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Costa, EU's Costa, expressed concern to Li of China about expanding mineral export curbs
Antonio Costa, President of the European Council, said that he had expressed his deep concern to Premier Li Qiang in China about Beijing's increased export controls for critical raw materials. Costa expressed that the European Union expects China to help end Russia's war on Ukraine in a press release following his meeting with Li in Malaysia, at the ASEAN summit. Li stated that China was willing to extend and deepen "optimised" and "balanced" trade cooperation with European Union. This statement came from a Chinese readout of the discussion, which was released by Xinhua, the official news agency. Beijing and Brussels are embroiled in several disputes. trade disputes In recent years, Washington has been trying to avoid trade uncertainty by working together on issues such as European pork and dairy and Chinese electric vehicles. Beijing's export controls on rare earths and the perception that China was inactive regarding Russia's attack on Ukraine has The person who stood in the way was Further consensus building Li said that bilateral relations had both challenges and opportunities. He called on the EU for a non-discriminatory and fair business environment. Li said that both sides should "promote resolution of existing issues in China-EU Economic and Trade Cooperation through dialogue, consultations, mutual understanding, and accommodation", Li. Last week, China’s Commerce Minister spoke with the EU’s trade commissioner Then, there is the Dutch Economy Minister Discussions will include, among others, the standoff over China's chipmaker Nexperia. Dutch authorities Nexperia seized control Last month, Wingtech, the Chinese company that owns the company, expressed concern about its technology being stolen. China, where the majority of Nexperia chips are packaged and exported, has responded by blocking exports, alarming European automakers who rely on these chips. (Reporting and editing by Martin Petty, Thomas Derpinghaus and Beijing Newsroom)
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Gold drops on stronger dollar and US-China trade hopes
Gold prices fell Monday as investors waited for the monetary policy signals from major central bank meetings scheduled later this week. As of 0655 GMT, spot gold was down by 0.8%, at $4,077.11 an ounce. U.S. Gold Futures for December Delivery fell 1.1% to $4.090.90. The U.S. Dollar rose to its highest level in more than a two-week period against the Japanese yen. This made gold more expensive for holders of other currencies. On Sunday, the top Chinese and U.S. economists hammered out the framework for a trade agreement that U.S. president Donald Trump and Chinese president Xi Jinping will decide on this week. This potential trade agreement between the U.S.and China came as a complete surprise and was a positive for the markets in general. The developments are also negative for gold, according to Capital.com analyst Kyle Rodda. The market is now calmer and the sentiment has cooled. Gold is gaining support because of the prospects for loose fiscal and monetary policies in the future. If that is the case, then gold's upward trend should continue." Federal Reserve officials are widely expected to lower interest rates at their meeting on Wednesday by a quarter of a percentage point. This view is supported by Friday's inflation report, which was softer than expected. The markets will be looking for any comments from Fed chair Jerome Powell that are forward-looking. In a low-interest rate environment, gold that does not yield tends to be more profitable. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings dropped 0.52% on Friday to 1,046.93 tons from 1,052.37 tonnes on Thursday. Other metals include spot silver, which fell 0.6% per ounce to $48.31, platinum, which rose 0.7% to 1,616.30, and palladium, up 0.5% at $1,435.75.
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The heatwaves in China threaten to reduce the supply of 'hairy Crabs'
Xie and her family have had to endure the most hardships in the last three years, after more than a decade of cultivating "hairy claws", a Chinese delicacy renowned for its furry appearance. The 34-year old woman, who was standing in front of tanks full of crabs prized for their golden roe and sweet flesh, said that the weather had been getting worse each year since 2022. She wrapped some of the crabs in straw before preparing them for her customers. We've prepared ourselves mentally for these losses. Xie, a farmer at Yangcheng Lake in Jiangsu province's eastern region, is one of the many farmers forced to find new ways to maintain the survival of crustaceans due to unusually high temperatures. Since 2022, the breeding cycle has been disrupted by longer than expected summers and abnormally high temperatures. When exported in four-packs to Singapore, Japan and other countries, the Chinese mitten crabs can fetch hundreds of dollars. "Those in agriculture are at mercy of the skies," said Xie. His community suffered losses last year due to the strongest typhoon that hit the east coast of China since 1949. The storm ripped out nets and closed down oxygenation systems. Kenneth Leung is a marine environment specialist at City University of Hong Kong. He said that higher temperatures can have a triple effect on crabs. They slow their growth and reduce the oxygen content in the water, while also boosting the growth of bacteria. The summer temperatures in Suzhou, a city famous for its delicious crabs, stayed above 30°C (86°F) until late October. This delayed their maturation. Farmers begin the labor-intensive crab farming by growing the larvae of the crabs in ponds. After about a year, the crabs are then moved into fenced farms inside the lake to allow the creatures to shed their outer shells as they grow. Xie stated that molting occurs five times between the end of March and the start of harvesting at the traditional end of September. The longer summers can also cause crabs to die from heat, as they lose their shells. Xie reported that in 2022 farmers poured blocks of ice directly into the water. As early as July, some of the hottest and longest summers of eastern China in the past three years brought temperatures as high as 40 degrees C. Weather officials reported in September that this summer's heat was the hottest China has experienced since 1961. The northern rains also were the longest they have been during the same time period. Scientists attribute these disruptions to climate change. Leung suggested that selective breeding could be a solution. He recommended selecting crabs that are more tolerant of higher temperatures. The authorities expect the lake's harvest to be 10,350 metric tonnes this year. This is roughly the same as previous years, with the exception of 9,900 tons in last year's case, when the typhoon struck. Xie said that crab farmers might pray for better weather in the future, but they are aware they have limited control. We can only see if the hairy crabs can adapt. If they cannot, this industry may be eliminated. We cannot do anything. Clarence Fernandez, Clarence Goh, and Brenda Goh contributed to the reporting.
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Oil prices increase after US and China sign trade agreement
Oil prices rose Monday after U.S. economic officials and Chinese economic officials drew up a framework for a trade deal, allaying fears that tariffs or export restrictions between the two world's largest oil consumers would dent global growth. Brent crude futures were up 47 cents or 0.71% to $66.41 per barrel at 0629 GMT. U.S. West Texas Intermediate Crude Futures rose 44 cents or 0.72% to $61.94 after rising by 8.9% and 7.7% respectively in the previous weeks due to U.S. Haitong Securities stated in a note to clients that the market has improved expectations following the new sanctions against Russia and easing tensions between U.S. and China. This is countering concerns about crude oversupply which had pushed prices lower earlier in October. U.S. Treasury secretary Scott Bessent said on Sunday that U.S. officials and Chinese officials have hammered out a "very substantive framework" for a deal, which will allow President Donald Trump to meet with President Xi Jinping this week to discuss the trade cooperation. Bessent stated that the framework would allow for the avoidance of 100% U.S. duties on Chinese products and a postponement of China's export controls for rare earths. Trump said that he is optimistic about a possible agreement between the United States and China. Trump said, "I believe we will have a deal" with China. "We will meet with them in China later and then in the U.S. either in Washington or Mar-a-Lago." Tony Sycamore, IG analyst, says that the framework for a trade deal helps to allay concerns about Russia's ability to offset new U.S. Sanctions, which target Rosneft, Lukoil and other oil companies, by offering deep discounts and using shadow-fleets as enticements. Yang An, analyst at Haitong Securities, said: "However, in the event that sanctions against Russian energy prove less effective than anticipated, there could be a return of oversupply on the market." (Reporting and editing by Sonali Cushing and Christopher Cushing; Colleen Waye and Sam Li)
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Asian stocks reach record high on optimism about trade deals
Asian stocks rose on Monday, while gold and bonds declined. Signs of easing tensions in trade between China and the U.S. boosted risk appetite. This was a positive start to a busy week which will include central bank meetings and earnings from megacap companies. On Sunday, top Chinese and U.S. economists hammered out the framework for a trade agreement that U.S. president Donald Trump and his Chinese equivalent Xi Jinping will decide on this week at their eagerly awaited meeting in South Korea. The trade agreement would stop the steeper American tariffs, and Chinese export controls on rare earths. This would help calm investor nerves frayed by escalating tensions in trade between the two largest economies. Stocks soared, with South Korea’s KOSPI, Taiwan stocks, and Japan’s Nikkei each adding more than 2 percent and breaking landmarks. MSCI's broadest Asia-Pacific share index rose 1.3%, reaching a new record high. Investors will be looking for confirmation that the current trade truce is still in place and that China’s reform and stimulus signals are translating into tangible growth momentum, said Charu Chanana. Chief investment strategist at Saxo. Nasdaq Futures rose 1%. European futures rose 0.5%. The Nikkei broke 50,000 for the very first time, while the Kospi climbed above 4,000. George Boubouras said that the market was satisfied with the recent momentum between the U.S. and China. Over the past few weeks, the market has watched global tariff negotiations with the understanding that some of the commentary could be theatre and noise. The Australian dollar (often seen as a proxy for China and a risky currency) rose 0.42%, to $0.6541. This is near its two-week high. The Hang Seng in Hong Kong rose 0.78%, while blue-chip Chinese stocks gained 0.84%. Safe-haven Gold fell 1%, while U.S. Treasuries fell. The benchmark 10-year bond rate increased 3.8 basis points. Commodities such as soybeans, corn, and wheat rose due to trade deal prospects. CENTRAL BANK RESULTS ARE AWAIT This week, investors will also focus on the central bank meetings taking place in Japan, Canada and Europe. Federal Reserve rates are expected to be cut by 25 basis points, after September data showed that U.S. consumer price increases were slightly lower than expected. However, the impact of the government shutdown on data is still a concern. The dollar was slightly up at 151.13yen and hovering around a two-week peak. Last time, the euro bought $1.16215. The dollar index is flat at 98.982. Both the European Central Bank (ECB) and Bank of Japan (BoJ) are expected to keep rates unchanged this week. The BOJ will likely debate whether the conditions are right to resume rate increases as concerns about a recession caused by tariffs ease. However, political complications could keep them on hold. Focus on Megacap Earnings This week, the U.S. earnings reporting season will be at its busiest. Megacaps like Microsoft, Apple and Alphabet, as well as Amazon and Meta Platforms, are all expected to release results. The "Magnificent 7", a grouping of companies with large market capitalisations and whose shares dominate equity indices, are expected to continue posting stronger results this quarter, even though the margin of profit between them and the rest of index has narrowed. Stock market performance has been driven by the enthusiasm of a number of megacap companies in the artificial-intelligence industry. Chanana, from Saxo, said that the U.S. earnings and guidance provided by big tech companies will be crucial in gauging whether corporate profits are resilient enough to survive a slowing economic environment. The coming week will determine whether the optimism has lasted.
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Gold drops on stronger dollar and US-China trade hopes
Gold prices fell Monday as investors awaited the outcome of major central bank meetings later this week to get a sense of monetary policy. As of 0504 GMT, spot gold was down by 1%, at $4,072.65 an ounce. U.S. Gold Futures for December Delivery fell 1.3% to $4.085.60. The U.S. Dollar rose to its highest level in more than two weeks against the Japanese yen. This made gold more expensive for holders of other currencies. On Sunday, the top Chinese and U.S. economists hammered out the framework for a trade agreement that U.S. president Donald Trump and Chinese president Xi Jinping will decide on this week. This potential trade agreement between the U.S.and China came as a complete surprise and was a positive for the markets in general. The developments are also negative for gold, according to Capital.com analyst Kyle Rodda. The market is now calmer and the sentiment has cooled. Gold is gaining support because of the prospects for loose fiscal and monetary policies in the future. If that is the case, then gold's upward trend should continue." Federal Reserve officials are widely expected to lower interest rates at their meeting on Wednesday by a quarter of a percentage point. This view is supported by Friday's inflation report, which was softer than expected. The markets will be looking for any comments from Fed chair Jerome Powell that are forward-looking. In a low-interest rate environment, gold that does not yield tends to be more profitable. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings dropped 0.52% on Friday to 1,046.93 tons from 1,052.37 tonnes on Thursday. Silver fell by 1.3% at $48.04 an ounce. Platinum edged down 0.1% to $1.604.80. Palladium dropped 0.8% to $1.418.
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Bessent hints at possible Trump-Xi talks optimism
Chicago soybean futures reached their highest level since more than two month on Monday as renewed optimism about Chinese purchases lifted sentiment. Treasury Secretary Scott Bessent had said that the two countries' leaders could discuss a "substantial deal" in soybeans during a potential meeting. The most active soybean contract at the Chicago Board of Trade climbed by 1.42% to $10.56-1/2 a bushel as of 0124 GMT. This was their highest level since 25th August. The markets are watching closely a much-anticipated meeting between Trump & Xi this week in South Korea. Washington has maintained its optimism about a possible soybean deal with Beijing. China has not confirmed the meeting yet. U.S. Treasury Sec. Scott Bessent stated on Sunday that China is likely to resume substantial purchases of U.S. soya beans for several years. China may also delay the expansion of its licensing regime for rare Earths by one year, and then re-examine this after two days of talks with Malaysia. Bessent, on ABC's "This Week," said that when Trump and Xi announced a trade agreement next Thursday, U.S. soy farmers "will feel extremely good about what is going on for both this season and for the coming seasons for many years." Ole Houe is the director of advisory services for IKON Commodities, Sydney. "There's still a way to go until we see the boats arrive in China, and there are many things that can happen," he added. Analysts say a major soybean agreement could help U.S. Farmers avoid further losses. However, China's window of import is closing as buyers continue to purchase cargoes from South America. Wheat and corn also followed soybeans upwards. Wheat gained 1.9% and corn added 1.42%, respectively. Houe said that the excitement is unlikely to last more than two days for corn and wheat, because supplies are plentiful.
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Copper jumps 16 months high on optimism about trade deals
The copper price rose to a 16 month high on Monday as optimism grew over a possible U.S. China trade agreement. This was after the two world's largest economies outlined their framework for negotiation ahead of the leaders' meetings. As of 0330 GMT, the most traded copper contract on Shanghai Futures Exchange increased 1.78%, trading at 88.420 yuan (12,413.31) per ton. The yuan-per-ton price hit 88.620 earlier in the day, resetting a 16 month high. The benchmark copper for three months on the London Metal Exchange increased 0.94% to $10,065.50 per ton after reaching a 16-month-high of $11,076.50 per ton earlier in session. On Sunday, Chinese and American negotiators reached an agreement on a framework for a new trade agreement. On Thursday, Donald Trump, the U.S. president and Xi Jinping, the Chinese president will meet in South Korea. U.S. Treasury secretary Scott Bessent stated that the framework would halt steep American tariffs against Chinese goods. He also said he expected Beijing to delay by a full year its control of rare-earth imports and resume purchases of U.S. soya beans. Li Chenggang, China's top trade negotiator, confirmed to reporters the "preliminary agreement". After the announcement of the framework, most other base metals gained as well. Other base metals in the SHFE rose by 0.24%. Zinc, nickel, and tin all increased. Lead, however, fell by 0.29%. Aluminium gained 0.73% among other LME metals. Zinc rose 0.45%. Nickel ticked upward by 0.06%. Tin was up 0.27%. Lead was unchanged. Data/Events (GMT 0900 Germany Ifo Business Conditions New October 0900 Germany Ifo Expectations for New Oct 1100 France Unmp Class-A SA September 1230 US Durable goods Sep ($1 = 7.1230 Chinese Yuan Renminbi). (Reporting and Editing by Harikrishnan Nair; Reporting by Dylan Duan, Lewis Jackson)
MORNING BID EUROPE - Trade deal hopes spurs risk rally
Ankur Banerjee gives us a look at what the future holds for European and global markets
Even the mere possibility of a U.S. - China trade deal, which is more of a truce extension than a real agreement, was enough to send stock prices to new highs. It also pushed up gold and other commodities such as copper in anticipation of an exciting week.
First, let's be clear: there is still no deal. It may only be a concept. This is what sparked the risk-on rally in Europe on Monday.
U.S. officials and Chinese officials hammered out the framework for a trade agreement that U.S. president Donald Trump and Chinese president Xi Jinping will decide upon later this week, when they meet in South Korea.
A deal could stop the steep U.S. duties on Chinese products as well as Chinese export controls for rare earths, which would calm investor nerves. The U.S. has made a lot of positive noises, while the Chinese have been more circumspect.
The stock market has soared, however, as benchmark indices from Japan, Taiwan, and South Korea have all set records, after each gaining 2%. Chinese stocks rose by 0.86%, while Nasdaq Futures grew 1%.
Many of the things that have been said so far are within the market's expectations. It could be disappointing if a "deal" is just a way to push the can further down the road.
Investor enthusiasm will likely keep stocks high ahead of the central bank meetings taking place in Japan, Canada and Europe.
It is likely that the U.S. Federal Reserve's policy interest rate will be lowered by 25 basis points. Focus will shift immediately to the next step, given that the U.S. shutdown and lack of economic data are a concern.
Investors will pay more attention to the earnings week that is busiest this year. The near-term outlook will be shaped by mega-cap earnings.
Market developments on Monday that may have a significant impact
The Ifo German Business Sentiment data for October
(source: Reuters)