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Dutch pension fund PFZW terminates partnership with BlackRock due to conflict over sustainability
The Dutch pension fund PFZW announced on Wednesday that it had ended its relationship BlackRock, a wealth manager. This was part of a revamping of its portfolio to prioritise sustainable investments. The Netherlands' second largest pension fund selected 756 companies for investment and sold its stakes of over 2,600 companies in the last few months. Ellen Habermehl, spokesperson for PFZW, said: "In the next five-year period, we will strive to achieve a balance between our desire for good returns and acceptable risks, as well as sustainability." BlackRock was not selected. BlackRock's Dutch Office did not respond immediately to a comment request. Although many U.S. multinationals have moved away from sustainable business model since Donald Trump's re-election, some of the largest Dutch pension funds continue to believe that sustainability is the best approach for the long term. In an interview with the Dutch newspaper NRC PGGM, the fund's Investment Manager said that its decision to terminate its relationship with BlackRock is due to its reluctance in supporting sustainability resolutions during shareholder meetings. The fund does not want to have its votes in these meetings clash with the votes of the wealth management firms it works with. Sander van Steijn, PGGM's investment expert and NRC commentator, said: "If you don't do it right things can get complicated." PFZW's total assets are around 250 billion euro ($293 billion), with approximately 50 billion euros in investments in shares. Last year, the country's largest pension funds ABP, with 544 billion euro in assets, announced that it would reduce investments with large climate impacts, and instead direct more money to projects and companies that improve society and environment.
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EU drafts plans to prevent carbon border tariff circumvention
A spokesperson for the European Commission said that measures will be proposed this year to stop countries from avoiding its border carbon tariff. Some in Brussels are concerned that Chinese companies could restructure their trade to avoid paying the tax. Carbon Border Adjustment Mechanism, the first carbon border tax in the world, will begin to charge fees for CO2 emissions from imported goods, including steel, aluminum, cement, and fertilisers, starting in January. The system is designed to bring foreign producers up to par with European manufacturers who pay for their carbon emissions through the European Carbon Market. Brussels officials are worried that the system can be circumvented by foreign companies who send low-carbon products into Europe while producing high-carbon goods to sell on other markets. They could avoid the EU carbon tax without changing their production. A spokesperson for the European Commission said that the Commission plans to propose measures to address this risk by the end the year and to extend the carbon border tax to other downstream products. How can we ensure that the Chinese, in particular, will not be able to game this system? A senior EU official stated. The Chinese Foreign Ministry did not respond immediately to a comment request. According to the official, The Commission is looking at measures such as a system where goods are assigned a fixed value for CO2 emissions per country or company instead of calculating specific emission per shipment. They added, "You don't want to let anyone off the hook because they sent us green stuff, but used grey stuff back home and didn't change anything." The industries are pushing for anti-circumvention measures. Last month, the industry group European Aluminium called on the EU to simplify its CO2 levies by assigning the same CO2 emissions rating to all aluminum imports regardless of whether they were manufactured in that country. This would make it easier to enforce the EU levy, but foreign companies could resist. They would lose their ability to reduce their carbon border tax bill directly if they reduced their own emissions. (Reporting from Kate Abnett in Brussels, Additional reporting by Liz Lee and Joe Bavier in Beijing)
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Goldman Sachs raises its fourth-quarter forecast for iron ore prices.
Goldman Sachs increased its average forecast price for the fourth quarter to $95 per metric ton, up from $90 previously. The day-traded contract for January iron ore on China's Dalian Commodity Exchange closed 0.71% higher, at 777 Yuan ($108.63). As of 0721 GMT, the benchmark October iron ore traded on Singapore Exchange was trading at $102.85 per ton. Goldman Sachs has maintained its forecast for the end of 2026 at $80 per ton. First Futures analysts said that while prices have recovered, ore demand is not showing signs of improvement. They warned about potential short-term downside risks. This week, iron ore demand was suppressed as steelmakers at the top Chinese production hub Tangshan were required to reduce production in order to improve air quality in Beijing for a military celebration of the end to World War Two. Analysts expect the consumption of the key ingredient in steelmaking to increase after the production restrictions are lifted on September 4. Coke and other steelmaking materials, such as coking coal, have fallen by 1.25% and 0.59 %, respectively. The Shanghai Futures Exchange has seen a decline in most steel benchmarks. Rebar fell by 0.32%. Hot-rolled coils dropped 0.09%. Stainless steel declined 0.54%. Wire rod gained 0.12%. Wood Mackenzie, a consultancy, predicts that China's steel demand will fall between five and seven million tons per year over the next decade. Reporting by Amy Lv, Lewis Jackson and Sonia Cheema; editing by Subhranshu Sahu, Sonia Cheema and Subhranshu Sahu
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CORRECTED - Copper prices drop in London but China data and Fed optimism limit the downside
London copper prices fell on Wednesday after reaching their highest level in over five months. However, positive Chinese economic data, and optimism about U.S. interest rate cuts, helped to limit the decline. As of 0418 GMT, the London Metal Exchange's three-month copper was down by 0.12% to $9,969. The contract reached its highest level since the beginning of March when trading began, but was delayed 90 minutes in Asia. The cause of the delay was not immediately known. The Shanghai Futures Exchange's most traded copper contract rose by 0.5%, to 80,180 Yuan ($112,094.44) per ton. The survey of purchasing managers of China's manufacturing industry, which showed an increase in August due to new orders, indicates a better outlook for industrial metals. Other London metals include aluminium, which fell by 0.27%, to $2.612 per ton. Tin also dropped by 0.27%, to $34,640. Zinc eased down to $2.861, while lead was off 0.05%, at 1,993. Nickel edged up to $15,235, with a 0.02% increase. SHFE aluminium rose 0.14%, to 20,745 Yuan. Lead strengthened 0.06%, to 16,885 Yuan. Zinc climbed 0.11%, to 22,290 Yuan. Nickel eased 1.32%, to 121530 Yuan. Tin lost 0.64%, to 272,600 Yan. Click or to see the latest news in metals, and other related stories.
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Russia has said that it will help China surpass the United States in nuclear power
The chief of Russia's Rosatom nuclear state corporation, who spoke on state television on Wednesday following talks in Beijing, said that Russia would help China surpass the United States in terms of the world's largest producer of nuclear energy. The United States has the largest nuclear reactor network in the world, with a total installed capacity of nearly 97 gigawatts. According to the U.S. Energy Information Administration, China is racing to construct dozens of nuclear reactors. It had 53.2 GW in operating capacity of nuclear power reactors as of April 20, 2024. "China has ambitious plans to develop atomic energy." "The task is to surpass and catch up with the United States, which would mean reaching a power of more than one hundred gigawatts," Alexei Likhachev said on Russian state television. Likhachev replied, "Of Course. We will assist. "We are already helping." Likhachev stated that Russia has helped China build four nuclear reactors and is currently building four others. China also needs a lot of uranium for its ambitious plans. He said that China would need to develop new closed nuclear fuel cycle units based on Russian technologies. (Reporting and Writing by Guy Faulconbridge, Editing by Andrew Osborn.)
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Yamuna River breaches danger mark at Delhi
Officials said that widespread flooding had hit parts of northern India. More thunderstorms are expected to occur on Wednesday. Local media reported that at least 10,000 people have been evacuated from river banks in the capital Delhi. This year's monsoon has been especially intense in India. At least 130 people have died in the north of India in August, villages were destroyed and infrastructure was destroyed. The latest flooding in northern Jammu & Kashmir, Himachal Pradesh and Punjab has seen the Chenab & Tawi rivers rise above the danger level at various points. The rivers are swollen and have caused landslides, damaging many roads and separating parts of Jammu Himachal and other mountainous areas of India. Rains in Jammu-Kashmir's Rajouri District caused a wall to collapse in a woman and her daughter's house. The India Meteorological Department has warned that heavy rains are expected to fall in the region today, especially in Uttarakhand. On Tuesday, the Central Water Commission announced that the Yamuna River had exceeded its danger mark. Local media reported on the evacuation of nearly 10,000 people to relief camps that the government had set up along main highways. This was a precautionary move for those who live in low-lying regions. In 2023, residents living near the Yamuna river in Delhi were also evacuated after floodwaters reached their homes and the Yamuna River hit its highest level for 45 years. In recent weeks, raging rivers have damaged infrastructure in many tourist areas in Himachal Pradesh. Sukhvinder Singh Sukhu, the state chief minister, said that three people died in Mandi in the latest landslide. Two more are believed to be trapped under the debris. Authorities have ordered all educational institutions to close due to flooding warnings. The government of Punjab said that 30 people were killed and nearly 20.000 evacuated in the neighbouring province since August 1. The government announced on Tuesday that the flooding of Punjab, India's breadbasket state, has caused 150,000 hectares to be destroyed by water. The continuous rain forced authorities to release water in dams which caused flooding on plains in India, Pakistan and other countries. Reporting by Tanvi Mhta from New Delhi, Fayaz Bukhari in Srinagar, and Jaspreet Sing in Patiala. Editing by Saad Saeed.
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Oil drops but remains near its month-high on US sanctions
The oil prices in Asia eased on Wednesday, but remained near a month-high on the backs of new U.S. Sanctions against a number of shipping companies and ships. Traders also looked forward to the OPEC+ summit over the weekend. Brent crude dropped 19 cents or 0.3% to $68.95 per barrel at 0433 GMT. U.S. West Texas Intermediate Crude fell 16 cents or 0.2% to $65.43 per barrel. The benchmarks rose more than 1% during the previous session, after the U.S. imposed sanctions against a network led by an Iraqi/Kittitian businessman who was smuggling Iranian crude oil under the guise of Iraqi oil. Priyanka S. Sachdeva is a senior market analyst with Phillip Nova. She said that the new sanctions are likely to tighten up the supply of oil in the future. Sachdeva said that "structural volatility persists with Iran sanctions and geopolitical hotspots forming the risk premium, and keeping crude near its recent strength." Market participants were also awaiting the outcome of the meeting of eight countries of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, which took place on September 7. Analysts believe that the group will not make any further changes in production until later. Geopolitical risk continues to influence oil prices. "The market is watching the upcoming OPEC meetings and is on high alert for any further increases that could lead to an oversupply," Emril Jamil said, senior analyst at LSEG. A preliminary poll on Tuesday showed that the U.S. crude stockpiles, as well as distillate and gasoline stocks, were also expected to have decreased last week. Three analysts surveyed by before weekly inventory data were released estimated that crude inventories had fallen by an average of 3.4 million barrels during the week ending August 29. Prices were held in check by soft economic data. U.S. Manufacturing contracted for the sixth consecutive month, as President Donald Trump’s tariffs impacted business confidence and economic activities. This weighed on demand for oil.
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Brazil opens probe into Anglo American's $500 million nickel sale, FT reports
The Financial Times reported that Brazil's Competition Authority has opened an investigation into Anglo American’s plans to sell its nickel operations in the country. The FT reported that CADE, Brazil’s antitrust regulator confirmed it had opened a investigation into the $500-million deal Anglo concluded in February with MMG Singapore Resources in response to a complainant. The FT reported that "based on a complaint, a Administrative Procedure for Investigation of an Act of Economic Concentration" was initiated by CADE. The newspaper reported that CoreX Holding, a global industrial group, had lodged an objection to the deal. It cited a source with direct knowledge. The London-listed company demerged its platinum operations in May, and announced in July that its nickel and steelmaking coke assets had been discontinued. Since BHP failed to acquire it last year, the company has sold or spun off non-core assets in order to concentrate on copper and ore. The company also announced that it is considering whether or not to sell its loss-making De Beers Diamond unit. Anglo American CADE and CoreX Holding have not responded to our requests for comment. Could not verify the report immediately. Reporting by Rishabh J. Jaiswal, Bengaluru. Editing by Mrigank.
MORNING Bid EUROPE-Bond Markets Shake as Xi’s Tanks Roll
Rocky Swift gives us a look at what the future holds for European and global markets.
The largest military parade in China's history was held a day after Donald Trump, the president of the United States, re-emerged at the Oval Office on Monday to deny rumors about his health.
Trump, who had been absent from the public eye for days, returned to court to defend his policies on tariffs, deporting immigrants, and firing any public officials he chooses.
In Beijing, the optics were quite different as Xi and Vladimir Putin, along with Kim Jong Un, North Korea, watched missiles, tanks, and drones being paraded. Kim followed the tradition of "bring your daughters to work", showing the world that autocracies are still alive and well.
Bond markets have again raised alarms about the mounting debt and deficits of governments, away from geopolitics. In Asian trading, U.S. Treasury rates ticked higher and Japan's 30-year rate reached a record high.
The sterling fell even further after Tuesday's 1.1% decline when the 30-year gilt yields rose to their highest level since 1998.
Gold is a safe investment when stocks are shaky, and bonds look threatening. Gold reached a record high of $3.546.99 during the Asian trading session.
The euro zone purchasing managers' indexes and the UK JOLTS data will be the first to arrive, followed by the US July JOLTS numbers as a precursor to the nonfarm payrolls figures on Friday.
The markets are pricing in a 89% chance that the Federal Reserve will reduce its key policy rate by 25 basis points this month. Weak labour data could increase the chances of more cuts.
The equity futures market is indicating that Europe will open in positive territory. The Euro Stoxx 50 contract for the entire region was up 0.34% to 5,317. German DAX Futures gained 0.3% to 23,609 and FTSE Futures were up by 0.1% to 9,151.
Trump, in keeping with the positive theme of the day, sent a reassuring message to Xi on Twitter, writing: "Please send my warmest regards for your conspiracies against the United States of America.
The following are key developments that may influence the markets on Wednesday.
- PMIs in Britain, the euro zone and Chicago
Sarah Breeden, of the Bank of England and Catherine Mann both speak at separate events
- European Central Bank President Christine Lagarde speaks
- Euro zone PPI inflation (July)
France: Reopening 3-month, 4-months, 6-months and 11-months government debt auctions
Germany: Reopening 7-month, 2-years, 7-years and 10-years government debt auctions
Reopening the auctions for government debt with terms of 1 month, 3 months, 6 months and 3 years
The Federal Reserve will be represented by St. Louis Fed president Alberto Musalem, and Minneapolis Fed president Neel Kahkari.
Job openings in the U.S. for durable goods, JOLTS and U.S. Data.
(source: Reuters)