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Copper falls on China's weak data and US caution
After a four-session run of gains, copper prices fell on Friday as investors awaited delayed U.S. economic data in order to gauge the health and performance of the largest economy. By 0250 GMT, the most traded copper contract at Shanghai Futures Exchange had dropped by 0.30%, to 87.070 yuan (12,223.78) per metric ton. The benchmark copper for three months on the London Metal Exchange fell 0.45% to $10.906.5 per ton. Data from the National Bureau of Statistics revealed that China's industrial production grew by 4.9% on an annual basis in October, and retail sales grew 2.9%. Both were the lowest in over a year. New home prices dropped 0.5% monthly, the most since October 2024. According to data released by the People's Bank of China, new loans from Chinese banks dropped sharply from the previous month in October. This number was also below expectations, which indicates weak private demand in the face of a downturn in the property market. After the federal government reopened, the markets became cautious as they awaited the release of U.S. Economic data. The chances of an interest rate cut by the U.S. Federal Reserve in December have also diminished after a growing group of Fed policymakers expressed a reluctance to ease further. Aluminium, zinc, lead, and nickel all fell in price. Tin also lost 1.46 percent. Friday, November 14 DATA/EVENTS (GMT) 0430 Japan Tertiary Ind Act NSA Sep 0745 France CPI (EU Norm) Final MM, YY Oct 0745 France CPI MM, YY NSA Oct 1000 EU Total Trade Balance SA Sep 1000 EU GDP Flash Estimate QQ, yy Q3 1100 EU Reserve Assets Total Oct ($1 = 7.1230 Chinese yuan). Friday, November 14, DATA/EVENTS(GMT) 0430 Japan Secondary Ind Act NSA Sept 0745 France Final CPI (EU Norm), MM, YY NSA October 0745 France MM, YY NSA NSA Oct 1000 EU Trade Balance SA Sep 1,000 EU GDP Flash Estimate QQ and YY Q3 (1100 EU Reserve Assets Oct ($1 = 7.1230 Chinese yuan). (Reporting and editing by Dylan Duan, Lewis Jackson, Subhranshu
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China's October crude steel production falls on lower margins and weather-related restrictions
China's crude output of steel in October was down 2% compared to the previous month, and 12.1% compared to the year prior. This is due in part, weather restrictions in northern regions, declining margins, and falling exports. Data from the National Bureau of Statistics revealed on Friday that the world's largest producer of this product produced 72 million metric tonnes of crude steel in December, the lowest level recorded since December 2023. This was down from the 73.49 millions tons produced in September. Calculations based on data show that the average daily production in October was 2,32 million tons. This is down from 2,45 million tons in Septembre. In response to forecasts of worsening air pollution, several cities in northern China, including Tangshan (the key steelmaking hub), implemented production controls late October. Analysts also reported that the higher prices of raw materials pushed some mills to reduce their output in October. Iron ore rose 2% in October, while coking coal increased 13%. Steel reinforcing bars only grew 1%. Mysteel data showed that around 45% of steelmakers had made a profit at the end of October, compared to 56.7% late in September. Steel exports fell 6.6% in October from their peak of September, a result of dwindling demand. The total output for the year to date was 817.87 millions tons, a decline of 3.9%. China's output of steel will fall below 1 billion tonnes this year, for the first in six years. The state-backed steel industry association announced late last month that the country is on track to achieve the government's commitment to reduce production. Beijing announced a proposal in late October for a more strict steel capacity swap plan in order to reduce current capacity. This move is expected to rebalance the supply and demand of the sector, which is struggling with overcapacity.
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Oil prices rise by more than 2% following the Ukrainian attack on a Russian oil depot
The oil prices increased by more than 2% after an attack by a Ukrainian drone on a depot of crude oil in the Russian Black Sea Port of Novorossiysk. Brent crude futures increased $1.34 or 2.13% to $64.35 a bar by 0227 GMT. U.S. West Texas Intermediate Crude rose $1.40 or 2.39% to $60.09 a bar. According to a Telegram post by the operational headquarters for Krasnodar Region, drone fragments struck three apartments, an oil depot and coastal structures in a complex of trans-shipment. The benchmarks remained unchanged on Thursday, as fears of looming Russian sanctions countered worries about the global oversupply which had driven the contracts lower by more than $2 per barrel the previous session. As part of their efforts to get the Kremlin into peace talks on Ukraine, the U.S. has imposed sanctions against Russian oil companies Lukoil & Rosneft. The sanctions prevent transactions with Russian companies after November 21, JPMorgan reported on Thursday that the U.S. sanctions imposed against Rosneft, Lukoil and other Russian oil companies have slowed down tanker unloading. This has led to an increase of around 1.4 million barrels of oil per day, which is almost a quarter of Russia's potential seaborne exports. After the November 21 deadline for receiving oil from sanctioned companies the bank said that unloading cargoes may become more difficult. Brent and WTI Futures dropped more than $2 per barrel on Wednesday, after the Organization of the Petroleum Exporting Countries (OPEC) said that global oil supplies will slightly exceed demand by 2026. This is a change from the earlier projection of a deficit. Haitong Securities reported that after Wednesday's crash, the markets stabilized to reassess crude oil outlook. The U.S. Energy Information Administration reported on Thursday that crude oil stocks in the United States rose more than expected last week. However, gasoline and distillate stockpiles fell less than anticipated. The EIA reported that crude inventories increased by 6.4 millions barrels, to 427.6million barrels during the week ending November 7. This was compared to expectations from a poll of a rise of 1.96million barrels. (Reporting and editing by Tom Hogue; Sam Li, Lewis Jackson)
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Iron ore prices rise as investors digest mixed China statistics
The price of iron ore futures fluctuated in a narrow range on Friday as investors digested mixed messages from surprisingly strong demand data, and weaker data for bank loans in China, the top consumer. As of 15:00 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange(DCE) had risen by 0.58% to 775 yuan ($108.80) per metric tonne. As of 145 GMT, the benchmark December iron ore price on Singapore Exchange was down 0.48% at $102.3 per ton. The average daily hot metal production, which is a measure of ore consumption, increased by 1.1% compared to the previous week, reaching a new three-week record of 2.37 million tonnes in the week ending November 13. The number of new loans from Chinese banks dropped sharply by October compared to the previous month, and fell short of market expectations amid warnings about economic uncertainty and trade tensions with Washington. Analysts said that both benchmarks rose 1% on a weekly basis. This was aided by the hopes of a possible new stimulus announced by Beijing at the Politburo Meeting in late December in order to support the Chinese Economy. Analysts at Jinrui Futures stated in a report that further price gains were expected to be restricted due to the growing supply and seasonal slowdown of demand. Coking coal, another steelmaking ingredient, fell by 0.21%. While coke increased by 0.27%. The benchmarks for steel on the Shanghai Futures Exchange are mixed. Hot-rolled coils were flat, wire rods lost 1.24%, and stainless steel fell 0.4%.
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ROI-US, Japan share unorthodox anti-inflation tool - fiscal stimulus: McGeever
Both the United States and Japan use a novel tool to combat inflation: fiscal stimuli. Both U.S. president Donald Trump and Japan’s prime minister Sanae Takaichi want to calm down angry voters who are being squeezed by rising costs of living. Offering lavish fiscal giveaways in order to control inflation is like trying to put out a raging fire by dousing it with petrol. Trump's Republican Party lost key gubernatorial elections and mayoral elections earlier this month. Concerns about high costs of living were a big factor. The White House seems to have heard loud and clear the electorate. The president is now determined to send a $2,000 cheque to the majority of U.S. homes, funded by money raised from increased duties on U.S. imported goods. Treasury Secretary Scott Bessent stated on Wednesday that the issue is being discussed. What? The hundreds of billions in tariff revenue was supposed to be used to reduce the budget deficit, right? Trump's 'One Big Beautiful Bill Act,' which he pushed through earlier this year, made it clear that the former was no longer a priority. According to the nonpartisan Congressional Budget Office, the package contains a slew of tax cuts which are expected to add $2.4 billion to the federal deficit over the next decade. Trump's administration is focused on growth. This means that it will keep the economy humming, even at the cost of inflation above target. White House officials may not have said it publicly, but they seem to believe that inflation nearer 3% than the Fed target of 2% is worth it in order to maintain nominal growth. FISCAL HOUSE DISEORDDER Looks like Japan's new Prime Minister is adopting a similar strategy. The rising cost of living in Japan was a major factor in the historic defeat suffered by the Liberal Democratic Party in the summer elections that led Takaichi to surprise sweep to the top last month. Takaichi and Trump advocate a fiscal easing, rather than tightening policy to combat inflation. Her newly formed government is preparing a stimulus package for the economy that will probably exceed last year's package of $92 billion. One of the three main goals of this package is to reduce the impact of rising costs. She has also appointed members of key government economic panels who advocate an expansionary fiscal strategy. This week, she indicated that her willingness to slacken long-term commitments in getting the country's financial house in order. Takaichi, as well as Trump, have both made it known to their central banks that they want to maintain a stimulative monetary policy - something with which many rate-setters may disagree. Both leaders seem to be determined to counter the effects of inflation by taking actions that may very well worsen inflation. Inflation Doom Loop Fiscal stimulus is a powerful tool that can help lower-income people spend their money. The Global Financial Crisis of 2007-09 and the Pandemic of 2020 both showed that fiscal generosity is necessary during times when the economy is trapped in a liquidity trap, the demand for goods and services has collapsed and deflation must be defeated. The U.S. and Japan are not facing an economic disaster. In aggregate, both countries are experiencing a soft but steady growth, with unemployment at a historically low level and inflation a full percentage-point or more above the target. Also, it is unclear by how much the fiscal spree will boost growth. The 'fiscal multiplyer' is not a measure that is universally accepted. It is a measure of how much additional government spending and tax cuts increase economic growth. The San Francisco Fed's 2020 paper stated that economists agree it is higher during recessions. It is also higher when debt-to GDP ratios are low and monetary policy less "activist". It is a completely different environment than the one that exists in both countries. Washington and Tokyo may find it politically appealing at the moment to indulge in populist fiscal splurges, but this unorthodox approach could make the fight against inflation harder. The opinions expressed in this article are those of the columnist, who is also the author. Open Interest (ROI) is your indispensable source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
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Australia shares sink in a sea of red, as banks and miners lead the broad sell-off
Australian shares dropped nearly 1.5% Friday, sinking in a sea red and reaching their lowest level since July, as miners, financials, and fading expectations for a domestic interest rate cut this summer weighed on benchmark. S&P/ASX 200 Index fell 1.5% at 2348 GMT to 8,623.30. The benchmark index fell 0.5% Thursday. The index fell by 1.7% this week, on course for a third consecutive weekly decline. This was due to the weakness of major banks after the earnings announcements from Commonwealth Bank and the Thursday jobs data. The Labor Report reinforced expectations that Reserve Bank of Australia would hold rates for longer and dampened hopes of a rate cut this year. The higher-than-expected readings of inflation earlier this month cast doubt on any near-term policy easing. This prompted economists to delay their forecasts. Miners on the stock exchange lost 2.7% due to the lower copper price. BHP Group, Rio Tinto and other mining giants fell by 2% each. The sub-index gained 5.5% for the week as the copper price rose throughout the majority of the period. Mineral Resources, a major player in the lithium sector, also saw a rise. The "Big Four" banks led the losses, with financials falling as much as 1,9%. This sector is on track to have its worst week ever. Gold stocks dropped 4% due to lower bullion price. The sector is on track to have its best week ever since August. Technology stocks continued to decline and fell 4%. They reached their lowest level since the 29th of April. This sector has also lost 5% in the last week, marking its fourth consecutive session. The sub-index of energy stocks fell 1% due to lower global oil prices. Woodside Energy, a smaller competitor of Santos, traded mostly flat. As of 2348 GMT, the benchmark S&P/NZX 50 Index for New Zealand fell 0.5% to 13,540.70.
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Law firm drops London lawsuit against Brazil Mining Group over dam disaster
Ibram, a Brazilian mining lobby group, said on Thursday that the law firm Pogust Goodhead would have to refund 811,000 pounds (about $1 million) after it dropped a London lawsuit filed against Ibram over a dam disaster in 2015. This amount is due to Ibram for the costs incurred as part of a lawsuit filed by 25 Brazilian municipalities represented by PG regarding the collapse of a Samarco dam, a joint-venture between Vale, BHP and Vale, that killed 19 people and contaminated a major river. A London court will announce its decision regarding BHP's responsibility in this case on Friday. The lawsuit was brought by individuals and cities who were affected by the collapse but did not wish to sign the compensation agreement of 170 billion reals ($31.5 billion), which the companies reached with Brazilian authorities in the past year. The law firm didn't respond to a comment request immediately. Ibram, the Brazilian Supreme Court, has ruled that the cities have violated the Brazilian constitution by suing abroad for compensation in the case of the dam failure. A Supreme Court Justice ruled in August that laws and foreign legal decisions must be approved by the country's judiciary system before they can take effect. "It's essential that Brazil protects the sovereignty it has over its mineral resources." Ibram has always tried to ensure that public policy and judicial decisions respect the right," Ibram president Raul Jungmann stated in a press release. (1 pound = 0.7451 pounds; 1 reais = 5.4039 pounds) (Reporting and writing by Marta Nogueira, Editing by Leslie Adler & Stephen Coates).
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Morgan Stanley is questioned by US House committee over Zijin gold IPO in Hong Kong
Morgan Stanley and its U.S. shareholders were at risk of financial, regulatory and reputational damage as a result of the underwriting of Zijin Gold International’s Hong Kong IPO, a U.S. House of Representatives Committee warned Morgan Stanley on Thursday. Zijin Gold, a subsidiary company of Zijin Mining Group is listed on the U.S. Government list of companies that are prohibited from importing their products due to alleged abuses of human rights by Uyghurs. The House Select Committee on China stated that Morgan Stanley helped with Zijin Gold’s IPO in September to help raise funds for its parent company by selling non-Chinese assets of gold mining and listing them at the Hong Kong Stock Exchange. The committee questioned whether Morgan Stanley's involvement helped Zijin Mining avoid the U.S. ban. Morgan Stanley declined comment. Zijin Gold & Zijin Mining didn't immediately respond to comments. In a letter sent to Morgan Stanley CEO Ted Pick, Representative John Moolenaar (chair of the committee) wrote: "When U.S. Financial Institutions engage with Chinese companies linked to Uyghur Forced Labor, they undermine U.S. Government's goal to deter forced labor worldwide." Zijin Mining has been added to the Uyghur Forced Labor Prevention Act Entity List in January. This list restricts imports that are linked to what the U.S. calls a genocide against minorities taking place in western Xinjiang, China. U.S. officials claim that Chinese authorities have set up labor camps in Xinjiang for Uyghurs, as well as other Muslim minorities. Beijing denies all abuses. In his letter, Moolenaar requests documents and communications related to Morgan Stanley's involvement with the public offering, including its links to the Chinese Government, Chinese Communist Party and military as well as human rights violations. He requested the information before November 27. This letter is a new action taken by the committee to address the involvement of U.S. Financial Institutions in the underwriting of IPOs for Chinese companies that have ties with the Chinese military, or illegal labor practices. The committee issued subpoenas to JPMorgan in July for documents pertaining to their role as underwriters of the Hong Kong IPO of China’s CATL, which is the largest manufacturer of electric vehicles batteries in the world. The U.S. Department of Defense has designated CATL as a Chinese military firm. Reporting by Karen Freifeld and Kanishka in Washington, editing by Jamie Freed.
Gold poised to gain weekly gains on weaker dollar
Gold prices rose on Friday, and were set for a rise of at least a week, thanks to a weaker US dollar. However, gains were held back by the hawkish remarks from officials of the U.S. Federal Reserve, who squelched hopes that interest rates would be cut in December.
As of 0200 GMT, spot gold was up 0.4%, at $4,188.93 an ounce. Bullion has risen 4.8% this week.
U.S. Gold Futures for December Delivery remained unchanged at $4,191.90 an ounce.
Gold became more appealing to other currency holders as the dollar index fell for a second consecutive week.
GoldSilver Central MD Brian Lan stated that "this week, gold did well. It's mostly because there was a slight weakening in the dollar as well as the speculative flow coming into the market expecting the Fed will lower interest rates."
The gold price fell slightly because the Fed was not expected to reduce rates as aggressively due to the slowdown in the economy and the inflation fears.
A growing number of Fed policymakers have expressed reluctance to ease further, citing concerns about inflation and signs that the labour market has remained relatively stable after two rate reductions this year.
The Fed cut rates 25 basis points last month. However, Chair Jerome Powell has signaled caution about another rate reduction this year. This is partly due to the lack of data.
According to CME Group’s FedWatch tool, traders are now pricing in a probability of 51% for a rate cut by a quarter point next month. This is down from 64% the previous session.
Gold that does not yield tends to perform well when interest rates are low and economic uncertainty is present.
After a 43-day record shutdown, which had caused investors to worry and disrupted economic data flow, the U.S. Government reopened.
Silver spot rose by 1.2%, to $52.95 an ounce, and is on course for its best weekly performance since September 2024. It was up 9.6%.
Palladium rose 1.2%, to $1443.55, while platinum gained 1%, to $1596.24. (Reporting and editing by Rashmi aich in Bengaluru, Subhranshu Sahu and Brijesh patel)
(source: Reuters)