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Stocks are near flat one day before the Fed's announcement; dollar and yields both slightly up
The major stock indices were little altered on Tuesday, and the dollar edged up as investors focused their attention on the Federal Reserve meeting. They also digested the news that Washington has allowed Nvidia to export its second-best chips into China. Treasury yields rose slightly after U.S. data on the labor market. The dollar extended its gains following the data which showed that U.S. employment increased modestly during October while hiring was subdued. Donald Trump, the U.S. president, said Washington would allow Nvidia to export its H200 processors to China. A 25% fee will be charged for such sales. Nvidia shares fell 0.7%. Investors expect the Fed to announce a rate cut on Wednesday, but policymakers are expected to remain divided. It's quiet before the storm. Adam Sarhan of 50 Park Investments, New York, explained that the market is experiencing mild movements because tomorrow's Fed meeting will be a "big catalyst." According to CME's FedWatch Tool, traders now see an 89.6% probability of a rate cut of 25 basis points this week. The Reserve Bank of Australia had held rates at the same level as expected earlier on Tuesday. The Reserve Bank of Australia, however, ruled out any further policy easing, and warned that the rates could rise if inflation pressures remain stubborn. The Australian dollar rose 0.26% against the greenback to $0.6639. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) rose by 0.15%, reaching 99.22. Both the Bank of Canada (Canada) and Swiss National Bank (Switzerland) are expected to keep rates unchanged when they meet respectively on Wednesday and Thursday. The Dow Jones Industrial Average dropped 138.43, or 0.29, points to 47,601.06, while the S&P 500 declined 1.35, or 0.02, points to 6,845.16, and the Nasdaq Composite grew 31.37, or 0.13, points to 23,576.17. The MSCI index of global stocks fell by 1.04 points or 0.10% to 1,007.00. The pan-European STOXX 600 fell by 0.1%. Isabel Schnabel, a member of the European Central Bank's board, said that even though it was not imminently foreseeable, the next move for euro interest rates would be upwards. She also warned that if rates were left unchanged too long they could lead to a passive easement?of monetary policies. On the Treasury Market, the yield of the benchmark U.S. 10 year notes increased by 1 basis point, to 4,182% from 4,172% at the end of Monday. Kevin Hassett, White House economist and top candidate to be the next Fed chair, stated on Monday that central banks should "continue to reduce interest rates". This will raise questions as to how the Fed will function in the medium-term. Investors focused on the peace talks between Russia and Ukraine, which lowered oil prices. Brent crude futures dropped 55 cents or 0.88% to settle at $61.94 per barrel. U.S. West Texas Intermediate Crude fell 63 cents or 1.07% to $58.25. The yen also weakened on the foreign exchange markets. The yen weakened instantly after a powerful quake that rocked Japan Monday.
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Anglo American, Teck Resources shareholders approve mining merger
Anglo American shareholders and Teck Resources shareholders approved a merger announced earlier on Tuesday, according to the companies. This paved the way for the creation of a new copper giant, with regulatory approvals remaining the last hurdle. Anglo released a statement saying that more than 99.17% votes were cast in favor by Anglo's London-listed shareholders. For the motion to be passed, a simple majority was needed. Teck shareholders have also passed their approval threshold of two thirds. The new company 'Anglo-Teck' will have its headquarters in Vancouver and its primary listing in London. Teck and Anglo-American announced in September their plans for a $53 Billion all-stock merger with no premium. This would create the fifth largest copper producer in the world. Both companies have been undergoing significant restructuring over the past few years, largely due to previous takeover attempts. Copper, an important metal used in the construction and power industries, will benefit from a'surging demand' driven by artificial intelligence and electric vehicles. A wave of takeovers has prompted miners to rush into developing new projects, but no major deal is yet completed. The risk of an outsider was a major obstacle to the deal. BHP, the world's biggest listed miner?made a new approach for Anglo, in November. Meanwhile, activist investors were pushing Rio Tinto towards Teck. The combined entity will?produce more than 1.2 millions metric tons copper per year. By the fourth year following the completion of the tie-up, it is expected that the combined entity will generate annual savings and gains in efficiency worth $800 million. Teck shares fell 0.8% after the shareholder vote. Anglo's shares in London closed 0.5% lower. Both companies will now need to obtain regulatory approvals in Canada, China and key other jurisdictions. The review will be based on national interest and competition, especially given that copper is a critical mineral. (Reporting from London by Clara Denina and Unnamalai L, Bengaluru by Maju Sam and Matthew Lewis).
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EIA raises forecast for US oil production in 2025 to a new record high, as supplies soar
The Energy Information Administration announced on Tuesday that U.S. production of oil is likely to be higher than expected this year. The EIA raised its forecast of 2025 oil production to 13.61 million barrels a day, which is the highest ever recorded. The EIA, however, lowered its estimate for 2026 total production by 50,000 barrels per day to 13.53 millions bpd. The EIA's 'update' in the U.S. production estimate for this year adds to the expectation that oil?markets are heading towards a supply?overhang. The Department of Energy’s statistical arm also raised its oil consumption estimate for?2025 by 100,000 bpd, to 20.6 millions bpd. It forecasts that the demand for 2026 will be flat. The EIA reported that the price of U.S. benchmark West Texas Intermediate oil will average $65.32 a barrel in 2025. This is up from its estimate last week, which was $65.15 a barrel. The EIA forecast that global benchmark Brent prices would average $68.91 per barrel by 2025. This is higher than its November forecast of $68.76. Reporting by Liz Hampton, Arathy S. Somasekhar, Scott DiSavino, and Barbara Lewis in New York.
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Stocks and dollar rise a day before Fed announcement, yields remain steady
The dollar and major stock indices edged up on Tuesday, as investors focused their attention on the Federal Reserve meeting. They also digested the news that Washington has allowed Nvidia to export its second-best chips?to China. Treasury yields were barely changed, after the data on U.S. employment market erased earlier declines. The dollar extended its gains following the data which showed that U.S. employment increased modestly during October while hiring was subdued. Donald Trump, the U.S. president, said Washington would allow Nvidia to export its H200 processors to China. A 25% fee will be charged for such sales. Shares of Nvidia The number of people in the United States who are enrolled in college has decreased by 0.3%. Investors expect the Fed to announce a rate cut on Wednesday, but policymakers are expected to remain divided. It's quiet before the storm. Adam Sarhan of 50 Park Investments, New York, explained that since there is a major Fed meeting tomorrow, a catalyst, it is normal for the market to be in a mild state right now. According to CME's FedWatch Tool, traders now expect a rate cut of 25 basis points this week. The Reserve Bank of Australia had earlier held the rates at their current level as was expected on Tuesday. It also warned against further policy easing, and that rates may rise if inflation pressures remain'stubborn. The Australian dollar rose 0.4% to US$0.6647. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, increased by 0.2% to reach 99.22. Both the Bank of Canada (Canada) and Swiss National Bank (Switzerland) are expected to keep rates unchanged when they meet respectively on Wednesday and Thursday. The Dow Jones Industrial Average rose by 126.30, or 0.27 percent, to 47.865.62. The S&P 500 gained 17.84, or 0.26 percent, to 6,864.35; and the Nasdaq Composite increased by 60.27, or 0.26 percent, to 23,606.54. The MSCI index of global stocks rose by 1.11 points, or 0.1%, to 1,009.15. The pan-European STOXX 600 fell by 0.1%. Isabel Schnabel, a member of the European Central Bank's board, said that even though it was not imminently foreseeable, the next move for euro interest rates would be upwards. She warned that if rates were left unchanged too long they could lead to a passive easing of the monetary policy. These remarks caused yields for German government bonds with shorter and longer maturities to rise the most in a single day since months. On the Treasury market, yields on benchmark U.S. 10 year notes dropped 0.2 basis points from 4.172% to 4.17% late Monday. Kevin Hassett (White House Economic Advisor and top candidate for the next Chair) said on Monday that the Fed must continue to reduce interest rates. Kevin Hassett, White House Economic Adviser and top contender for the next chair, said on Monday that the Fed should continue to lower interest rates. U.S. crude dropped 1.09%, to $58.24 per barrel. Brent was down to $61.94 a barrel on the same day. The yen also weakened on the foreign exchange markets. The yen weakened instantly after a powerful earthquake rocked Japan Monday.
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Sources: Top Indian arms manufacturers held rare meetings with Russian counterparts on joint ventures.
Three people with knowledge of the situation said that at least a half-dozen executives from Indian arms manufacturers, including Adani Defence, Bharat Forge and others, met in Russia for rare discussions about potential joint ventures. The meetings took place during the first visit by India's defense business leaders to Russia after Moscow's invasion of Ukraine in 2022. The visit of the defence business leaders was not reported previously. The Indian government wants to refocus its long-standing defence relations with Russia on joint weapons development. A potential collaboration with Russia could set back plans for Indian defence firms to develop Western weapons in tandem as part of Prime Minster Narendra Modi’s push to turn India, which is one of the largest arms importers in the world, into a global manufacturing hub. Western diplomats previously stated that the Indian military's use of 36% of Russian-origin arms is a major obstacle to the transfer to India of sensitive military technologies. The talks were held in Moscow on the sidelines a visit of an Indian defence-industrial delegation on October 29-30. This delegation was led by India's Defence Production Secretary Sanjeev Kumru, and aimed to prepare the groundwork for Russian President Vladimir Putin’s visit to India from December 4-5. Adani Group's and BharatForge's spokespeople denied that any executives of their companies attended the meeting. The sources cited in the article and India's Defence Ministry did not respond when asked for comment. JOINT PRODUCTION IN?INDIA Two sources and an industry executive said that the meetings focused on the possibility of manufacturing spare parts for the Mikoyan MiG-29 jet fighter and other Russian-origin systems of air defence and weapons. They also discussed a Russian proposal for setting up production units for the development of equipment which could be exported to Moscow. The subject matter was sensitive, so they spoke under the condition of anonymity. Russia has been India’s largest arms supplier for decades. During Putin’s visit, the two sides agreed to reorientate their partnership to "joint research and development, as well as co-development and production of advanced defence systems and technologies" in order to support India’s independence. INDIAN EXECUTIVES ARE IN MOSCOW Sources said that a large delegation of representatives of Indian defence units, state-owned companies, and startups involved in developing drones and artificial Intelligence for military purposes attended the meetings. Two sources confirmed that an executive from the?engineering group Kalyani's Bharat forge, which produces components for artillery and missiles, attended the meeting as part of efforts for sourcing or developing components for Russian origin?tanks? and aircraft, as well as exploring potential future collaborations on helicopters. Ashish Rajvanshi was the Chief Executive Officer of Adani Defence and Aerospace. This unit is part of Gautam Adani’s Adani Group which includes everything from airports to apples. A representative of the Society of Indian Defence Manufacturers was also present. This group has more than 500 members including defence divisions of Tata Sons and Larsen & Toubro as well as state-owned companies such as Bharat electronics. SANCTIONS RISK In 2024, it was reported that a subsidiary of?Bharat forge was one of three Indian companies that exported artillery to Europe. Some were then diverted to Ukraine. This led to a diplomatic protest by Moscow. A senior Indian executive stated that Indian companies would be reluctant to sign new deals with Russia because of the possibility of secondary sanctions. An Indian defence official stated that while India could use its diplomatic outreach and lobbying efforts to offer some protection against sanctions, the companies would still have to consider the political risks. (Reporting and editing by Frances Kerry in New Delhi)
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European shares fall as Fed meeting dominates the news; EssilorLuxottica also falls
European shares closed flat on Tuesday as investors remained cautious ahead of the U.S. Federal Reserve’s two-day meeting. EssilorLuxottica also fell after Google announced plans to launch AI powered glasses. The STOXX 600, the pan-European index, closed at 578.11. The regional benchmarks showed mixed results, with Germany's DAX rising 0.5% and France’s CAC-40 falling 0.7%. Google announced that it will launch artificial intelligence-enabled eyewear in 2026, with Warby Parker. Other luxury stocks were also affected by the news, including Kering, LVMH and LVMH Group, which declined 2% and 1.40% respectively. Sector losses were led by the broader luxury index, which fell 1.8%. Banks and insurers both made gains of 0.8%. Bloomberg News reported on Tuesday that German lawmakers will approve contracts totaling a record-breaking 52 billion euros (60,5 billion dollars) in the coming week. Rheinmetall, RENK, and Hensoldt all gained between 3.6% to 5.9%, which lifted the sector index by 0.9%. The markets remained focused on the Fed’s two-day meeting which begins on Tuesday. Markets expect the central bank to reduce rates by 25 basis point on Wednesday. However, attention will be focused on the policymakers' guidance on how they plan to proceed beyond December. It's the most important risk event for the week. "It's all about the details... the dot plots and any changes in the projections. How many dissenters," said Daniela Hathorn senior market analyst for Capital.com. It's not uncommon to see a sense of indecision and a more wait-and-see attitude when a major event is coming up in a few days. Global equity markets have been boosted by expectations of U.S. interest rate cuts after economic data that was delayed and comments made by policymakers who were dovish. Investors in Europe have started to price in a rate reduction in the next few years, after European Central Bank policymaker Isabel Schnabel stated on Monday that ECB could make its next move be a hike. This signals a possible divergence between both central banks. On Monday, the hawkish comments sent German 30-year yields?to a 14-year high and 10-year euro zone borrowing rates to multi-month highs. Thyssenkrupp, among other stocks fell 6.4% after the German conglomerate predicted a net loss up to 800 millions euros ($931million) in 2026. Galp fell 14.6%, the worst performing stock of the day, after the Portuguese energy company signed a contract giving TotalEnergies the operatorship over the Mopane discovery off Namibia. Nordex, a renewable energy company, and SMA Solar, a solar energy company, both rose by 2.1% and 3.1% respectively after a US federal judge rejected President Donald Trump’s ban on wind energy projects.
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Tusk: EU approves state aid to Poland's first nucleus plant
Donald Tusk, the Polish prime minister, said that the European Commission had agreed to allow Poland a?state?aid for the construction the first nuclear?power?plant in the country. In a press release, the?European Commission confirmed that it had approved state aid. In order to reduce its dependence on coal, Poland chose Westinghouse Electric for the construction of its first nuclear power plant along the Baltic Sea Coast. Poland plans to start constructing the first unit in 2028, and finish it by 2036. Tusk stated, "We'll soon receive official confirmation from the European Commission that it is willing to provide state aid for the construction of an nuclear power plant in Poland." We have received the entire?amount, which is 60 billion zlotys (16.51 billion dollars). The first?4.6billion zlotys of treasury bonds will be delivered to the interested party in?December. The CONSENT OF THE EUROPEAN COMISSION IS A CONDITION NECESSARY Tusk stated that the European Commission’s approval was necessary for the launch of the Polish nuclear program. He said: "We will be able, in fact, to start construction with enough momentum so that electricity from Poland's first nuclear power station can flow as soon as possible." The government officials said that the nuclear power plant would provide Poles with cheap and reliable energy. The power plant will provide electricity to Polish consumers as well as to Polish industry. It will do so at a low price...and will be able to generate free energy for the next forty years," said Wojciech Wrochna, Deputy Minister of Energy. This operation, in my opinion will enable us to achieve some the most competitive prices for energy anywhere in the world.
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Glencore ships first cobalt shipment under Congo's newly implemented quota system
One government source and two sources in the trade familiar with the matter said that Glencore was the first miner who exported cobalt to the Democratic Republic of Congo under the new quotas. They sent a "small" initial shipment as a test to the system. The government source confirmed that the Congo has cleared Glencore's shipment pending payment a 10% royalty. This marks the beginning of exports following a long-term ban which pushed cobalt prices sky high and strained the availability of metals needed for electric cars. Analysts estimate that the central African nation's production will be around 280.000 metric tons this year. This country accounts for over 70% of global supplies. The system was launched on 16 October and has a quota for the fourth quarter of 18,125 tons. It will cap exports to 96,600 tonnes per year from 2026. Two separate sources in the trade said that traders originally expected to see shipments of cobalt to smelters as early as January, after Congo implemented its quota system. However, they have now decided it will be longer. Two separate sources said that the first full-sized shipment of Congo's cobalt is expected in April. CHINA'S GLENCORE AND CMOC RECEIVE THE LARGEST ALLOCATIONS The world's largest cobalt producers, China's CMOC, and Glencore received the largest quota allocations. CMOC has a quota of 6,650 tons for the fourth quarter, while Glencore is allocated 3,925 tons. The regulator of Congo, ARECOMS, retains 10%?for strategic reserve. The government source stated that CMOC Tenke Fungurume mining has also begun the exporting process. Glencore declined comment. CMOC didn't immediately respond to a request for comment. Neither did ARECOMS or Congo's Mines Ministry. "We authorized the first shipment of Glencore to be released as a trial process. The procedure to determine quality and make a final decision about the amount of exports is still in progress. The 10% royalty is paid after the determination of quality. The source said that "once someone has done a first export it will be much easier to do the second." The sources were not allowed to be identified because they weren't authorised by the government to make public statements on this issue. Although the Congo government has imposed penalties for non-compliance with its laws, exporters are still struggling to comply with unclear payment procedures and procedural requirements. MINING LOBBY HAS SOUGHT URGENT TALKS IN ORDER TO TACKLE?DELAY The country's mining industry had previously called for urgent discussions to clear up legal ambiguities. The new requirements, including a royalty prepayment of 10% within 48 hours and a certificate of compliance before any cargo is moved, could cause delays in exports as well as disrupt global supply chains. Glencore, the company that operates the Mutanda, and Katanga mines, in the Congo, favored a quota system for exports, while CMOC sought a complete lifting of the embargo. Exporters are required to notify authorities and prepare samples for testing, and then wait for laboratory tests to verify quality and volume before royalties can be calculated and paid. A cargo cannot be moved without proof of payment. The price of cobalt metal is around $24 per lb, or $52,900 per ton. This compares to a nine-year low of around $10 per lb when Congo announced the suspension cobalt exports in February. (Reporting and editing by Veronica Brown, Barbara Lewis and Ange Kasongo; reporting by Pratima Deai and Maxwell Akalaare Adombila)
Trinidad is awaiting the field plan that will allow Shell to proceed with its Aphrodite gas development
Documents seen by revealed that the Trinidad and Tobago government was waiting on a development plan to be submitted by energy company Shell in order to move forward with the Aphrodite offshore gas project. Shell announced in June that it had made a final investment decision in the "discovery" project, which is expected to start producing gas in 2027. It will also have a maximum production rate of 18,400 barrels oil equivalent per day.
One of the documents revealed that Trinidad's Energy Ministry had written to Shell on November 24th, saying the company hadn't fully met the required conditions. A field?development plan was needed before the government could approve the project.
Documents show that Trinidad and Shell, one the Caribbean's main gas producers, have been negotiating for almost a full year to extend four licenses in Shell's East Coast Marine Area, where the "Aphrodite" discovery was made.
Trinidad set up three conditions for Shell in order to obtain the five-year extension it is seeking: approval of a development plan and $4 million as a signature bonus.
Shell remains committed to developing the Aphrodite Project after making the final investment decision in the first half of this year, a spokesperson for the company said on Tuesday without giving any further details. "We continue to closely work with all relevant stakeholders."
Shell accepted the bonus according to a document, but it wasn't immediately clear if the bonus was actually paid. Sources close to the project told us on Tuesday that the project was still awaiting government approval.
Shell holds a 45% share in Trinidad's flagship Atlantic LNG project. This project can produce 12 million metric -tons of liquefied gas per year (MTPA), but is currently suffering from a natural gas shortage. Shell hasn't been able get its share of the LNG produced by the plant, which is over 5.5 MTPA.
Trinidad has been pressing operators to increase production of gas to reduce the shortage for Atlantic LNG, and the country's Petrochemical Plants. (Reporting and editing by Matthew Lewis in Houston)
(source: Reuters)