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Carney, Canada's Carney, visits Asia in order to form new alliances with Asia and reduce US dependency
Mark Carney, Canada's prime minister, will make his first official trip to Asia this Friday. He is hoping to strengthen trade and security links at a moment when North America struggles to reduce its dependence on the U.S. Canadian officials have said that Carney's trip could include a meeting between him and Chinese President Xi Jinping in an effort to restore a relationship previously strained by a trade war. Donald Trump, President of the United States Termination of trade talks Canada responded to a political ad in Ontario that featured Ronald Reagan, the Republican icon who said tariffs caused economic disaster. Analysts believe Carney must explain to Asian leaders why Canada is not aligned to the U.S. president, who has threatened to annex Canada. Vina Nadjibulla is vice president of Asia Pacific Foundation of Canada. She said that Carney must make it clear to the world that Canada is not fragmenting and still supports rules-based globalization and trade. Canada signed a deal last month with Indonesia to provide duty-free access to up to 95% its exports to Indonesia in the coming year. Maninder Singh Sidhu, Canada's Trade Minister, said that the country is now focusing on agreements with Malaysia, South Korea, and Japan. Carney will attend meetings in Singapore, the Association of Southeast Asian Nations Summit in Kuala Lumpur and the Asia-Pacific Economic Cooperation Summit in South Korea. The White House announced that Trump will also leave for Malaysia on Friday evening and meet Xi next Thursday in South Korea. Carney may say he wants Canada to diversify its exports in the next decade but the country still depends on the U.S. about 75% for its goods. Fen Hampson is a professor at Ottawa's Carleton University who specializes in international affairs. She said that Canada has more business opportunities in Asia than Europe. Carney visited Europe three times since he became prime minister in march. Hampson stated that the economies of Southeast Asia were more dynamic, and therefore compatible with Canada's energy and commodity trade. Hampson noted that, despite this, any deal Canada makes with China would be affected by the geopolitical dynamics of the U.S.-China. Hampson stated that as tensions between the U.S.and China escalate, Prime Minister Carney will have less room to maneuver. Hampson said that he believed it would be hard to resolve Canada’s ongoing tariff disputes against China, such as those over canola or electric vehicles, without improved relations between the world's two superpowers. Hampson stated that the Americans put a lot of pressure on him to refuse to concede to his perceived rival. Former banker raises hopes for improved relations Many Canadians also fear closer economic ties with China. A recent poll conducted by Angus Reid for the Asia Pacific Foundation of Canada revealed that 59% of respondents still have a negative view of China, and only 14% believe Canada should pursue closer economic ties with China. Justin Trudeau, Carney's predecessor as prime minister, was responsible for the deterioration of relations between Canada and China. Canadian citizens were executed and detained by the Chinese government. Canada's security agencies concluded that China interfered with at least two federal election. Xi publicly scolded Trudeau for allegedly leaking their conversations to the media. Analysts believe Carney's experience as a central banker, and his credentials as an ex-central banker give him credibility that his predecessor lacked. Carney met with Chinese Premier Li Qiang in the last month, and said that he would be meeting senior Chinese leaders soon to "see how the trade relationship develops." In a region where protocol and customs are of great importance, the Prime Minister may still need to tread with caution. Isaac Stone Fish is the CEO of Strategy Risks a Chinese-focused business intelligence company. He said that whatever deals are made, it will be important to see how Carney behaves with Xi Jinping. Carney knows that if he appears to bow down to Xi, it will make him look weak. (Reporting and editing by Caroline Stauffer and Marguerita Choy)
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Wall Street to open with a higher opening after US inflation data
The European stock market struggled to find direction on Friday but was still on course for another weekly increase. Wall Street futures were boosted by data showing that U.S. Inflation rose less than anticipated last month. Wall Street closed higher on Friday, after the White House confirmed that U.S. president Donald Trump will meet Chinese President Xi Jinping as part of his Asia trip next week. The pan-European STOXX 600 index was flat at 1242 GMT, but it is still on course for a weekly increase. London's FTSE 100 rose by about 0.1%. INFLATION DATA Wall Street futures rose following the inflation data. S&P 500 E-minis were up 0.6%, and Nasdaq E-minis were up 0.9%. The MSCI World Equity Index was up 0.1% for a total gain of 1.3% on the overall week. The Consumer Price Index increased by 0.3% in September, after rising 0.4% in August. This was less than expected at 0.4%. Brad Conger said in an email that he expected the reading to be higher than usual due to tariffs being passed through into consumer prices. Our base case is that CPI will remain high over the next six months as final price adjustments." The U.S. Stock Markets have surged in this year and reached record highs, as traders invest money in artificial intelligence while betting that the U.S. Federal Reserve continues to reduce rates. Analysts claim there are signs that a bubble is forming. At its meeting next Monday, the Fed is expected cut rates by 25 basis point. After Friday's inflation report, traders increased their bets on rate cuts. Peter Fitzgerald, Chief Investment Officer for Macro at Aviva Investors, said: "It is a continuation in a generally supportive environment for equity markets where interest rates have been broadly falling across developed markets with Japan being the notable exception. Volatility has begun to drop again after a short spike, and there are no major earnings surprises." He said that it was impossible to know when or how a bull market would end. TRUMP CANCELS CANADA TRADE NEGATIONS The dollar index was 98.863, unchanged on the day. Trump's announcement on Twitter that he would be ending all trade talks with Canada had a limited impact on the Canadian dollar. The euro remained steady at $1.1628. Data showed that the euro zone's business activity grew more rapidly than expected in October. After the data, yields on euro zone government bonds rose. Germany's Bund reached 2.612%. The oil prices that had increased by 5% following the U.S. sanctions against major Russian oil companies have now eased down, but are still on course for a gain of 5% per week. Gold fell around 1.2% per day to $4,075.39 an ounce. It is on course for a weekly decline, ending its nine week winning streak. Apple and Microsoft are among the five companies that will be reporting earnings next week. Intel's earnings beat expectations on Thursday.
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VW says production secure for coming week despite chip dispute
Volkswagen's German plants will continue to operate normally in the next week, as it seeks to protect its supply chain against a dispute involving Dutch chipmaker Nexperia. However, the automaker warned that short-term impacts were possible. Sources told Reuters on Thursday that Volkswagen's main Wolfsburg plant production would continue as planned next week but there were uncertainties beyond that. The Chinese ban on Nexperia chips in automotive and other industries has caused supply chains to be shaken. Companies are now looking for alternatives, as they wonder how long their stockpiles will last. UNCERTAINTY RESURRES EVEN NEXT WOEEK. Volkswagen said that production at its German sites was secure until Thursday, October 30. In parts of Germany, where Volkswagen's Wolfsburg and Zwickau factories are located, the following day is a holiday. Volkswagen's spokesperson stated on Friday that "operations for the next week at all other German sites of the Volkswagen Group are also secured today as the current situation". Skoda, Seat and Porsche are all part of the group. The spokesperson added that the Volkswagen Group was in touch with potential suppliers and examining other sourcing options. CHIP SHORTAGES HITTING SUBSIDIARIES Nexperia does not supply Volkswagen or other automakers such as BMW and Mercedes directly. Its relatively simple computer chip is used in large numbers in car parts and impacts the supplier networks of companies more widely. On Friday, a regional representative of the German IG Metall union expressed concern about deteriorating conditions. Horst Ott said that some automotive suppliers have already announced furlough plans for their workers. He was speaking at an industry conference in Munich. Mario Gutmann, a member of the works council at IG Metall and a parts supplier Bosch, announced at an event that the company will be furloughing workers in its Salzgitter plant. When contacted, Bosch did not immediately comment on this matter. The union representatives did not name any other companies. Rachel More reported. (Editing by Jan Harvey, Mark Potter and Jan Harvey)
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Spain investigates steelmaker for violating Israel Sales Ban
The Spanish High Court has opened an investigation into privately owned steelmaker Sidenor, which is accused of selling steel to a firm in Israel for the purposes of manufacturing weapons. This is one of the potential legal consequences that could result from Spain's ban of such deals. According to a statement, Judge Francisco de Jorge will lead the investigation against Sidenor CEO Jose Antonio Jainaga Gomez as well as two other executives. They are accused of smuggling drugs and being complicit in crimes against humanity and genocide. On November 12, they were called to testify. The court ruled that Sidenor sold metal to Israel Military Industries (a subsidiary of Elbit Systems) in a transaction that was allegedly done without the approval or registration by the government. The High Court ruled that the executives "went forward with the deal knowing that (the company) was a producer of both heavy weapons and light weapons and that the materials sold were to be used in the manufacture of weapons." Sidenor didn't respond immediately to a comment request. Elbit Systems refused to comment. The investigation is a result of a complaint that was filed by the Association of the Palestinian Community of Catalonia in July. Spain, which recognized a Palestinian state in Gaza last year, was a vocal critic, describing Israel's actions as genocide multiple times, a charge the Israeli government denies. In September, Spain banned aircraft and ships carrying jet fuel or weapons to Israel from entering Spanish airspace or calling at Spanish ports. This was done to put pressure on Israel to stop its Gaza offensive. It also reinforced the prohibition on Spanish companies selling weapons and materials to Israel. Washington mediated a deal that brought Gaza into a fragile truce on 10 October. The restrictions were maintained. Emma Pinedo, David Latona (Reporting). Emily Rose contributed additional reporting from Jerusalem. Editing was done by Andrei Khalip, Joe Bavier and Joe Bavier.
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China proposes a more stringent plan for steel capacity swaps to curb overcapacity
China unveiled on Friday a proposal to implement a more strict steel capacity swap plan. This comes 14 months after the country halted its old programme, which failed to curb the rapid expansion of the industry, and left it with an overcapacity, which impacted profitability and led to a protectionist backlash. halted The existing steel capacity replacement program will be implemented on August 23, 2024. China's Ministry of Industry and Information Technology issued a statement that said the addition of new capacity to steel in key areas, transfer of capacity from non-key regions to key areas and capacity transfer between key areas were all strictly prohibited. Key areas refer to the Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta region, and the Fenwei Plain, according to the statement. It said that provinces and cities where the country has set clear targets for the total steel capacity of the country are not allowed accept transfer of capacity from another region. For every ton of new steel capacity, at least 1.5 metric tonnes of the old capacity must be removed. More efficient utilization of scrap steel to develop the cleaner electric-arc-furnace-based steelmaking in an organized way and the development of hydrogen metallurgy in appropriate regions are encouraged, it added. Reporting by Amy Lv and Ethan Wang, Editing by Louise Heavens
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Trilogy Metals reports that key permits for Alaska mining roads have been reissued
Trilogy Metals, a Canadian miner, announced on Friday that the federal government had reissued key permits for a road planned in northwest Alaska to support future mining operations. Trilogy Metals' shares listed in the United States rose by over 8% during premarket trading. These permits were granted by U.S. agencies, including Alaska Industrial Development and Export Authority (AIDEA), the Army Corps of Engineers and Bureau of Land Management. This follows a recent order from the president to restore the approvals that were originally given in 2020. The Ambler mining district, Alaska is home to a trove of minerals and copper. Trilogy CEO Tony Giardini stated that the road would provide access to an area of mining which could strengthen the United States ability to secure supplies of copper, and other essential minerals. The White House announced earlier this month that it would invest $35.6 million in Trilogy Metals. This investment will make the U.S. Government a 10% stakeholder in the miner. The investment included warrants for an additional 7.5% stake. Trilogy, one of the key developers in Ambler, has a joint venture with South32, an Australian company. (Reporting and editing by Krishna Chandra Eluri in Bengaluru, Vallari Srivastava)
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Sources say that Reliance is racing to get orders for battery gear out of China before export restrictions.
Reliance Industries, owned by Indian billionaire Mukesh Amani, is hurrying to ship its battery component orders out of China before new export restrictions are implemented, according to two people who were briefed about the issue. This comes as global concerns grow over how Beijing plans to enforce its expanding export control regime. One source said that a team from Reliance had travelled to China in order to accelerate the work. Reliance, as well as the Ministry of Commerce of China, did not respond when asked for a comment. Due to the sensitive nature of the situation, the people refused to be identified. To maintain its competitive edge, Beijing has introduced new rules that require companies to obtain permission before exporting equipment for the battery supply chain. The new restrictions will take effect on November 8. The second source said that at least a dozen foreign customers in the Chinese battery industry are in the same situation as Reliance. Some of them were sacrificing quality assurance and other final stages of production to expedite the shipment of goods. The second source stated, "Who cares that it hasn't yet been painted or the screws checked?" They are saying that we will do the testing when it lands. Just get it out of the door. CHINA HAS A MAJOR ROLE in BATTERY SUPPLY CHAIN The person said that without the Chinese gear Reliance could not fulfill its plan to locally produce or assemble batteries to store the energy generated by its mega solar project, which is being promoted by the Indian Government to reduce dependence on fossil fuels. According to SNE Research, six of the top 10 battery manufacturers in the world are Chinese. People did not specify which Chinese companies provided Reliance. CATL, China’s largest battery manufacturer, stated in a press release that it is confident exports of its products to overseas factories will proceed smoothly under the newly implemented export regime. The export of materials and equipment needed for our European plants is proceeding as planned, it stated. China exported batteries worth $48 billion in the first eight month of this year. This is up 26% from the same period of last year. China's export of batteries adds to the concern that key technologies can be reliant on Beijing and become the subject of trade disputes. China's export restrictions on rare earths has highlighted the dangers of being dependent on a single supplier. Export controls introduced by China in April led to shortages which threatened to cripple global car production. The second source stated that Chinese battery manufacturers are assuring their foreign customers that there is no need to worry about such drastic changes for batteries. Export licences will be issued quickly and widely in the first few months after the new regime takes effect. In the meantime, foreign companies must play a waiting-game. The first source said, "It's a very tense atmosphere." (Reporting from Lewis Jackson in Beijing, Aditi in Delhi and Zhang Yan in Beijing. Editing by Brenda Goh & Jane Merriman.
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MORNING BID AMERICAS-Tariff Man turns terminator
What the ROI team and Mike Dolan are looking forward to reading, watching and listening to this weekend. Editor's Notes Hello Morning Bid readers! The White House announced on Thursday that Donald Trump will meet with Chinese president Xi Jinping during his Asia trip next week. This boosted Asian equities on Friday. On Thursday, Trump wrote on Truth Social, that negotiations with Canada, another major U.S. trade partner, had been "TERMINATED" because of a "fraudulent ad" showing Ronald Reagan criticizing tariffs. The U.S. signed a trade deal with Australia on Monday, which will invest up to $8 billion in projects that develop and refine metals essential to industries such as defence, advanced manufacturing, and energy transition. Clyde Russell, ROI Asia Commodities columnist, argues that while this deal is not a game changer for the U.S. or its allies in their quest to reduce reliance on China, it is still a good first step. Investors, who were deprived of economic data due to the government shutdown will receive official information on the economy today. The CPI inflation rate for September. It is expected to remain at 3.1% over the past year. As ROI's editor-at-large Mike Dolan points out, the markets will likely shrug off this announcement, since almost no one cares about inflation any more. The job market is what matters, according to Federal Reserve Chair Jay Powell at the FOMC meeting in September. Jamie McGeever, a columnist for ROI markets, argues that the fall in Treasury yields over the past month -- the 10-Year yield dropped below 4% this week -- shows investors are listening to Powell. Intel, among many other companies, reported strong results for the third quarter, while Netflix and Tesla posted disappointing results. Jamie McGeever says that we may be seeing signs of the equity rally expanding. Geopolitics was once again at the forefront of this week's energy markets as President Trump imposed sanctions on two Russian oil companies, Rosneft, and Lukoil, on Wednesday in an attempt to press Russian President Vladimir Putin into agreeing to a ceasefire agreement in Ukraine. Ron Bousso, ROI Energy's columnist, argues that Trump's willingness and ability to enforce secondary sanctions will determine the effectiveness of this measure. Brent crude prices rose over 5% after the announcement, but it is likely that this increase will be short-lived as global oil markets are widely believed to have an oversupply. Ron Bousso points out that the uncertainty around OPEC+'s production should limit any selling. Gavin Maguire, ROI Energy Transition columnist, pointed out that, in terms of fossil fuels, the natural gas consumption of U.S. gas firms is likely to surpass the gas consumption of U.S. consumers for the first time by 2025. This will exacerbate tensions between export-oriented gas companies and domestic gas users. Andy Home, ROI's Columnist for Metals, shares his main takeaways following the recent London Metal Exchange Week. Spoiler alert: everyone loves Doctor Copper. Gold, the most famous of all metals, saw its prices plummet on Tuesday. This was the biggest drop in five years. Gold is up over 50% in this year despite its fall from a record high of $4,300. Check out what the ROI team recommends you read, watch, and listen to as we enter the weekend. Stay informed and prepared for the coming week. This weekend we will be reading... CLYDE RUSSELL. ROI Asia Commodities and Energy columnist. My suggestion for this week is a report by the OECD on Australia's Green Iron Potential. The report outlines both the size of the opportunity and the enormous challenge that comes with funding and coordinating a major shift for the largest iron ore producer in the world. MIKE DOLAN is ROI Financial Markets Editor at Large. This column by Jacob Funk Kirkegaard, of the Peterson Institute, explores the possibility that a fiscal crisis in France - the EU's sole nuclear power - could result in the transference of France's nuclear deterrent cost to the EU. RON BOUSSO is the ROI Energy columnist. This fascinating investigation reveals that dark fleet oil tankers are not only used for dubious Iranian and Russian oil trade. These vessels are being used also by Mexican drug cartels to trade illegal oil and evade taxes in a thriving market. Andy HOME, ROI Metals columnist: The most fascinating thing I read this week was about the underground race that will be held in Boliden’s Garpenberg Zinc mine in Sweden. Participants will run in darkness and complete silence, with temperatures up to 30degC. We're listening... GAVIN MAGUIRE. ROI Global Energy Transition columnist. This is an interesting podcast about the possibilities of EV battery recycling. The plan is to "turn a massive wave incoming of used batteries into a resource for the grid." We're watching... ANNA SZYMANSKI (ROI Editor-in Charge): I know I recommended the World News vodcast to you last week but I am doing it again so that you don't forget the new video version. Opinions are the sole responsibility of the author. These opinions do not represent the views of News. News is bound by the Trust Principles to maintain integrity, independence and neutrality. Want the Morning Bid delivered to your inbox each weekday morning? Subscribe to the newsletter by clicking here. You can find ROI at the website and follow us on LinkedIn or X.
European stocks drop as traders await US inflation data
The euro fell on Friday but was still on course for a weekly gain. Meanwhile, the dollar remained steady while market observers waited for U.S. Inflation data.
Wall Street closed higher Thursday as the White House confirmed that U.S. president Donald Trump will meet Chinese president Xi Jinping as part of his Asia trip next week. The White House confirmed that Donald Trump would meet Chinese President Xi Jinping next week as part of his trip through Asia.
The Shanghai Composite Index, which measures the performance of China's stock market, reached its highest level since August 2015. European markets opened higher but then fell in the course of the session.
The pan-European STOXX 600 index was down around 0.2% at 1110 GMT but on track to gain a week. London's FTSE 100 fell by less than 0.1%.
The MSCI World Equity Index was flat for the week, resulting in a gain of 1.2%.
Wall Street futures are still up. S&P 500 E-minis rose 0.3%, and Nasdaq E-minis gained 0.5%.
The U.S. Stock Markets have surged in this year and reached record highs, as traders invest money into artificial intelligent and bet on the U.S. Federal Reserve to continue cutting rates. Analysts claim there are signs that a bubble is forming.
Investors awaited U.S. data on inflation, which was delayed because of the government shutdown. Consumer Price Index report (CPI), which is due to be released at 0830 ET (1230 GMT) is expected show that core inflation held steady at 3.1% during September.
Next week, the Fed is expected cut rates by 25 basis points.
Peter Fitzgerald, Chief Investment Officer for Macro at Aviva Investors, said: "It is a continuation in a generally supportive environment for equity markets where interest rates have been broadly falling across developed markets with Japan being the notable exception. Volatility has begun to drop again after a short spike, and there are no major earnings surprises."
He said that it was impossible to know when or how a bull market would end.
TRUMP CANCELS CANADA TRADE NEGATIONS
The dollar index rose by 0.1% to 99.028, a new high for the day.
The Canadian dollar was not affected by Trump's announcement on social media, that he would end all trade negotiations with Canada over what he called a fraudulent advertisement where Ronald Reagan, the late former president of Canada, spoke negatively about tariffs.
Dollar-yen at 152.93. The yen fell as the new Prime Minister of Japan pledged to stimulate the economy.
The euro remained steady at $1.1612. Data showed that the business activity in the Eurozone grew more rapidly than expected in October. After the data, yields on euro zone government bonds rose. Germany's Bund reached 2.612%.
The oil prices that had increased by 5% following the U.S. sanctions against major Russian oil companies have now eased down, but are still on course for a gain of 5% per week.
Gold fell around 1.6% per day to $4,058.41 an ounce. It is on course for a weekly decline, ending its winning streak of nine weeks. Bank of America Global Research reported that gold funds received their highest weekly inflow ever in the week ending Wednesday.
Apple and Microsoft are among the five companies that will be reporting earnings next week. Intel's earnings beat expectations on Thursday.
(source: Reuters)