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US cuts deep Colorado River water to California, Nevada and Arizona
U.S. government finalized on Friday a plan for reducing?water supply to California, Nevada, and Arizona in order to manage the drought-stricken Colorado River, but left open the possibility that the cuts could be even deeper later in the decade. According to the plan, the three states in the lower basin will receive a reduction of 21% in water in 2027-2028. However, the cuts could double in future years. Arizona and Nevada said that any plan to double cuts after 2028 will destroy their economies. Arizona has threatened the federal government with a lawsuit if they impose these potential cuts in the new 10-year plan. Colorado, Utah and Wyoming, the states in the upper basin, are not subject to mandatory cuts. Colorado River water is used by one in ten Americans. It irrigates the land that produces 15% of U.S. agricultural output. And it generates power for six million people across seven states. In 1922 the river's governing agreement allocated water roughly equally to both basins. However, California, Arizona, and Nevada historically used more water. This was a major point of contention. Arizona Governor Katie Hobbs praised the federal government's decision to adopt the Lower Basin proposal for water reductions in 2027-2028. She said that the 10-year plan of the federal government did not provide water to Lower Basin states as they were entitled. She called Upper Basin's refusal of negotiating reductions in their water use "reckless." Hobbs stated in a press release that Arizona is prepared to defend our water with any legal means possible and will not back down when defending our rights. Upper Basin States refused to accept any cuts in water supply during three years of failed negotiation between the seven states. They argued that the severe drought affecting the U.S. West was causing them to run out of water. This month, Lake Powell and Lake Mead - the two nation's largest reservoirs - reached record lows. On Thursday, the water level in Lake Powell was 3,519.2 ft above sea level -- just 30 ft above the minimum required to run the Glen Canyon Dam hydroelectric plant in Arizona. According to a proposal from the Lower Basin States made on May 1, their water allocation will be reduced by combined 1.6 millions acre-feet each year in 2027 and 2028. The three states have agreed to conserve water by a combined amount of 3.2 MAF in two years. This is based on a mandatory cut of 1.25 MAF each year and reducing the consumption of water by 700,000 MAF in two years. If necessary to maintain critical levels of reservoirs, the annual mandatory cuts for the three states can almost double up to 3.0 MAF each year. A lawsuit over these potential cuts could lead to more uncertainty. California Governor Gavin Newsom stated that all seven states who depend on the Colorado River must conserve water. Newsom stated in a press release that the plan only provides "short-term stability". "Any long-term solutions must be shared fairly among all seven states to recognize the new reality of the Colorado River." Sarah Porter, a hydrologist, still believes that Arizona will sue the federal Government over its plan for 2029-2036. She said that the state was not happy with the Bureau of Reclamation assessing its authority to?cut water deliveries from Lake Mead?to Lower Basin states and not impose compulsory cuts on upper basin?states. Porter, director at the Kyl Center for Water Policy, Arizona State University, said that the Bureau of Reclamation has made it "clear" that, if reservoir levels fall to certain points in the future, they may take further cuts, limit Lake Powell releases, or other actions far beyond the Lower Basin's agreement. Reporting by Nichola Hay and Andrew Hay from Los Angeles; Additional reporting by Jasper Ward from New York; Editing done by David Gregorio
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US finalizes deep Colorado River Water Cuts to California, Nevada, and Arizona
The U.S. Government finalized on Friday a plan that will cut water supplies in?California and Nevada to help manage the Colorado River, which is suffering from a severe drought. According to the plan, signed by Interior Secretary Doug Burgum, in 2027 and 2028, water will be reduced by around 21 percent in these three states. However, this reduction could double in subsequent years. Arizona and Nevada said that any plan to double cuts after 2028 will destroy their economies. Arizona has threatened the federal government with a lawsuit if they impose?these possible cuts as part the new 10-year-plan. Colorado, Utah New Mexico, and Wyoming are not required to make any cuts as part of the plan. The Colorado River provides water for one in 10 Americans, irrigates lands producing 15% of U.S. agricultural output and generates electricity for six million people in seven States. Upper basin states refused to 'take cuts' in three years of failed negotiations. They claimed that they would be forced into a 'cut off water supply because of the severe drought affecting the U.S. West. According to a proposal from the states of the lower basin made on May 1, their water allocations will be reduced in 2027 and 2028 by a total of 1.6 million acres feet. The three states have agreed to conserve 700 000 MAF in two years, resulting in a combined saving of 3.2 MAF. If necessary, mandatory annual cuts to the three states could be almost doubled to 3.0 MAF annually to maintain critical reservoir levels after the first two years of operation. If there are any lawsuits filed over these potential cuts, it could lead to more uncertainty. JB Hamby said in a statement that "this is not a solution, but a bridge." "California Arizona and Nevada have shown that states are able to compromise, make difficult decisions and reduce water usage when the river requires it. Three states can't take on the responsibility for all seven." Reporting by Nichola Hay in New Mexico and Andrew Hay in Los Angeles; editing by David Gregorio
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US and Canadian trade teams met again as the deadline for tariffs looms
On Friday, top trade negotiators of Canada and the U.S. met for a third consecutive day in Washington to try to reach a deal before new American tariffs that are expected to take effect on Saturday. The deal could be a sign of detente after 18 months of tensions that began when Donald Trump imposed tariffs against key Canadian imports, prompting Ottawa's retaliation with a series of countermeasures. Trump has said he would impose a 50% tariff on $20 billion of Canadian goods on Saturday at 12:01 am EDT (0401 GMT), if there is no agreement. Dominic LeBlanc - Canada's Minister of Trade with the U.S. - did not address reporters when he arrived for the meeting. LeBlanc and Greer met for over three hours on Thursday. They said that the two sides are "very close" in reaching a deal. Mark Carney may find it difficult to convince Canadians and the powerful premiers of the ten provinces to accept a deal. Leger's opinion poll on Wednesday showed that 56% Canadians wanted Carney to not make any further concessions. Sources claim that an agreement will reduce the top line tariff on Canadian built vehicles from 25% to 15% and cut tariffs on Canadian aluminum and steel to 25%. Ontario, which is a major producer of steel and aluminum, wants to scrap the tariffs. Carney has called on the major provinces to lift their bans on selling U.S. alcoholic beverages, which are a major irritation for Washington. Wab Kinew said that Trump is "very weak", and Canada should take advantage. "I believe we have the upper hand. They're on their heels right now. He told reporters that they were coming to us for a bargain. Canada is only a tenth of the size of the U.S. and exports 70% of its goods south of the border. This makes it "uniquely susceptible" to U.S. punitive trade measures. JD Vance, the U.S. vice president, mocked Carney on Wednesday, saying that he "comes into and puffs out his chest?and tells me, 'I am going to out-tough Donald Trump.'" In a recording obtained by The Canadian Press, Vance is heard saying: "It's funny because Carney presents it as some sort of victory for Canada, when they fundamentally, like... climb down on many issues." Vance spoke at a fundraising event in Southampton, New York. (Written by David Ljunggren, edited by Katharine J. Jackson, Philippa A. Fletcher and Sanjeev M. Miglani).
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Global stock markets close out a difficult week as oil and bond yields remain high
The global stock market was headed for a largely lower week last Friday as the strain on the global bond markets did not show any signs of easing and the diplomatic deadlock over the Gulf pushed oil prices up to a one-month high. The yields on U.S. government bonds resumed their rise after the surprise intervention by the Treasury on Wednesday. This was barely a relief from selling that had been sparked primarily by fears of inflation and fiscal pressures. The increase came as?U.S. Treasury Secretary Scott Bessent suggested that the government could increase its repurchases and also floated the idea for fiscal consolidation. Analysts doubted he would be able to find the necessary spending cuts in order to reduce a budget gap of over 6% of GDP. Interest charges alone for this year totaled $1.2 trillion while U.S. government debt just passed $40 trillion. The dollar is now heading towards the three-month lows it hit on Thursday. It has fallen almost 1% against major currencies this week. "The initial Treasury buyback was remarkable, because it came as a total surprise. But the question is: 'Is this meaningful enough to make a lasting?impact'?" Christian Hantel is a portfolio manager for Vontobel. We could still see the market trying to test whether they are ready to increase the $4 billion that they announced previously. It could be an exciting couple of days. The 30-year bond yield in the U.S. increased by 3 basis points to 5.266%, while the 10-year bond yield was up 3.2 basis points at 4.73%. The 30-year bond yield increased by 3 basis points to 5.266%, while the yield on the 10-year bond rose by 3.2 basis point to 4.73%. Selling on Friday was heaviest in the 2-year Treasury, which was up 5 basis points for the ?day and 9 bps for the week at 4.236% following a stronger-than-expected U.S. purchasing managers' report. The markets assume that 5.3% in 30-year bond yields will be a painful threshold for Treasury. This is similar to what 160 yen has been for Japanese policymakers. Cost of Borrowing The global debt costs are rising as tech giants borrow heavily to fund AI capital expenditures, causing the discount on corporate profits to rise and stock valuations to be challenged. The Nikkei was also feeling the strain, as it?slipped by 0.3%. This brought the losses for the entire week to nearly 4%. It is the?biggest drop weekly since mid-July. Stock markets in Europe have made some early gains. STOXX 600 was still on track for its largest weekly drop since early July. It fell nearly 1%. MSCI's global stock index fell slightly. Wall Street has seen some relief from the recent earnings slump. Major indexes were up by nearly 1% as of midday on Friday. However, they still fell by about 2% for the entire week. Next week, when Nvidia releases its quarterly report, the AI industry will be put to the test. Much depends on Nvidia's outlook for data center revenue and infrastructure demand. Walmart's Thursday slide of 9% was a clear example of what happens when expectations are not met. WAR AND DEBASEMENT Bessent made headlines by extending President Donald Trump's promise of economic war against Iran. He said that the U.S. will impose "the strongest sanctions in history" to the country. The threats dimmed further hopes for a deal to fully open the Strait of Hormuz. Brent crude reached a peak of $95 per barrel in a month, before profit taking set in. Brent futures rose around 0.5% to $94 per barrel. This is up over 5% for the week. U.S. crude climbed 0.4% to $84. The dollar has been losing ground in currency markets this week, as investors are concerned that the ever-growing U.S. government debt and policy uncertainty will cause the currency to lose its purchasing power, driving them towards scarce assets such as gold. Yellow metal rose 1.45% to $4,583 per ounce, its highest price in nearly three months. Dollar index fell almost 0.9% on the week to 98.74, after hitting a three-month low overnight. The euro was up by 1.0% for the week, at $1.1686, having touched a 14-week high. The last time it traded was around $1.1689. This is off the session highs. The dollar's biggest weekly drop since January was 1.7% against the Swiss franc. It is now 0.7995 Francs. Some investors have also been influenced by concerns over the rising U.S. national debt to look at alternatives, such as bitcoin. Bitcoin has typically benefitted from diversification away from U.S.-based assets. Bitcoin reached a two-month high on Friday, and last was up almost 6% to $76,446, which is a good start for a 20% rise in a week. This would be its biggest gain in over 2-1/2 years. Jonas Goltermann is the chief markets economist of Capital Economics. He said that "the dollar has come under renewed pressure due in part to a resurgent narrative about 'debasement.' While we still think that such concerns are overblown and that an overall stronger dollar is likely to be the result of the economic backdrop in the months to come, the continued surprise from U.S. Policymakers could well matter more over the short term. The dollar dropped around 0.2% to 158.79 Japanese yen.
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Johannesburg pays its debts to the state utility and avoids being cut off from power
The electricity department announced on Friday that South Africa's largest city, Johannesburg, had settled an overdue debt of?5.25 billion Rand ($328 million) to the state-owned utility Eskom. The settlement was reached after a government-led process of mediation to resolve a long-running dispute over billing that threatened to cut off electricity supply to the economic center of 'Africa's largest economy. Johannesburg is expected to be one of the most hotly contested battlegrounds in the November 4 municipal elections. The African National Congress is the leader of the coalition that governs the city on a national scale. After seeing its vote share decline at successive elections, the ANC faces pressure to 'improve service delivery' and turn around struggling'municipalities. Business leaders have pledged 'to help improve the state' of Johannesburg's dilapidated infrastructure and ailing finances, saying that the city's condition risks undermining efforts to boost economic growth.
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Goldman: Options demand could push gold above $4,900 forecast
Goldman Sachs said in a Friday note that the price of gold could surpass its $4,900 forecast for the year. This is due to a surge in demand for bullish options on gold. The bank said that a further increase in Western investor demand combined with strong central bank purchases could push bullion towards key strike levels where dealer hedging can mechanically accelerate the price movements. Goldman stated that "gold call?options demand has increased sharply amid renewed global macro-policy hedges, creating an automatic price amplifier on both the upside as well as?downside." Options have a double-edged effect. Dealers who sold call options could be forced to purchase bullion in order to hedge their exposure as gold climbs towards key strike levels. This would amplify the rally. Goldman warned that the opposite is also true: a drop in price could cause dealers to remove hedges and deepen any sale. Bank of America said that gold's rise to $4,600 per ounce was driven by a decline in expectations for a U.S. Federal Reserve interest rate hike this September, after the Fed's policy hold on July and weaker jobs and inflation data. Goldman stated that this has?revived speculative positions on COMEX, and boosted demand for exchange-traded funds. The note stated that "a renewed increase in Fed-hike expectation could also trigger dealer 'hedge unwindings and produce an even sharper correction than usual." Spot gold is on track for its third consecutive weekly gain. It rose nearly 5% this week, reaching a three-month-high and breaking through the 200-day moving avg.
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US and Canadian trade teams will meet again as deadline for tariffs looms
The top trade negotiators of Canada and the U.S. are meeting for the third time in Washington to finalize the trade agreement before the new American tariffs that will be implemented on Saturday. The deal could be a sign of detente after 18 months of tensions that began when Donald Trump imposed tariffs against key Canadian imports, prompting Ottawa's retaliation with a series of counter-measures. If a deal cannot be reached, Trump has said he will impose new tariffs of 50% on Canadian goods worth $20 billion at 12:01 am EDT (0401 GMT) on Saturday. Dominic LeBlanc is Canada's Minister responsible for Trade with the U.S. LeBlanc and Greer met for over three hours on Thursday. They said that the two sides were "very near" a deal but also added that there was still more work to be done. Mark Carney, the Prime Minister of Canada and the influential premiers from the 10 provinces may find it difficult to sell a deal to Canadians. Leger's opinion poll on Wednesday showed that 56% Canadians wanted Carney to not make any further concessions. According to sources, an agreement will likely reduce the top-line tax on Canadian-built cars to 15% (from 25%) and to halve tariffs for Canadian steel and aluminium to 25%. Ontario, which is a major producer of steel and aluminum, wants the tariffs to be scrapped. Carney has called on the major provinces to lift their bans on selling U.S. alcohol. This is a major irritation for Washington. Wab Kinew said, on Thursday, that Trump was "very weakened" and Canada should benefit. "I believe we have the upper hand - they are back on their heels at this moment. He told reporters that they were coming to us with a deal. "I think we should fight," said the reporter. Canada is only a tenth the size of the United States, but it exports 70% of its goods south of the border. This makes Canada particularly vulnerable to U.S. punitive trade measures. JD Vance, the U.S. vice president, mocked Carney on Wednesday, saying that he "comes into and puffs out his chest and says, I'm going, 'like, to out-tough Donald Trump.'" Vance is heard in a recording by the Canadian Press saying, "It's funny because Carney presents it as some sort of victory for Canada, when they fundamentally, like... climb down on many issues". Vance spoke at a Southampton, New York fundraiser. (Writing and editing by Katharine Fletcher, Philippa Jackson, David Ljunggren)
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Officials say that Israeli forces killed a Palestinian teenager after settlers entered a West Bank village.
Officials?said that an Israeli guarding a group?of?Jewish settlements who entered Palestinian village land on Friday fired at Palestinians who confronted the settlers, killing a 17-year old and wounding a man 70 years of age. The incident in the occupied West Bank town of Sa'ir was the latest of what Israeli military calls "unauthorized hikes" of settlers who invade the outer reaches of villages, which Palestinians see as an act intimidation. In a press release, the military stated that the Palestinian villagers "threw stones" at the settlers who were "present in the area without prior authorization". It was also reported that some of the settlers were injured. The military reported that "a security official opened fire on the area and there were Palestinian casualties" as a result. Palestinian officials confirmed that a 17-year old boy was killed after being shot in his chest. The 70-year old's condition was not immediately known. Sa'ir is a village located near Hebron, in the southern West Bank under civil control of the Palestinian Authority. Israelis are not allowed to enter this area. In the 'West Bank, which is home to three million Palestinians, and about 500,000 settlers there has been a rise of settler violence, and seizures of land and resources. International condemnation was expressed this week for a siege of homes by settlers in the village of Qusra. Most countries and U.N. agencies consider the settlements to be illegal in international law. Israel denies?this and cites biblical connections to the area. Palestinian officials reported that Israeli troops killed a Palestinian overnight in Jenin, north of Jerusalem, after raiding the man's home. According to the military, soldiers shot him when he attempted to stab at them. It added that no troops were injured. Reporting by Rami AYYUB and Ali SAWAFTA Editing by Gareth Jones
US and Iran continue to use hostile rhetoric in advance of new sanctions
Iran and the United States exchanged defiant messages before Monday's announcement of new U.S. sanctions that could affect Iran and its most important trading partners, including China.
The war was approaching its'six-month mark when the sides stopped exchanging fire and also halted peace talks. Oil shipments have been virtually stopped through the Strait of Hormuz as Tehran holds on to its leverage, threatening to hit any unauthorised oil tankers who attempt to cross the narrow waterway. Scott Bessent, U.S. Treasury secretary, will hold a news conference on Monday at 2 pm EDT (1800 GMT), promising to unveil "the most severe sanctions in history" against Iran. He also wants China to work with Washington. According to data from the analytics firm Kpler, China will buy more than 80% (or roughly $600 billion) of Iran's oil by 2025. Beijing urged diplomacy.
Esmaeil baghaei, spokesperson for Iran's Foreign Ministry, said that the impending announcement by the United States of new economic sanctions against Iran is an "assertion?extraterritorial sovereignty over every independent member of the United Nations".
In a blog post on X, he stated that "Such secondary sanctioned have no basis in international law."
Donald Trump, the U.S. president who has warned of economic consequences for any country providing "any type" of "lifeline to Iran," stated on Friday that Washington is observing "whatever happens" in this conflict.
Trump said that Iran would like to do a deal but is not ready to do the right one.
HORMUZ TRAFFIC HALTED Despite the fact that the U.S. effectively blockedaded Iranian vessels from entering their ports, a bottleneck remained in place at the Strait of Hormuz with thousands of seafarers stranded aboard hundreds of vessels. Ship-tracking data revealed that only four commodity ships were sailing along the Strait of Hormuz on Thursday. None were large crude carriers, or liquefied gas tankers.
Energy Secretary Chris Wright of the United States said that the U.S. Military helped move an average of 8,000,000 barrels of oil per day through the Strait in a period of seven days. This is down from over 20 million barrels per day prior to the war, or one out of every five oil barrels consumed globally.
U.S. strikes have destroyed Iran's navy and air force and severely damaged its economy, but Tehran still has enough missiles and drones to attack regional rivals and impede oil tanker travel.
Trump has not yet achieved the objectives he set out at the beginning of the war, such as dismantling Iran’s nuclear program - which is still uncertain, given that U.N. Inspectors have been'shut out' since 2025 – and creating conditions for Iranians overthrow their clerical leaders.
On the first day of the war, 168 Iranian children were killed. More than 750 U.S. military personnel have been wounded, and 18 people have died.
The Iranian Economy is Damaged
On Friday, the chief of staff for Iran's Armed Forces, Major General Ali Abdollahi promised that Iran would respond to any military threats from its enemies with "crushing and punishing responses."
Masoud Pezeshkian, the president of Armenia, called for a diplomatic resolution.
Pezeshkian told the ISNA news agency that it would be better if the war ended today when the United States was able to demonstrate its power and dignity. The world will also acknowledge our victory, as well as the fact that America has violated all laws and regulations by attacking our schools, hospitals and infrastructure. Mohammad Baqer Qalibaf is the main negotiator for Iran in the?mediated negotiations with the U.S. He acknowledged the strains on Iran's economic system in remarks to Iranian and Iraqi businesses late on Thursday.
Qalibaf told the official news agency IRNA that "no matter how much power we have in terms of military, we will not survive without food for our people, financial turnover, economic development and national production." (Reporting and writing by Kanishka Singa and Ismail Shakil, Editing by Cynthia Osterman).
(source: Reuters)