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Stocks surge and US yields on longer terms dip as Fed rate-cut bets increase
Global stocks rose for a second day on Monday, as expectations of a rate cut by the U.S. Federal Reserve in December helped ease recent concerns over stretched valuations within the AI sector. Meanwhile, longer-dated U.S. Treasury Yields also declined. The stock market dropped last week, with the largest percentage weekly drop since early August. Market pessimism was fueled by concerns about the impact of an extended U.S. Government shutdown on the economy and the high valuations of AI-related firms. The equities market rallied by the end of last week, after New York Fed president John Williams stated that interest rates could fall in the short term. Other policymakers however insisted that borrowing costs should stay the same for the time being. Williams' comments have been echoed by Fed Governor Christopher Waller who stated that data available indicates that the U.S. employment market is still weak enough to warrant a further quarter-point reduction in interest rates. The dominant theme is uncertainty. "We're going remain in a choppy environment until December 10 when we receive the Fed's announcement and all the commentary around it," said Lilian Chovin. Lilian Chovin is the head of asset allocation for Coutts. According to CME's FedWatch Tool the markets are now pricing in a probability of 78.9% that a 25 basis point cut will be made at the December meeting. This is up from 42.4% one week ago. Wall Street's early trading saw gains for the U.S. stock market, led by the sector of communication services, as Alphabet, parent company of Google, jumped over 5%. The Dow Jones Industrial Average gained 147.39, or 0.32 %, to 46.394.72, while the S&P 500 rose 64.62, or 0.97% to 6,667.61, and the Nasdaq Composite grew by 393.85, or 1.73 %, to 22657.20. Investors were encouraged by the signs of progress towards a peace agreement between Ukraine and Russia. European stocks were also up on expectations for interest rates. MSCI's global stock index rose 7.89 points or 0.81% to 978.65, and is on course for its biggest percentage gain daily since November 10. The pan-European STOXX 600 Index, meanwhile was 0.42% higher after having gained as much as 0.7%. This week, the U.S. government will resume its release of data after the government shutdown ended. The British budget of finance minister Rachel Reeves is due Wednesday. After agreeing to change an earlier proposal, which Kyiv and Europe deemed too favorable to Moscow, the U.S.-Ukraine team continued to work on a plan that would end the war. This weighed down on oil prices as a deal would allow more Russian oil to be supplied through an easing in sanctions. The yields on longer-dated U.S. Treasury notes were lower than expected. The yield on the benchmark U.S. 10 year notes dropped 0.9 basis points to 4.054%. The dollar index, which measures a dollar's value against a basket, dropped 0.01%, to 100.23. In terms of currencies, the euro rose 0.09%, at $1.1521. The pound fell by 0.06%, to $1.3086. The markets were also looking for any signs of a possible Japanese intervention. The yen fell by 0.48% to 157.11 dollars per yen. This month, the Japanese yen is down by 1.9% against dollar. Takuji Aida, an advisor to Prime Minister Sanae Takaichi said on Sunday, that Japan could actively intervene in currency markets to mitigate the negative impact of a weakening yen.
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Gold prices rise on higher Fed rate cuts bets and a weaker dollar
Gold prices increased on Monday due to a growing expectation of a Federal Reserve rate cut in the next month, and a weaker US dollar. As of 10:53 am EST (1553 GMT), spot gold was up by 0.6% to $4,091.45 an ounce. U.S. Gold Futures for December Delivery rose by 0.3%, to $4.089.80 an ounce. Dollar-priced gold is now more affordable to holders of other currencies, as the dollar index has slipped lower. Bart Melek is the head of commodity strategy at TD Securities. Melek continued, "A combination (of lower expectations) and a stronger U.S. Dollar has helped gold in the current environment." John Williams, the New York Fed president, said that U.S. rates could drop "in the short term" without jeopardizing the Fed's goal of inflation and while protecting against a decline in the jobs market. The CME FedWatch tool revealed that 79% of bets on a rate reduction next month are in place. Gold is a non-yielding investment that tends to perform well in low interest rate environments and when there is geopolitical unrest. Investors will be watching for important economic data, which was delayed by the government shutdown. These include U.S. retail sale, unemployment claims, and producer prices, due this week. The U.S., Ukraine and other countries continued their talks Monday in order to come up with a plan that would end Russia's conflict in Ukraine. This was after the U.S. agreed to revise a previous proposal, which many considered too favorable to Moscow. In a recent note, Rhona O’Connell, an expert at StoneX, stated that "gold is likely to continue catching a bid, but we believe it will remain range-bound between $4,000 and $3,100." Silver spot rose 0.8% per ounce to $50.41. Platinum rose 2.1%, to $1.542.75, and palladium increased 1.3%, to $1.392.36. (Reporting and editing by Nick Zieminski, Matthew Lewis, and Pablo Sinha from Bengaluru)
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Author of memo criticizing BBC says it is not "institutionally biased"
The author of the report that plunged BBC into crisis claimed the broadcaster wasn't "institutionally bias" but had editorial flaws. He hoped his criticisms could help to fix these. Michael Prescott, former external editorial advisor, has compiled a dossier of issues at BBC News. This includes allegations of bias regarding its coverage of the Israel/Hamas conflict and trans issues. The leaked report led to the resignations by Director General Tim Davie, and Deborah Turness as head of news, as well as a threat from Trump to sue up to $5 billion. This plunged the public broadcaster in its worst crisis for decades. Prescott said to a group of lawmakers that he did not believe the BBC was institutionally biased. "Let's not be confused, the BBC produces a lot of world-class programming, both in terms of factual and non-factual content." He thought that the political reporting coming out of Westminster is exemplary. However, he wrote his memo as he felt there were "systemic" causes behind the problems found. He also said that he sent the memo to the Department of Media, and to Ofcom, the media regulator. He wanted to see the corporation improve its handling of any bias issues. He said: "I was often seeing that the BBC's way of handling something was to switch editors, or tweak the written guidelines. But there never seemed to be any willingness to look at what went wrong with some stories and whether there were deeper implications." Prescott, an ex-journalist who later became a corporate advisor, served as a member of the BBC's Editorial Guidelines and Standards Committee along with Davie and Turness. Robbie Gibb was a nonexecutive BBC Board member, a former BBC journalist, and the communications chief for Conservative Prime Minister Theresa May. Some commentators claim that Prescott and Gibb collaborated to launch an ideological attack against the broadcaster which they considered to be too liberal. Prescott denies the assertion. He said, "I am not Robbie Gibb's ideological soulmate." "I'm a centrist dad."
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Author of memo criticizing BBC says it is not "institutionally biased"
The author of the report that plunged BBC into crisis claimed the broadcaster wasn't "institutionally bias" and had hoped to improve things with his criticisms. Michael Prescott, former editorial advisor, has compiled a dossier of issues at BBC News. This includes allegations of bias regarding its coverage of the Israel/Hamas conflict and trans issues. Leaked reports led to the resignations by Tim Davie, Director General, and Deborah Turness as head of news, and Trump threatened to sue the broadcaster for up to five billion dollars. This was the biggest crisis the public broadcaster has faced in decades. Prescott said to a group of lawmakers that he did not believe the BBC was institutionally biased. "Let's not be confused, the BBC produces a lot of world-class programming, including factual and non-factual programs." He thought that the political reporting coming out of Westminster is exemplary. However, he wrote his memo as he felt there were "systemic" causes behind the problems found. He also said that he sent the memo to the Department of Media, and to Ofcom, the media regulator. He wanted to see the corporation improve its handling of any bias issues.
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US labels Venezuela's Cartel de los Soles as terrorist organization
The United States officially designated Cartel de los Soles as a terrorist group on Monday, adding additional sanctions related to terrorism against the group that includes Venezuelan president Nicolas Maduro and high-ranking officials. Venezuela's government has rejected what it calls a "ridiculous plan" by the United States to designate a "nonexistent" group. Secretary of State Marco Rubio announced this month that his country will announce its designation as a Foreign Terrorist Organization (FTO) due to its alleged role in the importation of illegal drugs to the U.S. Maduro is under increasing pressure because President Donald Trump has increased the U.S.'s military buildup in Caribbean, which raises concerns that the U.S. could use the designation to justify military action. Sanctions specialists, however, say that the statute governing the designation doesn't allow for such an action. MADURO SUGGESTS U.S. WANTS REGIME CHANGE Maduro, his government and the United States have denied all involvement in criminal activity and accused them of trying to change the regime because they wanted control of Venezuela's vast reserves of oil. "Venezuela categorically rejects the ridiculous new fabrication by the Secretary of the U.S. Department of State Marco Rubio that designates the nonexistent Cartel of the Suns a terrorist group," said Venezuelan Minister of Foreign Affairs Yvan Gil, on his Telegram page, using the English version of the group's title. Gil said that the measure revives an "infamous and vile lies to justify a illegitimate, illegal intervention against Venezuela under the classic U.S. format of regime change. This new maneuver will have the same outcome as previous and repeated aggressions against Venezuela: failure. The report on Saturday stated that the U.S. was poised to launch new operations related to Venezuela in the next few days. However, the timing and scope of these new operations were not specified, nor had Trump made a decision to act. The Treasury Department designated Cartel de los Soles in July, a reference made to the sun-insignia worn on Venezuelan generals' uniforms, as a “Specially Defined Global Terrorist,” which frozen any of its U.S. Assets and barred Americans from doing business with it. InSight Crime is a foundation which analyzes organized crime. In August, they said that it would be an "oversimplification," to say that Maduro leads the cartel. They stated that "it's more accurate described as a corruption system whereby military and political officials benefit by working with drug dealers." Rod Nickel is responsible for editing and reporting.
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Nigeria's NNPC reports a 64% increase in net profit at $3.6 billion
Nigeria's oil state company NNPC Ltd announced on Monday that it had recorded a net income of 5.4 trillion naira (about $3.6 billion) for 2024. This is up 64% compared to the previous year. Analysts were told by Group Chief Executive Bashir Ojulari that "the earnings demonstrate the positive momentum in our ongoing transformation, and the unwavering dedication of our workforce." Ojulari stated that NNPC aims at mobilizing $60 billion in energy investment by 2030. The company will also increase oil production to 2 million barrels of oil per day (bpd), and to 3 million bpd, by 2030. Gas production is expected to reach 12 billion cubic feet a day by the end the decade. Nigeria has been struggling to meet its OPEC+ quota due to theft, vandalism of pipelines and underinvestment in recent years. OPEC data show that Nigeria's output in 2024 was below the 1.8 million bpd goal, averaging about 1.5 million bpd. Analysts believe that achieving NNPC targets will require tackling the security challenges as well as attracting foreign capital. NNPC is profitable since 2020 when it posted its very first profit. However, lawmakers are scrutinizing the company's spending. In 2022, the company underwent a restructuring to become a commercial enterprise under the Petroleum Industry Act in order to prepare for the sale of shares to the general public. It is a major player in Africa's largest oil producer which aims to attract investors and reduce chronic production shortfalls. Reporting by Isaac Anyaogu Editing and Franklin Paul by Chijioke Ahuocha
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JPMorgan forecasts Brent crude to be $57 per barrel and WTI at $53 by 2027
JPMorgan predicted on Monday Brent crude to be $57 per barrel in 2027 and West Texas Intermediate at $53, while maintaining its estimates for 2026 at $58 and $54 each. Brent crude futures traded at around $62.54 per barrel by 1434 GMT. U.S. West Texas intermediate crude was trading for $58.08. JPMorgan predicts that global oil demand will grow by 0.9m barrels per day to 105.5m bpd in 2025. In a note, JPMorgan said that similar gains were expected in 2026 and then accelerated to 1.2m bpd by 2027. JPMorgan forecasts that global oil supply will outpace the demand. It is expected to grow at three times faster than demand in 2025 and in 2026, before slowing down to one-third this pace in 2027. JPMorgan said that about half of the gains in supply will come from non OPEC+ producers. This is due to strong offshore projects, and the continued growth in global shale production. OPEC+ (Organisation of the Petroleum Exporting Countries, plus Russia and allies) has been increasing production since April. OPEC+, or the Organization of Petroleum Exporting Countries plus Russia and other allies, has been increasing output since April. This is adding to fears about a glut and pushing prices down. As long as the demand growth is between 0.8 and 1.3 mbpd – enough to match non-OPEC+ production over the next two-year period – the market will remain relatively stable, assuming OPEC+ remains steady.
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Gold prices rise on higher Fed rate cuts bets and a weaker dollar
Gold prices increased on Monday due to a falling dollar and growing expectations that the Federal Reserve will cut interest rates next month. As of 09:12 am, spot gold was up by 0.4% to $4,081.52 an ounce. ET (1412 GMT). U.S. Gold Futures for December Delivery were unchanged at $4,079.30 an ounce. Dollar index fell, making dollar priced bullion more accessible to holders of other currencies. Bart Melek is the head of commodity strategy at TD Securities. Melek continued, "A combination (of lower expectations) and a stronger U.S. Dollar has helped gold in the current environment." John Williams, the New York Fed president, said on Friday that U.S. rates could drop "in the short term" without endangering the Fed's goal of inflation and while protecting against a job market slide. The CME FedWatch tool shows that bets on a rate reduction next month are at 76%. The CME FedWatch tool showed that gold, which is a non-yielding investment, does well when interest rates are low and when there is geopolitical unrest. Investors will be watching for important economic data that were delayed by the government shutdown. These include U.S. retail sale, unemployment claims, and producer prices figures, which are due this week. The U.S., Ukraine, and other countries continued their talks Monday in order to come up with a plan that would end the conflict with Russia. They had previously agreed to revise a U.S. proposal, which many considered to be too favorable to Moscow. In a recent note, Rhona O’Connell, an expert at StoneX said that "gold is likely to continue to be in demand, but it will remain range-bound between $4,000 and $3,100." Spot silver rose 0.5% to $50.24 an ounce. Platinum rose 1.1%, while palladium increased 0.8%, to $1385.85. (Reporting and editing by Nick Zieminski in Bengaluru)
Barrick and Mali Government agree to settle gold mine dispute
Barrick Mining announced on Monday that it had reached a settlement with the Mali government regarding all their disputes regarding the Loulo-Gounkoto Gold Mining Complex. Shares of the Toronto-listed firm rose by nearly 3%. The Friday report stated that Barrick had agreed in principle to settle the dispute with Mali. In a press release, the Canadian miner announced that it would drop its arbitration case against Mali before the World Bank dispute tribunal. Mali, in turn, will drop all charges and free four employees who are currently in jail and will return operational control to Barrick. Mali's miner ministry didn't respond to our request for comment. Barrick shares rose by as much as 2,6% in Toronto. Two years ago, the two sides were in a dispute over the new mining code of Mali. The code gives Mali an increased share of gold miner's revenue as gold prices reach record highs. Mali's government, led by the military, seized three metric tons (three metric tons) of gold earlier this year from Barrick's mining operation and appointed a temporary administrator to run it. Barrick wrote off $1 billion of revenue from the mine, and its former CEO Mark Bristow was also fired. Loulo-Gounkoto mine was one of Barrick's most profitable operations when it was in its control. It generated almost $900,000,000 in revenue by 2024.
(source: Reuters)