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EU to set price controls on new carbon market
In a letter to the European Union's climate chief, it was revealed that the EU is working on measures to control the prices of its new carbon market. This is in response to concerns from governments about the possibility that the scheme to reduce emissions could lead to higher fuel costs. Policy is to be implemented in 2027 to charge for the planet-heating emission produced by transport and heating fuels. This will encourage people to switch to cleaner heating systems and electric vehicles. The revenue from the scheme will be used to help people pay their bills, subvention electric cars and make energy-saving renovations in homes. Some governments are concerned that the measure could stoke citizen opposition to climate policies if perceived as a way to increase their bills. This year, a group of 19 countries, including the Czech Republic and Germany, asked Brussels to implement stricter price controls. In a response to the requests, EU climate commissioner Wopke H. Hoekstra wrote: "I share your concerns about the uncertainty of future price levels in ETS2 and the price volatility therein. The new EU Carbon Market is designed to release extra permits into the market if the price of CO2 reaches 45 euros. This will help lower prices. Proposal to DOUBLE the number of permits released Hoekstra stated that the Commission would propose to double the number of permits issued in this scenario, potentially reaching up to 80 millions per year in the years 2027-2028-2029. The letter, dated 21 October, stated that "this will more effectively address unwarranted prices rises and improve the market confidence, which are key for planning decarbonisation investment." The Commission will propose to launch carbon permits auctions in 2026 to give governments funds to jump-start investments that help people switch to cleaner technologies. The Czech Prime Minister Petr Fiala welcomed the plans on Wednesday, but he said that he wished Brussels would go further and delay launching the carbon market. Leaders of EU countries will meet on Thursday to discuss the bloc's 2040 climate goal. They will focus on the funding and policies needed to help businesses and citizens achieve the target. (Reporting and editing by Ed Osmond; Additional reporting by Jan Lopatka & Jason Hovet)
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Belgium considers energy limits to power data centres that are consuming a lot of electricity as AI demand increases
The Belgian grid operator said it could limit the amount of electricity allocated to data centres in order to protect other industrial users. This was due to a surge in energy-intensive AI facilities. According to the reforms proposed by Elia, data centers would be put in a different category, allowing grid capacity to specifically be allocated for them, within a certain limit. The operator added that this would allow for flexible connections in cases where grid congestion may limit access. As major tech companies spend billions on AI and data centres, nations around the globe scramble to meet the sudden energy demand required to operate the buildings. This is expected to push power consumption to new records over the next two-years. Elia reported that in Belgium, data centre requests have increased nine-fold from 2022. The capacity reserved for 2034 is already more than twice the 8 terawatt hours envisioned by national grid development plans. The report said that "such volumes were not expected during the development of various grid development scenarios in Belgium's electric network," and stressed the need to stop speculative development which is unlikely to materialise by blocking grid capacity. Mathieu Bhet, Minister of Energy in France, told the Parliament earlier this week that the federal grid development plan 2028-2038 will address the evolution of data centres consumption. He said Tuesday that he would pay special attention to the issue during the approval of the plan. Google, the U.S. technology giant, plans to invest $5.80 billion in Belgium to expand its data centres campuses and support its AI strategies. (Reporting and editing by MuvijaM; Alban Kacher)
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Netflix and stocks are mostly down as gold prices continue to fall
Gold prices fell again on Wednesday. This comes a day after gold spot experienced its biggest single-day decline in five years. Major stock indexes were mostly down, with Netflix shares falling after disappointing outlook. Investors booked profits, and gold, which was one of the best performing trades for the year, fell. The price of gold is still on track to have its best year since 1979's oil crisis. It has risen more than 50% this year. Last week, spot gold fell 1.73% to $4,052.69 per ounce. Netflix shares were down by more than 9% at the opening of trading. Wall Street's major three indexes were also lower. Investors will be waiting for Tesla's results, which are expected to kick-off the earnings season of the Magnificent 7 group of megacap stock. Tesla shares fell about 1%. We've been seeing a lot more volatility on the markets in recent months. "We've seen a lot of volatility in the markets lately. He said, "We're in the earnings season and that means uncertainty." Tariff issues still exist. The Middle East war is still a major issue. "We try to focus on the companies themselves and their performance." Russia said Wednesday that it is still preparing for the potential summit between U.S. president Donald Trump and Russian President Vladimir Putin. The Dow Jones Industrial Average dropped 118.69, or 0.25 percent, to 46.806.05, while the S&P 500 declined 22.73, or 0.33 percent, to 6,713.39, and the Nasdaq Composite was down 165.07, or 0.70% to 22,791.98. The MSCI index of global stocks fell by 2.63 points or 0.26% to 922.22. The pan-European STOXX 600 rose by 0.07%. Investors increased their bets that the Bank of England would cut interest rates after data revealed unexpectedly stable inflation. The blue-chip FTSE 100 rose 1.1%. The yield on benchmark U.S. 10-year notes increased after two consecutive sessions of falling, but the market remained range bound as the U.S. Government shutdown entered its 22nd day without a resolution in sight. The yield on the benchmark U.S. 10 year notes increased 1.1 basis points from late Tuesday to 3.974%. Investors have priced in an almost full 25-basis point rate cut. Due to the shutdown, policymakers may be left blind during the meeting. This is not ideal as they are divided on which risks should receive the most attention. Trump rejected a Tuesday request from top Democratic lawmakers that they meet until the U.S. shutdown, which has been ongoing for three weeks, ends. The dollar was barely changed. According to sources, the new prime minister Sanae Takaichi has been preparing a stimulus package that will likely exceed last year's $192.19 billion (13.9 trillion yen) in order to help families combat inflation. Next week, the Bank of Japan will also meet. Like the ECB of Europe, it is expected that the central bank will maintain its current rate. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) fell by 0.01%, while the euro rose 0.01%, reaching $1.16. The dollar gained 0.01% against the yen to reach 151.94. The price of oil rose today, with U.S. Crude up 2.45% to $58.64 per barrel and Brent up 2.15% at $62.64 a barrel. (Reporting and editing by Mark Potter and Peter Graff; Additional reporting from Marc Jones in London.
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Oil prices remain low, and so do the deals for upstream oil and natural gas.
Enverus, an analytics firm, said that the persistently low crude oil prices in the US upstream oil sector impacted merger and acquisition activity during the third quarter. Dealmaking has fallen for the third consecutive quarter, as U.S. Crude Futures have averaged around $65, which is the price that producers claim they need to drill profitably. U.S. crude oil futures averaged $75 during the same quarter of last year. Deals worth $9.7 billion were disclosed in the quarter ended September 30, Enverus said, marking a 28% drop quarter-over-quarter. The decline in M&A activity comes after a series blockbuster takeovers of oil and gas giants in recent years. These deals culminated in a record deal worth $192 billion by 2023. Andrew Dittmar is the principal analyst of Enverus Intelligence. He added that "most remaining shale M&A deals need to be priced higher in order for public companies to pay for undeveloped locations." (Reporting and editing by Nathan Crooks, Barbara Lewis and Georgina McCartney from Houston)
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Vice President: Gabon does not plan debt restructuring but is focused on growth.
Vice President of Gabon said that the country is not contemplating a debt restructuring, or reprofiling. Instead, it is recalculating its GDP to make the debt-to-GDP more favorable. Alexandre Barro Chambrier, vice president of Gabon, said that Gabon also audits internal debts. He made this statement at the Financial Times Africa Summit held in London. When asked about possible debt restructuring or reprofiling, Chambrier replied: "We're not at that point at this time." In January, Gabon's World Bank disbursements ceased due to mounting arrears. It was also experiencing a severe liquidity crunch that left it increasingly dependent on regional capital markets for financing. Chambrier stated that "there is no need to be afraid" about the debt and borrowing of the country, and that Gabon was finalising an economic plan to ensure that all the debts contributed to the long-term development and growth of the country. He said to a panel in the early morning that Gabon is working to increase oil production and can repay. In his comments, he said that rebasing gross domestic product would better capture both the informal sector and "natural capital" of the country. This would result in a higher GDP figure than what the World Bank calculated, which was just under 21 billion dollars in 2024. He said that the rebasing will likely be finished before year's end and would make the ratio of debt to GDP more favorable. Auditing internal debt will ensure it is "clean or right". "This is a part of the rule-of-law in a nation. You really need to assess whether things are done well and that governance is good. Resources are used efficiently. He said, "There is no evaporation." He said that Gabon has regular contacts with the International Monetary Fund but is more interested in having "room to manoeuvre" for investment than securing a loan programme from the Fund. Reporting by Libby George Editing Peter Graff
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TSX rebounds with energy and tech stocks leading gains
Canada's main index of stocks rebounded Wednesday after the previous session saw the largest single-day decline since April. Energy and technology shares were the leading upward movement. 10:16 am ET (1416 GMT), Toronto's S&P/TSX composite index was up 0.15% at 29932.49 points. The S&P/TSX Composite Index in Toronto was up 0.15% to 29932.49 at 1416 GMT. Energy sector was the best performer with a 1% gain, as oil prices rose for a second day in a row, about 2%. Material stocks remained stable despite the volatility on precious metals markets. Gold fell further after having fallen more than 5% the previous session. The fact that inflation is increasing while gold prices are falling is counterintuitive. Shiraz Ahmed is the founder and CEO of Sartorial Wealth Inc. He said that he attributes a large part of gold's price movement to profit-taking because of its incredible rise. He said that historically, an increase in price is viewed as a "bubble", so the recent drop in precious metals was viewed positively. Gold is still on track to have its best year since 1979, despite the volatility. Canada's benchmark stock index, which is heavily weighted towards commodity-related stocks has been riding this gold wave to a gain of 20.9% so far this season. BlackBerry, the cybersecurity company, surged 7%. Industrials and real estate also contributed to the increase, with increases of 0.7% and 0.5% respectively. Consumer staples and discretionary products bucked this trend by declining 0.3% each. The market participants are now awaiting the release of the U.S. Consumer Price Index on Friday. This is a key inflation indicator which could give insight into the Federal Reserve's monetary policy trajectory. Also, the Canadian retail sales numbers, which are due to be released on Thursday, should provide a good indication of consumer spending habits. (Reporting by Ragini Mathur in Bengaluru; Editing by Vijay Kishore)
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UN chief warns that the rules-based trading system is at risk of being derailed.
The United Nations chief said that tariffs were a major problem for the global trade system, and the developing countries were the worst affected. The rules-based system of trading is in danger of being derailed, U.N. Secretary General Antonio Guterres warned delegates on Wednesday at the U.N. Trade and Development Conference in Geneva. He cited concerns over trade wars and increasing trade barriers. The tariffs imposed by Donald Trump since his inauguration in January shocked the financial markets, and created a ripple of uncertainty throughout the global economy. Trump increased tariffs on imports of dozens countries starting August 7. This left major trading partners such as Switzerland, Brazil, and India scrambling to find a better deal. Guterres stated that "supply chains are in chaos and trade barriers are increasing, with some of the least developed countries being subjected to extortionate 40% tariffs despite only representing 1% of global flows." The EU may have struck a deal that sets duties at 15% for most of the goods it exports into the United States. However, these are usually much higher in the so-called Least Developed Countries. Laos for example faces 40% tariffs. The World Trade Organization (WTO) slashed its forecast of growth in global merchandise trade volumes to 0.5% by 2026, citing the delayed impact expected from U.S. Tariffs. This was a major revision downwards from the previous estimate of 1,8% growth in August. Trump's tariff policy has also put pressure on the global trade rules that were agreed by the World Trade Organization. A former WTO chief said in April that the future of global trade terms could be decided without the 30 year-old international watchdog, unless it quickly reforms itself. (Reporting and Editing by Miranda Murray and Aidan Lewis, Aidan Lewis, Aidan Lewis, Olivia Le Poidevin)
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Western retail demand for Gold soars amid rush for Hard Assets
Gold is gaining in popularity at London's Hatton Garden. Diamonds were once the main attraction, but gold has now taken over. Customers are flocking to the famous jewellery district in search of bullion coins and bars, expanding the pool of investors for tangible assets. "There is a mix between buying and selling, but the buying is stronger." Despite high prices, people continue to buy. "Many believe that prices will rise even further," said Mashhood a member of staff at a local store. On Monday, spot gold reached a new record of $4381 an ounce. Retail interest in gold remains high, despite a sharp sell-off on Wednesday and Tuesday that took it down to $4,076 an ounce. The Royal Mint of Britain has seen a surge in activity due to the increased investor interest. This month, the Mint's e-commerce activity reached its highest level ever. The demand for precious metals was reflected in this record-breaking day. The surge in demand also resulted in exceptional individual transactions. The Royal Mint's Stuart O'Reilly said that the company is seeing 60% of its existing customers and 40% of new ones. Existing investors are increasing their average orders and their positions, and existing investors have also increased their average order value. TAX STRATEGY Tax-efficient strategies are being explored by customers as well. "I am converting my bar of gold into coins in order to avoid Capital Gains Tax. Cherry Jephson said she would sell some but keep the other two thirds because I hear that prices are likely to rise. Profits from the sale of gold bars are subject to CGT in the UK. These assets are taxed. Certain British gold coins such as Sovereigns or Britannias are exempt from CGT because they are considered legal tender. Other REGIONS In Germany and Austria, traders and banks are reporting a very strong demand from consumers for gold. I saw long lines of customers at both the Viennese Shop Ogussa and the Austrian Mint store in the centre of the city. "Traders from Germany have reported the same scene in front of their stores," said Wolfgang Wrzesniok Rossbach, founder and director of precious metals consulting Fragold GmbH. Retail investors' interest in gold has grown dramatically this year. Global economic uncertainty and increasing geopolitical tension have highlighted its appeal as a safe-haven. Prices have more than doubled in the last two years, and they are up by 55% this year. Perth Mint is one of the leading producers of new mined gold in the world. It has seen a similar increase. Over the last four weeks, visitors to our "East Perth" premises increased from an average 5,000 per week to approximately 8,750. Tina Kircher said that this has led us to hire eight additional staff members to help our retail and customer service teams. World Gold Council data shows that investment in gold bars will increase 10% by 2024 while coin purchases will fall 32%. Physical gold may remain an important part of retail portfolios for the months to come, as investors seek security and liquidity. BullionVault's head of research, Adrian Ash, said that gold was reflecting the world's deep unrest. Reporting by Ashitha shivaprasad from London, with additional reporting by Polina devitt. Editing and Veronica Brown by Arun Koyyur.
Sources say that Thyssenkrupp and Jindal Steel will deepen TKSE due diligence in the next week.
Two people familiar with this matter have confirmed that Germany's Thyssenkrupp is going to start giving India Jindal Steel International greater access to the financial details of Thyssenkrupp Steel Europa (TKSE) from next week.
Last month, Jindal Steel submitted an indicative offer for TKSE. TKSE is the second largest steelmaker in Europe.
People said that the deepening due diligence coincides the visit by a Jindal Steel delegation to TKSE headquarters in Duisburg in advance of the crunch negotiations planned for later this year.
Thyssenkrupp declined to provide any further comment, but said that official due diligence procedures had begun in recent weeks. This included site visits by Jindal Steel.
Jindal Steel (part of the Naveen Jindal Group) declined to comment.
The Key to Understanding Pension Liabilities
After the news, Thyssenkrupp shares, which had been up 1.5% in the morning, soared as high as 3.2%. They were trading at 2% above their previous levels by 1149 GMT.
The people stated that Jindal Steel was willing to take on 2.7 billion euro ($3.2 billion) of pension liabilities, which has been a major obstacle to previous attempts to sell TKSE. However, this would require Thyssenkrupp making substantial financial commitments.
This could lead to a negative equity value for TKSE. TKSE employs 26,000 people, or 28% of Thyssenkrupp.
Brokerage Jefferies estimates TKSE's value at 2 billion euros.
The people reported that more formal discussions took place after Jindal Steel chairman Naveen Jindal, during his trip to Germany on October 8, met with Thyssenkrupp executives, worker representatives and the premier of North Rhine-Westphalia.
Jindal Steel, as part of its plans, has committed to completing a direct reduction facility in Duisburg that will produce carbon-neutral stainless steel. It also pledged more than 2 billion euro for an additional capacity electric arc furnace.
Jindal Steel will also supply Duisburg high-quality iron from its mines located in Cameroon.
Labour leaders welcomed Jindal Steel’s consensus-driven strategy after criticizing Czech billionaire Daniel Kretinsky for not engaging. Kretinsky was slated to purchase half of TKSE prior to Jindal Steel’s interest being revealed.
Juergen Kerner is Thyssenkrupp’s deputy chairman of the supervisory board and a senior leader in Germany’s most powerful union IG Metall.
Jindal Steel is looking to expand its European operations. Last year, it bought Vitkovice Steel in the Czech Republic and until recently, was in the running for Italy's Ilva Steel plant. Reporting by Christoph Steitz, Editing by Alexander Smith and Tomaszjanowski.
(source: Reuters)