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The Russian rouble is flat against the dollar after a spike in October foreign exchange sales
The Russian rouble is stable against the U.S. Dollar and weaker than the Chinese yuan after the central banks reported an increase in exporters' foreign currency sales last month. Some analysts attribute this to U.S. sanctioned. The rouble traded at 81.20 dollars in the over-the-counter market and at 11.43 yuan at the Moscow Stock Exchange, which was down 0.5% at 0840 GMT. The central bank of Russia announced Monday that foreign currency sales for October were up 68% compared to a month ago, reaching $8.2 billion. The central bank attributed the increase to exporters repaying their foreign debt. In a report published monthly, the central bank stated that "the rouble was stable in October, fluctuating within a range seen over the last six months". Some analysts attribute the increase to new U.S. Sanctions on Russian oil giants Rosneft & Lukoil. Finam, an Russian financial services firm, estimates that up to 35% domestic foreign currency sales are attributed to them. Analysts at Alor, an investment brokerage, stated that "we believe this is due to the U.S. sanctions; exporters are afraid of difficulties making payments and bringing money into Russia. They also try to buy relatively cheap bonds and to invest in deposits with high interest rates." On November 21, the U.S. sanctions against Rosneft, Lukoil and other oil companies will come into effect. Finam analysts predict that foreign currency sales may decline between 10% and 20% by early December. The rouble is supported by high domestic interest rates. Slower imports, and the continued sales of forex by the government. Many analysts expected the rouble to weaken, but its strength has surprised them. Goldman Sachs analysts stated that the rouble was surprisingly strong despite the erosion of the current accounts surplus. They suggested that carry trades were also supporting the currency despite strict currency controls. Goldman stated that "we now believe the rouble will remain well supported and the external funding constraint may be less restrictive than we previously thought." (Reporting and editing by Thomas Derpinghaus; Gleb Bryanski)
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Iron ore prices are on the rise amid new stimulus hopes and a softening of demand
Iron ore futures were traded within a narrow price range on February 2, as investors weighed the prospects of fresh stimulus coming from Beijing in the next month, against signs of a softening in demand in China's top consumer. The day-trading price of the most traded January iron ore contract at China's Dalian Commodity Exchange was 0.2% higher, closing at 763 Yuan ($107.12). Iron ore benchmark on the Singapore Exchange for December fell by 0.56%, to $101.6 per ton at 0813 GMT. Steven Yu, senior analyst at Mysteel, explained that the recent price drop caused a divergence in the market outlook. This led to a consolidation. Yu stated that "bulls" believe the annual decline in crude steel production year-to date has reduced the pressure to cut production in the remainder of the year. Also, they hope for stimulus measures which will be announced at the politburo in December. Official data released last month showed that China's crude-steel output dropped 2.9% on an annual basis in the nine-month period ending September. The October figures will be released on Friday. Beijing announced in March that it would restructure the vast steel industry by cutting output. China has set a cap on the growth of crude steel production annually since 2021 in order to reduce carbon emissions. Mysteel’s Yu stated that bears are betting on a lower demand, as some mills continue reducing production. Steelmakers are cutting back production due to a decline in steel demand, and high raw material costs. Coking coal, coke and other steelmaking components fell by 3.81% and 3.66% respectively. The majority of steel benchmarks traded on the Shanghai Futures Exchange suffered losses. Rebar fell 0.33%, steel prices dropped 0.84% and stainless steel fell 0.84%. Hot-rolled coils rose 0.03%. $1 = 7.1230 Chinese Yuan (Reporting and editing by Amy Lv, Lewis Jackson and Subhranshu Shu).
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The Gulf markets are gaining on US rate cuts
The Gulf's major stock exchanges rose early on Tuesday. This was aided in part by the rising expectations of a Federal Reserve rate cut in December and signs that the U.S. shutdown may be nearing its end. The U.S. economy lost jobs last week. Retail and government sectors were the main culprits. A survey released on Friday showed that the U.S. consumer's sentiment had fallen to its lowest level in 3-1/2 years at the beginning of November, due to concerns about the effects the shutdown would have on the economy. The shutdown has delayed important economic metrics including the non-farm employment report. Saudi Arabia's benchmark stock index rose 0.1%. This was helped by Al Rajhi Bank, which rose 0.7%, and Dar Al Arkan Real Estate Development (which jumped 4.9%). Both are on track to extend their gains after a sharp rise in quarterly earnings. Kingdom Holding, the investment company controlled by billionaire prince Alwaleed Bin Talal, saw its shares jump 3% after a 129% rise in profit for the third quarter. Saudi Aramco, the oil company, fell by 0.2%. In Asian trading, oil prices fell as concerns about oversupply outweighed the uncertainty surrounding U.S. sanctions against Russian oil giants Rosneft & Lukoil. Saudi Advanced Industries fell 6.4%, its largest decline since August. This was after it reported a 99% drop in the third-quarter profits. Dubai's main stock index rose 0.5% with Emaar Properties, a blue-chip developer, rising 1.9%. According to CME Group’s FedWatch tool, traders are pricing in an approximately 64% chance that the Fed will reduce rates by 25 basis point next month. The U.S.'s monetary policy changes have an important impact on Gulf markets where the majority of currencies are pegged with the dollar. Abu Dhabi's Index was flat. The Qatari Index rose 0.4% led by the 1.5% increase in Qatar Islamic Bank. (Reporting from Ateeq Sharif in Bengaluru, Editing by Thomas Derpinghaus.)
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Gold nears three-week high after bill to end US Shutdown passes Senate
The gold price rose on Tuesday, reaching its highest level in almost three weeks. This was due to expectations that a possible reopening of the U.S. federal government could restore economic data flow ahead of a Federal Reserve rate reduction expected next month. As of 0816 GMT spot gold had increased 0.5% to $4,137.06 an ounce, after hitting its highest level since October 23, at $4148.75. It is still below the record high of $4381.21 reached on October 20, however. U.S. Gold Futures for December Delivery rose by 0.5%, to $4.143.80 an ounce. Ole Hansen is the head of commodity strategy for Saxo Bank. He said that gold has gained traction due to "a renewed focus on U.S. financial concerns" as a reopening of government would allow new spending, financed by additional borrowing. The U.S. Senate passed a compromise Monday that will end the longest shutdown of the U.S. government in history. This had delayed the release of critical economic data, including the non-farm payrolls key report. It next heads to the Republican-controlled House of Representatives, where Speaker Mike Johnson has said he would like to pass it as soon as Wednesday. Hansen stated that a reopening could also re-start the flow of economic data, possibly boosting expectations for a rate cut in December. The U.S. Federal Reserve's policymakers are divided over the direction of monetary policy. This complicates Jerome Powell’s attempts to negotiate differing opinions following two rate reductions earlier this year. Fed Governor Stephen Miran suggested on Monday that a cut of 50 basis points might be appropriate in December. Data released last week showed that the economy is in a state of stress. The U.S. lost jobs in October, and consumer confidence fell to a three-and-a half year low by early November. Traders have priced in a probability of 64% for a rate cut by a quarter point next month. Carsten Menke, an analyst at Julius Baer, reiterated his positive outlook for gold and silver. He added that "the fear to miss out" still exists despite the favorable fundamentals for these metals. Gold that does not yield a return is usually more profitable in periods of low interest rates and economic uncertainty. The price of spot silver rose 0.5%, to $50.81 an ounce. Platinum increased 1%, to $1.593.11, and palladium gained 1.3%, to $1.433.36. (Reporting from Anmol Choubey, Bengaluru. Editing by Jan Harvey.)
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Sources say that Saudi Arabia and Iraq allocated full-term crude volumes to Indian refiners by December.
Sources at three Indian refiners reported on Tuesday that Saudi Arabia and Iraq, producers from the Middle East, have allotted full-term crude volumes for Indian refiners in December while also offering additional quantities under optional contracts. After halting their Russian oil purchases due to the tightening of Western sanctions, Indian suppliers have increased demand for Middle East crude. Last month, the United States, Britain and European Union designated Russian Top oil producers Rosneft, and Lukoil caused immediate disruptions in trade as fears of sanctions drove away buyers from India and China. Sources said that the Indian refiners received their full allocation from OPEC's two biggest producers. The sources said that at least one refiner would receive a larger monthly supply of oil from Iraq than the previous month. Saudi Aramco, and Iraq's State Oil Marketer SOMO, did not respond immediately to requests for comment. Two other sources confirmed that Kuwait Petroleum will also supply more crude oil to Indian refiners between November and December. According to one of the sources, Middle Eastern oil suppliers have a surplus and are willing to share it. Indian refiners also seek more supplies after Saudi Aramco Official selling prices are lowered. Indian refiners have been buying crude oil from the Middle East and Iraq since the latest round sanctions. Spot market
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Lebanon's historical pines are dying one cone at atime
A quiet crisis is unfolding in the southern Lebanon heartland, where once there were many and tall pine trees. The trees are shriveled and the cones have dried up. A forest that once provided a vital lifeline to entire communities is now under siege. Since years, farmers in Bkassine Forest have seen their pine yields decline. Initially, farmers blamed the seasonal weather change. In 2015, scientists confirmed that many had feared: that an invasive insect was destroying the pine cones, which produce Lebanon's prized Pine Nuts. "It is not only the nuts," Dr. Nabil Nmer, a forest-health expert at Holy Spirit University of Kalik (USEK), said. This insect attacks cones for three years. It does not just reduce productivity; it destroys it. According to Nemer, in some cases up to 82% (or more) of the cone's seeds pods can be left as empty shells. The trees that have been weakened by climate change are especially vulnerable. Leptoglossus westernis is a North American insect that likely came to Lebanon on untreated wooden pallets. According to his research, it has spread from the Mediterranean to Turkey as well as other areas. The livelihoods of the Bkassine Reserve, the Middle East’s largest productive forest, are threatened. Other parts of Lebanon have the trees, but they are not grown commercially. The family of Miled Hareb has survived for decades on the bounty of the forest. This is no longer true. This work has been passed on to me. "This work was passed down to me. I built my home with it and raised a family with it." "But then, the trees died and our way of living also," Hareb said. The harvesting of pine cones can be a difficult task. Workers balance on thin branches and climb tall trees without safety equipment, using narrow ladders. Injury is common, and wages have decreased along with the harvest. Nabil Assad is a Syrian worker who has been harvesting pine cones in Lebanon since more than a decade. He still remembers the days when 250 pine-pickers were working simultaneously in Bkassine. Now there are only 20-30 people. He said, "There's no more work." A DWINDLING Ecosystem The majority of Lebanon's forests of pine trees were planted more than 100 years ago. The older trees still have a productive lifespan, but climate change has made them more susceptible to pests. Nemer stated that "a healthy tree is able to fight back." "But when it is thirsty and hungry, it has no defense." U.N. officials have stressed the importance to protect forests from pests, diseases, and other threats, describing them as "the planet’s most powerful natural defense". According to the U.N. Development Programme, Bkassine Forest was once home around 100,000 productive pin trees. Nemer explained that the number of trees has fluctuated over time. Pest infestations and years of climate stress have reduced them, and efforts to replant were made to compensate for those losses. However, no new studies provide accurate figures. Wood-boring beetles also kill pines, in addition to the cone eating insect. The forest floor is littered with dead trees, which attracts pests and accelerates the decline. The political and economic turmoil that has characterized Lebanon for decades also took its toll. State-run forest management was abandoned after the brutal civil war that ravaged the country from 1975 to 1990. Since the economic collapse of 2019, illegal logging has increased. Market prices are rising as productivity falls, but very few Lebanese have the money to pay for them. Five years ago, a kilogram of pinenuts cost around $65; today it costs nearly $100. Families, restaurants and even supermarkets have switched out pine nuts with cheaper sliced almonds to add crunchiness to Lebanese dishes. The efforts to fight back were slow. The Lebanese Army controls helicopters that spray pesticides. The delays in the logistics mean that treatments are often missed during the crucial window when insects lay eggs. The agriculture ministry of Lebanon announced a nationwide spraying campaign in August. Nemer warns, however, that it will not be enough without a wider strategy that includes farmers themselves. Through training programs run by USEK and FAO, as well as the Lebanese Ministry of Agriculture and United Nations Environment Programme, farmers in Bkassine are learning how to identify pests, manage forests and report outbreaks. Nemer stated, "We must manage the forest in its entirety." "This isn’t a vegetable garden. This is not a garden. "It's not a farm. It's an ecosystem that is alive." (Editing by Maya Gebeily & Andrew Heavens).
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Sources say that Kuwait's KPC has offered more heavy crude in December due to refinery shutdown.
Kuwait Petroleum Corp. has offered heavy crude to be loaded in December through a spot bid, according to sources within the industry and the tender document. This is because it sells extra oil that Al-Zour Refinery cannot process. The producer offered to load 500,000 barrels Kuwait Heavy Crude on December 6 and 7, as well as the same amount of Eocene Crude on December 8 and 9. The bids will be valid until Thursday. KPC now has a total of 3.9 million barrels in heavy crude spot sales. Kuwait Integrated Petroleum Industries Company (KIPIC) has announced that on October 21 its affiliate Kuwait Integrated Petroleum Industries Company was incorporated. shut down A fire has destroyed parts of a refinery that produces 615,000 barrels per day. Two trade sources stated that the refiner plans to restart one of its three crude distillation units (CDUs), which was affected by the fire in the first half December. KPC did respond immediately to a comment request. Reporting by Florence Tan and Trixie Yap; Editing by Christian Schmollinger
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Thyssenkrupp to help Nigeria's Dangote Fertiliser expand its urea production
The companies announced on Monday that Nigeria's Dangote Fertiliser will use technology provided by a German subsidiary of Thyssenkrupp in order to build four urea granulation plants. The unit can produce 4,235 metric tonnes of urea per day. This will increase Dangote’s annual production to over 8 million tons. The new units are being built next to Dangote Fertilizer Complex in Lekki Lagos which is currently operating with Thyssenkrupp UFT technology. The expansion will be using the German firm's UFT Fluid Bed Granulation Technology. This technology is used for more than 70% global urea production. The agreement also includes proprietary equipment such as granulators, scrubbers and process design packages. The ammonia conversion technology will be used to incorporate the ammonium-sulfate waste into granules. This will eliminate waste and improve logistics. Nadja haakansson CEO of Thyssenkrupp said, "This partnership highlights our shared vision for sustainable development industrial and global food security." Aliko Dangote, President of the Dangote Group, said that the expansion was a reflection of the company's commitment towards agricultural self-sufficiency. It also positions Nigeria as the world's leading fertilizer manufacturer. (Reporting and editing by Thomas Derpinghaus; Isaac Anyaogu)
Trump praises aggressive start of term in speech before Congress, drawing catcalls from Democrats
In his address to Congress, U.S. president Donald Trump made a victory lap. This drew catcalls from Democratic lawmakers and they held signs up and left mid-speech.
The partisan rancor reflected the turmoil that has been accompanying Trump's first 6 weeks in office, upending U.S. Foreign Policy, igniting trade wars with close allies and cutting the federal workforce.
The Primetime Speech, his first before Congress since assuming office on January 20th, capped off a second turbulent day for the market after he imposed new, sweeping tariffs against Mexico Canada and China.
According to The American Presidency Project, at 100 minutes, it was the longest speech a president has ever given to Congress.
The speech was similar to Trump's rallies during the campaign, though he avoided his habit of deviating from prepared remarks in order to make asides. The president attacked his Democratic predecessor Joe Biden and called immigrant criminals "savages." He also attacked what he termed "transgender ideologies."
He promised to balance the federal buget, while urging lawmakers to pass a tax-cut agenda that analysts said could add $5 trillion to federal government's debt of $36 trillion. Congress must act this year to raise the debt ceiling of the United States or risk a disastrous default.
A day after Trump halted all military assistance to Ukraine, world leaders closely watched his speech. The suspension came after a heated Oval Office exchange in which Trump scolded Ukrainian President Volodymyr Zelenskiy before TV cameras.
Zelenskiy reportedly wrote Trump a letter Tuesday saying that Ukraine was ready to sign the rare earth minerals agreement which had been in limbo due to their conflict.
Trump said, "We've also had serious talks with Russia. We have strong signals from them that they are prepared for peace." "Wouldn’t that be lovely?"
The pause in assistance threatened Kyiv’s efforts to defend itself against Russia which launched an invasion on a large scale three years ago. It also razzled European leaders who were worried that Trump was moving the U.S. far enough toward Moscow.
Trump may have blamed Ukraine for the start of the war but a new Ipsos survey found that 70% of Americans, including two thirds of Republicans, believe Russia is more responsible.
DEMOCRATIC PROTESTS
Trump opened his speech with "To my fellow Americans, America is back," to the standing ovation of fellow Republicans. "Our country is about to make a comeback that the world hasn't seen before, and may never see again."
Democrats held signs that read "No King" or "This is NOT Normal," while dozens of them walked out in the middle of their speech.
Al Green, a Texas congressman who refused to sit, was removed from office.
The chair will now instruct the sergeant to restore order. After warning Democrats to keep decorum, Republican House Speaker Mike Johnson told them to remove the man from the room.
Green appeared to shout at Trump while he shook his cane, claiming that Trump had not won a mandate for the November election, after Trump boasted about the Republican victories. Some Republicans sang "Nah nah nah nah hey hey goodbye" as Green was led out of the chamber.
Trump, who is a natural political brawler, seemed to relish the differences.
After Green's expulsion, he said: "I realize that there is nothing I can do to make the Democrats happy or make them smile or applaud or stand up."
Trump spoke at the House of Representatives where, a little more than four years ago, lawmakers huddled together in fear of their lives as a mob of Trump fans ransacked Capitol Hill in an attempt to overturn Democrat Joe Biden’s victory in 2020 over then-incumbent Trump.
Elon Musk, a billionaire businessman, was lauded by the president for his Department of Government Efficiency. This department has reduced federal employment to more than 100,000 workers and cut foreign aid worth billions of dollars.
Trump said Musk had identified "hundreds and billions of dollars in fraud," an amount that is far greater than what the administration claimed to date. Musk received applause from Republicans in the gallery.
MORE TARIFFS TO COME
Trump reaffirmed his intention to impose reciprocal additional tariffs on the financial markets.
He said, "Other nations have been using tariffs against us since decades. Now it's time for us to use them against these other countries."
Many Republicans were seated at this point. This was a sign of the divisions in Trump's party caused by his tariffs.
Investors' concerns over the economy were heightened by Trump's tariffs of 25% on Mexico and Canada - two of his closest allies - and an additional 10% for Chinese imports. The Nasdaq Composite has fallen more than 9% since its record-breaking closing high of December 16. This is close to the 10% drop commonly referred to as a market correction.
Trump, who often takes credit for the market's rise, didn't mention this week’s decline in his speech. He barely mentioned the stubbornly high price, instead blaming Biden. He said he "fought every day" to reduce costs.
According to a /Ipsos survey, only one third of Americans approve of Trump’s handling of cost of living. This could be a danger sign, given that his tariffs may increase inflation.
Trump asked Congress to extend the 2017 tax cuts. The Congressional Republicans presented a $4.5 trillion plan to extend tax cuts, strengthen border security and increase deportations.
The proposal calls on $2 trillion in cuts over the next decade. This could include education, healthcare, and other social services.
The Committee for a Responsible Federal Budget, a nonpartisan organization, estimates that Trump’s tax agenda could cost anywhere between $5 trillion to $11.2 trillion in a decade. This includes the elimination of taxes on overtime pay, tips and Social Security benefits. Reporting by Bo Erickson and Erin Banco Additional reporting by Jason Lange and Richard Cowan Trevor Hunnicutt, Tom Westbrook, and Tom Westbrook. Writing by Joseph Ax, Steve Holland, and Colleen Jenkins Editing by Scott Malone, Howard Goller, and Colleen J. Jenkins
(source: Reuters)