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Stocks and the euro rise as France votes on confidence
The stock market retreated to all-time highs on Friday as strong corporate earnings offset the simmering U.S. China trade tensions. Meanwhile, the euro edged up as France's Prime Minister passed the first crucial vote of confidence. Gold's appeal as a safe haven showed no sign of waning, as it continued its record-breaking run. The dollar fell for a third consecutive day and oil climbed from soaring lows of five months after U.S. president Donald Trump announced that India had promised to stop purchasing oil from Russia. Europe's bond market cooled meanwhile after a rally lasting four days that drove regional borrowing costs down to their lowest levels in months. Sebastien Lecornu, the now-reinstated French Prime Minister, was about to face his second of two confidence votes in France. A debt auction would follow. Michael Metcalfe of State Street, the head of global macro-strategy, stated that he expected the situation to stabilize in France, with Lecornu passing the test after his promise to delay the increase in France's retirement. Metcalfe added that the market is now examining whether the dollar starts to drop again. "Have you seen a stabilisation in the dollar's sentiment or is it just a reflection of increased political uncertainty outside of the U.S.??" He said. HOT CHIPS In Asia, both politics and economy drove the overnight movements. The Nikkei index of Japan rose 1.3%, while the yen dipped as Sanae Takaichi's chances to become Japan’s first female premier appeared brighter. This stoked bets that Japan would see a return to big spending and looser monetary policy. As trading ended, shares of chip- and AI-related companies also saw a surge. Taiwanese chips maker TSMC reported record earnings. Its customers include Nvidia, Apple and Apple. The CEO of the company said that it expected artificial intelligence demand to remain robust, raising its revenue guidance for 2025 to mid-30% in U.S. dollars from around 30%. It also maintained its commitment to spending up to $42 Billion this year. CEO C.C. Wei said in an earnings call. South Korea's KOSPI, dominated by the tech sector, jumped 2,2% to reach its record high after the chief adviser to the president of the country said that he is "optimistic about the ongoing negotiations to finalise an agreement with the United States." Australian stocks gained nearly 1%, and reached a new record high. This was after the poor employment data increased the chances of further central bank rate cuts. This also led to a drop in the Australian dollar. Kit Juckes, Societe Generale’s Kit Juckes, said that nobody had predicted the drop in unemployment. He added that the yen looked "stuck", because "a minority government will want fiscal stimulus but not rate hikes." GOLD SURGE CONTINUES Gold reached a record $4,241.77 an ounce after a 0.8% increase. Dollar meanwhile fell for the third consecutive session, falling 0.2% against an index of major counterparts. Investors are closely monitoring China's recent expansion of its rare earth export controls. Senior U.S. officials have strongly criticised this move on Wednesday and warned that it may disrupt global supply chains. Chris Turner, Global Head of Markets at ING, said: "The question that financial markets must ask is whether China's export controls on rare Earths are merely a bargaining tactic to get greater concessions from America." Scott Bessent, U.S. Treasury secretary, said that despite the titt-for-tat, Trump expects to still meet Chinese President Xi Jinping this month in South Korea. Trump's trade maneuvers have also helped oil prices rise from five-month lows. Brent crude futures are up 0.4% to $62.13 per barrel, and U.S. West Texas Intermediate futures are up 0.7% at $58.69. Trump announced on Wednesday that India would stop buying oil from Russia, its largest supplier, and Washington will then try to convince China to follow suit as Washington intensifies efforts in order to press Moscow to reach a peace agreement with Ukraine. (Editing by Joe Bavier).
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Sources say bidders have radically different visions of Citgo's future.
Five sources said that an affiliate of Elliott Investment Management wanted to cut costs in Citgo Petroleum, a Venezuelan-owned refiner, while a unit from Gold Reserve was mainly focused on maintaining the statusquo. This is as the long auction which will determine the refiners' future approaches its end. The details of the competing visions of Citgo were revealed ahead of an auction to select the winner of PDV Holding, Citgo's parent. The Delaware court ordered the auction of shares to be held to pay for Venezuelan debt defaults, expropriations and other damages. The judge will decide next week who wins the auction, which has been running for nearly two years. A court officer who was overseeing the August auction recommended Elliott's Amber Energy's $5.9 billion bid as the winner. This is a change from his previous recommendation of Gold Reserve's Dalinar Energy's $7.4 billion offer. Amber's agreement to pay $2.1billion to holders of Venezuelan bonds that have defaulted is the main difference in the bids. This was a crucial step to remove an obstacle to a takeover. Five sources familiar with the plans say that if Amber's bid is accepted, it would implement a streamlined plan, while Dalinar - which is still fighting for a chance in court - wants to use the refiner’s strengths to keep its assets and operations largely the same. The strategies of the two companies have not been made public. Gold Reserve declined comment. Citgo Amber has not responded to requests for comments. Extreme Makeover Amber's team will be led by Greg Goff, a refining expert, as CEO and Jeff Stevens, as president. Three sources claim that the Elliott affiliate is more interested in radical changes to Citgo. This could include the removal of the board and top management. After purchasing a $2.5 billion stake in Phillips 66 this year, hedge fund Elliott snatched up two seats on the board of the rival refiner and supports a divestiture, cost-cutting and operational changes for perceived underperformance. "Elliott is sure to find where to make cuts in Citgo," said one source close to refiner. Citing audits, the source cited inefficiencies that were grandfathered into its status as a former wealthy state-owned company. Garfield Miller, an independent expert in refining, believes that Goff and Stevens will run the company for several years. Elliott is the best person to call if there's a need for reorganization, he said. Citgo is one of the most complex refiners in the United States, with an 807,000 barrels per day network spread across Texas, Louisiana, and Illinois. It also has 42 terminals, 8 pipelines, and 3 lubricant factories. It has 3,300 employees and supplies 4,000 independent retailers. Sources said that Amber's plans could help to monetize its investment, particularly after it pays out billions of dollars as planned in cash to Venezuela bondholders. Another source stated that "if Elliott's affiliate wins the auction, then the takeover will be aggressive just like its cost-cutting plan." The person said that a hostile removal of board directors would trigger clauses to indemnify the members. Sources said that asset sales would be preceded by a streamlined process. The auction has already identified potential buyers of certain assets, including rival refiners. It also helped Citgo identify possible trading pacts which could help it source oil more efficiently. Go with the flow Gold Reserve envisages a collaborative approach. The Toronto-listed company, which is familiar with Venezuela and its state firms from its previous ventures there, hopes to leverage Citgo’s existing management, financial strength, and infrastructure to launch Dalinar, its U.S. subsidiaries, into the refining industry, according to the five sources. Gold Reserve has praised Citgo for its leadership, and has recently aligned itself with Venezuelan and Citgo lawyers in court in order to counter Amber’s bid and ensure that auction proceeds benefit creditors in Delaware. Paul Rivett (executive vice-chairman of Gold Reserve’s board) told investors that Citgo’s current management had done a good job in the circumstances. Tony Sementelli was previously the executive vice president and Chief financial officer at Flint Hills Resources (a refiner owned by Koch). He was appointed as Dalinar’s chairman. Two other members of the board were previously employed by Flint Hills. Dalinar's plan is dependent on Citgo's near-total preservation due to the complexity of its financing. The court officer Robert Pincus, rival bidders and some creditors have said that the bid is too dependent on Citgo's performance in the future, which would be a reason to preserve assets. The sale could be delayed by roadblocks, regardless of what the court decides. Any winner must be approved by the U.S. Treasury Department. Reporting by Marianna Pararaga, Editing by Nathan Crooks & Ni Williams
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TSX futures gain on commodity strength before Macklem's comments
Futures linked to Canada's major stock index rose Thursday on the back of higher commodity prices. Investors awaited comments by Bank of Canada Governor Tiff MacKlem, who could provide clues about interest rate reductions by the central banks. At 5:36 a.m., December futures for the S&P/TSX Index were up by 0.2%. ET (0936 GMT). Macklem will speak at 13:30 ET on Canada's Economic Outlook. The market participants have priced in a 66% chance of a rate cut of 25 basis points at the policy meeting on October 29. Many analysts think that despite the unexpectedly strong jobs report last week, the central bank is still on a easing path -- one which could be slowed down rather than completely derailed. The day's economic data showed that Canadian home sales dropped 1.7% from August to September. Gold prices rose to new record highs in commodities as investors sought out the safe haven asset amid rising U.S. China trade tensions and concerns about the U.S. Government shutdown. The copper price in Shanghai has also increased as participants on the market focussed on possible supply constraints. Oil prices rose after U.S. president Donald Trump claimed that Indian Prime Minister Narendra modi had promised his country would cease buying oil from Russia. This could reduce supply in other countries. Investors bet that the Fed and BoC will continue to lower interest rates, and this led the S&P/TSX Composite Index of the Toronto Stock Exchange to reach a new record high. Altius Minerals announced Wednesday that it expects its third-quarter royalty revenue to be approximately C$21.2million ($15.1million) compared with C$14.7million in the same period of last year. CLICK CODES TO GET CANADIAN MARKETS UPDATES: TSX Market Report Canadian Dollar and Bond Report Global Stocks Poll for Canada Canadian markets directory ($1 = 1.4038 Canadian dollars) (Reporting by Ragini Mathur in Bengaluru; Editing by Sahal Muhammed)
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Copper prices fall as trade tensions and the US government shutdown weigh
The copper price fell on Thursday, as U.S. China trade tensions and uncertainty caused by the United States shutdown weighed down on sentiment. However, the weaker dollar offered some support. At 0923 GMT, the benchmark copper price on London Metal Exchange had fallen by 0.7% to $10,566 per metric tonne. Last week, fears about tight supply due to disruptions in mining drove prices up to $11,000 per ton. This was a 16-month record. The U.S. government shutdown has lasted two weeks. Cost A Treasury official late on Wednesday said that the loss of output could be as high as $15 billion per week, which is a factor in the drop in the dollar. Metal traders reported that concerns about manufacturing and demand growth, especially in China, the world's largest consumer, have resurfaced. Some companies who had bet on higher copper prices are now reducing their positions. The GDP data for third quarter forecast is likely to confirm the expectations of poor demand prospects, given China's heavy reliance on exports and manufacturing. at a lower Rate than the second quarter. Goldman Sachs analysts expect the market will remain surplus "for now", and they also expect Chinese buyers to avoid the market if the price exceeds $11,000. In a recent report, they stated that "current high prices for Copper... reflect bullish sentiment for 2026. Fueled by U.S. Fed rate cuts, expectations for a weaker Dollar and AI-related Capex." Analysts expect copper demand to increase due to data centres, grid infrastructure and investment. Increases in the next few decades are expected to be substantial. Two companies hold large amounts of warrants, which are title documents that confer ownership of metals stored in LME registered warehouses (0#LMEWHL>). Also, large amounts of forwards and cash contracts 0#LMEWHC>0#LMEFBR> are being analyzed. Cash contract for three-month forward has been boosted by concerns about a tight LME aluminum market This week, the price of a ton of climbed to its highest level since February, surpassing $21. Last trading price was around $7. Aluminium for three months rose by 0.4%, to $2.755 per ton. Zinc was up 0.1%, at $2.943, while lead remained unchanged at $1.982. Tin increased 0.3%, to $35,500, and nickel fell 0.1%, to $15,175. (Reporting and editing by Harikrishnan Nair; reporting by Pratima Dasai)
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Munich Re, the German insurer, warns against riots in Europe's slower-growing regions
A top executive at the German insurer Munich Re warned on Thursday that a tepid economic growth could lead to civil unrest in Europe. Clarisse Kopff is a board member who oversees business in Europe and Latin America. She said that the lower economic growth rates in Europe compared to those in the United States and China are already creating tension. This will put pressure on European consumers' purchasing power. She told journalists that this could fuel more civil disturbances and riots. This week, the International Monetary Fund predicted that the United States would grow by 2.1% and China 4.2% in 2026. The euro zone was expected to grow only 1.1%. The world's biggest insurer warned of civil unrest as one of the many risks ahead of a upcoming industry meeting in Baden-Baden. Munich Re has also highlighted the growing risks of hail damage and cyber-risks that can cause business interruptions in Europe, particularly in countries with low levels of cyber insurance.
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Codelco increases 2026 European copper premium by record $345/T
According to three sources on the copper market, Chile's Codelco is the world's biggest copper miner and will offer to sell its metal to European customers at a record $325 per metric ton next year. This represents a 39% increase from this year. Codelco's premiums for physical copper delivery are paid in addition to the London Metal Exchange contracts and are used as benchmarks for global contracts. Copper is used by the construction and power industries. Codelco, a state-owned company, declined to comment. Fears of a copper shortage next year pushed LME Copper to a 16 month high of $11,000 per ton, last week. On Thursday, it was about $10,600. After a mudslide, Freeport-McMoRan declared force majeure last month at its Grasberg copper mine in Indonesia. It is the second largest mine of copper in the world. This year, there have also been problems at the Kamoa Kakula mine in Democratic Republic of Congo as well as at Chile's El Teniente Mine. According to sources, the biggest copper smelter in Europe Aurubis is also going to charge European customers $315 per ton of refined copper.
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Investors' guide to the Ivory Coast presidential election
Ivory Coast is the top cocoa producing country in the world. The presidential elections will be held on October 25, with Alassane ouattara expected to win a fourth term. Investors are focused on the following key issues. Who is running? Ouattara faces four opponents: Laurent Gbagbo’s ex-wife Simone Gbagbo and two former ministers. The race is notable because neither Laurent Gbagbo nor Tidjane Thiam - a former Credit Suisse CEO - have received the support of a major party. Thiam was found to have French nationality, which is illegal under Ivorian law. Ouattara is the only candidate who has a strong chance of winning the first round. He's an economist trained in the United States, and he previously worked for the central bank of the region as well as the International Monetary Fund. The 83-year old brushed aside concerns about his age and his health when he announced his candidacy back in July. He said Ivory Coast required experience to face "security, economic, and monetary challenges." WHY DO INVESTORS CARRY ABOUT THE IVORY COAST Ivory Coast has one of the fastest-growing economies in the entire region. Market participants claim that its international bonds are among the best performers in Africa. They attract investors who don't usually invest their money in frontier debt. In order to build on this success, the government has expanded into new markets and debt instrument. These include a swap of debt for education in December last year, an international bond denominated in regional currencies in March and a Japanese Samurai bond certified by ESG in July. It also secured Africa's first ever sustainability-linked loan last month. Investors are closely watching the elections to determine Ivory Coast’s democratic credentials. Is violence in relation to elections a risk? Ivory Coast is known for its tense polls. After Laurent Gbagbo refused the defeat, the 2010 elections that brought Ouattara into power led to a short civil war in which 3,000 people died. Around 85 people were killed in clashes around the 2020 election, which the opposition boycotted because of Ouattara’s decision to run despite the constitutional limit of two terms. Thiam dismissed the upcoming elections as a "coronation of Ouattara", calling the exclusions of opposition figures "an abandonment of democracy." Market participants say that while seasoned investors may be able to weather the turbulence of an election, those who are new to Ivorian assets might feel uncomfortable if violence breaks loose. They said that any unrest is unlikely to spiral out of control. What economic challenges will the winner face? The Ivorian economy is based on cocoa, but production in West Africa is decreasing. The issues that are behind this decline will have to be addressed by whoever wins the election: changing weather patterns, disease, and small-scale, destructive gold mining. Ivory Coast's plan to combat climate change and its impact on the economy is in place, but the implementation of the plan will be difficult due to the lack of funding for climate action in Africa. The cocoa industry could also be under pressure due to the landmark EU anti-deforestation legislation, which is not yet in effect but will require EU importers prove that their products do not cause deforestation. The economy may also suffer if the Ivory Coast faces greater threats from islamist militant groups operating elsewhere in West Africa. This includes Mali, Burkina Faso, and Niger.
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Dalian iron ore reaches a 6-week low after betting on falling demand
Dalian iron ore prices fell further on Thursday to a six-week low, due to the expectation of a fall in demand from China, their biggest consumer. The January contract for iron ore on China's Dalian Commodity Exchange ended daytime trading 0.89% lower, at 773.5 Yuan ($108.56), after hitting its lowest level since September 1, at 766.5 Yuan. As of 0809 GMT, the benchmark November iron ore price on the Singapore Exchange had slipped 0.02%, to $105.1 per ton, as hopes for further rate cuts by the U.S. Federal Reserve helped to curb some losses. On Wednesday, the contract reached a low of almost $103.6 per ton. A weaker dollar makes commodities priced in dollars cheaper for buyers of other currencies. Steven Yu, senior analyst at Mysteel, says that the market is now focusing on the potential softening of fundamentals within the steel industry, amid signs of a de-escalation in trade tensions between China and the U.S. "While stocks did fall this week, it was better than expected. However, steel inventories are expected to rise in the coming weeks. This could reduce demand for ore," Yu said. The disappointing credit data from China has also raised concerns about the outlook for demand. China's new loans to banks in September were lower than expected, as policymakers struggled to reverse an extended property slump and curb overcapacity. The renewed U.S. China trade war, fueled by the tit for tat port fee, has overshadowed the hopes of talks between the sides. This has weighed on sentiment and driven down ore prices. The Shanghai Futures Exchange saw a rise in most steel benchmarks. Wire rod, stainless steel and rebar all gained ground, but hot-rolled coils lost 0.19%. Coking coal, which is also used to make steel, increased by 3.36%. $1 = 7.1250 Chinese Yuan (Reporting and editing by Amy Lv, Colleen howe and Harikrishnan Nair).
US rate cuts bets continue to drive gold's record-breaking run.
Gold reached a record high of $1,050 on Thursday as investors flocked to gold due to U.S. China trade tensions, the U.S. Government shutdown and prospects for interest rate reductions.
As of 1012 GMT, spot gold was up by 0.7% to $4,235.41 an ounce. Bullion had earlier reached a new record of $4,243. This was the fifth straight session that bullion rose.
U.S. Gold Futures for December Delivery were up 1.2% to $4,252.30.
Gold prices, which are traditionally seen as a safe haven during periods of uncertainty, have risen by 61% in the past year.
Focus on Trade Spat
This week, investors have been focused on the trade dispute between the two world's largest economies. On Wednesday, U.S. officials criticized China's expansion of export controls on rare earths as a danger to global supply chains.
Investors are turning more to gold because of renewed trade frictions, said Nitesh Sha, commodities strategist with WisdomTree. He added that the gold breakout is also indicative of investor uncertainty over U.S. policies.
Shah said that there is a high probability the metal will remain above $4,200.
The gold rally is driven by several factors including the expectation of interest rate reductions, political and economic uncertainties, central bank purchases, and inflows to gold exchange-traded fund.
A Treasury official stated on Wednesday that the shutdown of the federal government, which has lasted for two weeks, could cost the U.S. economic system as much as 15 billion dollars a week due to lost production.
On the monetary front, traders have priced in a 25-basis-point cut from the U.S. Fed for October, with a second one in December. These are viewed as 98% and 85% chances, respectively.
Gold that does not yield is usually more profitable in an environment with low interest rates.
Aakash Doshi is the head of State Street Investment Management's gold metals strategy.
Silver spot fell by 0.4%, to $52.88 an ounce. It had hit a record high $53.60 per ounce on Tuesday. The rally in gold was mirrored and the tightness of the spot market supported this decline.
Palladium rose by 0.3%, to $1,540.25, while platinum rose 0.9%, to $1669.60. (Reporting and editing by Elaine Hardcastle, Ed Osmond, and Anushree mukherjee from Bengaluru)
(source: Reuters)