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Silver eases off record highs as gold remains steady, while markets are focused on US data
The gold price remained stable on Wednesday, as traders waited for key U.S. indicators to gauge Federal Reserve policy. Silver prices also declined from their new record high. At 0856 GMT the spot gold price was unchanged at $4,207.60 an ounce, after dropping more than 1% during the previous session. U.S. Gold Futures for December Delivery were up 0.4% to $4,237.90 an ounce. Ole Hansen is the head of commodity strategy for Saxo Bank. He said, "(Gold's) price remains unchanged in early European morning hours as attention turns to key U.S. economic data that may cement expectations of a metal-supportive rate cut in December." Investors will be watching for the U.S. ADP November employment figures, which are due at 1315 GMT. The September Personal Consumption Expenditures Index (PCE), delayed due to the U.S. Government Shutdown, is due on Friday. The Fed's dovish tone and weaker economic data in the United States have increased expectations for a rate reduction at its meeting on December 9-10. Brokerages, such as BofA and J.P. Morgan are projecting a policy easing. According to CME's FedWatch, U.S. rate-futures now indicate an 87% probability of a rate reduction next week. Gold that does not yield tends to do well in an environment of low interest rates. Silver fell 0.5%, to $58.15/oz. It had earlier reached a new record of $58.94. Hansen stated that silver is supported by "a limited supply outlook, momentum buying, and short-covering following Friday's breakout over $54.50." He added that overbought condition posed a risk to bulls in the near term. Silver, a precious metal and an industrial metal, gained 101% in value this year. Its inclusion on a U.S. critical mineral list has also helped. This year, gold has risen 60%. Global shares were also more stable on Wednesday thanks to a Wall Street rebound overnight, as the brief sell-offs in bond markets, cryptocurrencies, and cryptocurrency markets subsided. Palladium, on the other hand, lost 0.5% and rose to $1.455.34, while platinum increased by 0.6%. Reporting by Pablo Sinha from Bengaluru. Mark Potter (Editing)
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Stocks of the Russian rouble fall as US-Russian talks fail to yield a breakthrough on Ukraine
The Russian rouble fell and the stocks in Russia dropped on Wednesday, after late-night talks at the Kremlin between President Vladimir Putin and Donald Trump's top representatives failed to produce a breakthrough regarding a solution to end Ukraine's war. The talks between Putin, Steve Witkoff (Trump's special representative) and Jared Kushner, Trump's son-in law, went well past midnight. Yuri Ushakov said that "compromises had not been reached" after the talks. The rouble fell 0.6% against the dollar at 0820 GMT and was down 0.5% against the Chinese Yuan at 11,01 on the Moscow Exchange where it is most traded. The main index of the Moscow Exchange was down by 1.6%, with Gazprom down 2%, Sberbank down 1.5% and Rosneft down 1,7%. Analysts at Alfa Bank said that the flagship stock market indicator has been declining due to the fact that there have not been any progress in Ukraine negotiations and reports of a lack of compromise. Analysts consider the Russian stock exchange, which has most of its blue-chip companies under Western sanctions as being undervalued. They call the main beneficiaries of the Ukraine peace talks, "peace coin". In February, the U.S. and Russia talks began. This initially lifted the thin Russian market driven by domestic funds after Western funds had left Russia. However, since then, hopes of a rapid end to the conflict have slowly faded. There is less hope. Fewer illusions. How much does hope cost? It's not so small. Yevgeny KOGAN, an economist, said that the market could lose between 8-10% as a result of the general disappointment. (Reporting and editing by Guy Faulconbridge/Andrew Osborn; Gleb Bryanski, Gleb)
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Swiss inflation unexpectedly drops to zero in November
Official data released on Wednesday showed that the annual inflation rate in Switzerland unexpectedly fell by a tenth of a percent point to zero. This was a slight undershoot from expectations. A poll of analysts found that the consensus was that last month's inflation rate would be unchanged, at 0.1%. The Federal Statistics Office published data that showed the Swiss Consumer Price Index fell by 0.2% compared to the previous month. This was in line with poll predictions. According to the office, this was due to a number of factors, including lower prices on hotels, package holidays, new cars, and certain vegetables. The office said that prices for housing, heating oil, and air travel rose. The data comes just a little over a week ahead of the Swiss National Bank's next rate setting decision. SNB's benchmark is zero at the moment, and it has stated that they expect inflation to gradually increase next year. The market expects the SNB to leave its benchmark rate unchanged in the coming week. The SNB targets a rate of inflation between 0 and 2 percent. (Writing and editing by Dave Graham)
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Iron ore prices ease amid policy meetings and soft fundamentals
The price of iron ore futures fell slightly on Wednesday due to weaker demand signals. Traders were also awaiting the outcome of upcoming Chinese economic meetings for any guidance regarding growth targets that could be supportive. The January contract for iron ore on China's Dalian Commodity Exchange was down 0.19% at 799.5 Yuan ($113.19). As of 0724 GMT, the benchmark January iron ore traded on Singapore Exchange was up 0.24% at $104.15 per ton. Atilla Winnel, Singapore-based Navigate Commodities managing director, explained that a broader macro trade drives speculation in China-centric futures for industrial commodities. Investors await signals from the Central Economic Work Conference, which sets the agenda for the year ahead, and the Politburo meeting in December on the growth targets. Widnell said that some traders were positioning themselves ahead of these meetings to take advantage of any rally. However, we do not expect positive announcements from these meetings regarding steel-intensive consumption. According to market intelligence provider Shanghai Metals Markets, iron ore concentrate prices are expected to be stable in the short term in Tangshan. SMM said that hot metal production, which is a measure of iron ore consumption, has been on a downward trajectory. Weakening fundamentals are putting pressure on the ore price, but sentiment remains positive in advance of important policy meetings. According to broker Galaxy Futures, due to the recent tightening of environmental inspections, it is expected that pig iron production will continue to fall this week. This puts pressure on raw materials. According to the latest monthly outlook of Mysteel, the chief analyst Wang Jianhua, the prices of Chinese steel are still expected to rise in December due to the improvement in the macroeconomic climate and the recovery in the market fundamentals. Coke and coking coal were both up, but coking coal was down by 2.19%. The benchmarks for steel on the Shanghai Futures Exchange also showed mixed results. Hot-rolled coils and wire rods both fell by 0.21%, but rebar rose 0.06%. Stainless steel also grew 0.2%. $ 1 = 7.0632 Chinese yuan (Reporting and editing by Harikrishnan Nair, Eileen Soreng).
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Copper prices rise on concerns about supply; Fed rate decision pending
The copper price rose on Wednesday, hovering near the highs set earlier this week. Supply concerns fueled the overall bullishness surrounding the metal. Meanwhile, the market focused its attention on the U.S. Federal Reserve’s interest rate announcement next week. The Shanghai Futures Exchange's most traded copper contract reversed initial session losses and closed daytime trading at 89210 yuan per metric ton ($12,630.79), extending gains for the eighth consecutive session. Shanghai copper was a close follower of the benchmark London three-month copper, which was lowered from its all-time-high on account of a lower appetite for risk and profit-taking. London copper reversed Tuesday’s losses, rising 0.93% at $11,249 per ton by 0705 GMT. The upward trend was supported by optimism over a second rate cut from the U.S. Central Bank on December 10. A 25-bps cut has already been priced into the market despite limited economic data being available due to the 43 day U.S. Government shutdown. Analysts at Sucden Financial warned that policymakers risked "creating an unnecessary market disruption" if they resisted the expectations. Base metals from Shanghai and London are combined. Aluminium, zinc, lead, nickel, and tin all rose in value. $1 = 7.0629 Chinese yuan renminbi $1 = 7.0629 Chinese Yuan Renminbi (Reporting and editing by Dylan Duan, Lewis Jackson and Ronojoy Mazumdar).
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The restructuring costs of Thyssenkrupp Steel Head are estimated at hundreds of millions euros
Marie Jaroni is the head of Thyssenkrupp’s steel division. She estimates that a restructuring agreement, which will result in the loss or outsourcing of 11,000 jobs, will cost the company three digit million euro, according to the Frankfurter Allgemeine Zeitung. Thyssenkrupp Steel Europe said this week it had reached an agreement with the IG Metall to reduce or outsource 40 percent of its workforce. It will also reduce production to a level of shipping of 8,7 million to 9,0 million tons from 11.5 millions at present. The restructuring costs us about a million euros. In an interview published Wednesday, Jaroni stated that the exact amount will depend on how many employees take up each offer. She told the newspaper that this will be a good investment, as the company's personnel costs will permanently fall, and will be "a three-digit amount less per year than they are today." Thyssenkrupp has been trying to sell its steel business for many years. In September, India's Jindal Steel International made an indicative offer for TKSE. Jindal Steel has been conducting detailed due diligence in order to determine whether it should make a formal, binding offer to TKSE. TKSE is Germany's biggest steelmaker and had sales of 10,7 billion euros (12.46 billion dollars) last year.
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Rate cut bets and gold hold steady in the face of US data
The price of gold was unchanged at the end of Asia trading on Wednesday, as investors awaited the release of a number of U.S. economic data that will determine the direction of the U.S. Federal Reserve’s monetary policies. Meanwhile, silver reached a new record high. As of 0647 GMT spot gold was unchanged at $4,205.78 an ounce after falling by more than 1% the previous session. U.S. Gold Futures for December Delivery were up 0.4% to $4,237.20 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said: "I believe buyers are still interested in gold due to the interest rate outlook. However they may be waiting for further evidence of an economic slowdown that may signal the Fed a possible rate cut next month." Investors will be focusing on the data due this week, which includes the November ADP Employment figures, released on Wednesday, and the September Personal Consumption Expenditures Index (PCE), the Fed's preferred measure of inflation, due Friday. Waterer said that prices are generally stable, as there are few new catalysts, and the higher liquidity during European and U.S. sessions usually cools some of the enthusiasm in early Asia session. According to CME's FedWatch, U.S. rate derivatives now indicate an 88% probability of a rate reduction next week. This is up from 85% one week ago. Recent U.S. economic data indicating a slight slowdown in the economy has reinforced expectations for a rate reduction at the Fed meeting on December 9-10. Major brokerages have also predicted policy easing. Gold that does not yield tends to do well in an environment of low interest rates. Silver dropped 1% to 57.87/oz, after reaching a new session high of 58.94 earlier. Silver import tariffs are a concern, as is the tightness of the London spot market. Recently, the inventory data from China have also dropped. These factors still support silver prices, said Soni Kumari a commodity analyst with ANZ. Palladium fell 1%, while platinum rose 0.8%, to $1.651.15. (Reporting by Ishaan Arora in Bengaluru; Editing by Sherry Jacob-Phillips, Harikrishnan Nair and Janane Venkatraman)
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Stocks hold steady despite bitcoin's slide and global bonds' halt
The global shares are on a more stable footing today, thanks to an overnight rebound in Wall Street and the abating of a short selloff on bond markets and cryptocurrency. Bitcoin has regained the $90k level and reached a new two-week high, while Nasdaq futures and S&P500 futures each rose by 0.2%. The EuroStoxx 50 futures rose 0.3%, while the FTSE futures gained 0.1%. After a turbulent start to the week in which expectations of an imminent rate hike in Japan caused a global sell-off in bonds and a steep decline in cryptocurrency, stocks were caught up in the rush away from risky assets. The prospect of falling rates differentials between Japan and the U.S. has resurfaced carry trade concerns and led to the unwinding or leveraged positions, according to Kerry Craig, global strategist at J.P. Morgan Asset Management. "Rightly, or wrongly, there was a time when the performance in crypto was used as a measure for risk sentiment. But we also know that market conditions are sensitive to liquidity." The Nikkei 225 index rose by 1.5% in Japan, while MSCI’s broadest Asia-Pacific share index outside Japan fell 0.12%. This was due to losses on Chinese markets. China's CSI300 index of blue-chip stocks fell 0.26%, while Hong Kong's Hang Seng Index dropped 1.2%. China's slowing growth in services added to concerns about an economy struggling with a long property slump. On Wednesday, the Japanese government bond (JGB) market was more orderly, but they still faced downward pressure from investors who were betting on a Bank of Japan interest rate hike in late this month. The yield on the 10-year JGB hit its highest level since June 2008, at 1.885%. Meanwhile, the yield on two-year JGBs rose by one basis point to 1,015%. Bond yields are inversely related to bond prices. The yield on the two-year U.S. Treasury fell 1.6 basis points to 3,500%. The benchmark 10-year yield remained steady at 4,081%. DOVISH FED OUTLOOK: Analysts said that, given the lack of significant market catalysts, the focus has shifted to the Federal Reserve's expected rate reduction next week. This has improved the market sentiment. Tony Sycamore is a market analyst at IG. He said: "I can't think of any reason (equities will not be supported) into the FOMC's rate cut next Monday. And I believe then, you'll start to hit a really nice sweet spot mid-December, when equity markets rally." December is historically a good month to invest in stocks. Investors also priced in a more dovish Fed perspective, on the belief that White House Economic Advisor Kevin Hassett - reportedly the frontrunner for the next Fed chair - would deliver further rates cuts after he succeeds Jerome Powell. Donald Trump, the U.S. president, said Tuesday that he will announce his Fed nominee in early 2019. He has also narrowed down the list of candidates to just one. The dollar has been on the backfoot, and the euro is now 0.14% higher at $1.1642. The dollar also fell 0.14% to 155.66 yen, while sterling rose 0.16% at $1.3236. Hassett is dovish in his monetary policy, and closely aligned to President Trump. His appointment could therefore damage the FOMC's perception of independence, which is a negative for USD," said Kristina Clifton, senior currency analyst at Commonwealth Bank of Australia. Oil prices fell in commodities after falling the previous session as markets weighed waning Russia-Ukraine hopes for peace against fears of an oversupply. Brent crude futures rose by 0.11%, to $62.52 per barrel. U.S. crude climbed 0.14%, to $58,72 a barrel. Spot gold was unchanged at $4,206.89 per ounce.
Fuel and funds to aid flood-hit Indonesian areas are running low
The authorities battling the floods that hit Indonesia's Sumatra island this week, which killed 804 people, have asked for more help from the central government to address shortages in funds, fuel and food.
Local government officials say that landslides and floods caused by cyclones have led to 634 deaths in the three provinces West Sumatra (North Sumatra), Aceh and West Sumatra. They also claim that power lines and roads were cut, preventing aid from reaching those who needed it.
Teuku Raja Keumangan told Kompas TV that "people are getting sick" in Aceh where flooding has affected 25,000 people.
Haili Yogi, the chief of central Aceh where 21 people died and 54,000 were affected by floods, has said that fuel and rice supplies are running out. He urged the central government declare a state of emergency, as anger amongst citizens grows at being cut off from assistance.
The budget of Indonesia, which is 500 billion rupiah (30 million dollars) for disaster relief, is adequate, according to presidential spokesperson Prasetyo Didi on Wednesday. However, he added that this figure could be raised if needed.
These comments follow remarks made by the President Prabowo Subianto to reporters earlier this week, in response to a question about declaring an emergency national, that things were improving and existing arrangements would suffice.
People turn to muddies when they don't have access to fresh water
Sibral Malasi, the chief of Aceh's Pidie Jaya Region, has also said that fuel supplies are limited.
KompasTV reported that residents of Aceh Tamiang were cleaning and drinking flood water due to a lack of freshwater.
Jonathan Victor Rembeth said that a national disaster could be declared if the provincial governments declare their inability of responding to a catastrophe, which they haven't done yet.
Indonesia has declared a COVID-19 national emergency. The floods in the country have affected over 3.3 million people, and 576,000 of them were evacuated.
The law allows the president to declare an emergency national, releasing additional funds for aid and rescue.
Indonesians have criticised the central Government for not declaring a state of emergency. They also cited the cuts in the budget allocated to the agency for disaster mitigation, which according to official data was 50% lower this year than the previous.
Indonesia's Minister of Home Affairs, Tito Karnavian said that he asked regional governments not affected by floods to donate any unused funds they had to those who were affected.
Tito said on Wednesday that the central government will support local authorities who have "given up on" flood response efforts.
Muhammad Baron, a spokesperson for Pertamina, said that the company faces fuel distribution problems in "nearly" all of the flood-affected regions. The company will be looking for alternative routes but it may take some time to deliver.
Green groups blame illegal logging and deforestation for the worsening of the disaster. $1 = 16,625.0000 Indonesian rupiah (Reporting and editing by Clarence Fernandez, Stanley Widianto, Gayatri Sulaiman, Fransiska Naangoy, Stefanno Sulaiman, Dewikurniawati, Hidayatullah, Pidie Jaya)
(source: Reuters)