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Asian shares fluctuating, Dollar steady as traders wait for Powell's speech
The Asian stock market started the day on a cautious note as traders anxiously awaited Jerome Powell's speech at the annual Jackson Hole Symposium. The financial markets are waiting for Powell to give clues on the likely likelihood of a rate cut for September, in light of recent signs of weakness of the job market and the short-term outlook for policy. Carol Kong, economist and currency analyst at Commonwealth Bank of Australia Sydney, said that markets are on edge before the Jackson Hole Speech. S&P futures gained 0.1% following a five-day losing spree on Wall Street. This puts the cash gauge for U.S. equity stocks on track to record its largest one-week drop this month. In the region it was a completely different story. MSCI's broadest Asia-Pacific share index outside Japan rose 0.1% and has now gained 1.5% this month. South Korea's Kospi Index led the charge with a 1.1% rise. Nikkei was trading flat last time, but has fluctuated between gains and losses. The yen remained at 148.45 per dollar, after data revealed that Japan's core consumer price index in July was higher than analysts' expectations and exceeded the Bank of Japan inflation target. The U.S. Dollar Index, which tracks greenbacks against currencies of major trading partners was stable at 98.60, after four days of gains. Traders were analyzing speeches by Fed officials, who seemed lukewarm about the idea of a rate cut next month. After a weaker-than-expected payroll report earlier this month and consumer price data showing limited upward pressure due to tariffs, traders had increased their bets on a September reduction. The market's pricing has retreated slightly since the minutes of the Fed meeting in July were released. According to CME Group’s FedWatch tool, traders now price in a 75% chance of a September cut, down from an 82.4% probability on Thursday. Kong says that the most likely scenario for Powell is to not provide "any definitive hints" about what the Fed's next move will be ahead of crucial non-farm payrolls data and CPI figures. "Given the current state of the market, the risk is that the U.S. Dollar will strengthen, especially if the challenge the current pricing on the market for a 25 basis-point reduction." The PMI data of S&P Global shows the fastest growth in manufacturing orders for 18 months. The labour market has also revealed pockets of weakness. Last week, the number Americans who applied for unemployment benefits increased by the largest amount in three months and the number receiving unemployment relief rose to its highest level in almost four years. The euro rose 0.1% after the EU and U.S. released details of the framework trade agreement they struck in July. Brent crude oil prices fell, last trading at $67.64 a barrel after strong gains Thursday, as Russia and Ukraine blamed one another for the stalled peace processes, and U.S. Data showed signs of a strong demand in America, the largest oil consumer. Gold prices were slightly lower with the spot price of bullion remaining flat at $3335.41 a troy ounce.
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WSJ reports that Trump administration is not interested in investing in companies which are increasing US investments.
The Wall Street Journal, citing an official, reported that the Trump administration was considering taking equity stakes into companies receiving funding from the 2022 CHIPS Act, but had no plans to take shares in larger semiconductor firms who are increasing their U.S. investment. This follows remarks made by U.S. Secretary of Commerce Howard Lutnick on Tuesday, who said that the government continues to explore the possibility of acquiring a 10% stake at troubled chipmaker Intel. The official informed the Journal that the administration did not plan to acquire equity stakes in firms like TSMC which are increasing their investment. The government may have to exchange subsidies for equity if businesses do not increase their commitments. The official said that the Commerce Department does not want to take any equity from TSMC or Micron. According to the report, TSMC executives had already discussed giving back their subsides if the government asked to become a shareholder. White House and TSMC didn't immediately respond to a request for comment. TSMC announced its plans to invest $100 billion in the United States at an event hosted by President Donald Trump in March. This investment comes on top of the $65 billion already committed to three manufacturing facilities located in Arizona. The U.S. Commerce Department oversees the $52.7-billion CHIPS Act (formally known as CHIPS and Science Act) and late last year, it finalized subsidies for TSMC of $6.6-billion to produce semiconductors within the United States. TSMC, Samsung, Micron and besides Intel were the largest recipients of CHIPS Act funds. The U.S. Government has in the past taken stakes into companies during times of economic uncertainty as a way to restore confidence and provide financial support.
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Sources say that RPT-Trump is considering using $2 billion of CHIPS Act funding to purchase critical minerals.
Two sources with knowledge of the situation have confirmed that the Trump administration is mulling over a plan in which at least $2 billion will be reallocated from the CHIPS Act for the purpose of funding critical minerals projects, and to increase Commerce Secretary Howard Lutnick’s influence on the strategic sector. The move proposed would use funds already allocated to Congress for semiconductor manufacturing and research, thus avoiding the need for a new spending request. It also aims to reduce U.S. dependency on China in terms of critical minerals that are widely used by electronics and defense industries. Sources said that boosting Lutnick's position over the crucial minerals financing would help centralize the approach of the administration to the sector. This was a move sought by White House officials, after the Pentagon's investment in rare-earths company MP Materials sparked concerns about the U.S. Government's minerals policy. Requests for comments from the White House were not immediately answered. Pentagon officials weren't immediately available for comment. MP Materials has declined to comment. The Commerce Department is responsible for the $52,7 billion CHIPS Act. This act was formerly known as the CHIPS and Science Act. The act was signed into law in 2022 by then-President Joe Biden. It has funded research and also sought to attract chip production from Asia while also boosting American semiconductor production. Since taking office in January 2017, Trump has worked to alter the CHIPS Act, which he called a "horrible, horrible thing", and a giveaway for companies. He has done this primarily by renegotiating grant agreements with chipmakers. The sources who were not allowed to discuss the discussions publicly said that repurposing funds for mining projects would be in line with the spirit and intent of the CHIPS Act, as the semiconductor industry needs an abundance of germanium, galium and other essential minerals, over which China has tightened their market control. The first source said, "The administration is trying to come up with creative ways to finance the vital minerals sector." Sources added that the plans are still under discussion and may change. Beneficial not only to mining companies, but also to recycling and processing firms. The U.S. government considers that most of the critical minerals are not processed in the country. Kent Masters, CEO at Albemarle, a North Carolina-based company that is the world's leading producer of lithium used in rechargeable batteries, said last month it was "difficult" to move forward with the company's plans for a U.S. Lithium Refinery without government assistance or partnership. The Trump administration has not yet made it clear whether the money will be used for grants or equity stakes to mining companies. However, Lutnick wants to "get $2 billion out of the door as soon as possible," the first source stated. Former U.S. officials said that the Biden administration considered CHIPS Act grants to purchase rare earths, but ultimately decided they were uneconomical and required many environmental exceptions. They also felt it would be best left up to the Department of Energy. According to a report on Tuesday, the administration also wants to use funding related to CHIPS Act to buy equity in Intel and other chipmakers in exchange for cash grants. Since taking office in January, Trump has moved quickly to increase U.S. production of critical minerals by signing executive orders that boost deep-sea mines and domestic projects. He met with Rio Tinto CEOs and BHP CEOs at the White House on Tuesday, despite ongoing negotiations with European leaders about Russia's invasion in Ukraine. The meeting was meant to show his support for U.S. Mining. The CHIPS Act is being debated after the Energy Department proposed last week $1 billion for certain critical mineral projects with funds linked to the Bipartisan Infrastructure Act of 2021. LUTNICK Sources said that the White House wants to give Lutnick more control over the funding decisions made for vital minerals, by giving him a role in the administration's decision-making process. Susie Wiles, White House Chief Staff, viewed the Pentagon's multibillion dollar investment in MP Materials as being uncoordinated. It caused confusion about whether Washington would guarantee an affordable price for all miners. The administration was forced to clarify that MP does not have a monopoly on rare earths. Congress still has to allocate a large portion of funding for the MP's deal, including Washington's equity stake and loans. Reports say that two weeks after the Pentagon's announcement of its investment in MP, officials from the White House rushed to meet with rare earths companies and their clients to show broad support for this sector. Sources said that Lutnick would now take the lead in the coordination of the funding decisions made by the administration, replacing the Pentagon and the other agencies. Lutnick was the CEO of Cantor Fitzgerald, a brokerage firm, before joining Trump's Cabinet. Cantor owns a significant stake in Critical Metals Corp., which in June reported that it was being considered for a loan by the U.S. Export-Import Bank. (Reporting and editing by Chris Sanders, Veronica Brown Alistair Bell; Additional reporting by Alexandra Alper.
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Sources say that Trump is considering using $2 billion of CHIPS Act funding to purchase critical minerals.
Two sources with knowledge of the situation have confirmed that the Trump administration is looking at a plan for reallocating at least $2 billion to the CHIPS Act in order to fund crucial minerals projects, and to increase Commerce Secretary Howard Lutnick’s influence on the strategic sector. The move proposed would use funds already allocated to Congress for semiconductor manufacturing and research, thus avoiding the need for a new spending request. It also aims to reduce U.S. dependency on China in terms of critical minerals that are widely used by electronics and defense industries. Sources said that boosting Lutnick's position over the crucial minerals financing would help centralize the approach of the administration to the sector. This was a move sought by White House officials, after the Pentagon's investment in rare-earths company MP Materials sparked concerns about the U.S. Government's minerals policy. Requests for comments from the White House were not immediately answered. Pentagon officials weren't immediately available for comment. MP Materials has declined to comment. The Commerce Department is responsible for the $52,7 billion CHIPS Act. This act was formerly known as the CHIPS and Science Act. The act was signed into law in 2022 by then-President Joe Biden. It has funded research and also sought to attract chip production from Asia while boosting American semiconductor production. Since taking office in January 2017, Trump has worked to alter the CHIPS Act, which he called "a horrible, terrible thing" and a giveaway for companies. He has done this primarily by renegotiating grant agreements with chipmakers. The sources who were not allowed to discuss the discussions publicly said that repurposing funds for mining projects would be in line with the spirit and intent of the CHIPS Act, as the semiconductor industry needs an abundance of germanium, galium and other essential minerals, over which China has tightened their market control. The first source said, "The administration is trying to come up with creative ways to finance the vital minerals sector." Sources added that the plans are still under discussion and may change. Beneficial not only to mining companies, but also to recycling and processing firms. The U.S. government considers that most of the critical minerals are not processed in the country. Kent Masters, CEO at Albemarle, the largest producer of rechargeable lithium in the world, said last month that his company's plans to build a U.S. Lithium refinery, which have been stalled, are "impossible without government support or partnering." The Trump administration has not yet made it clear whether the money will be used for grants or equity stakes to mining companies. However, Lutnick wants to "get $2 billion out of the door as soon as possible," the first source stated. Former U.S. officials said that the Biden administration considered CHIPS Act grants to purchase rare earths, but ultimately decided they were uneconomical and required many environmental exceptions. They also felt it would be best left up to the Department of Energy. According to a report on Tuesday, the administration also wants to use funding related to CHIPS Act to buy equity in Intel and other chipmakers in exchange for cash grants. Since taking office in January, Trump has moved quickly to increase U.S. production of critical minerals by signing executive orders that boost deep-sea mines and domestic projects. He met with Rio Tinto CEOs and BHP CEOs at the White House on Tuesday, despite ongoing negotiations with European leaders about Russia's invasion in Ukraine. The meeting was meant to show his support for U.S. Mining. The CHIPS Act is being debated after the Energy Department proposed last week $1 billion for certain critical mineral projects with funds linked to the Bipartisan Infrastructure Act of 2021. LUTNICK Sources said that the White House wants to give Lutnick more control over the funding decisions made for vital minerals, by allowing him to oversee the decision-making process within the administration. Susie Wiles, White House Chief Staff, viewed the Pentagon's multi-billion dollar investment in MP Materials as being uncoordinated. It caused confusion about whether Washington would guarantee an affordable price for all miners. The administration was forced to clarify that MP does not have a monopoly on rare earths. Congress still has to allocate a large portion of funding for the MP's deal, including Washington's equity stake and loans. Reports say that two weeks after the Pentagon's announcement of its investment in MP, officials from the White House rushed to meet with rare earths companies and their clients to show broad support for this sector. Sources said that Lutnick would now take the lead in the coordination of the funding decisions made by the administration, replacing the Pentagon and the other agencies. Lutnick was the CEO of Cantor Fitzgerald, a brokerage firm, before joining Trump's Cabinet. Cantor owns a significant stake in Critical Metals Corp., which in June reported that it was being considered for a loan by the U.S. Export-Import Bank. (Reporting and editing by Chris Sanders, Veronica Brown Alistair Bell; Additional reporting by Alexandra Alper.
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Norwegian and Dutch funds will submit Tennet bids by mid-September according to Handelsblatt
A consortium consisting of the Norwegian sovereign wealth fund (SHF) and Dutch pension fund APG is planning to make a bid by mid-September for a stake within power grid operator TenneT, Handelsblatt reported Thursday, citing sources familiar with this matter. The Dutch government said that it would announce its decision next month on whether to sell a minority stake in the German division of the grid operator, or to pursue a partial IPO. According to a report in a German business paper, if the negotiations fail to produce a positive result, TenneT Germany will pursue listing plans, and within two days publish an "intention" to float. APG, TenneT and the Norwegian sovereign wealth fund declined to comment. In May, people familiar with the situation said that TenneT had begun talks with investors regarding the sale of a minor stake in its German Division. This could be one of the biggest deals in Europe for this year. Sources said that the sale of new shares of TenneT Germany would raise up to 13 billion euros. However, the actual amount raised could be much lower, depending on the size and level of debt. The German electricity network needs to be upgraded to cope with the growing renewable energy capacity, and help the country transition from fossil fuels. The price of $1 is 0.8615 euro. (Written by Rachel More and Ludwig Burger, with additional reporting by Benoit van Overstraeten and Geert de Clercq; edited by Joe Bavier.)
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IGC increases world corn production forecast on bumper US harvest
The International Grains Council raised its forecast of 2025/26 for global corn production. This is largely due to an improved outlook on the U.S. harvest. In a monthly report, the intergovernmental body projected that global corn production would hit a record of 1.299 billion tonnes, an increase of 23 million tons over its previous estimate. The IGC stated that "the unusually sharp revision is mainly due to upgraded US maize (corn), area and yield forecasts." The U.S. corn harvest was projected at 423.5 millions tons, an increase from the previous estimate of 398.9 millions. The U.S. Department of Agriculture increased its forecast of the crop for the United States to a record breaking 425.3 million tonnes, revising upwards both area and yield estimations. Chicago corn futures have dropped by about 17% in the last four month due to an improving crop outlook for the United States. IGC however expected that an increase in the demand would absorb over half of the additional supply. It raised its global consumption prediction by 13 million tonnes to 1.285 millions. The IGC stated that "global consumption growth will accelerate amid record supply and price pressure," The IGC said that it also increased its forecast for the world wheat crop in 2025/26 by 3 million tonnes to 811 millions. The Russian wheat crop is now expected to reach 83.7 million tonnes, an increase from the previous estimate of 81.7 millions. Meanwhile, the outlook for Europe has been upgraded from 137.2 to 138.8. Ukraine's population was revised down to 24.5 from 25.1. (Reporting and editing by Jane Merriman; Elaine Hardcastle, Richard Chang, and Nigel Hunt)
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China suspends Argentine chicken imports five months following lifting of ban
China has suspended the imports of Argentinean poultry products as of August 20, only five months after lifting a ban that lasted two years. The ban was imposed after the Argentinean government temporarily halted shipments due to a detection of avian influenza in a commercial poultry farm. The notice of suspension posted on the Chinese Customs website did not specify the reason or the length of time the suspension would last. The Customs authorities didn't immediately respond to an inquiry for comment. This week, Argentina's National Health Service (Senasa), confirmed a case in the province of Buenos Aires of Highly Pathogenic Avian Influenza (HPAI), resulting in a temporary halt to exports. Senasa announced that it would resume exports if there were no more outbreaks in commercial establishments after 28 days of cleaning, disinfection, and slaughter. China imports mainly poultry products, such as chicken legs, chicken wings and chicken boneless pieces. This decision could help to support prices for some poultry products, as China has limited imports from major suppliers. Pan Chenjun is a senior animal proteins analyst at Rabobank Hong Kong. The overall impact of the price increase is limited, however, due to China's surplus poultry meat and its ongoing financial difficulties. Customs data show that China's imports of poultry meat from January to July totaled 226,013 tons, down by 2% when compared with the same period in 2017. Beijing has also banned imports of poultry and other products from Brazil since May, and from Spain in this month. Authorities have noted bird flu outbreaks both countries. Reporting by Ella Cao and Lewis Jackson in Beijing; Additional reporting from Maximilian Heath, Buenos Aires. Writing by Paolo Laudani. Editing by Edwina gibbs, Alexander Villegas, and Ros Russell.
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Oil and the dollar are advancing, while global equities are declining
Gold prices and global equities fell on Thursday as traders avoided big moves, and awaited the three-day annual Jackson Hole Symposium of the Federal Reserve. The symposium begins on Thursday, and traders will focus on Fed Chairman Jerome Powell's Friday speech as they look for clues about the possibility of a rate cut in September. The U.S. Treasury rates increased as the meeting began. Oil futures rose, supported by strong demand from the United States and uncertainty about efforts to end war in Ukraine. The U.S. Dollar also gained, gaining 0.35% compared to a basket other currencies. Stocks in Asia remained near their recent highs, while Australia's benchmark reached a record. The MSCI World Equity Index fell 0.21%, but European and U.S. stock markets were also under pressure. People are sitting around. "You have two big unknowns in the near future, Jackson Hole tomorrow, and the Fed on September," said Tim Graf. He is head of macro strategy at State Street Markets for EMEA. He said: "This is the right time to let people know that you are going to relax, and it will be coming." "But I also see them saying that we don't yet know the full impact of tariffs, and inflation pressure has not been completely removed from the economy." Wall Street saw the S&P 500 fall 0.17%. The Dow Jones Industrial Average dropped 0.24%. And the Nasdaq Composite fell 0.07%. The traders had increased their bets on a September reduction after a surprising weak payrolls report earlier this month. They were also encouraged by consumer price data, which showed that tariffs did not exert much upward pressure. They did, however, lower their expectations after the minutes of the Fed's meeting in July were released. According to LSEG, the markets had priced in a 79.6% probability of a rate cut for September, compared with 83% on Wednesday. The STOXX 600 pan-European index fell 0.04%. Analysts attribute a drop in tech stocks to fears that AI investments are not producing returns. The PMI data shows that euro zone business activity increased in August. Germany registered its highest growth since March, and France's decline eased. The benchmark German Bund 10-year bond rose 2.5 basis points to 2.751%. The yield on the 10-year U.S. Treasury rose by 3.7 basis points, to 4.334%. The euro fell 0.32% to $1.1614. Donald Trump intensified on Wednesday his efforts to influence the Fed, urging Governor Lisa Cook resign based on allegations made by a political ally of his about mortgages that she holds in Michigan or Georgia. Cook stated that she "had no intention" of being bullied into stepping down from her role at the central banking. In a research note, analysts at Deutsche Bank attributed the rise in gold over night to renewed concerns regarding the Fed's autonomy. The news reminded the market of the concerns about future Fed independence, and the risks of fiscal dominance. However, the reaction of the markets was relatively modest. Tim Graf, State Street Markets, said that while central bank independence is considered "sacrosanct by markets", it is not yet problematic. He said: "Markets look at this quite correctly, and there is a risk premium in the price, but I don't think it upsets things too much." Gold futures rose 0.01%, but spot gold prices fell 0.09% to $3,343.69 an ounce. Brent oil futures gained 0.49% per barrel to $67.17 and U.S. crude added 0.48% to $60.01.
Oil and the dollar are advancing, while global equities are declining
Investors were jittery about the Federal Reserve's annual three-day Jackson Hole Symposium, and gold prices fell under the pressure of a stronger U.S. Dollar.
The symposium began on Thursday. Traders were waiting for Fed Chair Jerome Powell to speak on Friday in order to get a hint about the possibility of a rate cut in September.
The yields on U.S. Treasury bonds have risen.
Oil futures rose, supported by strong demand from the United States and uncertainty about efforts to end war in Ukraine.
The U.S. Dollar rose by 0.43% versus a basket other currencies.
The MSCI World Equity Index dropped by 0.38%.
Adam Turnquist is chief technical strategist at LPL Financial. He said, "The jitters about what will happen tomorrow in Jackson Hole certainly weigh on risk appetite with chair Powell's address."
Wall Street saw the Dow Jones Industrial Average drop 0.34%, to 44,785.50. The S&P 500 fell 0.40%, to 6,370.17, and the Nasdaq Composite dropped 0.34%, to 21,100.31.
Walmart's quarter-end results have dampened the mood.
The traders had increased their bets on a September reduction after a surprising weak payrolls report earlier this month. They were also encouraged by consumer price data, which showed that tariffs did not exert much upward pressure.
They did, however, lower their expectations after the minutes of the Fed's meeting in July were released. According to LSEG, the markets had priced in a 70.4% probability of a rate cut for September, compared with 83% on Wednesday.
The pan-European STOXX600 closed flat and major bourses mixed.
As the EU and U.S. detailed their commitments in a last-month agreement, the European Union announced that it would work to ensure lower U.S. car export tariffs applied retroactively.
Analysts attribute a drop in tech stocks to fears that AI investments are not producing returns.
The PMI data shows that euro zone business activity increased in August. Germany registered its highest growth since March, and France's decline eased.
Stocks were near their recent highs in Asian trading and Australia's benchmark reached a record.
The yield on the 10-year U.S. Treasury note increased by 3.2 basis points, to 4.328%.
The euro is down 0.4% to $1.1604.
Donald Trump intensified on Wednesday his efforts to influence the Fed, calling for Governor Lisa Cook's resignation on the basis allegations made by a political ally of his about mortgages that she holds in Michigan or Georgia. Cook stated that she "had no intention" of being pushed to resign from her role at the central banking.
In a research note, analysts at Deutsche Bank attributed the rise in gold over night to renewed concerns regarding the Fed's autonomy.
The news reminded the market of lingering concerns about future Fed independence, and the risks of fiscal dominance. However, the reaction of the markets was relatively modest," Deutsche Bank stated.
Tim Graf, State Street Markets, said that while central bank independence is considered "sacrosanct by markets", it is not yet problematic.
He said: "Markets look at this quite correctly, and there is a risk premium in the price, but I don't think it upsets things too much."
Gold prices on the spot fell by 0.25%, to $3338.51. U.S. Gold futures closed 0.2% lower, at $3386.50.
Brent oil futures settled at $67.67 a barrel, up 1.24%. U.S. crude finished up 1.29% at $63.52.
(source: Reuters)