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The season for choppy morning bids is upon us.
Gregor Stuart Hunter gives us a look at what the future holds for European and global markets. It's strange that, despite the fact we have passed the autumnal equinox and are now in the pumpkin spiced latte period, the markets still don't show the usual weakness at this time of year. That is, until today. Stocks in Asia are dropping after overnight Wall Street sell-offs sparked by weaker-than-expected data on the economy and comments made by Jerome Powell, who gave little clues as to where interest rates will go. Around lunchtime, the MSCI Asia Pacific ex Japan index is down 0.2% for most of Asia. Even with soggy data, the index has still risen 5.6% this month, and is hovering around a 4-year high. The usual dip buyers were not around, as U.S. stocks futures traded flat. Early European trades showed pan-region futures down 0.4%, DAX futures off by 0.3%, and FTSE Futures down 0.3%. Australian shares fell almost 1% following a higher-than-expected increase in consumer prices for August. Japan's Nikkei index fell 0.5% in September after the manufacturing sector saw its fastest decline in six months, driven by a further drop in new orders. There were still some bright spots, particularly in the Chinese markets. Alibaba's Hong Kong listed shares rose 5% on Wednesday after the ecommerce giant announced its largest artificial language model, the Qwen3Max, that contains more than one trillion parameters. This is almost six times more than the original ChatGPT version released three years earlier. New Zealand named Anna Breman its new central banking governor on Wednesday. She is the first woman to hold the position. The move comes after a major shakeup of the bank following criticisms over its economy management. Breman is the first deputy governor of the Riksbank, Sweden's central banking institution. Jimmy Kimmel has returned to the airwaves following a six-day ban for comments made on the air about the man suspected of assassinating Charlie Kirk, a conservative activist. "I cannot believe ABC Fake News has given Jimmy Kimmel back his job," U.S. president Trump wrote on Truth Social. He threatened further action against network. He posted: "Why would they bring back someone who is so bad, who is not funny and who puts Network in danger by playing 99% positive Democrat garbage?" The following are key developments that may influence the markets on Wednesday. Economic Data Germany: Ifo Business climate, current conditions and expectations for September Weekly crude oil stock report by EIA: US: new home sales for August Debt auctions: Germany: 7-year government debt U.K.: 4-year government debt
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Shanghai copper rates little changed despite US rate cuts
The copper price was little changed on Tuesday as traders were cautious about when the U.S. would cut rates again, while there remained doubts about whether China will provide more stimulus in order to boost its economic growth. As of 0334 GMT, the most traded copper contract on Shanghai Futures Exchange was up 0.03%, at 79.960 yuan per metric ton ($11,237.76). By 0334 GMT, the benchmark three-month price of copper at the London Metal Exchange had risen by 0.01% per ton. Jerome Powell, the U.S. Federal Reserve chair, said on Tuesday that the central bank must continue to balance competing risks such as high inflation and a weakened job market. Arguments from other Fed officials, however, showed policy divisions within the Fed. This led to uncertainty about future rate cuts in 2018. The U.S. Dollar strengthened, which weighed on the market. The dollar is stronger, making commodities that are traded in the greenback costlier for investors who use other currencies. China's key lending rate remained unchanged on Monday for the fourth consecutive month following the U.S. rate cut. This left investors in doubt about whether the Asian nation would continue to implement stimulus measures, and investor sentiment was cautious. Galaxy Futures analysts said that the incident involving the leakage of wet material at Freeport’s Grasberg mine operations remained unresolved. This kept supply of raw copper concentrates tight. Aluminium was unchanged among other SHFE base materials, while zinc fell 0.21% and nickel increased 0.27%. Lead lost 0.26%, and tin rose 0.5%. The price of nickel, tin, and zinc on the London Metal Exchange (LME) were all down. Aliminium, lead, and zinc, however, did not change much. $1 = 7.1513 Chinese Yuan Renminbi (Reporting and editing by Dylan Duan, Lewis Jackson)
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Equinor Gets Clearance to Use Deepsea Bollsta Semi-Sub for North Sea Ops
Norway’s offshore industry safety watchdog Norwegian Ocean Industry Authority (Havtil) has given Equinor consent to use the Deepsea Bollsta semi-submersible rig for operations in the North Sea.The rig will be used for plugging, drilling and completion of wells on the Visund Sør field, located in the northern part of the North Sea, 10 kilometers northeast of the Gullfaks C platform.The water depth in the area is 290 metres. Visund Sør was discovered in 2008, and the plan for development and operation (PDO) was approved in 2011. The field is developed with a subsea template tied to Gullfaks C. Production started in 2012.Deepsea Bollsta is a semi-submersible drilling facility of the Moss CS60E type, built at the Hyundai Heavy Industries shipyard (HHI) in South Korea and completed in 2019.The rig, under a two-year contract with Equinor valued at $335 million, is owned by offshore drilling contractor Northern Ocean and managed by Odfjell Drilling.
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Powell's comments weigh in as gold eases off its record highs.
Gold prices fell on Wednesday, as investors took profits after reaching a record-high in the previous session. Markets also weighed Jerome Powell’s cautious comments on possible interest rate cuts. As of 0224 GMT, spot gold was down 0.3%, at $3,753.22 an ounce. Bullion reached a new record of $3,790.82 per ounce on Tuesday. U.S. Gold Futures for December Delivery fell by 0.8% to $3.785.90. Powell said that the central bank must continue to balance the competing risks of a high inflation rate and a weakening of the job market when making future rate decisions. His colleagues, however, argued on opposite sides of the debate. OANDA Senior Market Analyst Kelvin Wong stated that gold is being affected by technical indicators overbought, leading to profit taking, and Powell's speech which was balanced but lacked any clear indications of future rate increases. The relative strength index of gold (RSI) was 78. This indicated that the metal had been overbought. We may see a slight dip in the gold price today. Wong stated that both short- and medium-term trends support a bullish view. The U.S. Weekly Initial Jobless Claims Report is due Thursday. This will be followed by the Personal Consumption Expenditures Index, the Fed’s preferred inflation indicator, on Friday. Capital.com analyst Kyle Rodda said that if Friday's data shows inflation rising faster than policymakers would like, perhaps due to tariffs or higher interest rates, this could put downward pressure on the price of gold. According to CME FedWatch, the markets expect two additional 25-basis point rate cuts in this year. The tool predicts 93% in October, and 77% in December. While U.S. president Donald Trump changed his rhetoric, claiming that Ukraine can recover all the territory occupied and occupied by Russia, NATO warned Russia Tuesday it would use "all military and non-military" tools to defend itself. Spot silver fell by 0.7% to $43.72 an ounce. Platinum dropped 0.2% to $1475.78. Palladium slipped 0.1% to $ 1,218.5.
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Asian stocks fall as concerns about growth cloud outlook
The stock market in Asia dropped on Wednesday following the declines on Wall Street, as comments by Federal Reserve chair Jerome Powell provided little insight into future interest rate trends and economic data fueled concerns about slowing global growth. MSCI's broadest Asia-Pacific index outside Japan fell 0.4% at mid-morning trading, after U.S. shares ended the previous session with a lower close. The S&P500 was down by 0.6%, its largest one-day drop in three weeks. Australian shares, down 1% in the region, extended losses following a larger-than-expected increase in consumer prices for August. U.S. futures for stocks were flat. After two days of declining, the greenback has stabilised. The dollar index is up 0.1% to 97.301. The dollar rose 0.1% to 147.735, as traders analyzed messages from Federal Reserve officials. Westpac analysts noted in a recent research note that Powell's speech highlighted the fact that "near-term inflation risks are tilted upwards and risks to employment are to the downwards", highlighting the difficulties of balancing Fed's dual mission in the current climate. After hitting a record high, Asian stocks are taking a breather. They remain on course to achieve their best performance this month in over a year. This is due to a weakening dollar, an increase in regional technology shares, and the Federal Reserve's policy of easing. A private sector survey revealed on Wednesday that the Nikkei index in Japan fell 0.5% as manufacturing sector activity dropped at its fastest pace in 6 months in September. This was due to further declines in orders. The Fed funds futures now indicate a 93% probability of a rate reduction at the October meeting of the U.S. Central Bank, up from an 89.8% chance on Tuesday. Treasury bonds from the United States attracted bids on all curves. The yield on the benchmark 10-year Treasury note fell to 4,1061% compared to its U.S. closing of 4,118% on February 2. The two-year rate, which increases with traders' expectation of higher Fed fund rates, dropped to 3.5673% from a U.S. closing of 3.592%. The U.S. economy data released Tuesday has stoked concerns about growth. S&P Global's purchasing managers' index data shows that U.S. businesses slowed down for the second consecutive month in September. Citi analysts stated in a note that "the S&P PMIs are softer than the preliminary September release but remain in expansion, and both are within the range of recent months." They said that the headline figures were misleading because they did not reflect the weakness of the details. Analysts said that the composite output price index had fallen to its lowest level since April. Anecdotes indicate that companies are finding it difficult to pass on higher costs to customers due to weaker demand and increased competition. Brent crude oil prices were last up 0.4%, at $67.87 a barrel. This was after an agreement to resume exports out of Iraq's Kurdistan fell through, which calmed some investor fears that a restart would worsen concerns about global oversupply. After hitting a record-high on Tuesday, spot gold was down by 0.2% to $3,757.49 an ounce.
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Anson, Australia's lithium supplier, signs a deal with LG Energy Solution. Shares soar
Anson Resources, an Australian miner, signed a deal on Wednesday with LG Energy Solution in South Korea for the supply and purchase of battery-grade Lithium Carbonate. This led to a nearly 25% increase in its share price. The agreement stipulates that the South Korean battery maker will purchase up to 4,000 dry tons of lithium-carbonate per year from Anson's Paradox Basin project in southern Utah in the United States. Supply is expected to begin in 2028. The initial term of the agreement is five years, with an option to extend it by another five years. The partnership is expected to help Anson with its debt financing efforts when the final investment decision is made. Bruce Richardson, CEO of Anson Energy Solution, said: "This offtake agreement lays the foundation for a partnership that will last a very long time. We are proud to supply LG Energy Solution with low-cost lithium made in the Paradox Basin." Anson's shares surged up to 24.7% as of 0045 GMT. This was the biggest intraday gain it had seen in over two months. The benchmark ASX 200 fell 0.6%. The price of lithium, an important material used in the batteries of electric vehicles, has been in a downward spiral for over a year due to a slower than expected uptake. Anson has made a "company-making deal" but it was bound to happen somewhere. Michael McCarthy, CEO for Australia and New Zealand of trading platform Moomoo, said that LG had won the race and that these commitments indicate a firming up of U.S. batteries. McCarthy said that the deal shows, in general terms, that battery technology is still a major component. (Reporting and editing by Alan Barona, Rashmi aich and Kumar Tanishk from Bengaluru)
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Asian stocks fall after Wall Street's overnight decline
The stock market in Asia started the day with a downturn on Wednesday after Wall Street saw a decline overnight. This was due to comments made by Federal Reserve chair Jerome Powell, who gave few hints about the future of interest rates. MSCI's broadest Asia-Pacific index outside Japan fell 0.2% early in the morning after U.S. shares ended their previous session with a lower close. The S&P500 was down by 0.6%. This is the biggest single-day drop in three weeks. Australian shares were the first to fall in early Asian trading, down 0.7% before today's release of CPI figures. Japan's Nikkei index also fell 0.4%. U.S. futures for stocks were flat. After two consecutive days of declines, the greenback stabilized but remained defensive. The U.S. Dollar index was last up 0.1% to 97.301. The dollar last fell 0.1% against the yen at 147.575 as traders analyzed messages from Federal Reserve officials. Westpac analysts noted in a recent research note that Powell's speech highlighted the fact that "near-term inflation risks are tilted upwards and risks to employment are to the downwards", highlighting the difficulties of balancing Fed's dual mission in the current climate. After hitting a four year high, Asian stocks are taking a breather. They remain on course to achieve their best month in a decade this month, thanks to a weaker dollar, an increase in regional technology shares, and the Federal Reserve's policy of easing. The Fed funds futures now indicate a 93% probability of a rate reduction at the October meeting of the U.S. Central Bank, up from an 89.8% chance on Tuesday. Treasury bonds from the United States attracted bids on all curves. The yield on the benchmark 10-year Treasury note fell to 4,1061%, down from its U.S. closing of 4.118% Tuesday. The two-year rate, which increases with traders' expectation of higher Fed fund rates, dropped to 3.5673% from a U.S. closing of 3.592%. The U.S. economy data released Tuesday has stoked concerns about growth. S&P Global's purchasing managers' index data shows that U.S. businesses slowed down for the second consecutive month in September. Citi analysts stated in a note that "the S&P PMIs are softer than the preliminary September release but remain in expansion, and both remain within the range of last few months." They said that the headline figures were misleading because they did not reflect the weakness of the details. Analysts said that the composite output price index had fallen to its lowest level since April. Anecdotes indicate that companies are finding it difficult to pass on higher costs to customers due to weaker demand and increased competition. Brent crude oil prices last rose 0.3% to $67.86 a barrel after an agreement to resume exports out of Iraq's Kurdistan fell through. This pacified some investors who were worried that the restart could exacerbate concerns about global oversupply. After hitting a record-high on Tuesday, spot gold was down by 0.1% to $3760.90 an ounce.
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Canadian PM Carney anticipates meeting Chinese President Xi 'at the appropriate time'
Mark Carney, the Canadian Prime Minister, said on Tuesday that he discussed steel tariffs with Chinese Premier Li Qiang and that he expects to meet Chinese President Xi Jinping "at an appropriate time." Carney, speaking to reporters in New York on Tuesday, said that there was some alignment in tariffs between the United States and China. "We had a very open discussion with our Chinese colleagues and Premier about this and the reasons behind it," Carney explained. Carney and Li discussed other topics, including "agriculture and agrifood products such as canola as well as seafood, and electric vehicles," according to the readout released by Carney’s office. Carney stated that there were "very productive discussions" between Chinese officials. "These discussions will intensify." "I will be expecting, at the appropriate moment, to meet with President Xi Jinping, but continue this dialogue with Premier," he stated. Christian Martinez, Ryan Patrick Jones Ismail Shakil, and Michael Perry contributed to this report.
Iron ore prices fall as analysts warn against an overstretched rally
Analysts warned that recent gains in iron ore futures may have been too rapid.
As of 0220 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange was trading 0.12% lower. It was 802.5 yuan (about $112.77) per metric ton.
The benchmark iron ore for September on the Singapore Exchange fell 0.04% to $105.65 per ton.
Analysts from Citi said that the recent strength of iron ore is overstretched and fundamentals are already reflected at current levels.
Citi warns that despite the fact that demand is resilient due to strong exports, and a steady blast-furnace output, this may not be sustainable as seaborne ore supplies are increasing.
Hexun Futures said that despite the poor profits per ton of steel at steel mills in China, hot metal production, which is a measure of iron ore consumption, continues to be high due to the accumulation of inventories on restocking before Chinese National Day, from 1-8 October.
According to Chinese consultancy Mysteel, the prices of iron ore concentrates produced domestically continued to rise in all regions of China during last week, as there was a tight supply of this commodity and a high level of demand.
The OECD stated on Tuesday that the U.S. tariff shock will be felt in full, as the fiscal support cushioned China's economic slowdown.
China's economy will grow by 4.9% in 2018, before slowing down to 4.4% in 2026. This is despite the slower growth expected in the second half as exports are rushed to be shipped before U.S. Tariffs and fiscal support recede.
Coking coal and coke, which are used to make steel, have both gained in price, rising by 1.07% and 0.8%, respectively.
The Shanghai Futures Exchange steel benchmarks were mostly lower. Rebar fell by 0.28%, while hot-rolled coils dropped 0.03%. Wire rods were down 0.49%, and stainless steels remained flat. ($1 = 7.1162 Chinese yuan). (Reporting and editing by Rashmi Liew)
(source: Reuters)