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MORNING BID EUROPE - Day off for Dollar Debasement Trade
Gregor Stuart Hunter gives us a look at what the future holds for European and global markets. The greenback has been given a reprieve by monetary authorities of Asia's largest economies, who are concerned about the weakness of the U.S. dollar. It hit a low for five weeks this week. Silver has cooled off after hitting a record high price of $58.98 on Wednesday. The U.S. Dollar Index also ended a nine-day loss streak. The Chinese yuan has retreated from its highest levels in over a year against the dollar after the central banks set an official midpoint that was weaker than expected for the sixth straight session. This is a sign of caution about the rapid appreciation of the renminbi. The yields of 30-year Japanese government bond yields have also fallen from their record highs, after Japan's chief Cabinet Secretary said that the government closely monitors market movements. Bond yields on longer-dated bonds had reached new peaks in anticipation of a rate hike by the Bank of Japan expected later this month. BOJ Governor Kazuo ueda, who was slapping the BOJ for the jawboning, said that there is uncertainty about the direction of the central bank's interest rate hike due to the difficulty in estimating the neutral rate. The auction of 30-year JGBs attracted the most demand in over six years, as record yields attracted buyers. This added to the relief in Tokyo about investor appetite for government debt. The Indian rupee has also fallen to a new record low against the dollar, surpassing the 90-dollar mark. This will put pressure on the Reserve Bank of India to lower interest rates when they meet this Friday. Stocks have been tepid outside Japan where Nikkei 225 has surged 1.8%. Fanuc Corp. is leading the way with a 12.4% increase. Shares of the industrial robot manufacturer have soared since their announcement earlier this week about a partnership with Nvidia. Early European trades saw pan-regional futures up 0.6%. German DAX Futures rose by 0.5%. FTSE Futures gained 0.3%. The following are key developments that may influence the markets on Thursday. Economic Data Euro Zone: HCOB Construction Sales and PMI for October, November Germany: HCOB Construction Purchasing Managers' Index for November France: HCOB Construction Purchasing Managers' Index for November Italy: HCOB Construction Purchasing Managers' Index for November U.K.: S&P Global Construction Purchasing Managers' Index for November Debt auctions: France: Government debt for 9 years, 15 years and 30 Years U.K.: 14-year government debt
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Sumatra flooding leaves 800 dead, Indonesia vows action against any violations of mining permits
Indonesia will revoke mine permits if it is found that companies have violated the rules in flood-ravaged Sumatra, said the Energy Minister as questions about deforestation's role in the disaster intensified. According to data from the government, cyclone-induced flooding and landslides in West Sumatra have killed 800 people and left 564 others missing. The cyclones have also caused the deaths of almost 200 people across Malaysia and Thailand. They followed months with deadly weather conditions in Southeast Asia including deadly typhoons that hit Vietnam and the Philippines. Landslides in Indonesia have blocked roads and cut off power, making it difficult for rescuers to reach isolated villages. Hanif Faisol Nurofiq, the Environment Minister, said on Instagram Thursday that the disasters were caused by the changing climate, which intensified bad weather and environmental damage. He cited the shrinking forest coverage across the three provinces most affected. Green groups claimed that deforestation caused by mining and illegal logging was a major factor in the disasters. Landslides and mud pools were left where homes once stood. Social media users are outraged by images of logs washed up on Sumatra's shores after the floods. Energy Minister Bahlil lahadalia said to evacuated residents of West Sumatra that he will look into revoking mining licenses for companies who violate rules. On Wednesday, he told evacuated residents in West Sumatra that if he found violations in the mining permits of companies, he would consider revoking them. JATAM, an environmental group, said that legal permits for converting forests into extraction zones covered approximately 54,000 hectares (130,000 acres), with the majority being used for mining. PT Agincourt Resources operates the Martabe Gold Mine in the Batang Toru Ecosystem. In a recent statement, it stated that attempting to link the flooding with the mine operations would be "premature and inaccurate". David Gaveau is the founder of Nusantara Atlas, a deforestation monitoring organization. Between 2001 and 2024 Sumatra lost 11 million acres (4.4 million hectares) of forest. This area is larger than Switzerland. (Reporting from Stanley Widianto).
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Iron ore prices fall for the second day in a row as rising supplies dampen sentiment
The iron ore futures price fell for the second session in a row on Thursday as global supply increased. As of 0327 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange was trading 0.88% lower. It was priced at 792.5 Yuan ($112,10) per metric ton. The benchmark January Iron Ore at the Singapore Exchange dropped 0.19%, to $104 per ton. Analysts from ANZ said that the first commercial shipment of iron ore from the Simandou Mine in Guinea will be heading to China. This marks a change in global supply. India's imports of iron ore hit a record high in this year. They more than doubled to 10 million tons during the first ten months of 2025. Steel mills were able to take advantage of lower global steel prices by importing cargoes from overseas to compensate for shortages of ore of higher quality. Thyssenkrupp, Germany's biggest steelmaker, announced with the IG Metall that it would cut or outsource 40 percent of its workforce, and reduce production capacity. Shipments will be reduced to 8,7 million to 9,0 million tons from 11.5 millions at present. China will likely stick to its current economic growth target for next year of around 5%. This is part of Beijing’s efforts to launch a new 5-year plan to overcome the effects of an extended property slump, weak demand from consumers, excess factory capacity and declines of infrastructure-led investments. Coke and coking coal were both up, while coking coal was down. The benchmark steel prices on the Shanghai Futures Exchange are mostly down. The benchmarks for hot-rolled coil and stainless steel were both down, but wire rod was up 0.68% and rebar was unchanged.
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Shanghai copper reaches record high due to tight supply
Shanghai copper reached a record-high on Thursday. This was boosted by the sharp increase in London Metal Exchange cancellations, which signaled a tightening of supply outside of the United States. Also, bets increased that Federal Reserve rates would drop this month. As of 0240 GMT the most active copper contract at the Shanghai Futures Exchange had risen 2.45% to 91150 yuan (12,893.96) per kilogram, after reaching an all-time-high of 91400 yuan during the morning. The rally was triggered by the record-breaking high reached on Wednesday for LME three-month copper benchmark. London copper rose 0.08% to $11,497 per tonne on Thursday. LME data showed that on Wednesday, 50,725 tonnes of copper were cancelled in South Korea and Taiwan warehouses 0#MCUSTX, which brought the amount of copper on warrant in LME sheds down to its lowest level since July, at 105.275 tons. Analysts at Chinese broker Jinrui stated in a report that the sharp increase in LME warrants cancelled suggested that expectations for tightening of supply on markets outside of the United States were starting to materialise. Glencore cut back its copper production forecast for 2026 on Wednesday but still said that it expected to see a rise by 2035. Goldman Sachs has raised its average LME Copper Price Forecast for the First Half of 2026 from $10,415 to $10,710. The dollar fell on Thursday as a result of mediocre economic data that bolstered the argument for a Fed rate reduction next week. Tin prices have risen to their highest levels in over three and a half years. Shanghai tin rose 3.50% to 320,160 Yuan per ton after reaching its highest level since April 2022, when it was 323,700 Yuan. London tin fell 0.38% to $40,625 per ton after reaching $41,010 earlier. This was also the highest price since April 2022. Aluminium, zinc, and lead all rose in price. Nickel also increased by 0.22%. Aluminium was up by 0.26% in London. Zinc gained 0.10%, while lead and nickel both rose 0.15%. Thursday, December 4, DATA/EVENTS(GMT) 0930 S&P Global PMI: MSC Composite - Output Nov 1330 Initial US Jobless Clm 29, Nov, w/e (1 = 7.0692 Chinese Yuan) (Reporting and Editing by Subhranshu, Sahu, and Lewis Jackson)
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Asia markets mixed; sentiment tepid with Fed on the horizon
The dollar fell to a five-week-low on Thursday while Asian stocks had a dull start to their trading session. Weaker-than-expected data from the economy confirmed expectations that the Federal Reserve would cut interest rates during its meeting next Monday. The Nikkei rose by 0.8% while MSCI’s broadest Asia-Pacific share index outside Japan fell 0.1%. This was due to declines in Korea, New Zealand, and Australia. S&P 500 futures are little changed as the momentum of U.S. stocks overnight has waned in Asia. The Russell 2000 index rose 1.9% on Wednesday, while the benchmark S&P 500 also gained ground. Gains were made after the U.S. private employment data showed their largest drop in over two-and-a half years. A separate survey by the Institute for Supply Management revealed that its measure of employment in the services sector contracted in November. The subindex of prices received fell to a 7-month low. Henry Russell, an economist at ANZ, said on a podcast that this move is in line with his view that recent supercore inflation will subside and pave the way for a resumption in disinflation by 2026. "We still believe that the Fed should continue to reduce interest rates in response to the downside risks of the labour market," he added, adding that the bank anticipates a cut of 25 basis points at the meeting next week and more easing next. Fed funds futures indicate an 89% implied probability that the U.S. Central Bank will cut interest rates by 25 basis points at its next meeting, which is scheduled for December 12. This compares to an 83.4% implied probability a week earlier. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, fell last by 0.4% to 98.878, its lowest level in nine consecutive sessions. The yield on the 10-year Treasury bond in the United States was last stable at 4.0749% after the Financial Times reported that bond investors had expressed concern to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates to align himself with President Donald Trump. In Hong Kong, the Chinese yuan remained stable in offshore trading after reaching its highest level against the U.S. Dollar in over a year. The greenback fell to its lowest level against the renminbi in October 2024. The last time it traded was at 7.056 Yuan. The Australian dollar gained 0.1% following official data showing that Australian household expenditure surged the most in nearly two years in October. Meanwhile, the goods trade surplus of the country grew more than expected due to a rise in gold exports for the second consecutive month. The Japanese chip makers in the AI supply chains advanced after reports that Trump met with Nvidia CEO Jensen Huang to discuss export control, citing an informed source. Tokyo Electron rose 0.7%. The recent surge in precious metals continues. Silver was up 0.1% to $58.5415 an ounce. Gold was up 0.2% at $4,213.38. The metal had hit a new record high on Wednesday of $58.98. (Reporting and editing by Gregor Stuart Hunter.
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Chevron will spend up to $ 19 billion in the next year on US and Guyana oil production
Chevron announced on Wednesday that its capital expenditures for 2026 would be between $18 and $19 billion. The oil major is focusing on investments in Guyana and production in the U.S. The range falls at the lower end of the previous guidance, which put annual investments between $18 billion to $21 billion until 2030. Last month, the second-largest U.S. producer of oil outlined a strategy to reduce costs, increase efficiency and boost returns to investors by the end decade. In a recent statement, Chevron CEO Mike Wirth stated that the 2026 capital program would focus on opportunities with the highest return while maintaining discipline and increasing efficiency. This will allow us to increase cash flow and earnings. Around $17 billion is expected to be spent upstream. Of that, approximately $9 billion will go to the United States. Chevron has said that it will spend $6 billion in American shale, and expects to produce 2 million barrels equivalent of oil per day. The offshore production budget will be around $7 billion, which includes projects in the Eastern Mediterranean, Guyana and the U.S. Gulf of Mexico. Spending on downstream will be around $1 billion. This is a slight decrease from this year. Chevron completed its $55 billion purchase of Hess last July. The main asset was a 30% stake on the Stabroek Block, a prolific oil field in Guyana. The deal included new assets within the Bakken Shale Formation in the U.S.
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NASA study shows that satellite light pollution can interfere with space telescopes
The exponential growth in satellites in low-Earth orbits has led to improvements in telecommunications, including broadband in rural and remote regions around the world. The increase in satellites in low-Earth orbit has also led to an explosion in light pollution, which threatens the work of orbiting astronomical observatory. NASA's new study on four space telescopes, two of which are currently in operation and two more that are planned, estimates that many images taken by these observatories within the next decade will be affected by light emitted by or reflected from satellites orbiting low Earth. Researchers calculated that satellite light could contaminate about 40% of the images taken by NASA Hubble Space Telescope, and 96% of the images taken by SPHEREx Observatory of U.S. Space Agency. The researchers also calculated that images taken by the European Space Agency’s planned ARRAKIHS Observatory and China’s planned Xuntian Telescope could be similarly affected. Researchers said Hubble's narrow field of vision would make it less susceptible to damage. Orbiting telescopes play a crucial role in space exploration. Orbiting telescopes can see a wider spectrum of electromagnetic radiation than traditional ground-based instruments. They also get clearer images because they are not affected by atmospheric disturbances. The study, published in Nature, was led by NASA's Ames Research Center, California. Satellites can cross in front cameras as they stare into the universe, trying to reveal distant galaxies. They leave bright traces of lights that erase the faint signal we receive from space. This problem was well-known for ground-based observatories. "Space telescopes, which are much more expensive than ground-based telescopes and located in pristine locations in space, were believed to be free from light pollution until recently," Borlaff said. In 2019, approximately 2,000 satellites were in low-Earth-orbit. The number is now around 15,000 Borlaff stated that industry proposals foresee 560,000 satellites on low-Earth orbit within the next decade. Borlaff stated that "to give an idea how much this number has increased recently, in the last four-year period - from 2021 to -2025 - we have launched more low-Earth-orbit satellites than in all the previous seven decades in space flight together." Researchers used data from satellite operators, including SpaceX's Starlink and China's Guowang, to simulate orbital layers for each constellation of satellites. The researchers then looked at specific telescope properties such as orbital altitude, trajectory and field of view. Borlaff explained that once we had our simulated telescopes watching our simulated universe we could count how many times the satellites crossed our observatories - or "photobombed" them - and measure their brightness at the time of the event. Satellites emit and reflect multiple types of light. They reflect the light of the Earth and the Moon, which are very bright in low-Earth orbit. Satellites emit not only optical light but also infrared radiation, which is generated by the temperature of the satellite's components. They also reflect radio waves from Earth and their antennas," Borlaff explained. Researchers said that one solution to the problem is to place satellites in orbits lower than the ones where telescopes are located. Some telescopes located in more distant orbits will be better protected from light pollution. The study did not examine the effects of satellites on NASA’s James Webb Space Telescope or the European Space Agency’s Euclid Observatory, nor NASA’s Nancy Grace Roman Space Telescope. They are located much farther from Earth than telecommunication satellites. Borlaff stated that, "for the time being, it is unlikely they will be affected by contamination of this kind." However, these unaffected telescopes only provide a small fraction of the total number of astronomical observations. Borlaff stated that the robots are used only for specific scientific purposes and their operational time is very limited.
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Codelco and Glencore partner up on a Chilean smelter
The companies announced on Wednesday that Glencore, a Swiss miner and trader, and Chilean state-owned copper producer Codelco have signed a preliminary agreement to work together on a smelter in Chile. Codelco will provide the copper concentrate, and Glencore will build the smelter, which has a processing capacity of about 1.5 million tons per year, in Antofagasta in the northern part of Chile. Experts in the industry say that a project this large would require an investment of $1.5 billion - $2 billion. Glencore will carry out a feasibility study and the companies aim to finalize the agreement by the first half next year. The companies stated that if the project proceeds, construction would begin in 2030, and operations would begin between 2032-2033. Codelco said that Glencore was selected after a competitive bid process. As part of the agreement, it agreed to provide Glencore with up to 800,000. metric tons per year of concentrate for a minimum of ten years. Chile has only 6% of the global copper smelting capability. It sends most of its copper to China for processing, where it holds half of that capacity. Treatment charges, the fees that miners pay to convert concentrate into metallic metal, have dropped below zero due to China's highly-efficient smelters. This has forced some overseas smelters from business. Chile wants to expand its own smelting capability, which includes a $1.7 billion investment smelter modernization The state-owned mining company ENAMI is the leader. Codelco Chairman Maximo Pacheco stated that the Glencore smelter would be located in the Antofagasta area, where the majority of Chile's mined copper is found, to provide logistical advantages and meet high operational and environmental standards. He said that increasing Chile’s smelting capability was meant to benefit Codelco, as well as "strengthen Chile’s sovereignty and strategic safety." (Reporting and editing by Daina-Beth Solomon and Fabian Cambero, Brendan O'Boyle, Deepa Babington and Kylie Madry)
Gold falls as investors become cautious ahead of Fed Meeting, PCE data is in focus
Gold prices fell on Thursday, as investors took profits and awaited the Federal Reserve's meeting next week. They also waited for upcoming data to provide more clarity on interest rate policy.
As of 0446 GMT, spot gold was down by 0.2%, at $4,196.96 an ounce. U.S. Gold Futures for December Delivery were down 0.2%, at $4225.90 an ounce.
Soni Kumari is a commodity strategist with ANZ. She said: "The market has priced in a Fed cut of 25 basis points. What is needed now is a new trigger to push (gold) higher."
Kumari said that a decline to $4,000 could attract new buyers due to the strong fundamentals of precious metals.
The ADP Employment Report showed that the U.S. private sector payrolls fell by 32,000 during November, which is the largest drop in over two-and-a-half years. However, the low number of layoffs suggests the decline may not be a true reflection of the healthiness or the labor market.
According to CME's FedWatch, the markets now give an 89% chance that a rate reduction will occur next week. Major brokerages are also expecting easing during the December 9-10 meetings.
Gold is a non-yielding asset that tends to be favored by lower interest rates.
The Fed's preferred inflation indicator, the September Personal Consumption Expenditures Index (PCE), will be released this Friday.
Silver fell 0.4%, to $58.26, after reaching a record-high of $58.98.
Silver prices have risen by 101% this year, mainly due to the concerns over market liquidity following outflows from U.S. stocks. It has also been included on the U.S. Critical Minerals list.
Ajay Kedia of Mumbai-based Kedia Commodities said that since mid-November, Shanghai's silver inventories had fallen to a low level of 531 tons. This is the lowest level since 2015, as China's exports have increased significantly.
Palladium fell 1.3% to 1,441.75, while platinum dropped 0.9% to $1656.15. (Reporting and editing by Rashmi aich in Bengaluru, Sherin Elizabeth varghese from Bengaluru)
(source: Reuters)