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Copper prices fall as demand worries rise due to weak Chinese data
Copper and industrial metals fell on Friday, after weak economic data in China's top consumer fueled concerns about demand. Hopes of another Federal Reserve rate reduction this year also faded. The benchmark three-month price of copper at the London Metal Exchange fell 0.6%, to $10,890 a metric ton, as of 1026 GMT. It had fallen as low as $10,000.25 earlier in the day. Metal used in construction, manufacturing and power was still on track for a gain of 1.6% per week, after briefly crossing the $11,000 mark Thursday. On October 29, copper reached its all-time high of $11,200. Analysts at brokerage Sucden Financial wrote in a report that they expect previous highs to act as strong resistances as the markets struggle to find fundamental catalysts powerful enough to sustain an ongoing breakout. "We anticipate a short-term period of consolidation, especially if fundamental conditions do not change." In October, China's factory production and retail sales increased at the slowest pace for over a decade. This put pressure on policymakers who are responsible for revamping this $19 trillion export driven economy. The Shanghai Futures Exchange reported on Friday that copper inventories in warehouses it monitors fell 4.9% compared to a week earlier, reaching 109,407 tonnes. As a result, the chances of an interest rate reduction in December have dimmed. A growing number of Fed policymakers are signaling reluctance to ease further. The entire LME Complex was in the red. Aluminium dropped by 1.4%, to $2,856.50 per ton. Zinc fell by 1.1%, to $3,021. Nickel dropped 0.9%, to $14,845, its lowest level since August 1. Tin fell 0.6% to $ 37,005 while lead dropped 0.4% to $1,069.50. Sucden Financial stated that "apart from tin, zinc and nearby spreads, near-by spreads are still in contango. This suggests availability of deliverable materials and limited tightness at the front end of the curve." Reporting by Tom Daly. Lewis Jackson and Dylan Duan contributed additional reporting. Subhranshu sahu, Mark Potter and Subhranshu sahu edited the article.
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The central bank of Romania has raised its inflation forecasts for 2019 and 2026
The Romanian central bank has raised its inflation forecasts both for this year as well as next, and said that discussions about an interest rate increase will not take place before the summer of next year. Bank of England expects the inflation rate to reach 9.6% in December. This is higher than its previous estimate of 8.8%, due to higher electricity costs and increases to VAT and excise duty earlier this year. Isarescu stated that power prices and tax increases would make up just under five percent of 2025's headline inflation. By 2026, the headline rate will fall from 3.0% to 3.7%. The benchmark interest rate was held at the European Union’s second-highest level of 6.50% by policymakers on Wednesday. They warned that inflation would only return to its target range of 1.5%-3.5% in the first quarter 2027. This is later than expected. Isarescu said to reporters that "talking about a rate cut or a rate reduction is not helpful at this time." "We won't make such a misstep. We'll see what happens with inflation. "We have a lot of uncertainty." He initially said that he thought the interest rate increase would be in the summer or spring of next year. Later, he stated that it was more likely to happen in the summer. The bank held its interest rates through this year, despite the fact that the EU's biggest budget deficit was reduced by tax increases and the rerun of an canceled presidential elections. The deficit-lowering measures helped to avoid a downgrade of the ratings from investment grade, and stabilized debt yields that are now lower than Hungary's. However, they also depressed demand, even though more fiscal corrections needed. Isarescu stated that the economic growth this year could be around 1% and that an imbalance in domestic demand was behind the bank's forecasts for inflation. It was difficult but relatively quick to regain the trust of international markets. "The correction programme must be continued." The correction programme must continue."
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ADNOC's Covestro deal gets conditional European Commission greenlight
The European Commission announced on Friday that ADNOC, the state oil company of Abu Dhabi, has received conditional approval from the EU for its bid of 14.7 billion euros ($17 billion) for German chemicals firm Covestro. The approval was conditional on the full compliance of the commitments made by both parties, which included ADNOC's proposal to adapt its articles of Association and the sharing of Covestro patents in sustainability with other market participants. Last week, people with direct knowledge of this matter said that they expect the deal to be approved. According to an update posted on the Commission's website last Wednesday, the Commission, the EU’s competition enforcer and regulator, restarted their investigation into the deal after stopping the clock September 3 while awaiting requested information. ADNOC offered last month to amend its articles of Association to address EU concerns about its unlimited state guarantees, and pledged to maintain Covestro’s intellectual property throughout Europe. The company then tweaked this element in response to feedback from customers and rivals. ADNOC has acquired Covestro, its largest acquisition to date. It is also one of the biggest foreign takeovers by a Gulf State of a company in the EU. This deal has raised EU concerns about the possibility that state subsidies were used.
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Gold drops as Fed cuts fade amid hawkish Fed comments
Gold prices sawsawed Friday, as hawkish remarks from U.S. Federal Reserve officials lowered prospects for a rate cut in December. However, they were still set to make a gain for the week due to wider economic uncertainty. As of 1044 GMT spot gold was down by 0.1%, at $4,166.91 an ounce. It had earlier reached $4,211.06 per ounce. Bullion has risen 4.2% this week. U.S. Gold Futures for December Delivery fell 0.6% to $ 4,170.10 an ounce. The cautious mood on financial markets is helping to support gold prices. However, there are growing doubts that the Federal Reserve will cut rates in December due to the lack of new economic data, said ActivTrades Analyst Ricardo Evangelista. After a 43-day record shutdown, which disrupted the flow of important economic data, the U.S. Government reopened. White House, on the other hand, has tempered expectations for clarity in regards to the economy by stating that it is possible that October's employment data will not be available. Evangelista stated that "gold may also face pressure from the closing of positions to meet margin demands triggered by falls in equity markets." The equity markets fell on Friday following the global selloff caused by Fed hawkish signals. Some Federal Reserve officials have given their opinions on the rate-cutting expectations by citing inflation concerns and the relative stability of labor markets following two rate reductions earlier in the year. CME Group's FedWatch tool shows that traders see a probability of 49% for a rate cut by a quarter point in December. This is down from 64% this week. Alex Ebkarian is the COO of Allegiance Gold. He noted, however, that as the shutdown costs become clearer and spending increases, "the inflation plus uncertainty growth regime favors precious metals". Gold that does not yield a return tends to do well in periods of economic instability and low interest rates. The physical gold market in major Asian markets has been subdued as high prices have curtailed purchasing activity. In India, discounts reached their highest level for five months. Silver spot rose 0.8%, to $52.68 an ounce, and is on course for its best weekly performance since September 2024. Palladium fell 0.5%, to $1420, and platinum dropped 1.3%, to $1559.70. (Reporting and editing by PhilippaFletcher, Harikrishnan Nair, and Anmol Choubey from Bengaluru)
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BHP is liable for the 2015 Brazil dam collapse: UK court rules on mammoth suit
The High Court of London ruled that BHP is liable for the collapse in 2015 of a dam located in the southeast region Brazil. This ruling was made in a case which lawyers representing the claimants had previously estimated at up to 48.32 billion pounds (36 billion pounds). BHP was sued by hundreds of thousands of Brazilians as well as dozens of local governments, and about 2,000 companies, over the collapsed Fundao Dam in Mariana (southeastern Brazil), which BHP's joint venture with Vale, Samarco, owned and operated. Brazil's worst ecological disaster released a toxic sludge wave that left 19 dead, thousands homeless, inundated forests, and polluted the entire length of the Doce River. In her ruling, Judge Finola O'Farrell stated that the continued raising of the height of dam even though it was unsafe was "direct and immediate" cause of its collapse. This means BHP is liable according to Brazilian law. BHP announced that it would appeal the ruling and continue the litigation. Brandon Craig, BHP's Minerals Americas President, said in a press release that "240,000 claimants" in the London case had already received compensation in Brazil. He added: "We think this will reduce the value and size of the claims in the UK collective action." ($1 = 0.7451 pound) ($1= 5.4039 reais). (Reporting and editing by Sarah Young, Kate Holton, and Sam Tobin)
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UN Rights Council considers fact-finding missions in emergency session on Sudan
On Friday, the U.N. Human Rights Council held a special session to discuss the situation in al-Fashir in Sudan. States will be considering a request for an investigation into the reported mass murders that occurred as the city of Darfur fell under paramilitary control. A draft resolution would include a fact-finding investigation to identify those responsible for alleged violations committed in al-Fashir by the Rapid Support Forces (RSF) and their allies. In his opening remarks to delegates, U.N. Human Rights Chief urged the international Community to Act. "There's been too much show and pretense, but too little action." "It must stand against these atrocities, a display displaying naked cruelty that is used to subjugate an entire population," said U.N. Human Rights High Commissioner Volker Turk. Rogue actors, not the RSF, are responsible for such actions. UN RIGHTS CHAIR WARNS OF SURGERY VIOLENCE IN KORDOFAN Turk called for actions against those "fuelling" and "profiting" from war in Sudan. He also issued a warning regarding the escalating violence in central Sudanese Kordofan region, where people are being forced to leave their homes and bombardments and blockades have been imposed. Kordofan, a region made up of three states, is used as a buffer zone between the RSF-held western Darfur and the army-held eastern states. The RSF's control over the Darfur region was cemented by the fall of al-Fashir on October 26, a year after the civil war began with the Sudanese Army. The draft text that is being considered by the council strongly condemns reports of ethnically motivated killings and the use of rape by RSF and its allies in al-Fashir. The international community has not taken any action to investigate the role of the external actors that may be supporting RSF. This was criticised by the ambassador of the permanent mission of Sudan to Geneva, who said his country faces an "existential conflict" as a result of the failure to act. Hassan Hamid Hassan stated that "We warned all over the U.N ....calling to pressure the rebel militia, and the country who is sponsoring them with military equipment. I mean the UAE." UAE STRONGLY denies support for RSF Sudan's Army has The United Arab Emirates are accused of providing weapons to the RSF. Jamal Al Musharakh, the UAE ambassador at the U.N. Geneva office on Thursday, categorically denied claims that the UAE provides any support to either side in the conflict. The United Kingdom and the European Union as well as Norway and Ghana have expressed their support for this resolution. They strongly condemned the violence in Sudan which, they warn, could threaten regional stability. "Staying quiet is not an option...The Council should send a clear signal that impunity will be not tolerated", said Kumar Iyer. He was the ambassador of the permanent mission to the United Kingdom at Geneva. The resolution calls on the RSF to ensure that life-saving aid reaches the people trapped in the famine-stricken city. Women who fled the city reported systematic rape and killings, while others described drone attacks and civilians being attacked on the street. (Reporting and editing by Aidan Lewis, Sharon Singleton, Emme Farge. Additional reporting by Olivia Le Poidevin.
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Gold gains shrink as Fed cuts hopes fade following hawkish Fed comments
Gold prices pared gains earlier on Friday, as hawkish remarks from U.S. Federal Reserve representatives clouded the prospects for a rate cut in December. However, they remain set for a week-long gain supported by wider uncertainty. As of 0930 GMT spot gold remained steady at $4169.58 an ounce after reaching $4211.06 earlier during the session. Bullion has risen 4.3% this week. U.S. Gold Futures for December Delivery eased by 0.2% to $4.185.90 an ounce. The cautious mood on financial markets is helping to support gold prices. However, there are growing doubts that the Federal Reserve will cut rates in December due to the lack of new economic data, said ActivTrades Analyst Ricardo Evangelista. After a 43-day record shutdown, which disrupted the flow of important economic data, the U.S. Government reopened. White House, on the other hand, has tempered expectations for clarity in regards to the economy by stating that it is possible that October's employment data will not be available. Evangelista stated that "gold may also face pressure from the closing of positions to meet margin demands triggered by falls in equity markets." The equity markets fell on Friday following a global sell-off triggered after hawkish Fed signalling. Some Federal Reserve officials have given their opinions on the rate-cutting expectations by citing inflation concerns and relative stability in the labor market following two rate reductions earlier this year. CME Group's FedWatch tool shows that traders see a probability of 49% for a rate cut by a quarter point in December. This is down from 64% this week. Alex Ebkarian is the COO of Allegiance Gold. He noted, however, that as the shutdown costs become clearer and spending increases, "the inflation plus uncertainty growth regime favors precious metals". Gold that does not yield tends to do well in periods of economic instability and low interest rates. Silver spot rose 0.9%, to $52.78 an ounce, and is on course for its best weekly performance since September 2024. Palladium fell by 0.8% on Friday to $1,414.94, while platinum dropped 0.7% to 1,569.85. (Reporting and editing by Philippa Feletcher in Bengaluru, Anmol Choubey from Bengaluru)
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Ethiopian Investment Holdings signss agreement with Rusal for an aluminium plant
Ethiopian Investment Holdings announced on Friday that it had signed a preliminary contract with Rusal for the establishment of a large-scale aluminum smelter in Ethiopia. This is the latest major investment in Ethiopia. Ethiopian Investment Holdings announced in a press release on its X Account that the proposed facility will have a production capacity of 500,000 metric tonnes per year. The first phase is estimated to cost $1 billion. The investment firm stated that the project covered by this memorandum will be completed in three to four year and will operate for up to fifty years. Ethiopian Investment Holdings stated that preliminary activities, including site identification and an extensive feasibility study, are already in progress to ensure a timely progression. Rusal has declined to comment. Ethiopia and Nigeria’s Dangote Group in August signed an agreement for the construction of a $2.5 Billion fertiliser manufacturing facility in Ethiopia’s south-east. In September, Russia signed a plan of action with Ethiopia for the construction and development of a nuclear plant. (Reporting and editing by Jan Harvey; Additional reporting in Moscow by Anastasia Lyrchikova; Reporting by George Obulutsa, Vincent Mumo Nzilani)
What are the risks and outlines of a potential Ukraine peace deal?
What are the possible contours of a peace agreement between Russia and Ukraine?
SECURITY GUARANTEE
Ukraine, which has been subjected to a full scale invasion in 2022, and witnessed Russia annex Crimea, needs security guarantees from major powers, primarily the United States.
The Budapest Memorandum of 1994, in which the U.S., Russia and Britain agreed to refrain from using force against Ukraine and respect Ukrainian sovereignty was not enough for the Ukrainian government. The powers agreed to take the matter to the United Nations Security Council in the event of an attack on Ukraine.
Sources involved in the talks say that the problem is that any security agreement that does not have teeth will leave Ukraine vulnerable.
Diplomats in draft proposals of a possible settlement for peace, seen by us, spoke about a "robust guarantee" including a possible agreement similar to Article 5. Article 5 of NATO's treaty binds allies together to defend one another in the event of a military attack. Ukraine is not part of NATO.
According to a draft of the failed 2022 agreement, Ukraine had agreed to permanent neutrality as part of a deal with the five permanent members on the U.N. Security Council - Britain, China France, Russia, the United States and other nations such as Belarus, Canada Germany Israel, Poland, and Turkey.
Officials in Kyiv, however, say that they will not accept neutrality for Ukraine.
NATO AND NEUTRALITY
Russia has said repeatedly that a possible NATO membership by Kyiv is inacceptable and that Ukraine should be neutral, with no foreign bases. Zelenskiy said that it was not up to Moscow to decide Ukraine’s alliances.
NATO leaders in Bucharest agreed to admit Ukraine and Georgia as members one day at the Bucharest Summit of 2008. In 2019, Ukraine amended its constitution to commit to full membership in NATO and the European Union.
U.S. ambassador General Keith Kellogg said that NATO membership for Ukraine was "off the table". Donald Trump said that the U.S.'s past support of Ukraine's NATO membership was the cause of war.
Ukraine and Russia discussed neutrality in 2022. According to a draft of an agreement, Russia wants limits placed on the Ukrainian military. Ukraine is opposed to any restrictions on the size or capabilities of its military.
Russia has stated that it does not object to Ukraine's EU membership bid, although some members of the EU could oppose Kyiv’s bid.
Territorial
Moscow claims to control about a fifth (or a fifth) of Ukraine, and that the territory now belongs formally to Russia. This is a position that most countries don't accept.
In 2014, Russia annexed Crimea. According to Russian estimates, Russian forces control nearly all of Luhansk and more than 70% Donetsk and Zaporizhzhia regions. Russia controls a small part of Kharkiv.
Putin's most detailed peace proposals, which he outlined in June of 2024, stated that Ukraine would be required to withdraw from all these regions, including those not currently under Russian rule.
According to a draft plan of peace drafted by the Trump Administration, the U.S. will de jure recognize Russian control over Crimea and de facto acknowledge Russian control over Luhansk, Donetsk, Kherson, Zaporizhzhia and other parts.
Ukraine would gain territory in Kharkiv Region, and the U.S. will control and administrate Zaporizhzhia Nuclear Power Plant which is currently under Russian control.
Kyiv has said that officially recognising Russian sovereignty over occupied territories is not possible and would be a violation of Ukraine's Constitution. However, territorial issues could be discussed in talks after a ceasefire.
Steve Witkoff, a Trump envoy, told Breitbart last week that the main issues are the regions and the nuclear plant. It's also about how the Ukrainians can use the Dnieper River to reach the ocean.
Sanctions
Russia is in favor of Western sanctions being lifted, but it's sceptical they will happen soon. Even if US sanctions were lifted, EU sanctions and other Western sanctions such as those imposed in Australia, Britain and Canada could continue for many years. Ukraine wants sanctions to stay in place.
The U.S. government has been reported to be studying ways to ease sanctions against Russia's energy industry as part of a broader plan that would allow Washington to provide swift relief in the event Moscow agreed to end the Ukraine conflict.
OIL AND GAS
Trump suggested that Putin who is the second largest oil exporter in the world, may be more inclined towards a resolution of the Ukraine War following the recent drop in oil price, although the Kremlin stated that national interests always trump oil pricing.
Some diplomats speculate that the U.S. and Russia are looking for lower oil prices in a larger grand bargain that includes issues ranging from the Middle East to Ukraine.
In the beginning of this month, it was reported that Washington and Moscow officials had held talks about how Washington could help revive Russian gas exports to Europe.
CEASEFIRE
Before talks can begin, European powers and Ukraine want Russia to agree to a truce. But Moscow insists that a truce will only be effective once the verification issues have been resolved. Kyiv claims that Moscow is trying to buy time.
RECONSTRUCTION UKRAINE
European powers are looking to utilize some of the Russian assets that have been frozen in the West, to assist Kyiv. Russia rejects this.
Reports from February indicate that Russia may agree to use $300 billion in sovereign assets that are frozen in Europe as part of the reconstruction of Ukraine, but that it will insist on spending a portion of that money in the one-fifth that is controlled by Moscow's forces.
Ukraine wants to use all $300 billion in assets seized for post-war reconstruction. (Reporting and editing by Gareth Jones, Guy Faulconbridge)
(source: Reuters)