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New York Fed survey shows consumers are more concerned about their personal finances and employment.
The New York Federal Reserve reported that the outlook of U.S. households for inflation remained unchanged in August as their?worries?about the job market?and the state of?their?personal finances grew. In the latest Survey of Consumer Expectations from the regional Fed bank, respondents held steady to their projections of inflation of 3.6% a year hence and 3% in five years. They also marked down inflation expectations in three years from 3.3% to 3.2%. The report stated that respondents in August predicted higher gasoline prices within a year. Although households' inflation expectations did not change much, their outlook for hiring and personal finances grew?more uncertain. In August, respondents to the survey increased their expectations of the unemployment rate in a year's time. This was the highest reading since April 2020 when the COVID-19 pandemic devastated the economy. This expectation was noted to be based on a wide range of factors, including age, income level and education. The expectation of losing a job decreased in August compared to July. In the report, the likelihood of a 'new job' in the case of an involuntary loss of a job was also lower than the survey conducted in July. In the August survey, respondents rated their financial situation now and in one year as well as their opinions on credit. This week, the key data on inflation is due. The report was released a week ahead of the U.S. Central Bank's two-day meeting. The Fed's benchmark overnight rate is set at 3.50% to 3.75%, but there is uncertainty about what it will do. Policymakers are still struggling with an inflation rate that is well above their 2% target. The release of the Consumer Price Index for August on Friday is pivotal to the outcome of the policy meeting scheduled for September 15-16. Many Fed officials believe that the data they use could be decisive in determining their policy. At a NEXT Newsmaker Event last Thursday, Fed governor Christopher?Waller stated that if the upcoming report on inflation shows continued progress towards?our 2% target, I would be willing to hold the policy rate where it is. However, other Fed officials remain prepared to raise?rates. In a Friday posting on LinkedIn, Beth Hammack of the Cleveland Fed, who had voted for a rate increase at the July meeting, stated that given the inflationary pressures in her district it was "time to act" in order to reduce the price pressures. This indicates she is still in support of a rate rise at next week's meetings.
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Investors await US data and tariff clarity as copper prices set to reach $15,000
Analysts?said that copper?prices may break through $15,000 this week for the first-ever time, as investors prepare for another round of U.S.?economic?data and President Donald Trump continues to keep the market guessing about import tariffs. The benchmark copper price on the London Metal Exchange reached a record high of $14,779 a metric ton. This was the fourth session in a row that the rally continued. Will it reach $15,000 this coming week due to Trump's tariff confusion?" "Yes, it's possible," said Panmure Liberum Analyst Tom Price. You can choose any large number when you have this much speculative money behind a trading concept. The U.S.?proposed? a 15% duty on imported refined copper starting in 2027. This would rise to 30% by 2028. However, the U.S. neither confirmed or ruled out such a tariff. Copper has been flowing into COMEX warehouses approved in the U.S. due to the prospect of tariffs, which is draining inventories in China and the LME. LME is a combined LME of just over 300,000 tonnes. ShFE Copper stocks are less than half COMEX stock Imports from the United States are at record levels of 695,624 tonnes, and an arbitrage window that is open has helped to fuel this. DATA IN FOCUS Alastair Munro is a senior base metals analyst at Marex. He said that macro events this week could determine whether the copper price increase lasts. Details on a U.S. Treasury Bond Buyback are expected on Wednesday, and U.S. Consumer Price Index -data for August will be released on Friday. Broker Sucden Financial said in a note that copper could be susceptible to profit-taking, if the dollar recovers following the CPI release. A stronger ?U.S. The dollar makes metals denominated in dollars more expensive to investors who use other currencies. Sucden stated that there was still room for further gains, if copper held above $14,400. Amy?Gower is the head of metals, mining and commodity strategy for Morgan Stanley. The bank remains 'positive' on copper until 2026. Gower stated that "However, while we are cautious for 2027 where the U.S. demand for imports is likely to be?softer, if tariffs were either in place or ruled out." John Meyer, analyst at SP Angel, believes that copper prices will continue to rise as long as there is uncertainty about tariffs. There's a lot of copper around the world but all the physical copper is in the United States.
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Gambia protesters set fire to tyres in order to denounce power outages
Residents and witnesses said that police used tear gas in order to disperse protesters who gathered in several?locations overnight, including near the official residence of President Adama Barrow, to denounce their alleged prolonged power outages. Around Banjul's capital, protesters burned tires in the streets and built barricades while shouting, "Barrow must leave!" The witness reported that plumes of smoke were filling the air. Some residents have reported blackouts that lasted up to 48 hours. This is ahead of the presidential elections expected in December, in which Barrow will be seeking his third term. As a sign of their growing frustration, protesters from the town of Farato gathered in front of the residence of Vice-President?Mohammed B.S. Jallow destroyed banners in an office of the National People's Party. Ismaila Ceesay said that officials are "working tirelessly to restore stability and increase the reliability of electricity supply as quickly as possible" in a statement released on Tuesday. She described the events from the previous evening as "deeply disturbing." Ceesay apologized for the inconvenience caused by the power outages. He said: "As a Government, we understand the frustration, anger, and hardship many Gambians experience." On Tuesday, a police spokesperson failed to respond to an inquiry for comment. Barrow had been scheduled to visit the National Water and Electricity Company Ltd facilities on Tuesday morning and then address the nation at 8 p.m. UTILITY WARNED ABOUT DEMAND SURGE DUE HEAT NAWEC stated in a press release on August 15, that they were experiencing "an unexpected surge in electricity during the peak period", which was attributed to high temperature. The report did not elaborate on "a technical issue affecting one of the largest power-generating units imported." No dates were provided for the load-shedding that would be required in "several parts of the country". NAWEC didn't respond to a comment request on Tuesday. "There is no lighting everywhere. There is no light. "People have been complaining about electricity," Ousainu jammeh, a Banjul resident from the Westfield district said. Jammeh claimed that he joined the protesters outside after "tear gas" "landed in my house." Jammeh, after the protests had died down by?the early morning hours', joined a crowd of young men to use water to put out fires and remove barricades. On Tuesday, traffic had returned to its normal level in Banjul.
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Wall Street drops as oil, yen gain amid Middle East turmoil
U.S. stocks fell Tuesday morning as the attacks on energy facilities in the Gulf drove oil prices to near $100 per barrel. After a long weekend of holidays, all three major U.S. indexes traded lower. The Dow Jones Industrial Average dropped 1.21% in its first hour. The S&P500 fell by 0.49%, and the Nasdaq Composite dropped by 0.52%. Brent crude oil jumped 1.32%, to $98.28 a barrel, the highest in six weeks. U.S. crude oil rose 2.11%, to $93.40 per barrel. The rise in oil prices came after Houthis, who are backed by Iran, attacked Saudi Arabian cities and energy facilities. The recent resurgence of inflation has impacted the stock market, largely because the bond yields have risen to multi-year highs. This puts pressure on central banks to increase interest rates. The European Central Bank will almost certainly raise the euro zone interest rates by a quarter-point on Thursday this week. Meanwhile, the Bank of Japan is likely to do the same thing next week. This has put the yen in a position for its strongest rally in the past two years. STOXX600 fell 0.2% in Europe. MSCI's global index of stocks was down by 0.49% last week. Unwinding Yen Carry Trades The U.S. data on inflation could be decisive for setting expectations about the outcome of next week's Federal Reserve meeting. Money markets indicate that traders currently attach a 58% chance to a rate increase. The yen's rise may be the "bigger story" for the global markets. Due to its low yield, traders borrowed yen to buy higher-yielding assets, including currencies, bonds, and equities. This strategy is known as the "carry trade". The yen gained almost 4% in the last week, which is its biggest week-on week increase since July 2024. On Tuesday it was trading at around 154.1 and the dollar was roughly unchanged for the day. Francesco Pesole, a ING strategist, said that despite the fact that short-term fundamentals suggest the move has been overdone, it is still risky to block the way. The dollar index (which measures the greenback against a basket including the yen, the euro and other currencies) rose by 0.06%, to 98.88. Copper, another commodity besides oil, reached a new record on Tuesday as global supply dwindled. The metal continued to flow into the U.S. in anticipation of potential tariffs. The price of a ton of?copper traded on the London Metal Exchange for three months was up by 1.6%, at $14 736. The benchmark 10-year Treasury note yielded 4.8% on the bond market. This was up by 2 basis points for the day, and is not far from its highest level since November 2023.
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NextEra receives a loan from the US of up to $1.9 Billion for the restart of Iowa Nuclear Plant
NextEra Energy announced?on Tuesday that it had secured a U.S. Department of Energy Loan of up to $1.9 Billion to support the restart of the Duane Arnold Energy Centre in Iowa as the country sought to increase power generation capacity to satisfy rising demand. Google, owned by Alphabet, signed a 25-year contract last year with the nuclear plant to 'buy power. The surge in electricity demand from AI data centres is putting pressure on the U.S. power grids. It also spurs interest in extending existing nuclear plant life and bringing shut-down reactors online. Gregory Beard is the director of the Energy Dominance Financing office at the Department of Energy. He said that Duane Arnold was "exactly" the type of investment needed to help "restore American leadership in nuclear energy, improve our energy security and provide the reliable, affordable power Americans require for the future of our nation." The Duane-Arnold Energy Center in Iowa, which had operated for 45 years, was shut down in 2020. The plant is scheduled to resume operations in early 2029. Although there are efforts underway to restart three U.S. Nuclear Centers, including Holtec's 800MW Palisades Plant in Michigan (which is not linked to a tech deal), no nuclear power plant that has been mothballed has yet to resume operations. The Energy Department granted Holtec a $1.52 billion loan in 2024. The company had originally?said that the plant would restart by late 2025. However, it has now been delayed. The Trump administration announced last year that it had lent Constellation Energy Corp. $1 billion for the restart of a nuclear reactor in a Pennsylvania plant formerly called Three Mile Island. The plant's separate unit was shut down in 1979 following an accident which froze the nuclear industry. Constellation and Microsoft signed an?agreement in late 2024 to restart the 835 megawatt reactor that shut down in 2019. Microsoft's data centre would be able to use less electricity after the restart.
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Ukraine steelmaker Metinvest's bonds tumble after missile strike shuts plant
On 'Tuesday', the bonds of Ukraine's biggest steelmaker, 'Metinvest', experienced some of their largest falls since Russia invaded in early '2022. This was after one of 'the firm's main plants' was severely damaged by a Russian missile strike. Metinvest announced at the weekend the five deaths caused by the strike at its Kamet Steel Plant in the eastern Dnipro Region. The plant was forced to halt all production. Metinvest only controls two steel mills in Ukraine. Tradeweb data revealed that the firm's bonds on the international market were down as much as 4.44 cents per dollar, as U.S. Investors got their first opportunity to react on Tuesday following the announcement of the strike after Monday's Labor Day holiday. Metinvest's maturing bond 2029 was set to fall the most -- barring an inflated end-of-year move in December 2022 -- ever since its initial slumps post-invasion of late February or early March. The?bonds of the Ukrainian government were also lower, although not as dramatically following weekend talks between 'U.S. The?bonds of the Ukrainian government were also down, although not as dramatically after weekend talks between?U.S. Both Russian and Ukrainian officials have?also shown little sign of progress in ending this now 4-1/2 year-long conflict.
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Andy Home: China's aluminium dominance is not limited to its home market.
China's aluminum smelters are booming this year. Shanghai's aluminium price has risen to three-month highs. Raw material costs have been historically low, and margins remain strong. Each producer is encouraged to run their plant at full capacity. Indeed, national output has exceeded Beijing's 45-million-metric-ton capacity cap for the past couple of months, as smelters flex their full production ?potential. However, the mandated ceiling remains in place. Chinese producers have embraced this reality and are investing heavily in smelter projects abroad. While Donald Trump claims that the United States needs more aluminum "desperately", the world's biggest producer consolidates its position as the dominant player in the global supply chains. At the Limit China's cap on capacity dates back to 2017 when the sector was experiencing a boom. It seemed that everyone wanted to build an aluminium smelter. This put a greater strain on the power system of China. Beijing marked a line of 45 million tons in the sand. Wen Xianjin is the vice-chairman of the China Nonferrous Metals Industry Association. He said that by the end of this year, the authorities would have stopped 5.37 million tonnes of "illegal capacity" and 6.19 millions tons of "noncompliant capacity". The new rule required that, if you want to build a greenfield plant with the same capacity as an existing one, you must close it. Since then, the regulations have been?enforced with a stern hand and led to an upgrade in smelter technologies as new plants have replaced older ones. This technology is being used now. According to consultants AZ Global "the physical limit of an aluminium smelter is not immutable". Operating improvements can easily increase actual output above nameplate capacity. This collective capacity creep is the reason why national production has been above 45 million tons since March. AZ Global estimates China's smelters were operating at?99.7% their actual capacity of 45.26 millions tons in August. Ironically, China's smelters benefit from their own capacity limit and the lack of a "complementary" limit on domestic production. The price of the main input for?the smelting is at a bombastic level. It is not important whether China's smelters are able to maintain these levels of capacity usage, but any potential production increase is very limited. Powering Up in Indonesia Chinese producers now understand that they must go overseas if they wish to expand. The majority of investment has been directed to Indonesia where aluminium smelters are located in the same industrial parks built by China for nickel processing. Tsingshan Group has partnered with Chinese aluminium producers Huafon Group (the powerhouse behind Indonesia’s nickel boom) and Xinfa Group (the Xinfa Group) to construct the Hua Chin smelter and Juwan smelter, respectively. Existing infrastructure in power and logistics has enabled rapid construction. Hua Chin's annual capacity was 480,000 tons last year. In May, it applied to list the "HCAI" trademark at the London Metal Exchange. Juwan exported its first aluminum to the U.S.A. in March. PT Alamtri Resources Indonesia - in which China's Zhejianglygend Mining has a minority interest - did the same thing in June. CAPACITY SWAP Other Chinese aluminum smelter project are popping up in other countries. Xinfa, a Kazakhstani company, is preparing a full cycle industrial park in Kazakhstan with a planned?aluminum capacity of 2.4 millions tons?per annum. East Hope Group, meanwhile, is working on an integrated project that runs from bauxite to aluminium. A Chinese consortium led Hebei Huatong Wire and Cables Group supports a new smelter at the Barra do Dande free-trade zone in Angola. The first phase of the 120,000-ton project was built using equipment that had been transferred from China. This was likely an older smelter which was replaced by a newer one. China's aluminium market reach is extended further in the West thanks to its location along the Atlantic. Due to the Iran 'war, the Gulf has lost its production. This ratio has risen to 63%. As long as the West is unable to respond in a similar manner, this new generation of Chinese backed smelters can cement their dominance. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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MMG faces EU Antitrust Warning over Anglo American Deal, Sources say
EU regulators are about to issue a warning to Hong Kong listed mining and metals company MMG regarding its plans to purchase 'Anglo American’s Brazilian nickel business due to 'competition concerns. This move reflects the growing concern of the European Union about its reliance on China to supply critical minerals for defence, technology, and renewable energy. Beijing also uses export control measures?on these critical mineral supplies. According to the people, the European Commission, acting as the EU's "competition enforcer", is planning to send this month a document known as a "statement of objections" or "charge sheet", which will outline the concerns that must be addressed in order for the deal to pass. The 'people' spoke on condition of anonymity as the matter was not public. MMG may be able to stave off charges by offering remedies. However, this is unlikely, according to one person. MMG and the EU antitrust watchdog declined to comment. Anglo American repeated comments made two weeks earlier. In a press release, it said: "The evidence that we have provided shows that this transaction does not pose any?competition issues to the EU market. It should be approved unconditionally." The report stated that "over the past year the market has benefitted from a significant'structural expansion of FeNi supplies from a number of producers. At the same time, European customers have demonstrated how easily they can switch suppliers." The European Commission said in November that the deal could allow MMG to divert ferronickel away from Europe, and undermine the competitiveness for European stainless steel production.
ROI-US, Japan share unorthodox anti-inflation tool - fiscal stimulus: McGeever
Both the United States and Japan use a novel tool to combat inflation: fiscal stimuli.
Both U.S. president Donald Trump and Japan’s prime minister Sanae Takaichi want to calm down angry voters who are being squeezed by rising costs of living. Offering lavish fiscal giveaways in order to control inflation is like trying to put out a raging fire by putting gasoline on it. Trump's Republican Party lost key gubernatorial elections and mayoral elections earlier this month. Concerns about high costs of living were a big factor.
The White House seems to have heard loud and clear the electorate. The president is now determined to send a $2,000 cheque to the majority of U.S. homes, funded by money raised from increased duties on U.S. imported goods.
Treasury Secretary Scott Bessent stated on Wednesday that the issue is being discussed.
What? The hundreds of billions in tariff revenue was supposed to be used to reduce the budget deficit, right?
Trump's 'One Big Beautiful Bill Act,' which he pushed through earlier this year, made it clear that the 'One Big Beautiful Bill Act,' was no longer a priority. According to the nonpartisan Congressional Budget Office, the package contains a slew of tax cuts which are expected to add $2.4 billion to the federal deficit over the next 10 years.
Trump's administration is focused on growth. This means that it will keep the economy humming, even at the cost of inflation above target. White House officials may not have said it publicly, but they seem to believe that inflation nearer 3% than the Fed target of 2% is worth it in order to maintain nominal growth.
FISCAL HOUSE DISEORDDER
Looks like Japan's new Prime Minister is adopting a similar strategy.
The rising cost of living in Japan was a major factor in the historic defeat suffered by the Liberal Democratic Party in the summer elections that led Takaichi to surprise sweep to the top last month.
Takaichi and Trump advocate a fiscal easing, rather than tightening policy to combat inflation.
Her newly formed government is preparing a stimulus package for the economy that will probably exceed last year's package of $92 billion. One of the three main goals of this package is to reduce the impact of rising costs.
She has also appointed members of key government economic panels who advocate an expansionary fiscal strategy. This week, she indicated that her willingness to slacken long-term commitments in getting the country's financial house in order.
Takaichi, as well as Trump, have both made it known to their central banks that they want to maintain a stimulative monetary policy - something with which many rate-setters may disagree.
Both leaders seem to be determined to counter the effects of inflation by taking actions that may very well worsen inflation.
Inflation Doom Loop
Fiscal stimulus is a powerful tool that can help lower-income people spend their money. The Global Financial Crisis of 2007-09 and the Pandemic of 2020 both showed that fiscal generosity is necessary during times when the economy is trapped in a liquidity trap, the demand for goods and services has collapsed and deflation must be defeated.
The U.S. and Japan are not facing an economic disaster. In aggregate, both countries are experiencing a soft but steady growth, with unemployment at a historically low level and inflation a full percentage-point or more above the target.
Also, it is unclear by how much the fiscal spree will boost growth. The 'fiscal multiplyer' is not a measure that is universally accepted. It is a measure of how much additional government spending and tax cuts increase economic growth.
The San Francisco Fed's 2020 paper stated that economists agree it is higher during recessions. It is also higher when debt-to GDP ratios are low and monetary policy less "activist". It is a completely different environment than the one that exists in both countries.
Washington and Tokyo may find it politically appealing at the moment to indulge in populist fiscal splurges, but this unorthodox approach could make it harder to bring down inflation.
The opinions expressed in this article are those of the columnist, who is also the author. Open Interest (ROI) is your indispensable 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.
(source: Reuters)