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Trump says the issue is'settled,' after China agreed to a one-year deal on rare earths exports.
China has agreed to continue exporting rare earths to the rest of the world for a year as part of an agreement signed by President Donald Trump on Thursday, shortly after his meeting with his counterpart Xi Jinping. Trump said that the agreement would "settlement" the matter. He did not provide many details, except to say it was likely to be extended. China has not yet commented on the agreement reached by both leaders during their nearly two-hour long talks. Trump told reporters aboard Air Force One that "all of the rare-earth issue has been resolved." "And this is for the entire world, globally, you could say that this was not only a U.S. situation. situation." There is no roadblock on rare earth. This will hopefully be a thing of the past for a while." Rare earths are 17 tiny elements that play vital roles in planes, cars and weapons. They have emerged out of obscurity as China's greatest source of leverage during its trade war against the United States. Export controls implemented in April led to widespread shortages abroad, particularly for magnets. Some automakers were forced to halt production until exports recovered following agreements between Beijing, Washington, and the European Union. China increased these controls again in October. The total number of restricted elements was reduced to 12, and the processing equipment added. It is not clear whether the agreement that Trump discussed covers all of China's controls on rare earth exports or only the October extension. Jamieson Greer of the U.S. trade representative, who was also on board the plane, stated that China will not impose its proposed controls on rare earths after an agreement between the two presidents. He didn't comment on the controls already in place. Reporting by Lewis Jackson, Beijing; editing by Lincoln Feast
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The 'amazing' Trump Xi meeting calms tensions
Ankur Banerjee gives us a look at what the future holds for European and global markets Investors can only think of a handshake between Donald Trump, Xi Jinping and the Bank of Japan. They also have to consider Jerome Powell of the Federal Reserve's cautious tone. The markets will welcome the optimism expressed by the U.S. President and his counterpart in China. Trump claimed to have struck a deal with China that would reduce tariffs in exchange for Beijing continuing U.S. purchases of soybeans, maintaining rare earth exports and crackingdown on illicit fentanyl trade. China has not yet responded. Trump called his meeting with Xi "amazing", stating that "on a 1-10 scale, the meeting with Xi is 12." The markets didn't really know what to think, and stocks have been choppy. Markets are waiting for more details on the agreement between two of the world's largest economies. Stocks around the world reached record highs as signs of trade tensions eased. Chinese stocks also held close to a decade-high. This sets up a busy European schedule, with earnings due from Volkswagen, Puma, and many French banks, as well as inflation and economic data for the region. The Bank of Japan kept rates unchanged but reiterated its commitment to increase borrowing costs if economic growth is in line with their projections. This has shifted investor attention to the possibility of a rise as early as December. Powell was the star of the show on Wednesday, when the Fed cut rates in line with expectations. Powell said that a policy split within the U.S. Central Bank and the lack of data from the federal government may prevent another rate cut this year. The following are key developments that may influence the markets on Thursday. Economic events: Germany October inflation data; GDP data for the eurozone, Germany and France
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Russell: Imports of thermal coal from Asia are easing as prices increase after a 4-year low.
Open Interest (ROI), your indispensable source of global financial commentary, is Open Interest. The prices of seaborne thermal coal have been recovering modestly from their four-year lows in Asia, but this is at the cost of volume as major importers reduce demand. According to analysts DBX Commodities, China, India and South Korea are on course for lower coal arrivals in September than October. The prices of the main Australian and Indonesian grades have been rising since early June after a downward trend that began in October 2023. The lower prices in July and August did increase import demand, but the higher prices are now causing buyers to pull back. DBX estimates that China imported 28.17 millions metric tons of seaborne thermal coke in October. This is down from 28.43 in September, and below the 33.53 in October last year. India, the second largest coal importer in the world, is expected to import 13,35 million tons in October. This is down from the 13.76 million tons imported in September, and also below the 13.82 millions from last October. DBX predicts that Japan, ranked third in the world, will import 9.52 millions tons in October. This is down from 10.44 in September and 9.94 in 2024. South Korea is the fourth largest coal importer in the world. It expects to receive 6.45 million tonnes of coal in October. This is down from the 8.19 million tons that arrived in September but an increase from the 5.92 millions in October last year. It is not surprising that October's lower imports reflect the increased prices from July. PRICE RECOVERY The Australian coal price with a 5,500 kilocalories-per-kilogram (kcal/kg) energy content, a grade that is popular in China and India was $76.34 per ton by the commodity price reporting agency Argus in the week ending October 20. The price has increased by 16% from the low of $65.72 set in early June, and now stands at its highest level since the week ending March 3. Argus assessed Indonesian coal, with an energy content 4,200 kcal/kg at $45.26 a tonne in the seven-day period ending October 20. This is 12% higher than its low point of $40.45 for the week of July 4. GlobalCOAL assessed the price for 6,000 kcal/kg of fuel at Newcastle Port at $105.34 per ton on Tuesday, an increase from $103.74 last week. Newcastle's price, however, has remained largely unchanged in recent weeks in a small range of around $104 per ton. The lower imports to Japan and South Korea is more likely due to a weaker demand during the shoulder season, between the peak of northern summer and winter. Recent trends in the import and price of Asian seaborne thermal coke show that the market is divided between buyers who are more sensitive to prices, such as China and India and those who are more seasonal-driven, such as Japan or South Korea. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of a columnist who writes for.
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All eyes are on the outcome of US-China trade talks to determine how oil prices will perform.
In Asian trading, oil prices maintained their gains from Thursday's previous session as investors awaited for the results of the U.S. China trade talks. They were hoping to see signs that the tensions threatening the global economic outlook would ease. Brent crude futures fell by 4 cents (0.06%) to $64.88 per barrel at 0402 GMT, after rising 52 cents the previous day. U.S. West Texas Intermediate Crude Futures fell by 9 cents, or 0.15%, to $60.39. They had risen 33 cents the day before. The U.S. president Donald Trump and China’s leader Xi Jinping held a nearly two-hour meeting at a South Korean base in Busan. It was not immediately known what the outcome of these discussions would be. Sugandha Sagandha, the founder of SS WealthStreet in New Delhi, said that any progress toward a trade deal could boost market confidence and increase global energy demand. This would provide some upside for oil. Trump said that he expected to reduce U.S. Tariffs on Chinese Goods in exchange for Beijing’s commitment to curtail the flow of precursor chemical to make the drug Fentanyl. In line with expectations, the U.S. Federal Reserve also lowered interest rates Wednesday to help boost the economy. The Fed did, however, indicate that this might be the final cut for the year due to the government shutdown. Claudio Galimberti, Rystad's chief economist, said that the Fed's move reflects a wider shift in its policy cycle. It favours reflation over restraint and supports commodities sensitive to economic activity. Brent and WTI's gains in the previous session reflected an even greater drawdown than expected in U.S. crude oil and fuel inventories. The benchmarks, however, are on course to decline by about 3% this October, marking their third consecutive month with losses. The EIA reported that crude inventories fell by 6.86m barrels, to 416m barrels for the week ending October 24. This was a far cry from the 211,000 barrels analysts had predicted in a recent poll. Investors will also be interested in the OPEC+ Meeting scheduled for November 2 where the alliance is expected to announce a further 137,000 barrels of oil per day increase for December. In a series monthly increases, the group has increased its output by over 2.7m barrels per day. This is about 2.5% global supply. This is less than half of the cumulative supply cuts the group agreed to over the years.
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South Korea releases details about the trade agreement with the US
Here are some details from the U.S. White House Factsheet and South Korea's Chief Policy Advisor Kim Yong Beom on the recent trade agreement between the two nations. Washington and Seoul agreed that tariffs on U.S. auto imports from Korea and auto parts will be reduced to 15% from 25%. This is to bring them in line with their Japanese counterparts who pay the same 15% tariffs after Tokyo made a deal with Washington. South Korean wood product and pharmaceutical manufacturers will have the lowest tariffs of all countries. Generic drugs and aircraft parts will be exempt from tariffs. Kim said that South Korean chipmakers would "not be at a disadvantage in comparison to their Taiwanese counterparts". Seoul also managed to defend the opening of additional markets for agricultural products such as rice and beef. Government-controlled Korea Gas Corporation also signed an agreement to purchase about 3.3 million metric tons of U.S. liquefied natural gas per year in long-term agreements with sellers, the White House said in a statement. INVESTMENT The two countries agreed that a $350 billion promised investment fund would be split into $200 billion of cash, to be paid out in installments. They also agreed to cap the payments at $20 billion a year. The Bank of Korea said recently that Seoul could only afford to give $20 billion per year without impacting the forex market. The remaining 150 billion dollars would be used for shipbuilding, including guarantees, investments by South Korean firms, and ship financing. Seoul stated that this would help to reduce the burden on the South Korean currency market and increase chances for South Korean companies to win orders. Kim stated that the deal is structured similarly to the agreement between Japan and the U.S. in September. However, South Korea was able to secure additional safeguards, such as the annual limit of $20 billion, to protect the local foreign currency market from any shocks. The White House announced that South Korea's cable maker LS Group has pledged to invest 3 billion dollars by 2030 in building power-grid infrastructure for the U.S. including undersea cables. HD Hyundai, a Korean shipbuilder, will work with U.S. investment company Cerberus Capital Management to invest $5 billion in a project that will improve American shipyards. White House: The two countries have also signed a Memorandum of Understanding to enhance collaboration in strategic science, technology, and research, including artificial intelligence and space exploration. RAISING FUNDS Kim, the South Korean official, said that the two parties agreed to split the profits 50/50 after the initial investment is recovered and to pursue only commercially viable projects. Kim stated that South Korea would use the operating income of its foreign assets, including interest accrued and dividends. South Korea does not need to issue government-backed bonds on the local market, but will likely raise funds through offshore markets. This is what policy banks like The Export and Import Bank of Korea do. Howard Lutnick, U.S. Secretary of Commerce, would lead a committee that would assess investment projects. Reporting by Cynthia Kim, Joyce Lee and Jack Kim in Seoul; Jihoon Lee, Ju-min Park and Juhoon Park in Gyeongju. Editing by Frances Kerry, Christian Schmollinger and Christian Schmollinger.
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Equinor Profit Falls, Impairments Mount as Oil Price Forecasts Trimmed
Equinor posted a bigger than expected drop in third-quarter profit on Wednesday as oil and gas prices fell, and booked asset impairments on a weaker long-term outlook for crude prices.The Norwegian energy group's adjusted earnings before tax for July-September fell 9.9% to $6.21 billion from $6.89 billion a year earlier, slightly lagging the $6.31 billion predicted in a poll of 21 analysts compiled by Equinor.Equinor maintained a projection that its oil and gas output will grow by 4% this year compared to 2024 and kept its forecast for capital expenditure in 2025 of $13 billion.Lower Price Outlook, Weaker TradingBut the group booked net asset impairments for the quarter, including some reversals of previous writedowns, of $754 million, "primarily driven by lower price outlook".Equinor now expects the benchmark Brent Blend oil price to be $75 per barrel between 2030 and 2040, while it had previously predicted a price of $80 at the start of that decade, declining to $75 by the end.The biggest impairment was a revaluation of British assets, including the North Sea Rosebank oilfield development, that Equinor is merging with Shell SHEL.L in a deal expected to complete by the end of this year, taking a $650 million hit.In the United States, Equinor booked an impairment of $385 million on offshore oil fields due to reduced production estimates, increased cost estimates, and the lower oil price assumption for the decade from 2030-2040, it said.Equinor lowered its quarterly guidance for its Midstream, Marketing and Processing segment, home to its energy trading activities, to an average adjusted operating income of around $400 million, from a previous $400 million to $800 million range."This is due to changing market conditions and earlier divestment of certain assets," it said.(Reuters - Reporting by Nerijus Adomaitis and Nora Buli, editing by Terje Solsvik and Alexander Smith)
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Mermaid Subsea Wraps Up North Sea Subsea Recovery Project
Mermaid Subsea Services (UK) has completed a fast-track subsea recovery campaign in the North Sea for a major operator.The operation involved the internal and external severance of casing, conductor, guide pipe and cement lines, as well as local seabed excavation and recovery of the CAN-Basic structure.Mermaid also handled waste management of recovered items and backfill operations to prepare for an over-trawl survey. “This was a time-critical project, and our team responded with professionalism and agility to ensure safe and efficient delivery. The successful recovery reinforces our reputation for handling complex subsea operations across the North Sea,” said Scott Cormack, Regional Director for Mermaid Subsea Services (UK).The campaign follows several North Sea operations completed by Mermaid earlier this year, including a scale-inhibitor treatment on the Teal P2 well in the Anasuria Cluster and a complex wellhead severance project in the Southern North Sea.Both projects were executed from the Island Valiant vessel, which the company has chartered for a second year.
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Gold rises on dollar decline; Trump-Xi Meeting in Focus
Gold prices rose on Thursday as a result of a slight drop in the dollar. Investors were waiting to see if U.S. president Donald Trump and Chinese counterpart Xi Jinping could reach a deal. As of 0235 GMT, spot gold was up by 0.2% to $3,937.88 an ounce. U.S. Gold Futures for December Delivery fell 1.2% to $3950.70 an ounce. The dollar index dropped 0.2%, after reaching a two-week peak against its rivals during the previous session. This made gold cheaper for holders of other currencies. "There is no catalyst other than a little technical bounce. This week, gold has been under pressure. The U.S. China trade deal is a negative for geopolitics and trade, according to Capital.com analyst Kyle Rodda. Gold is also negatively affected by the Federal Reserve's hawkish stance and the decline in odds of another rate reduction in December. This dynamic could cause gold to continue its decline. "Gold is on the rise in the long term." The U.S. Central Bank cut interest rates for the second consecutive time by a quarter percentage point, bringing benchmark overnight rates to a range of target 3.75%-4.00%. Fed Chair Jerome Powell stated that officials are still struggling to come to a consensus on what the future holds for monetary policies and that the financial markets shouldn't assume another rate reduction will occur at the end the year. Gold that does not yield is a good investment in low-interest rate environments and economic uncertainty. The market is now focused on Trump's meeting in South Korea with Xi. U.S. negotiators are signaling that they want to return to the fragile truce in the trade war, but tensions still remain high. Long-term economic irritations will continue between geopolitical competitors. Trump and South Korean president Lee Jae Myung finalised the details of their fraught deal at a South Korean summit, and the U.S. President also sounded optimistic about the summit with China’s Xi. Spot silver was unchanged at $47.51 an ounce. Platinum rose 0.3% to 1,590.21 while palladium increased 1.2% to $1417.80. (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)
Asia stocks rise as Fed cuts and Trump-Xi Meeting in focus
Asian stocks rose on Thursday, after the Federal Reserve lowered interest rates. U.S. leaders and Chinese officials met to negotiate a trade agreement. The yen fell after the Bank of Japan held rates as expected.
MSCI's broadest Asia-Pacific index outside Japan rose 0.4% last, while U.S. S&P500 e-minis futures advanced 0.4% after Wall Street stocks posted a small loss to end a four-day streak of gains.
As the Trump Administration imposes tariffs on imports from abroad, global markets are undergoing a series of central bank decisions. These will provide clues as to the future path of interest rates.
Fred Neumann is the chief Asia economist for HSBC Hong Kong. He said that "the BOJ is tiptoeing toward a hike." All eyes are on December now, as a rate increase appears to be likely.
After the Bank of Japan decision, Nikkei fluctuated between gains or losses. It was 0.2% higher at its last close. Although it did not change rates, the Bank of Japan reiterated its promise to increase borrowing costs in case the economy continues to move according its projections.
The yen has reversed earlier gains against US dollar, and last was 0.2% weaker. Later today, BOJ Governor Kazuo Ueda is scheduled to hold a media conference.
Donald Trump, the president of the United States, is meeting with Chinese leader Xi Jinping at this time in South Korea. U.S. negotiators are signaling that they want to return to the fragile truce in the trade war, but tensions between geopolitical opponents remain high.
Fed Chair Jerome Powell said that policymakers will likely become more cautious in the absence of additional job and inflation data.
The traders have reduced their expectations of a rate cut by the U.S. Central Bank in December. This was viewed earlier as near certainty. Fed funds futures indicate a 67.8% chance that the Fed will maintain rates at its December 10 meeting, compared to a 9.1% possibility on Wednesday.
The yield of the 10-year Treasury Bond in the United States was at its highest point of 4,068% last week, an increase of 1 basis point from a previous closing of 4,058%.
The dollar index (which measures the strength of the greenback against a basket six currencies) has slipped from its two-week high and is now down by 0.1% to 99.09. The last increase in gold was 0.1% to $3,932.08 an ounce.
The euro last firmed up 0.1% at $1.1613, ahead of the policy decision made by the European Central Bank in the afternoon. It is expected that the bank will leave interest rates unchanged for the third time in a line.
The KOSPI index also jumped by 0.8%, after Trump and South Korean president Lee Jae Myung finalised the details of a deal.
Samsung Electronics shares soared by 3.9% on Friday after the company reported a 32% increase in its third-quarter operating profits.
Investors are becoming more anxious about the AI buildout as corporate earnings season approaches. This is despite the fact that the U.S. economic outlook appears to be in good health. The pressure is being put on the tech megacap stocks, which account for the largest weighting of the S&P 500 Index.
Meta forecast on Wednesday "significantly larger" capital expenditures next year, as its revenues exceeded market expectations. Microsoft's spending for artificial intelligence infrastructure reached a record high of almost $35 billion during the third quarter. Both companies' shares fell.
Alphabet, the parent company of Google, a rival tech giant, bucked this trend. Its shares rose in after-hours trade after exceeding revenue expectations.
Brent crude oil was down 0.4% last week, at $64.64 a barrel.
(source: Reuters)