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AMBITION EUROPE-Stress relief as Japan's debt auction is successful
Gregor Stuart Hunter gives us a look at what the day will bring for the European and Global markets. Jittery bonds markets found calm after members of the Federal Reserve sounded a support note for rate reductions and Japan's most recent super-long bond auction passed without incident. The markets stabilized after a Thursday auction of 30-year Japanese Government Bonds met with a bidding-to-coverage ratio of 3,31. This was after the yield of similar-dated debt reached a record. The bond market is not yet experiencing a new wave of fear, despite the fact that demand for 30-year Japanese government bonds was at its lowest level since June. Investors in Asia took a positive view of the U.S. Stock Futures after Federal Reserve officials including Governor Christopher Waller reiterated their support for rate reductions in the months to come. Stephen Miran, the nominee of President Donald Trump to fill a vacant seat on the Federal Reserve Board said that he would also work to preserve the independence of the central bank ahead a Senate confirmation meeting later today. According to CME Group’s FedWatch tool, traders are pricing in a 96% probability that the Fed will cut interest rates during its September meeting. The yield on 10-year Treasury bills rose to 4.2187% from its U.S. closing of 4.211% Wednesday. Meanwhile, the U.S. Dollar Index retreated 0.1% to 97.231. Early European trading saw pan-regional futures flat, German DAX Futures slipping 0.1%, and FTSE Futures up 0.1%. MSCI's broadest Asia-Pacific share index outside Japan, which had been up in the beginning, was down by 0.2% at its last update. China losses were to blame for this. Bloomberg News reported that financial regulators were preparing cooling measures to cool the market. The blue-chip CSI 300 dropped 2.5%, and was on course for its largest one-day drop since April. The SSE STAR 50 Index fell 5.4% as GPU chip maker Cambricon Technologies, a leader in the recent rally, dropped as much as 132%. The BSE Sensex rose 1.1% at the opening of the markets after the Indian government slashed taxes on several items to boost consumption and counteract U.S. Tariffs. Brent crude fell 0.7% on the commodities market to $67.16 per barrel. Gold spot prices dropped by 0.8% to $3,531.63 an ounce, after reaching a record high on Wednesday. The following are key developments that may influence the markets on Thursday. Earnings: Broadcom, CVC Capital Partners, Lululemon Athletica Eurozone economic data: retail sales for July Debt auctions: France: 10 year, 17-year, and 31-year government bond auctions United Kingdom: 20-year government debt auction
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Oil prices continue to fall as OPEC+ considers a new output increase
Oil prices fell on Thursday, extending a drop of more than 2% from the previous session. Investors and traders are looking ahead to a meeting at OPEC+ this weekend, where producers will likely consider another increase to output targets. Brent crude dropped 46 cents or 0.7% to $67.14 a bar by 0416 GMT. U.S. West Texas intermediate crude fell 47 cents or 0.7% to $63.5 a bar. Two sources with knowledge of the discussions said that eight members of the Organization of the Petroleum Exporting Countries (OPEC+) will discuss further increases in production at a Sunday meeting. The group is seeking to regain its market share. Brent crude oil is under pressure again as OPEC+ looks to release more barrels (in the fourth quarter). If this goes ahead, it could worsen the anticipated surplus, especially during the lean season," ANZ Research analysts said in a note to clients. OPEC+ agreed to increase output targets from April to September by approximately 2.2 million barrels a day, plus a 300,000. bpd quota for the United Arab Emirates. Middle Eastern oil has remained the most expensive region in the world despite production increases. According to a Haitong Securities report, this has boosted the confidence of Saudi Arabian and other OPEC member countries to increase output. Vivek Dhar is an analyst with Commonwealth Bank of Australia. He said that claiming more market share was another factor driving OPEC+'s decision to raise quotas in April. Dhar stated that "this implies that OPEC+ is more comfortable with a Brent oil price of $60 to $65 per barrel than their prior target of $70." He added that Brent futures would likely fall between $60 and $65, pushing WTI into a range of high $50 to low $60, putting pressure on the economics behind the growth in U.S. Shale Oil supply. The market is also waiting for government data about U.S. crude stocks, which are due later on Thursday. This is a day earlier than usual as Monday was a U.S. federal holiday. Market sources cited American Petroleum Institute (API), which released figures on Wednesday, to say that U.S. crude stock levels rose by 622,000 barges in the week ending August 29. API's estimate of a U.S. increase in crude stock went against the estimates of analysts surveyed by who, on average estimated that U.S. crude inventory had fallen by 2,000,000 barrels. (Reporting from Sam Li in Beijing, Trixie Yap and Nicole Jao in New York. Additional reporting by Nicole Jao and Christian Schmollinger.
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Climate change is responsible for the weather that caused Iberian fires, according to a report
According to an analysis conducted by World Weather Attribution, the hot, dry, and windy conditions that caused Spain's worst wildfires for at least 30 years are 40 times as likely to occur again due to climate change. World Weather Attribution, an international collaboration, has carried out over 110 studies to determine the influence of climate changes on extreme weather events. A group of 13 scientists analysed weather data and found that extreme conditions which caused the fires that occurred in the Iberian Peninsula's northwest, including Portugal, last month, are likely to occur every 15 years because of today's climate. Climate is now 1.3 degrees Celsius warmer than pre-industrial levels, when similar events were expected every 500 years. In the European Union, forest fires have destroyed more than one million hectares in this summer. Spain and Portugal accounted for two-thirds. At least eight people were killed in the fires, which forced thousands to evacuate and halted rail and auto traffic in many areas. The fires coincided with the longest heatwave in history, lasting 16 days. Theodore Keeping is a researcher with the Centre for Environmental Policy Imperial College London. He added that "for wildfires there is an urgent need to manage vegetation in rural areas," especially land that had been abandoned by shepherds and farmers. "In the end, however, we need to stop burning coal, oil and gas." The study concluded that heatwaves with similar intensity would occur every 13 to 2,500 years, if man-made climate changes did not exist. Scientists analysed a daily severity rating (DSR) that takes into account temperature, humidity, windspeed and rain in order to determine the intensity and difficulty of an upcoming wildfire. The study concentrated on the 10 most intense DSR days every year, and the 10 hottest summer days in northwestern Spain. (Reporting and editing by Andrei Khalip, Gareth Jones and Charlie Devereux)
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SPIE Secures Cabling Job at Taiwanese Offshore Wind Farm
SPIE Global Services Energy, through its SPIE Wind Connect, has secured termination and testing job of the inter-array cables for the Taiwan Power Company (TPC) offshore wind farm phase II.SPIE Wind Connect signed the contract with Shinfox Far East Energy (SFE) for the 300 MW TPC phase II, located approximately 20 kilometers offshore from Changhua County in Taiwan.The inter-array cables connect 31 Vestas V174-9.5MW offshore wind turbines to the offshore substation. Execution of works began in August 2025, with completion scheduled in 2026.Building on the success of TPC Phase I, which added 109.2MW of renewable energy capacity in November 2021, TPC Phase II is set to significantly expand Taiwan’s offshore wind portfolio.Once operational, it is expected to generate 1,000 GWh of electricity annually, meeting the power needs of approximately 270,000 households and reducing carbon dioxide emissions by over 403,000 metric tonnes each year.“This project marks another significant milestone in SPIE Wind Connect growing presence in Asia’s offshore wind sector.“As Taiwan establishes itself as a regional leader in offshore wind, with a robust project pipeline through 2035 and world-class wind resources, we are honored to be entrusted by Shinfox Far East Energy to contribute to the country’s energy transition,” said Sam Dowey, Managing Director at SPIE Wind Connect.
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New tax law aims to give Philippines a fairer share of mining profits
On Thursday, Philippine President Ferdinand Marcos Jr. signed into law a measure that overhauls the country's tax system for mining. The aim is to provide a greater share of revenue to the government as well as more transparency in the sector. The new law replaces the fragmented system that differed depending on what type of mining agreement was signed. Marcos stated during the signing ceremony that "we are putting in place a more fair, clearer system that responds to both the needs of our people and environment." The previous system required only mines located within mineral reserves to pay royalties. However, the fiscal obligations were different depending on the type mining agreement. The new law simplifies and increases taxation on all large-scale metal mining operations. It is expected to generate additional revenue of approximately 6.26 billion pesos (110.56 millions) per year. The margin-based royalties will range from 1% up to 5% depending on profitability. When income margins are greater than 30%, there will be a tax rate of between 1% and 10%. This is to capture excess profits in commodity booms. The law introduces a rule of ring-fencing, which means that each mining project is taxed separately. This prevents companies from balancing losses from one project with profits from another. "The days of a mining contractor burying its profits under the weights of losses are over." Marcos stated that we can no longer use the failure of one project to hide the success of another. "Transparency has become the norm." The Philippines has untapped copper, gold and nickel reserves worth an estimated $1 trillion. Government data revealed that mining concessions cover less than 3% (or 22.22 million acres) of the 9 million hectares (9 million acres), which have been identified as areas with high mineral potential. According to the Mines and Geosciences Bureau, in 2023, the exports of mineral products and non-metallic minerals will total $7.32 billion. This is a slight decrease from $7.53 million in 2022. ($1 = 56.6220 Philippine Pesos)
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Asia markets rise as Fed comments and jobs data indicate rate cuts
Asian stocks rose in the early hours of trading on Thursday, as Federal Reserve officials' dovish remarks soothed investor nerves during a period when global growth concerns and bond market sell-offs were at an all-time high. The Nikkei rose by 1.2%, and Australian shares gained 0.8% after their largest one-day drop since April. MSCI's broadest Asia-Pacific share index outside Japan, which includes Japan and Australia, lost early gains before falling 0.2% in the last few days. Losses in China were a major factor. Bloomberg News reported that financial regulators were preparing cooling measures to cool the market. The Shanghai Composite dropped 1.6%, and was headed for a third consecutive day of declines. The financial markets started September with a gloomy mood. A sell-off of longer-dated debts has dampened investor confidence in advance of Friday's crucial non-farm payrolls in the United States. A 30-year auction of Japanese government bonds will be held later today to test the appetite of global debt markets for super-long fixed income. The bond market sold-off overnight, but the concern about the fiscal health in major economies, from Japan to Britain and United States, kept borrowing costs for long-term loans near their multi-year-highs. Investors received a boost in confidence after Federal Reserve officials including Governor Christopher Waller expressed their support for rate reductions in the months to come. Stephen Miran said that he would also work to maintain the independence of the Federal Reserve Board. He was selected by President Donald Trump to fill a vacant seat. U.S. Stock Futures rose 0.1%, as investors reacted positively to the Fed's dovish remarks and bought beaten-down stocks. Tony Sycamore is a market analyst with IG, Sydney. He said: "We had one or two weak days but dip-buyers stepped in." Many people see this September weakness as a good opportunity to buy, with the economy still growing strongly. "This is an excellent backdrop for equity markets." The latest "JOLTS", or Job Openings Report, released on Wednesday showed that job openings were lower than expected. This boosted market bets for a rate reduction at the Fed meeting scheduled later in the month. The Federal Reserve "Beige Book", which was released in September, painted a mixed image of the U.S. economy. This appeared to confirm the concerns of monetary policymakers. Analysts from ING described the report's tone as "bleak," and said that it "was littered with tariff warnings about prices." According to CME Group’s FedWatch tool, traders are pricing in a 96% probability that the Fed will cut interest rates during its September meeting. The yield on the benchmark 10-year Treasury note rose to 4,2226% from its U.S. closing of 4.211% Wednesday. The two-year rate, which increases with traders' expectation of higher Fed Funds rates, reached 3.6187%, compared to a U.S. closing of 3.612%. The dollar was unchanged against the yen, at 148.13. It remained within the trading range that it has been in since August began. The euro currency fell 0.1% to $1.1652, whereas the dollar index (which tracks the greenback's value against other major trading partners) rose 0.1% to 98.217. Brent crude fell 0.5% on the commodities market to $67.29 per barrel. Gold spot prices fell 0.8% to $3529.94 an ounce, after reaching a record high on Wednesday.
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The price of iron ore is rising on the hope that China will demand more.
Iron ore futures prices rose for the third consecutive session on Thursday. This was aided by expectations of improved demand in China, but rising steel inventories fueled concerns about the pace of resumption of steel production, limiting gains. By 0315 GMT, the most-traded iron ore contract for January on China's Dalian Commodity Exchange rose 0.39%, to 781.5 Yuan ($109.26), per metric ton. The benchmark iron ore for October on the Singapore Exchange rose 0.69% to $103.95 per ton, the highest since August 29. Yingguang Wang said that some steelmakers were planning to resume production and increase raw material procurement on Thursday, according to a note written by an analyst from Lange Steel the day before. Steel mills at the top Chinese steelmaking center Tangshan had to reduce production temporarily to improve air quality in preparation for a military display in Beijing to mark the end of World War Two on September 3. This temporarily weakened ore demand. Bright Futures reported that inventories of construction steel continue to increase, which puts pressure on the prices. Steel stocks are likely to rise and the demand for steel may be low. This could prevent mills from quickly restarting production. Analysts at Yongan Futures stated that portside stocks would be expected to keep price increases in check. Coke and coking coal, which are used to make steel, have fallen by 3.09% and 2.46 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange are stagnant. Rebar fell 0.35%; hot-rolled coil slipped 0.06%; stainless steel dipped 0.39%, while wire rod rose 0.43%. ($1 = 7.1529 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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Gold's record high is lowered due to profit-taking and the focus on US job data
Profit-taking led to gold's decline on Thursday, after the bullion reached an all-time high on expectations of a U.S. rate cut. Investors were also looking forward to this week's U.S. employment data. As of 0153 GMT, spot gold was down 0.3%, at $3,546.73 an ounce. On Wednesday, gold reached a new record of $3.578.50 per ounce. U.S. Gold Futures for December Delivery fell 0.8% to $3.605.60. Gold is still on a bullish market, despite some profit-taking. "Rate-cut expectations and concerns over the Federal Reserve’s independence will add to safe haven demand," GoldSilver Central's MD Brian Lan stated. "We will not be surprised if the gold price goes up to $3.800 or higher in near-term." The U.S. Labor Department announced on Wednesday that the number of job openings in July was lower than expected, at 7.181 millions. Fed officials have said that labor market concerns are still driving them to believe in rate cuts. Fed Governor Christopher Waller believes the Fed should cut rates at its next meeting. According to CME Group’s FedWatch tool, traders are now pricing in 97% of a rate cut of 25 basis points at the end the two-day meeting of the U.S. Central Bank on September 17. This is up from 92% prior to the data. Gold that does not yield is usually a good investment in an environment with low interest rates. Now, the focus is on Friday's non-farm payroll data in the United States. According to a poll, the non-farm payrolls in August are expected to grow by 78,000 jobs compared to 73,000 in July. On Wednesday, Donald Trump stated that if the Supreme Court rules against the U.S. in a case regarding tariffs, the U.S. may have to "unwind' trade agreements it has made with the European Union (EU), Japan and South Korea. Silver fell 0.8%, to $40.87 an ounce. It had reached its highest level since September 2011, in the previous session. Platinum fell 0.5% to $1415.03 while palladium dropped 1% to 1136.26.
Oil prices continue to fall as OPEC+ considers a new output increase
Oil prices fell on Thursday, extending a drop of more than 2% from the previous trading session. Investors and traders are looking ahead to a meeting at the weekend of OPEC+, where producers will likely consider another increase of output targets.
Brent crude dropped 27 cents or 0.40% to $67.33 a bar by 0114 GMT. U.S. West Texas intermediate crude fell 28 cents or 0.44% to $63.69 a bar.
Two sources with knowledge of the discussions said that eight members of the Organization of the Petroleum Exporting Countries (OPEC+) will discuss further increases in production at a Sunday meeting. The group is seeking to regain its market share.
Phil Flynn is a senior analyst at Price Futures Group. He said that the prospect of OPEC+ increasing output had increased before the meeting. The traders had not expected any change from the group.
OPEC+ agreed to increase output targets from April to September by approximately 2.2 million barrels a day, plus a 300,000. bpd quota for the United Arab Emirates.
Middle Eastern oil has remained the most expensive region in the world despite production increases. According to a Haitong Securities report, this has boosted the confidence of Saudi Arabian and other OPEC member countries to increase output.
The market is now awaiting government data about U.S. crude stocks, which are due on Thursday. This will be a day later than usual due to the U.S. federal holiday on Monday. U.S. crude stockpiles increased by 622,000 barges in the week ending August 29, according to market sources citing API figures released on Wednesday.
The API estimate of a U.S. increase in crude stock went against the estimates of analysts polled who, on average estimated that U.S. crude inventory fell by 2,000,000 barrels. (Reporting from Sam Li in Beijing, Trixie Yap and Nicole Jao in New York. Editing by Tom Hogue.)
(source: Reuters)