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Asia stock markets fall as Fed cuts, BOJ meeting and Trump-Xi in view
Asian stocks were up and down early on Thursday, as investors watched to see if U.S. leaders and Chinese leaders would reach a deal. MSCI's broadest Asia-Pacific index outside Japan traded flat last, while U.S. S&P500 e-minis futures edged up 0.1% after Wall Street stocks posted a small loss to end a four-day streak of gains. As the Trump administration in the United States imposes tariffs on imports from abroad, global markets are undergoing a series of central bank decisions. These will provide clues as to the future path of interest rates. Trump will meet with Chinese leader Xi Jinping later today in South Korea. U.S. negotiators are signaling that they want to return to the fragile truce in the trade war, but tensions still remain high. Long-term economic irritations will continue between geopolitical competitors. Sally Auld is the chief economist of the National Australia Bank, Sydney, in a podcast. She said that after a lot of activity in the first two days of the week, the central banking story will probably end with a whimper over the next 24 to 48 hours. The Nikkei opened down 0.1%, in anticipation of the Bank of Japan's decision later today. It is widely expected that the central bank will keep interest rates unchanged. The U.S. Dollar was unchanged against the yen at 152.70 yen last after comments by U.S. Treasury Sec. Scott Bessent, who called for faster rate increases to avoid a currency that is too weak. Analysts said this may have an impact on the BOJ communication about the pace of future rate hikes. Fed Chair Jerome Powell said that policymakers will likely become more cautious in the absence of additional job and inflation data. The traders have reduced their predictions of a rate cut of 25 basis points next month. This was viewed earlier as near certainty. Fed funds futures imply that the Fed is likely to hold rates during its next meeting, on December 10. This compares with the 9.1% chance it had yesterday. The yield on a 10-year Treasury bond in the United States was trading at a high of 4.0757% last week, an increase of 1.77 basis points from the previous close of 4,058%. The dollar index (which measures the strength of the greenback against a basket six currencies) reached a new two-week high at 99.131. Gold rose 0.4% to $3,944.25 an ounce. The euro last remained unchanged at $1.16035, ahead of the policy decision made by the European Central Bank in the afternoon. It is expected that the bank will leave rates at the same level for the third time in a line. Investors are also becoming more anxious about the costs of AI development, despite the fact that the U.S. appears to be in good health. This is putting pressure on the tech megacap stocks, which account for the largest weighting in S&P 500 Index. Meta forecast on Wednesday "significantly larger" capital expenditures next year, as its revenues exceeded market expectations. Microsoft's spending for artificial intelligence infrastructure reached a record high of almost $35 billion during the third quarter. Both companies' shares fell. Alphabet, the parent company of Google, a rival tech giant, bucked this trend. Its shares rose in after-hours trade after exceeding revenue expectations. Brent crude oil was unchanged on the energy markets at $64.92 a barrel.
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UK energy watchdog to take on 4.4 billion pound consumer debt
Ofgem, the UK's energy regulator, announced on Thursday plans to address debts of 4.4 billion pounds ($6billion) that customers have accumulated. These debts are driving up household bills for millions. The unrecovered energy debt will be added to all consumer bills. This adds 52 pounds or around 3% to the current cap price of 1,755 pounds per year. Ofgem announced that it would soon publish a debt-relief scheme, which aims to erase 500 million pounds in debts, benefiting around 195,000 clients, but did no detail on how the program will be funded. Charlotte Friel said, "We must protect the consumer by striking a balance between ensuring those who can pay receive support and focusing on those in need." BILLS STILL 50 % HIGHER THAN BEFORE THE UKRAINE INVASION The regulator proposed that the process for moving into a new house be changed so that no debts accumulate in anonymous accounts prior to the registration of new residents with an energy provider. Although domestic energy prices are down since their peak of 2023, they still remain about 50% higher than the summer of 2021. This was before Russia invaded Ukraine and sent gas prices skyrocketing, causing an energy crisis across Europe. After a price cap for domestic gas and electricity was raised in October, the government is being pressed to lower bills. Consumer groups say energy costs are still unmanageable by many. They have urged the government for more assistance for those who struggle.
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Australia's Lynas misses the market estimate despite Q1 revenue rising
Lynas Rare Earths, based in Australia, missed the market's expectations on revenue for Thursday. The company reported a 66.1% increase for its first quarter. It also noted that market conditions remain challenging, as strategic metal prices continue to fluctuate. As China tightened export restrictions, governments outside the dominant producer have scrambled to find alternative supply routes for their industries. This includes automotive and defence. The largest rare earths producer outside China reported sales revenue of A$200.2 (130.09) million for the quarter ending September 30. This is up from A$120.5 a year ago, but below the Visible Alpha consensus forecast of A$230. Lynas' statement added that "the initial relaxation of China magnetic exports during the third quarter led to an increased demand for NdPr by China magnet manufacturers." The market price rose through July and August, but then reversed itself in September as the magnet makers assessed demand. The future of the company's heavy rare earths processing plant in Seadrift, Texas is also "significantly uncertain". The total rare earth oxide production for the first three months of this year was 3,993 tons, up from 2,722 tons reported last year.
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The Australian government claims its environmental protection legislation will benefit business and nature
The Australian government will introduce a bill on environmental protection into the parliament on Thursday. It said that this would help businesses by making approvals of resource and construction projects faster and easier. The center-left Labor party hopes that its legislation will give a boost to an economy geared toward resource extraction. Australia is one of the world's largest producers of metals, coal and gas. The environment ministry released a statement saying that "these vital changes had been waiting five years for delivery, and we have seen our environment going backwards, and businesses losing time and money." The bill will bring Australia modern, balanced environmental laws that are good for both the environment and business. The ministry stated that it would like to have the legislation passed through both chambers of parliament before the end of this year. The centre-right Coalition and the Greens on the left will need to vote together in order for the bill to pass. The Coalition wants a more business-friendly bill, while the Greens want stricter environmental protection. Murray Watt, the Environment Minister, said that he is still in negotiations with both parties and has not decided yet which amendments he will accept. According to the Environment Ministry, the bill was intended to define "unacceptable impacts", and increase penalties for violations. The bill would also create an independent National Environmental Protection Agency to enforce the rules. However, the Environment Minister would still have the final say on whether a project is approved. According to the Ministry, it has promised to make the approval process easier and faster for businesses. This should help reduce the time required to reach a decision.
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Reeves, UK's Reeves, looks to early scrapping windfall tax in the oil and gas industry. FT reports
The Financial Times reported that Britain's Finance Minister, Rachel Reeves could eliminate a windfall-tax on the oil and gas sector a year sooner than originally planned. Reeves, it is said, is considering several options in order to achieve her goal of balancing daily spending and tax revenue by the end the decade. The Financial Times reported that she could use her budget for next month to eliminate the energy profit levy by March 2029, instead of March 2030. This was according to people who are familiar with her thoughts. The newspaper reported that Reeves wanted assurances from the energy companies about how such a move could spur new investments, jobs, and future tax revenue. Could not verify immediately the report. In an email, a spokesperson from Reeves’ office stated: "We don't comment on speculation about changes to tax before the Budget." The levy was introduced in 2022, after the surge in energy costs following the Russian invasion of Ukraine. It increased the effective tax rate for North Sea producers to 78 percent. Offshore Energies UK, a UK industry body, has claimed that removing the temporary tax earlier could unlock investment of 40 billion pounds ($53.68billion) across 90 projects. Economists say Reeves could have to break a government promise and increase income tax. This would be a break from the commitment Labour made before the 2024 election to the voters. On Wednesday, Prime Minister Keir starmer declined to commit to his previous promise not to increase taxes. He said that future forecasts will show that the economy is in a much worse state than previously thought. People familiar with the situation said that the British budget watchdog will likely cut its productivity forecasts by more than expected 0.3 percentage points. This could lead to a hit of 20 billion pounds to the public finances. $1 = 0.7451 pounds (Reporting from Sam Tabahriti and Anusha in Bengaluru, Editing by Leslie Adler & Daniel Wallis).
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Mali cancels 90 mining exploration permits due to non-compliance
According to an official order seen by the. Local subsidiaries of Harmony Gold and IAMGOLD as well as Birimian Gold and Resolute Mining are affected. In a statement released on Wednesday, the Mines Ministry said that holders had failed to meet new legal requirements. The decree does give no reasons for the revocation, but it states that the "permits" are "released", allowing the reallocation of the land covered by these permits. The statement stated that "permit holders were required to submit documents in accordance with new mining rules. However, after verification, the authorities found widespread noncompliance." The government has cancelled the permits as a result of this, in accordance with mining legislation. The ministry has not clarified whether companies may appeal or reapply. PERMIT PURGATIONS AND TOUGHER RULES RESHAPE MINING IN AFRICA Guinea, along with several other African nations, has recently reformated their mining sector by canceling dormant permits or those that were non-compliant. Others have introduced stricter regulations in order to increase earnings from natural resource, as part of a larger push to tighten up oversight and regain control over strategic assets. The Mali decree, which was signed by the Mines Minister Amadou Keita in October and reviewed on October 29, cancels all permits for exploration of gold ore, iron ore bauxite uranium rare earths and other minerals between 2015 and 2022. The order lists all the permits affected by location and number, but it does not include the area covered or an estimate of their value. Cora Gold said it relinquished permits in question over two years prior and that no formal notice had been received. The company said that the cancellation was delayed and had no effect on its business. Harmony Gold IAMGOLD Birimian Gold and Resolute have not responded to our requests for comments. Mali is Africa's largest gold producer, and mining is a major revenue source and export. However, recent regulatory crackdowns have hampered foreign investment. Due to disruptions in Barrick's Loulo-Gounkoto Mine, the country's biggest gold asset, industrial gold production is expected to fall short of 2025's target. The military-led government has recently moved to deepen ties with Russia through energy and mining agreements, including a deal to supply 160,000 to 200,000 metric tons of petroleum and agricultural products amid an Islamist-militants-imposed fuel blockade that has crippled transport and forced nationwide school closures. The agreement comes after earlier Russian-backed initiatives, including joint ventures for gold, uranium and lithium and the construction of an state-controlled refinery for gold in Bamako. (Reporting and writing by Maxwell Akalaare Adombila, Editing and Mark Potter and Bill Berkrot).
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Spain commemorates flood anniversary with state funerals, bringing out anger and grief
On Wednesday, one year after deadly floods killed 237 people in Spain's Valencia Region, hundreds of families of victims attended a state funeral, presided by King Felipe. The City of Arts and Sciences, a futuristic building in Valencian, is a popular destination for many people who wear black T-shirts that read: "Their deaths could have been avoided". Carmina is a relative to a flood victim. She said, "We are filled with mixed emotions." "We've been waiting for this ceremony a long time. A collective funeral was needed because it was a death that affected the whole community. "The day is here and we're ready to pay tribute to the people of our country." Some of the attendees chanted insults at regional leader Carlos Mazon. He is being investigated for his role in this tragedy, and he attended the ceremony even though some relatives asked him to stay away. Tens of thousands of Valencians demonstrated on Saturday calling for his resignation. Mazon said to reporters: "Today, is not the time for confrontation. In the days following the tragedy, many Valencians felt helpless. "We tried our best under unimaginable conditions, but it was often not enough." TORCH LIT MARCHES The protesters had covered the central plaza of Valencia earlier in the day with foil blankets. Each one represented a victim. As the night fell, two marches carrying torches and silently marching joined together in Benetusser - one of the Valencia suburbs most affected by floods. Last week, Spanish authorities found victims still buried in mud. The country is dealing with the worst flooding it has seen in Europe for more than 50 years. On October 29, 2024, flash floods caused from torrential rainfall washed away bridges and cars as well as people. They also flooded homes and underground parking lots. In the Valencia region, 229 people were killed and eight more in other parts in Spain. Some protesters and relatives claim that the regional government failed to alert citizens in time during an emergency. They sent a text message warning when many buildings had already been submerged. After a local reporter claimed that she had spent nearly four hours with Mazon at a meeting of emergency services, a court is now investigating his handling of the situation and whereabouts. Mazon refused to reveal the details of his lunch, or the bill for the restaurant. However, he claims he was informed throughout the day over the telephone. On Tuesday, the government approved a loan guarantee of 5 billion euros ($5.8billion) to assist businesses and homes that were affected by floods. More than 8 billion euro has been spent by the government to clean up flood-damaged areas. Heavy rains and flash floods in the area were caused by an isolated high-altitude depression, locally known as a DANA. This is a weather system that can be highly destructive when warm and cold air combine to create powerful rain clouds. Scientists believe that climate change is causing this phenomenon to occur more often.
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Brazil official assures that COP30 will be held in safety after Rio violence
A Brazilian official assured visitors that the events next week in Rio, and other Brazilian cities, linked to COP30, will be safe. The official was attempting to reassure attendees following a brutal police crackdown against a drug gang, which resulted in dozens of fatalities. Public defenders reported on Wednesday that the deadliest police action in Brazil's recent history has killed at least 130 people. Residents found corpses in a favela after finding them overnight. His spokesman stated that U.N. Secretary General Antonio Guterres will be joining Brazilian officials to preside over the summit next month. He urged Brazil, which will also host Brazilian officials, to conduct a swift investigation and ensure any police actions adhered to international human rights laws and standards. Stephane Dujarric, spokesman for the Secretary-General, said: "I can confirm that the Secretary-General is gravely worried by the high number of injuries sustained during an operation yesterday in Rio de Janeiro's favelas." Rio's governor and mayor have both insisted that this violence is part of an anti-crime crackdown and has nothing to do the events of the Rio Summit, which are being held across three cities: Rio, Sao Paulo, and the coastal Amazonian city of Belem. Brazilian police conducted a drill on security in Belem, Brazil, on Tuesday. A finance ministry official told, "The COP30 will be safe for all the tens and thousands of people expected to attend. Joao Paulo De Resende, undersecretary of the Ministry for Economic and Fiscal Affairs said: "I'd say that it's a localized issue; it has nothing whatsoever to do with climate change or the COP." It was a very strange event, even by Brazilian standards. You won't see this happening again in the next few weeks or months. The U.S. Consulate issued a travel advisory for the affected Rio neighborhoods citing "ongoing fights between police and criminal groups." Participants at COP30 who spoke with on Wednesday were unafraid. Rio will host a climate conference for local leaders and the Earthshot Prize of Prince William next week. In Sao Paulo, business and banking officials are meeting to discuss climate financing. Meanwhile, world leaders will gather in Belem in preparation for the COP30 negotiations in November. "We have not changed anything; I am unaware of any business that has reconsidered their plans." Andrew Wilson, the deputy secretary-general of International Chamber of Commerce said that they knew it would be logistically difficult but nothing had changed over the past 24 hours. (Reporting from Simon Jessop at the United Nations and Michelle Nichols in London; editing by Rosalba o'Brien).
US Export-Import Bank to consider $200 million loan for REalloys, a rare earths company
The U.S. Export-Import Bank has sent a letter of intent to Rare Earths firm REalloys for a loan of up to $200,000,000 to fund processing and magnetic facilities. This would be Washington’s latest effort to boost American production of these specialized materials. If approved, the loan could increase U.S. accessibility to magnets that are used in electric cars, cell phones and fighter jets, among other products. These magnets are the focus of a global trade dispute as China is using them to leverage negotiations with the Trump Administration.
A letter from September 18 was seen by and shows that privately-held REalloys met the initial requirements for applying for the $200 million EXIM Loan. If approved, the loan would have a repayment period of 15 years, which is longer than what the company would likely have had with private financing.
EXIM, the U.S. export credit agency, has confirmed that the letter of intent was received on the same day REalloys revealed the potential loan.
In order to qualify for the loan, it was stated in the letter that the project must find customers in the United States to purchase its magnets. The Ohio company formed in 2023 plans to convert rare earths from mined ore and recycled electronics into metal in Saskatchewan. The company signed an agreement in the first week of this month for ore to be sourced from a Greenland mining project that Critical Metals Corp hopes to develop.
The metal will then be transported to Ohio where it will be transformed into an alloy, and then into magnets. REalloys will provide details of its costs for both facilities next month. The company aims to produce 10,000 tons of magnets per year by 2029. This is roughly the same amount as MP Materials, which receives price support from the U.S. Government.
REalloys did not receive any guarantees regarding price protection. (Reporting and editing by Matthew Lewis in Houston, Ernest Scheyder)
(source: Reuters)