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Stocks rise, US yields drop on expectations of Fed cuts
Investors remained hopeful that the U.S. Federal Reserve will cut interest rates during its December meeting. Meanwhile, the U.S. Dollar eased. Wall Street's S&P 500, Nasdaq and Dow Jones were all lower at the start of trading due to a decline in Nvidia, but the declines were somewhat curbed by Alphabet, parent company of Google. Investors also sorted through a flood of economic data that was delayed by the 43-day U.S. Government shutdown. The Commerce Department reported that retail sales in September rose by 0.2% after a 0.6% increase in August. This was below the 0.4% expected by the economists surveyed. Separately, the Labor Department reported that the Producer Price Index (PPI) for final demand rose 0.3%, after a 0.1% unrevised drop in August. This was expected, given the price of energy goods increased and producers passed some tariffs on. The shutdown did not help the trend of lower consumer spending that was forming. Brian Jacobsen is the chief economist of Annex Wealth Management, Menomonee falls, Wisconsin. He said that inflation has changed much more than consumer spending. The adjustment to the new tariff realities may not be complete, but the price adjustments may be nearer the end rather than the beginning. The Dow Jones Industrial Average rose 133.69, or 0.29% to 46,581.96, while the S&P 500 dropped 8.10, or 0.12% to 6,697.02, and the Nasdaq Composite declined 120.05, or 0.52% to 22,751.96. The trading volume will likely decrease towards Thanksgiving in the United States on Thursday. Markets will be closed on that day and Friday's session will be abbreviated. Alphabet reached an intraday high of $328.60, and was up last about 3%. It is approaching $4 trillion market capitalization. This would make it the only company to achieve this mark. The Information reported on Meta Platforms' talks with Google about spending billions of dollars to buy chips from Alphabet owned company for use in Google data centers beginning in 2027. Since Friday, the market has been gaining momentum after New York Fed president John Williams stated that interest rates could fall in a short time frame. Other policymakers were insisting on borrowing costs remaining unchanged for now. This boosted expectations of a rate reduction. These expectations were boosted on Monday by comments made by San Francisco Federal Reserve Bank president Mary Daly and Fed governor Christopher Waller, who both supported a rate cut in December. MSCI's global stock index increased by 1.73 points or 0.18% to 984.04, while the pan-European STOXX 600 rose by 0.76%. After the influx of data, U.S. yields fell. The yield on the benchmark U.S. 10 year notes dropped 2.5 basis points to 4,011%. The markets are pricing an 84.9% probability of a Fed 25 basis point cut at its meeting in December, which is up from the 84.4% the previous session and above the 50.1% a week earlier. In a television interview, Federal Reserve Governor Stephen Miran stated that the central bank's short-term rate target is to blame for a declining job market. ADP's latest data, released on Tuesday, showed that private U.S. employers lost an average of 13,500 positions during the four-week period ending November 8. The dollar index, which measures greenbacks against a basket currencies, dropped 0.41% at 99.79. Meanwhile, the euro rose 0.45% to $1.1572. The dollar index, which measures the greenback against a basket of currencies, fell 0.41% to 99.79. Meanwhile, the euro rose 0.45% to $1.1572, ahead of Britain's budget announcement scheduled for Wednesday. Traders also piled into options markets in order protect themselves from increased volatility. The traders have been watching closely for any signs of a possible Japanese intervention. The yen has strengthened by 0.55% to 156.05 dollars per yen but is still down 1.3% on the month. U.S. crude dropped 2.72% to $57.24 per barrel and Brent to $61.78 a barrel, down 2.5% after reports quoted a U.S. government official as saying that Ukraine agreed to a peaceful deal.
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Iraq pays salaries to Lukoil to maintain its output, sources claim
Three Iraqi energy officials confirmed that the Iraqi government had arranged for the payment of the delayed salaries to local staff working at the Lukoil operated West Qurna-2 Oilfield in order to continue production despite U.S. Sanctions against the Russian company. Qurna-2 is the second largest oil producer in OPEC after Saudi Arabia, and accounts for around 0.5% of global supply. According to three government officials who declined to give their names because they were not authorized to speak with the media, the U.S. Sanctions announced on October 22, made it difficult for Lukoil employees to transfer money to Iraq. This forced the government to step in and facilitate the payments. Lukoil used to pay Iraqi employees on the ground via monthly bank transfers. One of the three officials stated that "two months' worth of delayed salaries were paid after government intervention in order to ensure production wouldn't be affected." To avoid any further disruptions, the authorities will also pay December salaries in Iraqi dinar. Lukoil didn't immediately respond to an inquiry for comment. Three sources stated that further delays in the payment of salaries could undermine operations on the field where Iraqi staff currently manage production. Sources said that the staff received their salaries on Thursday, after the government intervened, which eased tensions following two months of workers going without pay. Officials said that production at West Qurna-2 is steady and between 460,000 and 480,000 barrels of oil per day. The officials stated that the output from the field was critical to Iraqi exports, as any decrease in production could not be offset by other fields due to current capacity constraints. Reporting by Ahmed Rasheed and Aref Mohammed, Editing by Alex Lawler, Tomaszjanowski and Alex Lawler
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If Jindal's sale proceeds, unions will launch job security discussions at Thyssenkrupp.
The IG Metall union reported that workers representatives met on Tuesday at Thyssenkrupp Steel Europa (TKSE) to begin a process to agree on job security and codetermination if Germany's group is sold to India’s Jindal Steel International. Jindal Steel made an indicative offer for TKSE, Europe’s second largest steelmaker. It is now conducting detailed due diligence in order to determine whether it will launch a binding formal offer for the company. Thyssenkrupp workers in the steel division are determined to keep their influence over corporate decisions if ownership changes. The union said in a press release that "a fair and best-owner contract is intended to provide safety for employees, locations and co-determination, as well as the future of TKSE, in the event of a potential sale to the Jindal Group." IG Metall stated that it had requested management at TKSE and its parent company Thyssenkrupp enter into negotiations in a short time frame. Jindal Steel International was also informed of the process. A spokesman from Thyssenkrupp stated that the company planned to enter into negotiations with IG Metall soon. Jindal Steel International did not respond to a request for comment. (Reporting and writing by Tom Kaeckenhoff, Madeline Chambers, Miranda Murray).
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Gold prices hold steady as US Fed rate cuts bets are reinforced by data
The gold price remained largely unchanged on Tuesday as traders expected the Federal Reserve to cut interest rates by December due to weaker-than-expected retail sales in the United States. By 09:36 am, spot gold was down 0.2% at $4,130.85 an ounce. ET (1436 GMT). The prices rose by nearly 2% after some Fed policymakers indicated support for the third rate cut of this year. Prices had reached their highest levels since November 14 earlier in the day. U.S. Gold Futures for December Delivery rose by 0.8% to $4127.40 an ounce. Peter Grant, senior metals analyst at Zaner Metals, said that recent Fed dovishness has revived hopes for a rate cut in December. This (data) does not seem to change this. The retail sales in September were lower than expected, following a period of rapid growth. Data showed that the U.S. Producer Price Index increased by 2.7% for the 12-month period ending in September after increasing by the same margin during August. The 43-day government shutdown delayed the report. CME data shows that the markets are pricing an 85% probability of a rate cut in December - up from 30% last week – and a 64% chance of one in January. Federal Reserve Governor Stephen Miran stated on Tuesday that the deteriorating state of the job market requires further rate cuts. This is in line with remarks made by Fed Governor Christopher Waller, who was dovish on Monday. Gold that does not yield tends to perform well when interest rates are low and there is geopolitical or economic instability. ActivTrades analyst Ricardo Evangelista stated that "economic uncertainty, geopolitical turbulence, and dovish Fed expectation continue to support the gold price (in near-term)". Silver spot rose by 0.1%, to $51.41 an ounce. Platinum rose by 0.3%, to $1.548.80, and palladium fell 0.2%, to $1.392.79. (Reporting from Pablo Sinha, Bengaluru. Additional reporting by Sherin E. Varghese. Editing by Louise Heavens.)
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UK stockpiles critical minerals and accelerates lithium plants
The UK will stockpile critical minerals as part of its defence procurement plans and is expecting that lithium processing projects in Northern England will begin within the next couple of years, in an effort to reduce its dependence on China. The government announced its critical minerals strategy, last week. It set a target to meet 10% domestic demand by UK mining, and 20% by recycling, by 2035. This was backed up by funding of up to 65.58 million pounds. To reduce the risk in the supply chain, it is also hoped that no more than 60 percent of any mineral will come from a single source by this date. On Tuesday, Industry Minister Chris McDonald said that two London companies planning to build lithium refineries to supply battery grade materials for electric cars in Teesside in northern England were "very close to the end stage" and predicted that "spades will be in the ground" within the next few years. He said that Britain's biggest lithium reserves are located in Cornwall where mining operations have begun but require support to be scaled up. Global Alliances are part of Strategy The UK needs to ensure a long-term, secure supply of minerals like copper, lithium, and nickel that are used in electric cars, smartphones, and data centres supporting artificial intelligence. This push is a reflection of China's dominance, which leaves supply chain vulnerable to disruption. About 70% of rare-earth mining and 90% refining is done in China. McDonald said Britain is working with NATO, IEA, and G7 to improve supply chain resilience. He was also open to bilateral agreements outside of these frameworks. This includes Australia, which has a strategic reserve. He cited the AUKUS defence agreement, pointing out that critical minerals are "very much" a part of this relationship due to their role in supply chains for defence. He said that the procurement plan of [the Ministry of Defence] is also part of this strategy, and includes stockpiling of essential minerals. Last month, Australia and Washington signed a deal to counter China's dominance of critical minerals. Australia pledged an $8.5 billion pipeline project as well as preferential access to the proposed reserve. Canberra claims that the agreement has attracted interest from the EU and South Korea. The governments are scrambling to secure supplies of electric vehicles, defense systems, and data centres for artificial intelligence. Britain is also under pressure. According to estimates by the government, copper consumption will nearly double by 2035 and lithium demand will increase by 1,100%. The U.S. Inflation Reduction Act is introducing subsidies to the U.K., which will increase competition for investment. The plan also includes recycling. McDonald said that projects are expected to begin next year. The processing capacity is set to increase across Britain, Europe, and the United States. McDonald said that businesses are planning to start operations in the lithium-recycling area in 2026. He cited efforts to meet 20% Britain's crucial minerals demand with reused materials.
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Iran raises fuel prices in limited circumstances
Iran will increase the price of heavily subsidised fuel in certain circumstances, according to the semi-official Tasnim News Agency on Tuesday. The OPEC member is trying to curb the increasing demand for fuel without provoking public anger. Tasnim reported that "the government has decided, starting in December to charge a rate for refuelling emergency fuel cards at 50,000 Iranian Rials per litre (0.44% of the free market price)" and added that this rate represents 10% of the cost of buying one litre fuel from refineries. Fuel stations accept emergency cards if the driver does not have their smart card. The smart card was introduced in 2007 and allows drivers to buy up to 60 litres for 15,000 rials ($0.14) per litre, or up to 100 litres for 30,000 rials ($0.27) per litre. Tasnim reports that domestic fuel production, which is around 110 million litres a day, can be exceeded by the rising demand, which could reach up to 140 millions litres a day, due to factors like inefficient cars and summer heat. Officials from the Iranian government have warned that fuel subsidies are "not rational", burdening state finances and encouraging suboptimal consumption. They also warn of fuel imports. The sudden increase in fuel prices in Iran in 2019 that led to protests and the suppression of the state was not the same as the introduction of a 'third pricing rate' for fuel. Tasnim released the document of the cabinet decision, which mentions that drivers who own multiple cars can only use the smart card quotas on one car, whereas government vehicles, newly produced cars, and imported foreign cars must pay the higher rate. The document states that further changes, such as lower gas quotas on CNG powered cars, which make up a significant share of taxis in the country, will be expected to take place in February. Reporting by Dubai Newsroom. Mark Potter (Editing)
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Bloomberg News reports that Canada's Barrick will pay $430 Million to settle a dispute over a gold mine in Mali.
Bloomberg News, citing sources familiar with the situation, reported Tuesday that Barrick Mining had agreed to a settlement of 244 billion CFA Francs ($430 millions) with Mali. After two years of negotiation, the Canadian miner and Mali's Government reached an agreement on Monday to settle all disputes regarding the Loulo-Gounkoto Gold Mining Complex. Barrick announced that it would drop its arbitration case against Mali before the World Bank dispute tribunal in exchange for Mali dropping all charges against Barrick, its affiliates and releasing four employees from prison. Bloomberg News reported that Barrick must pay Mali 144 billion CFA Francs in six days after signing the agreement. The report stated that another 50 billion CFA Francs will be paid via offsets of VAT credits, while a payment of the same amount was made last year. Barrick Mining refused to comment while Mali’s Mining Ministry didn’t respond to a comment request.
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EU antitrust regulators suspend probe into MMG Anglo American deal
An update posted on the European Commission's website on Tuesday showed that EU antitrust regulators had paused their investigations into MMG, a Hong Kong-listed company which owns Anglo American's Brazilian Nickel business. On November 24, the EU executive, acting as the EU Competition enforcer, halted the clock. The 'clock' can be stopped in merger investigations if parties do not provide important information requested by the Commission (for its assessment of competition) in a timely manner. The Commission will adjust the deadline to reflect the new information once the parties have provided it. The Commission warned in this month that MMG could divert ferronickel away from Europe and harm European steel producers. This deal comes amid global concerns over the supply of minerals, as well as China's dominance. MMG's largest shareholder is the state-owned Chinese firm China Minmetals Corporation. Reporting by Foo-Yun Chee, Editing by Jan Harvey & David Goodman
Barrick is committed to Pakistan's Reko Diq Copper Project, says interim CEO
Barrick Mining Corp.'s interim CEO confirmed on Tuesday that the company is committed to the Reko Diq Copper Mine in Pakistan. It is one of the largest undeveloped copper deposits in the world.
The company and Pakistani authorities are in a partnership of equals to develop the $7 billion project, located in the insurgency-ravaged western province of Balochistan. Production is expected by the end 2028. Barrick's Board had discussed the possibility of splitting up the company assets. This could include a sale of Reko Diq and its African assets.
Mark Hill said that Barrick remains committed to Pakistan and the Reko Diq Project.
Security, scale, and stake are all important factors for this mine. Balochistan is a region that suffers from frequent attacks by separatists or jihadists. The project requires an upgrade of the railway line to transport copper concentrate from Karachi to be processed abroad.
The International Finance Corporation, the Asian Development Bank and others are working on a package of financing that exceeds $2.6 billion. The Reko Diq Project added 13 million ounces of gold to Barrick's reserves in 2024. It is expected to produce 200,000 tons of copper per year in its initial phase and double after expansion. With projected free cash flows of over $70 billion in 37 years, the project has a total financing package of over $2.6 billion.
PAKISTAN’S MINERAL PLAY
Barrick's remarks underscore the importance of Reko Diq to Pakistan and to the company. Islamabad relies on the mine as the anchor for its minerals strategy, while the Canadian miner is advancing one of its biggest long-term projects.
Sources familiarized with Barrick's thinking said this month that some board members and shareholders are concerned that Barrick's exposure to riskier assets, such as those in Pakistan and Africa, may weigh on its valuation in comparison with its more secure North American operations. This is especially true in light of potential takeover interests. Barrick returned in 2022 to Pakistan after a long-running legal dispute was resolved. The mine has become a flagship project for Pakistan as it seeks more capital to invest in its minerals sector.
(source: Reuters)