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You are not looking for payroll data, but MORNING BID Europe.
Stella Qiu gives us a look at what the future holds for European and global markets. Christopher Waller, the U.S. Federal Reserve governor, urged overnight markets to "give deflation a shot" while?global bonds yields flew. The markets have now reverted to pricing this month's interest rates decision as a coin flip, deciding whether the Fed will?stay?pat or raises rates for the first three years. You can consider the job done. Then he suggested that the non-farm payrolls for August, which is due in the afternoon, was not the data you were looking for. The August CPI report due next week will reveal the truth. After a 23,000-job drop in the previous month, median forecasts predict a rise of 56,000. Participants in the market expect unemployment to remain at 4.1% with a possible risk of 4.2%. Asia's relief was enough to boost the Nikkei by 1.1%. South Korea's KOSPI jumped 1.3%, and Hong Kong's Hang Seng rose 2.1%. Wall Street and European Futures are "practically flat" as I write. A further fall in employment could be enough to tip the scales towards a 'pause' on rates this month. However, a strong result would allow the Fed to raise interest rates. The CPI and PPI results next week will be the deciding factor. Some economists have even modelled PCE inflation to within three decimal places. The yield curve has risen as investors who hold long-term bonds prefer a Fed rate hike to prevent inflation. Brent crude futures rose 7% to $95.52 per barrel this week, a six-week high. The retreat of the U.S. Dollar has added to an enigmatic rally in the yen this week, which is up 2.5% to 156 per dollar. Some believe that?Tokyo is conducting?FX checks or has even made a clandestine intervention. Meanwhile, expectations of a rate hike by the Bank of Japan have also been building. The BOJ's move is priced about 75% in this month, and a tightening by 30 basis points is expected by October. This raises the possibility of a bigger increase or rare back-toback moves. OpenAI has released Astra which it claims is the most powerful large-language model ever and can perform most of your laptop tasks. This will be a huge hit with laptop makers. The following are key developments that may influence the markets on Friday. * UK S&P Global PMIs Eurozone retail sales in July The August nonfarm payrolls report includes the following data:
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The soft dollar sets off a 10-week streak of saving copper
The U.S. Dollar's overnight drop has helped to offset the pressure of receding supply fears. By 0300 GMT, the benchmark three-month copper price on London Metal Exchange had risen 0.06% to $14,342 per metric tonne. This puts the metal on course to gain 0.03% in this week's trading, marking its tenth consecutive weekly gain. The Shanghai Futures Exchange's most traded copper contract rose by 0.58%, to?109.170 yuan (16,254.73) per ton. After comments from Fed Governor Christopher Waller, the dollar fell overnight as expectations of a rate hike dwindled. CME's Fedwatch shows traders are now pricing in an even chance of a rate hike for September, up from a two-in-three chance the day before. A cheaper U.S. dollar can ?support greenback-denominated commodities by making them ?more affordable for buyers using other currencies, and lower rates can support industrial metals by stimulating economic activity. The week was marked by volatility for copper. Market perceptions of a less tight physical supply and resurgent rate fears weighed down trading in the early part of the week. LME copper’s cash-to-3-month spread The price of backwardation dropped to $57.93 per ton, down from $171.40 per ton the week before. Aluminium prices also rose on the 'LME, nearing a new three-week record due to supply shortages and concerns about availability. LME aluminium rose?0.2% and is on track to end the week with a 2.16% increase. Cash-to-three-month Spreads shifted to a slight downwardation on Thursday. This indicates tight availability. After paring down earlier gains, the?SHFE aluminum price increased by 0.25%. It had reached 24,510 yuan per ton, which was its highest level since June 4. Zinc was the least affected metal, only increasing by 0.01%. Lead increased by 0.11%. Nickel also gained 0.17%. Tin fell 0.27%. Nickel lost 0.57%, while tin gained 0.67 percent.
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Officials estimate Nepal flood losses at $2.56 Billion
KATHMANDU, September 4 - Property, housing, and infrastructure valued at?at least?387.5 billion Nepalese Rupees ($2.56 'billion) were lost during 'Nepal's' 'catastrophic flooding' last week, according to the head of the disaster authority. Dharma Raj Upreti said that the cost of restoring power, providing drinking water, and building temporary shelters in the first four months would be approximately $52.6 million. These are estimated amounts. "We have calculated these?in coordination?with different?concerned?agencies and departments," Upreti stated, adding that a more detailed assessment will be made soon. Upreti, a senior official at the Nepali government, said that Nepal would need to rebuild 20,000 homes in flood-ravaged regions, and that 7,500 of these homes were destroyed. On August 26, a collapsed glacier in Nepal's border area with China sent a flood down the Trishuli River, wiping out towns and villages. More than 1,250 people were killed, and more than 4,200 are still missing. Thousands of people have been displaced.
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Sources: Motiva restarts a small crude distillation plant at Texas refinery
Motiva Enterprises restarted a small 'crude distillation unit (CDU) at its 656,400 barrel per day (bpd), Port Arthur, Texas refinery on Thursday. Sources?said that the 90,000 bpd unit, which is the smallest of the refinery's three crude distillation units, was one of several closed on Tuesday night as Tropical Storm Eduoard passed close to the?refinery. It is the largest in the United States. VPS-2, the refinery's smallest crude distillation unit, is located in the refinery. Motiva did not respond to a request for comment. CDUs are typically the first step in the refining of crude oil, converting it into feedstocks that can be used by other processing units. All units that were shut down by the storm are now back in production. The units that have been restarted include the?18,000 bpd unit of alkylation, the?57,000 bpd delayed coker-1 and the 49,000 bpd catalytic Reformer-4. Cokers are used to convert residual crude oil from distillation units, into motor fuels and petroleum coke. Different?processes are used by alkylation units and reformers to create octane boosting components that are used in premium gasoline blends.
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Waller calms bond markets as Asian stocks climb ahead of US employment data
Asian shares rose Friday, as investors welcomed a "global rally" before the release of crucial U.S. employment data. Bonds also found relief after a Federal Reserve official calmed fears about rate hikes and drove down the dollar. The retreat of the dollar 'turbocharged' a rally for the yen. It has gained 2.6% in this week to trade at 155.7 per dollar. This puts it within striking range of the 155.2 mark reached by Tokyo and Washington after their joint intervention in late July. Christopher Waller, Federal Reserve Governor, said in remarks at a NEXT Newsmaker Event that recent data showed some signs of deflation. If future reports confirmed this trend, he'd prefer to hold rates steady during the policy meeting next month. Futures markets lowered the probability of a rate increase this month from 63% to 50% just a day earlier. These expectations had risen in recent sessions, as a global bond crisis pushed long-dated yields up to multi-year levels, fueled by fears over persistent inflation, soaring government debt, and geopolitical tensions. Analysts at JPMorgan wrote in a report that Waller is fighting back against Warsh's argument that there are few signs that inflation is underlying has decreased. "We are confident that Chair Warsh can deliver a raise if he advocates it. Without his advocacy, Governor Waller’s speech confirms that we believe the bar is high for data to convince the majority of data-dependent people to hike this coming month. The MSCI broadest index for Asia-Pacific shares outside Japan, which tracks Wall Street's gains, rose 1% in Asia. However, this was not enough to offset the earlier losses, as the index fell 0.4% last week. The Nikkei 225 index of Japan gained 0.8%, but fell 2.7% in the past week. Chinese blue-chips rose 1%, and South Korea's KOSPI rose 1.1%. The Wall Street and EURO STOXX futures were both flat, as traders awaited the U.S. August payrolls report due later that day. The forecasts predict a gain of 56,000 new jobs following a shocking drop of 23,000 in the previous month. The unemployment rate will remain at 4.1%. The U.S. data released overnight revealed that the service sector's activity picked up last month, with prices paid reaching a record high. Fed's "Beige Book", a survey of economic activity, also indicated that it had increased in recent weeks. BONDS GET ?SOME RELIEF The yield curve rose on the back of fading concerns about imminent rate hikes. Treasuries rallied after Waller's dovish remarks. The yield on two-year Treasury bonds held steady at 4.3381% after dropping 5 basis points over night to move away a peak of 4.4102% that was reached 20 months ago. The 10-year yield was unchanged at 4.7620% after dropping 3 basis points over night, and the 30-year yield was at 5.2433% following a 2 basis point drop overnight. Investors in bonds with longer maturities remain cautious about inflation risk, as there are few signs of progress being made between the U.S.A. and Iran on ending the war and reopening the Strait of Hormuz. Brent crude futures rose 7% to $95.52 per barrel this week, a six-week high. After a 0.6% drop overnight, the dollar was trading at 98.96 versus its major counterparts. It is expected to drop by 0.7% on a weekly basis. Investors increased their bets that the Bank of Japan will raise interest rates this month, which helped boost the yen's gains. Markets now indicate a 75% probability of a September move, while a hike in October is fully priced in. This raises the possibility?of a bigger increase or back-toback tightening. Tony Sycamore is an analyst at IG. He said: "While we cannot rule out another round or price check, or intervention, this could also be prepositioning -- either official or speculative, in anticipation of a weak non-farm payrolls tomorrow night and a BOJ meeting that may be hawkish in a week." Gold held steady at $4,470 per ounce on the commodity markets after a 2% increase overnight. The week was set to finish little changed.
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The steepest weekly increase in oil since mid-July due to intensifying US-Iran tensions
The price of oil rose on Friday, and is on track to be the highest weekly gain since mid July. Rising tensions and renewed U.S. - Iran hostilities have heightened concerns about Middle - East supply risks. Brent 'crude futures increased 15?cents or 0.2% to $95.67 a barge at 0100 GMT. U.S. West Texas Intermediate Crude Futures were up by 26 cents or 0.3% at $91.56. Brent was up 7.1% on a weekly basis and WTI 9.8%, the biggest gains since the week ending July 20. The U.S. attack this week, which killed and wounded dozens of people, including Iranians civilians, was the most violent clashes that have occurred between the two nations since July. The conflict, which began at the end February with U.S. and Israeli strikes, is now in its seventh month. Israel's Defence Minister Israel Katz warned that Israel would "cripple Iran's" military and civil infrastructure, including energy facilities. JD Vance, the U.S. vice president, told reporters Thursday that Washington will not hold talks with Iran until Tehran ceases to attack commercial shipping in Strait of Hormuz. Russian President Vladimir Putin, who capped oil's rise, said that there was still a?path to an agreement to end the conflict in Ukraine. He added that the U.S. as well as China were prepared to support any peace settlement. Iran has also expanded the list of vessels it considers non-compliant, and those who attempt to transit through the strait will be fined, confiscated or detained. The only vessels that Tehran has allowed to transit through Hormuz are Iraqi ships. Two Iraqi energy officials stated on Wednesday that Iraq's oil exports increased to 2.34 million barrels a day in August, from 1.35 million bpd the previous month. September exports are also expected to rise as a result of heavy discounts and Iranian approvals of Iraqi tankers.
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Nigeria's Dangote claims refinery IPO will open within days
Owner?Aliko?Dangote announced on Thursday that the initial public offering (IPO) of Nigeria's Dangote refinery, the largest in Africa, would open within the next 10 to 12 days. "Our dream is to double the capacity of our refinery, which would take us up to 1.4 millions barrels per day." Dangote, who was visiting Botswana in Southern Africa, told investors and analysts that the IPO would open within 10-12 days. The African richest man's refinery is expected to try to raise $5 billion, which could be the largest IPO on the continent. Dangote does not reveal refinery margins. However, the industry has benefited from higher profits as the Middle East turmoil boosted the demand for alternative fuels. The 650,000-barrel-per-day refinery reached full nameplate capacity in February and has already tested output at 700,000 barrels per day. The businessman said that the secondary listing of Dangote Cement - 'another flagship in his industrial empire' - on the London Stock Exchange was most likely to take place in October. This would allow the company greater access to international capital and investors. Dangote is also planning to build an entirely new refinery in Kenya, working with the governments of East Africa. The project is expected to take up to three year to complete and would provide refined petroleum products for Kenya?and its neighbouring countries. This would help reduce East 'Africa's dependence on imported fuels. This would be the largest refining investment made by Dangote Group outside Nigeria. He said: "We will launch it on the 30th of September."
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US: Deal aims to stabilize Venezuelan power grid within 6-12 months
U.S. Energy Sec. Chris Wright stated that a deal between Venezuelan and U.S. energy equipment and services firm GE Vernova aims 'to help stabilize Venezuela's power?grid within six months to a year, and boost it over the coming years. Wright, speaking to reporters on Wednesday evening before flying back to Washington, said: "The plan immediately is to... within six to twelve months, focus on bringing existing assets back into working order and condition, stabilizing the grid, and extending the hours of service." GE Vernova is one of the companies who committed to?expanding their energy projects in Venezuela? during a ceremony held in Caracas, Venezuela on Wednesday. The event was overseen by Delcy Rodriguez, interim president and Wright. Wright stated that the Guri Dam was built in the 1960s. It is only producing half of the power intended for it, due to the ageing turbines and transmission cables. Rodriguez called the agreements reached with GE Vernova a 'historic step. She called for energy conservation last month due to the drought conditions that were expected by El Nino's weather pattern. After the twin earthquakes that killed thousands of people in June, she called for power conservation. Maria Corina Machado, Venezuela’s opposition leader said on Thursday in a video that only "a serious, democratic government" can provide the stability investors need?in Venezuela. The White House stated that GE Vernova will bring 1 Gigawatt of new energy online within the first 24 months and another 5 GW in the next four years. GE Vernova didn't immediately respond to a comment request.
Australia sends drone experts to Nepal to help in search for 36 missing citizens
On Friday, Australian disaster response experts left for Nepal to "join" the search for survivors following the Himalayan floods. The government had expressed "serious concern" about the welfare of the 36'missing' citizens.
After a collapsed glacier triggered floods on the 26th of August, more than 1,200 people have been confirmed dead and?some 5,00 remain missing. According to the Nepalese government, 583 foreigners are missing.
Authorities said that a 15-member Australian Disaster Assistance Response Team consisting primarily of drone pilots in state emergency services was sent to Nepal after the government requested it.
"We still hold out hope that some people may still be surviving and we're hoping this team can assist in locating any of these people," Jeremy Fewtrell (the commissioner of Fire and Rescue New South Wales) told reporters on Friday at Sydney Airport.
He said that the majority of the team was made up of drone pilots. They were also?equipped with drones that could?survey large areas and navigate inaccessible spaces.
This response is in response of the Nepali authorities. It's a set of tools they believed would help them.
Seven Australian Federal Police disaster victim identification specialists will also arrive in Nepal this Saturday.
The announcement was made by the government on Thursday. Foreign Minister Penny Wong said 19 Australians, including consular officials, humanitarian police, and?defence & police?personnel, were already in Nepal.
Nepal's Foreign Minister said last week that international assistance was needed in specialist and technical areas.
Authorities in the area have stated that the chances of finding survivors are fading, but rescue efforts continue along 'the border with China.
Australian media reported that some relatives of Australians who have gone missing also traveled to Nepal to carry out their own searches.
Australian Treasurer Jim Chalmers said on Friday that 36 Australians were still?missing?, even though two had been confirmed safe over night.
He told ABC News Breakfast that "we still have serious concerns about the 36 Australians we haven't yet been able locate."
(source: Reuters)