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Yamuna River breaches danger mark at Delhi
Officials said that widespread flooding had hit parts of northern India. More thunderstorms are expected to occur on Wednesday. Local media reported that at least 10,000 people have been evacuated from river banks in the capital Delhi. This year's monsoon has been especially intense in India. At least 130 people have died in the north of India in August, villages were destroyed and infrastructure was destroyed. The latest flooding in northern Jammu & Kashmir, Himachal Pradesh and Punjab has seen the Chenab & Tawi rivers rise above the danger level at various points. The rivers are swollen and have caused landslides, damaging many roads and separating parts of Jammu Himachal and other mountainous areas of India. Rains in Jammu-Kashmir's Rajouri District caused a wall to collapse in a woman and her daughter's house. The India Meteorological Department has warned that heavy rains are expected to fall in the region today, especially in Uttarakhand. On Tuesday, the Central Water Commission announced that the Yamuna River had exceeded its danger mark. Local media reported on the evacuation of nearly 10,000 people to relief camps that the government had set up along main highways. This was a precautionary move for those who live in low-lying regions. In 2023, residents living near the Yamuna river in Delhi were also evacuated after floodwaters reached their homes and the Yamuna River hit its highest level for 45 years. In recent weeks, raging rivers have damaged infrastructure in many tourist areas in Himachal Pradesh. Sukhvinder Singh Sukhu, the state chief minister, said that three people died in Mandi in the latest landslide. Two more are believed to be trapped under the debris. Authorities have ordered all educational institutions to close due to flooding warnings. The government of Punjab said that 30 people were killed and nearly 20.000 evacuated in the neighbouring province since August 1. The government announced on Tuesday that the flooding of Punjab, India's breadbasket state, has caused 150,000 hectares to be destroyed by water. The continuous rain forced authorities to release water in dams which caused flooding on plains in India, Pakistan and other countries. Reporting by Tanvi Mhta from New Delhi, Fayaz Bukhari in Srinagar, and Jaspreet Sing in Patiala. Editing by Saad Saeed.
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Oil drops but remains near its month-high on US sanctions
The oil prices in Asia eased on Wednesday, but remained near a month-high on the backs of new U.S. Sanctions against a number of shipping companies and ships. Traders also looked forward to the OPEC+ summit over the weekend. Brent crude dropped 19 cents or 0.3% to $68.95 per barrel at 0433 GMT. U.S. West Texas Intermediate Crude fell 16 cents or 0.2% to $65.43 per barrel. The benchmarks rose more than 1% during the previous session, after the U.S. imposed sanctions against a network led by an Iraqi/Kittitian businessman who was smuggling Iranian crude oil under the guise of Iraqi oil. Priyanka S. Sachdeva is a senior market analyst with Phillip Nova. She said that the new sanctions are likely to tighten up the supply of oil in the future. Sachdeva said that "structural volatility persists with Iran sanctions and geopolitical hotspots forming the risk premium, and keeping crude near its recent strength." Market participants were also awaiting the outcome of the meeting of eight countries of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, which took place on September 7. Analysts believe that the group will not make any further changes in production until later. Geopolitical risk continues to influence oil prices. "The market is watching the upcoming OPEC meetings and is on high alert for any further increases that could lead to an oversupply," Emril Jamil said, senior analyst at LSEG. A preliminary poll on Tuesday showed that the U.S. crude stockpiles, as well as distillate and gasoline stocks, were also expected to have decreased last week. Three analysts surveyed by before weekly inventory data were released estimated that crude inventories had fallen by an average of 3.4 million barrels during the week ending August 29. Prices were held in check by soft economic data. U.S. Manufacturing contracted for the sixth consecutive month, as President Donald Trump’s tariffs impacted business confidence and economic activities. This weighed on demand for oil.
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MORNING Bid EUROPE-Bond Markets Shake as Xi’s Tanks Roll
Rocky Swift gives us a look at what the future holds for European and global markets. The largest military parade in China's history was held a day after Donald Trump, the president of the United States, re-emerged at the Oval Office on Monday to deny rumors about his health. Trump, who had been absent from the public eye for days, returned to court to defend his policies on tariffs, deporting immigrants, and firing any public officials he chooses. In Beijing, the optics were quite different as Xi and Vladimir Putin, along with Kim Jong Un, North Korea, watched missiles, tanks, and drones being paraded. Kim followed the tradition of "bring your daughters to work", showing the world that autocracies are still alive and well. Bond markets have again raised alarms about the mounting debt and deficits of governments, away from geopolitics. In Asian trading, U.S. Treasury rates ticked higher and Japan's 30-year rate reached a record high. The sterling fell even further after Tuesday's 1.1% decline when the 30-year gilt yields rose to their highest level since 1998. Gold is a safe investment when stocks are shaky, and bonds look threatening. Gold reached a record high of $3.546.99 during the Asian trading session. The euro zone purchasing managers' indexes and the UK JOLTS data will be the first to arrive, followed by the US July JOLTS numbers as a precursor to the nonfarm payrolls figures on Friday. The markets are pricing in a 89% chance that the Federal Reserve will reduce its key policy rate by 25 basis points this month. Weak labour data could increase the chances of more cuts. The equity futures market is indicating that Europe will open in positive territory. The Euro Stoxx 50 contract for the entire region was up 0.34% to 5,317. German DAX Futures gained 0.3% to 23,609 and FTSE Futures were up by 0.1% to 9,151. Trump, in keeping with the positive theme of the day, sent a reassuring message to Xi on Twitter, writing: "Please send my warmest regards for your conspiracies against the United States of America. The following are key developments that may influence the markets on Wednesday. - PMIs in Britain, the euro zone and Chicago Sarah Breeden, of the Bank of England and Catherine Mann both speak at separate events - European Central Bank President Christine Lagarde speaks - Euro zone PPI inflation (July) France: Reopening 3-month, 4-months, 6-months and 11-months government debt auctions Germany: Reopening 7-month, 2-years, 7-years and 10-years government debt auctions Reopening the auctions for government debt with terms of 1 month, 3 months, 6 months and 3 years The Federal Reserve will be represented by St. Louis Fed president Alberto Musalem, and Minneapolis Fed president Neel Kahkari. Job openings in the U.S. for durable goods, JOLTS and U.S. Data.
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Brazil opens probe into Anglo American's $500 million nickel sale, FT reports
The Financial Times reported that Brazil's Competition Authority has opened an investigation into Anglo American’s plans to sell its nickel operations in the country. The FT reported that CADE, Brazil’s antitrust regulator confirmed it had opened a investigation into the $500-million deal Anglo concluded in February with MMG Singapore Resources in response to a complainant. The FT reported that "based on a complaint, a Administrative Procedure for Investigation of an Act of Economic Concentration" was initiated by CADE. The newspaper reported that CoreX Holding, a global industrial group, had lodged an objection to the deal. It cited a source with direct knowledge. The London-listed company demerged its platinum operations in May, and announced in July that its nickel and steelmaking coke assets had been discontinued. Since BHP failed to acquire it last year, the company has sold or spun off non-core assets in order to concentrate on copper and ore. The company also announced that it is considering whether or not to sell its loss-making De Beers Diamond unit. Anglo American CADE and CoreX Holding have not responded to our requests for comment. Could not verify the report immediately. Reporting by Rishabh J. Jaiswal, Bengaluru. Editing by Mrigank.
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Saudi Arabia's private non-oil sector growth accelerates in August-PMI
A survey on Wednesday showed that Saudi Arabia's private non-oil sector growth was stable during August. Business activity expanded at a faster pace than it did in July as new orders rose. The Riyad Bank Saudi Arabia Purchasing Managers' Index grew to 56.4 from 56.3 in August, and remained above the 50 mark indicating growth. Naif Al Ghaith is the chief economist at Riyad Bank. He said that "the slight increase was a sign of another month's steady growth driven by improved demand conditions, modest growth in output, and continued gains in employment." "Although the growth in activity has slowed from the highs of earlier this year, there is still a positive trend." The growth of new orders was accelerated by the improved economic conditions. New export orders were also boosted by marketing and collaborations in the Gulf Cooperation Council Region, which marked the fastest increase in four months. The subindex of new orders increased to 60.1 from 59.7 points in July. The number of employees continued to increase, although at a slower rate than previous months. Companies expanded their sales teams and launched new projects. In response to increasing orders, inventory growth reached its highest level in four months. The survey revealed that companies raised their prices for the third month in a row, and faced a steep rise in input costs due to higher purchasing costs as well as global inflationary pressures. The business confidence index rose from its 12-month low reached in July, and the outlook for output increased. This indicates a positive mood among non-oil private sector companies. (Reporting and Editing by Hugh Lawson).
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PMI data shows that slowing sales in August weighed on the growth of UAE's non-oil private sectors.
A survey on Wednesday showed that the growth in the non-oil sector of the United Arab Emirates grew slightly in August, thanks to a faster increase in production, but sales grew at their slowest rate in over four years. The S&P Global UAE Purchasing Managers' Index, seasonally adjusted (PMI), rose to 53.3 from a 49 month low of 52.9 at the end of July. It remained above the 50 mark which signals growth. The slowdown in sales growth was attributed to supply chain issues and competition. The New Orders subindex fell from 54.2 in July to 53.1 in August. This is the lowest reading recorded since June 2021. David Owen, Senior Economic Analyst at S&P Global Market Intelligence, said that "the sales growth in the UAE's non-oil sector weakened again for the fourth consecutive month in August." The slowdown was a further concern about fading momentum in the economy and made output more dependent on work backlogs. The output growth rate improved to a six-month peak, with companies reporting increased activity as a result of ongoing projects and the growth of local markets. Purchases fell for the first four-year period, due to reduced stock levels and a weaker demand. The cost pressures increased, with wage inflation at a 15-month peak, and selling prices rising at the fastest rate in five month as firms passed higher costs on to consumers. The overall business climate improved in comparison to the previous month. Firms expressed optimism for future growth, citing stable domestic conditions and solid client relationships. The survey revealed that Dubai's non oil sector continued to grow strongly. Its headline PMI was 53.6 in august, up from 53.5 in the previous month, and supported by the fastest rate of output growth in seven months. Hugh Lawson, Editor and Reporter (Reporting)
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Cadeler Sets Up New Taipei Office as it Targets Asia-Pacific Market
Danish offshore wind installation firm Cadeler has opened new, expanded offices in Taiwan's capital Taipei, underscoring the company’s focus on strengthening client collaboration and long-term growth in the Asia-Pacific region.With the opening of this new office, Cadeler has reinforced its position to pursue and deliver offshore wind projects across the many growing markets in the region, from Taiwan’s well-developed offshore wind sector to emerging hubs such as Vietnam, the Philippines, South Korea, Australia, and beyond.Following its merger with Seajacks/Eneti in 2023, Cadeler has built on a solid regional foundation in Taiwan.The company has established a strong project track record including Taiwan’s first commercial scale offshore wind farm, the Formosa 1. Currently, Cadeler has two vessels actively operating in Taiwanese waters, with Wind Maker installing 14 MW turbines at Ørsted’s Greater Changhua 2b & 4 Offshore Wind Farm and Wind Zaratan active on a long-term service agreement with Vestas.Looking ahead, Cadeler’s vessels have secured a regional pipeline that runs through the end of the decade. In 2027, Wind Maker and her crew are contracted to install turbines at Copenhagen Infrastructure Partners’ Fengmiao 1 project. And in 2028, Cadeler will install Siemens Gamesa 14 MW turbines at the Formosa 4 Offshore Wind Farm in Taiwan developed by Synera Renewable Energy (SRE). “Cadeler’s new Taipei office becomes the hub for expanding our regional footprint – supporting local teams, anchoring client relationships, and coordinating cross-border opportunities as we build momentum for the clean energy future across Asia-Pacific,” said Mikkel Gleerup, Cadeler CEO.
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Gold hits record high on fiscal concerns as long bond yields increase
On Wednesday, the global decline in long-dated bond prices extended into Asia. Meanwhile, gold reached a new high as worries about government debt and economic expansion grew. After overnight gains in gilts and Treasuries with similar maturities, the 30-year Japanese government bonds (JGBs) yield reached an unprecedented 3,255%. Japan's Nikkei index of shares opened lower following Wall Street declines after data showed continued contractions in U.S. Manufacturing. The data from the European services sector will provide an indication of how the countries are coping with the unpredictable tariff regime imposed by U.S. president Donald Trump. On Friday, the Federal Reserve will release key U.S. labor data that could indicate a rate cut. Skye Masters of National Australia Bank's markets research said on a podcast that the rise in bond rates is affecting your U.S. tech sector. It's all about the government's budget deficit and its implications for bond issuance. Trump said on Tuesday that his administration would ask the Supreme Court to expedite a ruling on tariffs, which an appeals court ruled illegal last week. The court allowed tariffs to remain in place until October 14, Data released on Tuesday showed that U.S. manufacturers contracted for the sixth consecutive month in August, as they struggled to cope with import tariffs. The euro zone and Britain's purchasing managers indexes are scheduled to be released on Wednesday. The U.S. nonfarm employment figures on Friday will include data on private payrolls and job openings. This information will provide clarity on the labour markets that have become the focal point of the Fed's policy debate. The Fed is widely expected to cut interest rates in the next few weeks. Markets are pricing in a 89% chance that they will do so. Bond yields are inversely related to bond prices. In recent years, investors have become increasingly concerned with the debt levels in many countries, from Japan to America. As markets prepare for the sale of debt on Thursday, the 30-year JGB's yield has risen 8 basis points to a new record of 3.28%. The yield of the benchmark 10-year Treasury note in the United States rose by 0.4 basis points, to 4,281%. The 30-year Treasury yield rose 0.7 basis point to 4.978%. This is the highest it has been since mid-July. The broadest MSCI index of Asia-Pacific stocks outside Japan rose 0.1% while Japan's Nikkei fell 0.5%. After the release of second-quarter Gross Domestic Product data, Australia's S&P/ASX 200 Index fell 0.9%. The dollar's winning streak continued, with a 0.3% increase to 148.79 Japanese yen. The dollar index (which tracks the greenback versus a basket currencies) was flat at 98.431 following a 0.7% rise on Tuesday. Sterling is currently trading at $1.33716, down 0.2% on the day. The pound fell by 1.1% during the previous session, and 30-year gilt rates reached their highest level since 1998. This was after the British government issued 10-year bonds at the highest rate in 17 years. In Europe, French Premier Francois Bayrou is likely to lose his confidence vote after opposition parties protested against the cuts he made to government spending. Meanwhile, British Finance Minister Rachel Reeves will raise taxes to meet her fiscal targets in her Autumn Budget. U.S. crude oil ticked upwards by 0.2%, to $65.69 per barrel. Gold spot reached $3,546.99 - a new record. Futures indicated a strong opening in Europe. The Euro Stoxx 50 futures rose 0.6% across the region, while German DAX futures gained 0.5%, and FTSE futures gained 0.3%. The S&P 500 E-minis (U.S. Stock Futures) were up by 0.1% to 6,430.5.
Gold's record run continues on the back of strong inflows into safe-haven assets
Gold prices continued their record run Wednesday as investors grew more confident that the U.S. Federal Reserve would cut interest rates in the next few months due to persistent market uncertainty.
As of 0145 GMT spot gold was up by 0.1%, at $3,537 an ounce. It had previously reached a record high of $3,546.99. U.S. Gold Futures for December Delivery gained 0.3% at $3,602.50.
The U.S. administration of President Donald Trump said that it would ask the Supreme Court to issue a ruling quickly on tariffs which a U.S. court of appeals found illegal last Thursday.
Ilya Spirak, global macro manager at Tastylive said: "The Supreme Court's decision seems to have introduced a lot more uncertainty in the market. They could drastically change the macro-scape if the decisions do not go the President's way."
"The attempt to compromise Fed independence in some way, that is also a big deal." Gold is clearly the preferred metal, and momentum seems to be one-sided.
Trump has publicly discussed the firing of Fed chair Jerome Powell and has consistently pressed the Fed to lower interest rates.
Trump's attempt to fire Fed Governor Lisa Cook last month was a major legal test of the Fed’s ability to operate without political interference.
According to CME Group’s FedWatch tool, U.S. rate-futures are pricing in 92% of a rate-cut of 25 basis points by the Fed at the conclusion of its two-day meeting on September 17.
Gold that does not yield is usually a good investment in an environment with low interest rates.
SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings grew 1.32% on Tuesday to 990.56 tonnes, their highest level since August 2022.
Investors now await the U.S. Non-Farm Payrolls Data, due Friday, in order to determine the size and potential of the Fed rate cut this month.
Silver spot fell 0.2%, to $40.82 an ounce. It had previously reached its highest level since September 2011. Palladium increased 0.7% and platinum gained 0.4%, respectively, to $1142.77.
(source: Reuters)