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Italy will use EU budget leeway in 2027-2028 to fund energy relief measures
Italy plans to use the so-called "escape clause" of the European Union budget rules in order to fund measures that will reduce energy costs by 2027 and 2028. Meloni met with senior coalition members and there was a "broad consensus" about a proposal that would use EU flexibility to help families, businesses and individuals cope with the rising cost of energy over the next 2 years. In March 2025, following Russia's invasion in Ukraine, the European Commission decided that all EU members could increase their defence spending up to 1.5% of GDP each year for four years until 2028. Italy was a strong advocate for the Commission to give EU governments fiscal flexibility to cushion the impact of higher energy costs. Last month, as a compromise, it was decided that EU countries could use 0.3% GDP (out of 1.5% GDP extra allowed for defense) to fund investments?that help transition fossil fuels into?green energy. Meloni's plan to invoke the clause one year before the 2027 general elections suggests that 'Italy' is prepared to abandon efforts to reduce its budget deficit to below the 3% GDP threshold and to exit the EU’s ongoing excessive deficit procedure. According to the 'latest multi-year budget plan', Italy was targeting a ratio of deficit-to GDP of 2.9% in 2019 and 2.8% by 2027. (Reporting and editing by Gianluca Smeraro, Keith Weir and Giuseppe Fonte)
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Gold profits on the hope of a de-escalation of Middle East conflict
Gold prices rose by?more? than 1% on Tuesday, amid hopes for a diplomatic breakthrough with Iran. This could lower energy costs and calm expectations about a Federal Reserve that is hawkish. Spot gold rose 1.7%, to $4.077.09 an ounce, by 11:20 am EDT (1520 GMT), whereas U.S. Gold Futures for August Delivery rose?1.6%, to $4.080.20. Edward Meir, Marex analyst, said that commodities were higher on the expectation of a possible cease-fire being negotiated in the Middle East. He added that technical buying is also a factor in gold's price rise after it broke above the short-term downward trend in place since 6 July. Prices are expected to remain range-bound for the near future. On?Monday, a senior Iranian official said that Tehran received a mediator's proposal for a 10-day truce in an effort to salvage the interim agreement. The increased oil prices caused by the Gulf supply disruptions are weighing down on gold prices, as they fuel inflation fears and increase bets for higher interest rates. Gold is often seen as a hedge against inflation. However, the high interest rate increases the cost of owning the metal. Investors are now waiting for the U.S. Federal Reserve to announce its interest rate decision, and Kevin Warsh's remarks following the central bank's two day policy meeting next Monday. According to the CME FedWatch Tool, traders are pricing in a 68% probability of a rate hike in September. The psychologically significant $4,000 gold mark is holding strong on the market. Interest rate concerns in the U.S. Interest rate concerns in the?U.S. (Reporting by Noel John in Bengaluru; Editing by Sahal Muhammed) (Reporting from Noel John, Bengaluru. Editing by Sahal Muhammad)
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Norwegian Olympic champion Tufte dies at 50
The Norwegian family of Olympic rowing champ Olaf Tufte announced on Tuesday that he had died at age 50. Tufte won two gold medals, one silver and one bronze in his seven-year Olympic career from Atlanta in 1996 until Tokyo in 2021. In Athens, he won gold in the single sculls and four years later again in Beijing. At the Tokyo Games he was 45 years old and finished ninth in the quadruple-sculls. He won two golds and one silver at the World Championships. According to Norwegian media, he was found unconscious on his family farm Monday. The statement stated that "Medical personnel arrived quickly at the scene, and life-saving?first aid was initiated before Tufte?was?airlifted?to hospital for further treatment." "There were no witnesses and no suspicions of an accident at work." (Reporting from Tommy Lund, Gdansk; editing by Pritha Sakar)
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China shortages are eroding copper inventories, pushing the price of copper to a one-month record.
The price of copper hit its?highest level in over a month Tuesday. This was largely due to a firm demand from the top consumer China, and a sharp drop in inventories. Benchmark three-month?copper?on London Metal Exchange rose?1.5%?to $13,826.50 per metric ton at 1405 GMT. This was its highest level since June 15 A tightening Chinese economy is driving copper prices higher. Stocks are dropping, import premiums have risen and physical demand is stronger than expected despite seasonal slowdown, said ING 'commodities analyst EwaManthey. The Shanghai Futures Exchange's most traded copper contract rose 1.6%, to 105460?yuan (15,589.29 dollars) per ton. Premium paid to purchase copper on the spot market over SHFE prices Copper stocks in?SHFE-monitored warehouses rose to?435 Yuan per ton from 0 yuan last week, the highest level since May of last year. Stocks of copper in warehouses monitored by the?SHFE Copper in LME-registered storage has fallen by 82% since the beginning of May The LME has fallen by?28% over the same time period. A large amount of LME material is now being shipped to the United States. U.S. Comex futures have outperformed LME by gaining 2.7%, to $6.52 a lb. This is the highest price since June 17 and brings the Comex premium to $529 a tonne over LME. Tariff anxiety is a boost to Comex. Manthey said that the market is pricing in more and more of the risk associated with U.S. Import restrictions. The U.S. Commerce Department had to complete a review on the copper market before June 30, but President Donald Trump has not yet made a decision about tariffs. Investors' increased risk appetite also helped industrial metals, as global stocks recovered. LME aluminium rose 0.7% to $3.161 per ton, as the market digested a lower global primary production in June and an adjustment of tariffs on the imports of the metal to the United States. LME zinc increased 0.6% to $3,540 per ton. Lead edged up by 0.1% to $1.881. Nickel was up 0.8% to $17,060. Tin jumped 1.9% to $53,900.
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South Korea's efforts to expand the AI chip hub outside Seoul will be tested by power and water requirements
South Korea wants to build a new semiconductor hub in the southwest of its country within four years. However, local opposition due to its massive water and power needs will be one of its greatest obstacles. Honam semiconductor industrial complex, which is estimated to be worth at least 800 trillion won (540 billion dollars), is central to President Lee Jae Myung’s efforts to extend the AI chip boom outside the prosperous Seoul metropolitan region. Companies involved in the project like Samsung Electronics, however, will have to find new sources of energy to power it, with the goal of establishing it by the time Lee finishes his term in 2030. Analysts say that the power demand of the four planned chips fabrication plants could be 70% to 80% more than the current annual consumption of electricity in the southwestern regions Gwangju, North Jeolla, and South Jeolla. Local residents have said they are against plans to build new nuclear reactors or transmission lines, citing the flaws of previous energy infrastructure that they claim failed to win their approval. Residents claim they were not also consulted on plans to raise an existing dam in order to supply water to the project. Neal?Won is the principal analyst for S&P Global Energy. He said, "A large amount of power demand has been added to a region which had previously very little." Experts say that it will be difficult to operate the complex in its full capacity by 2030 without accelerated infrastructure growth. South Korea's Energy Ministry said that the southwest region has enough power to meet?local demands. If new chip fabs were located in the area, the majority of electricity would be produced locally, eliminating the need for long-distance transmission cables. It said that it would work with local governments to build the power infrastructure before fab operations, and improve public acceptability. This includes placing underground lines in densely-populated areas. Kim Sung-whan, the Energy Minister, has said that they could also consider building small modular reactors or new nuclear reactors. BOTTLENECKS FOR INFRASTRUCTURE The chip cluster project in Yongin near Seoul is a cautionary tale. Samsung Electronics, SK Hynix and other chip manufacturers have been working to expand their manufacturing capacity in the region. However, projects have faced delays due power and water problems. Mayor Lee Sang Il said SK Hynix’s first Yongin fabs were supposed to receive 265,000 metric tonnes of water a daily from a dam in another city. But opposition from the residents delayed the process for months. And supplies of power and water from other regions may face similar objections. He said that the responsibility for calming opposing voices and resolving differences rests with the central government. The government plans to assist Samsung and SK HYnix?to accelerate construction in Yongin. Roh Byeong Nam, a farmer in Yeonggwang County, southwest Korea, and co-chairman of the local anti-nuclear alliance, stated that residents would challenge any expansion or?expansion nuclear reactors if necessary through litigation. Roh stated that "to now talk about building new reactors on top of extending their lifespan is nothing less than declaring Yeonggwang as a nuclear test ground and ultimately a permanent?nuclear-waste site." Water supply is also complex. The environment ministry estimates that the cluster requires about 650,000 metric tonnes?of water per day. This is more than Gwangju’s daily residential water consumption. The developers hope to avoid building a large new dam by utilizing reclaimed water and five dam systems. They also plan to raise one of these systems - Dongbok Dam, to ensure an additional 250,000 tons per day. Kim Kwang Jin, the head of a group of dam-residents near Dongbok said that residents wanted to be consulted. Kim stated that the construction of a dam would be similar. He estimated that 1,500-1,600 households may be affected directly or indirectly. "They announced this unilaterally, without considering the resident's acceptance." The ministry of energy said that the dam-raising alternative would minimize environmental damage and relocation when compared to constructing a brand new dam. It will also continue discussions with Gwangju residents and the local government in order to avoid delays due either infrastructure or opposition.
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Oil prices drop as US-Iran strikes are offset by mediation efforts
Oil prices dipped on Tuesday as markets weighed reports of mediation attempts?between Iran and the U.S. versus an exchange of new?attacks?between both and threats of a Saudi Arabian naval blockade by Yemen's Houthis. Brent crude futures fell 35 cents or 0.4% to $88.87 a barrel at 0052 GMT. U.S. West Texas intermediate crude for September was unchanged at $82.47 a barrel. Both contracts were trading at levels below their highest in over a month, which they reached in the previous session. Houthis, who are allied with Iran in Yemen, announced?on Sunday that they would impose an naval blockade against Saudi Arabia. This could open a new front for the United States. In its war against Iran, the United States is now facing a new threat that could affect global energy supplies and international trade. Tim Waterer is the chief market analyst for KCM Trade. He said that the Houthis' threats of a blockade against Saudi Arabia are important because they raise the risk of disruption to another major oil exporter. Separately, an Iranian official said that Tehran received a mediator's proposal for a 10-day truce in order to salvage the interim agreement signed on June 17. The deal was intended to pave way for a long-term agreement to end "the war" that began February 28 when U.S. and Israeli attacks against Iran. The diplomatic move came after another night of U.S. attacks on Iranian cities, and attacks by Iran's Revolutionary Guards against U.S. military bases in the region. The U.S. Central Command announced that it would be launching another round of attacks on Iran later?on Monday. "(Oil has) come a long, way and it certainly has the potential to rise again. The overnight talk of peace and de-escalation appears to have capped the upside in the short term. Whether 'anything' comes out of those peace talks is yet to be seen, according to IG market analyst Anthony?Sycamore in a recent note. A preliminary poll on Monday showed that U.S. crude stockpiles fell last week along with gasoline while distillate inventories likely increased. (Reporting by Ishaan Arora in Bengaluru; Editing by Jacqueline Wong)
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As the AI rally cools, Indonesian stocks that have been beaten down feel the love.
Some investors are buying back the laggards as big investors start to sell and Indonesia's battered, unloved stock markets is gaining some love. Jakarta's stock market has been Asia's worst performing'major' stock market for this year. It is down by 28%. Investors have been looking at markets with less of a focus on AI. David Chao is the Asia-Pacific Global Market Strategist at Invesco, based in Singapore. He said: "We have been buying Indonesia and taking a profit in South Korea." "Indonesia remains the most overlooked macro-growth story." BARGAIN HUNTERS ARE SEEKING VALUE AS SENTIMENTS CHANGE Although still cautious, the sentiment is growing that it may not be as bad as it seems for Indonesian markets. This year there were more than $4 billion of foreign outflows due to MSCI transparency and fiscal concerns. Aninda M. Mitra, BNY Investments' head of Asia macro- and investment strategy, said: "I think a lot is already in the price on the equity side." Mitra stated that, despite the concerns about the pending MSCI decision, if the price multiples continue to fall and the rupiah stabilizes, "then there is a good case to make to begin adding selectively." Last month, Allan Gray, an asset manager, made his first investment in Indonesia, investing in Indofood Sukses Makmur - the holding company that owns the dominant instant noodle maker in the country. According to our estimates, INDF is trading at just over five times earnings. We believe this is a fair price for a consumer-facing, dominant business that generates cash. Investors also prefer banking and commodity firms, with Citi choosing Bank Central Asia, Vale Indonesia Alamtri Minerals, and Amman Mineral International. The Jakarta benchmark index has risen by more than 10% in July, while the tech-heavy indices have fallen sharply. This suggests that some investors may be starting to shift their focus into markets with lower returns. The rebound came despite the fact that there was little improvement to the concerns which sparked this year's selling, such as questions about Indonesia's fiscal policy and uncertainties surrounding MSCI's evaluation. MSCI NOVEMBER DEATHLINE THE NEXT CATALYST Indonesia retained its emerging markets status. Most analysts expect MSCI to confirm that classification in November, after it has extended its review to include a?review of the impact of reforms implemented by Jakarta regulators earlier this year. S&P helped calm investors' nerves by reaffirming Indonesia’s sovereign rating last week with a stable outlook. Citi said Indonesia was the most popular country in client meetings held by the bank earlier this month in Hong Kong and Thailand. Not everyone is convinced that an AI-driven rally cooling will provide a lasting support for Indonesian assets. Indonesia is not the only market that has recovered, as global investors have also returned to Indian and Chinese stocks. Investors have lost confidence in the welfare policies of President Prabowo Subito, as a result of fears about worsening fiscal conditions. The?rupiah has fallen nearly 8% so far this year and is at record lows. The fact that Iran is a net importer of oil has heightened concerns. Arthur Budaghyan is the chief emerging markets and China Strategist at BCA Research. The bar has been raised for these portfolios in order to allocate more capital and upgrade Indonesia. Even so, foreign investors have opted to retreat gradually rather than in a mass exodus. Copley Fund Research shows that more than half of the active fund managers they track remain overweight on Indonesia, even though the percentage of funds invested there has fallen to 80.45% - a 15 year low. The research firm stated that "the structural case for Indonesia" has not vanished. The Indonesian market is not overcrowded in either direction. It is arguably more expensive to be wrong about a recovery than it is to continue being patient. (Reporting and editing by Jacqueline Wong in Singapore, Ankur Banerjee)
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Stocks drop as oil prices rise; Iran tensions and earnings are in focus
Investors were cautious on Monday, as they awaited earnings from high-profile U.S. firms this week and developments in the U.S./Iran conflict. Oil prices ?gained. Yemen's Houthis, who are allied with Iran, said that they would impose an naval blockade against Saudi Arabia. The announcement came despite indications that Washington and Tehran want to resume diplomatic efforts to stop a spiraling attack. Brent crude futures rose by around 1.3%, settling at $89.22 per barrel. U.S. West Texas intermediate crude climbed 0.9%, settling at $83.23, after reaching its highest level in June at $85.39. Oil prices are generally a negative factor for stocks, as they raise costs for both consumers and businesses. This week, several major U.S. firms like Intel and Alphabet will report their earnings. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. He said that earnings are beginning to flow and this will provide a cushion for markets. He also said that chipmaker shares had recovered some of the recent sharp losses. The semiconductor index rose 0.6% Monday, after closing Friday at a record low of?more? than 20% below its June late-closing high. This confirms that it is in a bear market. The Dow Jones Industrial Average dropped?30716 points or 0.59% to 51,839.26. The S&P 500 lost 14.41 points or 0.19% to 7,443.28. And the Nasdaq Composite was down 12.17 points or 0.05% to 25,508.07. The earnings season could reinforce or undermine this year's gains. This has been driven by an increase in AI capital expenditure, lifting semiconductor stocks and companies that have been seen as beneficiaries of the buildout. This season's show will give some insight into the AI trade, as well as chip makers, and provide more color about secondary effects of war. MSCI's global stock index fell by 3.23 points or 0.29 percent to 1,105.50. The pan-European STOXX 600 fell by 0.3%. U.S. Treasury rates rose as traders considered the impact of escalating oil prices due to the war in Iran. The U.S. economy is quiet this week, and Federal Reserve officials have a "blackout" period for public comments before the central bank meeting next Monday. The yield on the benchmark 10-year U.S. notes increased 5.68 basis points, to?4.598%. According to LSEG, the European Central Bank is holding a policy-setting meeting this week. Markets are pricing in a 13.1% probability of a rate hike. Andy Burnham, Britain's seventh prime minister since a decade, took over Keir starmer and the sterling fell 0.12% to 1.3437. He promised to reshape Britain's politics and introduce a "new economic model". The dollar index (which measures the greenback versus a basket currencies) rose 0.18%, to 100.92. Meanwhile, the euro fell 0.19%, to $1.1417. Gold spot fell by 0.24%, to $4,007.00 per ounce. (Reporting from Caroline Valetkevitch and Alun John, in New York; additional reporting from Wayne Cole, in Sydney; editing by Nick Zieminski & Stephen Coates).
Malaysia clamps anti-dumping responsibilities on iron, steel from 4 nations
Malaysia has enforced provisionary antidumping duties on some exports of flatrolled iron items or nonalloy steel from China, India, Japan and South Korea, the trade ministry said.
The responsibilities, which work from Jan. 11 and at first run for approximately 120 days on items with a width of more than 600 mm ( 24 inches), range from 2.52% to 36.80%, the ministry stated on Monday.
A last determination on the provisional anti-dumping duties would be made by May 10, while feedback on the initial decision might be sent by Jan. 20, the ministry included in its statement.
The decision followed an investigation begun in August into the products from China, India, Japan and South Korea that begun after a petition from a domestic manufacturer.
The petitioner had alleged the imports were being sold well listed below the domestic cost in the 4 nations and had caused material injury to Malaysian market, the ministry added.
Individually, India's finished steel exports are not likely to be impacted by the anti-dumping task as its export volumes to the Southeast Asian are really low, a senior government official with direct understanding of the matter informed Reuters.
India finished steel exports to Malaysia in 2023/24 were 36,000 metric heaps, down 78% considering that 2019/20, the authorities said, adding that while the anti-dumping duty would impact two-way trade, it was not likely to strike New Delhi's general steel exports.
India's steel ministry did not immediately react to a. Reuters email looking for comment.
(source: Reuters)