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The US rate decision and peace talks with Ukraine have a positive impact on oil prices.
The oil prices fell a little more?on Tuesday. This was a continuation of the 2% decline in the previous session. Markets are keeping a close watch on the peace talks that will end the war between Russia and Ukraine, as well as the imminent decision by the U.S. Federal Reserve on interest rates. Brent crude futures fell 8 cents or 0.1% to $62.41 per barrel at 0409 GMT. U.S. West Texas Intermediate Crude was trading at $58.75 - down 13 cents or 0.2%. Both contracts dropped by more than $1 per barrel on Monday, after Iraq restored production of Lukoil’s West Qurna 2 Oilfield, which is one of the largest in the world. Priyanka Sahdeva, senior market analyst at Phillip Nova, said that Brent's move back?towards the $62 level (aligns) seamlessly with the broader narrative for December. The noise about potential Iraqi disruptions faded overnight and the market quickly returned to its core theme: ample supply and conservative demand expectations. After talks between the President of Ukraine Volodymyr Zelenskiy and leaders from?France Germany and Britain in London, Ukraine will share its revised peace plan with the U.S. Tim Waterer, KCM Trade's chief market analyst, said that oil is "keeping to a narrow trading range" until we know the outcome of the peace talks. He added that if the talks fail, oil prices will likely rise. If progress is made and it is possible for Russian energy to be supplied to the global market again, the price is expected to drop. Sources familiar with the issue claim that the Group of Seven and the European Union have been in discussions to replace the price cap on Russian oil exports by a complete ban on maritime services in an effort to reduce Russia's revenue from oil. The Federal Reserve policy decision is due on Wednesday. Markets have priced in a 87% chance of a rate cut by a quarter point. Low interest rates are typically a positive factor for oil demand, given that they reduce the cost of borrowing. However, some analysts remain cautious as to how this will affect oil prices in the near future. Sachdeva, of Phillip Nova, said that although markets are heavily invested in the FED's policy decision for Wednesday, which could result in a 25bp cut and provide short-term support to the lower end 60-65 range, the price structure is still anchored on the expectation of an oversupplied oil market by 2026. Reporting by Ashitha Shivprasad from Bengaluru, and Trixie Yap from Singapore. Editing by Thomas Derpinghaus & Jamie Freed.
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Gold prices stable as markets prepare for Fed's hawkish tone
Investors had already 'priced in' a Federal Reserve rate reduction, and were bracing themselves for signs that the U.S. Central Bank may adopt a more moderate easing cycle than expected at its two-day meeting beginning later in the afternoon. As of 0231 GMT, spot gold remained unchanged at $4,186.99 an ounce. U.S. gold futures for December delivery dropped 0.1% to $4215.80 an ounce. Kelvin Wong, senior market analyst at OANDA, said that investors are repositioning themselves largely ahead of the Federal Reserve's policy-setting meeting. Powell had given a hawkish rate cut guidance in his press conference earlier this month. Investors in the U.S. Treasury Market are now adjusting their positions. On Monday, the benchmark U.S. 10-year Treasury yields reached a two-and-a-half-month high. The higher U.S. treasury yields raise the opportunity costs of holding non-yielding investments like gold. Analysts expect to see a "hawkish" cut this week, accompanied by forecasts and guidance that indicate a high threshold of further easing next year. The U.S. The Fed's preferred inflation indicator, the Personal Consumption Expenditures Price Index (PCE), was in line with expectations. Meanwhile, consumer sentiment improved in December. Private payrolls fell by the most in over 2-1/2 years. However, jobless claims dropped to a 3-year low. According to CME’s FedWatch Tool, the markets now give an 87% chance of a quarter point cut at the Fed’s December 9-10 meeting. This is down from 90% Monday. Gold is a good example of a non-yielding asset that benefits from lower interest rates. Silver was flat at $58.10 per ounce after reaching a record high on Friday of $59.32. Silver is currently a more risky play than gold, according to Wong. Low inventories, industrial demand and the expectation of Fed rate reductions are all driving it. Palladium was up 0.4% to $1,471.25, while platinum gained 0.5% at $1,650.20. (Reporting and editing by Sumana Aich, Rashmia Aich and Ishaan arora from Bengaluru)
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BHP signs $2 billion deal with GIP to fund WAIO power grid
BHP Group announced on Tuesday that BlackRock's Global Infrastructure Fund (GIF) will invest $2 bn in Western Australia Iron Ore (WAIO)'s inland?power?network for a minor stake. BHP and GIP will form a joint entity, in which BHP holds 51% of the shares while GIP will hold the remaining 49%. BHP will pay the entity a tariff based on its share of WAIO inland power over a period of 25 years. BHP will retain full operational control over WAIO and its inland electricity infrastructure. Vandita Pan, Chief Financial Officer at BHP, said in a press release that "this arrangement is a good example of BHP's disciplined capital portfolio management." She added, "It enhances BHP shareholder value and supports BHP's long-term value creation." Investors are looking for assets with low-risk and consistent returns, while miners evaluate new ways to unlock the capital in infrastructure investments. Rio Tinto's CEO Simon Trott stated last week that Rio Tinto has identified several assets that are worth a lot of money. It is not necessary to own It said it would explore options including partnerships and divestments. BHP said that the agreement with GIP would not affect its?existing joint-venture agreements.
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Copper prices drop from record highs; Market awaits Fed policy
The price of copper eased on Tuesday from its record high as the Federal Reserve's rate decision this week and tight supply continue to dominate trading. As of 0255 GMT, the most traded?copper?contract on Shanghai Futures Exchange fell 0.58%, to 91900 yuan (12,998.77 dollars) per metric tonne. The benchmark copper for three months on the London Metal Exchange was also down, falling 0.54% to $12,572.50 per ton. Shanghai copper is up 25% so far this season, while the London benchmark is up more than 30%. Analysts at Sucden Financial expect copper prices to be "characterized by sharp rallies, followed by shallow consolidation", since there is limited interest in selling at the current levels. Investors are expecting a U.S. rate cut this week, as well as Jerome Powell's hawkish remarks on future reductions. Markets now predict fewer rate reductions in 2026 due to lingering concerns about inflation and the resilience of the U.S. economy. Copper is a market that continues to be affected by supply issues due to the disruption of mines and the constant dislocation of copper stocks into the U.S. After reaching a record-high?on the 5th of December, copper stocks at Comex warehouses increased to 439 510 short tons (398 717 metric tons). Other base metals in the SHFE fell by 1.33%. Zinc was down 0.09%, lead dropped 0.72%, Nickel was down 0.17% and Tin was down 0.44%. Aluminium fell 0.54% on the LME, while zinc dropped 0.42%. Lead also decreased 0.10%, nickel increased 0.24%, and tin remained unchanged.
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Simandou iron ore project begins supply
Iron ore prices continued to fall on Tuesday as the Simandou project, located in Guinea in west Africa,?shipped out its first ore. This increased prospects for more supply, at a time when China, the top consumer, is expected to see a decline in demand due?to falling steel production. The most traded iron ore contract at China's Dalian Commodity Exchange was down 1.51% as of 0229 GMT. Its lowest price since July 10, and headed for its fifth straight session of losses. As of 0219 GMT the benchmark January iron ore price on the Singapore Exchange fell for a third session in a row, falling 0.94% to $100.11 per ton. This is its lowest level since November 10. Rio Tinto, the largest iron ore exporter in the world, announced on Monday that the first shipment of the Simandou Project had left Guinea. The mine will have a production capacity of 120,000,000 tons per year, making it the largest iron ore mine in the world. China imports 80% of its iron ore from Australia and Brazil. Analysts predict that the share of Guinean supply will fall as it increases. Analysts at broker Xinhu Futures stated in a report that the near-month contract would face 'further pressure due to high supply, swollen inventory, and decreasing demand. This year, China's crude steel production is expected to drop below 1 billion tons for the first time in six years. Coking coal and other?steelmaking components coke and coking coal both fell, by 2.39% and 2.67 percent, respectively. This was due to lingering fears about an increasing supply. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell 1.5%, while hot-rolled coil dropped 1.27%. Wire rod also declined 0.38%. Stainless steel was not affected.
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Asian stocks fall as nervous markets await the Fed
Asian stocks fell on Tuesday and the dollar remained steady as investors braced themselves for a?cut in U.S. rates this week. The yen remained calm after an earthquake that rocked Japan’s northeast region, though the impact was minimal. Investor sentiment remains cautious as the markets await a number of central bank meetings. This includes a decision that is expected to be made by the Reserve Bank of Australia. All three banks, the RBA, SNB, and Bank of Canada, are expected to keep rates unchanged this week. The Federal Reserve, on the other hand, is expected to reduce borrowing costs Wednesday. Bond investors are preparing for a short-term easing cycle in the U.S., following the Fed's rate cut of December. Wall Street banks expect fewer Fed rate cuts in 2026 due to lingering concerns about inflation and the expectation of a more resilient U.S. economic. Stocks are now trading in a sideways fashion. MSCI's broadest Asia-Pacific share index outside Japan fell 0.28% after a weak session overnight on Wall Street. Japan's Nikkei fell by 0.08%, while South Korea’s Kospi dropped by 0.58%. Prashant Nnewnaha, senior Asia-Pacific rate strategist at TD Securities said: "The low-hanging fruits from risk management reductions are likely over. Chair (Jerome Powell)'s presser will likely convey a more conservative approach moving forward?regarding further policy recalibration." The dot plot will likely show one reduction in 2026. If the dot plot showed two cuts next year, this would be "dovish." Some strategists believe that the Fed's Policy Committee could be divided, even though a rate reduction is expected. The meeting is also being held in the context of a heightened interest from the market on who will replace Powell as Fed Chair when his current term ends next May. Kevin Hassett, White House Economic Advisor and leading contender for the Fed chair role, said in an exclusive interview that the Fed must continue to reduce interest rates. According to LSEG, traders are pricing 77 basis point of easing at the end of next. David Mericle is the chief U.S. economics at Goldman Sachs. He expects that the Fed will raise the bar on further rate cuts. Powell will also be cautious. "But the FOMC can't box itself in, especially at a time where we have two outdated employment reports, as a January reduction could be appropriate." Asian chip stocks shook after U.S. president Donald Trump announced that the United States would allow Nvidia H200 processors - its second best artificial intelligence chips - to be?exported to China, and collect a 25 percent fee on such sales. China's CSI Semiconductor Industry Index fell about 1% during early trading. The dollar remained mostly stable in Tuesday's currency market. The dollar was mostly steady on Tuesday. The dollar index (which measures the U.S. money against six other currencies) was 99.09. The index has fallen by nearly 9% in the past year and is on track to have its biggest annual decline since 2017. The Australian dollar was stable at $0.6625 before the RBA's policy announcement later that day. It is expected that the central bank will maintain its current rate, but markets are worried about any hawkish comments in the commentary. After a sharp decline immediately following the earthquake, the yen traded at 155.87 to the dollar during early Asian hours. The Japanese authorities lifted the tsunami warnings Tuesday, hours after a powerful 7.5-magnitude quake shook northeastern Japan, injuring 30 people at least and forcing 90,000 residents from their homes. Gold was 0.13% more expensive at $4194.11 an ounce, ahead of the Fed's meeting. Oil prices stabilized after a 2% drop in the previous session, as traders kept an eye on the peace talks that are expected to end Russia's conflict in Ukraine. Brent crude futures remained flat at $62.48 per barrel. U.S. West Texas Intermediate Crude was trading at $58.84 a barrel, down by 0.07%. (Reporting and editing by Shri Navaratnam in Singapore)
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EU strikes agreement to further weaken corporate Sustainability laws
After months of?pressure by companies and governments including the United States, Qatar and others, European Union Members and Parliament reached an agreement early on Tuesday in order to 'cut corporate sustainability laws. These changes will weaken the corporate sustainability requirements for most businesses that are currently subject to them. They were made in response to complaints from certain industries who claim that "EU red tape" and strict regulations hinder their ability compete with foreign competitors. The EU negotiators have agreed that the reporting of social and environmental issues will only apply to companies with more than 1,000 employees, and a net annual turnover exceeding 450 million euros. The threshold for reporting sustainability was set at 450 millions of euros in revenue generated within the EU. According to the agreement, only large EU corporations - those with more than 5,000 employees or an annual turnover of over 1.5 billion euros - are required to conduct due diligence to reduce harm to people and to the environment. Non-EU companies that have a turnover in the EU over?that amount will be subject to the same rules. Before the law can be passed, both the EU Parliament and EU countries must give their formal approval. This is a standard procedure that passes pre-agreed agreements. $1 = 0.8591 euro (Reporting and editing by Christopher Cushing, Michael Perry and Mrinmay Abnett)
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Oil prices rise, Ukraine peace talks and US interest rate decision are in the spotlight
The oil prices were stable on Tuesday, after falling 2% the previous session. Market participants remained focused on the upcoming decision by the U.S. Federal Reserve on interest rates and on peace talks that could end Russia's conflict in Ukraine. Brent crude futures were down?2 Cents, or 0.03 %, at $62.47 per barrel as of 0101 GMT. U.S. West Texas Intermediate Crude was trading at $58.84 - down 4 cents or 0.07%. The prices of both contracts dropped by over $1 after Iraq re-started production at Lukoil’s West Qurna 2 Oilfield, which is one of the largest in the world. After talks in London between the President Volodymyr Zelenskiy and leaders from France, Germany, and Britain Tim Waterer, chief market analyst at KCM Trade, said that oil is "keeping to a narrow trading range" until we know more about the outcome of the peace talks. If the talks fail, we expect oil prices to rise. However, if there is progress and there is the possibility of Russian energy supply returning to the global market, then the prices are expected to fall," he said. Sources familiar with the issue claim that the Group of Seven and the European Union have been in talks to replace the price cap on Russian crude oil exports by a complete maritime service ban, as a way to reduce Russia's oil revenues. The Federal Reserve policy decision is also due on Wednesday, and the markets have priced in a 87% chance of a rate cut by a quarter point. Analysts at BMI predict that the market will be oversupplied with energy in 2026, causing prices to remain under pressure. BMI said that, "although much depends on OPEC+'s response to lower prices during the first quarter of 2026," we should still see crude prices recovering through the rest of 2026 due to the lower production from U.S. shale activities and steady growth of consumption bringing markets closer into equilibrium. Ashitha Shivprasad, reporting from Bengaluru; and Thomas Derpinghaus.
Iron ore prices rise on demand and lower inventories
Iron ore futures were in a tight range on Friday but were expected to gain weekly, supported by a steady demand from the top consumer China, and declining inventories.
The January contract for iron ore on China's Dalian Commodity Exchange closed the daytime trading 0.77% higher, at 787.5 Yuan ($110.10) per metric ton. This represents a 2.3% weekly increase.
As of 0814 GMT the benchmark October iron ore price on Singapore Exchange was down by 0.53%, at $103.55 per ton. However, it has gained 3% this week.
The demand for this key ingredient in steelmaking remained strong despite the production restrictions in Tangshan - China's largest steel hub - to improve air quality before the military parade to mark the end of World War Two on September 3.
According to Mysteel, the average daily hot metal production, which is a key indicator for iron ore consumption, fell by 0.3% on a week-on-week basis to 2.4 millions tons as of 28 August, but was still 8.7% higher than it was during the same period in 2013.
Two analysts warned that the output could fall even more next week, as the effects of the most recent round of production control take hold. This could put downward pressure on the prices.
Mysteel data shows that portside stock levels dropped by 0.4% compared to the previous week. This also helped support ore prices.
The news that China would cut its steel production from 2025 to 2026 in order to combat overcapacity, which has impacted prices and sparked a global protectionist backlash, also boosted sentiment.
Coking coal and coke, which are used in the steelmaking process, have declined by 0.13% and 0.87 %, respectively.
The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar dropped 0.83%, while hot-rolled coils fell 0.21%. Wire rod fell 0.69%, and stainless steel gained 0.16%. ($1 = 7.1529 Chinese Yuan Renminbi)
(source: Reuters)