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Australian shares fall as Trump's threat of tariffs dampens sentiment
Australian shares dropped on Tuesday. Heavyweight miners, financial stocks and other sectors led the losses. Global risk sentiment was soured by escalating tensions following U.S. President Donald Trump's threat to impose extra tariffs against Europe. As of 0007 GMT, the?S&P/ASX 200 was down 0.5% to?8,832.9. The benchmark closed Monday 0.3% lower. Overnight, global stocks fell as Trump announced he would add 10% to the tariffs imposed on eight European nations that oppose his takeover Greenland. U.S. stock markets were closed for a public holiday. S&P 500 Eminis futures fell 70.75 points or 1.01% early on Tuesday. Meanwhile, Japan's Nikkei dropped 0.5%. The "Big Four", which comprise a large portion of the benchmark, fell between 0.6% to 0.9%. The mining subindex fell by almost 1%. Iron ore fell to a two-week low following data from China, the largest consumer. BHP shares fell 0.7% as the sector's heavyweight announced that it had accepted lower iron ore prices during annual contract negotiations in China and also flagged a 20 percent increase in costs at its Jansen Potash project in Canada. However, the miner reported record-breaking?first half iron ore production. Rio Tinto, due to announce its fourth quarter production results on Tuesday, has also slipped 0.7%. Market participants will also be watching the December jobs data to determine the Reserve Bank of Australia rate cut trajectory. The broader mining sub-index lost 0.3% of its value as the price of safe-haven gold retreated from record highs. Real estate stocks dropped 0.9% on their way to their steepest single-day drop since earlier this month. Technology stocks, which were bucking the mood of gloom, added 0.7%. Healthcare and consumer discretionary stocks, on the other hand, rose by 0.2% and 0.4% respectively. New Zealand's benchmark S&P/NZX50 index fell by 0.4%, to a low of 13,523.19.
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BHP flags price concessions, reports record HY ore production
BHP Group accepted lower prices during annual contract negotiations. It said this on Tuesday as it reported record production in the first half of steelmaking's key ingredient. The miner has also reported a 20% increase in the costs of its Jansen Potash Project in Canada. BHP?said that it is currently negotiating a contract?terms of annual with the state iron ore buyer, China Mineral Resources -Group (CMRG). BHP stated in a press release that "during negotiations, we continue optimising product placement distribution channels as well as taking?actions? within our operations so to preserve 'operational flexibility and productivity". This has had some impact on the realised price. BHP has separately announced that the estimated total investment for its Jansen Stage 1 project is now $8.4?billion, up from an earlier estimate of between $7 billion and $7.4 billion. The cost increase was attributed to the construction hours and materials used that were not included in earlier estimates. The world's biggest listed miner reported that?iron ore produced from its Western Australia operations was 146.6 metric?tons on a 100 percent basis in the six-month period ended December 31. This is a 1% rise from the same time last year. (Reporting from Rajasik Mukherjee, Bengaluru. Editing by Jamie Freed.)
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UK targets struggling water sector through new regulator
Britain will announce plans on Tuesday to improve England's Water Sector. They promise a "new regulator" with the power to check more on infrastructure and prevent sewage spills?and?supply outages. After years of underinvestment in the water sector, the government declared that the privatised system was broken. Meanwhile, the biggest provider of the country, Thames Water, struggles to survive, having been?loaded with debt. Two incidents in the last six weeks left thousands of homes in south east England with no water for several days. Last July, the creation of a regulator that would "combine existing authorities" was suggested. Environment Minister Emma Reynolds said new legislation planned by the government would ensure improved performance from water companies. Water companies won't be able to hide their poor performance. Customers will receive the service they deserve. Investors will see an?system designed for the future", she said. Thames Water is attempting to get regulatory approval for a plan of rescue led by some of its lenders. However, the heavy fines that it has to pay prevent it from investing in order to improve performance. The government announced a plan to create a "Performance Improvement Regime" that would help "underperforming companies recover quicker". The government did not give any further details. The new regulator will also be able to perform "health checks" of water companies' infrastructure and pipes. (Reporting and editing by Paul Sandle, Sarah Young)
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UK to overhaul its antitrust system to drive growth
Britain wants to improve its competition regime. It has launched a formal consultation to see if it can be made "faster, predictable, and more proportionate". The government announced that it would speed up and simplify the anti-trust investigations, "working closely" with CMA (competition regulatory body) while maintaining its independence. It added that the consultation proposed changes to the way the CMA makes merger decisions and market investigations. This would ensure market remedies were regularly reviewed and businesses could be more certain about whether they will face merger controls. The CMA's decision-making independence will not be affected by these proposals, it was added. The CMA announced on Monday that they would review their historical interventions in order to determine if any of them were still needed to reduce the burden?of compliance. They identified 33 market'remedies' - 60 percent of all those already in place – that might no longer be necessary. The government has also announced that the state-owned bank for development will invest in Kraken Technologies 25 million pounds ($34million) as its largest direct investment, supporting the AI energy software company ahead of an eventual London listing. The government announced that the investment in Kraken, valued at $8.45billion after its spinoff from UK-based Octopus last year, follows reforms made to the British Business Bank mandate, allowing them to take larger, more risky stakes in important scale-ups. Peter Kyle, the business minister, said that Britain's most promising businesses have been looking abroad for support to help them grow. "We are cutting red tape and backing innovators who can really 'firepower'. According to a statement, The BBB, 'owned by the Government's Business Department but operatingly independent', will invest separately 50 million pounds in Epidarex Capital and IQ Capital. Kraken, a company that provides energy software to utilities, energy groups, and companies such as EDF, National Grid U.S., and Tokyo Gas, has 70,000,000 global customers. It "may list in London", the government said, following its demerger.
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The Russian budget deficit in 2025 was 2.6% of the GDP, which is the highest level since 2020
The Finance Ministry announced on Monday that Russia had a budgetary deficit of 5.6 trillion roubles, or 2.6% of GDP, by 2025. This is the largest deficit in terms of percentage of GDP since 2020 and in roubles since 2006. In 2024, Russia's fiscal deficit was equal to 1.7% of its GDP. The?government increased the deficit target in 2025 from the initial?1.2 trillion Rubbles or 0.5% GDP due to the shrinking energy revenue and a strong Rouble. Budget revenues were 37.28 trillion rubles, down 7.5% on the original target. This was due to the 24% drop in oil and gas revenue, which reached its lowest level since 2020 despite the corporate profit and income tax increases. Budget spending, at 42.93 trillion rubles, was up 6.8% from 2024, and 3.5% more than the original?budget plan. Analysts doubt that the government will be able to meet its target, despite the fact that the government has raised the value added tax in order to keep the deficit this year at 1.6% of GDP.
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Italian fashion great Valentino dead at 93
His foundation announced that Valentino Garavani, the Italian designer of fashion, died on Monday. Valentino, who is usually only known by his first name, was 93 years old and had Retired in 2008 Valentino, the founder of his eponymous label, was a pioneer in haute couture, who built a successful business empire, and also introduced to fashion a new color, the so-called "Valentino Red". The foundation posted on Instagram that "Valentino passed away today in a?his Roman home, surrounded by his loved ones." It added that the funeral would take place at 11am (1000 GMT) on Friday in Rome. Valentino, along with Giorgio Armani, Karl Lagerfeld and other great designers of an era when fashion was not a globalized industry dominated by marketing executives and accountants but rather a highly commercialized one. Lagerfeld The year 2019 has seen the death of many people. Armani Died in September. (Written by Alvise Armillini, edited by Gavin Jones).
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Ghana's mining reforms could choke off investment, warns industry body
Ghana's main mining industry group said that changes in the country's tax and royalties terms could deter investment, and slow?output. Last week, it was reported that Africa's largest gold producer planned to cancel long-term mining investments stability agreements and double royalty payments under sweeping reforms. These changes will result in the termination of the?stability agreement with Newmont, AngloGold Ashanti, and Gold Fields. The mining regulator stated that the change was intended to increase state revenue and crackdown on companies abusing their licenses. The draft bill, which is expected to be presented to the parliament in March, proposes a royalty rate of 9%, rising to 12% when gold reaches $4,500 an ounce or more, about double the current range of 3% to 5%. Fear of Stalemated Projects, Lost Jobs In a statement released on Monday, the Chamber of Mines - which represents the 'big mining companies' - said that they supported the principle of a sliding scale royalty system, which would allow the government to earn more when gold prices are higher. It warned, however, that the current proposal could push Ghana up the global effective taxes curve and potentially cause projects to be halted or jobs to be lost. "We understand why a sliding scale is used, but it must be structured in a way that the government can secure sustainable revenues?while industry continues to grow and reinvest," said Chief Executive Kenneth Ashigbey. The current proposal fails to strike this balance. The chamber did not offer a "counterproposal". The Minerals Commission and the Lands and Natural Resources Ministry of Ghana did not respond immediately to comments. The chamber of commerce said that Ghana's large scale miners pay a 3% growth levy and a flat 3-5% royalty rate. Both are levied based on gross revenue, not profit, and include a 35% corporation income tax, an 8% dividends tax and a 10% state-free carried interest. It said that stability and development agreements need to be improved, but not repealed outright. The chamber welcomed the ongoing consultations between Ghana's Lands and Natural Resources Minister and stressed that a competitive, predictable fiscal regime is essential to sustaining investment. Maxwell Akalaare Adombila, Robbie Corey Boulet and Susan Fenton edited the report.
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Gold and silver record highs amid Greenland dispute
Gold and silver reached record highs on Monday as investors fled to safety following the warnings from U.S. president Donald Trump about extra tariffs being imposed on certain European countries over a dispute regarding Greenland. By 12:05 pm, spot gold had risen 1.7% to $4672.49 per ounce. After reaching a record high of $4,689.39, ET (1705 GMT) was reached. U.S. Gold Futures for February Delivery increased 1.8% to $4677.70 per ounce. Trump threatened several European Allies on Saturday with an escalating series of tariffs unless the U.S. was allowed to "buy Greenland", intensifying a dispute about Denmark's vast Arctic Island. "When institutional or policy risks resurface the markets tend to'react quickly by reallocating towards safe-haven investments, with gold emerging once again as the preferred option," said XS.com senior analyst Linh Tran. Dollar fell after Trump's latest threats to raise tariffs prompted investors to seek out safe-haven currencies like gold, yen (Japan) and Swiss Franc. This was part of a broader risk-averse movement across all markets. Gold is more likely to do well in times of geopolitical or economic uncertainty and when interest rates are low. It has gained over 64% since 2025, and more than 8% in the first half of this year. Michelle Bowman, Vice Chair of the Federal Reserve for Supervision, said that the U.S. Central Bank should be prepared to lower interest rates if necessary due to a fragile and potentially weakening job market. The markets expect the Fed will hold rates at its meeting on January 27-28, but they are pricing in two 25 basis point rate cuts this year. Spot silver, which had previously reached a record-high of $94.61, has risen 5% to $94.41 per ounce. Since the beginning of the year, silver has increased by more than 32%. Citi Research analysts said they remain "tactically bullish" on precious metals. They set price targets for gold of $5,000 per ounce and silver at $100 per ounce in the next three month, citing the geopolitical tensions likely to continue to be high. Palladium increased 1.1%, to $1,819.99, while spot platinum rose 1.5%, to $2,362.65 per ounce.
The season of macro forecasts is upon us.
What Mike Dolan, the ROI team and I are looking forward to reading, watching and listening to this weekend.
From the Editor
Hello Morning Bid readers! As we enter the final month of 2018, it's time to look at the 2026 market forecasts. It's hard to find U.S. equity bulls but forecasts come with a lot of qualifiers. This is understandable, given the uncertainty surrounding an artificial intelligence boom. AI adoption may really take off in 2019, but according to ROI's editor-at-large Mike Dolan, U.S. growth will likely be constrained by the 150-year trendline of 2%, especially if technology innovation is hampered by supply chain bottlenecks or labor market bottlenecks. The U.S. labour market is as clear as mud. The U.S. private payrolls in November were negative 32,000, which is well below the consensus and represents the largest drop in over two and a quarter years. The number of Americans submitting new claims for unemployment benefits dropped to its lowest level in more than three year. A slice of the consumer delinquency data suggests that the U.S. economy might not be as grim as it seems despite the K-shaped economic model. Moreover, the fears that foreign investors will lose interest in U.S. stock markets may be unfounded. In recent months, the inflow of overseas private sector funds into U.S. stock markets has reaccelerated to record levels. Now the big question is if this trend can continue into next year. In Asia, Japan's 10-year bond yield reached its highest level since 2007, rising over 25 basis points in just four weeks. This was happening as Prime Minister Takaichi sought to calm investor fears about her $137-billion spending plan. The weakened yen is still hovering around 155 per dollar, close to the upper end of its long-term range. Stephen Jen, CEO of Eurizon SLJ, believes that the currency's apparent excessive weakness could be a ticking bomb. In the energy markets, OPEC+ announced that they would maintain production levels through the first three months. The market is complicated by the uncertainty around sanctioned volume. OPEC+'s changes to the oil production quotas could lead to a surge of investments in upstream. In the meantime, Europe prepares to eliminate Russian imports from its gas market by 2027. Gavin Maguire, ROI's energy transition columnist, explains the countries that will be affected. Copper continues to be a hot commodity, but it does not necessarily mean that global manufacturing will increase in line with this trend by 2026. Next week's main event will be the Federal Reserve meeting. Fed-watchers are paying close attention to how many dissents there are, because this could indicate the growing divisions within an organization that has been known for its consensus. But the real story of the Fed is Donald Trump's choice for next chair. Mike Dolan says that if White House advisor Kevin Hassett, as Trump hinted at, is chosen - the markets will be watching his every word.
Check out what the ROI team recommends you read, watch, and listen to as we enter the weekend. Stay informed and prepared for the coming week. Please contact me via
CLYDE RUSSELL: You do not need to be a chess expert to understand the story of Sarwagya Kushwaha. She is the youngest chess player in history to have earned an official FIDE ranking before the age four.
RON BOUSSO is the ROI Energy columnist. A picture speaks a thousand. This is why I suggest you look at the stunning collection of 'top photographs of 2025', which was selected from the over 1.6 million images released to clients in this year. What a year...
GAVIN MAGUIRE is the ROI Global Energy Transformation Columnist. This high-def, updated map of U.S. Data Center Infrastructure created by the Chief Cartographer at the newly renamed National Renewable Energy Laboratory(NREL)is a work of art. It really highlights the enormous scale of the activity taking place across the country as transmission lines and server farms get up at running to power the AI revolution: https://docs.nrel.gov/docs/gen/fy26/98020.jpg
JAMIE McGEEVER, ROI Markets columnist: AI is experiencing a speculative boom in the U.S. and around the world. Simon Johnson and Piero Novelli, professors of economics, examine Charles Kindleberger’s “Manias, Panics and Crashes” to get a feel for where this might go. The 1978 book raises three important questions that are still relevant today.
MIKE DOLAN is the Editor-at-Large for ROI. It's rare to find a podcast about 'r*! This Brookings podcast, which will be released next week in conjunction with the Fed's meeting, shows how recent shocks may have caused this theoretical 'neutral rate' of interest to creep higher after years on decline.
JAMIE MCGEEVER is a columnist for ROI Markets. Michael Burry, the author of 'The Big Short,' doesn't do much media other than his often cryptic postings on X – and interviews are rarer still. Fast forward through 6-7 minutes worth of ads and introduction, and you'll find an interview with Michael Lewis on the Against the Rules podcast.
ANNA SZYMANSKI is the editor-in-charge of ROI. We have just launched a Morning Bid podcast that will be available both in audio and video. Subscribe to the Morning Bid daily podcast and hear ROI editor-at large Mike Dolan, along with other journalists, discuss the latest news in finance and markets seven days a weeks.
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(source: Reuters)