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Powell to speak on the Morning Bid Europe-New Highs in Asia
Wayne Cole gives us a look at what the future holds for European and global markets. While Asia was quieter with Tokyo away on vacation, South Korea and Taiwan managed to reach new all-time records amid the AI love affair. OpenAI is the latest attempt by Nvidia to invest $100 billion into the technology. The first data center gear will be delivered to customers in the second half 2026. Analysts are divided on the issue. Bulls see it as OpenAI admitting that there is no other alternative to Nvidia's GPUs. Others wonder why Nvidia would fund a client to purchase its equipment. The flash PMIs released today for September are a hot topic. Will they continue to be resilient in the face U.S. Tariffs? The Australian numbers are disappointing but do not correlate well with the growth in Australia. The EU versions remain above 50.0 - albeit by a small margin - while the U.S. versions have retreated a bit but are still in positive territory. At 1235 EDT/1635 GMT, Fed Chair Jerome Powell will speak about the economy and take questions from the audience. The markets remain dovish, despite the Fed's mixed messages. Stephen Miran, the new Fed governor, was hand-picked by President Trump and argued on Monday for large cuts. However, three of his fellow Fed officials were cautious about inflation. The futures market suggests that there is a 90% probability of another quarter-point cut in October and 75% of a rate easing also in December. On Thursday, President Trump is due to meet with top Democratic leaders. This could add an extra wrinkle to the story. Investors assumed that some kind of extension would be reached, but this time the Senate appears to be in a deadlock. This raises the possibility of a shutdown, which would be particularly bad timing for the markets and Fed. Nomura analysts noted that when the government shuts down, so does its data release. The Fed may be left blind by the lack of data if the standoff is prolonged. Reports on retail sales, CPI, payrolls and other important indicators could disappear. Disney's decision of re-hiring Jimmy Kimmel as a host is a powerful example of how online boycotts can have sway. Just a quick glance at the social media sites shows how many people have cancelled their subscriptions, vacations, time-shares, and even their Disney weddings. Another headache for board members. The following are the key developments that may influence Tuesday's markets: Fed Bank of Atlanta president Bostic and Fed Bank of Atlanta Vice Chair Bowman will be speaking on the economy. Media conference on the Riksbank's monetary policy announcement - Appearances of ECB Director Cipollone and Bank of England Chief Economist Pill. Bank of Canada Governor Macklem - September PMIs for Asia, Europe and the US. US Treasury auctions $69bn in 2yr Notes
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Australian critical mineral firms flock to US markets
Despite Australia's efforts to develop its domestic industry, some of Australia's leading critical mineral producers are moving ahead with plans to build facilities in the United States. Last week, an Australian delegation of companies that produce critical minerals visited Washington and New York to meet with senior officials and investors. ASX-listed companies such as Australian Strategic Materials and Ionic Rare Earths are interested in expanding their operations in the U.S. They said that the size of the U.S. client base was a major draw, especially given the rapidly growing electric vehicle, defense, and advanced manufacturing industries as well as the cheap energy and subsidies the country is planning to implement. Annaliese Eames, Chief Legal Officer of ASM said that the company is looking to expand its operations beyond its rare earths plant in Korea. ASM, a $85 million company, conducts detailed due diligence in Oklahoma and South Carolina, which includes reviewing sites. ASM was attracted to the U.S. by more than just strong incentives and support from federal and state governments. She said that the commitment to growing the ecosystem was what attracted ASM to the U.S. The national security of some minerals companies that supply customers in the defence industry requires them to be located nearby. This is due to the complex process of converting raw materials into magnets, which are used for everything from missiles to wind power. Tim Harrison, the Managing Director of Ionic Rare Earths said that the company is currently in advanced talks with Tennessee to replicate magnet recycling technology developed in Belfast. There are other states which can offer very low-cost power... He said that they also had a lower cost of labour and both the federal and state government were willing to provide huge funding. Andrew Worland, CEO of International Graphite said that the company is looking into options for building in the U.S. or Europe to better align with the needs of its customers. China's April restrictions on rare-earths exports galvanized the U.S., which has since supercharged its rare-earths industry. Higher Western world prices have also emerged and are attracting investors. Access to U.S. financing is still expected to be very competitive. Lynas Rare Earths in Australia, the largest supplier outside China warned last month its heavy rare earths processing plant may not be built after the Trump Administration provided multi-billion dollar funding for its U.S. competitor. POLICY CHALLENGES This trend highlights the critical policy challenges that Australia faces in developing new markets for its fossil fuels. According to a PwC study from 2023, this opportunity would be worth A$170 Billion ($112 Billion) to Australia's economy by 2040. Amy Lomas, PwC Australia's chief economist, said: "Australia is struggling to establish the crucial minerals industry beyond primary mining." Major miners complain that Australia's high labour and power costs and its cumbersome approvals processes are slowing down growth and decreasing the country's competitiveness internationally. The closure of Australia's auto industry in 2010s has stunted the growth of advanced manufacturing, which is still a relatively small sector. Where do we sell materials to an Australian company that wants to build it in Australia? Where are the magnets, metals and alloys being produced? "Ionic's Harrison stated that it is not being manufactured in Australia due to our high cost base and lack of advanced manufacturing industries. Australia has passed a A$17billion production tax credit that will provide 10% off for key minerals processors starting in 2027. Lomas said that Australia is building partnerships for critical minerals with allies such as Japan, India, and Britain, which could increase its customer base. She said: "This will allow Australia to operate a lot more efficiently, especially for midstream and downstream processing."
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WTI's premiums and the increase in shipping costs threaten to close US-Asia arbitrage
Trade sources reported on Tuesday that the arbitrage window for shipping U.S. West Texas Intermediate Crude to Asia has shrunk as tanker rates have risen, and strong export demand has pushed up premiums for this grade to multi-month heights. The U.S. Asia arbitrage opened in late summer, and the demand for Very Large Crude Carriers to make this two-month journey prompted a tightening of vessel supply. Kpler's preliminary data shows that U.S. imports into Asia will increase in September. South Korea and India are the top buyers. The first shipment of U.S. oil for Pakistan's biggest refiner Cnergyico, and the first import from Vietnam for this year are also among Asia's U.S. sales. Data from shipbroker SSY showed that the cost of chartering a VLCC for the transport of 2 million barrels from the U.S. Gulf Coast into China soared to $12.5m last week, the highest level since March 2023. This week, however, it has dropped to $12m. Kpler estimates that U.S. crude oil exports to Asia will be 1.35 million barrels per day in September. This figure could increase if additional cargoes arrive. The strong export demand also drove spot premiums at East Houston (also known as MEH) for WTI to $1.60 per barrel on Friday, the highest since February. Sparta Commodities analyst June Goh stated that the high freight costs made it more risky to bring the cargo into Far East. The surge in freight costs added $1.75 per barrel to shipping costs, according to a U.S.-based trader. He added, "That would be enough to close the arb." WTI-MURBAN PRICES GAP NARROWS A Singapore-based trader reported that offers for 2,000,000 barrels of WTI to be delivered to Asia in December ranged from $4.50 to £5 per barrel over Brent dated. Another trader stated that, by comparison, November-loading Murban oil could arrive in Asia in December for about $5 per barrel over Dubai's quotes. He added that the arbitrage was closed because Asia had reached its maximum volume. Some traders say the arbitrage window has closed, but others are looking for November-loading WTI cargoes that may be offered later this week. Another U.S. based trader stated that "for now, it seems like WTI premiums are impacting the U.S. - Asia arb for trade in November." Goh, from Sparta, expects that freight rates will ease and the arbitrage economy for WTI will improve. She added that "with only marginal WTI assistance and average supply, it is likely rates will retrace and improve WTI's competitiveness."
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US lawmakers talk up big Boeing deal during China visit
Adam Smith, an American Democratic Representative who spoke at a Tuesday press conference, said that a group of U.S. legislators on a rare trip to Beijing had raised the issue of a deal between top Chinese leaders, which would have China agree to purchase more Boeing jets. U.S. David Purdue, the ambassador to China, said that he believed the negotiations were in their final days or weeks. He added that the deal was "very important" to the President. Bloomberg reported that Boeing was in talks with China to sell up to 500 jets. This would be a major break-through for Boeing in the second largest aviation market where orders have been stalled due to U.S.-China tensions. It's been quite some time since Boeing planes were sold in China. Smith, the leader of the bipartisan delegation and the person who was asked about the deal, said, "We'd love to see that deal get done." It's a great company with a great product. I hope you can get back to selling planes in China." The House of Representatives delegation, which started Sunday, is the first to visit China since 2019. Relations between the United States and China deteriorated after the coronavirus outbreak. This follows a conversation on Friday between President Donald Trump, and his Chinese counterpart Xi Jinping. The two world's largest economies are looking to improve their relations beyond the current tariff truce. Boeing is the biggest U.S. aircraft exporter and has historically sold around one-quarter of its planes in China. However, it hasn't secured a large Chinese order since Trump took office. Purdue stated that he visited Boeing's Tianjin plant last week. Tianjin is located 150 km (95 mi) south of Beijing. On Sunday, the lawmakers met with China's second highest official Li Qiang, while on Monday they met with He Lifeng, China's economy tsar, and Dong Jun, China’s Defence Minister. They raised the issue of a need for greater military dialogue. Smith said at a press conference held by the U.S. Embassy in Beijing that "it's time for us to have a discussion about this when we reach the hundreds, or even close to 1,000 nuclear weapons" to ensure we all understand one another and avoid any conflict. Adam Smith is currently the top Democrat in the House Armed Services Committee. This committee oversees the U.S. Defense Department as well as the armed forces. Although Trump has been vocal about his tariff policies - singling out China for duties exceeding 100% earlier this year, before walking back the bulk of them - U.S. sanctions over semiconductor chips and Chinese activities in South China Sea as well as matters related to Taiwan and TikTok ownership also cloud the relation. A member of the delegation from the Democratic Party, Democratic Representative Ro Khanna, who represents Silicon Valley in his district, has also been vocal about tech and economic competition between China. (Reporting and writing by Laurie Chen, Joe Cash, Jamie Freed, and Lincoln Feast; editing by Jamie Freed.)
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Glamox to Light Up Tennet’s Offshore Wind Power Converter Platforms
Lighting specialist Glamox has secured contracts from electrical contractors working for three yards to provide connected marine lighting and light management systems for 11 offshore High Voltage Direct Current (HVDC) converter platforms.The HVDC platforms are being built for grid operator TenneT as part of its 2 GW North Sea program. The contracts represent Glamox’s largest marine lighting project to date, in which it will provide more than 38,000 marine lights with advanced systems to control, test, and monitor them.TenneT specified the design of the HVDC platforms and commissioned various yards for their construction. Glamox’s framework contracts are with Petrofac, which will build six platforms, Seatrium, which will build three, and McDermott, which will build two.The offshore platforms will convert AC electricity generated by wind farms off the coast of the Netherlands and Germany into high-voltage DC electricity. The DC electric power will be transmitted through submarine and land cables to onshore substations, where it will be converted back into AC electricity and fed into the electricity grid systems.Glamox will provide a comprehensive package of approximately 3,500 marine lights for each platform, including floodlights and other external lighting, as well as interior lighting for stairwells, corridors, walkways, ladders, and crew quarters. The company will also supply explosion-proof lighting for potentially hazardous environments, such as plant rooms, along with battery-powered emergency lighting for the platforms.The lighting will be delivered in phases starting at the end of 2025.“This is the largest offshore lighting project we’ve ever won and speaks volumes for the reputation of our marine smart lighting systems to be chosen for this groundbreaking project.“In the future, most offshore platforms will be unmanned and automated. Glamox is already pioneering the use of smart lighting and light management systems for mostly unmanned oil and gas platforms and ships. Now we are extending this capability to the offshore wind industry,” said Astrid Simonsen Joos, Group CEO of Glamox.
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Shanghai Copper prices fall, due to higher demand and prices
The price of copper fell slightly on Tuesday, after two days of gains. This was due to higher prices and the uncertainty surrounding China's economy. These factors outweighed a weaker dollar and concerns about supply disruptions. As of 0423 GMT, the most traded copper contract at the Shanghai Futures Exchange fell 0.24% to 79,940 Yuan ($112,237.47), per metric ton. By 0423 GMT, the benchmark three-month price of copper at the London Metal Exchange had fallen 0.04% to $9,976 per ton. According to an anonymous Singapore hedge fund analyst, the dip was caused by traders closing long positions on Monday after SHFE closed above a key psychological level of 80.000 yuan/ton. China also kept its benchmark lending rate unchanged on Monday for the fourth month in a row as it kept markets guessing whether or not they would announce further stimulus. Analysts at Everbright Futures wrote in a Tuesday note that the combination of higher prices, uncertainty over stimulus, and U.S. rates of interest weighed on China's procurement appetite, despite restocking demands, in advance of the National Day holiday, which will take place from October 1-8. The dollar's slight weakness helped to limit the decline. The dollar's weakness makes commodities priced in greenbacks cheaper for traders who use other currencies. Uncertainty regarding the status of Freeport Grasberg Analysts at Benchmark Mineral Intelligence wrote in a report that the mine clouded the future with uncertainty over the balance between supply and demand. Nickel, aluminium, zinc, and lead were all down, while tin was up 0.17%. Lead was down by 0.28% on the LME, while tin was up 0.3%. Aluminium, nickel, and zinc were little changed. $1 = 7.1337 Chinese Yuan Renminbi (Reporting and editing by Dylan Duan, Lewis Jackson)
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Gold reaches record highs as traders bet against US interest rate cuts and watch Powell's signals
The gold price stabilized on Tuesday, after hitting a record-high, underpinned with expectations of further U.S. interest rate cuts, and a weaker U.S. dollar. Investors awaited Federal Reserve Chairman Jerome Powell's address for any additional policy clues. Gold spot held steady at $3,743.39 an ounce by 0238 GMT after reaching a session high of $3.759.02 earlier. U.S. Gold Futures for December Delivery rose by 0.1% to $3.779.50. Gold priced in greenbacks is now cheaper for foreign buyers, thanks to the U.S. Dollar index's 0.1% decline. The short-term trend remains bullish, but we expect a pullback in the short term due to technical reasons, said Kelvin Wong, senior market analyst at OANDA. He added that the weaker US dollar is helping gold right now. The key support levels that we will watch to keep this dip in check are between $3,710 and $3690. Investors will be watching Powell's 1635 GMT speech for any signals about the policy of the central bank. Stephen Miran, the new Federal Reserve governor, said that on Monday the Fed misread how tight its monetary policy was and would put the job markets at risk without aggressive rates cuts. This view was countered by remarks made by three of Miran's colleagues who felt the central bank needed to remain cautious regarding inflation. The U.S. Central Bank cut rates last week by 25 basis points citing the labour market and warned that more rate cuts will be made at future meetings. Investors, according to CME FedWatch, see a 90% chance of a rate cut of 25 basis points in October. They also see a 75% probability of another one in December. "We are seeing a slowing of economic growth and higher inflation. The changing geopolitical scene, as well as a weaker USD, is keeping the demand for gold investments strong," ANZ stated in a report. Silver prices will continue to rise as long as the gold price shines. Silver spot fell by 0.9%, to $43.67 an ounce. This is near the 14-year high. Palladium fell 0.2% and platinum was down 0.3% at $1,412.80. (Reporting from Anmol Choubey, Bengaluru; additional reporting by IshaanArora; editing by Sherry J. Phillips).
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Sources say that the Marathon Galveston Bay Refinery, Texas, will complete repairs to its hydrotreater in October.
People familiar with the plant's operations have said that Marathon Petroleum will complete repairs on its damaged hydrotreater by mid-October at its Galveston Bay refinery, which processes 631,000 barrels per day (bpd). Jamal Kheiry, the spokesperson for Marathon, declined to comment about the operations of the Texas City refinery. It is the largest in the United States by capacity. A fire that broke out on June 14 shut down the 64,000 bpd RHU (residual hydrotreating unit). The two sources confirmed that the RHU has restarted the operation of two small hydrotreating systems. A third unit is also expected to be restarted this month. The 400-train Hydrotreater will be repaired by mid-October. This is the largest hydrotreater on the RHU, and it was also where the fire started. The RHU had originally been scheduled to close for a complete overhaul in the first three months of 2026. However, the repairs were brought forward. Hydrotreaters remove sulfur from motor feedstocks using hydrogen in order to comply with U.S. Environmental rules. RHU is responsible for processing residual crude oil. This thick, tar-like oil that remains after the refining stage. The residual crude oil is used for motor fuel feedstocks, and petroleum coke. (Reporting and editing by Clarence Fernandez, Jacqueline Wong, and Erwin Seba)
Stocks rally in Vietnam's IPO markets fails to attract foreign investors
The IPO market in Vietnam is booming, thanks to a stock rally, regulatory reforms and a credit boom, but it has not attracted new interest from foreign investors despite FTSE Russell's potential upgrade of the index.
Techcom Securities, an arm of Techcombank, raised $410m last week, which represents a valuation of $4billion. This is one of the largest IPOs in Vietnam over the past few years.
According to data provider LSEG Workspace, that was nearly half of the combined value of 36 IPOs in Malaysia this year, Southeast Asia's biggest IPO market based both on value and the number of deals.
Dragon Capital, a private equity fund focused on Vietnam, predicted at the beginning of the year, that 13 companies including Techcom Securities would be listed in Vietnam by the end of 2028. The fund said that the combined market capitalisation for all 13 companies could reach $47.5 billion. This is about 14% of Vietnam’s current market value.
In 2024, there was only one IPO and in 2023 three.
Nguyen Minh, the head of research and developments at Yuanta Securities Vietnam and a brokerage, says that both the share rally and the regulation to reduce listing procedures adopted in this month are fueling enthusiasm.
STOCK MARKET RALLIES
LSEG data show that the Vietnamese index is Southeast Asia's top-performing stock market.
Minh stated that firms who had planned to launch IPOs would not want to miss the wave.
Vinpearl is the resort arm for the Vietnamese conglomerate Vingroup. In May, it raised $190 million through an IPO, after being taken private more than a decade earlier.
Recently, both the agricultural unit of Hoa Phat Group (a steelmaker) and the securities division of VPBank (a lender) announced plans to issue their own shares.
Dragon Capital reports that other potential listings include the largest securities company by market share VPS and Long Chau Pharmacy, a division of FPT.
Credit expansion, including margin finance, has contributed to the market boom. This debt, however, could cause asset price bubbles. Vietnam's credit to GDP ratio is more than three-times the median for emerging and middle-income countries.
Hoang Huy said that the IPO drive of securities firms was driven by their need to raise additional capital in order to meet new regulations and to support margin loans.
BE CAUTIOUS FOR OUTSIDE INVESTORS
Analysts also expressed interest in the possible upgrade of Vietnam’s stock exchange by index provider FTSE Russell from frontier market to emerging market status - which could occur as soon as next month.
Before and after upgrading, the World Bank estimated about $5 billion in net foreign inflows from both passive and active investors.
Foreign ownership of the Ho Chi Minh City stock exchange, the largest in the country, has decreased this year to about 15.5%, down from 17.5% last month and almost 19% by the end of 2024.
Huy, a Maybank analyst, said that foreign investors were selling because of concerns about exchange rate volatility. They also wanted to lock in their profits after the index's strong performance. However this did not mean that they had completely left Vietnam. Reporting by Phuong nghuyen and Francesco Guarascio, Editing by Neil Fullick
(source: Reuters)