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Investors pare back over-extended gains as copper prices fall this week
The market was expected to post a weekly decline on Friday as it pared gains that had been over-extended in the last few weeks, which were backed by concerns about supply. During the morning of trading, investors were searching for direction in the absence of macroeconomic and fundamental data. As of 0301 GMT the most traded copper contract at the Shanghai Futures Exchange rose 0.01% to 85,980 Yuan ($12,070.76) a metric ton, and was set for a weekly decline of 1.41%. The benchmark three-month price of copper at the London Metal Exchange rose 0.34% to $10,719 per ton. It is expected to finish the week with a 1.54% decline. Analysts at Sucden Financial wrote in a report that markets are struggling to establish a clear trend because there have been few fundamental updates. They said that this was particularly true for the copper market, which after falling from record highs faces contradictory signals: a tight supply on the basis but a weak fundamental demand. The October PMI manufacturing reading for China's top consumer missed expectations on Friday. Investors rolled back their overbought bets on Thursday, ending a four-day loss streak. Investors are looking for clues to the Federal Reserve's interest rate decision in December. Some Fed officials advocated for support of another rate cut. However, investors were unsure due to the lack of reliable data during the shutdown. Aluminium gained 0.60% among other SHFE base materials, while zinc increased by 0.53% and tin added by 0.31%. Lead and nickel did not change much. Aluminium, zinc, and lead all rose in price, but nickel and tin remained unchanged. Friday, November 7, DATA/EVENTS - (GMT) 0700 UK Halifax House Price MM,YY Oct 0745 France Total Reserve Assets Oct 1330 US Non Farm Payrolls Oct 1300 US Unemployment Rate October 1330 US Average Earnings Year Oct 1500 US U Mich sentiment Prelim Nov (1 = 7.1230 Chinese Yuan Renminbi). (Reporting and Editing by Harikrishnan Nair; Reporting by Dylan Duan, Lewis Jackson)
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China's production cuts and soft steel demand will cause a weekly decline in iron ore.
The price of iron ore futures fell on Friday, and was set to fall for the week as a result of a weakening steel market and production cuts in China. By 0202 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange fell 1.16%. It was 766 Yuan ($107.54) per metric ton. The contract was expected to finish the week at a loss of 3.95%. On Friday, the benchmark December iron ore at the Singapore Exchange fell 1.79% to $102,05 per ton. The contract has fallen 3.9% this week. Analysts from ANZ said that in order to control deflation in China, the country has been focusing on eliminating overcapacity. The steel industry is a particular focus, as rapid capacity growth in this sector has impacted profitability. SteelHome data showed that blast furnace production was cut in North China, the region with the largest steelmaking industry. This led to a drop in steel production. Galaxy Futures, a Chinese broker, says that ore prices will remain low, as steel demand is expected to continue declining, due to the decline in consumption of real estate, infrastructure and manufacturing in the third quarter. The fourth quarter should not show any significant improvement, because the consumption of these sectors has declined on an annual basis. After the European Commission proposed last month that tariff-free import quotas for steel be cut by almost half, while the duty on steel imported outside of the quota be doubled to 50%, German Chancellor Friedrich Merz called on European patriotism in order to protect the EU’s steel industry. ArcelorMittal is the second largest steelmaker in the world. It beat earnings estimates for the third quarter, and provided a positive outlook to 2026. However, it noted that the overall demand was weak during the quarter, and there were few signs of restocking. Coking coal and coke, which are used to make steel, have gained 0.16% and 0.1% respectively. The Shanghai Futures Exchange saw a rise in most steel benchmarks. Rebar rose 0.43%; wire rod grew 0.06%; stainless steel grew 0.08%. Hot-rolled coils fell 0.06%. ($1 = 7.1230 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Supply concerns weigh on oil heads as they suffer a second consecutive loss of production.
After three days of declining prices, oil prices rose on Friday on concerns about an excess of supply and a slowing of demand in the U.S. Prices appeared headed for another week of losses. Brent crude futures were up 21 cents or 0.33% to $63.59 per barrel at 0149 GMT. U.S. West Texas Intermediate Crude was up 22 cents or 0.37% at $59.65 per barrel. Brent and WTI will fall by about 2% in the coming week. This is a second consecutive week of declines as major producers around the world increase their output. Tony Sycamore, IG Markets' analyst, said that the price drop was primarily due to a sudden 5.2 million barrel U.S. stock buildup which reignited fears of oversupply. He added that "risk-aversion flows have boosted the dollar, and the U.S. Government Shutdown continues to cloud the economic activity." The Energy Information Administration reported on Wednesday that U.S. crude stock levels rose more than anticipated due to higher imports, reduced refining, and a decline in gasoline and distillate stocks. The oil prices were also influenced by the concerns over the economic impact of the longest shutdown of government in US history. Private reports indicate a weaker U.S. labour market in October, according to the Trump administration. Sycamore stated that WTI prices will be settled between $58 and $62 per barrel in the short term. The U.S. Government reopening in a week is a potential catalyst for the rally, but persistent buildups and weak demand will limit it. The Organisation of the Petroleum Exporting Countries (OPEC+) and its allies decided Sunday to slightly increase production in December. The group has also decided to pause further increases in the first quarter next year due to concerns about a glut of supply. Saudi Arabia, the world's largest exporter, has responded to OPEC+ by announcing its decision. Sharply reduced In December, the company set lower prices for crude oil for Asian buyers due to an oversupplied market. The sanctions imposed by the European Union and the United States on Russia and Iran also affect supplies to China and India, which are amongst the largest global importers. This provides some support for international markets. Gunvor, a Swiss commodity trader, announced on Thursday that it had withdrawn a proposal to purchase foreign assets from Russian energy company Lukoil. The U.S. Treasury had called Gunvor "Russia's puppet" and indicated Washington was opposed to the deal.
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Tech stocks drop on a weekly basis due to a sour mood
Investors are uneasy with the pace of the artificial intelligence stock rally, and have shifted their focus to safer assets like bonds and the Japanese yen. S&P 500 and Nasdaq futures firmed up a bit in Asia's morning. However, overnight the Nasdaq fell 1.9%. The world's largest tech index has fallen 2.8% this week. If that trend continues, it would be the biggest drop in a single week since March. This is a shock for an juggernaut which had gained more than half its value from the lows reached when tariffs were first announced in April. In morning trading, Japan's Nikkei dropped 1.8%, resulting in a loss of 4.7% for the week, the biggest since late march. Meanwhile, in Seoul, the Kospi declined 1.4%, resulting in a fall of 3.3% for the week, its worst weekly drop since late mars. Softbank Group Corp, a tech investor, fell more than 20 percent this week. Chip and cable manufacturers were also among the worst performers. Bitcoin, which is sometimes used as a barometer for tech sentiments, has fallen 8% this week to $101,092. MOOD SHIFT The pullback of AI-related shares has not been triggered by any obvious event, but the reaction to recent results reveals that some fears are beginning to surface about the possibility of a bubble and profitability questions. Meta's stock plunged late last month after it revealed large capital expenditures as the company builds data centres to support its AI push. Palantir Technologies, a data and AI company, has also seen its shares fall despite exceeding earnings expectations. Herald van der Linde is the head of equity strategies for Asia Pacific, HSBC. "And another one says it. Then a third. A fourth person says that these three are all selling. It's possible that I am selling, too. It's just a change in market sentiment. This could be happening now." Overnight, the S&P 500 index closed down 1.1% and the Philadelphia SE Semiconductor Index fell 2.4%. BONDS, YEN HIGHER Bond markets rose on the back of a demand for safety, and as second-tier U.S. data indicated a wave layoffs which could support future rate cuts in the U.S. The benchmark 10-year U.S. Treasury rates fell 6.4 basis point overnight to 4.09%, after Challenger, Gray & Christmas, an outplacement firm, said that there was a spike in job cuts announced in October. These private surveys have attracted attention on the market, while the prolonged U.S. shutdown has stopped official U.S. data publishing. The dollar fell overnight by nearly 0.5% to $1.1546 a euro. The dollar was last, at 153.17 Japanese yens and 0.8069 Swiss francs. The pound soared after the Bank of England held interest rates, but the possibility of a rate cut in December limited gains. It traded at a slight discount to $1.3128 on the Asian market. Gold held steady at just under $4,000 per ounce. Brent crude remained at $63.64 per barrel. (Editing by Shri Navaratnam).
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Australian shares flat as financials counter energy, real estate strength
Australian shares were little altered on Friday as gloomy performances in the financial sector following a disappointing profit half-year from Macquarie, a top investment bank, partially offset gains in local stocks in energy, real estate and healthcare. As of 2349 GMT the S&P/ASX 200 was flat at 8,826.80, and is on course for its second consecutive weekly loss if current momentum continues. Macquarie Group shares fell 5.5%, their lowest level in over five months. The lender missed expectations on its half-year profits due to a lacklustre commodity division. CBA, the top lender in Australia, lost 0.8% and ended a winning streak of two sessions during which they had gained 2.5%. Westpac shares also dropped 0.8%, after reaching a record-high on Wednesday. The broad financial index fell 0.6% on the Friday, but it was still on track to achieve its best performance for a week since late September. The benchmark index fell 1.4% following a poor close on Wall Street over night amid a sell-off in the tech sector. The shares of WiseTech Global, Xero and each other fell more than 1%. Rio Tinto, Fortescue and BHP all fell more than 1%. Rio Tinto was down by 0.2%, Fortescue by 0.5%, and BHP 0.5%. Gold miners recovered some of their losses by rising 1.1% on the back of a falling dollar, a surge in safe-haven demand and concerns about a long U.S. shutdown and the legality and legitimacy of tariffs. The shares of Northern Star Resources and Evolution Mining rose by 1.1% and 2.2%, respectively. The energy subindex rose by nearly 1%. Woodside Energy and Santos gained 1.6% and 0.6% respectively. The healthcare sub-index rose 0.6% while the real estate index climbed 0.4%. Qantas shares fell 4.1%, their lowest since mid-May. The Australian airline lowered its domestic unit revenue projection for the first half 2026. It also flagged an increase in fuel prices. The benchmark S&P/NZX50 index in New Zealand rose 0.4% to 13,625.29.
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China's Vice Premier urges the end of trade barriers that are holding back green transformation
Ding Xuexiang, vice premier of China, called on fellow leaders to show "true multiculturalism" at the climate summit held in Brazil. Ding, via a translation, said: "We must strengthen international collaboration in green technology and the industry, remove trade obstacles, and ensure free flow of high-quality green products, to better meet global sustainable development needs." Ding told the official Xinhua News Agency on Friday that the developed countries must fulfill their obligation "to lead in emission reduction and honour their funding commitments", as well as provide more assistance to developing countries. He said that China was willing to work with other parties to "persistently encourage green and low-carbon development". In September, Chinese President Xi Jinping stated that China aimed to reduce its economy-wide greenhouse gases emissions by 7% - 10% by 2035 compared to their peak. He said that as part of China's national determined contribution targets by 2035, the country's consumption of non-fossil fuels will represent more than 30%. (Reporting from William James in Belem, and Farah Masters in Hong Kong. Editing by Brad Haynes & Michael Perry).
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Safety fears hinder rescue efforts in South Korea after power plant collapse.
Fire and rescue officials reported that a worker died and six others remain trapped after a large structure collapsed at a South Korean power station being prepared for demolition. On Thursday afternoon, workers were removing parts of a massive steel structure that was a decommissioned heating system when it collapsed. The footage from the scene shows the structure toppled and mangled, surrounded by other structures. Kim Jung-shik, a fire official, told reporters that two people were rescued quickly and then another two were found under the rubble. He said that one worker died early Friday morning and another's condition was still unknown. Rescuers used heat sensors, remote scoping and search dogs to help locate other trapped workers. However, their efforts were hampered by a risk of further collapse, said he. The South Korean president Lee Jae Myung has called for a full-scale effort to rescue the trapped workers. (Reporting and editing by Ed Davies.)
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France launches $2.5 billion initiative for Congo forest protection
A document seen by revealed that European nations have thrown their weight behind a plan worth $2.5 billion to save the Congo forest. This conservation scheme could steal some of the thunder from Brazil's flagship initiative for the COP30. The U.N. Climate talks are being held this year in the Brazilian Amazon to draw attention to the issue of emissions caused by rampant deforestation. The initiative, led by France, is called "The Belem Call to the Forests of the Congo Basin". It has the backing of Germany, Norway and Britain. The initiative's supporters hope to mobilize resources in order to protect the second largest rainforest on earth. Five European nations signed the document in French dated 6 November. The document stated that "the donors are... committing themselves to mobilize over $2.5 billion in the next five year period, on top of the domestic resources which will be mobilized for the protection and management of forests of the Congo Basin by Central African countries." Signatories also said that they aimed to assist African nations in reducing deforestation by using technology, training and partnership. The Congo, the Amazon, the world's biggest rainforest, and the Borneo-Mekong-Southeast Asia basin, the third-largest, all face threats from expanding farm frontiers, logging, mining, and other industries. The Congo's protection has attracted attention, as it absorbs more greenhouse gases net than any other forest. However, the timing was not in sync with Brazil's priority of a global fund for forests that is central to its COP30 agenda. The Brazilian President Luiz inacio Lula da So has hailed the Tropical Forests Forever Facility as the future of climate financing because it replaces grants by a more scalable model. A diplomat who is familiar with both initiatives said that "in theory, they are both very different." He noted that the TFFF offers annual payments without strings to rainforest nations. The source said that the two rainforest funds competing with each other may not be helpful. Norway The TFFF has pledged $3 billion On Thursday, the largest contribution to date was made. France has said that it will contribute up to 500 millions euros to the Brazilian initiative. Reporting by Lisandra paraguassu from Belem, and Simon Jessop from Sao Paulo. Editing by Brad Hayes and Diane Craft.
Asia shares up on China information, wait for clutch of reserve bank meetings
Asian shares firmed on Monday as Chinese data shocked on the advantage for as soon as, while investors aimed to navigate a minefield of central bank meetings this week that might see completion of free money in Japan and a slower move course for U.S. rate cuts.
Beijing reported industrial output climbed up an annual 7% over January and February, while retail sales increased 5.5% on a year earlier. Real estate remained a worry as property investment fell 9% on the year, highlighting the case for further policy assistance.
Reserve banks in the United States, Japan, UK, Switzerland, Norway, Australia, Indonesia, Taiwan, Turkey, Brazil and Mexico all satisfy this week and, while many are expected to hold constant, there is lots of scope for surprises.
Tuesday could see completion of an era as the Bank of Japan is now commonly tipped to end 8 years of unfavorable rates of interest and cease or amend its yield curve control policy.
The Nikkei paper on Saturday became simply the latest media outlet to flag the relocation, after major business gave the greatest pay walkings in 33 years.
There is a possibility the BOJ might await its April conference provided it will be issuing updated financial forecasts then.
Whether it is March or April, we presume the language accompanying any such move will bring a careful tone, stressing it more as a financial policy adjustment rather than a tightening up at this stage, said Carl Ang, a fixed income analyst at MFS Investment Management.
For Japan a measured and progressive course of policy normalisation appears appropriate for an economy unaccustomed to higher rates and therefore the policy messaging will be important.
Markets also presume the BOJ will trek at a snail's rate and have a rate of 0.27% priced in by December, compared with the current -0.1%.
The central bank on Monday said it would carry out an unscheduled operation to purchase bonds, presumably to head off any considerable increase in yields and avoid market volatility.
That might be one reason the yen really lost ground last week, with the dollar up at 149.20 yen. The euro stood at $1.0886, having alleviated 0.5% recently and far from a top of $1.0963.
Japan's Nikkei bounced 2.0%, having actually shed 2.4% last week as an added to tape highs drew some revenue taking.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.1%, after dipping 0.7% last week. Chinese blue chips firmed 0.4%.
EUROSTOXX 50 futures and FTSE futures were bit altered. S&P 500 futures included 0.1% and Nasdaq futures 0.2%, with stress building ahead of the Federal Reserve policy conference in Tuesday and Wednesday.
COUNTING THE DOTS
The Fed is thought about particular to keep rates at 5.25-5.5%,. There is a possibility it may signal a greater for longer. outlook on policy provided the stickiness of inflation at both a. customer and manufacturer level.
We now anticipate 3 cuts in 2024, vs 4 previously, generally. due to the fact that of the a little greater inflation path, stated Goldman. Sachs economist Jan Hatzius in a note.
He still anticipates the Fed will start in June, assuming. inflation reduces again as anticipated, and authorities will stick to. their dot plot forecasts of 3 cuts this year.
The primary threat is that FOMC individuals may rather be. more worried about the current inflation information and less. convinced that inflation will resume its earlier soft pattern,. Hatzius cautioned. Because case, they may bump up their 2024. core PCE inflation projection to 2.5% and reveal a 2-cut median.
The Fed is also expected to start official conversation of. slowing the pace of its bond sales today, perhaps halving it. to $30 billion a month.
Bonds might do with the assistance given the damage done by a. run of uncomfortably high inflation readings. Two-year Treasury. yields are up at 4.73%, having climbed 24 basis. points recently, while 10-year yields stood at. 4.301%.
The probability of a rate cut as early as June has. dropped to 55%, from 75% a week previously, and the marketplace has only. 72 basis points of relieving priced in for 2024 compared to more. than 140 basis points a month ago.
The Bank of England meets on Thursday and is expected to. keep rates at 5.25% as wage growth cools, while markets see some. possibility the Swiss National Bank might alleviate this week.
The climb in the dollar and yields took some shine off. gold, which was idling at $2,153 an ounce, having fallen. 1% last week and far from all-time highs.
Oil prices have had a better pursue the International. Energy Agency raised its view on 2024 oil need, while the. supply outlook was clouded by Ukrainian strikes on Russian oil. refineries.
Brent included 22 cents to $85.56 a barrel, while U.S. crude increased 25 cents to $81.29 per barrel.
(source: Reuters)