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Stocks rise on US shutdown relief, but markets keep a yen eye
The world stock market rallied Wednesday, as the U.S. Congress appeared to be on track to end a government shutdown. This will help clear the data fog which has been fueling uncertainty about the U.S. economy outlook. As the yen fell to its lowest level in nine months against the dollar, officials made more comments. European stocks reached a record high early in trade. U.S. Stock Futures indicated a positive opening on Wall Street. Japan's blue chip Nikkei, and the broader Asia equity market rallied about 0.4%. The Republican-controlled House of Representatives is due to vote later on Wednesday on a compromise that would restore funding to government agencies and end a shutdown that started on October 1. The Republican-controlled Senate approved the deal on Monday night. Michael Metcalfe, State Street's director of macro strategy, said that there was a risk if the shutdown continued. This would have affected growth and made it difficult to interpret data. "So the fact that the shutdown is finally over means that there won't be a significant slowdown in the growth due to the shutdown." Investors are weighing up whether the U.S. Federal Reserve is going to cut rates again in the month of December. ADP's latest weekly data on jobs showed that private employers lost an average of 11250 jobs per week over the last four weeks, ending October 25. The markets have priced in an approximate 64% chance of a Fed rate cut in December. Metcalfe said that the data must be soft enough for the Fed to reduce interest rates, but not so soft as to cause concerns about a slowdown. Japan's Topix index rose by over 1%, reaching a record high. SoftBank Group, however, bucked this trend by slipping 3.5%. This brings its total loss for the month to date up to 19%. Even after the recent drop, shares of Japan's largest tech sector investor are up more than twice this year. Watches YEN The yen fell to a nine-month low on currency markets at around 154.79 dollars before recovering slightly. This was after Japanese Finance Minister Satsuki Catayama stated that she would not deny the fact that the negative effects of the weaker yen have become more prominent than the positive. The market has been spooked by an overall risk-on sentiment, as investors are optimistic about the imminent end of the U.S. government shutdown and expect more fiscal generosity from the new prime minister, Sanae Takaichi. Chris Turner, ING's global director of markets, said that direct investment in the United States was one factor believed to be maintaining the dollar's higher value against the yen. In a note, he stated that "these potential flows have brought the dollar/yen up to psychological resistance of 155 where Japanese verbal interventions are picking up." Turner stated that "few will want to buy dollar/yen below 155 because they fear that it may easily rise to 160 on thinning markets at year's end and that the physical intervention of selling dollar/yen before 160 is unlikely to happen." The dollar index (which measures currency strength in relation to other major currencies) was 0.1% higher last week at 99.574, while the euro was stable at $1.1582. The sterling was slightly weaker around $1.3124, while UK government bonds showed a slight decline as politics returned to the forefront. Wes Streeting, the British health minister, denied that he plotted to topple Keir starmer after allies of Prime Minister David Cameron told newspapers they were worried about a coup attempt later this month following the budget. The oil prices weakened but maintained most of the gains made in the previous session, amid expectations that the U.S. government shutdown will end soon and boost demand for the world's largest oil consumer. Brent crude futures fell 29 cents or 0.3% to $65 per barrel, after rising 1.7% on Monday. U.S. West Texas Intermediate Crude was down 0.4% to $60.77 per barrel. Gold is now down 0.1% at $4,131.
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Gold prices steady before US House vote on reopening government
Investors waited for a House of Representatives vote to reopen federal government. This could provide clarity about economic data, and possible Federal Reserve rate reductions. As of 8:37 GMT, spot gold remained unchanged at $4,131.80 an ounce. U.S. Gold Futures for December Delivery rose 0.5%, to $4.137.20 an ounce. "Everyone awaits more clarity about the government shutdown, and when data will be coming from the U.S.A. again," said UBS Analyst Giovanni Staunovo. Gold prices are still on an upward trend. Staunovo said that nothing structurally has changed. Gold prices are up more than 57% in the past year, with a high of $4.381.21 reached on October 20. This is due to geopolitical tensions and economic concerns as well as the Fed's easing monetary policy. On Monday, the U.S. Senate passed a bill to restore federal funding following a government shutdown that set a new record. House lawmakers returned Tuesday to Washington to vote on a measure that could officially resolve the standoff. ADP, a payroll processor, reported on Tuesday that U.S. firms were cutting over 11,000 jobs each week until late October. The market's expectations have changed. CME Group's FedWatch shows a 67% chance of a rate cut of 25 basis points at the Fed meeting next on December 10. This is up from 62% just a day before. After a period of consolidation, gold prices have broken through the $4,050 level. This confirms the continuation of bullish momentum. The next resistance range is $4.160-$4.170/oz. A breach of this range would push the prices to the record high of 4.380/oz," ANZ stated in a report. In a note published on Wednesday, JP Morgan said that it expected central banks and consumers would emerge as reliable purchasers during price drops and predicted gold prices will exceed $5,000 in the fourth quarter 2026. Palladium rose 0.3% to 1,440.75 and platinum gained 0.4%. (Reporting and editing by Alexander Smith in Bengaluru, Anmol Choubey)
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Germany will set aside 7,6 billion euros for TenneT Germany stake
According to a draft budget document from the Finance Ministry, Germany will allocate up to 7,6 billion euros (equal to $8.9 billion) over the next few years to acquire a stake in TenneT's German division. TenneT Germany, with more than 14,000 km (8,700 mi) of powerlines, is the largest operator in Germany of high-voltage grids. Upgrades to these grids have been crucial for strengthening grids when there are more renewable inputs. The document anticipates approximately 102 million euro in expenditures by 2026, and then makes commitments to the next years using the remaining 7,48 billion euros. Berlin aims to ensure grid expansion in Germany and supply security on a long-term basis, according to the document. The initial budget is frozen and the funds can only be released after the approval of budget committee. After a failed attempt to sell the unit last year to Berlin, the Dutch government announced in September that it will be selling 46% to an investor group. Berlin was expected to be prompted by the September deal to pursue a stake through the state-owned lender KfW. The economy ministry confirmed that it is still considering a minor stake. The Handelsblatt newspaper reported for the first time on Wednesday that the TenneT unit was included in the ministry budget documents.
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Iron ore gains as China's stimulus hopes dominate
Iron ore futures rose on Wednesday as the hopes for a fresh stimulus from China, a major consumer, outweighed worries about gloomy prospects due to a growing supply and decreasing demand. The January contract for iron ore on China's Dalian Commodity Exchange closed the daytime trading 1.38% higher, at 774 Yuan ($108.66), its highest level since November 7. As of 0738 GMT the benchmark December iron ore traded on the Singapore Exchange was up 1.31% at $102,85 per ton, the highest price since November 7. China's central banks Tuesday announcement that it will maintain an "appropriately" loose monetary policy and keep liquidity abundant while improving policy transmission as the economy faces challenges, revived hopes of additional stimulus. The positive policy message came after the second largest economy in the world suffered its worst export slump since February, as tariffs hit U.S. consumer demand. An analyst in Shanghai, who spoke on condition of anonymity because she was not authorized to speak to the media, stated that a wave of restocking by steelmakers, with stocks hovering at a low level, helped to support prices. Analysts' predictions of a price increase for the key ingredient in steelmaking were defied as production began at the Simandou Project in Guinea. This consolidated prospects of rising supplies amid waning China demand and weighed on price outlook. Analysts at Galaxy Futures say that the fundamentals of iron ore have shifted to the negative side due to a rapid increase in imports and inventories, as well as dwindling China's demand. Coking coal and coke, which are used in the production of steel, have fallen by 1.85% and 1.89% respectively. The benchmark steel prices on the Shanghai Futures Exchange are mixed. Rebar was up 0.13%. Hot-rolled coils were up 0.22%. Wire rod was unchanged. Stainless steel fell 0.76%.
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Iceland's view of the Atlantic Ocean current collapse as a security and existential risk
Iceland's climate minister said that the government has classified the collapse of an Atlantic Ocean current as a threat to national security and an existential concern, which allows it to plan for worst-case scenarios. Warm water is brought from the tropics to the Arctic by the Atlantic Meridional Overturning Circulation (AMOC). This warm water flow helps keep Europe's cold winters mild. Scientists warn that the flow of the Atlantic Meridional Overturning Circulation (AMOC) could be disrupted by the cold water from Greenland melting the Arctic ice. The collapse of AMOC would trigger a new ice age in which winter temperatures in Northern Europe would plummet to extreme cold, resulting in more snow and ice. AMOC collapsed before - most notably, just before the last Ice Age ended 12,000 years ago. Iceland Climate Minister Johann Pall Johannsson stated by email that the AMOC is a threat to national security and resilience. This is the first instance that a climate-related phenomena has been brought before the National Security Council in a formal capacity as an existential threat. Johannsson stated that Iceland's Ministries will be alert and coordinate a response as the issue is elevated. The government is currently evaluating what additional research and policies it needs, while working on a policy for disaster preparedness. The risks being assessed cover a wide range of topics, including energy security and food safety as well as infrastructure and international transport. A collapse of the Atlantic current could have far-reaching consequences that extend beyond Northern Europe. Scientists say it could destabilize rainfall patterns that subsistence farmers in Africa, India, and South America have relied on for decades. Climate change could contribute to a faster warming of Antarctica. The sea ice that surrounds the southernmost continent, as well as the ice sheets on top are already threatened by climate change. Scientists warn that the global temperature is continuing to rise and that a collapse of the AMOC could be inevitable in the next two decades. The Nordic Council of Ministers sponsored a workshop called "Nordic Tipping Week", in which 60 experts assessed how society could be affected. Organizers said they are currently finalizing the recommendations that came out of the meeting. Aleksi Nummelin is a physical oceanographer with the Finnish Meteorological Institute. Scientists from over 30 universities and organizations raised the alarm on Monday about the rapid thawing Earth's glaciers and ice sheets. Climate ministries and meteorological services in Northern Europe have said they will fund more research, while also evaluating possible risks as part of their climate adaptation plans. Ireland's Weather Service said that its scientists briefed Ireland's Prime Minister last year, and a Parliamentary Committee last month. Norway's Environment Ministry said that it is "seeking new research to further our understanding" of AMOC before deciding whether or not to classify AMOC a security threat. Britain has said that it is following scientific reports which suggest an abrupt collapse in this century will be unlikely. It has also invested more than 81 millions pounds in research to determine when Earth's climate system might reach a point where there is no turning back. The tipping point could be very close, said Stefan Rahmstorf, oceanographer and climate scientist at Germany's Potsdam Institute for Climate Impact Research. Iceland is taking no chances as the rate of global warming continues to accelerate and greenhouse gas emissions continue their rise. Johannsson stated that extreme weather conditions could have a serious impact on our ability to maintain agriculture and fisheries which are vital to our economy and our food systems. We cannot wait until long-term, definitive research is completed before taking action." Reporting by Ali Withers in Copenhagen and Stine Jacobsen; editing by Katigle Daigle and David Gregorio
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Sources say that the volume of Saudi Arabian term oil imported by Chinese refiners will drop in December
Several sources familiar with the situation said that Saudi Arabia will export to China at least 36,000,000 barrels of crude, a slight decrease from the previous month. As some Chinese refineries prepare for maintenance, and independent refiners wait for Beijing's 2026 import quotas, the expected drop in oil supply for the second consecutive month from the top oil exporter to world's biggest importer comes at a time when many refineries in China are preparing for maintenance. Sources said that one of the Chinese buyers has reduced their December volume because they have already lifted the majority of their full-year contract supply. Data showed that December's volume was the lowest since April and a drop from 38 million barrels of oil in November. The shortage of import quotas available to independent Chinese refiners until 2025 has led to an increase in the price of refined petroleum products. Floating oil storage In Asia. India, on the other hand, will increase its crude imports in December from Middle Eastern producers Saudi Arabia and Iraq, as Indian refiners search for alternatives to Russian barrels.
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British utility SSE raises $2.7 billion in equity to fund investment plans
The British utility SSE announced a five-year investment program worth 33 billion pounds ($44.29billion) on Wednesday. This plan is partly funded by an equity raise of 2 billion pounds, and aims to upgrade UK's regulated electric networks as well as its renewables business. The British power company stated that about 80% of planned expenditures, or 27 billion pounds will be spent on upgrading the regulated electric networks. The remainder, however, will be invested in renewables and flexible assets. The plan is funded by a combination of cash flow generation, increased borrowing and equity placements. It also includes plans to sell assets worth about 2 billion pounds. SSE Chief Executive Martin Pibworth stated that the Transformation for Growth Investment Plan is based on an opportunity once in a generation to upgrade the UK's electricity network and create a cleaner, safer and more affordable energy supply. Power generator and network operator reported a 28% drop in adjusted first-half pretax profit for the six-month period ended September 30. This was due to lower output and unfavorable conditions. ($1 = 0.7451 pounds) (Reporting by Yamini Kalia, Ankita Bora and Yadarisa Shabong in Bengaluru; Editing by Sumana Nandy, Subhranshu Sahu and Rashmi Aich)
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Voestalpine does not expect a change in the tough environment as revenue for half-year dips
Voestalpine, an Austrian steel manufacturer, reported lower half-year revenues on Wednesday. The market had expected this and the company said that it did not expect any improvement in the economic climate in the months to come. The revenue fell from 8 billion to 7,59 billion euros (8,85 billion dollars) in the first six months of the financial year 2025/26. This was in line with the median forecast of LSEG's analysts. The company that makes specialty steels for the automotive industry said they did not expect economic conditions to improve over the next few months. They would continue with reorganizational measures, which could include capacity reductions. Voestalpine said that a decision will be taken by the end the year on the possibility of capacity adjustments to the Kindberg site. This is where steel tubes are made for industries like oil and gas and construction, as well as renewable energy. By September 30, the company had 4,1% fewer workers than at the same time last year. The auto industry has been affected by the weak demand, growing competition from China and the U.S. tariffs on imports. The Linz group reported that the demand for automotive components, which accounted for 30% of the company's revenue in the previous financial year, had been weak. However, the demand remained steady at a high level at the steel division. It added that the automotive component segment was still affected by the extremely low automotive production in Europe, and particularly in Germany.
Copper prices rise as US interest rate outlook and shutdown talks are in focus
Copper prices rose on Wednesday, as investors looked forward to progress in resolving the long-running U.S. shutdown.
The Shanghai Futures Exchange's most active copper contract closed the daytime trade up 0.16% to 86,840 Yuan ($12,191.49) per metric tonne.
As of 0705 GMT, the benchmark three-month price for copper showed minimal movement as well, with a 0.06% increase to $10,833.5 per ton.
ADP, a payroll processor, reported on Tuesday that companies in the United States lost more than 11,00 jobs during the week ending in late October. However, it had previously stated that the month of October saw a total gain of 42,000 new jobs.
Recent signs of a softening in labor conditions were bolstered by the ADP report. This alternative labor data is unavailable because of the U.S. Government shutdown.
Fed officials have cited the same trends to argue for another rate reduction in order to support growth.
The expectation of a rate cut weighed heavily on the U.S. Dollar, giving commodities that are traded in greenbacks some support. Dollar-priced commodities are more attractive to investors who use other currencies when the dollar is weaker.
Meanwhile, the longest U.S. government shutdown in history is nearing a possible end, as members of the Republican-controlled House of Representatives returned to Washington on Tuesday for a vote on a bill to fund federal agencies.
Market participants stated that a possible resolution would reduce the near-term uncertainties and restore the flow key economic data. However, the risk sentiment was still cautious.
Since Monday, copper has gained three days, but it was a slow increase due to a softening demand, particularly in China, the biggest consumer.
Citi analysts stated in a report that consumption from Chinese end users of copper was flat in September. However, ex-China consumption grew by 1% annually.
However, they expect copper to remain near $11,000 per ton, despite the weak demand in the near term. They also note that copper could rise to $12,000 sooner than their forecast for mid-2026, if new drivers are discovered.
Aluminium, lead, tin, zinc, and nickel all fell in the SHFE base metals.
Aluminium gained 0.66% on the LME, while lead rose by 0.48%. Tin grew by 0.23%, nickel fell 0.29% and zinc remained unchanged.
(source: Reuters)