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Top Democrats criticize Trump for delaying China export curbs
Senate Democrats, including Senate Minority leader Chuck Schumer, criticized the Trump administration's suspension of a measure which prevented thousands of Chinese firms from accessing U.S. tech in the latest round of trade negotiations with Beijing. They called it a "giveaway" of important national security tools. The rule was announced on September 29 and was intended to prevent sanctioned Chinese firms from using a system of subsidiaries to acquire key American equipment that they would otherwise be prohibited from receiving. Last month, President Donald Trump agreed to defer the rule by a full year as part of a trade deal with Chinese leader Xi Jinping. Beijing would then suspend its export restrictions on rare-earth minerals, which are key components for tech that is primarily controlled and produced by China. In a Wednesday letter, first reported by the Associated Press, Senators Ron Wyden and others called for Trump to reinstate the rule. They argued that its delay could put "American-developed advanced computer technologies at risk, as they may be used instead to advance China's agenda, rather than ours." They wrote: "The suspension undermines U.S. security, and it will be much more difficult to stop the illegal diversion of American-made advanced technology and semiconductors to Chinese state-affiliated organizations." We urge you to restore these controls and stop your giveaway of important national security tools. According to a White House statement from spokesman Kush Deai, the White House defended themselves on Thursday by arguing that "the Trump administration has implemented an export control regime rigorous to safeguard our national and economic security." The letter is a new blow against the Trump administration for its suspension of this rule. China hawks in both parties praised the move. According to a report by WireScreen, the U.S. has placed export restrictions on roughly 20,000 more Chinese companies. In their letter, the Democrats claimed that the one-year suspension reopened a "loophole", and provided "a year's opportunity for affiliates to blacklisted foreign companies to restructure to avoid the rule." They added that the delay is part of Trump's troubling tendency to "trade away national security" in order to make quick handshake deals' and mitigate the harms caused by trade wars he himself has created. We urge you to reconsider your misguided approach and make sure that export controls in the United States are not used as a bargaining tool. The letter was signed by Elizabeth Warren, Chris Van Hollen and Jeff Merkley. Andy Kim, Ben Ray Lujan and Catherine Cortez Masto also signed. (Reporting and editing by Leslie Adler, Matthew Lewis and Alexandra Alper)
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As the US opens to murky data, stock prices fall along with bond rates. Hopes for rate reductions fade.
Investors' hopes of a Federal Reserve rate reduction fell, and U.S. Treasury Yields increased. Officials pointed out a lack in clarity regarding economic data after the U.S. Government ended its longest shutdown ever. The dollar fell in value despite the hawkish comments of Fed officials, after the House of Representatives passed a bill to reopen U.S. Government late on Wednesday, and President Donald Trump had signed it. Investors bought equities during recent sessions, anticipating a U.S. reopening following its 43-day record shutdown. The shutdown disrupted the food benefits of millions of Americans, left hundreds and thousands of federal employees unpaid, and caused air traffic to be snarled, while also putting an pause on important economic data releases. Trump administration officials have shattered hopes of a more accurate view of the U.S. economic situation in the near future. White House Kevin Hassett, an economic adviser, told Fox News on Monday that, while the government would have a number on jobs, the data on the U.S. rate of unemployment for October might never be released because the survey is dependent on household surveys, which were not conducted during this government shutdown. Minneapolis Federal Reserve President Neel Kashkari He said that he is seeing mixed signals in the economy. Inflation, which was running at around 3%, and "too high", as well as parts of the labour market, "look under pressure". San Francisco Federal Reserve President Mary Daly On Thursday, the Fed said that now that it has reduced interest rates twice in this year, the risks are equalized for the Fed's goals. She said that the rate of decline in services inflation is not consistent and that it's more concerning that labor demand continues to slow. Trader Bets on Rate Cuts Tumble CME Group's FedWatch tool shows that traders bets on December rate cuts have fallen to 49.6% from 62.9% as of Wednesday. What you see today is a risk off assessment. The economic data will still be cloudy. The Fed may not be able to cut rates this December due to the incompleteness of the data. The market is already showing signs that it's concerned about the high valuations of heavyweight technology stocks and those linked to artificial intelligence. He said, therefore, that it wasn't surprising "to see investors step back from the risk, sell the winners, and move into defensive areas of market". Wall Street's Dow Jones Industrial Average dropped 451.61 points or 0.94% to 47,803.21. The S&P 500 declined 80.00 points or 1.17% to 6,770.79, and the Nasdaq Composite was down 429.28 or 1.83% to 22,977.17 as of 12:22 p.m. The MSCI index of global stocks fell by 8.01 points or 0.79% to 1,003.77. PAN-EUROPEAN STOCX 600 INDEX REACHES RECORD HIGH EVEN BEFORE FALL The pan-European STOXX 600 fell by 0.61% after hitting a new record earlier. Europe's FTSEurofirst 300 fell by 15.41 points or 0.66%. U.S. Treasuries Prices were down and yields increased as investors scaled back their expectations of imminent rate cuts. This was due to the uncertainty surrounding the inflation outlook, and the stark differences between Fed policymakers regarding the direction the U.S. economic and monetary policies are taking. The yield of the benchmark 10-year U.S. notes increased by 1.7 basis point to 4,096% from 4,079% at late Wednesday, while the yield on 30-year bonds rose by 2.1 basis points. The yield on the 2-year note, which is usually in line with Federal Reserve interest rate expectations, increased 1.9 basis to 3.585%. The dollar index, which measures greenbacks against a basket including yens and euros, dropped 0.46% at 99.02 while the euro rose 0.51% to $1.1651. The dollar fell 0.3% against the Japanese yen to 154.31. The British pound rose 0.59%, to $1.3207. This was despite data that showed the economy barely grew. The Australian dollar rose 0.17% to $0.6549 against the greenback as positive employment data boosted bets that its rate-cutting cycles may be ending. Oil futures recovered some of their losses in the previous session as investors weighed global oversupply and looming sanctions on Russia's Lukoil. However, gains were pared down after data revealed a larger-than expected buildup in U.S. crude inventory. U.S. crude increased 0.6% to $58.84 per barrel. Brent rose to $63.13 a barrel, an increase of 0.69% for the day. The gold price fell after reaching a three-week high earlier as the hopes of a Fed rate reduction next month faded. Gold spot was unchanged at $4,198.40 per ounce. U.S. Gold Futures dropped 0.25% to an ounce of $4,194.00. (Reporting from Sinead carew in New York and Marc Jones in London, with editing by Sharon Singleton, Ed Osmond, and Stephanie Kelly)
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KGHM profits rise on strength of Sierra Gorda and higher prices
The Polish state-run copper company KGHM reported a 80% increase in its third-quarter profit compared to the previous year, mainly due to the performance of its Chilean Sierra Gorda Mine and higher precious metals prices. KGHM is a major copper and silver producer in the world. Its earnings are highly correlated with global commodity prices and therefore a barometer of global industrial demand. CONTEXT The Sierra Gorda Mine in Chile is a joint-venture with Australian miner South32 and has become a major engine of profit growth for KGHM. The company reported that the mine's core adjusted profit for the first nine-month period increased 60% on the previous year to $970 millions, fueled by higher production volumes and metal prices. OUTLOOK KGHM is expecting its cost base to drop after the Polish Government announced in May it would reduce the country's sole copper mining tax that is paid by the company from 2026. This move is expected to boost future profitability for the miner. By the numbers, the company reported a third quarter net loss of 433 millions zlotys (119.07million), which was less than a forecasted 663 million in a poll. Its revenue came in at 8.32 billion, which was lower than the forecast of 8.46. $1 = 3.6365 Zlotys (Reporting and editing by Matt Scuffham).
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Citgo increases profit to $167 Million, liquidity to $2.75 Billion
Citgo Petroleum announced on Thursday that its profit grew to $167 millions in the third quarter, up from $100 million the previous period. The company also said that the refiner's liquidity increased from $2.6 to $2.75. The Houston-based firm, which returned to profitability in the second quarter after two consecutive periods in losses, is fighting to stop the auction of PDV Holding in Delaware, as part of a court ordered process to pay creditors in Venezuela for defaults on debt and expropriations. The Delaware judge Leonard Stark, who oversees the auction in Delaware, denied the Venezuela parties' and Gold Reserve's motions to disqualify the judge, court officer, and advisors, allowing the sale to proceed for the time being. In a press release, the company stated that the results of the third quarter were due to improved refining margins. Carlos Jorda, the chief executive of the company, said that "our refineries performed reliably during the quarter as the market conditions improved." Citgo completed planned maintenance at its Lake Charles refinery in Louisiana and made preparations for an extensive turnaround at the Corpus Christi refinery in Texas. From the fourth quarter onwards, the company will increase its crude refining capability to 829.000 barrels per a day from 807,000 currently. Citgo said it plans to redeem $650 million of outstanding notes due in the next year using a portion its $2.75 billion liquidity at quarter's end, including cash and credit facility available. It will have paid back more than $1.8 Billion in Senior Notes and Industrial Revenue Bonds this year. Citgo's financial and cash flow results are important metrics in determining the company's value at the Delaware auction.
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Gold reaches 3-week high in hopes of US data boosting Fed rate-cut betting
Gold prices rose to a record high of more than three weeks on Thursday. This was due to expectations that the release of economic statistics following the reopening the U.S. Government could support the case for an interest rate reduction by the Federal Reserve next month. As of 11:03 am EST (1603 GMT), spot gold rose 0.2% to $4206.64 an ounce, its highest price since the 21st of October. U.S. Gold futures for delivery in December fell by 0.1%, to $4.211.50 an ounce. Jim Wyckoff is a senior analyst at Kitco Metals. He said that traders expect economic data to be released following the end of the government shutdown. This will show a weakening U.S. labour market and force the Fed towards at least one rate cut in December. Job market weakness has been indicated by private surveys. According to an agreement funding federal operations until January 30, the U.S. Government will resume its operations following a 43-day record shutdown. Fed Chair Jerome Powell warned that, while the U.S. Central Bank reduced rates last week, further easing was not guaranteed this year, due in part to a lack data. A survey showed that 80% of economists expected another 25 basis-point cut during the Fed's meeting on December 9-10. Gold is usually a beneficiary of lower interest rates, as it offers no yield. It's also viewed as a safe haven during times of economic uncertainty. Standard Chartered noted that the correlation between gold and core macro-drivers like the dollar or real yields, has weakened significantly over the last two weeks. This reflects a shift towards structural themes, such as currency debasement, and U.S. bond concerns. Silver spot fell 1.1%, to $52.83 an ounce, after reaching its highest level since the 17th of October earlier in this session. Tai Wong is an independent metals dealer. He said: "If silver does not break higher decisively we could see another profit-taking round - expect volatility in the near-term to remain high." Palladium, which fell by 1.2%, was at $1,456.50. Platinum dropped 1.9% to $1,585.10.
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Helleniq Energy's Q3 adjusted core profits double on the strength of refining margins
Helleniq Energy, a Greek oil refiner, announced a record-breaking third quarter adjusted core profit on Thursday. The increase was driven by higher refining margins as well as record sales of refined products. The group reported adjusted earnings prior to interest, taxes and depreciation (EBITDA), of 365 millions euros ($426million) for the period July-September, an increase from 183million euros during the same period in last year. Helleniq Energy reported that the profit surge was despite lower crude prices. The benchmark refining margins increased from $3.1 to $8.5 per barrel, a more than two-fold increase. Natural gas and electricity were also 30% and 7% cheaper respectively. The Athens listed group also reported record refined products sales of 4.3 millions metric tons. This was supported by high refinery accessibility and strong exports which accounted for nearly half of the total sales. The marketing operations also delivered record results, with the domestic EBITDA increasing by 4% and the international EBITDA rising by 14%. Meanwhile, the newly-consolidated power and Gas unit Enerwave contributed to the quarter 18 million euro. Helleniq Energy’s Board of Directors also approved an interim shareholder dividend of 0.20 Euro per share.
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Pension funds reject UK Plc's proposal to encourage savers to invest in local stocks
Pensions industry said that proposals from the London Stock Exchange Group, and over 100 British business executives, to encourage pension funds to invest more in UK stocks ignores the interests of savers. Last week, more than 100 senior executives, including the chairs of Anglo American, Barclays and Compass Group's CEO wrote to Britain’s finance minister urging him to take action to reverse the decline of buying domestic shares. The executives said that it was a loss of cash for companies, a way to export wealth and a threat to economic growth. They proposed, in response, that defined contribution pension plans ensure default funds (the funds into which pension savers automatically invest) place a minimum of 25% of their assets across all asset classes in UK investments. The option to opt out would remain open to savers. Pensions UK's Zoe Alexander said that schemes are already looking for UK investments that offer attractive returns, even when they take into account risk. "Going even further and requiring that a percentage of default fund assets be invested in the UK would pose a significant risk to investment return." Alexander said that the interest of the saver is being overlooked in this debate. To revive growth, governments are focusing on encouraging UK asset ownership. Many warn against forcing people to invest in a certain way, which is a power that the government reserves. According to the letter written by LSEG Chairman Don Robert and CEO David Schwimmer, UK pension funds invest 4.1% of their equity in UK listed companies. This compares with 53% in 1997, and a global median for defined contribution funds that is 13% or more. They said that if their proposal were to be implemented, it would increase the overall investment in UK equity by between 76-95 billion pounds ($127billion) by 2030. LSEG declined comment. The British finance ministry didn't immediately respond to an inquiry for comment. Some schemes have been influenced by past regulations to move away from stocks and into government bonds. Investors say that the attraction of foreign markets also played a part. The U.S. S&P has risen nearly 500% in the last five years; Britain's FTSE is up 80%. Yvonne Braun, of the Association of British Insurers, responded to LSEG’s proposal by saying that investments shouldn't be influenced externally and that savers should be "at the heart of every policy decision".
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US Judge denies motions for disqualification of officers and advisers involved in Citgo Auction
On Thursday, a U.S. court filed showed that a U.S. Judge denied Venezuela's and Gold Reserve's motions to disqualify a judge, two advisory firms, and a court official overseeing the auction of shares of Citgo Petroleum parent company, which is a U.S. refiner. The Toronto-listed Gold Reserve miner, which was the winner of the auction with its bid, and Citgo, the owner of Venezuela, both accused the firms that advised the court of receiving $170 million from Elliott Investment Management affiliates, whose offer had been recommended to the court as the auction's winning offer, as well as bondholders who would receive proceeds. Their motions regarding alleged conflict of interest were denied. This allows for the complex sale process organized by PDV Holding, Citgo's parent company, to continue. In his ruling, Delaware Judge Leonard Stark stated that the motions were procedurally flawed because they were untimely. They also lacked merit because they relied on arguments which had been waived. He said that the motions were "without merit." Gold Reserve's application for a stay in the process of sale, as well as the court's assessment of Elliott's Amber Energy's $5,9 billion offer, recommended by Robert Pincus' officer, was denied. Gold Reserve has also filed other legal actions in separate U.S. courtrooms to stop the auction. One of these is before a U.S. Court of Appeals. The judge has stated that he will make a decision about the winner of the auction by the end November. The auction is intended to pay up $19 billion in compensation to Delaware for Venezuelan debt defaults or expropriations.
EBRD loans 22 million Euros to Ukrainian energy firm; more deals to come
The European Bank for Reconstruction and Development announced on Thursday that it will lend 22.3 million Euros ($26.0 Million) to a Ukrainian Energy firm as part a pipeline deals. This shows its continued support for this sector, despite the corruption scandal.
In a press release, the lender stated that the EBRD will provide cash to Power One, a private Ukrainian energy company to help finance new gas-piston energy plants and battery energy storage system.
The investigation of an alleged $100-million nuclear energy corruption scheme has inflamed anger against the wartime Kyiv government, led by President Volodymyr Zelenskiy. This government has been dependent on funding from donors since Russia invaded Ukraine in 2022.
The alleged plot involves attempts to control procurements at Energoatom, the nuclear agency and other state-owned enterprises that were not named. Since a loan of 300 million euros in 2013 was fully paid out by 2019, the EBRD did not provide financing to Energoatom.
The loan is part of a total lending amount of approximately 1 billion euros in this year, which will help Ukraine improve its energy resilience and rebuild its power sector. The country is working to decentralise power by using solar, wind, and small modular gas generators.
In October, Russian attacks intensified on Ukrainian energy targets. The EBRD estimates Ukraine has lost approximately 9,000 megawatts in generation capacity, and 90% of flexible generation, since the beginning of the war. This has caused economic hardships, as well as regular rolling blackouts.
Since the invasion, the EBRD has invested more than 8.5bn euros. The EBRD said that it plans to sign at least two more "major" agreements later this year. Multilateral lenders invest primarily in the private sector through equity investments, loans and guarantees. ($1 = 0.8575 euro) (Reporting and editing by Karin Strohecker, Philippe Fletcher and Libby George)
(source: Reuters)