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After the US government shutdown, copper prices stutter on weak China data
After a four-day streak of gains, copper struggled on Thursday to continue its upward trajectory as the positive sentiment surrounding the end of the U.S. Government shutdown was countered by the weak lending data coming from China, the world's largest metals consumer. As of 1025 GMT, the benchmark three-month copper price on the London Metal Exchange had not changed much. It was $10,937.50 a metric ton. The price of copper rose by as much as 0.4% earlier in the day to $10,984, but fell short of the psychologically important $11,000 mark. Last month, copper reached a new record of $11,200 on fears over disruptions in mine supply. Ewa Manthey, ING analyst, said that for the rally to continue, stronger demand – particularly from China as the largest consumer – will be critical. Prices will be range bound for the time being. The longest government shutdown ever in US history was ended by President Donald Trump's signature of a bill on Wednesday. Investors have welcomed the reopening of the government, as it reduces uncertainty in the market and will allow them to access economic data again to gauge the U.S. Economy. China's new loans fell dramatically in October compared to the previous month. This was below expectations due to persistently weak borrowing demand. Investors await a number of economic data from China, which will be released this Friday. These include new home prices and retail sales as well as industrial output. Manthey stated that in the short term, disruptions to supply should keep copper prices at around $10,000. Other LME metals were flat at $2.894 per ton. Zinc fell 0.3% to $3,000, nickel fell 0.2% to $15,000, and lead was down 0.7% to $2.079.50. Tin rose 0.6% to $37,560.00 from its previous high of April. Data from Indonesia's trade ministry revealed on Monday that the country's tin refinement exports to China dropped by over 50% in October compared to last year, resulting in concerns about supply. (Reporting and editing by Rashmi aich, Leroy Leo and Leroy Leo; Additional reporting by Dylan Duan; and Lewis Jackson).
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Top Democrats criticize Trump for delaying China export curbs
Senate Democrats, including Senate Minority leader Chuck Schumer, attacked the Trump administration for suspending the measure that prevented thousands of Chinese firms from accessing U.S. tech in the latest round of trade negotiations with Beijing. They called it a "giveaway" of "key national security tools." The rule was announced on September 29th and aimed to prevent sanctioned Chinese firms from using a system of subsidiaries to acquire key American equipment that they would otherwise be prohibited from receiving. Last month, President Donald Trump agreed to defer this rule by a full year as part of a trade with Chinese leader Xi Jinping. In exchange, Beijing would suspend for the same time period its export restrictions on rare-earth minerals. These are key components for tech products that are largely controlled by China. In a Wednesday letter, first reported by the Associated Press, Senators Ron Wyden and others called for Trump to reinstate the rule. They argued that its delay could put "American-developed advanced computer technologies at risk, as they may be used instead to advance China's agenda, rather than ours." They wrote: "The suspension undermines U.S. security, and it will be much more difficult to stop the illicit diversion to Chinese state-affiliated companies of American-made advanced technology and semiconductors," We urge you to restore these controls and stop your giveaway of important national security tools. Requests for comments were not immediately responded to by the White House or the Commerce Department which is responsible for export control. The letter is a Latest blowback The Trump administration was criticised by China hawks of both parties for its suspension. According to a report by WireScreen, the U.S. has placed export restrictions on roughly 20,000 more Chinese companies. In their letter, the Democrats claimed that the one-year suspension reopens "a loophole" and gives "affiliates of foreign firms blacklisted the opportunity to restructure to avoid the rule." They added that the delay is part of Trump's troubling tendency to "trade away national security" in order to make quick 'deals,' which are akin to a handshake, so as not only mitigate but also prevent trade wars he has created. We urge you to reconsider your misguided approach and make sure that export controls in the United States are not used as a bargaining tool. The letter was signed by Elizabeth Warren, Chris Van Hollen and Jeff Merkley. Andy Kim, Ben Ray Lujan and Catherine Cortez Masto also signed. (Reporting and editing by Leslie Adler; Alexandra Alper)
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The Russian rouble gains strength as oil companies repatriate their earnings before the US sanctions deadline
The Russian rouble gained against the U.S. Dollar and China's Yuan on Thursday, despite lower oil prices in Russia. Oil firms converted their earnings into roubles prior to U.S. sanctions taking effect. At 1020 GMT the rouble had gained more than 1% against the dollar, trading at 80.45, and was 0.5% higher at 11,31 against the Yuan at the Moscow Stock Exchange where it is traded the most. Washington introduced sanctions last month against Russia's two largest oil producers, Rosneft Lukoil as part of President Donald Trump's efforts for an end to Moscow's conflict in Ukraine. The deadline set for closing out transactions with these companies was November 21. The market is "thin", and can't absorb any currency surpluses, even if they are small. A dealer at a major Russian Bank said this. The dealer, who spoke under condition of anonymity, said: "As a consequence, the rouble has strengthened." He said that the rouble would begin to weaken in December due to the introduction of sanctions, and the low price for Russian oil. Since many Chinese banks distrust Western regulators, the sanctions will make it difficult for them to conduct transactions in foreign currencies, including the yuan. Last May, Russian Finance Minister Anton Siluanov stated that 90% of trade between Russia-China is done in roubles and Yuan. He did not specify the percentage. The trade between Russia and China was valued at $245 billion, a record. Finam, an Russian financial services firm, estimates that Rosneft, and Lukoil, account for up to 35 percent of the domestic sales in foreign currencies. The International Energy Agency reported on Thursday that Russia’s revenue from crude oil, refined products and liquefied petroleum gas fell in October because of lower export volumes and lower prices. However, Russian oil exports are still holding steady. (Reporting and editing by Joe Bavier; Gleb Brynski)
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Gold reaches a 3-week high amid US debt worries and Fed rate cuts expectations
The gold price rose to its highest level in more than a month on Thursday, as investors hoped that the reopening of the U.S. federal government would lead to an increase in debt. Meanwhile, delayed U.S. data on economic activity could shed more light on Federal Reserve policy. As of 1016 GMT spot gold rose 0.9% to $4,235.56 an ounce. This is its highest level since October 21. U.S. Gold Futures for December Delivery rose 0.6% to $4,240.10 an ounce. The resolution of the U.S. Government Shutdown will not have a significant impact on the trend, because it is expected to increase debt levels, said Hugo Pascal. The physical demand for gold and silver remains strong, and recent U.S. indicators indicate a weakening of growth. This is a favorable combination for metals' prices. The U.S. president Donald Trump signed legislation on Wednesday to end a 43-day shutdown of the government, which was the longest in U.S. History. This delayed important economic data, such as reports on jobs and inflation. The agreement will fund federal operations until January 30. However, the government expects to add an additional $1.8 trillion per year to its debt burden of $38 trillion. Fed Chair Jerome Powell warned against further easing in this year due to the lack of data. However, he cut interest rates by a quarter point last month. The U.S. Labor Department is urged to prioritise the November data on employment and inflation in order for Fed officials to have current information during their December policy meeting. According to a poll, 80% of economists believe that the Fed will cut rates next month by 25 basis points. Gold is usually a beneficiary of lower interest rates, as it offers no return and can be seen as a safe haven during times of economic uncertainty. Gold has risen 61% this year. It reached a new record of $4,381.21 in October, fueled by geopolitical and economic concerns, increasing ETF flows, and expectations for further rate cuts. Silver spot rose 1.2%, to $54.05 an ounce. This is a move towards the record high reached on October 17. Palladium increased 0.8%, to $1,485,26, while platinum remained at $1,615
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Indonesia will open up new land for plantations of palm oil, ending the freeze on expansion
A government official announced on Thursday that Indonesia will open 600,000 new hectares for palm oil production to boost stagnant production. This is the first expansion of plantation areas since a four-year moratorium expired. Abdul Roni Angkat, Agriculture Ministry official in Indonesia's resort island Bali, told an industry conference that the move was to increase production of palm oil due to a projected higher demand for food as well as energy independence. Roni stated that the plan will be implemented in four years, and will include 400,000 acres of "plasma" for smallholders. This category is usually composed of smallholder farmers who work with a partner company. He said that the government will offer a first 200,000 hectares to PalmCo. Private companies are welcome to join. Roni said to reporters at the conference that there would be no clearing of forests in order to implement the program. However, he did not specify what type of land other than forest would be included. Greenpeace, an environmental group, said that it doubted claims that the programme would not impact forest cover because of the limited amount of land available. Rio Rompas, Greenpeace's campaigner for emissions reductions, said: "This will cause environmental damage and agrarian conflict. It also goes against the commitment of the government to reduce emission levels." Baginda siagian, an official from the Agriculture Ministry, estimated that palm oil yields were declining. The palm plantations in Indonesia total approximately 16 million hectares with an average yield per hectare of 3.8 tons. The yield is on a steady downward trend, having been above 4 tons per ha in 2020. Indonesia implemented a moratorium between 2018 and 2021 on new palm-oil permits in order to improve the industry's reputation. Environmentalists accuse producers of the commodity of deforestation. The government launched a subsidised scheme for smallholders in order to increase yields without opening new areas. However, take-up was slow, with only about 400,000 hectares of the 2,5 million hectare target set for 2016 having been recommended for the scheme. Indonesia plans to increase its mandatory biodiesel blend to 50% in the second half next year, up from 40% currently. This will likely reduce the amount of exportable biodiesel.
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Nigeria cancels planned fuel import tariff
The downstream regulator announced on Thursday that Nigeria had abandoned plans to impose an import duty of 15% on petrol and diesel, after assurances were given about adequate supplies during the holidays. A leaked memo revealed the tariff approved by Bola Tinubu in fiscal reforms to increase non-oil revenue. The tariff was to go into effect in December. The Nigerian Midstream and Downstream Petroleum Regulatory Authority said that the implementation of the 15% ad valorem duty on imported premium motor spirits and diesel was no longer in sight. Fuel marketers had lobbied against the measure, warning it could restrict imports and leave the country reliant on a single source, the 650,000-barrel-per-day Dangote Petroleum Refinery in Lagos. Africa's largest oil producer imports fuels worth millions of dollars every year. This has been the case even since Dangote Petroleum Refinery started processing crude last summer. The NMDPRA warned buyers against panic-buying and assured them of an adequate supply for the holiday. The Authority said that it would continue to monitor the supply and take steps to prevent disruptions during peak demand periods. (Reporting and editing by Clarence Fernandez; Isaac Anyaogu)
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IEA: World oil market will have even greater surplus in 2026
International Energy Agency (IEA) said that the global oil market will have a surplus of up to 4,09 million barrels a day next year as OPEC+ and its rivals increase production and demand slows. In its November monthly report, the IEA stated that "global oil market balances look increasingly lopsided as global oil supply continues to grow while oil demand remains modest by historic standards." The Agency expects the global oil supply to increase by approximately 3.1 million barrels a day (bpd), and 2.5 million bpd in 2020, both up around 100,000 bpd per month. The IEA's 2026 implied surplus will be 120,000 bpd higher than the 3,97 million bpd supply-demand mismatch for next year that was suggested in its October report. The IEA's short-term forecast in its monthly report contrasts the annual outlook released by the agency on Wednesday, where global oil and natural gas demand is projected to increase. Potentially rising until 2050. Rapid Supply Growth The IEA reported that the global oil production was 6.2 millions bpd more in October than it was at the beginning of the year. This increase was evenly split between OPEC+ producers and non-OPEC ones. Saudi Arabia contributed to the rise by adding 1.5 million bpd, while Russia only added 120,000 bpd due to sanctions and Ukrainian attacks. Despite the new U.S. sanction on Russian companies Rosneft, and Lukoil that "may have had the most significant impact on global oil markets yet," Russian exports "continued to be largely unabated," according to the IEA. The agency has also increased its forecasts for demand growth by 80,000 bpd in 2025 and 70,000 for 2026. This is due to the need for more petrochemical feedstock. OPEC Sees According to calculations made on the basis of its own monthly oil mark report released on Wednesday, a more balanced marketplace is expected next year. The surplus will be just 20,000 barrels per day. Waterborne Stock Levels Surging The Paris-based watchdog also called attention to the sharp increase in global oil stocks, which reached their highest level since July 2021 at just over 8 billion barrels in September. The rise was mainly due to a dramatic increase in the amount of waterborne oil stored, which increased by 80 million barrels during September. The agency also added that preliminary data for October shows that global stock levels continue to rise, driven again by an increase in waterborne barrels.
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Croatian truffle hunters hunt for one of the world's most expensive delicacies
Ivana Karlic Ban, her two dogs and the fall-coloured forests in Croatia's northwest Istria region are on the hunt for one of the most expensive delicacies in the world. Only Italy and Croatia are home to the white truffle. It is a fungus underground that grows only from September to December, in symbiosis, with certain trees. The fungus has a strong, specific scent that can be detected by the Lagotto Romagnolo dogs of Karlic Ban. The white truffle, which is extremely rare, costs between 6,000 and 7,000 euros per kilogram ($6,997-$8,163), according to Karlic Ban. He added that black truffles, which are available all year round, can also be grown, but cost less. Karlic Ban, a third-generation truffle hunter born into a family that is passionate about the fungus, and her brother represent 'the third generation' of mushroom lovers. They run a store in Paladini near the northern Istrian city of Buzet, where they sell truffle-based products. Istria is a region in Croatia that borders Italy. She said, "We offer a variety of products." "We also have some original world products such as the first truffle chocolate and sweet treats with truffles for dogs." Karlic Ban, however, says that the number of truffles in the wild has decreased since her grandfather first hunted them fifty years ago. This is because climate change and deforestation are having a negative effect on the habitat where the fungus thrives. Karlic Ban stated that "too severe droughts will prevent the fungus growing, while too heavy rains will make it soft and rotten." "Their number has definitely decreased but the prices have accordingly gone up."
Stocks are aiming for record highs with the US shutdown about to end
The world stock market was looking to return to record levels on Thursday, following the end of the largest government shutdown in history. Meanwhile, the Japanese yen, which is under increasing pressure due its devaluation against the euro and the dollar has reached a new record low.
The STOXX 600 index in Europe made a steady debut with a nearly 1% increase from France's CAC 40, pushing both indexes up to their all-time highs and offsetting the more than 4% drop from German engineering giant
Siemens reported disappointing earnings.
The U.S. Stock Futures fluctuated from a slight negative to a 0.2% gain, but MSCI's 47 country All World Index was on track for its fourth daily gain in steadfastness as it drew to within four points of the October high.
In the Oval Office, President Donald Trump on Wednesday signed the bill that ended the shutdown of the federal government. Next week, we should start receiving delayed economic data. The first data to be released could be October's payrolls, with the focus being on whether the figures will confirm private surveys which have indicated a softening of the job market. Michael Metcalfe of State Street Global Markets said that they were waiting for data fog to clear. However, the PriceStats data shows that inflation has been rolling over, so the jobs data will drive risk sentiment.
SQUEEZED JEN
Overnight, there was also action in Asia. The Japanese yen suffered renewed pressure on the currency market after the new prime minister's latest call for the central banks to slow down rate increases.
The dollar was at a nine-month low, 154.92, and the yen had hit a new record low of 179.49 yen per euro.
The country's Finance Minister had reminded traders the day before that the government closely monitored the currency. The Nikkei closed 0.4% higher and the Topix index reached a new high, as investors moved their portfolios away from artificial intelligence companies to invest in other sectors of the economy.
There is still debate over whether the BoJ tightens rates by year's end. "Our inclination would be that they will but there's a strong narrative in the market that will prove hard to break, that policy settings will encourage an even weaker yen," State Street’s Metcalfe said.
Gold held on to its recent gains, trading above $4,200, while government bond benchmarks were quiet, with U.S. 10 year yields at 4.09%, and Germany's 10 year yields at 2.565%.
OIL SPILLS
Hong Kong's Hang Seng fell slightly from its one-month-high, and the Shanghai Composite gained 1% in advance of data on retail sales and credit due later this week.
Overnight, on Wall Street the Dow Jones Index reached a new record high while the Nasdaq, which is dominated by tech stocks fell. The mining-heavy London FTSE 100 fell fractionally after hitting a record high the day before. ASML and Infineon, two of Europe's leading tech stocks, showed signs that they had recovered from the steep losses suffered last week. The pound briefly hit a session-low after data revealed that Britain's economy barely grew during Q3, and the Australian dollar rose after employment numbers showed a rise, which boosted the view that rate-cutting cycles in Australia may have reached their limit. Brent crude futures dipped to a low of $62.42 a barrel, a three-week high. This was after OPEC revised its projection to predict a slight surplus in demand on the world oil markets for 2026. The previous day, they had fallen 3.8%.
Suvro Sarkar is the DBS Bank energy sector team leader. He said, "The recent (price) decline seems to be driven OPEC's revised supply-demand balance for 2026, which confirms that the group now acknowledges the possibility of a glut of supply in 2026." (Reporting and editing by Sharon Singleton; Marc Jones)
(source: Reuters)