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US and Canadian trade teams met again as the deadline for tariffs looms
On Friday, top trade negotiators of Canada and the U.S. met for a third consecutive day in Washington to try to reach a deal before new American tariffs that are expected to take effect on Saturday. The deal could be a sign of detente after 18 months of tensions that began when Donald Trump imposed tariffs against key Canadian imports, prompting Ottawa's retaliation with a series of countermeasures. Trump has said he would impose a 50% tariff on $20 billion of Canadian goods on Saturday at 12:01 am EDT (0401 GMT), if there is no agreement. Dominic LeBlanc - Canada's Minister of Trade with the U.S. - did not address reporters when he arrived for the meeting. LeBlanc and Greer met for over three hours on Thursday. They said that the two sides are "very close" in reaching a deal. Mark Carney may find it difficult to convince Canadians and the powerful premiers of the ten provinces to accept a deal. Leger's opinion poll on Wednesday showed that 56% Canadians wanted Carney to not make any further concessions. Sources claim that an agreement will reduce the top line tariff on Canadian built vehicles from 25% to 15% and cut tariffs on Canadian aluminum and steel to 25%. Ontario, which is a major producer of steel and aluminum, wants to scrap the tariffs. Carney has called on the major provinces to lift their bans on selling U.S. alcoholic beverages, which are a major irritation for Washington. Wab Kinew said that Trump is "very weak", and Canada should take advantage. "I believe we have the upper hand. They're on their heels right now. He told reporters that they were coming to us for a bargain. Canada is only a tenth of the size of the U.S. and exports 70% of its goods south of the border. This makes it "uniquely susceptible" to U.S. punitive trade measures. JD Vance, the U.S. vice president, mocked Carney on Wednesday, saying that he "comes into and puffs out his chest?and tells me, 'I am going to out-tough Donald Trump.'" In a recording obtained by The Canadian Press, Vance is heard saying: "It's funny because Carney presents it as some sort of victory for Canada, when they fundamentally, like... climb down on many issues." Vance spoke at a fundraising event in Southampton, New York. (Written by David Ljunggren, edited by Katharine J. Jackson, Philippa A. Fletcher and Sanjeev M. Miglani).
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Global stock markets close out a difficult week as oil and bond yields remain high
The global stock market was headed for a largely lower week last Friday as the strain on the global bond markets did not show any signs of easing and the diplomatic deadlock over the Gulf pushed oil prices up to a one-month high. The yields on U.S. government bonds resumed their rise after the surprise intervention by the Treasury on Wednesday. This was barely a relief from selling that had been sparked primarily by fears of inflation and fiscal pressures. The increase came as?U.S. Treasury Secretary Scott Bessent suggested that the government could increase its repurchases and also floated the idea for fiscal consolidation. Analysts doubted he would be able to find the necessary spending cuts in order to reduce a budget gap of over 6% of GDP. Interest charges alone for this year totaled $1.2 trillion while U.S. government debt just passed $40 trillion. The dollar is now heading towards the three-month lows it hit on Thursday. It has fallen almost 1% against major currencies this week. "The initial Treasury buyback was remarkable, because it came as a total surprise. But the question is: 'Is this meaningful enough to make a lasting?impact'?" Christian Hantel is a portfolio manager for Vontobel. We could still see the market trying to test whether they are ready to increase the $4 billion that they announced previously. It could be an exciting couple of days. The 30-year bond yield in the U.S. increased by 3 basis points to 5.266%, while the 10-year bond yield was up 3.2 basis points at 4.73%. The 30-year bond yield increased by 3 basis points to 5.266%, while the yield on the 10-year bond rose by 3.2 basis point to 4.73%. Selling on Friday was heaviest in the 2-year Treasury, which was up 5 basis points for the ?day and 9 bps for the week at 4.236% following a stronger-than-expected U.S. purchasing managers' report. The markets assume that 5.3% in 30-year bond yields will be a painful threshold for Treasury. This is similar to what 160 yen has been for Japanese policymakers. Cost of Borrowing The global debt costs are rising as tech giants borrow heavily to fund AI capital expenditures, causing the discount on corporate profits to rise and stock valuations to be challenged. The Nikkei was also feeling the strain, as it?slipped by 0.3%. This brought the losses for the entire week to nearly 4%. It is the?biggest drop weekly since mid-July. Stock markets in Europe have made some early gains. STOXX 600 was still on track for its largest weekly drop since early July. It fell nearly 1%. MSCI's global stock index fell slightly. Wall Street has seen some relief from the recent earnings slump. Major indexes were up by nearly 1% as of midday on Friday. However, they still fell by about 2% for the entire week. Next week, when Nvidia releases its quarterly report, the AI industry will be put to the test. Much depends on Nvidia's outlook for data center revenue and infrastructure demand. Walmart's Thursday slide of 9% was a clear example of what happens when expectations are not met. WAR AND DEBASEMENT Bessent made headlines by extending President Donald Trump's promise of economic war against Iran. He said that the U.S. will impose "the strongest sanctions in history" to the country. The threats dimmed further hopes for a deal to fully open the Strait of Hormuz. Brent crude reached a peak of $95 per barrel in a month, before profit taking set in. Brent futures rose around 0.5% to $94 per barrel. This is up over 5% for the week. U.S. crude climbed 0.4% to $84. The dollar has been losing ground in currency markets this week, as investors are concerned that the ever-growing U.S. government debt and policy uncertainty will cause the currency to lose its purchasing power, driving them towards scarce assets such as gold. Yellow metal rose 1.45% to $4,583 per ounce, its highest price in nearly three months. Dollar index fell almost 0.9% on the week to 98.74, after hitting a three-month low overnight. The euro was up by 1.0% for the week, at $1.1686, having touched a 14-week high. The last time it traded was around $1.1689. This is off the session highs. The dollar's biggest weekly drop since January was 1.7% against the Swiss franc. It is now 0.7995 Francs. Some investors have also been influenced by concerns over the rising U.S. national debt to look at alternatives, such as bitcoin. Bitcoin has typically benefitted from diversification away from U.S.-based assets. Bitcoin reached a two-month high on Friday, and last was up almost 6% to $76,446, which is a good start for a 20% rise in a week. This would be its biggest gain in over 2-1/2 years. Jonas Goltermann is the chief markets economist of Capital Economics. He said that "the dollar has come under renewed pressure due in part to a resurgent narrative about 'debasement.' While we still think that such concerns are overblown and that an overall stronger dollar is likely to be the result of the economic backdrop in the months to come, the continued surprise from U.S. Policymakers could well matter more over the short term. The dollar dropped around 0.2% to 158.79 Japanese yen.
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Johannesburg pays its debts to the state utility and avoids being cut off from power
The electricity department announced on Friday that South Africa's largest city, Johannesburg, had settled an overdue debt of?5.25 billion Rand ($328 million) to the state-owned utility Eskom. The settlement was reached after a government-led process of mediation to resolve a long-running dispute over billing that threatened to cut off electricity supply to the economic center of 'Africa's largest economy. Johannesburg is expected to be one of the most hotly contested battlegrounds in the November 4 municipal elections. The African National Congress is the leader of the coalition that governs the city on a national scale. After seeing its vote share decline at successive elections, the ANC faces pressure to 'improve service delivery' and turn around struggling'municipalities. Business leaders have pledged 'to help improve the state' of Johannesburg's dilapidated infrastructure and ailing finances, saying that the city's condition risks undermining efforts to boost economic growth.
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Goldman: Options demand could push gold above $4,900 forecast
Goldman Sachs said in a Friday note that the price of gold could surpass its $4,900 forecast for the year. This is due to a surge in demand for bullish options on gold. The bank said that a further increase in Western investor demand combined with strong central bank purchases could push bullion towards key strike levels where dealer hedging can mechanically accelerate the price movements. Goldman stated that "gold call?options demand has increased sharply amid renewed global macro-policy hedges, creating an automatic price amplifier on both the upside as well as?downside." Options have a double-edged effect. Dealers who sold call options could be forced to purchase bullion in order to hedge their exposure as gold climbs towards key strike levels. This would amplify the rally. Goldman warned that the opposite is also true: a drop in price could cause dealers to remove hedges and deepen any sale. Bank of America said that gold's rise to $4,600 per ounce was driven by a decline in expectations for a U.S. Federal Reserve interest rate hike this September, after the Fed's policy hold on July and weaker jobs and inflation data. Goldman stated that this has?revived speculative positions on COMEX, and boosted demand for exchange-traded funds. The note stated that "a renewed increase in Fed-hike expectation could also trigger dealer 'hedge unwindings and produce an even sharper correction than usual." Spot gold is on track for its third consecutive weekly gain. It rose nearly 5% this week, reaching a three-month-high and breaking through the 200-day moving avg.
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US and Canadian trade teams will meet again as deadline for tariffs looms
The top trade negotiators of Canada and the U.S. are meeting for the third time in Washington to finalize the trade agreement before the new American tariffs that will be implemented on Saturday. The deal could be a sign of detente after 18 months of tensions that began when Donald Trump imposed tariffs against key Canadian imports, prompting Ottawa's retaliation with a series of counter-measures. If a deal cannot be reached, Trump has said he will impose new tariffs of 50% on Canadian goods worth $20 billion at 12:01 am EDT (0401 GMT) on Saturday. Dominic LeBlanc is Canada's Minister responsible for Trade with the U.S. LeBlanc and Greer met for over three hours on Thursday. They said that the two sides were "very near" a deal but also added that there was still more work to be done. Mark Carney, the Prime Minister of Canada and the influential premiers from the 10 provinces may find it difficult to sell a deal to Canadians. Leger's opinion poll on Wednesday showed that 56% Canadians wanted Carney to not make any further concessions. According to sources, an agreement will likely reduce the top-line tax on Canadian-built cars to 15% (from 25%) and to halve tariffs for Canadian steel and aluminium to 25%. Ontario, which is a major producer of steel and aluminum, wants the tariffs to be scrapped. Carney has called on the major provinces to lift their bans on selling U.S. alcohol. This is a major irritation for Washington. Wab Kinew said, on Thursday, that Trump was "very weakened" and Canada should benefit. "I believe we have the upper hand - they are back on their heels at this moment. He told reporters that they were coming to us with a deal. "I think we should fight," said the reporter. Canada is only a tenth the size of the United States, but it exports 70% of its goods south of the border. This makes Canada particularly vulnerable to U.S. punitive trade measures. JD Vance, the U.S. vice president, mocked Carney on Wednesday, saying that he "comes into and puffs out his chest and says, I'm going, 'like, to out-tough Donald Trump.'" Vance is heard in a recording by the Canadian Press saying, "It's funny because Carney presents it as some sort of victory for Canada, when they fundamentally, like... climb down on many issues". Vance spoke at a Southampton, New York fundraiser. (Writing and editing by Katharine Fletcher, Philippa Jackson, David Ljunggren)
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Officials say that Israeli forces killed a Palestinian teenager after settlers entered a West Bank village.
Officials?said that an Israeli guarding a group?of?Jewish settlements who entered Palestinian village land on Friday fired at Palestinians who confronted the settlers, killing a 17-year old and wounding a man 70 years of age. The incident in the occupied West Bank town of Sa'ir was the latest of what Israeli military calls "unauthorized hikes" of settlers who invade the outer reaches of villages, which Palestinians see as an act intimidation. In a press release, the military stated that the Palestinian villagers "threw stones" at the settlers who were "present in the area without prior authorization". It was also reported that some of the settlers were injured. The military reported that "a security official opened fire on the area and there were Palestinian casualties" as a result. Palestinian officials confirmed that a 17-year old boy was killed after being shot in his chest. The 70-year old's condition was not immediately known. Sa'ir is a village located near Hebron, in the southern West Bank under civil control of the Palestinian Authority. Israelis are not allowed to enter this area. In the 'West Bank, which is home to three million Palestinians, and about 500,000 settlers there has been a rise of settler violence, and seizures of land and resources. International condemnation was expressed this week for a siege of homes by settlers in the village of Qusra. Most countries and U.N. agencies consider the settlements to be illegal in international law. Israel denies?this and cites biblical connections to the area. Palestinian officials reported that Israeli troops killed a Palestinian overnight in Jenin, north of Jerusalem, after raiding the man's home. According to the military, soldiers shot him when he attempted to stab at them. It added that no troops were injured. Reporting by Rami AYYUB and Ali SAWAFTA Editing by Gareth Jones
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FTSE Russell upgrades Hoa Phat Vingroup and Vietcombank to Vietnam's Emerging Market
FTSE Russell, a global index provider, published a list on Friday of 'Vietnamese Securities eligible for inclusion in their global equities benchmark indexes. This is a major'step before the reclassification of a southeastern Asian nation - due to take place next month. The move is made ahead of Vietnam being upgraded to emerging market status in September by the index provider. FTSE Russell estimates that this could result in up to $6 billion in passive capital flowing into the country's stock markets. FTSE Russell has named?27 Vietnamese companies eligible for inclusion in its FTSE Global All Cap Index. Vietcombank and Vingroup, a state-controlled lender, and Vinhomes, its property developer unit, were classified as large-caps, whereas BIDV, Hoa Phat, and VPBank, were mid-caps;?all of the six were listed on the FTSE All-World Index. All 21 stocks, including FPT (a technology company), were small-caps. The?notice listed 90 Vietnamese microcap stocks for FTSE Total Cap. It ?did not disclose individual ?constituent weights, free-float-adjusted investability factors or estimates of reclassification-related investment flows. FTSE Russell announced in April that it would add the country in stages to its global equity indices, adding 10% in September, another 20% in March and 35% in June and September next year. Vietnam is on the list of countries that are being considered for inclusion in the category which includes China and India. When the upgrade is completed, Vietnam will account for approximately 0.034% of FTSE Global All Cap Index, 0.02% FTSE All World Index, 0.329% FTSE Emerging All Cap Index, and 0.192% FTSE Emerging Index. Official data shows that foreign investors have sold Vietnamese stocks this year. The net outflows of the Ho Chi Minh Stock Exchange totaled approximately $3.61 billion. This follows $5?billion net outflows for 2025. The benchmark VN-Index for Vietnam closed Friday at 1,768.95, up by 1.95%. According to LSEG, the index has fallen 2.82% this year. (Reporting and editing by Toby Chopra; Phuong Nguyen)
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China and Indonesia ministers will meet Friday to discuss economic, security, and other issues.
China's and Indonesian's defence and foreign ministers will meet on Friday. Security, politics, and economic issues are expected to dominate the talks. Jakarta is trying to maintain a balance between its ties with both Beijing and Washington, amid tensions and trade disputes in the South China Sea. China's Foreign Minister Wang Yi will visit Jakarta for the first two years and meet with his Indonesian counterpart Sugiono. He will also participate in the "2+2 meeting" between the defence ministers of the two countries. Arifianto Sofiyanto (an Indonesian official in the East Asia division of the foreign ministry) told a Thursday press conference that this meeting would focus on both economic and political issues. Lin Jian said that the Chinese Foreign Ministry spokesperson would be attending the meeting to discuss "political issues and security, defence co-operation, and the situation in the region and internationally." DISPUTED CLAIM Taiwan, which China claims to be its territory, was outraged last week by a rare military exercise that took place east of Taiwan. Indonesian navy officials said that a vessel had conducted routine drills not only with China but also with Japan, and the United States. Curie Maharani, a defence analyst, said that while Indonesia viewed the exercise as routine but the location allowed China to send a different message. She said that Indonesia had learned an important lesson on how the great powers used defence diplomacy as a tool to project influence. Indonesia has also had its own disputes with China regarding the South China Sea which Beijing claims in almost entirety. In 2024, during President Prabowo's first overseas trip since taking office, both countries signed a maritime deal that stated they had come to an agreement "on joint development" in areas where there were overlapping claims. Analysts interpreted the controversial wording as Jakarta changing its long-held position as a non claimant state in South China Sea. Indonesia responded by repeating that it does not recognize China's claims. Curie stated that Indonesia does not want to escalate the situation, and instead prefers to engage China via defence diplomacy. She said that there has been an increase in engagement in the last five years between the two countries, but it still pales when compared to Indonesia's defense cooperation with Australia or the United States. Arifianto, when asked if these topics will be discussed at this week's discussions, said that the agenda was still being finalised. Prabowo said repeatedly that he maintained Indonesia's "free, active and non-aligned" foreign policy. He pledged to befriend every country including China and the United States. TRADE AND INVESTMENT According to Indonesia's Investment Ministry, China has been a major foreign direct investor in Indonesia. It contributed $3.9 billion in the first half 2026. Regulations around some of this investment have been a source for friction. In May, Chinese firms operating in Indonesia called on the government to adopt a more "business-friendly" policy, citing higher taxes and new nickel pricing formula as factors driving costs up and threatening investments. The China Chamber of Commerce in Indonesia, in a letter, said that Chinese firms were subjected to "excessively strict regulation, over-enforcement", as well as alleged corruption and extortion by authorities. The world's largest EV battery manufacturer, Contemporary?Amperex Tech Co., and the steelmaker Tsingshan Group have both invested in smelters built in Indonesia. Indonesia has the world’s largest nickel reserve. Prabowo said that foreign investors complained about Indonesia's excessive number of permits and approvals taking too long. He called for deregulation in order to encourage investment.
Global stock markets set to fall the most since mid-July, as bond yields and oil remain high
On?Friday global stocks were on track for their largest weekly drop since mid-July, as tensions in global bond markets continued to persist, and diplomatic deadlocks in the Gulf pushed oil prices up to a one-month-high, keeping inflation risks at the forefront.
The yields on U.S. government bonds resumed their rise after Wednesday's?"surprise" intervention by the Treasury. This was a response to fears?about rising inflation and fiscal pressures.
The increase came as U.S. Treasury secretary Scott Bessent suggested he could further boost the government's repurchases and floated ideas of fiscal consolidation.
Analysts doubted he would be able to find the necessary spending cuts in order to reduce a budget gap of over 6% of GDP. Interest charges alone for this year are $1.2 trillion and the U.S. national debt has just crossed $40 trillion.
The dollar is now heading towards the three-month lows it hit on Thursday. It has fallen almost 1% against major currencies this week.
"The initial Treasury buyback was remarkable because it was a total surprise. But the question is: Is this meaningful enough to make a lasting impact?" Christian Hantel is a portfolio manager for Vontobel.
We could still see the market trying to test whether they are ready to increase the $4 billion that they announced previously. It could be a very interesting few days.
The 30-year bond yield in the U.S. was around 5.25%, and the 10-year was slightly higher at 4.70%. Markets believe that 5.30% for 30-year bond rates is a threshold of pain for Treasury. This is similar to what 160 yen has become for Japanese policymakers.
As tech giants borrow heavily to fund AI capital expenditure, the cost of debt is rising globally. This also increases the discount on corporate profits and challenges stock valuations.
Nikkei was a victim of the strain, as it dropped 0.3%. This brings the losses for this week to almost 4%. It is on course for the largest weekly decline since mid-July. South Korea and Taiwan were both up, but down for the week.
Stock markets in Europe have made some early gains. STOXX 600 was on track for its largest weekly drop since early July. It is down around 1%. MSCI's global stock index is poised to experience its largest weekly fall since mid-July.
Wall Street has seen a positive response to a strong earnings season. S&P futures are up 0.53% and Nasdaq Futures are up 0.8%.
Next week, when Nvidia releases its quarterly report, the AI industry will be put to the test. Much depends on Nvidia's outlook for data center revenue and infrastructure demand.
Walmart's Thursday slide of 9% was a clear example of what happens when expectations are not met.
WAR AND DEBASEMENT
Bessent made headlines by extending President Donald Trump's promise of economic war against Iran. He said the U.S. will impose "the strongest sanctions in history" to the country.
Brent crude reached a peak of $95 per barrel in a month, before profit-taking took hold.
Brent futures rose around 0.5% to $94 per barrel. This is up over 5% on the week. U.S. crude oil increased 0.4% to $85.
The dollar has been losing ground in the currency markets this week, amid concerns that the ever-growing U.S. government debt and policy uncertainty will reduce the purchasing power of its currency, driving investors towards scarce assets such as gold.
The yellow metal reached its highest level since almost three months, with a 1.45% increase at $4,583 per ounce.
Dollar index fell 0.9% on the week to 98.74, after hitting a three-month low overnight. The euro was up by 1.0% for the week, at $1.1686, having touched a 14-week high. The last time it traded was around $1.1689. This is off the session highs.
The dollar's biggest weekly drop since January was 1.7% against the Swiss franc. It is now 0.7995 Francs.
Some investors have also been influenced by concerns over the rising U.S. national debt to look at alternatives, such as bitcoin. Bitcoin has historically benefited from diversification away from U.S.-based assets.
Bitcoin reached a two-month high last Friday, and was up almost 6% to $76,446, on course for a weekly gain of 20%. This would be its biggest gain in over 2-1/2 years.
The dollar is under renewed pressure due in part to a resurgent "debasement" narrative, said Jonas Goltermann. Chief markets economist at Capital Economics.
"We continue to believe that such concerns are?overblown and that the overall economic backdrop will point towards a'stronger dollar in the coming months. However, we think continued surprises from U.S. Policymakers could well be more important?in the near term." The dollar last fell around 0.2% to 158.79 Japanese yen.
A survey of the manufacturing industry showed that new orders were up in July, as import costs rose.
Both strengthened the case for an interest rate increase in September by the Bank of Japan. The markets are priced in for a quarter point rise to 1.25 percent and would like to see a more aggressive and faster tightening of policy.
(source: Reuters)