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Morning Bid Europe- No tricks, but some treats for the markets
Ankur Banerjee gives us a look at what the future holds for European and global markets Investors are unsure about the direction of global monetary policy in the near future, but a trade truce reached between the top two economies in the world has calmed nerves. Meanwhile, a mixed bag mega-cap earnings have kept the market in check. As the week began, there were signs that tensions between China and the U.S. had cooled. The Federal Reserve also delivered an expected rate reduction, but Chairman Jerome Powell warned that this could be the last cut in 2025. This helped to firm up the dollar. It is currently on track for a gain of nearly 2% for the month. The yen was hovering at its lowest level since Feburary, just below 154 dollars, which prompted some verbal scolding from Tokyo officials. As expected, the Bank of Japan kept rates unchanged on Thursday. However, markets interpreted Governor Kazuo ueda's comments as dovish despite his hints that an interest rate increase is still on the table. The Nikkei has benefited from the fall in the yen. It is down almost 4% for October. This was a huge boost to the Nikkei. It has surpassed another record and is now on track for a 16% gain for the month. That would be its best monthly performance since Jan 1994. The "Takaichi" trade in all its glory. The South Korean stock market, Kospi, has been the best performing in the world so far this year. It is expected to rise 20% in October. This will be the largest increase since January 2001. Artificial intelligence has been the focus of much excitement in the stock markets this year. Investors are still trying to get a better picture of the earnings season, which has so far been a mixed one. Amazon shares surged after cloud revenue rose to its highest level in almost three years. This lifted Nasdaq Futures and set up a successful Halloween for tech stocks. As businesses continue to invest in AI software, the online retailer has benefited. Apple is also expected to boost the market after it announced that its holiday quarter forecasts exceeded Wall Street's expectations. The following are key developments that may influence the markets on Friday. Economic events: October inflation figures for the eurozone and France, September retail sales in Germany
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Gold falls as Fed rate caution increases dollar, but is set to rise for 3rd month.
Gold prices fell Friday as the dollar strengthened on fears of further Federal Reserve rate reductions, but bullion is still on course for its third consecutive monthly gain. As of 0459 GMT, spot gold was down 0.4%, at $4,005.54 an ounce. Bullion is up 3.9% this month. U.S. Gold Futures for December Delivery remained at $4,018.10 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months, making gold more expensive to other currency holders. The U.S. Central Bank cut interest rates on Wednesday by a quarter percentage point, for the second consecutive time in this year. This brings the benchmark overnight rate down to a range of target of 3.75%-4.00%. After comments from Chairman Powell, traders have reduced their bets on the Fed cutting rates at its next policy gathering in December. According to CME Group's FedWatch, the markets now price in a probability of 74.8% for a 25 basis-point reduction from the Fed by December compared to a chance of 91.1% a week earlier. Donald Trump, the U.S. president, said that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl trafficking. He also stated that the U.S. would resume its soybean purchases as well as continue exports of rare earths. Gold was discounted in India this week for the first seven-week period, and a drop in prices boosted activity in other Asian hubs. Silver spot was unchanged at $48.89 an ounce. Platinum was stable at $1,610.75, and palladium rose 1.5% to $1466.42. (Reporting and editing by Subhranshu sahu, Mrigank dhaniwala in Bengaluru)
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Two people killed by heavy rains in New York
Two people were killed in New York by heavy rains on Thursday. Mayor Eric Adams confirmed this. Storms that accompanied the heavy rains also disrupted flights, and weather officials warned of flooding in certain areas. The media has reported flooding and damages, while officials at JFK and LaGuardia airports in New York City have said that flight schedules had been disrupted. Adams, on X said that the storm had broken rainfall records for the 30th of October. He added that most of the rain predicted to fall in a few hours was actually deposited in a 10-minute period in the afternoon. The weather authorities reported that a record breaking 1,85 inches (4.7cm) of rain fell in Central Park. Meanwhile, 2,09 inches (5.31cm) fell at LaGuardia Airport while 1.99 inches (5.05cm) at Newark Liberty International Airport. The National Weather Service issued coastal flood warnings in parts of Brooklyn, Queens and the Bronx. (Reporting and editing by Clarence Fernandez in Bengaluru, Chandni Shah from Bengaluru)
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ASIA GOLD-India switches to discount after festivals, premiums elsewhere rise as prices ease
This week, gold was sold in India at a discount for the first seven weeks as demand dropped after major festivals. Premiums in other Asian hubs also increased following a drop in global rates which boosted activity. Indian dealers offer a discount The premium is now down to up to $12 an ounce, including 6% import duties and 3% sales taxes, compared to the previous week's up to $25. Ashok Jain is the owner of Mumbai's gold wholesaler Chenaji Narsinghji. He said that price volatility has caused a drop in demand. Some investors have taken advantage by selling coins at a profit. After reaching a record-high of 132 294 rupees in the first half of this month, domestic gold prices have fallen to around 121 500 rupees for 10 grams. Global spot gold prices are on course for their second consecutive weekly decline. During the eight-week period between Dhanteras (the festival of lights) and Diwali, buying gold was considered auspicious. It was also one of the busiest days for gold purchases in India. A Mumbai-based private bank dealer said that jewellers saw a dramatic drop in footfall after the festival rush. This led them to reduce the amount of stock they build for the wedding season, which begins in November. Bullion was traded in China, the world's largest consumer of gold at a premium up to $4 per ounce over global benchmark spot prices . Last week, bullion was sold at a range of discounts ranging from $20 to a premium $8 per ounce. In Singapore Gold in Hong Kong traded at par or a $3 premium. Hong Kong Gold Was sold at par with a premium of $1.60 Brian Lan, the managing director of GoldSilver Central in Singapore, said: "We have seen investors come to buy, particularly when prices fell this week." In Japan, gold The spot price was $1 higher than the sale price. Reporting by Brijesh Patel in Bengaluru, and Rajendra Jadhav from Mumbai; editing by Harikrishnan Nair
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L&T Joins Hitachi Energy to Support TenneT’s 2GW Offshore Wind Grid Scheme
India’s EPC contractor Larsen & Toubro (L&T) has been hired to deliver High Voltage Direct Current (HVDC) converters in support of the Dutch-German transmission system operator (TSO) TenneT’s 2GW offshore wind grid program in the North Sea.Collaborating with Hitachi Energy, a global technology leader in electrification, L&T has been nominated by TenneT to deliver HVDC converter stations, as part of the initiative that aims to accelerate the integration of large-scale renewable energy into the European power grid, particularly across the German and Dutch sectors of the North Sea.The collaboration brings together complementary strengths in advanced technology, engineering excellence, and end-to-end project execution.“Partnering with TenneT and Hitachi Energy for this pioneering program underscores the confidence our customers place in L&T’s growing capability to execute complex, technology-intensive infrastructure projects,” said S N Subrahmanyan, Chairman & Managing Director - L&T.To remind, TenneT recently terminated Petrofac’s cope for the 2 GW offshore wind grid project, that was supposed to be delivered in collaboration with Hitachi Energy.Petrofac’s scope included the engineering, procurement, construction, and installation (EPCI) of offshore platforms and elements of the onshore converter stations.Shortly after, Petrofac filed for administration.Petrofac Goes into Administration after TenneT’s OW Contract Termination
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FLOWRA, ClassNK to Collaborate on Floating Offshore Wind Technology Development
The Floating Offshore Wind Power Technology Research Association (FLOWRA) of Japan and Nippon Kaiji Kyokai (ClassNK) have signed a Memorandum of Understanding to explore technology development cooperation in the field of floating offshore wind. FLOWRA is a technical research association that works with overseas organizations to research and develop common basic technologies for floating offshore wind to reduce costs and risks.ClassNK is an independent, non-profit international classification society, ensuring maritime safety and environmental protection through comprehensive inspection and certification services across a global network.
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Dollar to rise for third consecutive month as Fed caution on rate increases boosts gold
Gold prices fell Friday as the dollar strengthened on fears of further Federal Reserve rate reductions, but bullion is still on course for its third consecutive monthly gain. As of 0240 GMT, spot gold was down 0.5%, at $4,004 an ounce. Bullion is up 3.9% this month. U.S. Gold Futures for December Delivery remained unchanged at $4,016.70 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months compared to its rivals. This makes bullion expensive for holders of other currencies. The U.S. Central Bank cut interest rates on Wednesday by a quarter percentage point, for the second consecutive time in this year. This brings the benchmark overnight rate down to a range of target of 3.75%-4.00%. After comments from Fed Chairman Jerome Powell, traders reduced their bets on the Fed cutting rates again in December at its next policy gathering. According to CME Group's FedWatch, the markets now price in a probability of 74.8% for a 25 basis-point reduction from the Fed by December. This compares with a chance of 91.1% a week earlier. Donald Trump, the U.S. president, said that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl trafficking. He also stated that the U.S. would resume its soybean purchases as well as continue exporting rare earths. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.42% on Thursday to 1,040.35 tonnes from 1,036.05 on Wednesday. Spot silver remained at $48.94 an ounce. Platinum rose 0.2% to 1,614.53, and palladium increased 1.7% to $1469.63. (Reporting and editing by Subhranshu sahu, Mrigank dhaniwala in Bengaluru)
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Sources say that Indian Oil purchases Russian crude oil from entities not sanctioned by the United Nations.
Indian Oil Corp, the top refiner in India, has purchased five cargoes from non-sanctioned companies for delivery in December. Traders said that India had resumed purchases despite Washington's pressure to stop purchasing Russian oil. Washington imposed sanctions last week on Rosneft, and Lukoil - the two largest Russian oil companies - in an effort to increase pressure on President Vladimir Putin for the end of the war in Ukraine. Since then, Indian refiners, including the state-run Mangalore Refinery & Petrochemicals Ltd., HPCL Mittal Energy Ltd. and Reliance Industries (the operator of the largest refining facility in the world) have stopped buying Russian oil. Anuj Jain is the head of finance at IOC. He has stated that his company will buy Russian oil as long as it is in compliance with the sanctions. The European Union (EU), the United Kingdom (UK) and the U.S. imposed sanctions on Russia, including those that affect shipping, for its involvement in the Ukraine conflict. The sanctions forced Russia to offer its oil at steep discounts. India is now the largest buyer of Russian crude oil by sea. One of the sources in the trade said that IOC had purchased about 3.5 millions barrels of ESPO for delivery to an eastern Indian port by December at a price similar to Dubai's. One of the sources said that they did not know who the sellers were. IOC didn't immediately respond to an outside-of-working hours request for comment. The majority of Russian ESPO crude oil exports from Kozmino, a port on the Pacific coast, are usually shipped to China. The demand for ESPO crude from China has decreased after U.S. sanctioned state refiners stopped purchasing, and independent Chinese refineries have used up their import quotas. The price of ESPO has dropped, which makes it more attractive to Indian buyers.
Australian shares snap a three-day losing streak as Banks and miners drive the Australian share price upward
Australian shares rose Friday, ending three consecutive sessions of losses. Banks and miners saw gains, while Origin Energy shares fell to a new two-month-low after the company reported a sequential decline in its first quarter revenue.
By 0004 GMT, the S&P/ASX 200 Index had risen 0.5% to 8,930.80. The benchmark closed Thursday 0.5% lower.
Origin, a power producer, was one of the biggest losers in the benchmark index after it reported a 12% decline in revenue from its stakes in the Australia Pacific LNG Project. This was due to lower LNG prices and volumes.
The firm's shares fell 6.3% to A$11.81 in their lowest trading session since April 7.
Separately shares of insurance broker Steadfast Group were the biggest losers on the benchmark index, dropping up to 18.9% to A$5.03, their lowest level since November 16, 2022.
After the company's bell rang on Thursday, Robert Kelly, its CEO and managing director, announced that he would temporarily step down from his position while an investigation was conducted by an outside party into a complaint lodged against him.
On the local stock exchange, the banks rose 0.8% while the "Big Four", which includes the four largest banks, rose between 0.1% to 1.3%.
Gold miners rose on the backs of higher gold prices, which boosted their gains by 1.2%.
The shares of gold miners Evolution Mining (up 3.5%) and Northern Star Resources (up 3.8%) rose respectively.
JB Hi Fi continued to fall for the second consecutive session. The firm had posted on Wednesday a dramatic sequential decline in sales growth for its Australia and New Zealand segment in the first quarter.
Shares of Mayne Pharma, a potential acquirer, fell to their lowest intraday performance ever after it was revealed that Australia's Treasurer would block the A$672 ($436.67$) takeover.
The benchmark S&P/NZX50 index in New Zealand rose 0.4% to 13,509.0.
(source: Reuters)