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The Fed is hoping to boost the market and Venezuela tensions are looming. Oil prices will rise by 2% this week.
By Colleen Waye WTI oil was heading for a weekly gain of nearly 2% on early Friday trading, supported by escalating U.S. - Venezuela tensions, and stalled Moscow peace talks. This would be the second week in a row of increases. Brent crude was up 6 cents or 0.09% at $63.32 a barrel at the market opening on Friday. U.S. West Texas Intermediate rose 4 cents or 0.07% to $59.71 per barrel. The previous trading session saw both contracts settle up by around 1%. In a survey conducted between November 28 and December 4, 82% of economists expected that the Federal Reserve would reduce interest rates by 25 basis points at its policy meeting next week. A rate reduction would boost economic growth and oil demand. The markets continued to prepare for a possible U.S. invasion of Venezuela, after President Donald Trump announced late last week that he would begin taking action "very soon" to stop Venezuelan drug smugglers on land. Rystad Energy stated in a report that such an action could threaten Venezuela's crude oil production of 1.1 million barrels each day, which is mainly supplied to China. The prices were also lifted this week due to the failure of the U.S. negotiations in Moscow to reach any significant breakthroughs in the war in Ukraine. This could have included an agreement to allow Russian oil to return to the market. These factors helped to keep prices stable despite an increasing surplus. Saudi Arabia has cut its January Arab Light crude prices to Asia, to the lowest levels in five years due to an oversupply. This was revealed by a document that was reviewed on Thursday.
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Putin will hold a summit meeting with Modi in Delhi
On Friday, Russian President Vladimir Putin and Prime Minister Narendra modi will meet in New Delhi to discuss ways to increase trade between the two countries. Western sanctions are affecting their long-standing relationship. Putin's first India visit in four years comes at a moment when New Delhi and the U.S. are in negotiations for a deal that will reduce punitive tariffs placed by Donald Trump on India's goods because of its Russian oil purchases. Moscow has been India’s largest arms supplier for decades. It has stated that it would like to import more Indian products in order to increase trade to $100 billion in 2030. Trade has so far been heavily skewed to Moscow's advantage due to New Delhi’s energy imports. India has increased its purchases of Russian crude oil at discounted prices since European countries reduced their dependence on Russian energy following the Russian invasion of Ukraine four years ago. Michael Kugelman wrote this week in Foreign Policy Magazine that "India faces a dilemma. By taking steps to improve ties with either Moscow or Washington, New Delhi runs the risk of reversing ties with one." Modi and Putin will also discuss other topics, including civil nuclear energy and labour. Both sides are expected to announce new deals to demonstrate the resilience of their relationship. Hugs and handshakes After arriving in an airport near New Delhi, India's leader greeted Putin with a handshake and a hug as he walked along the red carpet. The visit was scheduled to last two days. Modi hosted Putin for a private meal at his residence. Andrei Belousov - the Russian defence minister - met with Rajnath Singh, his Indian counterpart, on Thursday. India's Defence Ministry said that Belousov had "stated the Russian defence industry was ready to assist India in becoming self-reliant on the production of defence products," after the meeting. Putin arrived in India one day after he held talks with Trump's top representatives on a potential peace deal for the end of the war in Ukraine. However, they failed to reach a consensus. India has refused to condemn Russia for the war, and instead called for peace through dialogue and diplomacy. It also said that Western nations unfairly target its ties with Moscow because they continue to do business in Moscow even when it's not in their best interest. Reporting by Shivam Patel, Editing by Peter Graff
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Dollar and global shares rise as markets anticipate Fed rate cuts
The dollar and global shares were mostly up on Thursday as traders awaited a Fed rate cut. U.S. stock prices ended mostly higher after a choppy session. The benchmark S&P and Nasdaq gained, while the Dow finished slightly lower. Consumer staples and healthcare stocks, as well as materials, suffered the biggest losses. Industrials, technology, and communications services, however, saw gains. The Dow Jones Industrial Average dropped 0.07%. The S&P 500 rose by 0.11%. And the Nasdaq Composite increased by 0.22%. STOXX 600 in Europe was up 0.45%, and is still on track for a modest gain each week. The FTSE 100 in London was up 0.19%, while the DAX in Germany gained 0.32%. MSCI's global stock index rose by 0.24%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for a broader equity market. The Nikkei rose 2.33%. After a 5% drop in stocks in late November, they have recovered and are trading near their all-time highs, said Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, in Washington. On Thursday, data appeared to allay fears of a rapid deterioration of the U.S. labour market. Last week, the number of Americans who filed new claims for unemployment benefits dropped to a three-year low. The number of Americans filing new applications for unemployment benefits fell to a more than three-year low last week, at 191,000. This came after the U.S. Private Payrolls Data posted its largest drop in over two-and-a half years and following a service sector survey that showed activity remained steady in November despite hiring slowing. Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets would be disappointed. Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10. This is up from an 83.4% possibility a week earlier, according to CME Group's FedWatch. The dollar index (which tracks the U.S.'s currency performance against six other currencies) was slightly up by 0.17%, easing previous losses and poised for an end to nine consecutive sessions of declines. Brent crude futures rose 0.94%, to $63.26. U.S. crude, however, gained 1.22%, to $59.67. US 10-YEAR BOND YIELD IS UP The yield of the 10-year Treasury Bond in the United States was up by 4.2 basis points to 4.1%. The Financial Times reported that on Wednesday, bond investors expressed concern to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to match President Donald Trump’s preferences. Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message. The government debt sale in Japan attracted the highest demand for more than six year, helping to calm investor nerves over the long-term financial health of the country, which has stoked fears about similar concerns about other economies. Dollar was down by 0.08% to 155.11 yen, heading towards its biggest weekly gain in two months. The yen was given a boost by a report that said the Bank of Japan would likely raise interest rates this December, and the government is expected to tolerate the decision. In Hong Kong, offshore trading, the yuan weakened a bit, resulting in a dollar gain of 0.21%, or 7.071 yuan. On Wednesday, the Chinese currency reached its highest level in over a year against the dollar. After a recent run of hot metals, precious metals have cooled. After hitting a record-high of $58.98 an ounce on Tuesday, gold was unchanged at $4,208.66 per ounce. Silver fell by 2.32% to reach $57.12 per ounce.
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Dollar and global shares rise as markets anticipate Fed rate cuts
The dollar and global shares were mostly up on Thursday as traders awaited a Fed rate cut. Wall Street stocks, however, were mostly flat following a series of economic reports. After two sessions of gains in the U.S., stocks fell after choppy trading. The benchmark S&P 500 was down. Consumer discretionary, healthcare and consumer staples stocks suffered the greatest losses. Industrials, communications and energy advanced. The Dow Jones Industrial Average dropped 0.19%. The S&P 500 fell 0.10%. And the Nasdaq Composite declined 0.03%. STOXX 600 in Europe was up 0.45%, and is still on track for a modest gain each week. The FTSE 100 index in London was up 0.19%, while the DAX index in Germany gained 0.32%. MSCI's global stock index rose by 0.23%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for broader equity markets. The Nikkei rose 2.33%. Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, said that after a 5% drop in stocks in late November, they have recovered and are trading near their all-time highs. On Thursday, data appeared to allay fears of a rapid deterioration of the U.S. labour market. Last week, the number of Americans who filed new claims for unemployment benefits dropped to a three-year low. The number of Americans filing new applications for unemployment benefits fell to a more than three-year low last week, at 191,000. This came after the U.S. Private Payrolls Data posted its largest drop in over two-and-a half years and following a service sector survey that showed activity remained steady in November, while hiring slowed. Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets would be disappointed. Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10. This is up from an 83.4% possibility a week earlier, according to CME Group's FedWatch. The dollar index (which tracks the U.S.'s currency performance against six other currencies) was slightly up by 0.08%, easing previous losses and poised for an end to nine consecutive sessions of declines. Brent crude futures rose 0.94%, to $63.26, while U.S. Crude futures climbed 1.22%, to $59.67. US 10-YEAR BOND YIELD IS UP At the last check, the yield on a 10-year Treasury Bond in the United States was up 5.2 basis point at 4.11%. The Financial Times reported that on Wednesday, bond investors expressed concern to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to align himself with President Donald Trump. Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message. The government debt sale in Japan attracted the highest demand for more than six-years, helping to calm investor nerves over the long-term finances of the country, which have caused similar concerns about other economies. The dollar last fell 0.16% to 154.97 yen. This is the largest weekly gain for the U.S. currency against the yen in more than two months. The yen was also boosted by a report that said the Bank of Japan would likely raise interest rates next month, with the government tolerating such a move. Three government sources who are familiar with these discussions were cited. In Hong Kong, offshore trading, the yuan weakened a bit, with the dollar gaining 0.17% to 7.069 yuan. On Wednesday, the Chinese currency reached its highest level in over a year against the dollar. After a recent run of hot metals, precious metals have cooled. After hitting a record-high of $58.98 Tuesday, gold was unchanged at $4,207.88 per ounce. Silver fell 2.54%, to $56.98, an ounce. Reporting by Chibuike Oguh and Gregor Stuart Hunter in New York; Editing by Ed Osmond, Lisa Shumaker
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Gold stable as rising yields offset dollar weakening; PCE data is in focus
Gold prices remained largely unchanged Thursday as rising U.S. Treasury rates offset the support provided by a weaker US dollar. Meanwhile, markets were waiting for Friday's U.S. Inflation data to get clues about Federal Reserve policy ahead of their December meeting. By 1833 GMT, spot gold had risen 0.1% to $4210.49 an ounce. U.S. Gold Futures for February closed 0.2% higher, at $4243.00 per ounce. Edward Meir, Marex analyst, said: "Higher yields keep a little cap on gold's upside. The general dollar index provides some support." The benchmark 10-year U.S. Treasury rates rose while the U.S. Dollar Index hit a low of one month, making gold more accessible to overseas buyers. The latest data on Thursday shows that the number of new U.S. unemployment benefits claims fell to 191,000 in the past week, which is lower than it has been for over three years. This figure was also well below what economists had predicted at 220,000. ADP's report on Wednesday showed that private payrolls in the United States fell by 32,000 during November. This was the largest drop in over two and half years. Over 100 economists surveyed by predicted that the Federal Reserve would reduce its key rate by 25 basis point at its policy meeting on December 9-10, as it seeks to support the cooling labor market. Gold is a non-yielding asset that benefits from lower interest rates. Investors will be watching the Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures report (PCE), due this Friday. Meir said that the markets will remain relatively unchanged between now and next Monday. As for gold, we are likely to be in a trading range which is fairly uneventful. Silver fell 2.6%, to $56.96, after reaching a record-high of $58.98. The metal has risen by about 97.3% in this year due to a structural shortage, market liquidity concerns and its inclusion on the U.S. Critical Minerals list. Palladium fell 1.4% to 1,440.57, while platinum dropped 1.7% to $1642.67. (Reporting and editing by Anmol Chhoubey, Bengaluru. Krishna Chandra Eluri, Maju Samuel.
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Stocks in the UK rise as industrials and financials gain momentum
Investors analyzed corporate updates and economic statistics ahead of next week's U.S. Federal Reserve rate decision. The blue-chip FTSE 100 closed up 0.2%, while the midcap FTSE 250 gained 0.3%. After the Russia-Ukraine talks broke down, aerospace and defence stocks gained 2.5% for the third session in a row. Rolls-Royce gained 2.6% and BAE Systems about 2.6%. Investment banks and brokerages rose by 2.2%. The investment firm 3i Group topped the FTSE 100 index with a 5.1% increase. Personal goods rose by 2.8%, with Burberry gaining 3% as HSBC increased the price target for the stock. Diageo fell 3.9% as UBS cut its target price and downgraded their stock. Pharma stocks fell by almost 1%. AstraZeneca dipped 1.3%. SSP Group rose 11.3% after airport outlet operator SSP said that it expected annual profits at the upper end of their forecasts. AJ Bell AJBA.L dropped 7.6% after the Investment Platform You can also read about the warnings below. The budget will add complexity and costs to the landscape of individual savings accounts, according to Mr. Frasers, the sportswear and fashion retailer, fell by 2.7% reported A 2.8% decline in the first-half profits. A survey revealed that British Construction activity contracted Last month, the highest rate since May 2020. In the run-up to Rachel Reeves annual budget, on November 26, other surveys revealed similar concerns regarding investment, hiring and demands. Calastone data shows that British investors sold shares worth 3 billion pounds during November, the sixth consecutive month in which they have sold net. The number of Americans who filed new claims for unemployment benefits in the U.S. dropped to its lowest level in over three years last week.
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US Defense Agency's push to stockpile Cobalt is paused as the price soars
A DLA spokesperson said on Thursday that the U.S. Defense Logistics Agency intends to continue purchasing cobalt as part of the National Defense Stockpile, but it is reassessing the strategy. There is no set date for reissuing this tender. The agency will likely pay more for any purchases of cobalt, as the prices have risen by 50% since the initial tender in August. The DLA has not stockpiled cobalt in over 30 years. Cobalt is essential to the United States' national security and industrial strength as global competition for strategic minerals increases. The U.S. also wants to reduce its reliance on China. China dominates the processing of metals used in missiles, aerospace components, magnets for communications and radars and guidance systems. DLA is currently reviewing its cobalt acquisition strategy. DLA's spokesperson confirmed that the requirement was still valid and the agency still intended to buy the material for its National Defense Stockpile. The agency has not set a date to reissue the solicitation. The original tender announced on August 19, with offers due to be submitted by August 29, went through several changes before being cancelled in October. Cobalt is currently priced at $24 per lb, or $52,910 per metric ton. This compares to $16 alb, or $35,275 for a ton back in August. Since February, when exports were banned by the top producer Democratic Republic of Congo, prices have been rising. Congo has since implemented quotas but producers still wait for approval from the government to resume exports. In its original offer, the agency detailed their plans to buy 16.49 million pounds or 7,480 tons of cobalt over a period of five years for the National Defense Stockpile. The initial offer was only from three companies: Vale's Port Colborne, Long Harbour and Sumitomo metal mining plants in Canada; Glencore's Nikkelverk operations in Norway; and Japan's Sumitomo. Sources in the cobalt industry say that the DLA wanted companies to commit to a fixed price for the five-year period, which didn't take into account the possibility of price fluctuations. This could lead to producers suffering losses. (Reporting and editing by Kirovan Donovan; reporting by Pratima Dasai)
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US allows transactions with Lukoil fuel stations outside Russia until late April
The Trump administration allowed transactions on Thursday with Lukoil outside of Russia, with a small waiver from sanctions imposed by the U.S. in October because the company's revenue is used to support Moscow's war against Ukraine. A posting on the Treasury Department website stated that the transactions for approximately 2,000 stations in Europe, Central Asia and the Middle East, as well as the Americas were authorized until April 29, 2026. In October, President Donald Trump imposed sanctions against Lukoil, one of Russia's largest oil companies. This triggered a rush of buyers to buy its assets, estimated at $22 billion. These were the first sanctions imposed by the United States directly on Russian entities during Trump's second tenure. The Treasury Department has cleared companies to speak to Lukoil about purchasing foreign assets until December 13, but specific deals will require approval. Lukoil operates about 200 gas stations under its own brand in New Jersey, Pennsylvania, and New York. Lukoil operates over 300 stations in Romania and around 600 in Turkey. It is also one of the largest retail players in Moldova, Bulgaria and Turkey. (Reporting Timothy Gardner, Bhargavacharya, Katharine Jack; Editing Bernadettebaum)
Improved supply and soft Chinese demand set to lead to weekly iron ore losses
Dalian iron-ore futures prices fell on Friday, and are on course for weekly losses as a result of rising seaborne shipments at year's end and tepid Chinese interest.
As of 0320 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 1.01% lower. It was 785.5 Yuan ($111.11), per metric ton.
The contract will end the week at a loss of 0.88%.
The benchmark January Iron Ore at the Singapore Exchange fell 1.02% to $103.2 per ton. However, it is still on track to finish the week with a 1.43% increase.
Iron ore shipments are expected to rise near year's end, and the supply of the material in China, the top consumer, will be further loosen in December, with an increase in the number of carriers arriving, while the demand for steelmaking materials is likely to fall amid the production cuts in steel mills. This was noted by consultancy Mysteel.
In November, the top Brazilian producer shipped nearly 34.5 millions tons of grain by sea. This was an increase of 2.93% on a year-on-year basis.
Mysteel said that positive macroeconomic signals as well as anticipated restocking demands among steelmakers would lend some support.
We see the iron ore markets in a surplus this year, and we see this surplus growing over the next couple of years. Analysts from Citi said that with Simandou online, and China's steel production on a structural decrease, prices will trade on fundamentals in the future and tend closer to costs.
Simandou's iron ore project will be the largest iron ore mine in the world, and the key to greening the global steel value chains, with a production capacity of 120 million metric tonnes per year.
Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 0.31% and 0.51% respectively.
All steel benchmarks at the Shanghai Futures Exchange increased. The benchmarks for steel on the Shanghai Futures Exchange all increased.
(source: Reuters)