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Stocks continue to rise as markets assess the impact of US shutdown
Gold traded at near-record highs as investors digested potential ramifications from a U.S. shutdown. Meanwhile, a weak U.S. private labour market report strengthened bets that the Federal Reserve will cut rates. The prolonged shutdown of the U.S. federal government could delay or disrupt the release of important official data, such as those on inflation and employment. This would cloud the picture of the health of the largest economy in the world and the direction of interest rates. A Friday release of the monthly payroll report is unlikely. This brings into focus an ADP employment report from overnight that showed unexpected job losses in September. The traders are pricing in two quarter point Fed rate cuts before the end of this year. Kevin Thozet of Carmignac Asset Management, who is a member of the investment committee, said, "I hope that they can sort this quickly." He was referring to the shutdown in the federal government. Inflation data were also due before the next Fed meeting. He said, "It is like a man walking with a dog who has no sight." He added that while U.S. stock prices have done well, the dollar has weakened due to uncertainty over the credibility of U.S. financial institutions in general. SHUTDOWN ANGST HURTS DOLLAR AND BOOSTS GOLD On Thursday, the MSCI global stock index rose by about 0.3%, after European stocks reached a new record high of about 0.7%. Wall Street futures also rose between 0.2 to 0.4%. The tech shares in Asia rose earlier, contributing to the rise in regional stock indexes. This was partly due to news that South Korean chip giants Samsung and SK Hynix had signed partnerships with OpenAI data centers. Gold reached an overnight high of $3.895.09, as a combination of Fed easing and shutdown anxiety pushed it to a new all-time record. This also supported U.S. Treasuries by sending yields dramatically lower. Gold last rose 0.4% to $3,880. Overnight, the yield on two-year Treasury bonds fell to a new two-week low at 3.531%. It was last seen at 3.5429%. Michael Brown, Senior Research Strategist at Pepperstone, said: "As it is usually the case, new highs will likely beget more fresh highs. The momentum remains firmly with bulls and the fundamental argument for further upsides in PMs (precious Metals) is also a strong one." The U.S. Dollar Index, which measures the currency's performance against six major counterparts, has been stuck near an overnight low of 97.459, which was a new one-week low. It was last trading at 97.567 and down 0.2% on Wednesday's closing price. In remarks made at an industry conference, Bank of Japan Deputy governor Shinichi Uchida expressed confidence that the conditions were in place for another rate hike. The euro increased slightly to $1.1752 while the sterling remained largely unchanged at $1.34815. The oil prices fell on Thursday as concerns over an oversupply of the market continued to weigh. Brent crude futures dropped 0.4%, to $65.09 a barrel. U.S. West Texas Intermediate crude fell 0.4%, to $61.54 a barrel.
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Venezuelan students turn plastic waste into classroom desks
In the northwestern part of Venezuela, a local foundation has turned piles of broken furniture and discarded plastic into desks. El Zulia Recicla in the capital of Zulia, Maracaibo has so far refurbished 160 desks using plastic waste collected from students. The foundation does not build new furniture but instead repairs metal frames that are damaged and replaces the missing parts with molded panels manufactured in its workshop. The research director of the foundation, Nicolino Bácho, said: "We show that desks with damaged wood and falling apart can be restored." Already, 20 desks were delivered to Ramon Reinoso Nunez school, where previously students sat on the ground or used backpacks for chairs. Maritza Jaimis, the school's director, said: "We have a lot of desk issues. Theft and wear take their toll over time." She said, "We had hoped that they would take more but are grateful for the 20 restored ones." The foundation, which is partly funded by France's embassy, has a goal to provide 200 desks in 10 schools located in areas that are vulnerable. This initiative is part of a larger effort to raise awareness about the environment and reduce plastic pollution in the region. Mariela Nava, Efraino Otero and Mariela Nava report.
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Rugby Australia and New Zealand compete for Rugby Championship medals in Perth final
Australia and New Zealand will meet again on Saturday at the Perth Stadium, after a brutal battle at Eden Park. Both teams are hoping to claim, even temporarily, the Rugby Championship Trophy. South Africa will not be able to celebrate their victory, as they must wait until after the match against Argentina, at Twickenham, in order to win back-to-back championships. The prospect of a showdown between the two teams in Perth should not dampen the excitement. Perth's much improved hosts will be looking to give prop James Slipper a fitting send-off in his final and 151st international. Scott Robertson’s All Blacks will, on the other hand, be desperate to maintain their traditional dominance against their trans-Tasman competitors. New Zealand has already secured the bilateral Bledisloe cup with a 33-24 victory at Eden Park, but it will still want to end the Rugby Championship on a positive note after a sometimes sobering campaign. The All Blacks' record defeat in Wellington against a revitalized South Africa and their first ever loss in Argentina to the Pumas, made them seem like a fading superpower half way through the World Cup cycle. New Zealand's egos would suffer another crushing blow if they were to lose the match against Australia, who is their usual punching bag. Robertson and his team would also be under increased pressure. Joe Schmidt has made the Wallabies happier despite their losing record of 2-3 in this tournament. The Tides Turning for 2027 World Cup Hosts Schmidt's blowout losses in his first season as coach are just a year old, but they seem like a bygone era. The fans have been packed to their seats for home matches in this season, but they are more likely to be disappointed by the results than hopeful. Andrea Piardi's capricious officiating and a late yellow-card could have prevented Australia from leaving Eden Park with the Bledisloe and a chance to reclaim it for the first 23 years. They left with a feeling of being aggrieved and the 10th consecutive loss to the All Blacks. This may be useful for settling the score in Perth. Schmidt told journalists on Thursday that if we were to win this week we would finish at the very least second. "That's incredible when compared to the last season or even season before. I do believe there is growth in the team. I cannot guarantee it will be linear, but I can guarantee the effort. The additions of Will Skelton from France and Rob Valetini on the bench, after he missed Eden Park due to a calf injury, will make Australia stronger. Schmidt gambled that Tane Edmed, who had a shaky debut at the Sydney loss to the Pumas in his number 10 jersey in the absence of flyhalf James O'Connor after he was benched for a full match at Eden Park due to some costly mistakes with the boot. Robertson also has thrown caution out the window, dropping Billy Proctor at centre in favor of Quinn Tupaea. Leicester Fainga’anuku will be playing on the wings for the first time since the World Cup 2023. New Zealand appears as vulnerable as ever, which could make the Wallabies as dangerous as ever. (Reporting from Ian Ransom, Melbourne; Editing done by Ken Ferris).
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Nepal celebrations hollow for families mourning protesters
The homes of Chaulagains, a family that has lost a son in Nepal's worst civil unrest, are suffused with grief. Ganesh Prsad Chaulagain (53), who lost his 18-year-old son Shreeyam in the political turmoil which ravaged the Himalayan country last month, said: "Dashain should be filled with joy, but this is the first year that I feel only sadness." The capital of Nepal, Kathmandu, was filled with music and the smell of festive feasts as he spoke in the echoing quiet of his family's home. The student, a high schooler, was shot in the face on 8 September near Parliament after he participated in a peaceful protest against corruption that spiralled into two days of violence. Nepal is slowly recovering from the violence that was sparked by so-called Gen Z protests, which were sparked by young people angry at perceived political indifference and lack of employment. 74 people died in these protests and they brought in a new interim administration. It has been reported that "high velocity firearms" were used to fire "live bullets" at least 33 out of the 58 demonstrators who died in the anti-graft demonstrations. The Chaulagains, like many others in the mountainous Nepal, lived off a meager monthly income. In their case, it was less than $200. They made sure Shreeyam got an education and hoped he would find a job abroad, maybe in Germany, in order to reduce their financial burden. Nepal's median age is 25 years. However, a lack in employment has caused nearly a third its youth to leave their homes in search of work that will ensure economic security. Nepal's instabile politics has not made matters any easier, with 14 government changes in less than 20 years. Sushila Karaki, 73, former chief justice of the Supreme Court was appointed interim prime minister after the protests to prepare for the elections scheduled for March 5. However experts warn that the task will be difficult. The Chaulagains and relatives of those killed in the protests are now demanding that the government provide them with regular economic assistance, not just an one-time payment. The father of Shreeyam, who died in a car accident, said that Dashain would never be the same. (Reporting and editing by Clarence Fernandez in KATHMANDU, Sahana Bajiracharya from KATHMANDU)
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S&P 500 and Nasdaq Futures Advance on New Rate-Cutting Optimism
Futures linked to the S&P 500 index and the Nasdaq Index advanced early on Thursday. A day earlier, weaker than expected private payroll data had boosted hopes for rate cuts. Traders were bracing for a session with little data due to the U.S. Government shutdown. Investors are still sensitive to any sign of policy easing. Rate-cutting optimism has been a major factor in the recent rally, which has pushed equities up to high valuations. Investors are now relying on alternative data sources to fill the data vacuum left by the shutdown. This includes Wednesday's ADP National Employment Report which was weaker than anticipated. Arnim Wooder, global macro-strategist at Easterly EAB, said that it would likely strengthen those in the Fed policymaking panel who think the labor situation warrants at least another cut. The ADP report could be the last labor market data for some time. Traders interpreted the lower reading as sufficient to nudge the Fed towards a 25 basis point rate cut at the next meeting. Kyle Rodda is a senior financial analyst at Capital.com. He said, "It appears that the U.S. economic system needs further policy support." At 06:41 am. At 06:41 a.m. ET, Dow E Minis were down 26 or 0.06%. S&P 500 E Minis were up 11.25 or 0.17%. Nasdaq E Minis were up 92 or 0.37%. On Wednesday, the benchmark S&P 500 index and blue-chip Dow ended at record highs. The shutdown, which began on Wednesday, has already affected the weekly report on jobless claims, an important indicator of the labor market's health. This report was due to be released on Thursday. In the past, shutdowns of government agencies have not had a significant impact on equity market. Investors are looking for signs of monetary ease, and the data vacuum is a risk. Investors will also be analyzing the comments of Dallas Fed President Lorie Lo Logan on Thursday. Tesla's stock rose 1.6% ahead of the release of its quarterly delivery report. Shares of Lithium Americas, listed on the NYSE, fell 4.6% following a downgrade by Canaccord Genuity. Equifax and TransUnion credit bureaus fell 12.2% each and 11.3% respectively after FICO launched its program to allow mortgage lenders access to scores without having them rely on bureaus. FICO was up by 10.7%. Advanced Micro Devices rose 2.9% following a report that Intel had begun early discussions to include the chipmaker as one of its foundry customers.
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Czech billionaire Kretinsky sells Thyssenkrupp stake after JV plans fail
The Czech billionaire Daniel Kretinsky agreed to sell his 20 percent stake in Thyssenkrupp’s steel business and scrap plans for joint venture, according to a statement released by both parties. This could pave the way for an agreement with Jindal Steel. The sale of the stake ends long-running discussions about what could have been a German and Czech steel and energy giant. Discussions that have made no measurable progress since Kretinsky purchased a fifth in Thyssenkrupp Europe (TKSE) late last year. Thyssenkrupp shares, which had earlier reached a high of six years, briefly fell on the news, before recovering and trading 1.6% higher by 1042 GMT. Thyssenkrupp can now move forward with its talks with India's Jindal Steel International. Jindal Steel International last month made an indicative offer for the entire TKSE business, a volatile one that its parent had been trying to sell for years. The statement stated that Kretinsky’s EP Group “respects Thyssenkrupp's AG preference to focus on discussions with Jindal Steel International” and that the purchase price paid by Kretinsky’s EP Group to Thyssenkrupp to acquire the TKSE shares would be reimbursed. People familiar with the situation estimate the price at approximately 140 million Euros ($164 million). This news comes at a time when uncertainty is growing about the future of steelmaking in Europe. The sector is battling with low-cost Chinese imports, rising energy costs, and a delayed decarbonisation based on hydrogen of one of the most pollution industries. The EP Group of Kretinsky and Thyssenkrupp aimed to form a joint venture with TKSE that would be 50/50. However, the talks have proved difficult as powerful unions accuse the Czech businessman for refusing engagement. $1 = 0.8511 Euros (Reporting and Editing by Matthias Williams, Louise Heavens, and Matthias Steitz)
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Taiwan will continue to cooperate in further restrictions on Russian Energy Imports
Taiwan's government announced on Thursday it would cooperate if "international allies", imposed further restrictions on Russian imports of energy, following criticism from a group non-governmental organizations about the island's business relationship with Russia. Taiwan, along with the United States, major Western allies, and other countries, put broad sanctions against Russia in 2022 after its invasion of Ukraine, but it did not ban explicitly imports, which are a major source of hard currency for Russia. Taiwan's Foreign Ministry responded to criticism on Tuesday from a group NGOs, including the Centre for Research on Energy and Clean Air, about Taiwan's continued use of Russian naphtha. The ministry stated that the government would continue to work closely with the United States and other democracies. Taiwan said that if international allies place further restrictions on Russian products, whether energy or otherwise, it would actively cooperate. It would show its unwavering determination to fight aggression and defend international order. Taiwan's Economy Ministry, which is responsible for energy policy, stated in a separate press release that it "urges local enterprises to purchase petroleum products that meet EU regulations". The report noted that while state-owned companies had stopped importing Russian crude oil by 2023, private firms were not restricted from doing so. The ministry added that "as international sanctions continue evolving, it will examine further relevant control measures and communication with domestic manufacturers." Data from shiptracker Kpler shows that Taiwan imported 102,000 barrels of refined products per day in the first nine month this year. This is up from 76,000 barrels per days in 2024. The data shows that petrochemical feedstock naphtha is the main import from Russia. (Reporting and editing by Hugh Lawson; Additional reporting in Singapore by Florence Tan)
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Kretinsky sells Thyssenkrupp steel stake as JV plans falter
The joint statement from both parties revealed that the Czech billionaire Daniel Kretinsky sold his 20% stake in Thyssenkrupp’s steel unit, and scrapped plans to create a 50/50 joint venture. This could pave the way for an agreement with Jindal Steel. The sale of the stake ends long-running discussions about what could have been a German and Czech steel and energy giant. Discussions that have made no measurable progress since Kretinsky purchased a fifth in Thyssenkrupp Europe (TKSE) late last year. Thyssenkrupp can now move forward with its talks with India's Jindal Steel International. Jindal Steel International last month made an indicative offer for the entire TKSE business, a volatile one that its parent had been trying to sell for years. In the statement, Kretinsky’s EP Group said it "respects Thyssenkrupp AG’s preference to focus on discussions with Jindal Steel International". This news comes at a time when uncertainty is growing over the future of steelmaking in Europe, due to cheap Chinese imports and high energy costs, as well as a delay of hydrogen-based decarbonisation for one of the most pollution industries. Kretinsky’s EP Group and Thyssenkrupp aimed to eventually form a 50:50 joint-venture for TKSE. However, talks have been difficult as powerful unions accuse the Czech businessman's refusal to engage. (Reporting and editing by Matthias Williams; reporting by Christoph Steitz)
How can Trump bring peace to Ukraine?
Donald Trump said that he would be meeting with the presidents from Russia and Ukraine to discuss stopping the "bloodbath" in Ukraine. What are the obstacles that the U.S. President faces when he is trying to negotiate a peace agreement with 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.
Sources involved in the talks say that the problem is that a security agreement without teeth could leave Ukraine vulnerable. Diplomats talked about a "robust" security guarantee, including a possible Article 5-like agreement. The NATO article 5 treaty binds allies together to defend one another in the event of a military attack. Ukraine is not part of the alliance. According to a draft of a failed 2022 agreement, permanent neutrality was proposed for Ukraine as recompense for security guarantees by 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. In their first high level talks since then in Istanbul, on 16 May, Russian negotiators reaffirmed their demand for neutrality in Ukraine. The Kremlin has said that the content of these talks should remain private.
The officials in Kyiv have said that they will not accept neutrality for Ukraine.
NATO AND NEUTRALITY
Russia has said repeatedly that a possible NATO membership by Kyiv is unacceptable, 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". Trump said that the U.S.'s past support of Ukraine's NATO membership was a major cause of war.
Ukraine and Russia will discuss permanent 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 comprehensive public peace proposals, which he outlined in June 2020, stated that Ukraine would be required to withdraw from all of these regions, including areas currently not under Russian control. The Ukrainian source claimed that his negotiators reiterated these demands at the Istanbul talks on May 16, according to the Ukrainian source.
Alexander Kots is a war reporter for the Russian newspaper Komsomolskaya Pravda. According to Kots' report, the negotiators told their Ukrainian counterparts to give up all claims on the four regions, including Crimea. According to a draft plan created 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 legally recognizing Russian sovereignty over the occupied areas would be illegal and violate Ukraine's Constitution. However, territorial issues could be discussed in talks after a ceasefire.
In an interview with Breitbart published on May 12, Trump's envoy Steve Witkoff said: "The main issues are the regions and the nuclear plant. It's also how the Ukrainians can use the Dnieper River to get to the ocean."
Sanctions
Russia is in favor of Western sanctions being lifted, but is skeptical that this 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 looking at ways to ease sanctions against Russia's energy industry as part of an overall plan that would allow Washington to provide immediate relief in the event Moscow agreed to end the Ukraine conflict.
OIL AND GAS Trump suggested that Putin, the leader of the world's 2nd largest oil exporter following the recent drop in oil price, may be more inclined towards resolving the Ukraine war, though 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. Reports from Washington and Moscow earlier this month indicated that the U.S. was interested in helping Russia to increase its gas sales into 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. Trump claims that this is possible, despite Kremlin's denials.
RECONSTRUCTION UKRAINE
European powers are looking to Kyiv to provide assistance with the reconstruction of Ukraine, which will cost hundreds and billions of dollars.
According to Kots the war correspondent in Istanbul, Russia's negotiators said that they wanted both parties to agree to not demand any reparations or to present bills for war damages.
RUSSIAN SPEAKERS
Kots reported that the Russian negotiators at the Istanbul summit said they wanted Ukraine to accept European standards for minorities in order to protect Russian-speaking and ethnic Russians living in Ukraine. Kots said that they demanded Kyiv stop what Moscow called "nationalist propaganda". Ukraine denies Russian accusations that it persecutes Russian-speaking speakers. Reporting by Guy Faulconbridge, Andrew Osborn and Philippe Fletcher. Editing by Gareth Jones & Philippe Fletcher.
(source: Reuters)