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The US dollar gains after Friday's gains and stocks mostly fall.
The dollar rose on Monday, after the major stock indexes had gained on Friday. Federal Reserve chair Jerome Powell said that a rate cut in September was probable but not certain. Last week, the dollar dropped following Powell's comments at Jackson Hole. On Monday, U.S. Treasury rates were higher. Barclays BNP Paribas, Deutsche Bank and other major brokerages now expect the Fed to cut rates by 25 basis points in September. Fed funds futures trader's are pricing in an 84% chance of a cut for September, according to CME Group’s FedWatch Tool. On Friday, there was much excitement about Powell essentially indicating that a rate reduction would be likely. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. He believes that the market has overreacted. "I believe that we will see a rate reduction, but it won't be by more than 25 basis point, and much depends on the PCE price index this Friday." The Fed could still change its policy based on data for August that is due before their meeting of September 16-17. Fed's preferred measure of inflation is the U.S. consumer prices reading due Friday. The dollar index (which measures the greenback in relation to a basket of currencies) rose by 0.58%, reaching 98.41. Meanwhile, the euro fell 0.79%, at $1.1622. The dollar gained 0.57% against the Japanese yen to reach 147.78. The Dow Jones Industrial Average dropped 284.09 points or 0.62% to 45,346.99. The S&P 500 declined 11.38 points or 0.18% to 6,455.26. And the Nasdaq Composite rose by 20.31 points or 0.09% to 21,515.66. Investors will also be eager to hear the results of Nvidia on Wednesday. The MSCI index of global stocks fell by 1.70 points or 0.18% to 953.59. The pan-European STOXX 600 fell by 0.44%. London's markets were closed due to a holiday. This lowered the overall trading volume in Europe. Sources told the weekend that they expect the European Central Bank to keep rates unchanged in September. If the economy continues to weaken, discussions about future cuts could resume in the fall. Donald Trump, the U.S. president, criticized South Korea only hours before Monday's summit with its new leader Lee Jae Myung. Both countries are involved in low-level discussions about trade, nuclear energy and military expenditure. The Korean won has weakened by 0.43% in relation to the dollar. As traders prepare for the auctions scheduled this week, U.S. Treasury rates also increased. The yield on the benchmark 10-year U.S. notes increased 1.3 basis points, to 4.271%. Euro zone bond yields rose earlier, too, after falling on Friday. As Russia and Ukraine's peace talks drag on, oil prices rose. U.S. crude oil futures rose by $1.14, to settle at $64.80 per barrel. Brent futures gained an additional $1.07 for a total of $68.80. Spot gold dropped 0.02%, to $3371.39 per ounce. Caroline Valetkevitch reported from New York, Nell Mackenzie contributed additional reporting in London and Andrew Heavens edited the article.
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US Interior Department adds copper to Critical Minerals List
Copper and potash, among other minerals, were added to the list of critical minerals for 2025 by the U.S. because they are important to national security and the economy. The Geological Survey (a branch of the U.S. Department of Interior) released the draft list to the Federal Register for public comments for 30 days. According to the Bipartisan policy center, inclusion on the list can make projects more eligible for federal funding or subject to a simplified permitting process. It may also make them more competitive because of fees placed on imported goods. Copper is used widely in transportation, defence, and in the U.S. Power Grid, which requires a revamp as the demand for electricity has increased due to the growth of data centers and artificial Intelligence. Potash, a potassium-rich sodium salt, is used primarily to make fertilizer. Silver, lead and silicon have also been added to the list. The draft list is a roadmap for reducing U.S. dependency on imports, and expanding domestic production. Secretary of the Interior Doug Burgum said. The Interior Department was directed by the executive orders signed this year by President Donald Trump to determine whether met coal (coal used to make steel), also known as coal for making steel, and uranium - the fuel in nuclear power plants - should be included on the list. Interior Department said that met coal and nuclear fuel uranium were not included in the draft list but welcomed public comments on their inclusion on the final one.
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Zimbabwe brings back maize import ban after bumper harvest
A senior official in the agriculture ministry said that Zimbabwe had brought back its ban on maize exports to support local farmers. The country has also grown enough this year to provide its millers with a bumper crop, the official added. The improved rainfall has increased production and reversed the sharp decline that occurred last year, when El Nino caused a drought in Zimbabwe which forced it to import maize, including GM varieties. "We evaluate the situation daily. Obert Jiri is the Permanent Secretary of Agriculture at the Ministry of Agriculture. Zimbabwe's maize consumption, which is around 1.8 million tons per year, fell to 800,000 tons in 2023/24, from 2.3 millions metric tonnes two years before. The crisis led the government of southern Africa to temporarily lift import restrictions in order to alleviate food shortages. Jiri stated that the recovery this year, coupled with the state's support programmes, such as the Pfumvudza Smallholder Scheme, has left the nation with enough stock. Independent analyst Paul Chidziva warned Zimbabwe's agriculture sector, which employs 70% of the country's population, remains vulnerable to extreme weather events and droughts exacerbated by climate changes. The government promotes drought-tolerant plants such as millet and sorghum. Jiri stated that the current surplus presents a rare chance to strengthen food security and reduce dependence on imports. Zimbabwe spent $300,000,000 in hard currency to import maize in 2020, as droughts had left over half of the population hungry. (Editing by Sfundo Parakozov & Andrew Heavens).
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Business community worried about Trump's desire to make more deals similar to Intel
Donald Trump, the U.S. president, said on Monday that he wanted to invest more in U.S. businesses. It is unclear if Corporate America will be on board. The White House announced on Friday a nearly 10% stake in Intel, which converts government grants to equity shares. Trump reiterated his commitment to other deals similar to Intel's announcement on Monday. The approach of the administration is a departure from decades of thinking in the U.S. about the economy. In the past, the government had taken corporate stakes during rare emergencies such as the global financial crisis of 2008 and the subsequent bailouts of U.S. automobile companies. Intel may be struggling, but the company still has $9 billion in cash and a $105 billion market value. Critics say that the Intel move, along with the White House’s full-court pressure to get the U.S. Federal Reserve lower interest rates, and its use of emergency power to slap import tariffs, as well as involvement in various mergers, threatens the nimbleness of the business world. "We are moving away from a capitalistic economy and towards a more state-engaged one. This is a major change in America's economy. Bill George, former Medtronic chief executive officer and fellow in executive education at Harvard Business School said: "I've never experienced an era quite like this." Trump wrote in a Truth Social post on Monday that he would "make deals like that all day for our Country," praising the rising stock price of the company. Trump stated in his post that companies who make "lucrative deals" with U.S. state would be helped, but did not provide any details. Intel had pledged to use CHIPS Act funds to build plants in America. Intel's regulatory filing from Monday makes the risks of government involvement more evident. Intel outlined several new risks associated with government investment in the company, including the potential harm to international sales and the limitations on the chipmaker's future ability to receive government grants. Intel CEO Lip Bu Tan took it a step farther in a video released on Monday by Commerce Department. He said, "I do not need the grant." He said: "But I am really looking forward to the U.S. Government becoming my shareholder." Analysts have also raised concerns about the impact of Intel's deal on customers. Is it possible that the administration could 'encourage,' Intel customers to use its capacity? In a note published on Tuesday, Bernstein analyst Stacy Rasgon outlined her thoughts. Intel isn't the only company in which Trump has personally invested. The White House intervened in June to ensure that Nippon Steel, a Japanese company, completed the purchase of U.S. Steel. Trump described this as a "golden stake" which gives Washington control over its operations. The White House also took a stake MP Materials, a rare earths company, and, on Monday, White House Economic Advisor Kevin Hassett stated that the government may take further stakes in companies. Nell Minow is the chairperson of ValueEdge Advisors, a Portland, Maine-based firm. The White House claims that it is better to increase the production of critical industries in the United States than to outsource manufacturing to other countries. Trump received a number of CEOs shortly after his November 2024 re-election, and this parade of visitors continues into his current term. Apple CEO Tim Cook gave Trump a souvenir plaque that was customized with 24-karat Utah gold earlier this month. Apple, one of the largest companies in the World with a Market Value of over $3 Trillion, has tried to move production from China to India. Trump also criticised this decision. Apple announced a $600 billion investment plan in the United States. The White House suggested that Apple could also manufacture smartphones in the United States. The United States has a limited capacity for manufacturing smartphones. George said, "I think that companies are starting to understand how much control and ownership they want to surrender to the government." George said. David Gaffen, New York (Writing and reporting by David Gaffen; editing by Chizu Nomiyama & Mark Porter; Reporting by Susan Heavey and Ryan Patrick Jones from Washington; Reporting by David Gaffen and Ryan Patrick Jones from Toronto; and David Gaffen and David Gaffen both in New York)
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As markets wait for clues about Fed policy, gold ticks lower
The gold price eased Monday as investors locked up profits. A stronger dollar also added to the pressure. Meanwhile, the market is now looking at the upcoming U.S. PCE statistics for clues about the Fed's future policy. As of 0957 am, spot gold was down by 0.1% to $3,370.14 an ounce. After reaching its highest level in August since Friday, ET (13.57 GMT) has seen gold prices fall 0.1%. U.S. Gold futures for delivery in December also dropped 0.1% to $3.414.90. The dollar is now 0.2% more expensive than rival fiat currencies. This means that foreign buyers will pay more for bullion in this currency. Peter Grant, senior metals analyst at Zaner Metals, said, "The market has absorbed Powell's Friday comments and may be taking a small profit as we wait for fresh inputs which might give us a better indication about the likelihood of September rate cuts." The gold price rose to a two-week high after Federal Reserve chair Jerome Powell hinted at a possible rate cut during the U.S. Central Bank's next month meeting. Powell stated that the risks of the job market are increasing, but inflation remains a concern and that a decision has yet to be made. According to CME FedWatch Tool, the markets expect a rate cut of 25 basis points at the Fed policy meeting in September. The benchmark 10-year U.S. Treasury rates rose following a sharp drop on Friday, after Powell's address. US/ Gold that does not yield is more attractive in an environment with low interest rates. Investors await U.S. Personal Consumption Expenditures data due on Friday for further clues about the future path of the central bank. Personal Consumption Expenditures data, due on Friday. Silver spot was down 0.2% to $38.74 an ounce after a Friday peak of nearly one month. "I believe $40 and beyond is definitely in play." Grant stated that the fundamentals of silver are very good and the market is still in a deficit. Palladium fell 2.1% to $1102.79 and platinum dropped 1.1% to $1346.90. (Reporting by Sarah Qureshi in Bengaluru; editing by Barbara Lewis)
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Hassett, White House's Hassett, says US could buy stakes in other chips companies
Kevin Hassett, White House economist and CNBC interviewee on Monday, said that the federal government could invest in other U.S. companies involved in semiconductors or even other industries. Hassett asked if this deal with Intel was part of a bigger effort by the U.S. Government to acquire equity stakes in industries it supports. He also said that there may be other transactions similar. The National Economic Council Director told CNBC, "I believe this is a special circumstance due to the huge amount of CHIPS Act expenditures that Intel was receiving." "But, the president made it very clear from the beginning of the campaign that it would be wonderful if, at the end, the U.S. was able to start building up a sovereign fund. Hassett added: "I'm certain that there will be more transactions at some point, if they are not in the industry but in other sectors." Intel's investment is the latest in a series of unusual deals with U.S. firms that have alarmed critics who claim Trump's actions are creating new categories of risk for corporations. Under Trump, the U.S. has allowed AI chip maker Nvidia's H20 chips to be sold to China. It also allowed the Pentagon become the largest shareholder of mining company MP Materials, and it acquired a "golden stake" with certain rights of veto as part of Japan Nippon Steel's purchase of U.S. Steel. (Reporting and editing by Toby Chopra, Louise Heavens and Susan Heavey)
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India warns Pakistan about potential flooding as both countries battle torrential rainfall
Pakistani officials and New Delhi source said that India had shared with Pakistan a warning about possible cross-border floods, amid deadly flooding and monsoon rains. Information sharing has been a shock to New Delhi because it put an old treaty between Islamabad and New Delhi on the table. Water access In April, the case was placed in "abeyance" after a fatal accident had been linked to it attack On Hindu tourists in Indian Kashmir, Pakistan. Islamabad denies any involvement. Tensions ? In May, the two nuclear-armed rivals engaged in the most violent military conflict in decades. The Indian source stated that the Indian high commission in Islamabad issued the warning to Pakistan's Foreign Ministry on Sunday on "humanitarian" grounds and not in accordance with the 1960 Indus water treaty. This was in response to heavy rains in Jammu and Kashmir, which borders Pakistan. Citing government regulations, the source declined to provide a name. The Indian foreign ministry has not responded to a comment request. The Pakistani foreign ministry stated that the warning was sent through diplomatic channels, "rather than the Indus water commission as required by the Indus waters treaty". The floods of this month are a major concern India's northern region of Jammu & Kashmir At least 60 people have been killed and more than 400 others injured in the northwest Pakistan. The National Disaster Management Authority of Pakistan said that 799 people have died in floods in Pakistan since monsoon began in late June. It warned that more heavy rains are expected until September 10. Mazhar Hussain is a disaster management officer in the Pakistani Province of Punjab. He said that the Indian government had shared information about a potential surge in the Tawi River, which turns into the Sutlej after crossing the border. Hussain stated that the report did not indicate the level of flooding but warned about the high floods in the river. The dams in India have been filled by heavy rains from Pakistan, and this will force India to release more water. The heavy rains in Pakistan combined with the water released by India will cause floods along Sutlej Ravi and Chenab rivers in Punjab. WATER SUPPLY According to the 1960 treaty three rivers flowing westward from India were given to Pakistan, and three east-flowing rivers to India. Pakistan is worried that India will choke off its main water source, which could put at risk its hydro-power and agriculture. In a statement issued on Monday, the Pakistani foreign ministry urged India to adhere to all of the Indus Treaty's provisions. "India's unilateral decision to put the Treaty on hold could have serious negative consequences for peace, stability and security in South Asia." Reporting by Krishna N. Das, Islamabad; Mubasher Bukhari, Lahore. Editing by YP. Rajesh & Gareth Jones
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Luxcara, a German company, may cancel the Chinese turbine contract for a North Sea wind farm
Luxcara, a German company, said Monday that it could switch to Siemens Gamesa wind turbines for the 300 megawatt Waterkant Wind Farm. This would mean scrapping an agreement with a Chinese firm which had attracted political scrutiny and criticism by European turbine manufacturers. Luxcara, an asset manager based in Hamburg, has reserved 19 Siemens Gamesa wind turbines. Siemens Gamesa is a subsidiary owned by Siemens Energy of Germany. The same type was already purchased for the 1.5-gigawatt Waterekke Project, the largest offshore wind project ever undertaken in the German North Sea. The turbines would be replacing the ones that Ming Yang Smart Energy, a Chinese company, was to manufacture for the project as part of a deal announced in the past year. Luxcara announced that it would consider the change in order to achieve economic efficiency through bundling of procurement processes and contracts. It will also conduct joint installation campaigns, and coordinate operations for both projects. Holger Matthiesen said that this would enable the two project companies to coordinate their development, construction and operations even closer. Waterkant is expected to generate power for 400,000 homes by 2028. It will be connected to the grid in the German North Sea. The former German economy minister was very critical of the deal, as were the wind turbine manufacturers in Europe. They said that it would allow China to access vital infrastructure. Ming Yang was a result of a review by the European Commission, last year, into possible market distortions caused by Chinese wind-turbine makers in five European Union member countries. China branded this move "discriminatory". Luxcara stated that it informed relevant authorities and partners of the project about the potential switch in turbine suppliers. It did not specify whether political and regulatory scrutiny had played a part in the decision. Siemens Gamesa and Ming Yang Smart Energy, as well as the German Economy Ministry, did not respond immediately to comments. Reporting by Riham alkousaa, Editing by Helen Popper
IMF expects Panama's GDP to grow 4.5% in 2019 as a result of the copper mine closure
The International Monetary Fund executive board stated on Monday that Panama's economy will grow this year, as the effects of the closure of First Quantum Minerals Cobre Panama Copper Mine in late 2023 fade and the non-mining sector continues to grow.
Why it is important
Panama's economy has recovered after the Cobre Panama Mine, the largest open-pit copper deposit in the world, was closed down in 2023 due to protests by local residents about tax contributions and environmental impact.
By the Numbers
IMF predicts that Panama's economy will grow by 4.5% in 2025, and continue to grow at 4% per year through 2030.
Comparing the economy of Central American countries
The growth rate is expected to be 2.9% by 2024.
KEY QUOTES
The IMF stated in a press release that "the economy is recovering" from the effects of the Cobre Panama mine closing.
The report said that the economy of the country "is expected continue to recover, but there are significant downside risks as well as a high level of uncertainty."
IMF said that a plan to reduce spending approved by the Cabinet, if implemented fully, could help the government reach its fiscal goal of 2025.
CONTEXT
First Quantum and Panama both suffered financial losses due to the closure of Cobre Panama. The company had contributed 1% of global copper production.
Panama, which was one of the fastest-growing economies worldwide in the past decade, experienced a slowdown in its gross domestic product (GDP) growth in 2024, compared to the 7.4% increase in the year before, due to the closure of the copper mine and the decline in air transport. Reporting by Diego Ore and Natalia Siniawski; Editing by Daina-Beth Solomon, Aida-Pelaez Fernandez, and Chris Reese
(source: Reuters)