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Gold reaches record highs on Fed rate-cut betting, US-China Trade woes
Gold reached a new high on Wednesday just below the $4,200 per ounce mark, boosted by expectations for further U.S. interest rate cuts. Meanwhile, renewed U.S. China trade concerns also increased demand for safe havens. As of 0252 GMT the spot gold price was up 0.8% to $4,173.56 an ounce after reaching a session high of 4,186.68. U.S. Gold Futures for December Delivery gained 0.7%, to $4192.90. The U.S. president Donald Trump announced on Tuesday that his administration would produce a list of "Democrat programs" on Friday, which will be closed due to the federal government shutdown. Matt Simpson, senior analyst at StoneX, said that the U.S. shutdown and Jerome Powell's dovish remarks have been two of the most recent reasons why gold prices are on an upward trend. Federal Reserve Chair Jerome Powell stated that the U.S. labor market was subdued. However, the economy may be "on a slightly firmer trajectory than anticipated." Powell said that interest rate decisions will be taken "meeting by meeting", balancing the labour market's weakness and persistent inflation above the target. Investors have priced in the near certainty of a Fed rate cut of 25 basis points in October and December. Bullion is more likely to perform well when interest rates are low and there is political and economic uncertainty. Gold has risen 59% in value year-to date, mainly due to geopolitical and financial uncertainties, central bank purchases, the de-dollarisation of currencies and strong exchange-traded funds. Simpson added that "this rally has become a momentum trading, where traders pile into the market to chase away prices." Trump stated that Washington would consider cutting off some trade relations with China, such as in the area of cooking oil. On Tuesday, both countries started imposing port fees tit for tat. The International Monetary Fund increased its global growth forecast for 2025, citing better than expected tariff and financial conditions. However, it warned that renewed U.S. China trade tensions may curb growth. Silver increased 0.3% to $51.60 after hitting a record of $53.60 Tuesday. This was due to the gold rally and tightening of supply on the spot market. Palladium and platinum both rose by 0.2%, to $1,528.50. (Reporting and editing by Sherry Phillips, Subhranshu Sahu and Ishaan Aroo in Bengaluru).
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Shanghai copper declines amid escalating US-China trade standoff
Shanghai copper fell on Tuesday, as tensions escalated between the two largest economies in the world, China and the United States, threatening to increase demand for the metal. As of 0315 GMT, the most active copper contract traded on Shanghai Futures Exchange fell 0.91%, trading at $8,933.60 per metric ton. Donald Trump, the U.S. president, threatened to cut off some trade relations with China on Tuesday in relation to cooking oils as a form of retaliation for China not "purposely" buying U.S. soy beans. Trump's threat was the latest escalation of trade tensions ahead of a high-stakes summit between Trump and his Chinese equivalent Xi Jinping in South Korea later this month. China imposed an export control on rare earths, to which the U.S. reacted with a threat of a 100% tariff, impacting the copper, used in construction and power, that is important for the macro-economy. Both sides sent conciliation signals. Beijing has stressed that the export control on rare earths does not represent a complete export ban. However, it is still open to talks. Scott Bessent of the U.S. Treasury Department said that talks between leaders in South Korea were still proceeding according to schedule. Shanghai coppe prices have dropped after the red metal reached a 16-month high on SHFE in early October, when mine disruptions such as the Grasberg closure triggered concerns about supply. Investors are profiting from the rally triggered when Grasberg was suspended for the time being, but risks are high as China and the U.S. trade barbs over export controls and tariffs," said a Shanghai copper trader, who requested anonymity because they were not authorized to speak to media. Benchmark three-month Copper, on the other hand rose 0.47%, to $10,628 per ton. London's future rose amid renewed U.S. interest rate cuts hopes, as Jerome Powell, the U.S. Federal Reserve chairperson spoke on Tuesday and signaled that economic conditions were unchanged from a few weeks ago when policymakers cut rates. They also projected two further reductions this year. Nickel and lead were little changed. Zinc also declined by 0.86%. The LME's other metals saw a gain of 0.27% in aluminium, 0.26% in nickel, 0.24% in lead, and 0.8% for tin. Zinc, however, posted a loss of 0.37%. Reporting by Dylan Duan, Lewis Jackson. $1 = 7.1261 Chinese Yuan Renminbi
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Eversource Expects $75m Charge Due to Offshore Wind Sale Settlement
Utility firm Eversource Energy said on Tuesday it expects a $75 million or 20 cents per share after-tax charge in the third quarter due to an increased liability for the two wind projects sold to Global Infrastructure Partners (GIP).In 2024, Eversource sold its stake in the South Fork and Revolution Wind projects to GIP, receiving adjusted gross proceeds of $745 million, down from $1.12 billion due to reduced capital spending and delayed commercial operations of Revolution Wind.The company added it increased its expected payments to GIP by about $285 million, following revised construction cost estimates including higher insurance expenses, tariff impacts, turbine vessel damage and costs tied to a temporary stop-work order issued by the Bureau of Ocean Energy Management in August.However, the company also said it expects to offset part of the impact with an estimated $210 million federal tax benefit linked to tax losses on its offshore wind investments.The company also said it is narrowing its full-year adjusted profit forecast to between $4.72 and $4.80 per share from a previous forecast of $4.67 to $4.82 per share.(Reuters)
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BHP's Slattery: Australia must reduce red tape and power costs to compete
Geraldine Slattery is the head of BHP Australia. She said that Australia must increase access to low-cost power and speed up environmental approvals if it wants to compete with other nations for mining investment capital. The comments of the world's largest listed miner highlight the rising competition for capital, with nations such as the United States who are ramping up their mining-friendly policies to spur the development of an alternate supply chain to the dominant producer China. Slattery explained what she believes Australia needs "to compete on the global market". Slattery, in remarks for a conference held in Western Australia, said: "This is no small matter. It's the linchpin that will make the resources sector and many other sectors, more productive." BHP CEO Mike Henry told the Financial Times this week that the company is considering reopening older mines in Arizona due to the U.S. Administration's "breathtaking shift" in building up the mining sector. Australia has reached the final stages of negotiations for reforming its environmental laws. Local media reported that new legislation will be introduced in the final two weeks of this year's parliament session. Slattery has been tipped as the top candidate for BHP's CEO position. He has worked at BHP for over 30 years and led its petroleum division. Henry was expected to leave BHP by the middle next year, after a six-year typical tenure. "Australia's growth in labour productivity is at its lowest level for sixty years." This isn't a random economic statistic. This trend poses challenges not only in attracting future investments, but also in maintaining the higher standard of living enabled by productivity," she said. BHP has allocated more than A$840 (555.16) million for its Olympic Dam Copper operations in South Australia. The miner is preparing to make a decision on investment by mid-2027, to double the output of the state. Slattery also listed Australia's need to reduce taxes in order to compete with other developed countries, improve workforce development, and embrace automation and AI, which, she said, was key to addressing productivity challenges.
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Iron ore prices rangebound due to Sino-US trade issues, but firm demand in the near term offsets this.
Iron ore futures ranged on Wednesday as worries about the worsening Sino US trade dispute and China's low inflation data, its largest consumer, offset optimism regarding remaining strong near-term demand. Donald Trump, the U.S. president, said that Washington is considering ending some trade relations with China. The U.S., China and other countries began to charge additional port fees for ocean shipping companies on Tuesday. This is another sign of the tensions that exist between the two world's largest economies. These tensions could impact the market sentiment and put pressure on commodity prices. As of 0303 GMT on Wednesday, the most-traded contract for January iron ore on China's Dalian Commodity Exchange dropped 0.32%, to 785.5 Yuan ($110.22), per metric ton. This was after Tuesday's record lows, which were more than a month old. As of 0253 GMT, the benchmark November iron ore traded on Singapore Exchange was $0.36% higher. Official data released on Wednesday showed that China's Consumer Price Index (CPI), which measures consumer prices, fell 0.3% on an annual basis in September, compared to a 0.2% drop in a survey. This was due to the fact that domestic weakness continued and trade tensions increased, while consumer confidence also suffered. Analysts at Everbright Futures said in a report that "the strong ore demand continued to support prices", halting any potential downside. The data released by the China Iron and Steel Association, a state-backed organization, showed that the daily crude steel production among members steelmakers increased by 7.5% compared to the same 10-day period in September. Coke and coking coal, which are used to make steel, both rose by 1.62% and 0.7 percent, respectively. The benchmarks for steel on the Shanghai Futures Exchange are mixed. The Shanghai Futures Exchange saw a mixed performance in steel benchmarks.
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Asia shares recover as dollar eases, Fed reduces bets and reclaims spotlight
The Asian stock market staged a modest rebound on Wednesday. This was helped by the dovish remarks of Federal Reserve chair Jerome Powell, and positive bank earnings in Wall Street. However, simmering U.S. - China trade tensions kept risk appetite at bay. Powell said that the possibility of further rate reductions was still open on Tuesday, and that the long-term effort of the central banks to reduce the size of their holdings could be nearing its end. Some viewed his comments as dovish. They lifted the markets slightly, and reinforced expectations for more easing in this year. By December, roughly 48 basis point worth of cuts will be priced into the market. Tom Kenny is a senior international economist with ANZ. He said that the Fed could announce its intention to end quantitative tightening at the upcoming FOMC meeting in October. We expect the Fed will cut 25bp in both October and December FOMC Meetings. The market was also supported by the strong earnings of U.S. banks and the upward revision to the IMF's global growth forecast for 2025. This came after the market had fallen on signs of renewed tension in U.S. China trade relations. The Nikkei gained 0.8%, after falling 2.6% the previous session. Nasdaq and S&P futures both rose by about 0.1%. Even so, the sentiment was fragile. On Tuesday, U.S. president Donald Trump said that Washington would consider terminating certain trade ties with China. This included in relation to cooking oils. Both the U.S.A. and China have begun charging extra port fees to ocean shipping companies that transport everything from holiday toys, to crude oil. The markets have been thrown into turmoil in recent sessions due to a rapid escalation of the U.S./China trade war. Trump announced an additional 100% duty on Chinese goods as retaliation against Beijing's dramatic expansion of export controls on rare Earths. It does indicate that a lasting ceasefire is unlikely to be achieved easily. It's a reminder to the market that they are shooting these arrows, and then walking them back," said Tony Sycamore. U.S. trade representative Jamieson Greer said separately on Tuesday that the timing of additional tariffs of 100% on China's exports to America depends on whether they kick in November 1, or earlier, but acknowledged that Beijing might find it difficult to find a way out. POLITICAL UNCERTAINTY Sebastien Lecornu, the French Prime Minister, promised to delay a historic pension reform until 2027, a measure that would provide some relief for investors. EUROSTOXX50 futures gained 0.8% in Asia. FTSE and DAX Futures also rose by roughly 0.3%. Juan Perez is the director of trading for Monex USA. He said: "I believe that anything that can bring relief to the squabbles within the French Parliament is an absolute victory." The euro last traded at $1.1611 despite being largely insulated from France's political turmoil. The Fed's cut bets weighed on the currency market as the dollar fell 0.25% to 151.42 yen and 0.06% to 0.8009 Swiss Franc. The fragile risk sentiment also supported the safe-haven yen as well as the Swissie. Spot gold, meanwhile, continued its record-breaking run, and last rose 0.9% to $4,179.80 per ounce. This was helped by the geopolitical, economic, and expectations of a U.S. interest rate cut. Brent crude futures fell 0.1% to $62.33 per barrel while U.S. crude dipped 0.07% to $58.66.
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Oil prices drop as investors consider a surplus supply outlook and US-China tensions
The oil prices dropped in the early trading on Wednesday. This was a continuation of the losses made in the previous session. Investors weighed the warning from the International Energy Agency about a surplus supply in 2026, and the trade tensions between the U.S. and China that could affect demand. Brent crude futures dropped 12 cents or 0.19% to $62.27 a bar by 0021 GMT. U.S. West Texas intermediate futures also fell by 10 cents or 0.17% to $58.60. The previous trading session saw both contracts close at lows of five months. The International Energy Agency (IEA) said that the global oil market may face a surplus of up to 4 million barrels a day next year, a larger glut than they had anticipated, as OPEC+ and its rivals increase production and demand remains sluggish. In response to the outlook for demand, the United States, China, and other countries have begun imposing port fees on ocean carriers. Beijing has also announced sanctions on five U.S. linked subsidiaries of South Korean shipbuilder Hanwha Ocean. Last week, tensions in trade between the two world's largest economies grew after China announced an expansion of its rare earth export controls. President Donald Trump also threatened to increase tariffs on Chinese products to 100% and tighten export restrictions for software starting Nov. 1. Yang An, an analyst at Haitong Futures, said that the current oil price is largely determined by the level of global oversupply as reflected in the changes in inventories. The weekly inventory report will give traders a good idea of the demand in the United States. A preliminary poll indicated that U.S. crude stockpiles were likely to have increased last week while gasoline and distillate stocks are expected to be down. Six analysts surveyed by estimated that on average crude inventories increased by around 200,000 barrels during the week ending October 10. The American Petroleum Institute's weekly industry report is due at 4:30 pm EDT (2030 GMT), and the U.S. Energy Information Administration will release its data at 10:30 am EDT (1430 GMT), on Thursday. The delay is due to Monday's Columbus Day/Indigenous Peoples' Day. (Reporting and editing by Sonali Paul; Sam Li, Jeslyn Lerh)
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Climate advisers warn that Britain must prepare urgently for higher temperatures
Climate advisers warned that Britain is not prepared for the extreme weather conditions already taking place. This year, Britain experienced the warmest summer in recorded history, which affected health, agriculture, and infrastructure. Droughts were declared in many regions. Climate Change Committee responded to an environmental minister's request for advice by writing to the government: "It is evident that we are not yet prepared for the weather and climate changes that we live with today. Let alone those expected in the coming decades." The CCC identified six key areas for action: public health and food security, resilience of infrastructure, protection of cities from extreme weather disruptions, maintenance of public service and climate-resilient growth. The majority of governments committed to the 2015 Paris Agreement that they would try to limit the global average temperature increase to 1.5 degrees Celsius over pre-industrial levels. Scientists have been shocked by the rapidity of change. According to data from U.N., and EU science agencies, global temperatures are already 1.3-1.4°C above pre-industrial levels. Julia King, Chair of the CCC Adaptation Committee, said at a CCC press conference: "We still believe (limiting the increase to) 1.5 degrees as a long term goal is achievable, but the risk that this will not be accomplished is increasing." The group warned that a global warming of four degrees Celsius by the end of this century cannot be ruled-out and suggested that it should be taken into account when planning homes and infrastructure to ensure they can withstand 75 to 100 more years. (Reporting and Editing by Ros Russel)
The Asian stock market rally stops for breath as the yen battles against crosses
Investors positioned themselves for the month-end and quarter-end flows on Thursday, as Asian shares took a break from their recent rally. The Japanese yen also tested new lows against a surging Swiss Franc and the euro.
After surging by over 2% to seven-week highs overnight, oil prices fell as a sudden drop in U.S. inventories exacerbated supply concerns amid issues with Iraq, Venezuela, and Russia.
S&P 500 and Nasdaq Futures gained 0.1% in advance of Federal Reserve officials whose views on interest rate will be closely monitored. San Francisco Fed president Mary Daly stated that further rate cuts are likely to be required, but timing is still unclear.
Fed Chair Jerome Powell has struck a cautious note about future rate cuts after the central banks first easing of the year, which was only last week.
MSCI's broadest Asia-Pacific share index outside Japan fell 0.2% after gaining 5.5% in a month and 9% during the quarter. Japan's Nikkei index rose by 0.1% after a 7% month-to-month gain and a 13% quarter to quarter.
Hong Kong's Hang Seng fell 0.2%, but Chinese blue-chips were flat.
Tony Sycamore is an analyst at IG. He said that depending on whether funds have been mandated to rebalance quarterly or monthly, the rebalancing flow should result in sales in U.S. indices and Japanese indices.
While the German and Australian markets are likely to benefit from rebalancing purchasing.
Wall Street closed down for the second consecutive session overnight as investors took profits on record-high stock prices. The Fed is still expected to cut rates in October by 92%, but the amount of easing that's anticipated has decreased from 125bps to 100bps.
The focus will then shift to U.S. Economic Data, which includes the Fed's preferred inflation gauge, the Personal Consumption Expenditures Report on Friday, and the final estimate of second-quarter GDP, on Thursday. Meanwhile, a potential government shutdown looms.
The Treasuries markets sawsawed, as the markets digested a large amount of increased corporate and government bonds. The yield on the benchmark 10-year Treasury bill in the United States was unchanged at 4,1408% after rising 3 basis points over night, reversing a Monday fall. Treasury Department will sell $44 billion worth of seven-year bonds on Thursday. This follows the sale of two-year, five-year, and five-year bonds earlier this week.
The dollar dropped 0.1% on the foreign exchange market to 148.77yen after gaining 0.9% overnight.
Overnight, the yen lost the most, falling to a new low against the euro of 174.78 yen, which is just above the record low of 175.9. The yen also reached a record low against the Swiss Franc, at 187.30.
It is expected that the Swiss National Bank will hold its policy interest rate at zero in the afternoon, marking its first pause on this front since late 2023.
On commodity markets, the spot price of gold was flat at $3.739 per ounce. It had fallen 0.7% overnight due to a strong dollar.
U.S. crude fell 0.4% to $64.73 per barrel while Brent dropped 0.3% to $69.11.
Vivek Dhar is a commodities analyst at Commonwealth Bank of Australia. He said that Brent oil futures continued to be supported in the range of $65-70/bbl despite forecasts of an oversupply of crude in Q4 2020 and Q1 2026.
Dhar said that there was a slight downside risk in his prediction of a further fall in Brent prices next quarter to $60 per barrel.
(source: Reuters)