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MORNING BID EUROPE-Reeves takes centre stage
Gregor Stuart Hunter gives us a look at what the markets will be like in Europe and around the world. It is make-or-break for Britain's Finance Minister Rachel Reeves, who will unveil her budget later today. The budget could contain tens or hundreds of millions of pounds worth of new taxes. In Asian trading, the pound is up 0.2% to $1.3193, a rise of a fifth day in a row ahead of her speech at 1230 GMT. Sources say that after the meeting between the new Japanese Prime Minister Sanae Takayichi and BOJ governor Kazuo Ueda last week, the Bank of Japan has begun preparing the markets for an interest rate increase as early as next month. This shifts the central bank to a more hawkish stance. The Yomiuri reported that the high approval ratings of Takaichi are leading Japanese opposition parties towards preparing for snap elections. The New Zealand dollar jumped 1.2% as the Reserve Bank of New Zealand reduced interest rates by 25 basis points, to 2.25%. However, it removed its dovish advice, signaling an end to central bank's ease cycle. The Australian dollar also jumped by 0.5%, after an inflation report that was hotter than expected reinforced the belief that the Reserve Bank of Australia has stopped cutting rates for the time being. After Ukrainian President Volodymyr Zelenskiy indicated he was willing to advance a U.S. peace plan, opening the door for an easing of sanctions against Russian energy, and additional supplies on Tuesday, oil prices tumbled to a 5-week low. Brent crude futures rose 0.4% to $62.72 as U.S. president Donald Trump backtracked on a deadline of Thursday for Ukraine to reach an agreement. Trump also dismissed a Bloomberg News story that U.S. negotiator Steve Witkoff had instructed the Russians how to approach him about the topic. The equity markets were not affected by the confusion and volatility on Wall Street, as they enjoyed a wide rebound after the S&P 500 climbed for a third day in a row. The Nikkei rose 2% Wednesday on the back of optimism over corporate earnings. Hong Kong and China, however, lagged behind. The Hang Seng Index rose 0.5%, despite earnings from AI leader Alibaba beating estimates. However, shares fell 1.1%, as the ecommerce company disappointed investors with its Q4 outlook and announced it would reduce spending on its instant-commerce business. This led to a 6% increase for Meituan, a rival. The following are key developments that may influence the markets on Wednesday. UK: Autumn budget Debt auctions: Germany: 10-year government debt
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Gold reaches near 2-week highs on US rate-cut bets
Gold reached a two-week high Wednesday after U.S. data reinforced expectations for a Federal Reserve rate cut in December, and the dollar was weighed down. As of 0437 GMT spot gold was up 0.7% at $4,160.12 an ounce. This is its highest level since November 14. U.S. Gold Futures for December Delivery were up 0.4% to $4,158.00 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that expectations are shifting towards a rate cut in December. "A chorus of dovish comments from Fed officials has strengthened the case," he added. Data released Tuesday showed that U.S. Retail Sales increased less than anticipated in September. In the 12-month period ending in September, the Producer Price Index rose 2.7%, after increasing by the same margin last August. Recent dovish remarks by Fed policymakers preceded the release of these data. Dollar hits one-week-low as investors bet that Kevin Hassett may lead policy in a dovish direction. This would make greenback-priced gold less expensive for holders of other currencies. The benchmark 10-year Treasury rates held close to the one-month lows reached in the previous session. Scott Bessent, U.S. Treasury secretary, said that the Fed's interest rate management system is in trouble and must be simplified. According to CME FedWatch data, the markets are pricing an 85% probability of a Fed rate reduction in December, up from 50% last week. In low-interest rate environments, gold, which is a non-yielding investment, performs well. The U.S. Weekly Jobless Claims Report is due to be released later on Wednesday. In October, net gold imports from Hong Kong to China, the top consumer, fell by 64% compared to September. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala) (Reporting and editing by Rashmi aich and Mrigank dhaniwala in Bengaluru)
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Copper prices rise as Fed cuts are fueled by soft US data
Copper prices rose on Wednesday, as soft U.S. economic data raised expectations for a Federal Reserve rate cut in December. Meanwhile, a Chinese senior industry official warned of the halting of smelting and cautioned against ultra-low fees. As of 0258 GMT, the most traded copper contract at the Shanghai Futures Exchange had risen 0.16% to 86,560 Yuan ($12,218.22). The benchmark three-month copper price on the London Metal Exchange rose 0.38% to $10,859.5 per ton. The market received a boost as the September economic data, which was released on Tuesday but delayed because of a government shut down, showed a cooling in retail sales and inflation. This supported a rate cut for December by the Fed. Commerce Department data shows that U.S. retail sale rose by 0.2% in September, but missed the forecast of 0.4%. In a speech delivered on Wednesday at the World Copper Conference Asia 2025 by Vice President Chen Xuesen, the China Nonferrous Metals Industry warned against the negative and zero treatment of copper concentrate. The association was against the free and negative processing. He noted that China had also halted construction of 2 million tons new smelting capacities. Nickel rose by 1.39% and tin increased by 0.15% among other SHFE metals. Aluminium was up by 0.30%. Zinc gained 0.28%. Lead rose 0.25%. Nickel grew 0.12%. Tin increased 0.43%. Wednesday, November 26, DATA/EVENTS 0500 Japan Chain Stores Sales YY Oct. 0500 Japan Leading Indictor Revised Sep. 1330 US Durable Goods Sept. 1330 US Initial Unemployment Clm 22.11.2018 w/e. ($1 = 7.0845 Chinese Yuan Renminbi). (Reporting and Editing by Dylan Duan, Lewis Jackson, Rashmi aich.
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Gold reaches near 2-week highs on US rate-cut bets
Gold reached a two-week high Wednesday after the Federal Reserve cut interest rates in December, bolstering expectations. The dollar also fell. As of 0241 GMT the spot gold price rose by 0.8%, to $4,161.10 an ounce. This is its highest level since November 14. U.S. Gold Futures for December Delivery fell 0.5%, to $4.159.00 per ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said: "Expectations have shifted more in favor of a rate cut for December...the case has been strengthened by the chorus of dovish comments from Fed officials as well as benign economic data that is driving gold up from a yield standpoint." Data released Tuesday showed that U.S. Retail Sales increased less than anticipated in September. In the 12-month period ending in September, the Producer Price Index rose 2.7%, after increasing by the same margin last August. Recent dovish remarks by Fed policymakers preceded the release of these data. Investors bet that the top candidate for the Fed chair could guide policy in a dovish manner, making greenback priced bullion cheaper for other currency holders. The benchmark 10-year Treasury rates held close to the one-month lows reached in the previous session. Scott Bessent, U.S. Treasury secretary, said that the Fed's interest rate management system is in trouble and must be simplified. According to CME FedWatch data, the markets are pricing in a 84% chance that the Fed will cut rates in December. This is up from 50% last week. In low-interest rate environments, gold, which is a non-yielding investment, performs well. The U.S. Weekly Jobless Claims Report is due to be released later on Wednesday. In October, net gold imports from Hong Kong to China, the top consumer, fell by 64% compared to September. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich) (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich)
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ASIA COPPER WOMAN-China suspends some new copper smelters and warns about negative processing fees
The vice president of China's nonferrous Metals Association said that the country has suspended plans to construct some new copper smelters. He also took steps to reverse the processing fees which have fallen below zero. Due to the rapid expansion of China's metal smelting industry, and the tight supply of copper ore globally, processing fees have fallen to negative levels. This means that smelters pay miners to mine ore rather than miners paying smelters fees to convert ore into metallic form. Capacity gluts have forced some countries to protest and cut production. China's Nonferrous Metals Industry Association Vice President Chen Xuesen announced at the World Copper Conference Asia 2025 that China had stopped working on 2 million metric tonnes of planned smelter capacities. He said that the growth of fixed asset investments in the industry has fallen to 0.4% compared to 23% at the beginning of the year. He said that the overheated investments in the industry are under control. In the future, China's new copper smelting capacities will be strictly limited. China's copper refinement and copper processing won't be pursuing the goal of volume." Chen warned that processing fees for the next year's supply contract should not be zero as negotiations between Chinese smelters, Antofagasta and copper mining giant Antofagasta begin. These talks established a benchmark for Chinese treatment and refinement charges (TC/RCs), also known as processing fees. These are traditional payments made by miners to the smelters. Chen stated that the China Nonferrous Metals Industry Association is against any negative or free processing of copper concentrate. We call on the global industry of copper to confront this unsustainable structural contradiction. The demand for COPPER substitutes is growing. Chen stated that the copper prices in China reached a record high of $11,200 a metric ton last October. While they have since dipped slightly, this elevated level is driving re-use of aluminium throughout the industry. He said that there was a lot of uncertainty about whether the market share and intensity of copper's use will grow over time. He said that copper consumption in electric cars has fallen from 60 to 80 kilograms per car in 2020 to between 50 and 70 kilograms (110-154 pounds) today. Copper in air conditioners has fallen by 67% from 2020 to 4 kg per unit. Reporting by Amy Lv and Lewis Jackson; editing by Himani Sarkar, Sonali Paul
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South Korea's HD Hyundai and Lotte Chemical present plan to restructure their petrochemical business
In separate regulatory filings, HD Hyundai and Lotte Chemical of South Korea have both submitted to the Industry Ministry a plan on restructuring their petrochemical business. The companies stated that the plan will allow Lotte to spin off their business in Daesan, South Korea and merge it into HD Hyundai Chemical in order to reduce the overcapacity in nathpha cracking centres. The plan is part of an industry-wide initiative to alleviate a glut in South Korea’s petrochemicals sector. In August, President Lee Jae Myung administration Push The sector is in a "crisis", and firms are being forced to reduce capacity by up to 25%. They claim that they need to increase efficiency and margins. The goal was set by ten petrochemical companies at the time. They were then asked to develop their own plans. Lotte stated that the merger would increase the efficiency and stability of their operations at the naphtha cracking centres. They did not elaborate. Both companies have said that they will adjust their business portfolios in order to concentrate on core businesses. Lotte's facilities for cracking naphtha in Daesan can produce 1.1 million tonnes, while HD Hyundai has a capacity of 850,000. HD Hyundai Chemical was created in 2014 as a joint venture between HD Hyundai Oilbank, Lotte Chemical and HD Hyundai Oilbank. (Reporting and editing by Ed Davies. Heejin KIM)
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Oil prices stabilize after Ukraine peace talks drive them to a one-month low
The oil prices rose slightly on Wednesday after falling to a one-month low in the previous session. This was due to signs that Ukraine and Russia are close to a deal that will likely result in the lifting of the international sanctions against Russian supplies. Brent crude futures increased 19 cents or 0.3% to $62.67 a barrel as of 0114 GMT. U.S. West Texas intermediate crude futures increased 14 cents or 0.24% to $58.09 a barrel. The two contracts were settled at 89 cents each on Tuesday, after Ukrainian President Volodymyr Zelenskiy said in a speech to European leaders that he is ready to promote a U.S. backed framework for ending Russia's war and that there are only a few remaining points of disagreement. In a note to clients, Tony Sycamore, an IG analyst said that if the deal is finalized it could quickly dismantle Western energy sanctions against Russia. This would potentially drive WTI prices up to $55. The market is waiting for clarity. However, if the talks fail, it appears that prices will fall. U.S. president Donald Trump has said that he has instructed his representatives to separately meet with Russian President Vladimir Putin, and Ukrainian officials. A Ukrainian official stated Zelenskiy may visit the U.S. within the next few weeks to finalise an agreement with Trump. In a recent stepped up pressure campaign, Britain, Europe, and the United States tightened sanctions against Russia. And in December, India, a key oil buyer, is expected to reach its lowest level for three years. Expectations have increased for a possible interest rate reduction by the U.S. Federal Reserve in December, following economic data that showed lower retail sales and lower inflation. Lower rates will stimulate economic growth, which in turn will boost demand for oil. (Reporting and editing by Kevin Buckland; Colleen howe)
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Trump does not set a deadline for Ukraine and Russia to reach a peace agreement
On Tuesday, U.S. president Donald Trump backed off a deadline of Thursday for Ukraine to accept a U.S. peace plan. He said "the deadline is when this is over." Trump told reporters aboard Air Force One, as he was flying to Florida to celebrate Thanksgiving, that U.S. negotiators had made progress in their discussions with Russia and Ukraine and that Moscow had accepted some concessions. He did not specify them. The first report of a U.S. framework for ending the conflict, which was made last week, has prompted new concerns that the Trump Administration might be willing and able to pressure Ukraine to sign a deal heavily tilted towards Moscow. Trump announced that his envoy Steve Witkoff will be visiting Moscow to meet Russian President Vladimir Putin soon, and that Jared Kushner was also involved in the Gaza deal, which led to a tense ceasefire between Israel and Hamas. In recent days, Trump had designated Thanksgiving Day on Thursday as the date when he hoped to see Ukraine reach a deal with Russia to end the war in Ukraine. He and his advisers have now backed off from setting a deadline, and say that they want to reach an agreement as quickly as possible. Trump stated that Russia appeared to have the upper hand and that it was in Ukraine's interest to reach an accord. He said that Russia "might get some Ukraine territory anyway" in the coming months. Trump said that security guarantees were being discussed with Europeans. (Reporting and editing by Jeff Mason, Andrea Shalal and Cynthia Osterman).
China's demand for iron ore is not changing much as supply increases.
The prices of iron ore futures were not much changed on Wednesday. A modest increase in China demand was offset by a decline in steel production and a rise in global supply.
As of 0249 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 0.06% lower at 796 Yuan ($112.36) per metric ton.
The benchmark December Iron Ore at the Singapore Exchange rose 0.28% to $106.1 per ton.
The global iron ore production is projected to reach a new record in 2026 of 2,68 billion tons, thanks to the continued expansions in mines in Australia and Brazil. Also, the recently commissioned Simandou Project in West Africa will be able to meet demand, according to a report by consultancy Mysteel.
The World Steel Association has reported a lower global steel production for October. It was down 5.9% on an annual basis to 143.3 millions tons. Meanwhile, crude steel output in China, the top producer, fell 12.1%.
China's steel production will fall below 1 billion tonnes this year, for the first six-year period. This is in line with government promises to reduce production and balance supply and demand in an industry that has been struggling with overcapacity.
Mysteel reported that the prices of Chinese iron ore concentrates produced locally remained unchanged across most production areas last week, despite a decline in demand from domestic steelmakers.
Mysteel stated that the strong performance of iron-ore derivatives, and the resilience of the imported ore price supported the market.
Galaxy Futures, a Chinese broker, says that the domestic end-use demand for steel has improved in the fourth quarter. Infrastructure demand is driving up apparent steel demand.
Coking coal and coke, which are used in the steelmaking process, have both fallen by 3.42% and 3.17 percent, respectively.
The benchmarks for steel on the Shanghai Futures Exchange are mixed. The price of rebar and hot-rolled steel fell 0.19%, respectively. However, wire rod and stainless steel rose 0.39% and 0.57%. ($1 = 7.0846 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
(source: Reuters)