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MORNING BID AMERICAS-Tariff Man turns terminator
What the ROI team and Mike Dolan are looking forward to reading, watching and listening to this weekend. Editor's Notes Hello Morning Bid readers! The White House announced on Thursday that Donald Trump will meet with Chinese president Xi Jinping during his Asia trip next week. This boosted Asian equities on Friday. On Thursday, Trump wrote on Truth Social, that negotiations with Canada, another major U.S. trade partner, had been "TERMINATED" because of a "fraudulent ad" showing Ronald Reagan criticizing tariffs. The U.S. signed a trade deal with Australia on Monday, which will invest up to $8 billion in projects that develop and refine metals essential to industries such as defence, advanced manufacturing, and energy transition. Clyde Russell, ROI Asia Commodities columnist, argues that while this deal is not a game changer for the U.S. or its allies in their quest to reduce reliance on China, it is still a good first step. Investors, who were deprived of economic data due to the government shutdown will receive official information on the economy today. The CPI inflation rate for September. It is expected to remain at 3.1% over the past year. As ROI's editor-at-large Mike Dolan points out, the markets will likely shrug off this announcement, since almost no one cares about inflation any more. The job market is what matters, according to Federal Reserve Chair Jay Powell at the FOMC meeting in September. Jamie McGeever, a columnist for ROI markets, argues that the fall in Treasury yields over the past month -- the 10-Year yield dropped below 4% this week -- shows investors are listening to Powell. Intel, among many other companies, reported strong results for the third quarter, while Netflix and Tesla posted disappointing results. Jamie McGeever says that we may be seeing signs of the equity rally expanding. Geopolitics was once again at the forefront of this week's energy markets as President Trump imposed sanctions on two Russian oil companies, Rosneft, and Lukoil, on Wednesday in an attempt to press Russian President Vladimir Putin into agreeing to a ceasefire agreement in Ukraine. Ron Bousso, ROI Energy's columnist, argues that Trump's willingness and ability to enforce secondary sanctions will determine the effectiveness of this measure. Brent crude prices rose over 5% after the announcement, but it is likely that this increase will be short-lived as global oil markets are widely believed to have an oversupply. Ron Bousso points out that the uncertainty around OPEC+'s production should limit any selling. Gavin Maguire, ROI Energy Transition columnist, pointed out that, in terms of fossil fuels, the natural gas consumption of U.S. gas firms is likely to surpass the gas consumption of U.S. consumers for the first time by 2025. This will exacerbate tensions between export-oriented gas companies and domestic gas users. Andy Home, ROI's Columnist for Metals, shares his main takeaways following the recent London Metal Exchange Week. Spoiler alert: everyone loves Doctor Copper. Gold, the most famous of all metals, saw its prices plummet on Tuesday. This was the biggest drop in five years. Gold is up over 50% in this year despite its fall from a record high of $4,300. Check out what the ROI team recommends you read, watch, and listen to as we enter the weekend. Stay informed and prepared for the coming week. This weekend we will be reading... CLYDE RUSSELL. ROI Asia Commodities and Energy columnist. My suggestion for this week is a report by the OECD on Australia's Green Iron Potential. The report outlines both the size of the opportunity and the enormous challenge that comes with funding and coordinating a major shift for the largest iron ore producer in the world. MIKE DOLAN is ROI Financial Markets Editor at Large. This column by Jacob Funk Kirkegaard, of the Peterson Institute, explores the possibility that a fiscal crisis in France - the EU's sole nuclear power - could result in the transference of France's nuclear deterrent cost to the EU. RON BOUSSO is the ROI Energy columnist. This fascinating investigation reveals that dark fleet oil tankers are not only used for dubious Iranian and Russian oil trade. These vessels are being used also by Mexican drug cartels to trade illegal oil and evade taxes in a thriving market. Andy HOME, ROI Metals columnist: The most fascinating thing I read this week was about the underground race that will be held in Boliden’s Garpenberg Zinc mine in Sweden. Participants will run in darkness and complete silence, with temperatures up to 30degC. We're listening... GAVIN MAGUIRE. ROI Global Energy Transition columnist. This is an interesting podcast about the possibilities of EV battery recycling. The plan is to "turn a massive wave incoming of used batteries into a resource for the grid." We're watching... ANNA SZYMANSKI (ROI Editor-in Charge): I know I recommended the World News vodcast to you last week but I am doing it again so that you don't forget the new video version. Opinions are the sole responsibility of the author. These opinions do not represent the views of News. News is bound by the Trust Principles to maintain integrity, independence and neutrality. Want the Morning Bid delivered to your inbox each weekday morning? Subscribe to the newsletter by clicking here. You can find ROI at the website and follow us on LinkedIn or X.
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Copper prices steady after reaching $11,000; weekly gains expected
Copper rose to $11,000 per metric tonne on Friday, before losing momentum. However, it was still on track for a weekly increase amid renewed optimism about trade talks between China and the United States as well as continuing concerns over a lack of supply. As of 0915 GMT, the benchmark three-month copper price on London Metal Exchange had risen 0.3% to $10,886.50. It had risen as high as 1.1% earlier to $10,969 and was close to the 16 month high of $11,000 reached on October 9. This week, the metal used for power and construction is expected to gain 2.6%. John Meyer, analyst at SP Angel, said: "I believe copper will continue to be used... purely due to the developing shortage caused by the mud rush in Grasberg as well as the continued need for copper around the globe and especially in China." Freeport's Grasberg Mine in Indonesia is closed since the September 8 incident. LME Copper Stocks The 136,350 tonnage was the lowest since late July. Meyer said that there is a possibility of a copper squeeze similar to the one in zinc seen this week. Chinese smelters who are playing the London-Shanghai arbitration risk being caught because of a shortage of physical metal. China's Communist Party held its Fourth Plenum Thursday. The party vowed to concentrate on technological innovation, and to boost consumption. Karoline Leavitt, White House Press Secretary, confirmed that Donald Trump and his Chinese counterpart Xi Jinping will meet next Thursday in South Korea. Meyer stated that with gold prices dropping from their record highs, "there's definitely more attention being paid to base metals." Aluminum fell 0.2% to 2,856.50 per ton after reaching $2,883.50 its highest level since May 2022 due to supply concerns. Zinc fell by 0.3% to $3,000, nickel dropped 0.5% to $16,290, while lead rose 0.1% to 2,012.50, and tin increased 0.2% to $3740. (Reporting and editing by Harikrishnan Nair; Additional reporting by Dylan Duan, Lewis Jackson and Vijay Kishore;
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Low spot prices expected due to strong wind supply
Germany's wind production is expected to be strong on Monday, even though it has fallen from the high levels that were expected on Friday. LSEG data showed that the German and French baseload power contracts for Monday were not traded by 0950 GMT Friday. According to LSEG analyst Naser Hachemi, the German residual load was relatively low on Monday, due to a strong wind supply. Thermal availability is also returning. Data compiled by LSEG shows that German wind power production is expected to fall by 6 gigawatts on Monday to 41.8 GW. Meanwhile, French wind power is projected to increase by 1 GW to 13.1 GW. The German solar energy supply is expected to drop by 2.6 GW - 3.6 GW. On Monday, power consumption in Germany will rise by 1.5 GW and reach 57.1 GW. In France, demand is expected to fall by 240MW to 48.3GW. On Sunday, October 26 at 3:00 am, the clocks will be set back one hour, bringing in the winter. The French nuclear capacity fell by five percentage points, to 70% total capacity. Two reactors were taken offline for planned maintenance and Golfech 1, for an unplanned shutdown. Operator EDF reported that the Golfech 1 reactor had been taken offline on Friday morning due to a fault on a power cord in the non-nuclear portion of the facility. The German power contract for 2026 has dropped 0.3%, to 56.15 Euro/MWh. The benchmark contract on the European carbon markets rose by 0.1%, to 78.51 euro per metric ton. $1 = 0.8575 Euros (Reporting and additional reporting by Vera Eckert, Editing by Sahal Muhammad)
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Sources say that the rise in fuel prices in Tajikistan is due to Ukrainian strikes on Russian refineries.
Three sources from the government of Tajikistan said that the rise in fuel costs in Tajikistan is partly due to Ukrainian drone attacks on Russian oil refineries, they told reporters on Friday. A source from the anti-monopoly service of the Tajik Government said that there is a shortage of gasoline on the market. This has resulted in higher prices. Sources said that the source was unable to deliver fuel that had been contracted from Russian producers, citing strikes at Russian refineries which supplied much of Tajikistan’s fuel requirements. Two other sources also agreed. Monitoring on Friday revealed that fuel prices have risen in the capital of Tajikistan, Dushanbe. This has been happening since October 1. The A-95 has risen by 3.54%. The AI-92 by 3.68%. Diesel by 5.58%. And liquefied petrol gas (LPG), by 5.81%. According to one source, prices are even higher outside of the capital. Tajikistan, a mountainous nation of about 10.5 million people, has few hydrocarbon resources of its own. It is therefore economically dependent on Russia, to which many of its citizens are sent for work. Since 2022, the war in Ukraine by Russia has had a devastating impact on all five former Soviet republics of Central Asia, whose economies have a close relationship with Russia. In recent weeks, an escalating Ukrainian campaign against Russian energy infrastructure knocked down up to a quarter of Moscow's refinery capacity. This had a ripple affect in Central Asia. The strike at Russia's Orenburg plant last week, which processes the gas from Kazakhstan Karachaganak, has drastically reduced the capacity of this plant, the largest in the world. Last week, Kazakhstan frozen fuel prices and utility rates, blaming the fallout of the Ukraine war. Kyrgyzstan officials warned on Wednesday that fuel prices may increase up to 15% due to the shortage. (Reporting and Writing by Felix Light; Editing by Hugh Lawson).
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Carney, Canada's Carney, visits Asia in order to form new alliances with Asia and reduce US dependency
Mark Carney, Canada's prime minister, will make his first official trip to Asia this Friday. He is hoping to strengthen trade and security links at a moment when North America struggles to reduce its dependence on the U.S. Canadian officials have said that Carney may also meet with Chinese President Xi Jinping during his week-long visit, as part of a possible attempt to restore a relationship previously strained by a trade war. Analysts say Carney will need to make it clear to Asian leaders that Canada is not as closely aligned to the U.S. President Donald Trump, who has threatened to annex Canada. Vina Nadjibulla is vice president of Asia Pacific Foundation of Canada. She said that Carney must make it clear to the world that Canada is not fragmented and still supports rules-based globalization and trade. Canada signed a deal last month with Indonesia to provide duty-free access to up to 95% its exports to Indonesia in the coming year. Maninder Singh Sidhu, Canada's Trade Minister, said that the country is now focusing on agreements with Malaysia, South Korea, and Japan. Carney will visit Singapore to meet with officials and attend the Asia-Pacific Economic Cooperation Summit in South Korea. Trump departs to Malaysia in the late evening Friday night The White House announced that Xi will be meeting with President Kim in South Korea on Thursday. Carney wants to diversify Canada's exports in the next decade. However, Canada is still dependent on the U.S. about 75% for its goods. Fen Hampson is a professor at Ottawa's Carleton University who specializes in international affairs. He said that there are far more business opportunities in Asia for Canada than in Europe. Carney visited Europe three times after becoming Prime Minister in March. Hampson stated that the economies of Southeast Asia were more dynamic, and therefore compatible with Canada's energy and commodity trade. Hampson noted that, despite this, any deal Canada makes with China would be affected by the geopolitical dynamics of the U.S.-China. Hampson stated that as tensions between the U.S.A. and China escalate, Prime Minister Carney will have less room to maneuver. He believed that it would be hard to resolve Canada's ongoing disputes with China about canola, electric vehicles and other issues without improved relations between these two global superpowers. Hampson stated that the Americans put a lot of pressure on him to refuse to concede to his perceived rival. Former banker raises hopes for improved relations Many Canadians also fear closer economic ties with China. In a poll conducted by Angus Reid & the Asia Pacific Foundation of Canada, 59% of respondents still have a negative view of China and only 14% believe Canada should pursue closer economic ties with China. Justin Trudeau, Carney's predecessor as prime minister, was responsible for the deterioration of relations between Canada and China. Canadian citizens were secretly murdered by the Chinese government. Canada's security agencies concluded that China interfered with at least two federal election. Xi publicly scolded Trudeau for allegedly leaking their conversations to the media. Analysts claim that Carney's experience as a central banker, and his credentials as an ex-central banker give him credibility that his predecessor lacked. Carney said that he spoke to Chinese Premier Li Qiang in the last month, and that he expects to meet with senior Chinese leaders soon to "see how trade relations evolve." In a region where protocol and customs are of great importance, the Prime Minister may still need to tread with caution. Isaac Stone Fish is the CEO of Strategy Risks - a Chinese business intelligence company. He said that Carney's behavior with Xi Jinping will be equally important. Carney knows that a literal bowing down to Xi would look weak. (Reporting and editing by Maria Cheng, Caroline Stauffer, and Margueritachoy).
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Wall St Week ahead-Megacap earnings and Fed meeting to headline a busy US market week
The U.S. Stock Rally faces a potentially significant week in order to maintain its momentum going into the year-end. This includes a flood corporate results, headlined by Megacap Companies and a possible interest rate reduction by the Federal Reserve following its two-day meeting. Investors may be concerned about the escalation of U.S.-China tensions in the next few days. Meanwhile, the U.S. shutdown continues to cause uncertainty. The S&P 500 is close to reaching its highest level ever, following a 35 percent increase since April's low. The benchmark index has risen over 14% in the past year. Chris Fasciano is the chief market strategist of Commonwealth Financial Network. He said that given the fact that the market has been on a rally for several months, without any significant declines, the equities market could continue to be choppy. Fasciano stated that "what we need to hear is corporate America talk positively about the economy and continue beating earnings." When people get nervous, they are usually when consumer confidence or business confidence is on the decline. The third-quarter earnings season has started well, despite the disappointments of companies like Texas Instruments and streaming service Netflix. According to LSEG IBES, the profits of S&P 500 companies have risen by nearly 10% compared to a year earlier, based on results reported by 130 companies as of Thursday. As of Thursday, 86% have exceeded analysts' revenue and earnings estimates. The next week will be the busiest for the season with more than 170 companies reporting. Microsoft, Apple Alphabet Amazon Meta Platforms are five of the seven "magnificent companies" with the largest market capitalizations. Their shares dominate the equity indexes. They have all posted huge profit growth in the last couple of years. Magnificent Seven's profit advantage over the rest is decreasing, but they are still expected post better results in this period. Tajinder Dhillon is a senior research analyst with LSEG and says that earnings for the group will rise 16.6% compared to an 8.1% increase for the rest. A number of megacap companies have also been key players in artificial intelligence, which has driven the stock market's performance. Anthony Saglimbene is the chief market strategist of Ameriprise Financial. He said that these large tech reports will have the biggest impact between now and the year's end. The hurdle rate for these companies is high as they prepare to report earnings next week. Next week, Visa, Mastercard and Exxon will also be reporting results. When it makes its policy decision on Wednesday, the Fed is expected to reduce its current benchmark rate between 4% and 4.25% another quarter percentage point. The markets will be more responsive to the Fed's Jerome Powell in terms of any future-oriented language. This is because asset prices have already been impacted by this. Dominic Pappalardo is the chief multi-assets strategist at Morningstar Wealth. He said that if there were any indications from the Fed that it would deviate away from its rate-cutting course, this could have a major impact. The Fed's ability to make decisions may be clouded by the lack of information provided by the federal government since the shutdown began on 1 October, including the delays in the release of employment data at a time when there are growing concerns about the state of the labor markets. Art Hogan is the chief market strategist for B Riley Wealth. He said that an increasingly prolonged shutdown, which has already lasted more than average in previous shutdowns, also poses a greater risk to economic growth. Hogan stated that the longer the situation continues, the harder it will be for the market to ignore. Investors had also largely shrugged off trade-related risk in recent months. But renewed U.S. China rifts brought tensions back to the forefront. Donald Trump, the U.S. president, threatened to impose significantly higher tariffs against China on November 1 after Beijing implemented export controls for rare earths. Investors are watching the developments surrounding the upcoming meeting between Trump, and Chinese leader Xi Jinping to see if tensions can be eased between the two nations. "If tariffs increase to the levels President Trump has threatened on China, you'd see a volatile and likely a negative reaction in the markets, especially if investors anticipate that this is going to last," Saglimbene stated.
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European stocks remain steady as traders await U.S. inflation figures
The dollar was stable and oil prices were down as traders waited to see U.S. data on inflation. Wall Street had Close higher On Thursday, sentiments were boosted by the White House's confirmation that U.S. president Donald Trump will be attending. Xi Jinping, the Chinese president, will be visiting Asia next week. The meeting was seen as an indication of the slight easing of tensions between China and the U.S. before a deadline of November 1, for additional U.S. duties on Chinese imports. The Shanghai Composite Index in China rose by 0.4% to its highest level since August 2015. European markets opened higher but then became mixed and lost direction. The pan-European STOXX 600 index was up by 0.1% at 0850 GMT. It is on course to gain a week. London's FTSE 100 also showed little change. The MSCI World Equity Index was up around 0.1%, resulting in a gain of 1.2% for the entire week. The U.S. Stock Markets have surged in this year and reached record highs, as traders pour money into artificial intelligence Bet that the U.S. Federal Reserve continues to reduce rates. Investors waited for U.S. Inflation data on Friday. The data was delayed because of the Government shutdown . It is expected that the Consumer Price Index report (CPI), which will be released later in this session, will show core inflation at 3.1% for September. Next week, the Fed is expected cut rates by 25 basis points. Peter Fitzgerald, Chief Investment Officer for Macro at Aviva Investors, said: "It is a continuation in a generally supportive environment for equity markets where interest rates have been broadly falling across developed markets with Japan being the notable exception. Volatility has begun to drop again after a short spike, and there are no major earnings surprises." He said that it was impossible to know when or where a bull run would end. Large technology companies. TRUMP CANCELS CANADA TRADE NEGOTIATIONS The dollar index rose to 99.045 on Monday, an increase of around 0.1%. Canadian dollar Trump's impact was limited Saying on Social Media He said that he would end all trade negotiations with Canada over what he called a fraudulent advertisement Ronald Reagan, the late former president, speaks negatively about tariffs. As the new Prime Minister of Japan promised economic stimulus, the yen fell. The dollar-yen pair was at 152.97. The dollar was stable at $1.1611. The euro zone's business activity grew more rapidly than expected in October. Data shown . Euro zone government Bond yields are rising After the data, Germany's Bund yields hit 2.612%. Oil prices After the U.S. sanctions on major Russian oil companies,, which had gained 5%, slowed down, but they were still on course for a weekly increase. Gold fell around 1.5% per day to $4,064.26 an ounce. It is on course for a weekly decline, ending its nine week winning streak. Gold funds received their The largest weekly inflow Bank of America Global Research reported that the number of people who died in the past week was up from Wednesday. Apple and Microsoft are among the five "Magnificent 7" U.S. firms at the heart of the artificial-intelligence boom that will report their earnings next week. Intel's earnings will be announced on Thursday beat expectations
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Sources: Japan's Q4 aluminium price is $86 per ton, a 20% drop from Q3.
Five sources involved directly in the price negotiations said that the premium for aluminium shipments for Japanese buyers from October to December has been set at $86 per ton. This is down 20% on the previous quarter due to weak demand. This is a lower figure than the $108 paid per ton in the quarter July-September and marks the third consecutive decline. Japan is the largest Asian importer for premiums and light metals For primary metal shipments, it agrees to each quarter pay over the London Metal Exchange cash price that is the benchmark for the area. Early in September, pricing talks were held between Japanese aluminium purchasers and global producers like Rio Tinto and South32. They were to be concluded by the end the month. They lasted longer than normal as both sides tried to close the gap. The producers initially offered premiums between $98 and $103 per ton, down from the previous quarter by 5% to 9%. A producer cut its price to $97 but buyers wanted levels in the 80s citing premiums of $70s. A source from a Japanese fabricator revealed that producers eventually agreed to $86 this past week and that buyers accepted it, despite their bids remaining in the low-$80s. The source added that high inventories kept prices in the 80s. Three major Japanese ports have large stocks of aluminium According to Marubeni, the trading house, the total volume of coal sold in September was 341,300 tonnes, an increase of 1.8% over the previous month. A producer source stated that "we cut offers to reflect the slow demand and to meet buyers' voice," noting that sellers had held out until last week for higher prices, as it was expected that rising premiums in Europe and the United States would tighten supply in Asia. Sources declined to identify themselves due to the sensitive nature of the issue. (Reporting and editing by Christian Schmollinger, Louise Heavens and Yuka Obayashi)
Take Five: Make or Break
The week will be dominated by renewed trade tensions, talks between Washington and Beijing, and decisions made by the central banks of the United States, Canada, and Europe. Meanwhile, Argentina's voters go to the polls.
Dhara Ranasinghe, Alden B. Bentley, Lewis Krauskopf, and Rodrigo Campos in New York and Kevin Buckland, in Tokyo, give you all the information about what to expect in world markets this week.
1/ A MIDTERM DRAMA The mid-term elections in Argentina on Sunday will be a crucial moment for the biggest reform story of emerging markets. Right-wing president Javier Milei wants to consolidate his minority position following his economic reform program that has crushed inflation and strengthened ties with Washington, which have produced some of the best returns in emerging markets since he assumed office in December 2023. But despite the unprecedented support of U.S. president Donald Trump, which includes direct intervention in the FX market, a central bank swap line worth $20 billion and the prospect for another $20 billion loan, the peso has continued to fall to record lows.
All of this could be swept away if Milei has a poor result. This would also hinder reforms and raise questions for investors about how they should shape their long-term investments in the country.
IT'S AI, STUPID
The earnings of megacap tech companies and growth companies are the highlight of a week full of corporate results in the United States that may shed light on how the "AI trade" is doing. Microsoft, Apple Alphabet Amazon Meta Platforms and Amazon are all part of the "Magnificent 7" megacaps that dominate equity indices.
In the next week, one-third of S&P500 constituents will report, including oil giants Exxon, Chevron, and Visa and Mastercard.
Investors will also examine data to determine the cost and impact of a shift in U.S. Trade Policy. According to LSEG data, S&P 500 companies have reported a 9.2% increase in Q3 earnings compared to the previous year. A greater than usual number of companies has exceeded profit expectations so far.
3/COUNTING on a CUT The markets are almost certain that the U.S. Federal Reserve is going to cut interest rates a quarter point when they conclude their meeting on Wednesday. They are also confident about another reduction in December.
This year-end cut could be less obvious if the shutdown continues, as data-driven policymakers will have no official economic indicators. Trump will meet with Chinese President Xi Jinping Thursday, as part of a visit to Asia on the sidelines the Asia-Pacific Economic Cooperation CEO Summit. The long-awaited meeting was put into doubt after escalating trade tensions.
It's not all about the FED. That's correct, the Bank of Canada will also cut rates on Wednesday, despite Trump's announcement to end trade talks. The European Central Bank will end its meeting on Thursday. It appears to be in a "nothing-to-see" mode. A poll of economists predicts that it will likely leave rates at 2% for the third consecutive meeting and remain on pause until the end the year. The downside risks of the economy are causing traders to predict a 65% chance that a quarter point cut will be made by mid-2026. However, headwinds are on the horizon. Aside from the trade tensions, France is also experiencing political turmoil and there will be an election on Wednesday in The Netherlands that is dominated by populist currents. Christine Lagarde, the ECB's chief, may be asked if the bloc is still in a good place.
5/HIKE HOLDED? Bank of Japan will likely hold off on a rate increase next Thursday, opting instead for a hike in December or early January. This is not because of pressure from Japan's new dovish premier. Sanae Takaichi - the new fiscal and monetary dove who was appointed to the top position on Tuesday - is expected to not delay the tightening of monetary policy, according two-thirds polled. However, her often-repeated belief that the central banks should align with government policies has been echoed by many analysts. Analysts and traders instead point to BOJ governor Kazuo Ueda’s consistently cautious tone. This is especially true on the potential fallout from tariffs, despite his board making a conspicuously aggressive pivot last month.
Most analysts are looking at a December increase as soon as possible, based on his desire to have more data. This includes U.S. holiday shopping trends.
(source: Reuters)