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The G7 nations have announced that they will be targeting those who continue to buy Russian oil.
The Group of Seven finance ministers announced on Wednesday that they would take joint measures to increase pressure against Russia, targeting those who continue to increase their purchases of Russian crude oil and those who facilitate circumvention. The G7 Finance Ministers have also agreed that trade measures such as tariffs, import and export restrictions, and bans on certain products are important in the effort to reduce Russian revenue due to Moscow’s invasion of Ukraine. The statement was released after a virtual finance minister meeting. Why it's important Washington has called upon its allies, including India and China, to impose tariffs against purchasers of Russian crude oil. Trump has not imposed additional tariffs against Chinese imports due to China's purchase of Russian oil. However, his administration has imposed extra tariffs upon imports from India. In the G7 statement of Wednesday, India and China were not mentioned. KEY QUOTES The G7 statement stated that "we will target those who continue to increase their purchases of Russian oil after the invasion of Ukraine, and those who facilitate circumvention." It added, "We will take measures to reduce our remaining imports, with an aim of eliminating them, including hydrocarbon imports." The G7 Foreign Ministers said that they are also "considering seriously" trade measures and other limitations on countries who help finance Russia's military efforts. The statement did not identify any country. CONTEXT Russia's full-scale Invasion of Ukraine The next election will be held in February 2022. In 2014, Moscow annexed Crimea. Western powers have imposed heavy sanctions on Russia and are considering ways to limit its financing. war efforts . (Reporting and editing by David Gregorio in Washington)
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Gold hits record price as US Government Shuts Down
The dollar and U.S. stock market were inchoate on Wednesday as the U.S. shutdown its major operations. This delayed the release of important jobs data that could affect the outlook for interest rates. The U.S. payroll data showed that employment in the private sector fell by 32,000, contrary to expectations of a 50,000 increase. This fueled fears that the U.S. labour market may be weakening. In the past, weak employment numbers would have led to increased bets that interest rates could be cut in order to support equity markets. However, with this week's shutdown of the government, it is less clear what will happen. Due to the government shutdown, Friday's publication of the Labor Department's September employment report, which is more comprehensive and closely watched than other reports in this category, will not take place. This would make it difficult for the Federal Reserve to determine whether or not rate cuts are warranted, as they assess U.S. economy health. Matthew Miskin is co-chief investment strategy at Manulife John Hancock Investments, Boston. The Fed is made more difficult by the lack of other data. The agencies have warned that the government shutdown will result in the furloughing of 750,000 federal employees at a cost of $400,000,000 per day. After a volatile session, the S&P 500 ended 0.3% higher. The Nasdaq Composite gained 0.4% and the Dow Jones Industrial Average remained flat. The MSCI All-World Index.MIWD00000PUS gained 0.4% after moderate gains on Wall Street. Gold prices rose to $3,895 per ounce, a new record for the third consecutive session. The benchmark 10-year Treasury yield in the United States fell by 5 basis points, to 4.1%. The STOXX Europe 600 index rose 1.2%, bucking the trend of the global market. It is now hovering near record highs. The FTSE 100 in Britain and the SMI in Switzerland outperformed. Healthcare stocks soared on expectations that they would avoid excessive U.S. tariffs following President Donald Trump's agreement with Pfizer regarding prescription drug prices. In the STOXX 600, the healthcare sector is ranked third. Lars Skovgaard is senior investment strategist for Danske Bank. He said: "There are a lot political risks in the healthcare industry, but once you see these risk diminish, investors will buy." I think that this could support European shares in the next few days." SLOW DOWN to Delay Data Investors may give greater weight to the ADP National Employment Report if Friday's nonfarm payrolls data is not released. George Lagarias is the chief economist of Forvis Mazars. He said: "The general notion is that these things will have a short term impact and not a longer-term effect, and the markets know this." The lack of data means we will assume that the current trend will continue. If there's no sign of a strong recovery in the economy, the Fed is likely to continue its current course. The futures market now indicates a 95% likelihood of a Fed rate reduction in October. This is up from 90% a day ago, and there's a 75% chance that another move will be made in December. Anthony Saglimbene is the chief market strategist for Ameriprise. He said that, if the shutdown continues, mid-October inflation reports could be affected. In a note, he stated that "an extended period in which the U.S. Bureau of Labor Statistics does not operate at full capacity could affect data collection for other reports and may impact the data quality." Japan's Nikkei fell 0.9% on Tuesday after a 11% rise in the previous quarter. South Korea's stocks rose by 0.9% to add to their 11.5% gains in the previous quarter. Data showed that exports in September rose at the highest rate in 14 months. DOLLAR FALLS The dollar index fell for the fourth consecutive day on foreign exchange markets. It was down last by 0.1% at 97.78. The euro remained unchanged at $1.1729 while the pound sterling rose 0.2% to $1.3478. The dollar fell 0.6% to 147.12yen after a Bank of Japan report showed that confidence among large Japanese manufacturers had improved in the second quarter. This increased the likelihood of an interest rate increase as early as this month. After two days of declines, oil prices dropped further as investors weighed up potential OPEC+ plans to increase output next month. U.S. crude fell about 0.7% to $61.93 per barrel, while Brent dropped 0.8% to $65.5.
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Wall Street closes at a higher level as investors ignore the US shutdown and jobs data
Wall Street's major stock indexes rose Wednesday with support from the Healthcare sector, despite a weaker than expected private payroll data and the uncertainty surrounding the first day of U.S. Federal Government shutdown. Investors were closely watching the ADP National Employment Report, as the Labor Department is expected to postpone its September jobs report if the federal government does not reopen by Friday. ADP reported a decrease in private payrolls by 32,000, and a downwardly-revised 3,000 drop in August. These numbers were lower than the economists' forecasts of growth of 50,000 for September, and the previous report of 54,000 in August. The Institute for Supply Management reported that U.S. manufacturing eked out a recovery in September. All three major U.S. indices rose after opening lower. S&P 500 Healthcare, which was boosted by pharmaceutical firms, was the largest gainer among the 11 major S&P 500 industry sectors. Tuesday, after Pfizer announced that it had reached a deal with President Donald Trump of the United States, healthcare rallies began in earnest. In exchange for tariff relief, the drugmaker agreed that it would lower its prescription drug prices under Medicaid compared to what they charge in other developed nations. Trump said that he expects more drug companies will follow suit. Lara Castleton of Janus Henderson Investors said that yesterday was a catalyst for the healthcare sector. She added that the sector had underperformed the market this year. She said that people haven't avoided it but haven't put as much money into healthcare as in technology or all the AI hype. Preliminary data shows that the S&P 500 rose 22.46 points or 0.34% to 6,710.92, and the Nasdaq Composite increased 94.02 or 0.42% to 22,754.03. The Dow Jones Industrial Average increased 42.04 points or 0.09% to 46,439.93. The S&P 500 technology sector gave the benchmark index another boost. Materials was the sector that saw the largest percentage drop during the session. Castleton observed that investors in equity appeared to be ignoring the uncertainty surrounding the shutdown. The markets have always been resilient when the government is closed. According to a Deutsche Bank note, the S&P 500 has risen during each of six shutdowns in recent years. The indexes advanced during the last government shutdown between the end 2018 and the start of 2019. AES shares rose sharply after Financial Times reported BlackRock's Global Infrastructure Partners is close to a deal worth $38 billion to buy the utility group. The U.S. Department of Energy took a 5% share in Lithium Americas, and another 5% in its joint venture with General Motors. Albemarle shares also soared after the U.S. Department of Energy acquired a stake. Corteva announced it would separate seed and pesticide business into separate publicly listed companies, sending shares of its company sharply down.
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Fermi: Allies could own equity in US nuclear consortium
The founders Fermi America, a company that hopes to build the largest data center in the world and fuel it using nuclear power, solar, and gas, said on Wednesday, foreign countries may take an equity stake. Fermi made its Nasdaq debut on Wednesday, with shares valued at $14.8 billion. Investors are increasingly interested in AI infrastructure stocks. Founders Rick Perry and Toby Neugebauer, a former U.S. Energy Secretary in the first Trump administration, want to build a site near Amarillo in Texas that will have four Westinghouse Electric AP1000 nuclear reactors. This would be the second U.S. plant to be built in a desert. Perry and Neugebauer are looking for the U.S. Government to partner with them in this project. It would be home to artificial intelligence powered by nuclear energy that the Pentagon could use. The founders stated that it is possible for the U.S. and other allies to take equity stakes into a nuclear consortium where Fermi will be involved. Neugebauer stated that high-level delegations from around the world have visited Neugebauer's office to discuss a possible partnership. "It's possible that other countries would also take an equity position in a nuclear consortium. He said that other countries could be interested in reinvesting in the United States, and becoming partners with us. After Trump's executive orders were issued in May, the interest in nuclear reactors increased. These executive orders aimed to speed up applications for new nuclear reactors, revamp the Nuclear Regulatory Commission and make nuclear waste and excess plutonium available for reactor fuel. The latest reactors in the U.S. were also Westinghouse AP1000 models at Vogtle, Georgia. They were delayed for years and cost about $16 billion more than budget. (Reporting and editing by Timothy Gardner, Echo Wang)
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US agencies continue to work on fossil fuels during shutdown
According to the Interior Department's contingency plan published on Wednesday, some government employees will remain on duty during the shutdown to process oil, gas, and coal leases on public lands. The U.S. Bureau of Land Management posted a plan that stated the goal of maintaining workers in these areas was to address the national energy crisis declared by President Donald Trump when he assumed office in January. BLM's shutdown plan for 2023 did not exclude energy leasing or permitting. The plan stated that "in order to protect life and property of the federal government and to address the National Energy Emergency," BLM employees responsible for processing coal energy leases and oil and gas permits/leases and other energy and minerals necessary for energy production would be excluded or excused on demand, to the extent necessary to protect life and property. It wasn't immediately clear if the Utah coal lease auction scheduled for Wednesday would go ahead. No officials from the Interior Department or BLM were available to comment. The BLM allows energy development on the 245,000,000 acres of federal land it manages. In its contingency plans, the Bureau of Ocean Energy Management (BOEM), which supervises energy development on federal waters, stated that renewable energy would cease, but oil-and-gas work would continue, albeit in a limited manner. BOEM announced that some exempt employees would continue to work on projects such as the Gulf of Mexico Oil and Gas Lease Sale scheduled for December and the development of the next oil and natural gas leasing plan for the United States. Energy Information Administration of the Department of Energy, on the other hand, announced on Wednesday that its weekly petroleum inventories - which heavily influence oil markets – would continue to publish on schedule. The Antideficiency Act prohibits federal agencies from spending taxpayer money without an appropriation from Congress, unless it is necessary to protect life or property. (Reporting and Editing by Bill Berkrot.)
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Gold hits record price as US Government Shuts Down
The dollar and U.S. stock market were inchoate on Wednesday as the U.S. shutdown its major operations. This delayed the release of important jobs data that could affect the outlook for interest rates. The U.S. data on private payrolls showed that employment in the U.S. fell by 32,000, contrary to expectations of a 50,000 increase. This added to fears that the U.S. labor market may be weakening. The government shutdown has muddied the outlook this week. While weak employment numbers would normally add to bets for interest rate reductions that could support the equity markets, it is not uncommon to see such bets. Due to the government shutdown, the Labor Department will not publish its more comprehensive and closely followed employment report for September on Friday. Investors said that this would make it difficult for the Federal Reserve to evaluate the U.S. economy as they weigh potential rate cuts. Matthew Miskin is co-chief investment strategy at Manulife John Hancock Investments, Boston. "Not having any other data makes this difficult for the Fed." The agencies said that there was no way out of the funding impasse, and the shutdown would result in the furloughing of 750,000 federal employees at a cost of $400,000,000 per day. S&P 500 recovered from earlier losses to gain 0.2% in the afternoon. Nasdaq Composite gained 0.3% and the Dow Jones Industrial Average remained flat. The MSCI All-World Index.MIWD00000PUS gained 0.3% thanks to moderate gains on Wall Street. In the face of uncertainty, gold prices rose to $3,895 per ounce, a new record for a third consecutive session. Meanwhile, the 10-year Treasury yield, the standard, fell by 4 basis points, to 4.1116%. The STOXX Europe 600 index rose 1.2%, bucking the trend of the global market. It is now hovering near record highs. The FTSE 100 in Britain and the SMI in Switzerland outperformed. Healthcare stocks soared on expectations that they would avoid excessive U.S. tariffs following President Donald Trump's agreement with Pfizer regarding prescription drug prices. In the STOXX 600, the healthcare sector is ranked third. Lars Skovgaard is senior investment strategist for Danske Bank. He said: "There are a lot political risks in the healthcare industry, but once you see these risk diminish, investors will buy." I think that this could support European shares in the next few days." SLOW DOWN DATA Investors may give greater weight to the ADP National Employment Report if Friday's nonfarm payrolls data is not released. George Lagarias is the chief economist of Forvis Mazars. He said: "The general notion is that these things will have a short term impact and not a longer-term effect, and markets are aware of this." The lack of data means we will assume that the current trend will continue. If there's no sign of a strong recovery in the economy, the Fed is likely to continue its current course. The futures market now indicates a 95% likelihood of a Fed rate reduction in October. This is up from 90% a day ago, and there's a 75% chance that another move will be made in December. Anthony Saglimbene is the chief market strategist for Ameriprise. He said that, if the shutdown continues, mid-October inflation reports could be affected. In a note, he stated that "an extended period in which the U.S. Bureau of Labor Statistics does not operate at full capacity could affect data collection for other reports and may impact the data quality." Japan's Nikkei fell 0.9% on Tuesday after a 11% rise in the previous quarter. South Korea's stocks rose by 0.9% to add to their 11.5% gains in the previous quarter. Data showed that exports in September rose at the highest rate in 14 months. DOLLAR FALLS The dollar index fell for the fourth consecutive day on foreign exchange markets. It was down last by 0.1% at 97.78. The euro fell 0.1% at $1.1724 while the pound rose 0.2% to $1.3475. The dollar fell 0.5% to 147.16yen after a Bank of Japan report showed that confidence among large Japanese manufacturers had improved in the second quarter. This increased the likelihood of an interest rate increase as early as this month. After two days of declines, oil prices dropped further as investors weighed up potential OPEC+ plans to increase output next month. U.S. crude fell about 1% to $61.71 per barrel while Brent dropped 1% to $65.35.
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Venezuelan oil exports exceed 1 million barrels per day for the first time since 2020
According to documents and shipping data from the state-run PDVSA, Venezuelan oil exports in September averaged 1,09 million barrels a day, which is the highest level since February of 2020. Data and documents show that the country has been struggling to stabilize its oil production and exports after coming under U.S. sanction in 2019. However, rising crude production, sales of stocks accumulated and increased imports of diluents for exportable crude grades have all contributed to a boost in oil shipments. The average for September was 13% higher than the previous month, and 39% higher than a year earlier. Around 84% of the total exports went to China directly or indirectly last month. China remained the top destination for Venezuelan crude shipped by intermediaries who have been trading Venezuelan oil since the sanctions were imposed. The data shows that an authorization granted by Donald Trump's U.S. administration in late July to Chevron has also allowed for increased exports. In September, 108,000 bpd Venezuelan crude was sent to the U.S., compared to 60,000 bpd in August. Oil exports dropped in the second quarter after the Trump administration suspended all licenses granted to foreign energy companies operating in Venezuela. This led to an increase of crude oil inventories, especially at Venezuela's primary production region, the Orinoco Belt. Some licenses were not reinstated. PDVSA has been draining these stocks since August while securing the imports of heavy crude oil and heavy naphtha, which is essential to dilution of OPEC's extra heavy output from allies, including Russia and China. Imports of diluents fell to 41,000 bpd from 99,000 bpd during the preceding month. Venezuela, however, has increased its purchases of heavy naphtha, light crude, and especially those from Russia this year. The accumulated average for the period through September is now 92,000 bpd, up from 88,000 bpd during the same period last year. Last month, Venezuela exported to its political ally Cuba 52,000 bpd crude oil and fuel and 74,000 tons of methanol. Venezuela reported to OPEC a crude production of 1.1 millions bpd for August, higher than the 1.08million bpd from the previous month. This is the highest output since February 2019.
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Brazil Energy Ministry seeks federal cash infusion for Eletronuclear amid risk of insolvency
Brazil's Mines and Energy Ministry asked the federal government to inject capital into Eletronuclear in order to prevent its imminent insolvency. This would add to the financial strains of the Angra 3 nuclear reactor in Rio de Janeiro, which is still unfinished. In a Monday letter seen by, Minister Alexandre Silveira informed the Finance, Planning and Management Ministries that planned investments for the maintenance of Angra 3 equipment and facility were completely cut from the budget 2026. Silveira said that the situation was "severely" compromising Eletronuclear, the state-run nuclear energy generator's ability maintain Angra 3 and service debts with banks BNDES Caixa Economica and Caixa Federal and make payments to a electricity sector fund. He claimed that the company would be "imminently insolvent" if it did not make a capital contribution to the budget cycle of next year. Without citing any figures, he referred to documents where the firm indicated a requirement for 1.4 billion reals ($262,70 million) to avoid government diluting before a planned bond issuance. Eletronuclear and the ministries did not respond immediately to comments. Budget uncertainty has caused a delay in the issuance of 2.4 billion reais ($450.4m) of debt to finance works that would extend Angra 1's operation by 20 years. Angra 1 is one of two nuclear plants in Latin America, operated both by Eletronuclear. According to a government agreement the securities would have been issued by Eletronuclear, and Eletrobras could convert them later into shares, without having to increase its stake or require additional federal support. Eletronuclear also called the issue "indispensable" in documents seen by. They cited short-term debts of 570 millions reais due to banks ABC and BTG in December, and cash that was expected to run out before November. If funds are not raised, BNDES, Caixa, and Santander could be in default, requiring "extraordinary liquidation measures" by October. Requests for comments from the lenders were not immediately responded to. ENBPar (which controls Eletronuclear) asked the Finance Ministry to convene a shareholder's meeting in August, but it has not been called. According to the internal studies in the documents, the government must pour 1.4 billion reals into Eletronuclear if it wants to keep control of the company.
Sources: GM and Hyundai are in talks about sharing pickups and electric vans with each other in North America.
According to documents and sources familiar with the discussions, Hyundai Motors and General Motors have reached a close agreement to share two commercial vans with the U.S. car giant.
Source: GM could provide Hyundai with pickups to sell under their own brand in North America.
Source: Such agreements could be the start of a larger partnership between the two automakers. Documents reviewed by the source show that Hyundai is looking at deals with GM, including joint development or purchasing of computing chips, batteries next-generation and battery materials.
GM and Hyundai, like many other global automakers are faced with increasing competition from Chinese EV manufacturers and the threat of a worldwide EV ban.
Trade war
Shared products are a great way to cut down on spending.
According to documents and a person familiar with these discussions, Hyundai would manufacture vans that will be sold both under its own brand and GM's, and initially import them from South Korea. Hyundai may manufacture the vans in North America as early as 2028. A person stated that Hyundai is looking at building a new factory, expanding production in an existing facility or outsourcing the manufacturing.
One of the sources stated that the talks about pickups are centered around GM sharing their midsized trucks branded as Chevrolet Colorado and GMC Canyon here in the United States. The source also said that Hyundai wants to sell a full-sized version of GM’s popular pickups. However, GM has not put this option on the table.
The person who spoke to me said that a pickup-sharing agreement would take longer than a commercial van arrangement to be finalized.
Sources said that the automakers were also discussing the possibility that Hyundai could provide GM with compact SUVs to add to their product lineup in Brazil.
Hyundai announced in January it was in discussions to supply electric commercial vehicle to GM. This is part of a pre-agreement to explore ways the automakers can cooperate in areas such as vehicles, supply chain and clean energy technologies in order to reduce costs and accelerate development.
Here are the first details of the partnership discussions, including the possibility of a pickup-sharing deal.
General Motors refused to comment on the specifics of negotiations, but stated in a press release: "Both businesses continue to explore possible areas of collaboration."
Hyundai stated in a press release that no deal has been reached in the ongoing discussions, but that both automakers are looking at deals "across strategic areas."
COMPETITIVE THREATS AND GEOPOLITICAL TENSIONS
Chinese EV manufacturers have revolutionized the auto industry by introducing high-tech and low-cost models. GM, one of many legacy automakers, is losing sales in China - the largest auto market in the world - and aiming to increase revenues elsewhere. Hyundai's China business is small, but the threat from Chinese exports to other countries is real.
Both automakers face geopolitical pressures that are exacerbated by the tariffs levied by or threatened by U.S. president Donald Trump. These could limit their ability to import components and force them to increase U.S. manufacturing.
Two sources with knowledge of the situation say that tariff threats also add uncertainty to the GM and Hyundai partnership talks.
Sam Fiorani is vice president of Auto Forecast Solutions, a research firm. He said that GM could benefit from a commercial van agreement to better compete with Ford Transit and Ram ProMaster, without having to invest in developing its own model.
He said that GM needed new commercial vans because the production of its decades old Chevrolet Express and GMC Savana is set to end soon.
Hyundai has considered sharing its ST1 electric vans, which are compact electric commercial vehicles. According to documents and a source, GM would also get a larger electric van that Hyundai has developed to compete with the Mercedes-Benz Sprinter. Hyundai documents indicate that the two automakers may share their sales and service networks.
Documents state that the smaller van will be assembled initially at Hyundai's Ulsan factory in South Korea and could potentially be supplied to GM beginning in mid-2027. In 2028, the model will be replaced by a larger van that is similar to Hyundai's Solati.
The proposed new North American van factory would aim to produce 60,000 vehicles by 2030, and over 100,000 by 2032.
PICKUP TRUCKS, SMALL SUVS
Hyundai has increased its U.S. Sales while China's sales are declining. It is now a serious competitor to Tesla on the EV Market, along with GM. Hyundai, unlike GM has a small presence in the lucrative U.S. truck and commercial vehicle market.
Fiorani of Auto Forecast Solutions said that Hyundai can leverage the GM partnership in order to gain a foothold where competitors like Toyota and Nissan are struggling to compete with Detroit Three automakers.
One source said that Hyundai is looking to give GM a small SUV called Creta in order to refresh its model line-up in Brazil.
Third source says GM is hoping to partly compensate for its struggles in China by partnering with Hyundai. The person stated that GM could potentially expand into South American markets by using Hyundai's mid-sized and small vehicle platforms. (Reporting from Hyunjoo Ji and Heekyong Ya in Seoul; Norihiko Shrouzu in Austin; Additional reporting in Detroit by Kalea hall; Editing and rewriting by Brian Thevenot, Nia Williams and Nigel Williams).
(source: Reuters)