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Was the US attack on a Venezuelan vessel, which resulted in the death of a man, legal?
On Tuesday, the U.S. Military killed 11 people on a vessel that was in the Caribbean. President Donald Trump claimed that the vessel carried illegal drugs and belonged to the drug cartel that he had designated as a terrorist group responsible for killings in the United States. Here is an overview of the legal basis for the attack. PRESIDENTIAL POWER OF USE OF MILITARY According to the Constitution, Congress has the power to declare a war, but it is the president who is in charge of the armed services. Presidents from both parties have carried out military operations overseas without the approval of Congress. According to a memo from the Office of Legal Counsel that provides advice to Presidents, presidents have justified limited military force when it was in national interest and wasn't restricted or war-like. WHERE THE ATTACK PERMITTED BY US LAW Presidents generally order attacks against enemy combatants or terrorist groups such as al Qaeda, or militants like the Houthis, who attacked U.S. ships in Yemen. The use of military forces in Tuesday's assault is a first. Trump claimed in a post on social media that the boat was carrying illegal drugs, and it would be the U.S. Coast Guard's responsibility to intercept them. Legal experts say that if the Coast Guard was fired on when they tried to stop the boat, then the Coast Guard would have been justified in defending itself. Trump however posted on social media a video that appeared to show an air strike destroying a boat speeding by. The administration failed to provide any proof that the United States were under imminent attack, or that the vessel was armed. They also did not identify the targets of the terror attack on the boat, as previous presidents did in similar attacks. Trump's claim that the Tren de Aragua cartel was operating the boat does not mean the drug cartel is at war with America in the same manner as other terror organizations, such as al Qaeda. Legal experts say that many people will see the attack as extrajudicial murder because the victims on the boat are civilians. What about international law? In order to achieve international peace and stability, the Charter of the United Nations requires that members refrain from using or threatening force against other nations. The charter recognizes that member states have a right to self-defense. Trump claimed that Tren de Aragua, which is under Venezuelan President Nicolas Maduro's control, was controlled by the United States. Legal experts say that this does not meet international law, as there is no evidence of an imminent attack by Tren de Aragua or of past attacks. Venezuelan officials also denied that the group was active in Venezuela. International law is still a subject of debate for legal experts, who said that the right to self-defense in relation to non-state actors was a controversial issue. Officials in the Trump administration said that the vessel was located in international waters. However, if the vessel had been flagged by a country then the attack would have occurred within its territory. This would be a major escalation. Officials from the administration have not confirmed if this vessel is flagged. Who can challenge the legality of an attack? Some opponents may not challenge the attack, given that Venezuela's government and Tren de aragua have been declared international pariahs. Pentagon officials said that this could change if there are more attacks. Members of Congress criticized the attack, and lawmakers placed limits on the use of force by the president. In recent decades, Congress has ceded its war-making powers to the president. The legal challenges to the authority of the president to execute the strike in the U.S. courts will probably face high hurdles. U.S. court generally defers to the president in matters of foreign affairs and security. Families of victims could bring civil lawsuits in the United States for damages, but it would take years and be very expensive. Legally, such attacks carry the risk that the government will kill an American. Anwar al Awlaki was a U.S. born al Qaeda militant. The Obama administration claimed it had the right to kill him because he posed a continuing imminent threat. U.S. lawsuits were filed after the deadly drone strike. The attack can be challenged before an international tribunal such as the Inter-American Court of Human Rights. This has led some countries to acknowledge past abuses, even though the United States was not a member of the court. Legal experts say that while the attack may not result in successful legal challenges, Washington's international relations could be soured and it would become more difficult to work with other countries to implement drug and immigration policies.
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IIR reports that Nigeria's Dangote Refinery gasoline unit may be closed for two to three months.
IIR Energy, a company that monitors the industry, told its clients on Thursday that repairs may cause the gasoline unit of Nigeria's Dangote refinery, which produces 650,000 barrels per day, to be closed for 2-3 months. This could result in a tighter market for gasoline. The unit was shut down around August 29 due to catalyst leaks. IIR Energy stated that the refinery intends to try to restart the Residue-Fluidized Catalytic Crushing Unit (RFCCU), which produces 204,000 bpd, on September 20, although major repairs and replacement of equipment could keep the unit closed for months. First reported on Wednesday, Dangote’s RFCCU is expected to close for at least two week. Dangote didn't immediately respond to an inquiry for comment. A gasoline dealer said that the market for motor fuel is already strong. The trader stated, "This only adds fuel to a fire." The U.S. futures crack spread LSEG data shows that the profit margins for Northwest European gasoline have risen by around 23%, reaching $19.31 on Wednesday, their highest level since late June. Philip Jones-Lux is a senior analyst with Sparta Commodities. He noted that the current and future outages will be enough to offset seasonal demand declines. Dangote's refinery, which started processing crude in 2024, significantly reduced the Europe-West gasoline export trade. According to Kpler, EU and UK gasoline imports to Nigeria dropped from an average of 200,000 bpd per year in 2024 to 120,000 bpd during the first half this year. The plant has also sent two cargoes of gasoline to the U.S. East Coast. They are expected to arrive later this month in the New York region. This is a significant milestone, as observers had been closely watching to see if the plant could produce fuel that met U.S. Standards.
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Bond markets shine as shares recover from China's sell-off
The world stock market was mostly higher on Friday as the Federal Reserve made dovish remarks and an auction of Japanese 30-year bonds went smoothly. This helped to calm recent fears in the government bond markets. Chinese bourses fell overnight, on reports Beijing was trying to cool down a red hot stocks rally. FTSEurofirst's 300 index ticked higher by 0.4%, while S&P 500 futures and Nasdaq futures grew by 0.1%. This was due to a easing of concerns about the rising cost of long-term borrowing in countries like France, Britain and America. The oil prices continued to fall after a report that OPEC+ officials were looking to increase output targets at the weekend. Meanwhile, the dollar was slipping ahead of Friday's important jobs report. The increase in jobless claims was a welcome appetiser, but traders were happy to keep the powder dry. In recent days, several key Federal Reserve officials have raised expectations for an imminent U.S. interest rate cut. The money markets now price in a near-100% probability that one will be announced at the Fed meeting in less than two weeks. Derek Halpenny, head of global markets research at MUFG, said: "The markets are now a bit more convinced that the Fed will cut rates this month. This has led to a modest decline in bond yields." He said that the Chinese equity market drop had affected the Australian and New Zealand dollars in FX markets a little, but it was mostly a matter of "consolidate" and "wait" for Friday's employment numbers. The German 30-year bond rate fell to 3.3% as European bond buyers pushed it down. France's bond yield was down slightly more, at 4.40%. It had hit 4.523% Tuesday, its highest level since June 2009. This was due to fears that the government might collapse again. SALEFORCE SHARES SLUMP Salesforce's shares fell by nearly 7% in the hours before market opening after Wall Street analysts were disappointed with its third-quarter revenue due to the slow monetization rate of AI-powered product. The AI euphoria that has driven U.S. stock indexes up to record highs has subsided since Nvidia's and other companies' numbers have failed to impress investors. China was the focus of overnight action following a report stating that regulators are preparing measures to cool equity markets. Beijing bluechips dropped as much as 2,6%. The tech-heavy STAR 50, which soared almost 30% last month fell more than 6% on its worst day since the beginning of April. Wall Street futures pointed to a smooth restart. The next payrolls will not be until Friday but traders can listen to the hearing for Stephen Miran. He is Donald Trump's choice to replace Adriana Kugler, who resigned from the Fed board. Jim Reid, Global Head of Macro Research at Deutsche Bank, said that it would be interesting to see senators question Miran about his views on Fed Independence, especially since Trump has tried to fire Fed official Lisa Cook, and has criticised Fed Chairman Jerome Powell repeatedly. Miran stated in his testimony, posted on the Senate Banking Committee website Wednesday, that he intended "to preserve" this independence. The auction of Japanese 30-year bonds that took place in Tokyo over night was a success, despite the concerns about Fed independence. The Nikkei ended the day 1.5% higher, after recovering from its biggest one-day drop since April. India's benchmark Sensex index rose by as much as 1% when markets reopened following the government's decision to lower taxes on several items in an effort to boost consumption and counter U.S. Tariffs. The Federal Reserve's "Beige Book", released on Wednesday, painted a mixed image of the U.S. economic situation. This appeared to confirm monetary policymakers concerns. Analysts from ING described it as "bleak", and warned that it was "littered" with warnings regarding the inflationary effects of import tariffs. In early U.S. trade, the yield on 10-year Treasury bills dipped to 4.18%. The 2-year yield was at its lowest since May. The dollar rose 0.2% to 148.45 yen, staying within the range of trading it has been in since August began. The dollar was slightly higher at $1.1650 against the euro. Brent crude fell another 1.4%, to below $67 per barrel. Gold also slipped 0.5% back after reaching a record high on Wednesday of 3,578.5 ounces. (Editing by Kevin Liffey).
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Femsa and Raizen end their partnership in Brazil
They announced on Thursday that Brazil's Raizen, and Mexico's Femsa, have decided to end their partnership, established in 2019, through the joint venture Grupo NOS, which operates an extensive network of convenience shops across Brazil. In response to operational challenges and high levels of debt, sugarcane processor Raizen has embarked on a divestment plan. The Brazilian company said that the agreement, which was described by both parties as amicable, did not include any cash considerations. Raizen will also receive 1,256 Shell Select convenience stores and Shell Cafe convenience shops. Femsa will receive 611 Oxxo shops, a distribution centre located in the state of Sao Paulo, as well as Grupo Nos’ existing debt and cash. This decision is in line with Raizen’s strategy to simplify and recycle its portfolio, said the Brazilian firm. It's a joint venture of oil giant Shell and conglomerate Cosan. In a separate announcement, Femsa confirmed that it will now control 100% Oxxo Brasil. This move signals to both firms the ability to concentrate on their respective strategies. "We are committed to expanding and strengthening Oxxo on this dynamic market. Femsa continues to place Brazil at the forefront of its long-term growth strategies, according to Jose Antonio Fernandez Garza. Oxxo stores, which are ubiquitous in Mexico, have become popular in Brazil in recent years. They are now found in many cities including Sao Paulo. Femsa predicted last year that Brazil would become a major global player. As big as a market The chain will be as big as Mexico in a few short years. (Reporting and Editing by Aida Pelaez-Fernandez, Nick Zieminski).
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Nigerian soldiers kill 28 militiamen in Borno state
A spokesperson for the Nigerian air force said that the airstrike targeted the hideout of more than 15 Islamist fighters from the militias around the Sambisa Forest in northeastern Borno State. Nigeria has been battling a 16-year-old islamist insurgency led by Boko Haram, and its offshoot ISWAP. This insurgency has caused mass casualties and displacement, as well as a growing humanitarian crisis. Air Commodore Ehimen Ejodame stated that the operation was carried out on 3 September and targeted fighters, commanders and those who were linked to recent terrorist attacks. He said the strike was carried out after intelligence and surveillance confirmed militant activity. Ejodame stated that the airstrike had destroyed important facilities used by insurgents. He did not mention the group but the Sambisa region is known as a hub for Boko Haram, ISWAP and other insurgent groups. Nigeria's Air Force says that it has killed at least 592 insurgents armed with guns in Borno in the last eight months following intensive airstrikes. Separately the army reported that troops had killed 13 Boko Haram militants in Borno after repelling an attack on a convoy of military personnel. The attack took place on Wednesday, as soldiers escorted trucks carrying humanitarian aid along the Gubio to Damasak road. Insurgents opened fire with two IEDs, but the troops responded by firing back, killing 13 insurgents and forcing many others to flee. In a press release, the army reported that one soldier was injured and two trucks were destroyed in the conflict. (Reporting and writing by Elisha Gbogbo, Alex Richardson's editing)
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Was the US attack on the Venezuelan ship legal?
On Tuesday, the U.S. Military killed 11 people on a vessel that was in the Caribbean. President Donald Trump claimed that the vessel carried illegal drugs and belonged to the drug cartel that he had designated as a terrorist group responsible for killings in the United States. Here is an overview of the legal basis for the attack. PRESIDENTIAL POWER OF USE OF MILITARY According to the Constitution, Congress has the power to declare a war, but it is the president who is in charge of the armed services. Presidents from both parties have carried out military operations overseas without the approval of Congress. According to a memo from the Office of Legal Counsel that provides advice to Presidents, presidents have justified limited military force when it was in national interest and wasn't restricted or war-like. WAS THE ATTACK PERMITTED BY US LAW Presidents generally order attacks against enemy combatants or terrorist groups such as al Qaeda, or militants like the Houthis, who attacked U.S. ships in Yemen. The use of military forces in Tuesday's assault is a first. Trump claimed in a post on social media that the boat was carrying illegal drugs, and it would be the U.S. Coast Guard's responsibility to intercept them. Legal experts say that if the Coast Guard was fired on when they tried to stop the boat, then the Coast Guard would have been justified in defending itself. Trump, however, posted on social media a video that appeared to show an air strike destroying a boat speeding by. The administration failed to provide evidence that the United States were under imminent attack. It did not indicate that the vessel was armed, and it did not identify the targets aboard the boat that would be critical in a terror attack. Previous presidents did this when similar attacks occurred. Trump's claim that the Tren de Aragua cartel was operating the boat does not mean the drug cartel is at war with America in the same manner as other terror organizations, such as al Qaeda. Legal experts say that many people will see the attack as extrajudicial murder because the victims on the boat are civilians. What about international law? In order to achieve international peace and stability, the Charter of the United Nations requires that members refrain from using or threatening force against other nations. The charter recognizes that member states have a right to self-defense. Trump claimed that Tren de Aragua, Venezuela's president Nicolas Maduro's Tren de Aragua, was under his control. Legal experts say that this does not meet international law if there is no evidence of a future attack or previous attacks by Tren de Aragua. Venezuelan officials also denied that the group was active in their country. International law is still arguing over the right to self-defense when it comes to non-state actors. Officials in the Trump administration said that the vessel was located in international waters. However, if the vessel had been flagged by a country then the attack would have been considered to have taken place on its territory. This would be a major escalation. Officials from the administration have not confirmed if this vessel is flagged. Who can challenge the legality of an attack? Some opponents may not challenge the attack, given that Venezuela's government and Tren de aragua have been declared international pariahs. Pentagon officials said that this could change if there are more attacks. The legal challenges to the authority of the president to execute the strike in the U.S. courts will probably face high hurdles. U.S. court generally defers to the president in matters of foreign affairs and security. Families of victims could bring civil lawsuits in the United States for damages, but it would take years and be very expensive. Legally, such attacks carry the risk that the administration may kill an American. Anwar al Awlaki was a U.S. born al Qaeda militant. The Obama administration claimed it had the right to kill him because he posed a continuing imminent threat. U.S. lawsuits were filed after the deadly drone strike. The attack can be challenged before an international tribunal such as the Inter-American Court of Human Rights. This has led some countries to acknowledge past abuses, even though the United States was not a member of the court. Legal experts say that while the attack may not result in successful legal challenges, Washington's international relations could be soured and it would become more difficult to work with other countries to implement drug and immigration policies.
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ADNOC slams EU regulators for 'invasive' demands in subsidy probe into Covestro deal
ADNOC, the state-owned oil company of Abu Dhabi, criticized EU antitrust regulators on Thursday for their disproportionate and intrusive requests for information regarding its $17 billion bid for Covestro in Germany. The warning was that such demands could even compromise the acquisition. The criticism comes after the European Commission (which acts as the EU's competition watchdog) announced on Wednesday that it has temporarily halted an investigation in order to wait for ADNOC, the company who requested the information, to respond. "We are disappointed with the decision today. "The Commission's requirements have gone beyond what is reasonable and relevant for this transaction. They are both disproportionately and invasive," a XRG spokesperson, the international investment arm ADNOC said in an email. He said that while he was committed to continuing a positive path, the continued use of such a strategy raises serious concerns about the viability and sustainability of the investment. Once the investigation is resumed, the Commission will establish a new deadline to make a decision. The previous deadline for a decision was 2 December. The Commission may stop the clock in FSR reviews if the parties do not provide the information it requests within a reasonable time frame. The EU investigation focuses on possible subventions granted by the United Arab Emirates. This includes an unlimited guarantee and a capital increase committed by ADNOC to chemicals company Covestro. (Reporting and editing by Foo Yunchee)
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Copper prices fall on a firm dollar and profit-taking before U.S. data
The copper price fell on Thursday due to a strong dollar, as investors locked up profits after a rally that reached a five-month high ahead of important U.S. employment data and amid uncertainty over tariffs. In open-outcry official trading, three-month copper at the London Metal Exchange fell 0.9% to $9.885 per ton, just a day after it reached its highest level since March 26 ($10,038/tonne). LME copper is up 13% this year. Ole Hansen is the head of commodity strategy for Saxo Bank, Copenhagen. He said: "It appears to be profit-taking before these economic data prints." "Also this $10,000 level appears to be quite a strong barrier for the price of copper for now, and the fundamentals are still not strong enough to allow it to break through." The U.S. non-farm employment report, which will be released on Friday, is crucial for setting expectations. The Shanghai Futures Exchange's most traded copper contract fell 0.5%, to 79.770 yuan (11,152.12 dollars) per ton. The dollar index has also been a factor in metals markets, as it makes commodities priced in U.S. dollars more expensive for buyers who use other currencies. The markets were also shook by uncertainty about the demand for metals in China, the top consumer of these products. Galaxy Futures said that the marginal weakness in terminal demand could be due to a weak peak season in China. However, the shutdown of many scrap copper rod mills has helped support copper prices. LME zinc activity dropped 1% to $2,832.50 per ton as investors shrugged at low inventories. The metal is mainly used for galvanizing steel. LME zinc stocks The number of people who have fallen 76% this year. Tom Price, Panmure Liberum's head of commodities strategy, stated in a report that the abating steel industry activity in China is the biggest zinc price/demand driver. Aluminium fell 0.7%, to $2,600 per ton. Lead slipped 0.1%, to $1,993. Nickel dropped 0.6%, to $15,215; and tin slid 0.4%, to $34,525. Click here to see the top metals stories ($1 = 7.1529 Chinese yuan). (Reporting and additional reporting by Lucas Liew, in Singapore. Editing by Shailesh Kumar)
McGeever: Gold's rise as a reserve currency is unstoppable.
Concerns over inflation, the deterioration of the U.S. financial health, the independence of the Federal Reserve, and the geopolitical instabilities are raising concerns about the stability long-term Treasuries. These assets have traditionally been the safest assets around the globe. Many central banks have responded by turning to gold, a "barbarous" relic.
Gold and government bonds fortunes have diverged dramatically this year. This split was highlighted by the fact that bullion prices reached a new record high, and bond yields on long-dated bonds hit levels they hadn't seen for years, or in some cases ever.
U.S. Treasuries aren't selling off as quickly as European or Japanese Bonds, in part because central banks and institutions that manage foreign exchange reserves still have a strong demand for U.S. government debt.
In recent years, Treasuries' share of global reserves has essentially "tread water", while gold holdings by central banks have grown exponentially, thanks to an accelerating price and demand.
GOLD STANDARD
For the first time in 1996, gold has surpassed Treasuries as the second largest global reserve asset, after the U.S. Dollar.
According to a study by the European Central Bank, central banks hold 36,000 tonnes of gold. They have accumulated huge amounts since 2022, when Russia invaded Ukraine and inflation spiked after the pandemic. In the last three year, they have bought more than 1,000 tons of gold each. This is a record and twice as much as the average annual purchase in the previous decade.
Gold is currently trading at over $3,500 per ounce. This represents a 35% increase in the past year. Central banks' gold reserves are worth $4.5 trillion. This is a significant amount more than the $3.5 trillion in Treasuries that central banks have.
In recent years, the share of Treasury bonds in total reserves has also been decreasing. By some measures, it is only 23%. This is down from a peak of over 30% in the 2010s and well below gold's 27%.
CHANGED DAYS
In 1996, gold was the last reserve asset to account for more than Treasury bonds. This date is important. In the late 1990s, many European countries aggressively sold gold in advance of the introduction of the euro. Unexpectedly, Britain was the largest seller, despite not even being a member of the single currency union.
In August 1999, gold fell to $250 per ounce, a 40% drop from the beginning of 1996. The "Washington Agreement", which was adopted by central banks in September 1999, effectively capped their sales.
The late 1990s were not gold-friendly. The late 1990s were a time of steady growth, low inflation, moderate macro volatility and the rarest occurrence - an American budget surplus.
In the last three decades, global macro-environment has changed dramatically, and is now much more favorable to gold. Treasuries are in relative decline.
Tavi Costa is a macro-strategist at Crescat. He says that there are many parallels with what we see today and in the 1970s, when inflation, monetary instability and geopolitical changes made gold an important strategic reserve asset.
Costa says that the fact that foreign central bank reserves now exceed U.S. Treasury bonds is "a significant milestone" and signals a longer-term structural change to reserve management. What we're seeing could be the beginnings of a major realignment of global reserve composition.
Could gold regain the 75% share it had in central banks' reserves assets during the 1980s and 1990s? This is unlikely, and would require years of double-digit inflation and a prolonged recession.
What will stop the yellow-metal footprint from growing? This would require that inflation pressures and geopolitical risks, as well as economic uncertainty, to be significantly reduced. Reserve managers will continue to buy gold because none of this is likely in the short term.
You would not bet against that.
(source: Reuters)