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The US data is the focus of this article.
The price of gold eased Tuesday, after reaching a six-week-high in the previous session. Rising U.S. Treasury rates and profit-taking were weighing on the prices. Investors awaited U.S. Economic Data to gauge the Federal Reserve’s policy direction. Spot gold dropped 0.3% to $4.218.71 an ounce at 0621 GMT. U.S. Gold Futures for December Delivery were down 0.6% to $4,250.70 an ounce. Benchmark 10-year U.S. Treasury Yields hovered near a two-week-high touched in the prior session, reducing interest in non-yielding gold. Tim Waterer, Chief Market Analyst at KCM Trade, said that while gold is showing a weak performance today, the fundamental picture remains unchanged. This includes the anticipated U.S. interest rate cuts which are expected to be beneficial for gold in terms of yield. Waterer stated that the markets are cautious as Federal Reserve Chairman Jerome Powell will not sound as dovish. The core Personal Consumption Expenditures price index (PCE), the Fed's preferred inflation measure, is expected to be relatively benign on Friday. Powell did not mention the economy or monetary policies in his late-night address to Stanford University on Monday. This week, the U.S. will release two important data sets: The delayed September PCE Index and Wednesday's ADP Employment Report. CME's FedWatch tool shows that traders are pricing in a 88% chance for a Fed rate cut in December. Kevin Hassett, White House Economic Advisor, said that he was willing to be the Fed Chair, while Treasury Secretary Scott Bessent hinted at a possible nomination before Christmas. Hassett wants lower rates, just like Donald Trump. Gold that does not yield is usually favored by lower interest rates. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.44% on Monday to 1,050.01 tons from 1,045.43 tonnes on Friday. Silver dropped 1.3%, to $57.24 an ounce. Platinum fell 0.9%, to $1,643.10 and palladium dropped 0.4%, to $1,419.50. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Harikrishnan Nair)
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Special Report-China floods world with gasoline cars that it cannot sell at home
In just a few short years, China's electric vehicle industry has captured more than half of its domestic market. This has led to a decline in sales for gasoline-powered cars from the once dominant global automakers. Foreign players were not the only losers. Chinese automakers who had been in business for decades also saw their sales plummet and responded by flooding foreign markets with fossil fuel vehicles that they couldn't sell domestically. Despite the fact that Western policymakers are protecting their markets by imposing tariffs on China's heavily subsidized EVs to protect them, U.S. automakers and European automakers will face more competition from China gas-guzzlers from Poland to South Africa, to Uruguay. According to Automobility, China's consultancy, fossil-fuel vehicles account for 76% (or more) of Chinese auto exports. Total annual shipments have increased from 1 million in 2020 to over 6.5 million likely this year. A recent examination revealed that the boom in gasoline exports was driven by the same EV policies and subsidies that destroyed the China businesses for automakers such as Volkswagen, GM, and Nissan. These policies and subsidies underwrote scores of Chinese EV manufacturers and ignited a price war. This phenomenon highlights the impact of Chinese industrial policies, as foreign companies struggle to compete with state-backed firms that are chasing Beijing's goal to dominate key sectors in China and internationally. Industry and government data indicate that China's gasoline vehicle exports last year - without including EVs or plug-in hybrids – were enough to make the nation the largest auto-exporting country by volume. This report on the global expansion of Chinese automakers is based upon a review and analysis of auto sales data from dozens of countries, as well as interviews with over 30 people. These included executives of 11 Chinese automakers and two Western brands, distributor managers for Chinese brands, and industry researchers. The Chinese gasoline car influx into emerging and secondary markets is a clash between Beijing's current push for electric vehicles and earlier policies that helped build China's domestic gas-vehicle sector by leveraging the technology of foreign automakers. State-owned giants SAIC, BAIC and Dongfeng, among others, are the largest exporters. They have historically depended on joint ventures to gain engineering expertise and profits from foreign automakers. In the 1980s, Beijing forced these partnerships as a price for foreign companies to enter China. These joint ventures have seen their sales plummet in recent years, as innovative Chinese EV manufacturers, led by BYD, have risen to prominence. SAIC data shows that SAIC-GM China's annual sales fell from more than 1.4million vehicles to 435,000 cars between 2020 and 2024. These state-owned automakers are now racking up sales on export markets that used to be the sole domain of foreign automakers, who are also their partners in China. SAIC exports, mainly of its own brands and without GM, soared to over a million dollars last year from just under 400,000 in 2020. Jelte Vernooij is Dongfeng Central Europe's manager. He said that Dongfeng exported nearly 250,000 cars last year. This was an increase of almost four times in just five years. Dongfeng has seen its annual global sales fall by one million vehicles, from 2020 to less than two million. This is according to company filings. Vernooij, however, is not worried about Dongfeng’s future because Beijing has backed it. He said that the fact that we are state-owned was important. "There is no doubt that we will survive." It's also a fact that gasoline cars sell better than EVs in markets with limited charging infrastructure, like those of Eastern Europe, Latin America, and Africa. Beijing aims for EVs and hybrids to be dominant in the world. In the meantime, Chinese automakers build overseas brands by offering customers what they want. Chery is China's largest auto exporter. Between 2020 and 2024, its global sales soared from 730,000 to 2.6 millions vehicles. Chery, owned by both the state and the private sector, increased its annual exports from 730,000 vehicles to 2.6 million between 2020 and 2024. Its sales are mainly gasoline powered cars, which account for four-fifths. Five other state-owned carmakers, as well as two private automakers, Geely Motor and Great Wall Motor are also among China's top ten exporters. They sell more gasoline cars than electric vehicles. Two of China's top ten auto exporters are exclusively focused on battery-powered cars. Tesla, the pioneer of electric cars in the United States, is one of them. BYD is the other, and it only sells EVs or plug-in hybrids. BYD has become China's second largest exporter this year, and the country's exports are now dominated by plug-in hybrids. China's gasoline vehicle exports will still exceed 4.3 millions and make up nearly two thirds of the total for this year. Exports are essential for the growth and profitability of Chinese automakers, according to overseas managers from Chery, Dongfeng, and FAW. Giles Taylor is the global vice president of design at FAW. He believes that some rivals in China are just one product away from bankruptcy. He said, "China is overpopulated with auto companies." It's on the verge of a dog-eats-dog situation. Managers said that most brands focus on exporting gasoline cars, because it's easier to sell them in many regions. Nic Thomas, Changan’s European Marketing Director said: "We can fine tune our offering for each market." The National Development and Reform Commission and other top exporters SAIC and BAIC as well as Geely and Great Wall Motor, and the government economic planner did not provide any comments for this report. Executives from global automakers have acknowledged that China's rising rivals are a serious threat to their business, but mainly in relation to the innovative and affordable EVs they produce rather than gasoline-powered models. Toyota, Ford Nissan and Hyundai representatives did not make any comments on China's export boom. Some of the old-timers say they are ready to fight. Alexander Seitz said that he has "no fears of the Chinese." He said, "I respect them for being competitors." "They are welcome to join us." Volkswagen wants to export more cars made in China overseas to counter the competition from China. A GM spokesperson referred to comments made by CEO Mary Barra in October, that the company aims "to compete with Chinese competitors" "with the right technologies at the right costs." IDLE FACTORIES FUEL SURGE The government's policies have created an excess of factory capacity for building them, which has led to the rush by Chinese automakers to export gasoline vehicles. Bill Russo, CEO of Automobility, says that China's rapid EV expansion has idled assembly plants capable of producing 20 million gasoline powered cars per year. These unproductive overheads increase costs and force automakers to use capacity for exports. Russo stated that "that excess capacity is being directed back to the rest of world". AlixPartners, a consultancy, predicts that Chinese automakers will increase their annual sales outside China by 4,000,000 vehicles by 2030. This will result in them gaining large market share in South America and the Middle East. They also expect to gain significant market shares throughout Africa, Southeast Asia, South America and the Middle East. Chinese automakers will control 30% of global auto sales in five years, including expected growth in China, which is the largest auto market in the world. Stephen Dyer is the joint head of AlixPartners China. Beijing's policies encouraged automakers over the past decade to build new electric vehicle plants instead of converting existing gasoline-vehicle facilities. Reports claim that local governments subsidized the boom in factory construction as they competed with each other to attract EV manufacturers, all for Beijing's economic purposes. Cities and provinces that wanted to show development financed automakers' EV factories at a low cost. Local governments prepare the land, build the factories and allow companies to "move in" with only a suitcase. Liang Linhe is the chairman of Sany Heavy Trucks, one of China's biggest truck manufacturers. The result is massive overcapacity. Su Bo, China’s former vice-minister of industry, urged the regulators at a March EV Conference to encourage the conversion of gasoline car factories into battery-powered models. Su Bo, China's former vice minister of industry, urged regulators to promote the conversion of gasoline-car factories into battery-powered models at a March EV conference. He said that the declining gasoline car sales are "leaving significant capacity underutilized" and "plummeting the sector into an essential survival crisis." 'THE REAL BUFFALOO' IN AUTOS: Emerging Markets While EV startups were building factories in China, the legacy Chinese automakers searched for new markets for gasoline cars to maintain their underutilized plants. In Warsaw, Poland on a sunny September day, new SUVs bearing chrome "BEIJING' logos dotted the Plaza dealership. These SUVs were powered by gasoline engines made by BAIC, an automaker owned and operated by the Beijing city government. BAIC is one of 33 Chinese brands to have announced or launched Poland sales, with many selling exclusively or primarily gasoline-powered cars, according to company announcements. GlobalData's sales figures also show that BAIC was among the first Chinese brands in Poland. Jerzy Przadka is BAIC's Poland Manager. He said that there are so few Chinese midsized SUVs with distinguishable features, and many of them look alike, that Poles cannot tell the difference. Marcin Slomkowski is the country manager of GAC and Geely at Jameel Motors. He called the new Chinese competitors that have entered Poland a "simple madness," noting that "local-market expertise" will be the "key to survival." Inchcape is a global distributor of autos. Most of the contracts it has signed recently are with Chinese automakers who have entered emerging markets. Older manufacturers are also joining the global market, as they struggle to meet Beijing's EV development mandates and maintain gasoline-car profit margins. Exports must be tailored to the market, which is usually gasoline cars in emerging economies. Tait stated that "the model you use with China will not necessarily work in Costa Rica or Peru, Indonesia, Greece, or Indonesia." You have to accept the world for what it is and not as you would like it to be. Even in more developed economies, Chinese brands are still a major player when it comes to fossil fuel vehicles. Chery sold almost all its cars in Australia with gasoline engines. Only recently has the company begun to offer plug-in hybrid models. The pragmatism of China's automakers in the engine field created new fronts for their battle to gain market share with foreign competitors. Historically, many automakers focused their marketing and engineering on the biggest or wealthiest markets, such as the United States, Europe and China. In the developing world they focused on cheaper cars with older technology. This has left companies like Stellantis, GM, and VW vulnerable to a flood of cheap Chinese imports with better software and safety features, according to Felipe Munoz of JATO Dynamics, a research firm. "Legacy automobile manufacturers were sleeping." "Now they are paying for it," said he. "The real fight between Chinese automakers and legacy carmakers does not take place in Europe. It is not taking place in the United States. "It's happening in emerging market countries." At a September investor's event, Antonio Filosa (CEO of Stellantis) was asked how the company would react to Chinese competitors. He said that Stellantis, which has a market share of 24% in South America and the Middle East, would also follow this model for markets such as Africa and the Middle East, by building cars locally to suit local tastes. Stellantis declined to comment on Filosa’s recent remarks. Faced with increasing Chinese competition, GM announced in August that it would develop South American cars jointly with Hyundai to reduce costs. CHINA'S AUTO IMPORTS GO TO RUSSIA AND MEXICO China is the world's biggest auto exporter. The United States has essentially banned Chinese brand vehicles through trade barriers aimed at safeguarding national and economic security. GlobalData estimates that Chinese automakers will likely end the year with more than 200,000 sales and a 14% share of the market south of the U.S.-Mexico border where there are few EVs sold. Legacy brands like Fiat, Ford, and Chevrolet are losing market share. GlobalData predicts that Chevrolet Mexico sales will be 52,231 this year. This is a decrease of more than 24% from 2023. Mexico announced in September that it would increase tariffs on Chinese vehicles from 20% to 50%. The government claimed this would protect jobs, but analysts argued the move was an attempt to appease Washington. U.S. officials pressured Mexico to limit trade with China in order to prevent China from using Mexico as an "backdoor" to avoid U.S. tariffs. Analysts called the move a tactic to placate Washington. Chinese automakers are also facing political challenges in Russia. Mexico became China's largest auto-export destination this year after Moscow increased fees on Chinese imports. GlobalData reports that Russia increased the tax after China overflowed its market. According to GlobalData, China's share grew from 21% in 2020 to 64% or approximately 900,000. These fees have slashed Chinese imports to Russia. Requests for comments on Chinese auto imports from the governments of Russia and Mexico were not answered. South Africa, like Russia and Mexico, has an industry at home to protect. This includes global automakers that have a large footprint in manufacturing. The government has encouraged Chinese automakers in South Africa to build factories, while also threatening to impose tariffs on cheap imports. According to JATO Dynamics, Chinese automakers controlled 16% of the South African car market during the first half. This is up from 10% a few years ago. The Chinese sold almost 30,000 gasoline cars - but only 11 electric vehicles. GlobalData reports that Toyota had the largest South Africa sales decline among traditional automakers, with a drop of almost 15%, or 93,805 cars. Changan, a state-owned company, is launching five new vehicles in South Africa. This includes two battery-powered models. However, the best-seller, according to Changan, will be its diesel-powered pickup truck, or "bakkie", as it's known locally. Marinus Venter who manages Changan for Jameel Motors, said that the EV market would take longer. CHINESE PICKUPS: A NEW FRONTIER In Chile, there are only a few charging stations scattered along the 2,600 miles (4200 km) of mountains and seaside terrain. According to the local auto-industry association, Chinese automakers now account for almost a third of the market in Chile. GlobalData reports that their growth came at the expense for legacy brands such as Chevrolet, Nissan, and Volkswagen whose sales dropped between 34% and 45% last year. Chinese brands in Chile are more likely to follow the strategy of a traditional automaker like Toyota, which has sold few EVs worldwide. Vernooij is the Dongfeng manager for Europe. He said that Dongfeng, like other state-owned companies, is expanding into emerging markets in order to increase sales. Dongfeng offers a wide range of vehicles in Chile, including sedans, vans, pickups, and SUVs. Vernooij stated, "We must win." If you want to be as successful as Toyota, then you can't leave any stone unturned. According to JATO Dynamics, Chinese brands sold less than 1,000 EVs but more than 25,000 internal combustion vehicles in Chile during the first half. Dongfeng, a long-time China-based joint venture partner of Nissan, sells gas-powered trucks in Uruguay that are a version Nissan's truck. The Dongfeng Rich 6 resembles a Nissan Frontier, but with a different exterior and an older Nissan V6 motor. Nissan's spokesperson confirmed that the Rich 6 was based on the Frontier, and jointly developed by both automakers. According to Uruguay dealers, the Nissan starts at around $30,990, while the Dongfeng is priced at approximately $21,490. Mariana Betizagasti (33), from Durazno in Uruguay, bought a Rich 6, to handle the heavy work on a farm, such as hauling feed and transporting animals, that her Renault pickup could not do. She said that the low price sealed the deal. "You can get two Chinese trucks at the same price as one traditional brand from Uruguay." Nissan's spokesperson refused to comment on whether Nissan makes money from its overseas sales, or on the competition that Chinese automakers pose. Nevertheless, many Chinese automakers sell their exports at prices that are higher than the ones they receive for similar models on China's fiercely competitive market. Yan Jun, executive vice president of Jetour International and Chery's Jetour Brand, stated that Chery will maintain a price-conscious policy as the brand expands into every European country before 2027. In an interview, he stated that "at the moment not many automakers in China make money." "We do not want to be involved in another price war."
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Nomura predicts that India's Nifty will rise to 29,300 in 2026, as the economy recovers.
Nomura's analyst Saion Mukherjee expects India’s benchmark Nifty to rise to 29,300 by the end of 2026, a 12% increase over current levels. This is due to cyclical economic growth and earnings growing under supportive policies. Mukherjee stated in a Tuesday note that the brokerage would drop its valuation concerns by May 2025, after the markets had recovered from the tariff-driven selling triggered by the U.S. increase in import duties. He added that a more stable macro-environment, signs of a cyclical recovery, and a calmer geopolitical environment now support the argument for higher valuations. The outlook of the research firm is similar to calls made by other experts for 2026. J.P.Morgan The Nifty 50 and Sensex reached record highs for the week. First time in 14 months Supported by improved earnings, stable valuations, resilient inflows of domestic funds and strong economic growth. According to the brokerage, India's relative underperformance in the last year helped normalise valuation premiums. Strong local flows also helped stabilize markets. The government expects that policy support will be provided to promote growth, self-reliance, and structural reforms in order to maintain a positive medium-term outlook. Nomura cautioned, however, narrative-driven stocks that have stretched valuations could deliver no return, and urged a selective bottom-up strategy. It favors commercial vehicles, pharmaceuticals, IT, and non-bank lending and is overweight in financials, consumer discretionary goods, real estates, internet, telecom, and cement. It is cautious about consumer staples and infrastructure. Capital goods, healthcare and capital services are also on its radar. Top picks for 2026 include ICICI Bank, Axis Bank , Infosys, UltraTech Cement, Mahindra & Mahindra and Bajaj Finance. The firm has also warned of global threats such as rising risk premiums and commodity spikes.
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Putin wants to increase energy and defence exports during India's visit.
The Russian President Vladimir Putin begins a two-day trip to India on Thursday. He will be promoting more Russian oil sales, missile systems, and fighter jets to restore the energy and defence links that have been damaged by U.S. sanctions against India. Russia has been supplying arms to India since the 1960s. New Delhi is now its largest buyer of oil by sea despite Western sanctions imposed after Moscow invaded Ukraine in February 2022. India's crude oil imports will hit a low of three years this month after Russia was sanctioned for its increasing purchases of U.S. gas and oil. Putin's defence minister Andrei Belousov will accompany him on his first trip to India in four years for a meeting with Prime Minister Narendra Modi. He will also be joined by a large delegation of businesspeople and industrialists. Michael Kugelman, of the Atlantic Council, said that the visit of Putin offers Delhi the opportunity to reassert its special relationship with Moscow despite recent events and to make progress in new weapons deals. Kugelman added that the summits between India and Russia are not solely based on optics, because of the nature of the relationship. He said that new initiatives would be announced even if most of them were low-hanging fruits in the ties. TRUMP FACTOR Indian officials are concerned that any new energy or defence deals with Russia may trigger a response from U.S. president Donald Trump. In August, Trump doubled the tariffs on Indian goods to 50% as punishment for New Delhi’s purchases of Russian oil. Both sides had discussions in advance of Putin's arrival, ranging from shipping to agriculture. In August, both sides agreed to begin negotiations for a free-trade agreement between India and the Russian led Eurasian Economic Union. Indian analysts claim that they are also in discussions to expand their partnership on civilian nuclear energy. A source familiar with the situation said that Putin's delegation included the CEOs of Sberbank, the dominant Russian bank, and Rosoboronexport (the state arms exporter), as well as the leaders of Rosneft/GazpromNeft. The industry source and another Indian government source said that Moscow will likely ask India for help in obtaining spare parts and technical equipment to support its oil assets. Sanctions have hampered access to suppliers. The speaker spoke under the condition of anonymity, as this is a sensitive matter. The source said that India will likely bid for a restoration of a 20% stake for the state-owned gas explorer ONGC Videsh Ltd, in the Sakhalin-1 Project in Russia's Far East. India will have a U.S. deal by the end of the year, since most refiners in India stopped buying Russian crude oil. However, some state refiners are now attracting more refiners with discounts. Sources at Indian Oil Corp and Bharat Petrol Corp said that they have placed orders with non-sanctioned Russian companies for loading in December and January, while Bharat is close to placing an order. Sources requested anonymity because they were not authorized to speak with media. INDIA LOOKS TO RUSSIA FOR DEFENCE SPARES Last week, Rajesh Kumar Singh, the Defence Secretary, said that India, unlike crude, does not intend to freeze its defence ties with Moscow any time soon, as it needs continued support for many Russian systems which it uses. According to two Indian officials who are familiar with the issue, Russian Sukhoi-30 fighter jets comprise the majority of India's fighter squadrons. Moscow has also offered the Su-57 fighter, its most advanced model, and this is likely to be discussed in the talks scheduled for this week. The officials who spoke under condition of anonymity said that India hasn't made a final decision about buying the jet. Singh stated last week that India will likely discuss the purchase of more S-400 systems. The country has now received three units and two more are pending delivery under an agreement signed in 2018. Harsh Pant of India's Observer Research Foundation, who heads the foreign policy studies department, believes that recent U.S.-Russian talks on ending the Ukraine conflict could make it easier for Indian officials and diplomats to communicate with Moscow. He said that ties appear to be strained. He added that "a large part of our trading relationship was based around energy, and now it is losing momentum under the threat from sanctions by the United States." "At the end of it all, defence is what binds the two together." (Reporting and editing by Clarence Fernandez; Nidhi verma, Shivam patel)
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Nomura predicts that India's Nifty will rise to 29,300 in 2026, as the economy recovers.
Nomura's analyst Saion Mukherjee expects India’s benchmark Nifty to rise to 29,300 by the end of 2026, about 12 percent above its current level, as the cyclical economy and earnings growth gain traction in the face of supportive policies. Mukherjee stated in a Tuesday note that the brokerage would drop its valuation concerns by May 2025, after the markets had recovered from the tariff-driven selling triggered by the U.S. increase in import duties. He added that a more stable macro-environment, signs of a cyclical recovery, and a calmer geopolitical environment now support the argument for higher valuations. The outlook of the research firm is similar to calls made by other experts for 2026. J.P.Morgan The Nifty 50 and Sensex reached record highs for the week. First time in 14 months Supported by improved earnings, stable valuations, resilient inflows of domestic funds and strong economic growth. According to the brokerage, India's relative underperformance in the last year helped normalise valuation premiums. Strong local flows also contributed to market stability. The government expects that policy support will be provided to promote growth, self-reliance, and structural reforms in order to maintain a positive medium-term outlook. Nomura cautioned, however, narrative-driven stocks that have stretched valuations could deliver no return, and urged a selective bottom-up strategy. It favors commercial vehicles, pharmaceuticals, IT, and non-bank lending and is overweight in financials, consumer discretionary goods, real estates, internet, telecom, and cement. It is cautious about consumer staples and infrastructure. Capital goods, healthcare and capital services are also on its radar. Top picks for 2026 include ICICI Bank, Axis Bank , Infosys, UltraTech Cement, Mahindra & Mahindra and Bajaj Finance. The firm has also warned of global threats such as rising risk premiums, commodities spikes and macro or geopolitical shocks.
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The US data is the focus of this article.
The price of gold eased Tuesday, after reaching a six-week-high in the previous session. Rising U.S. Treasury rates and profit-taking were weighing on the prices. Investors awaited U.S. Economic Data to gauge the Federal Reserve’s policy direction. Gold spot fell 0.4%, to $4,216.13 an ounce, at 0436 GMT after reaching its highest level since Monday, October 21. U.S. Gold Futures for December Delivery were down 0.7% to $4,246.60 an ounce. Benchmark 10-year U.S. Treasury Yields hovered near a two-week-high touched in the prior session, reducing interest in non-yielding gold. Tim Waterer, Chief Market Analyst at KCM Trade, said that while gold is showing a weak performance today, the fundamental picture remains unchanged. This includes the anticipated U.S. interest rate cuts which are expected to be beneficial for gold in terms of yield. Waterer stated that the markets are cautious as Fed Chairman Jerome Powell will not sound as dovish compared to some of his colleagues. The core Personal Consumption Expenditures price index (PCE), the Fed's preferred inflation measure, is also expected to remain relatively benign on Friday. Powell did not mention the economy or the monetary policy in his remarks, which were prepared for a Stanford University address late Monday night. Investors will now be awaiting important U.S. data, such as the delayed September PCE Index and Wednesday's ADP Employment Report. According to CME's FedWatch, traders are pricing in a 88% chance that the Fed will cut rates in December. Kevin Hassett, White House Economic Advisor, said that he was willing to be the Fed Chair, while Treasury Secretary Scott Bessent hinted at a possible nomination before Christmas. Hassett wants lower rates, just like Donald Trump. Gold that does not yield is usually favored by lower interest rates. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.44% on Monday to 1,050.01 tons from 1,045.43 tonnes on Friday. Silver dropped 1.5%, to $57.10 an ounce. Platinum fell 0.5%, to $1,649.72. Palladium also declined 0.5%, to $1,417.0. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu)
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Oil prices stable on concerns about geopolitical supply risks
The oil price held steady in the early trading of Tuesday, as participants weighed up risks arising from Ukrainian drone attacks on Russian energy sites and mounting tensions between the United States and Venezuela. They also pondered mixed expectations regarding U.S. gasoline inventories. Brent crude futures increased 7 cents or 0.1% to $63.24 per barrel at 0427 GMT. U.S. West Texas Intermediate Crude gained 10 cents or 0.2% to $59.42 per barrel. Both benchmarks rose more than 1% Monday, with WTI near its two-week high. In a client note, Saxo analysts stated that oil held gains while traders awaited the President Trump's move on Venezuela. They also assessed terminal damage in the Black Sea. On Monday, the Caspian Pipeline Consortium After a major Ukrainian incident, the company said that it had resumed oil deliveries from one of its Black Sea terminal's mooring points. drone attack On November 29, On Monday, Kommersant, citing anonymous sources, reported that oil loading had resumed using the single-point mooring 1, while SPM 2, was damaged. The analysts at Ritterbusch and Associates wrote in a report that "the military action further confirms our opinion that peace is unlikely to be achieved anytime soon and the diesel/gasoil market is on the verge of pulling back the complex." Volodymyr Zelenskiy, the Ukrainian president, said Monday that he was looking forward to negotiations. Kyiv’s priorities The main issues were the need to ensure security and sovereignty, as well as territorial disputes. The U.S. ambassador Steve Witkoff will brief the Kremlin Tuesday. Suvro Sarkar, DBS Energy Sector Team Lead, said that "the noise surrounding Venezuela" was the "only other emerging factor" in oil. He said that while a full-blown war is unlikely, the ongoing events in the country could destabilise it internally and threaten its oil production and exports. U.S. president Donald Trump discussed the Venezuela pressure campaign with his top advisors. A senior U.S. government official said. Trump stated on Saturday that the airspace surrounding Venezuela and above it should be "closed completely" without giving any further details. Sunday is a day of rest. Reaffirmed a small increase in oil production for December, and a pause on increases in the first three months of next year because of rising fears about a glut of supply. Sarkar, DBS Bank, said that "the OPEC+'s language on supply management in the short term is supportive of oil prices." Prices were slightly impacted by mixed expectations on U.S. crude oil and refined product inventory data. A preliminary poll of four analysts showed that crude inventories fell but product inventories rose in the week ending November 28. Ashitha Shivprasad reported from Bengaluru, and Trixie Yap was in Singapore. Sonali Paul and Thomas Derpinghaus edited the story.
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US data and firmer yields are the focus of gold prices.
Early trading on Tuesday saw gold ease after reaching a six-week-high in the previous session. Rising U.S. Treasury rates and profit-taking dampened sentiment in advance of U.S. data that will likely guide the Federal Reserve’s policy direction. As of 0228 GMT, spot gold dropped 0.4% to $4215.48 an ounce after reaching its highest level since Monday, October 21. U.S. Gold Futures for December Delivery were down 0.6% to $4,247.10 an ounce. Benchmark 10-year U.S. Treasury Yields hovered near a two-week-high touched in the prior session, reducing interest in non-yielding gold. Waterer stated that the markets are cautious because Fed Chair Jerome Powell will not sound as dovish than some of his Fed colleagues. The core Personal Consumption Expenditures price index (PCE), which is the Fed's preferred inflation measure, is expected to be relatively benign on Friday. Tim Waterer, Chief Market Analyst at KCM Trade, said that while gold is showing a weak performance today, the fundamental picture remains unchanged. This includes the anticipated U.S. interest rate cuts which are expected to be beneficial for gold in terms of yield. Powell did not mention the economy or monetary policies in his remarks, which were prepared for a Stanford University address on Monday evening. Investors will be watching the key U.S. economic data this week. This includes Wednesday's ADP Employment Report and Friday's Personal Consumption Expenditures Index, which is delayed from September. According to CME's FedWatch, traders are pricing in a 88% chance that the Fed will cut rates in December. Kevin Hassett, White House advisor, said he was willing to serve as Fed chairman. Treasury Secretary Scott Bessent had hinted at a possible nomination before Christmas. Hassett wants lower rates, just like Donald Trump. Gold that does not yield is usually favored by lower interest rates. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.44% on Monday to 1,050.01 tons from 1,045.43 tonnes on Friday. Silver dropped 1.9% per ounce to $56.88, platinum increased 0.1% to 1,659.23 and palladium rose 0.2% to $1.427.62. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich)
MORNING BID EUROPE-Auction bid steadies Japan bond slide
Tom Westbrook gives us a look at what the future holds for European and global markets.
On Tuesday, there was some relief on the Japanese government bond markets. A 10-year auction had gone well and stabilized a sell-off which had rippled throughout the world.
The bid-tocover ratio was nearly 3.6, the highest since Sept. and the "tail", or gap between where the market was trading before the sale, was negligible. At 1.86% the benchmark yield was just below the 17-year-high.
Global bonds were hammered in December after Bank of Japan governor Kazuo Ueda set the stage for a hike by saying that policymakers would weigh the "pros" and "cons" of such a move.
The rising yields in Japan raise the worry that Japan, the world's largest creditor nation, may reduce its demand for debt from abroad. So the auction results could be a warning to investors that they are staying at home.
Australian bonds continued to be under pressure during the Asia session while U.S. Treasuries stabilised. Cryptocurrencies, another source of nervousness, stabilised during the Asia session, after a further sharp drop in bitcoin's price.
Bitcoin was hovering around $87,000, and it is down 7% from a year when many expected that it would soar due to the inauguration of a crypto-friendly U.S. administration. The market value for cryptocurrencies tracked by analytics company CoinGecko is down nearly $1.4 trillion since a peak in October of $4.4 trillion.
Stocks in South Korea were mostly stable, but a reduction in U.S. Tariffs boosted chipmakers.
The Tuesday flash inflation data is expected to show a fairly sticky rise in prices, but it won't change the rate outlook too much, as markets expect the European Central Bank (ECB) to remain on hold until 2026.
The following are the key developments that may influence Tuesday's markets:
- Euro zone inflation
Earnings (after-market) for CrowdStrike
(source: Reuters)