi’s hometown. Shared by a GREAT FRIEND Abe was the focus of attention as soon as Trump entered the ornate Akasaka Palace, in central Tokyo, to exchange pleasantries with Takaichi and take photos. Takaichi is a conservative hardliner who became Japan's new leader last week. Trump told Trump as they shook their hands, "He was my great friend and your great friend." Takaichi received her first cabinet position in Abe’s 2006-2007 initial administration, and was later promoted to home minister during his second 2012-202020 term. Takaichi thanked Trump for his "enduring friendship with Abe" and for having hosted his widow Akie Abe in his Mar-a-Lago resort shortly after Trump won the election last year. Sunao Takao was the interpreter who translated her words into Japanese. Abe had previously used Sunao as an interpreter. Trump jokingly called Abe junior prime minister. Mark Davidson is a former senior U.S. diplomatic official in Japan and a professor of politics at Temple University, Tokyo. He said that Takaichi's decision to invoke Abe was a clever one. "With President Trump all politics are personal," said Davidson. "He had an extremely warm, trusting and close relationship with Prime Minister Abe." "I think Prime Minister Takaichi’s close ties to late Prime Minister Abe helped set this relationship up for success." Takaichi, Trump and Abe also signed baseball caps with the slogan 'JAPAN'S BACK'. Abe first used this catchphrase in his leadership campaign. Takaichi then adopted it for her own. Abe was the very first foreign leader who met Trump following his victory in 2016. This relationship blossomed during several rounds of golf played both in the United States as well as Japan. Takaichi, who may not be a golfer herself, said that she watched the first few innings with Trump of a Major League Baseball match before the formalities on Tuesday began. Analysts say that Takaichi could benefit from a relationship with Trump, the leader of Japan’s main security and trading partner. She would also be able to navigate Trump's sometimes erratic decisions which have surprised other world leaders. Takaichi's public support has risen since she became prime minister. However, her coalition is still two votes shy of a majority at the lower house of parliament. "This is a perfect opportunity for her to use her popularity to give her the room to make the small concessions she needs to solidify the relationship," Davidson stated. (Reporting and editing by Lincoln Feast; Additional reporting by Tim Kelly, Kiyoshi takenaka, John Geddie.
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MORNING BID EUROPE - Baseball, golf and Nobel Prizes
Wayne Cole gives us a look at what the future holds for European and global markets. Today, U.S. president Donald Trump is in Tokyo. The talk revolves around baseball, golf, Nobel Peace Prizes and the odd deal involving rare earths. This is at least a welcome change from the usual invective of the trade war and it keeps the hope alive for a rapprochement between China and the United States later this week. The Asian markets have been able to consolidate the majority of Monday's gains, with all three indexes nearing record highs. Data showing that the economy exceeded forecasts for the third quarter was a major boost to the latter. China's Shanghai Index also broke through 4,000 for first time since 2015. Beijing has signed a free-trade agreement with Southeast Asian bloc ASEAN. The European and Wall Street Futures are largely flat. This is not surprising, given that the mega-caps have much to live up to this week. The Street is expecting high expectations, given that 85% of S&P companies have reported so far and surpassed the Street in EPS. Options suggest that share prices could move up or down by 6% depending on the results. Bonds and the dollar also await with bated breath to see how dovish or not the Federal Reserve will be on Wednesday. Investors are waiting to see if their bets on another cut in December and two next year will come true. Please, stop reducing the balance sheet of the Fed. Please, no more QT. The Bank of Japan is betting on no rate increase for Thursday. However, there is the risk that at least two members will vote in favor of a rate rise due to stubborn inflation. A real hike would trigger a massive sell-off of the dollar/yen. This suggests that the risk-averse BOJ may be laying the foundation for a tightening by December or January. The following are key developments that may influence the markets on Tuesday. - ECB bank lending survey Dallas Fed Services Survey, U.S. Conference Board Consumer confidence, Richmond Fed Manufacturing Index for October, August house prices
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Oil prices fall as OPEC plans to increase output offset US-China trade optimism
The oil prices fell Tuesday, as OPEC’s plan to increase output countered optimism over a possible U.S. China trade deal. Investors also weighed the effectiveness of sanctions against Russia. Brent crude futures dropped 3 cents at $35.59 per barrel by 0359 GMT. U.S. West Texas Intermediate Crude Futures fell 5 cents to $61.26. ANZ's morning note stated that traders weighed progress in U.S. China trade talks as well as the broader outlook of supply. Four sources familiar with the discussions said that OPEC+ is in favor of a modest increase in output for December. This will act as a downward pressure on prices. After reducing production to support the oil markets for several years, the group began reversing these cuts in April. The prospect of a deal between President Donald Trump and Xi Jinping, the two world's largest oil consumers, who are due to meet in South Korea on Thursday, is expected to support the market. Beijing hopes Washington will meet them halfway in order to "prepare high-level interaction" between the U.S. and China, said Foreign Minister Wang Yi during a telephone call with U.S. Sec. of State Marco Rubio on Monday. Brent and WTI both registered their largest weekly gains in June after Trump, for the first time during his second term, imposed sanctions against Russia related to Ukraine, targeting Lukoil, and Rosneft. Lukoil, Russia's 2nd largest oil producer, announced on Monday that it would be selling its international assets in response to the sanctions. The Russian company has taken the most significant action to date in response to the Western sanctions imposed over Russia's conflict in Ukraine that began in February 2022. Fatih Bibil, Executive Director of the International Energy Agency, said that sanctions against oil-exporting nations could increase crude prices but their effect would be limited due to surplus capacity. Participants on the market generally believed that sanctions would have a short-term effect. Haitong Securities stated in a report that any medium-to-long-term losses of supply looked limited and an oversupply was likely to put pressure on the prices. Ashitha Shivprasad reported from Bengaluru, and Sam Li from Beijing. Sonali Paul and Thomas Derpinghaus edited the article.
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Singapore GasCo talks to LNG suppliers about long-term contracts
Alan Heng, CEO of Singapore's GasCo, said that the company is in negotiations with suppliers of liquefied gas for long-term agreements. The company will be operational by January 1, 2026. It is a government-owned enterprise that was created to centralise gas procurement and supply to the power sector of the city-state. Heng said that GasCo would be prepared to begin procurements on a short-term basis by then, but it wanted to establish a series long-term contracts to ensure supply. He said: "We'll occasionally take advantage of the spot markets, but we will do so with great care, as we don't want to see power prices in Singapore go up 50% or 100% because (we) are not contracted." Heng said that the next steps are to go to the market, build a portfolio, and diversify the supply. He said that it was important to have a portfolio mix between long-term and shorter-term contracts. He added, "And if there is enough longevity in the prices we can get affordable prices for a long period of time." It might not be the lowest price at any given time, but it will be consistently cheaper over a period of five years than if you went to the spot markets. GasCo will also be able to purchase supplies from the United States. Heng said that the U.S. would supply about 35-40% of global LNG. "So, invariably you will need to secure some U.S. Liquefied Natural Gas," he added. "We haven't yet figured out who is supplying us with U.S. Liquefied Natural Gas... but we will have a significant amount of U.S.LNG in our portfolio." Heng said that the company has been working with the Energy Market Authority to develop contingency plans in the case of any potential disruptions in power supply. For example, if a gas pipeline from neighbouring countries was shut down in large quantities.
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Iron ore gains continue on the back of new proposals to limit China's steel production
The market was buoyed on Tuesday by China's proposal to limit steel production capacity in order to balance supply and demand. As of 0309 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 1.35% higher. It cost 788 yuan (US$110.63) per metric ton. The benchmark iron ore for November on the Singapore Exchange rose 0.05% to $105.75 per ton. Analysts from ANZ said that higher steel prices created room for the steel market to increase its purchases of iron ore, and other raw materials used in steel production. China had on Friday unveiled a proposal to implement a stricter steel capacity exchange plan. According to the new plan the Chinese Ministry of Industry and Information Technology stated that the addition of new capacity for steel in key areas as well as the transfer of capacity from non-key regions to key areas and the capacity transfer between key areas will be strictly prohibited. China is grappling with a weak domestic market due to a long-running property crisis. This has led to a mismatch between supply and demand, which has eroded the steel margins. Due to environmental requirements, the steelmaking hub of China Tangshan has also decided to restrict blast furnace production by 30% for a period of four days beginning October 27. Hexun Futures, a Chinese financial information website, reported that the cap would affect 91,000 tonnes of hot metal production per day at local steelmills. Galaxy Futures, a Chinese broker, says that although the demand for crude steel overseas is still relatively high, domestic demand has weakened, making it unsustainable to maintain iron ore prices in the ferrous metals industry. Coking coal and coke both increased by 0.32% and 0.033% respectively. The benchmarks for steel on the Shanghai Futures Exchange are mixed. Hot-rolled coil and rebar both increased by 0.58%. However, wire rod and stainless steel declined by 0.59%. (Reporting and editing by Ronojojo Mazumdar; $1 = 7.1230 Chinese yuan).
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Siemens Gamesa Halts Port of Esbjerg Offshore Wind Nacelle Plant Plans
Siemens Gamesa has confirmed it has scrapped plans to build an offshore wind turbine nacelle factory at Denmark’s Esbjerg Port.The offshore wind turbine manufacturer confirmed it will not proceed with the development of the nacelle plant at the port of Esbjerg at this time, given the current market opportunities.“Siemens Gamesa has maintained a longstanding presence at the Port of Esbjerg, which is a strategically important location for our offshore wind operations, also in the future.“Like in any other place, we continue to evaluate potential investment opportunities; however, given the current market conditions, any such decision will require greater clarity and stability in the industry,” a spokesperson for the company said.To remind, earlier in October, Danish wind turbine maker Vestas also shelved plans to open its biggest offshore wind turbine factory in Poland, citing weaker-than-expected demand in Europe.Vestas Drops Plans for Second Polish Offshore Wind Turbine Plant
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Venezuela to Suspend Energy Agreements with Trinidad
Venezuela's oil ministry will ask the presidency to suspend a wide cooperation agreement with Trinidad and Tobago for energy development, including joint gas projects in negotiation, the South American country's oil minister said.Trinidad's previous government had been planning numerous joint gas projects with Venezuela, including the 4.2 trillion cubic feet Dragon field to be developed by Shell and the National Gas Company of Trinidad, for which it received a U.S. license earlier this month.However, the new administration of Prime Minister Kamla Persad-Bissessar has not been seen as an ally by Venezuelan President Nicolas Maduro.Since taking office in April, her new government has had a close relationship with the administration of U.S. President Donald Trump, while tensions between Washington and Caracas have escalated.The current relationship between Trinidad and Venezuela, which could complement each other's energy needs, is "hostile," oil minister Delcy Rodriguez said in a broadcast message."In consequence, all gas agreements between Venezuela and Trinidad would be suspended," she said, adding that President Maduro is expected to receive the suspension request soon.Venezuelan officials have criticized the authorization Trinidad received from the U.S. to negotiate the flagship Dragon project with U.S.-sanctioned Venezuela, and said Trinidad would have to pay for any gas supplies.The Dragon development, which lies in Venezuelan waters, has faced long-standing delays amid frequent U.S. policy changes since Washington imposed energy sanctions on Venezuela in 2019.Trinidad's government, Shell, NGC and BP, which are involved in various projects' that include Venezuela, did not immediately reply to requests for comment.Shell is separately developing the Manatee gas project, which crosses the maritime border into Venezuela but had received permission from the Maduro government to be developed on the Trinidad side independently. It was not immediately clear if that project could also be at risk.(Reuters)
MORNING BID AMERICAS - 'Phantom Trump tariffs' become more real in China
Mike Dolan gives us a look at what the U.S. market and global markets will be like today. After a four day guessing game, and financial turmoil, it appears that the United States has resumed its tit-fortat trade battle with China. Meanwhile Mexico and Canada have a minimum of a month breathing space. This leaves the markets a little shaky and unsure about the next step.
Mexico's peso and Canada's currency are now higher than when the latest round of threats, counter-threats and deferrals started on Friday. They have risen from their respective lows of two and 22 years.
The yuan is firmer, and back to where it was last Friday. This was despite the U.S. deadline for 10% tariffs on China having passed earlier in the day and China's immediate retaliation of plans for up to 15% import taxes on a variety of U.S. products starting next week.
This peculiar reaction indicates that there is still some hope that the delays and deferrals negotiated in Canada and Mexico will be replicated also in China. The press secretary for U.S. president Donald Trump said that Trump would be speaking with Chinese President Xi Jinping within the next few days.
The dollar index, on a broader scale, has mirrored all of these moves. It completed a 1,5% round trip since Friday that saw it reach three-week highs before reversing course. It was unclear whether Trump intended to impose tariffs on the European Union.
The Federal Reserve's broad, trade-weighted index of the dollar includes the yuan and peso as well as the Canadian dollar. Add the euro to that and you get more than 60%.
The fact that the mainland Chinese markets are closed until tomorrow for the Lunar New Year holiday complicates the market reading. However, Hong Kong shares rose almost 3% after reopening to reach three-month-highs even though the bilateral tariff salvos had been delivered.
Analysts say that the hope of delays and talks encouraged buying. Others claim relief at the 10% proposed U.S. Tariffs - as opposed to the 60% Trump had proclaimed before the election.
Beijing has announced that it will impose its own taxes of 15% for coal and LNG from the United States and 10% on crude oil, farm machinery and certain autos starting February 10.
China has also launched an anti-monopoly investigation into Alphabet’s Google. PVH, the holding company of brands such as Calvin Klein, and biotechnology firm Illumina are both included on a potential sanctions list.
Alphabet is the leader of the latest megacap quarterly earnings report on Wall Street. Big Pharma companies, Omnicom and Advanced Micro Devices are also in the top five.
U.S. Stock Indexes, however, are not back to the same level as Friday.
The S&P500 finished 0.8% lower, and futures are still negative ahead of Tuesday's bell due to the overnight China developments.
The VIX, or 'fear indicator' of Wall Street stock volatility, soared again above 20 on Monday. However, it has not yet closed above this level in the year.
The fear of inflation that is a result of tariffs has pushed up borrowing costs.
The benchmark 10-year U.S. Treasury rate remains higher this week, and the expectations for Fed cuts in 2019 have been lowered a bit. Both Fed officials and investors are assessing the extent to the which tariffs exacerbate the politically toxic price outlook.
There is some debate as to whether these one-off price increases would necessarily raise the inflation rate. However, it's reasonable to worry that the constant threats and the slow application of them will increase inflation expectations.
This is only one of many apparent contradictions that Washington's approach to policy has created.
The dollar will rise if tariffs are applied. This is in direct contradiction to Trump's claims that the dollar has been overvalued. It will also help overseas firms absorb the tariffs, and keep the prices of their products in U.S. shops down.
In the meantime, retaliatory tariffs against U.S. products overseas only hit U.S. importers.
Even if the assumption is only marginal, it will keep interest rates high and the stock market under a cloud, which goes against the stated intentions of the new administration. The administration's much-vaunted support for the crypto industry is now being questioned as the dollar increases on the trade dispute.
As we return to the domestic economy today, it is important that you pay attention to the multiple updates on this week's labor market. December's job openings will be released before Friday's payrolls report.
In Europe, earnings from corporates grew rapidly.
UBS's fourth-quarter profit exceeded expectations, but its shares dropped 5%, as investors failed to be impressed by the buyback plan, which was contingent on Swiss capital rules not changing.
Infineon's shares, on the other hand, rose 11% following the German chipmaker’s revenue forecast for full-year and its beat.
The French 10-year government bond premiums over Germany have fallen to 70 basis points for the first four months, after French Premier Francois Bayrou pushed the 2025 budget through parliament. He was betting that he had enough votes to overcome a possible no-confidence vote.
The following developments should help to guide U.S. stock markets on Tuesday:
(source: Reuters)