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MORNING BID AMERICAS - Tokyo takes off
By Mike Dolan February 9th - What's important in the U.S. and Global Markets Today By Mike Dolan Editor-at-Large of Finance and Markets Asian stocks rose on Monday following Prime Minister Takaichi’s election victory on Sunday. She is now poised to implement a number of fiscal measures. Wall Street futures remained steady following a strong chipmaker-led recovery on Friday. The focus now turns to the 'barrage' of U.S. Economic Data due out this week. Below, I'll go into more detail. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. TOKYO TAKES OF Asia shares rose on Monday, after the Japanese Prime Minister's Liberal Democratic Party won more than two thirds of the seats in the lower house of the parliament. Takaichi’s mandate for more spending and tax reductions helped the Nikkei to jump nearly 4%, reaching a new record high. On Monday, the yen was largely stable and so were Japanese government bonds. This could be because the markets have already priced in Takaichi’s extravagant fiscal agenda. Investors now await more information about how Takaichi will finance her lavish fiscal agenda. Expectations that the government would intervene directly in the foreign exchange market if the yen fell below the crucial 160-per-dollar level also helped to support the yen. Wall Street futures remained steady after the decisive Friday rebound that took the S&P and Nasdaq 2% higher. Nvidia AMD and Broadcom, all of which jumped by over 7%, were the main drivers behind the recovery. Software and data service companies, who had been hit by AI concerns earlier in the week, recovered some of their losses. Chipmakers may gain, but AI hyperscalers could lose, as a result of continued concern about their high-spending plans. Amazon, for example, fell 5.6% Friday after announcing a plan to increase capex by more than 50% in 2026. Investors also seemed to be moving away from expensive mega-caps in favor of smaller, cheaper companies. The S&P 500, Nasdaq and Russell 2000 all posted gains of around 3.5% on Friday. The mood is generally brighter this week than in mid-last week. Wall Street's so called fear gauge, VIX, fell for the first time in 3 days on Friday. Gold and silver, both commodities, firmed up on Monday following strong Friday rebound. The influx of U.S. data, including the delayed January employment report, is expected to be the major event of the coming week. Investors will also be looking at retail sales and CPI to see if they can find?signs that the economy is weak enough to justify a rate cut in mid-year. Chart of the day Japan's Nikkei rose nearly 4% Monday, surpassing the 56,000 mark for the first. The ruling LDP party has a decisive majority that will allow for increased spending and tax reductions. Watch today's events Bill auctions in the U.S. for 3-month and 6-month bills * Fed Governor Christopher Waller and Atlanta Fed President Raphael Bostic speak Sign up for the newsletter to receive Morning Bid every morning in your email. Subscribe to the Morning Bid newsletter Website You can find us on LinkedIn. The opinions expressed are solely those of the authors. These opinions do not represent the views of News. News is committed to the Trust Principles and values integrity, independence and freedom from bias.
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Mali establishes a state-owned mining company
A statement issued by the Council of Ministers said that Mali would create a state owned company to manage its holdings in mining companies. Other resource-producing countries in West Africa, such as Niger or Guinea, have managed their assets using similar state-owned management mechanisms. According to a statement issued late Friday, the company Sopamim will manage and acquire Mali's holdings. Its capital is owned by the government. West Africa is Africa's biggest gold producer, with mining companies such as Barrick Gold, B2GOLD and Endeavour Mining active in gold-rich regions of the western and southern regions. Mali will create a new state-owned firm called Sorem in 2022 to explore and develop mineral resources. Mali's ruling military class introduced a new code of mining in 2023 that increased state and local ownership to at least 35%, up from 20%. The new code will also increase tax collection and help to boost?state revenue from gold mining companies by 52.5% by 2024. Mali appointed a former Barrick executive last month as a special adviser to the president who will oversee mining. (Reporting and writing by Tiemoko Diallo; Editing and proofreading by Ros Russell).
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Uganda Central Bank holds key rate once again and says caution is needed
Uganda's central bank left its main lending rate unchanged for the sixth time in a line on Monday, citing an uncertain economic climate as a reason to be cautious. Since October 2024, the Bank of Uganda Central Bank Rate is 9.75%. At a recent press conference, Governor Michael Atingi Ego said that the current policy stance was appropriate to maintain economic activity and ensure?that the inflation stabilizes around the bank’s 5% medium-term target. Inflation increased to 3.2% in January, up from 3.1% in the previous month. Atingi-Ego stated that inflation is projected to be slightly below the target level in 2026. The range was?about 3,8%-4,3% before stabilizing around 5%. The governor said that the economic growth will be between 6.5% and 7% for the current fiscal period ending in June, but it is expected to rise to an average of 8.0% over the medium-term 'because of the high level of public investment, as well as the development of oil-related infrastructure. The East African country is getting ready to pump commercial quantities of crude oil in the second half of this year. (Reporting and writing by Elias Biryabarema, George Obulutsa, Editing by Alexander Winning & Toby Chopra).
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Olympic Alpine skiing-Johnson & Shiffrin form US combined Power Pair
Mikaela?Shiffrin, the most successful World Cup Alpine skier in history and Breezy Johnson, Olympic and world champion downhill skiing will form an?U.S. The women's combined team at the Milano Cortina Games will feature a?power pair. The race will feature downhill and slalom pairs with one run each in each discipline on Cortina d'Ampezzo's Olimpia delleTofane piste. Johnson, who won the world title last year and added the 'Olympic gold' on Sunday, is the best choice to partner Shiffrin. Shiffrin is a dominant slalom skiing with seven victories in eight World Cup races so far this season. Lindsey Vonn's teammate, who is leading the World Cup Downhill standings after five podiums and five races, including two wins, was the frontrunner one month ago, but she broke her leg during Sunday's race, after injuring herself in a serious way a week before. Shiffrin won a World Cup record of 108 races. Johnson, on the other hand, has not yet won one but holds two of the biggest titles in a skier's life. Shiffrin would earn her first medal since the 2018 Pyeongchang Olympics, and fourth in her career, after she was blanked out at Beijing four years earlier. Shiffrin won the gold medal at the world championships last year, as did Johnson. But, apart from Sunday's race the downhiller only stood on the World Cup podium?once during this season, and that was in a super G last month. This event will be held in a team format for the first time at the Winter Olympics. Shifrin also competes in giant slalom, slalom, and slalom. Each country is allowed to pair up four skiers from each of the two top-ranked countries. Jackie Wiles and Paula Moltzan will be the second U.S. pairing. Bella Wright and Nina O'Brien are the third, and Keely cashman and AJ Hurt are the fourth. (Reporting and editing by Andrew Cawthorne; Alan Baldwin)
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Phoenix Copper, based in the UK, suspends its top brass after a payment investigation
Phoenix Copper Limited, a UK-based company, announced on Monday that it has suspended its executive chairman and finance director with immediate effect as a result of an investigation into allegations regarding their conduct and payments made to a former Corporate Finance Advisor. This sent shares down by as much as 50 percent to a new record low price of 1 pence. The U.S.-based copper miner said on Monday that it was reviewing its funding options, and warned that current cash would only cover obligations until the early'second quarter' of 2026 if additional financing is not provided. Executive Chairman Marcus Edwards-Jones, Chief Financial Officer Richard Wilkins and Company Secretary Richard Wilkins have been suspended while the investigation examines allegations related to payments made to Lloyd Edwards Jones S.A.S. the company's former advisor co-founded by its chairman. The company did not provide any further information. It put in place interim financial oversight, started searching for a temporary finance director and outsourced its company secretary function. Phoenix stated that it is still in talks with Riverfort Global Opportunities PCC Limited about a "short-term lending facility". Edwards-Jones & Wilkins did NOT respond to LinkedIn requests for comments. (Reporting and editing by Nivedita Battacharjee in Bengaluru, Ankita Bora from Bengaluru)
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Sumitomo Metals increases FY profit forecast 89% due to higher gold and copper prices
Sumitomo Metal Mining, a Japanese mining company, has raised its net profit forecast for the full year by 89% due to higher copper and gold prices. It also said that it is still in discussions with global miners to obtain treatment and refining fees (TC/RCs), which are above China's benchmark. The miner and smelter expects its net profit to be 140 billion yen for the fiscal year ending March 31, up from an estimate in November of 74 billion. The revision was mainly due to higher metal prices, such as nickel, copper, and gold, as well as a weaker Japanese yen which increased inventory values, said Executive Officer Yasuhiro Myake. The net profit for the nine months to December increased by more than three times, from 29.6 billion Japanese yen in the previous year. Miyake stated that the company had revised its policy on shareholder remuneration in response to investor requests for higher returns. Sumitomo metal lowered its target equity ratio to 55% from 60% at the end of last fiscal year. It aims to reach 58% of equity by March 2028. The company will increase its minimum dividend to equity ratio from 2.5% to 3.5%, and it will continue its flexible share buybacks. The company increased its dividend forecast by?52 per share. Last year, it paid out 104 per share. Miyake confirmed that TC/RC's negotiations with global miners for?2026 are ongoing and that the company is seeking higher terms than those in China, which set $0 per metric tonne and 0 cents per pound. He declined to make any further comments. The TC/RCs or fees that miners pay to refine concentrate have been under pressure because global smelting capacity, led by China, has increased faster than mined supplies, which is reducing smelters’ margins. When asked if Sumitomo Metal planned to cut production, Miyake replied: "Our Toyo plant boasts an exceptionally high level of productivity. We believe that maintaining our current operating levels will be the most profitable for our company, and we therefore have no plans to decrease production." (Reporting and editing by Thomas Derpinghaus; Yuka Obayashi)
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India will support steel imports that are affected by Europe's carbon taxes, says the federal secretary
The carbon tax and import quotas of the European Union will continue to impact India's steel exports. However, the government is taking steps to support the sector. These comments follow a trade deal signed by India and the European Union, which reduced tariffs in several sectors, but kept?the Carbon Border Adjustment mechanism, or border tax on carbon, intact. Indian steel mills export roughly two-thirds of their total output to?Europe. Exports will remain a challenge with the CBAM of the European Union, tariffs and quotas?and other challenges. We must take action," said Sandeep Poundrik, Steel Secretary, at a government function in New Delhi. India has been critical of the CBAM policy, which is the first in the world. It was announced by the EU 2021 and could hinder trade in steel. The EU has imposed fees on steel imports, cement, and other goods that produce high levels of carbon emissions. Reports indicate that India's exports of steel to Europe will likely fall as a result, leading mills to look for alternative buyers in Africa or the Middle East. Reporting by Neha arora in New Delhi; writing by Hritam mukherjee, editing by Rashmi aich
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Iron ore prices drop as inventories increase, and concerns about disruptions in Australian supply ease
Dalian iron-ore futures fell for a sixth session on Monday, as China's inventories rose amid low demand, and Australia’s main?iron-ore hub resumed operations following a cyclone warning. The most-traded contract for May iron ore on China's Dalian Commodity Exchange traded 0.46% less at 761.5 Yuan ($109.89). As of 0705 GMT, the benchmark March iron ore contract on Singapore Exchange was up 0.57% at $99.6 per ton. Singapore's benchmark dropped below $100 per ton, as China's demand slowed in the lead-up to Lunar New Year. Data from Steelhome, released on February 6, showed that iron?ore inventories at major Chinese port rose by 0.58%. Portside stocks have been building as the industry enters its seasonal shutdown period. Port Hedland in Western Australia, the world's biggest iron ore hub, resumed its operations at noon on Sunday after being shut down on Friday due to tropical cyclone Mitchell off the coasts of the resource rich Pilbara region. ANZ Research released a report on Monday stating that this is the first major cyclone disruption in Pilbara for 2018. This follows a particularly active cyclone period between 2024 and 2025. Pilbara Ports stated on its website that while the Port of Port Hedland is now open, Ashburton and Cape Preston West remain closed. An alert will be issued when it is safe for them to reopen. Six cities in China's main steelmaking region, Hebei, issued air pollution alerts on February 8, causing concern about the?production cutbacks that will further dampen demand for feedstock. Coking coal and coke, two other steelmaking ingredients, also remained stagnant on the DCE. The benchmarks for steel on the Shanghai Futures Exchange have lost ground. Rebar fell 0.84%. Hot-rolled coils softened 0.55%. Stainless steel declined 0.74%. Wire rod dropped 0.89%.
LME suspends new Russian metal deliveries after sanctions: Andy Home
The London Metal Exchange has suspended warranting for Russian metal produced after April 13, in order to comply with the most recent sanctions announced by the U.S. government and British government on Friday.
Aluminum, copper, and nickel all soared in the early trading of Monday, reflecting the importance Russian supply has for these three markets.
The sanctions are carefully designed to minimize market volatility.
The cut-off date of April 13 allows Russian metals already in the LME to continue trading. This is especially important for aluminium, since Russian brands made up over 90% of the warranted stock at the end March.
The ban on metal deliveries to LME and CME, its U.S. counterparts, is more likely to cause a split in the market. This is because the exchange-based price will move to a premium compared to what is currently non-exchange-deliverable metal.
RUSSIAN STOCKS
Since the end of December, over 90% of LME-guaranteed stocks are made up of Russian aluminium brands.
Although many Western metal consumers have chosen to self-sanction themselves by refusing to purchase Russian metal, there is still a global market for aluminum produced by Russian producer Rusal.
According to the LME, Russian metal accounted for 58% of the total aluminium that was delivered from LME's warehouses in the month of January. The ratio increased to 94% by February, and to 88% by March.
At the end of the month of March, the amount of Russia nickel and copper in the LME was 62% lower than it was at the beginning of the month.
The copper market is much more tightly controlled than the aluminium market. The exchange inventory is low and China, which is the largest buyer in the world, appears to be happy to accept Russian metal. Imports from Russia of copper will increase by 14% in 2023 to 371,000 metric tonnes.
Nickel is oversupplied globally, but the LME market for the Class I nickel produced by Norilsk Nickel in Russia and traded there has been tighter than the LME market for Class II metals such as ferronickel or nickel pig iron. Like copper, the exchange inventory is low and is characterized by active movement both ways.
The latest sanctions allow physical trading on other markets and exchange trading or physical delivery of metals produced before April 13 in cases where the metal was produced prior to that date. However, there are restrictions for citizens of the two countries.
SPLIT MARKET
This could lead to large deliveries of Russian steel onto LME warrants as holders of material produced off-market prior to April 13, opt to deliver the metal to exchange.
The LME warned its members that "it is possible a relatively large amount of Relevant Metal could be warranted (...) in order to safeguard the market".
At the end of the month, the LME defined off-market aluminium stocks as metals that are being stored under a contract of warehousing with the explicit option of warranty.
It is not known how much Russian metal there is in the shadow stock. The amount of Russian metal in that shadow stock is unknown.
The design of the new package of sanctions may even benefit the LME. It has been resisting calls to unilaterally ban Russian metals from its system.
The supporters of this move have argued, that by allowing Russian metals to be traded freely on the exchange they risk debasing the LME prices which would end up reflecting the metal that the physical supply chain is least interested in.
LME was concerned that removing all Russian material as deliverable metal would create a crisis of liquidity for the LME aluminum contract.
These fears were allayed by allowing the metal produced before April 13 to be included in the physical liquidity base of LME.
By creating a pool of non-deliverable Russian Metal, it is logical that newly produced metal will trade at a discounted price to the LME, effectively strengthening the validity of the Exchange Basis Price.
The sanctions will reduce the revenue of Russian metal producers from new production, while preventing a default in delivery by holders of LME short positions who are unable to deliver Russian metal older than their position.
UNCERTAINTY
Early Monday, all three metals affected jumped higher. LME's three-month aluminum spiked up to $2,728 a ton. This is a two-year high. Copper, already in full bull-rally mode, increased its gains up to $9,640.50. This is the highest price for copper since June 2022. Nickel reached a price of $19,355, the highest since October 2023.
The initial knee-jerk reactions in all three cases have quickly reversed as the market considers the possibility of a rapid stock rise as older Russian metal is moved out of storage and into LME warehouses.
The new sanctions for the LME bring welcome clarity to a topic that was polarising the user base of the exchange.
The author is a columnist at .
(source: Reuters)