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Shanghai copper gains on increasing bets of December Fed rate reduction
Shanghai copper gained for the fourth consecutive session on Thursday as renewed hopes of a December rate cut by U.S. Federal Reserve boosted sentiment. After hitting the highest price since November 14, 87,300 Yuan, the most traded copper contract at the Shanghai Futures Exchange, closed the day's trading up by 0.35%, to 86990 yuan per metric ton. As of 0753 GMT, the benchmark three-month price for copper fell 0.44%, to $10,927 per ton. The London copper price eased after it broke through $11,000 per ton on the previous Wednesday. It reached $11,025, its highest level since October 30. ING analysts wrote in a recent note that the market now prices in a probability greater than 80% for a Fed cut in December, up from 30% a few weeks ago. As U.S. retail sales and consumer confidence weakened, a rate cut was expected this year. Codelco is the top copper producer in the world and they are pushing for a premium of up to $350 per ton. This is a steep increase from the $89 last year. Some Chinese buyers may not sign a contract for this year. Nicholas Snowdon, the high-profile copper bull who is also the head of Mercuria's metals research, stated that he expected copper prices to reach new heights in 2025. He cited the shortage of copper concentrates when delivering a keynote address at the World Copper Conference 2020 on Wednesday. Other base metals in the SHFE rose 0.26%. Zinc jumped 0.25%. Tin soared by 2.11%. Lead fell 0.67%. Nickel dropped 0.53%. The dollar is worth 7.0808 Chinese yuan renminbi. $1 = 7.0808 Chinese Yuan Renminbi (Reporting and editing by Dylan Duan, Lewis Jackson, Additional reporting by Polina Devitt in London. Editing by Rashmi aich).
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Iron ore gains on weaker dollar but demand is still low
Iron ore futures finished higher on Thursday thanks to a weaker dollar. However, gains were limited due to a decline in China lump ore premiums, which signaled sluggish demand for steelmaking materials. The January contract for iron ore on China's Dalian Commodity Exchange rose 0.44% to 799.5 Yuan ($112.92) per metric ton. As of 0703 GMT, the benchmark December iron ore traded on Singapore Exchange was $0.29% higher. It stood at $106.85 per ton. According to Chinese consultancy Mysteel, China's seaborne Iron Ore Lump Premiums against 62% Fe Fines have fallen 42.2% since two months ago and reached their lowest level in late May 2024. Mysteel stated that the low premiums are due to the declining demand for lump ore from steelmakers who have been suffering losses. India's finished imports of steel during the first seven-months of the current financial year fell 34.1% on an annual basis, and China's output is expected to fall below 1 billion tonnes this year for first time in 6 years following a pledge by the government to reduce production. Galaxy Futures, a Chinese broker, says that the decline in iron ore and coking coal prices has accelerated due to increased coal supplies and inventory accumulations at coal mines. Galaxy stated that the pig iron production will continue to fall this week. This will put pressure on raw materials. The U.S. Dollar Index was 99.431, down 0.28% from the previous day. Dollar-denominated investments are more affordable for holders of other currencies when the greenback is weaker. Coking coal was down by 0.19%, while coke rose 0.03%. The benchmarks for steel on the Shanghai Futures Exchange are mostly down. The price of rebar fell 0.13%. Hot-rolled coils dropped 0.27%. Stainless steel declined 0.28%. Wire rod rose 0.78%. ($1 = 7.0804 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Gold prices fall from near two-week peak as investors take profits
On Thursday, gold fell on profit-taking following a two-week-high in the previous session. Investors also weighed the likelihood of a U.S. rate cut for December amid contradictory signals from the Federal Reserve. As of 0616 GMT, spot gold was down 0.3% at $4,153.49 an ounce. U.S. Gold Futures for December Delivery fell 0.5% to $415.50 per ounce. After Wednesday's rise )... Gold is consolidating because the Fed hasn't decided what it's going to do. Investors seeking to protect themselves from increased policy uncertainty have accelerated the hedging flow into derivatives linked to overnight rates. Some Fed officials led by New York Fed president John Williams and Governor Christopher Waller have said that a December easing could be warranted because the weak labor market is putting downward pressures on Treasury yields. In the previous session, benchmark 10-year Treasury yields were near their lowest levels in over a month. However, their stance contrasted with that of several regional Fed Presidents who advocated a pause on easing until the inflation showed a more compelling move towards the 2% target. Kevin Hassett has also said that rates should be lowered, as has Donald Trump. According to CME's FedWatch, U.S. rate forwards price in a 85% chance that rates will be cut in December. Gold that does not yield tends to do well in an environment of low interest rates. Data on Wednesday revealed that weekly jobless claims declined last week, despite the fact that the labor market struggles to create enough jobs for those who are unemployed. In November, U.S. consumer sentiment also declined due to concerns about jobs and household finances. The spot price of silver dropped 0.6%, to $53.04 an ounce. Platinum gained 2.3%, to $1.624.75, while palladium fell 0.3%, to $1.419.0. (Reporting and editing by Rashmi aich, Eileen Soreng and Ishaan arora in Bengaluru)
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Stocks rise on hopes of Fed easing, but yen remains in the intervention zone
The dollar fell on Thursday as traders began to weigh the possibility of a rate increase before the end of the year. Asian stocks also rose. The holiday-shortened week has resulted in limited movements across the markets. Stocks have maintained a generally positive tone, while currencies are more sedate. Investors have shrugged off AI bubble fears that had shaken equities early in November. The U.S. market is closed on Thanksgiving Day, Thursday. It will reopen for a brief session on Friday. MSCI's broadest Asia-Pacific share index outside Japan rose 0.4%, following Wall Street gains and on track to end a three-week loss streak. Japan's Nikkei soared by over 1%, despite European futures indicating a muted opening. The EuroStoxx 50 futures declined 0.04% while the FTSE futures dropped 0.15%, and the DAX futures remained flat. Charu Chanana is the chief investment strategist for Saxo. He said that stocks have responded positively to renewed Fed rate-cut expectations, which helped cool recent AI bubble concerns. The Fed's anticipated cut and strong seasonality make December a difficult to bearish month, and Santa rally is still on the table. The sterling rose to $1.3269, its highest level in more than four weeks after UK Finance Minister Rachel Reeves budget on Wednesday helped ease some concerns about Britain's finances. DATA GAP CAN’T STOP RATE CUTS WAGERS The U.S. data has returned since the 43-day record government shutdown ended in mid-November. However, the majority of economic reports released so far are significantly outdated and offer very little insight on the state of the economy. Investors are now focusing on the comments of Fed officials in order to determine U.S. monetary policies. Comments this week by San Francisco Federal Reserve Bank president Mary Daly, and Fed Governor Christopher Waller have boosted expectations for a rate reduction. CME FedWatch shows that traders now price in an 85% probability of a rate reduction next month, compared to just 30% one week ago. George Boubouras of K2 Asset Management said that the weakening labour market is sufficient to offset inflation. A rate cut in December looks reasonable. While core inflation is higher than target, the U.S. breakeven 10-year inflation rate of around 2.25 percent suggests that markets remain comfortable with inflation expectations. The euro reached its highest level in over a week, at $1.16115. The dollar index (which measures the U.S. currencies against six rivals) was 99.431, down 0.28% from the previous day. China's property sector has been in the spotlight again after China Vanke, a property developer, sought approval from bondholders to delay repayment of an onshore bond worth 2 billion yuan (282.6 million dollars). Thursday's bond price plunged, adding to the losses of this week. China's CSI300 property index dropped to a new low of 1.7%. The broader CSI300 Index however ticked up by 0.5%. VIGILANCE ROUND THE CLOCK IN YEN The Japanese yen rose to 156.12 dollars per yen, but investors were watching for any intervention by Tokyo following weeks of verbal scolding from the authorities to stop the currency's steady decline. Sanae Takaichi, Prime Minister of Japan, ruled out Wednesday that Japan might face a "Truss Moment" or loss in market confidence resulting from her fiscal expansion. Since the beginning of October, the Japanese yen has fallen by almost 10 yen. This is because Takaichi assumed the presidency amid concerns that the government's spending plan will require heavy borrowing and doubts about the timing of next rate hikes from the Bank of Japan. Sources have told us that the BOJ has been preparing the markets for an upcoming rate hike. It may even be as early as next month. The BOJ could also adopt a more consistent path of rate hikes to change the trajectory of its currency. Bitcoin surpassed $90,000 again on Thursday. It is on course to end a four-week loss streak, with a gain of nearly 3%. Gold fell 0.4%, to $4,146.53 an ounce after rising by 0.8% the previous session. (Reporting and editing by Shri Navaratnam in Singapore, Ankur Banerjee)
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Japanese copper smelters want TC/RCs for 2026 that are different from China's benchmarks
The head of Japan Mining Industry Association JMIA said that Japanese copper smelters were negotiating treatment and refinement charges (TC/RCs), which will be implemented in 2026, with global miners. They are seeking to reach agreements at levels other than the benchmarks set by China, which should remain low. The TC/RCs are the fees that miners pay to refine concentrates into metal. They are a major source of income for smelters. Charges tend to decrease when concentrate supplies are tight and increase when ore is more available. China is leading the global smelting expansion, which has led to a shortage of concentrates. This has squeezed the margins of smelters. According to two sources in the industry, for 2025 annual TC/RCs a Chilean mining company and a Chinese smelter have agreed to $21.25 per ton, and 2.125 cents a pound. Japanese smelters, on the other hand, secured better terms of $25 per ton, and 2.5 cents a pound. Tetsuya Tanahka, Chairman of the JMIA said that Japanese smelters were trying to create a different market from the global benchmark for 2026 by signing contracts on an individual basis rather than following the benchmark. He said: "It is unclear where the levels will be landed, but these moves are already underway." He said that the positions of miners vary. Some insist on selling to the highest bidder, which is in line with economic principles. Others see risks when relying too heavily on one country. Tanaka warned Japanese smelters that they would continue to be faced with tough conditions. A significant impact is expected on earnings next year, as "smelters" in certain regions are likely to negotiate at low TC/RC rates. In October, Japan and Spain issued a rare statement together expressing their deep concern about the tumbling TC/RCs and warning that both miners and smelters cannot develop sustainably in current conditions. Tanaka, the president of Mitsubishi Materials, announced on Wednesday that it will reduce its primary copper smelting production by 30 to 40 percent by 2035, as it moves to secondary smelting in order to increase profitability. Sources said that China's leading copper smelters have decided not to set fee guidance for copper concentrate processing in the fourth quarter of 2025. This is the third time in a row they have taken this decision, which highlights a long-term feedstock shortage. (Reporting and editing by Thomas Derpinghaus; Yuka Obayashi)
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The dollar is headed to the carvery, according to the morning bid in Europe.
Tom Westbrook gives us a look at what the future holds for European and global markets. The dollar's weekly drop was the largest in four months, and traders were looking ahead to 2026 as markets slowed down for Thanksgiving in the U.S. The U.S. is looking to further ease interest rates, while the rest of world seems to be finishing off their rate cuts. South Korea is the latest country to adopt a hawkish stance, abandoning its easing bias. Bonds have fallen. Asahi Noguchi, a former Bank of Japan dove, also adopted a slightly hawkish tone in his speech to Kyushu. He advocated gradual increases and followed the same line as other BOJ policymakers. The Reserve Bank of New Zealand had effectively ended its currency-cutting cycle a day earlier. However, the Kiwi was still up on Thursday. The stock is up by nearly 2% in the last few months since the policy discussion. The minutes of the October meeting at which policymakers held rates steady are due to be released on Thursday. The European markets will be watching the progress of a peace agreement in Ukraine and are expecting confidence data. Russia has denied making any major concessions after the leaked call between Steve Witkoff, a U.S. envoy and a senior Kremlin official. The markets still have 90 basis points worth of U.S. interest rate cuts priced between now and 2026, compared to 75 bps for Japan and 40 bps for New Zealand. The U.S. Dollar Index is down about 1 percent from the six-month high reached last week. Although rates in New Zealand and Japan are lower than in the U.S.A., currency markets are always looking ahead and can influence exchange rates, as investors search for the highest yield. The Aussie has been discussed as a possible breakout by traders. Australian rates for 3-years and 10-years are now the highest in G10 after a higher-than-expected inflation figure on Wednesday. The Aussie has been trudge along in the same channel for over 18 months. The currency could be freed by a slight increase in the yuan. The U.S. stock and bond market is closed on Friday and only trades for half a day. The following are key developments that may influence the markets on Thursday. Thanksgiving Day in the United States -Euro zone consumer confidence, ECB minutes
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Gold prices fall from near two-week peak as investors take profits
On Thursday, gold fell on profit-taking following a two-week-high in the previous session. Investors also weighed the likelihood of a U.S. rate cut for December amid contradictory signals from the Federal Reserve. As of 0405 GMT, spot gold was down 0.5% at $4,145.08 an ounce. U.S. Gold Futures for December Delivery fell 0.6% to $4140.80 an ounce. After Wednesday's rise )... Gold is consolidating because the Fed hasn't decided what it's going to do. Investors seeking to protect themselves from increased policy uncertainty have sought protection through swaptions and derivatives linked to overnight rates. Some Fed officials led by New York Fed president John Williams and Governor Christopher Waller have said that a December easing could be warranted because the weak labor market is putting downward pressures on Treasury yields. In the previous session, benchmark 10-year Treasury yields were near their lowest levels in over a month. However, their stance contrasted with that of several regional Fed Presidents who advocated a pause on easing until the inflation showed a more compelling move towards the 2% target. Kevin Hassett has also said that rates should be lowered, as has Donald Trump. According to CME's FedWatch, U.S. rate forwards price in 85% of a December rate cut. Gold that does not yield tends to do well in an environment of low interest rates. Data on Wednesday revealed that weekly jobless claims declined last week despite the fact that the labor market struggles to create enough jobs for those who are unemployed. In November, U.S. consumer sentiment also declined due to concerns about jobs and household finances. Other than that, silver spot fell by 0.9%, to $52.89 an ounce. Platinum gained 1.4%, to $1.611.04 and palladium dropped 0.9%, to $1.409.87. (Reporting and editing by Rashmi aich, Eileen Soreng, and Ishaan arora in Bengaluru)
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Shanghai copper gains on increasing bets of December Fed rate reduction
Shanghai copper continued its gains for the fourth consecutive session on Thursday as renewed hopes of a December rate cut by U.S. Federal Reserve boosted sentiment. As of 0330 GMT the most traded copper contract at the Shanghai Futures Exchange had risen 0.27% to 86,920 Yuan ($12,277.70), after reaching 87,300 Yuan earlier in the session, which was the highest since November 14 The benchmark copper for three months fell 0.44%, to $10 927 per ton. The London copper price eased after it broke through $11,000 per ton on the previous Wednesday. It reached $11,025, its highest level since October 30. ING analysts wrote in a recent note that the market now prices in a probability greater than 80% for a Fed cut in December, up from 30% a few weeks ago. As U.S. retail sales and consumer confidence weakened, a rate cut was expected this year. Codelco is the top copper producer in the world and they are pushing for a premium of up to $350 per ton. This is a steep increase from the $89 last year. Some Chinese buyers may not sign a contract for this year. Nicholas Snowdon, the high-profile copper bull who is also the head of Mercuria's metals research, stated that he expected copper prices to reach new heights in 2025. He cited the shortage of copper concentrates when delivering a keynote address at the World Copper Conference 2020 on Wednesday. Other base metals in the SHFE rose 0.33%. Zinc jumped 0.27%. Tin soared 1.84%. Lead fell 0.79%. Nickel dropped 0.61%. Aluminium, zinc, lead, and nickel all fell in price on the LME. Tin was the only metal to gain, with a gain of 0.68%. Final Nov. 27th DATA/EVENTS 1000 EU Consumer Confid. Final Novembre
Global Market-Stocks rise on Fed easing hope, but yen remains in the intervention zone
The dollar fell on Thursday as traders began to weigh the possibility of a rate increase before the end of the year. Asian stocks also rose. The holiday-shortened week has resulted in limited movements across the markets. Stocks have maintained a generally positive tone, while currencies are more sedate. Investors have shrugged off AI bubble fears that had shaken equities early in November.
The U.S. market is closed on Thanksgiving Day, Thursday. It will reopen for a brief session on Friday.
MSCI's broadest Asia-Pacific share index outside Japan rose 0.4%, following Wall Street gains and on track to end a three-week loss streak. Japan's Nikkei soared by over 1%, despite European futures indicating a muted opening.
Charu Chanana is the chief investment strategist for Saxo. He said that stocks have responded positively to renewed Fed rate-cut expectations, which helped cool recent AI bubble concerns.
The Fed's anticipated cut and strong seasonality make December a difficult to bearish month, and Santa rally is still on the table.
The sterling rose to $1.3269, its highest level in more than four weeks after UK Finance Minister Rachel Reeves budget on Wednesday helped ease some concerns about Britain's finances.
DATA GAP CAN’T STOP RATE CUTS WAGERS
The U.S. data has returned since the 43-day record government shutdown ended in mid-November. However, the majority of economic reports released so far are significantly outdated and offer very little insight on the state of the economy.
Investors are now focusing on the comments of Fed officials in order to determine U.S. monetary policies. Comments this week by San Francisco Federal Reserve Bank president Mary Daly, and Fed Governor Christopher Waller have boosted expectations for a rate reduction.
CME FedWatch shows that traders now price in an 85% probability of a rate reduction next month, compared to just 30% one week ago.
George Boubouras of K2 Asset Management said that the weakening labour market is sufficient to offset inflation. A rate cut in December looks reasonable.
While core inflation is higher than target, the U.S. breakeven 10-year inflation rate of around 2.25 percent suggests that markets remain comfortable with inflation expectations.
The euro reached its highest level in over a week, at $1.16115. The dollar index (which measures the U.S. currencies against six rivals) was 99.431, down 0.28% from the previous day.
China's property sector has been in the spotlight again after China Vanke, a property developer, sought approval from bondholders to delay repayment of an onshore bond worth 2 billion yuan (282.6 million dollars).
The bonds of the firm fell on Thursday, continuing this week's loss. China's CSI300 property index dropped to a new low of 1.7%. The broader CSI300 Index however ticked up by 0.5%.
ROUND-THE CLOCK YEN VIGILANCE
The Japanese yen rose to 156.12 dollars per yen, but investors were watching for any intervention by Tokyo following weeks of verbal scoldings from the authorities to stop the currency's steady slide.
Sanae Takaichi, Prime Minister of Japan, ruled out Wednesday that Japan might face a "Truss Moment" or loss in market confidence resulting from her fiscal expansion.
Since the beginning of October, the Japanese currency has fallen by almost 10 yen. This is because Takaichi assumed the presidency amid concerns that the government's spending plan will require heavy borrowing and doubts about the timing of the Bank of Japan's next rate increase.
Sources have told us that the BOJ has been preparing the markets for an upcoming rate hike. It may even be as early as next month. The BOJ could also adopt a more consistent path of rate hikes to change the currency's trajectory.
Bitcoin surpassed $90,000 again on Thursday. It is on course to end a four-week loss streak, with a gain of nearly 3%. Gold fell 0.4%, to $4,146.53 an ounce after rising by 0.8% the previous session. (Reporting and editing by Shri Navaratnam in Singapore, Ankur Banerjee)
(source: Reuters)