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European shares tempered as oil rally fuels cautiousness; Novartis tumbles
Investors were cautious on Tuesday due to escalating tensions in the Middle East, and higher oil prices. Novartis also suffered its biggest one-day drop in history after reporting another setback in its drug development pipeline. The pan-European STOXX 600 fell 0.05% to 649.6. Novartis' 10.9% drop in the benchmark Swiss index weighed on the overall index, which fell by 1.6%. Novartis, the Swiss drugmaker, was the largest faller in the STOXX 600 index after it announced that its experimental treatment of a muscle-wasting condition had failed a late-stage study. News of the failure came just a day after Novartis revealed that its experimental cholesterol drug also failed in a closely-watched late-stage trial. Brent crude futures were hovering around $98 per barrel. Energy shares rose?0.6%. Oil prices increased after Houthi forces, who are aligned with Iran in Yemen, attacked Saudi Arabian cities and energy facilities. This highlights the danger that the conflict will spread across the region. Copper prices also rose, boosting mining stocks. Boliden Antofagasta KGHM all gained between 4.6% to 6.3% while the broader European Mining Index grew by 2%. German exports dropped unexpectedly in July. Weaker shipments to European Union and China highlighted the fragility of trade-driven growth in Europe's biggest economy. Focus on RISING RATE Bets The recent sell-off of global bonds has been attributed to the rising oil prices. This is also a factor in the expectation that central banks will need to continue to restrict their monetary policies. Investors expect that the European Central Bank will raise interest rates on Thursday by 25 basis points. Markets still expect another rate increase by the end of this year and in 2027, despite policymakers' limited appetite for tightening. "Any increases beyond September will move the policy away from the insurance end of the spectrum and into the restrictive side. This shift is still?not sufficiently supported by the data", ING analysts wrote in a recent note. Markets could also be underestimating the concerns over tightening and potential spillovers into European bond markets. The U.S. Inflation data is due this week. ?The inflation report follows a stronger-than-expected U.S. ?jobs reading that reinforced bets on another ?Federal Reserve rate hike this month. Kion Group, among other movers in the market, rose 6.8% following Citi's upgrade of the German forklift manufacturer to "buy" (from "neutral") citing a possible turning point in industrial-truck cycles.
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Venezuela's mining industry: More data is needed on its geological potential
Here are some facts about Venezuela's Mining Sector, which has attracted the interest of President Donald Trump's Administration. CONFUSION AROUND RESOURCES AND RESERVES Then-Venezuelan president Nicolas Maduro, and Delcy Rodrguez, the?acting president, announced in 2019 a five-year plan to boost mineral extraction, as an alternative to oil production. The previous year, Venezuela's government published data on its mineral deposits, using terms from the mining industry interchangeably. This included reserves and resources. It was difficult to determine whether Caracas understood its full potential. A reserve is a volume estimate for a mineral which can be economically produced. The volume of a particular mineral in a region is called a resource, regardless of its economic production. The 2018 report was published by Venezuela's Mining Ministry website as a "minerals catalog" for investors. It estimated that coal reserves were approximately 3 billion metric tonnes and nickel reserves at 407,885?metric tons. The same report also estimated that a gold reserve of 644 metric tonnes, an iron ore of 14.68 billion metric tones -- although it was acknowledged that much of this estimate was speculative -- and a resource of bauxite of 321.5 millions metric tons. Venezuela published in 2021 a map showing mineral reserves, based on 2009 data. The map listed antimony, copper and nickel reserves, as well as coltan, magnesium, molybdenum (molybdenum), titanium, tungsten, and silver. However, it did not include the volumes. Rare earths are a grouping 17 minor metals which is used in magnets to turn energy into motion. The country doesn't appear to have large reserves. Rare earths is a subset critical minerals. OPERATIONAL STATUS UNCLEAR It is unclear what the operational status of mines linked to Maduro’s five-year plans are. Maduro's National Council for Productive Economy said late last year that national production of coal, gold and iron ore increased in the first quarters of 2025. However, it did not provide figures. Venezuela nationalized the gold sector in 2011. The government controls CVG, a maker of iron and steel. Last year, it was reported that Venezuela had restarted its coal production and aimed at exporting more than 10,000,000 metric tons by 2025. The government has not yet confirmed whether it met its target. The U.S. Geological Survey estimates that Venezuela produced 100,000 tons of coal in 2019 from 731 million tons of reserves. USGS data for 2021 shows that Venezuelan bauxite production will be 250,000 metric tonnes, down from 2017's 550,000 metric tonnage. Iron ore production, on an iron content basis was 1,41 million metric tonnage, while gold production was only 480 kg. The USGS estimated that alumina production, which is the substance that can be refined from bauxite to produce aluminum metal, would drop to 80,000 tons by 2021. This was down from the 240,000 tons produced four years ago. Aluminum production is estimated at 20,000 tons, a decrease from 144,000 tons in 2017.
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Kazakh gold miner Solidcore announces no more shareholder payouts following buyback and targets expansion
Kazakh gold miner, Solidcore Resources Plc (formerly Polymetal International), which announced plans to buy back shares worth up to $1.2billion, has said that it does not intend to return any more capital to shareholders until they achieve the goals set forth in their strategy for 2029. Chief Executive Vitaly Nesse confirmed this. Tuesday, the company launched a tender to buy up to 23.2% (or $11.66) of its current capital at $11.66 a share. The offer will run between September 9 and October 12, 2009. Nesis stated that the company chose to buy back shares 'because of better liquidity and recognition that not every shareholder is willing to support its aggressive growth strategy. Nesis explained that they chose a buyback because it allowed them to distinguish between those who wanted to cash out, and those who preferred to remain 'invested' rather than taking money off the table. This will be a watershed event. We made the transaction so large deliberately because we don't plan to distribute any more capital until we reach our strategic goal. This is a "unique opportunity." Maaden International Investment of Oman, the largest shareholder with a stake of 31.7% in the company, has agreed not to take part in this buyback. Solidcore, which sold its Russian business to a private company in 2024 has suspended dividends. It is pursuing a strategy of doubling production and reserves by acquisitions. The Ertis POX Project will be completed by 2029. Nesis stated that the company is considering additional acquisitions in 'Oman, and other Gulf countries in particular Saudi Arabia. They are also exploring opportunities in Africa including partnering with Minerals Development Oman, as well as in Tajikistan, and 'Uzbekistan. Solidcore, a joint-venture with MDO, announced that it would announce another agreement with a new partner in the next few weeks.
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Kazakh gold miner Solidcore announces no more shareholder payouts following buyback and targets expansion
Kazakh gold miner, Solidcore Resources Plc (formerly Polymetal International), has announced plans to repurchase shares worth up to $1.2 billion. However, the company does not intend to return any more capital to its shareholders until they achieve their objectives as set forth in their strategy for 2029. The company launched on Tuesday a tender offer to buy up to 23.2% (or $11.66 each) of its current share capital between September 9 and December 12. Nesis said the company chose to 'buy back' shares because of a?improved liquidity and recognition that not everyone is willing to support its aggressive growth strategy. Nesis explained that they chose a buyback because it allowed them to differentiate between those shareholders who wanted to cash out and those who preferred to remain 'invested' rather than take money off of the table. This will be a "watershed moment." We intentionally?made this transaction so large because we do not plan to make any further capital distributions once the transaction is complete. This is an opportunity that will not come around again.
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New York Fed survey shows consumers are more concerned about their personal finances and employment.
The New York Federal Reserve reported that the outlook of U.S. households for inflation remained unchanged in August as their?worries?about the job market?and the state of?their?personal finances grew. In the latest Survey of Consumer Expectations from the regional Fed bank, respondents held steady to their projections of inflation of 3.6% a year hence and 3% in five years. They also marked down inflation expectations in three years from 3.3% to 3.2%. The report stated that respondents in August predicted higher gasoline prices within a year. Although households' inflation expectations did not change much, their outlook for hiring and personal finances grew?more uncertain. In August, respondents to the survey increased their expectations of the unemployment rate in a year's time. This was the highest reading since April 2020 when the COVID-19 pandemic devastated the economy. This expectation was noted to be based on a wide range of factors, including age, income level and education. The expectation of losing a job decreased in August compared to July. In the report, the likelihood of a 'new job' in the case of an involuntary loss of a job was also lower than the survey conducted in July. In the August survey, respondents rated their financial situation now and in one year as well as their opinions on credit. This week, the key data on inflation is due. The report was released a week ahead of the U.S. Central Bank's two-day meeting. The Fed's benchmark overnight rate is set at 3.50% to 3.75%, but there is uncertainty about what it will do. Policymakers are still struggling with an inflation rate that is well above their 2% target. The release of the Consumer Price Index for August on Friday is pivotal to the outcome of the policy meeting scheduled for September 15-16. Many Fed officials believe that the data they use could be decisive in determining their policy. At a NEXT Newsmaker Event last Thursday, Fed governor Christopher?Waller stated that if the upcoming report on inflation shows continued progress towards?our 2% target, I would be willing to hold the policy rate where it is. However, other Fed officials remain prepared to raise?rates. In a Friday posting on LinkedIn, Beth Hammack of the Cleveland Fed, who had voted for a rate increase at the July meeting, stated that given the inflationary pressures in her district it was "time to act" in order to reduce the price pressures. This indicates she is still in support of a rate rise at next week's meetings.
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Investors await US data and tariff clarity as copper prices set to reach $15,000
Analysts?said that copper?prices may break through $15,000 this week for the first-ever time, as investors prepare for another round of U.S.?economic?data and President Donald Trump continues to keep the market guessing about import tariffs. The benchmark copper price on the London Metal Exchange reached a record high of $14,779 a metric ton. This was the fourth session in a row that the rally continued. Will it reach $15,000 this coming week due to Trump's tariff confusion?" "Yes, it's possible," said Panmure Liberum Analyst Tom Price. You can choose any large number when you have this much speculative money behind a trading concept. The U.S.?proposed? a 15% duty on imported refined copper starting in 2027. This would rise to 30% by 2028. However, the U.S. neither confirmed or ruled out such a tariff. Copper has been flowing into COMEX warehouses approved in the U.S. due to the prospect of tariffs, which is draining inventories in China and the LME. LME is a combined LME of just over 300,000 tonnes. ShFE Copper stocks are less than half COMEX stock Imports from the United States are at record levels of 695,624 tonnes, and an arbitrage window that is open has helped to fuel this. DATA IN FOCUS Alastair Munro is a senior base metals analyst at Marex. He said that macro events this week could determine whether the copper price increase lasts. Details on a U.S. Treasury Bond Buyback are expected on Wednesday, and U.S. Consumer Price Index -data for August will be released on Friday. Broker Sucden Financial said in a note that copper could be susceptible to profit-taking, if the dollar recovers following the CPI release. A stronger ?U.S. The dollar makes metals denominated in dollars more expensive to investors who use other currencies. Sucden stated that there was still room for further gains, if copper held above $14,400. Amy?Gower is the head of metals, mining and commodity strategy for Morgan Stanley. The bank remains 'positive' on copper until 2026. Gower stated that "However, while we are cautious for 2027 where the U.S. demand for imports is likely to be?softer, if tariffs were either in place or ruled out." John Meyer, analyst at SP Angel, believes that copper prices will continue to rise as long as there is uncertainty about tariffs. There's a lot of copper around the world but all the physical copper is in the United States.
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Gambia protesters set fire to tyres in order to denounce power outages
Residents and witnesses said that police used tear gas in order to disperse protesters who gathered in several?locations overnight, including near the official residence of President Adama Barrow, to denounce their alleged prolonged power outages. Around Banjul's capital, protesters burned tires in the streets and built barricades while shouting, "Barrow must leave!" The witness reported that plumes of smoke were filling the air. Some residents have reported blackouts that lasted up to 48 hours. This is ahead of the presidential elections expected in December, in which Barrow will be seeking his third term. As a sign of their growing frustration, protesters from the town of Farato gathered in front of the residence of Vice-President?Mohammed B.S. Jallow destroyed banners in an office of the National People's Party. Ismaila Ceesay said that officials are "working tirelessly to restore stability and increase the reliability of electricity supply as quickly as possible" in a statement released on Tuesday. She described the events from the previous evening as "deeply disturbing." Ceesay apologized for the inconvenience caused by the power outages. He said: "As a Government, we understand the frustration, anger, and hardship many Gambians experience." On Tuesday, a police spokesperson failed to respond to an inquiry for comment. Barrow had been scheduled to visit the National Water and Electricity Company Ltd facilities on Tuesday morning and then address the nation at 8 p.m. UTILITY WARNED ABOUT DEMAND SURGE DUE HEAT NAWEC stated in a press release on August 15, that they were experiencing "an unexpected surge in electricity during the peak period", which was attributed to high temperature. The report did not elaborate on "a technical issue affecting one of the largest power-generating units imported." No dates were provided for the load-shedding that would be required in "several parts of the country". NAWEC didn't respond to a comment request on Tuesday. "There is no lighting everywhere. There is no light. "People have been complaining about electricity," Ousainu jammeh, a Banjul resident from the Westfield district said. Jammeh claimed that he joined the protesters outside after "tear gas" "landed in my house." Jammeh, after the protests had died down by?the early morning hours', joined a crowd of young men to use water to put out fires and remove barricades. On Tuesday, traffic had returned to its normal level in Banjul.
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Wall Street drops as oil, yen gain amid Middle East turmoil
U.S. stocks fell Tuesday morning as the attacks on energy facilities in the Gulf drove oil prices to near $100 per barrel. After a long weekend of holidays, all three major U.S. indexes traded lower. The Dow Jones Industrial Average dropped 1.21% in its first hour. The S&P500 fell by 0.49%, and the Nasdaq Composite dropped by 0.52%. Brent crude oil jumped 1.32%, to $98.28 a barrel, the highest in six weeks. U.S. crude oil rose 2.11%, to $93.40 per barrel. The rise in oil prices came after Houthis, who are backed by Iran, attacked Saudi Arabian cities and energy facilities. The recent resurgence of inflation has impacted the stock market, largely because the bond yields have risen to multi-year highs. This puts pressure on central banks to increase interest rates. The European Central Bank will almost certainly raise the euro zone interest rates by a quarter-point on Thursday this week. Meanwhile, the Bank of Japan is likely to do the same thing next week. This has put the yen in a position for its strongest rally in the past two years. STOXX600 fell 0.2% in Europe. MSCI's global index of stocks was down by 0.49% last week. Unwinding Yen Carry Trades The U.S. data on inflation could be decisive for setting expectations about the outcome of next week's Federal Reserve meeting. Money markets indicate that traders currently attach a 58% chance to a rate increase. The yen's rise may be the "bigger story" for the global markets. Due to its low yield, traders borrowed yen to buy higher-yielding assets, including currencies, bonds, and equities. This strategy is known as the "carry trade". The yen gained almost 4% in the last week, which is its biggest week-on week increase since July 2024. On Tuesday it was trading at around 154.1 and the dollar was roughly unchanged for the day. Francesco Pesole, a ING strategist, said that despite the fact that short-term fundamentals suggest the move has been overdone, it is still risky to block the way. The dollar index (which measures the greenback against a basket including the yen, the euro and other currencies) rose by 0.06%, to 98.88. Copper, another commodity besides oil, reached a new record on Tuesday as global supply dwindled. The metal continued to flow into the U.S. in anticipation of potential tariffs. The price of a ton of?copper traded on the London Metal Exchange for three months was up by 1.6%, at $14 736. The benchmark 10-year Treasury note yielded 4.8% on the bond market. This was up by 2 basis points for the day, and is not far from its highest level since November 2023.
Chile inflation quickens in August, testing rate-cut hopes
Official data released on Tuesday showed that Chilean consumer prices increased 0.6% from July to August, exceeding market expectations. This is the highest monthly increase since April.
The rate of growth in the month of August was?0.1%, up from?0.1% last July. It exceeded the median forecast of 0.3% in an?economists' poll and traders at central banks.
The INE statistics agency said that the 'biggest upward pressure' came from transport and food. Transport grew 1.6%, whereas food and non-alcoholic beverages increased 1.4%. Nine of the 13 categories included in the consumer basket showed monthly price increases.
The annual inflation rate increased to 4.1% in August from 3.5%, which is outside the tolerance range set by the central bank of 3% plus or minus a percentage point.
In a recent note, a group of?Scotiabank analyst said that "inflation expectations are likely to rise." They added that the 'central bank' could raise its forecast for the year-end of 4.2%, partly reflecting the effects caused by the weather phenomenon El Nino.
The savings and credit cooperative Coopeuch's analysts said that the report on inflation supported a cautious policy from policymakers.
In a meeting scheduled for later Tuesday, the central bank of Chile is expected to maintain its benchmark rate at 4.5 percent.
(source: Reuters)