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The Takaichi Trade makes a Comeback in the Morning Bid Europe
Wayne Cole gives us a look at what the future holds for European and global markets. Since the Liberal Democratic Party and the Japan Innovation Party formed a coalition to form a government, the Takaichi Trade has been in full flow. This brings Japan closer to the first female Prime Minister. Analysts believe Sanae Takaichi will be in favor of stimulus and against any further interest rate hikes. This is a negative for the Japanese yen, but positive for stocks. The Nikkei jumped to an all-time record high of 2,9%, and the yen fell modestly. Even the ultra-long JGBs attracted a bid. Perhaps on relief, there would be an actual government, even if it is a minority. JAPAN BUTTRESSES ASIA MARSKETS AFTER MIXED CHINA data Nikkei's jump helped to lead Asia higher as markets navigated a mixed bag of Chinese economic news. The Chinese economy outperformed expectations by growing at a rate of 1.1% in its third quarter, compared to the three months before. However, the pace of growth on an annual basis slowed down as expected. The industrial output was also above expectations, while retail sales and home prices were in line. The data was solid enough for China to feel confident that it can last longer than the United States during a trade conflict, and President Trump admitted that 100% tariffs are not sustainable. The Five-Year Plan was discussed by top Chinese policymakers this week, but investors had long since given up expecting any aggressive stimulus. Analysts also weren't sure what to think of the news that China's chief trade negotiator Li Chenggang was removed from his position as the country’s permanent representative at World Trade Organization. US WORKS ON DELIVERING DATA DURING GOVERNMENT SHUTDOWN The government shutdown in the U.S. is not going to end soon. And the longer it continues, the greater the impact on the economy, even though markets are complacent right now. The statistics bureau makes a special effort on Friday to release the CPI, as it is required for all kinds of indexing including TIPS. The Federal Reserve's refusal to back down on the near 100% probability of a rate cut this month should not change the expectations for an acceleration in core inflation. Companies reporting earnings include Tesla, Ford and GM. Also, Procter & Gamble, Coca-Cola and RTX, the aerospace and defense giant, as well as tech giants IBM and Intel. Markets punish results that do not blow the roof off. Options suggest that the average share price will drop by around 6% for even the slightest disappointment. BofA predicts earnings growth of 11 %, driven by a 20 % rise in the technology sector. Nvidia is responsible for a quarter growth in earnings per share. Market developments on Monday that may have a significant impact * Isabel Schnabel, ECB board director, participates in a panel. Erik Thedeen, Governor of the Riksbank, discusses economic conditions German Producer Prices for September
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Shanghai copper prices rise as China's industrial output data is strong.
Shanghai copper gained on Monday as China's stronger-than-expected industrial output helped to boost sentiment even as the country's economic growth slowed to a one-year low. As of 0330 GMT, the most active copper contract traded on Shanghai Futures Exchange rose 1.26%, trading at 85,790 Yuan ($12,041.88) a metric ton. The benchmark copper for three months on the London Metal Exchange increased by 1.06%, trading at $10 717 per ton. Data released on Monday by the National Bureau of Statistics revealed that China's industrial production grew 6.5% on an annual basis in September, up significantly from the 5.2% growth in the previous month. This figure is a new high for three months and beats the forecast of 5.0%. The data released on Monday also revealed that China's gross national product (GNP) grew at a slower pace than in any other quarter in the past year. It was down from 5.2% growth in the second quarter. The second-largest global economy, which grew by 5.2% over the first three-quarters of this year, is targeting a growth rate of around 5% for the entire year. The next five-year China plan is the focus of traders, who are looking for a stronger stimulus as GDP growth is slowing. A copper trader in Shanghai, who spoke on condition of anonymity because they were not authorized to speak to the media, said: "We expect to see more supportive measures in the future to boost economic development amid tariff threats and trade war." The copper shortage in 2026 remained a major concern for the market as disruptions in mining, such as at the Grasberg Mine in Indonesia, which is the second largest mine in the world, decreased raw material supply. Nickel fell 0.3%; lead increased 0.26%. Tin lost 0.44%. Zinc added 0.56% to the LME, nickel grew by 0.19%, and lead increased 0.3%. Tin was up 0.81%. Aluminium was not changed.
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Dalian iron ore falls to a seven-week low due to concerns about China's demand prospects
Dalian iron ore prices fell to their lowest level in seven weeks on Monday, after a series of disappointing data from the world's largest steel-making consumer China fueled concerns about demand prospects. The January contract for iron ore, the most traded on China's Dalian Commodity Exchange(DCE), closed morning trade at 770 Yuan ($108.08). It had touched its lowest level since September 1, at 762.50 Yuan, earlier in the day. As of 0354 GMT the benchmark November iron ore price on the Singapore Exchange had risen by 0.41% to $104.35 per ton. This was due to a weaker dollar, which made commodities priced in dollars cheaper for buyers who used other currencies. Singapore's benchmark fell to its lowest level since October 9th at $103.25. China's third-quarter economic growth is likely to have slowed down to its lowest level in a year as trade tensions and a prolonged property slump weigh on demand. Some key indicators, including new construction and property investment in the property sector, pointed to a gloomy outlook for steel demand that dragged ore prices lower. In September, the new home price in China dropped at the fastest rate in 11 months, further reducing the drag of the property sector on the broader economy. China's crude output of steel in September fell to its lowest level in 21 months, with persistent property market problems a major drag. The fourth quarter is usually a slow time for steel demand, as the temperatures are low in the northern regions. Analysts expect a limited supply of coke and coal, which are used to make steel. The benchmarks for steel on the Shanghai Futures Exchange have largely moved within a narrow range. Rebar grew by 0.13%. Hot-rolled coil, stainless steel and wire rod were unchanged. Reporting by Amy Lv & ColleenHowe. $1 = 7.1243 Chinese Yuan Renminbi.
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Gold rises on US rate-cut expectations; US-China Trade Talks in Focus
Gold prices rose on Monday as investors looked forward to U.S. inflation figures and U.S. China trade negotiations later this week. As of 0331 GMT, spot gold was up by 0.1%, at $4,253.33 an ounce. U.S. Gold Futures for December Delivery climbed 1.3%, to $4266.30 per ounce. Silver spot rose by 0.5%, to $52.12 an ounce. After hitting a record-high of $54.47 earlier that day, prices fell by about 4.4% in their worst session in early April. The gold market is still trying to get its bearings after the Friday selloff. After a few weeks' mania, the sentiment is cooling off a little, said Capital.com analyst Kyle Rodda. Gold prices fell by 1.8% Friday, the highest since mid-May after U.S. president Donald Trump announced that his 100% tariffs on Chinese goods would not be sustainable. He said he was going to meet Chinese President Xi Jinping, and that he believed things would go well with China. The next major hurdles will be the U.S. China talks this week, and the CPI release from the United States on the Friday. The absence of economic data has created a vacuum that, I believe, is responsible for the surge in gold price. The Federal Reserve is not expected to push back against the pricing of rate cuts. This will be revealed in figures due on Friday. According to CME FedWatch Tool, the markets are pricing in a quarter point Fed rate reduction this month and another in December. The non-yielding gold has gained over 60% in the past year, reaching a record high of $4378.69 last Friday. This was due to geopolitical tensions and aggressive bets on rate cuts, central bank purchases, de-dollarisation, and strong exchange-traded funds. Palladium rose 0.2% and platinum dropped 0.8%, respectively, to $1.476.97 an ounce. (Reporting and editing by Sherry Jacobi-Phillips, Subhranshu Saghu and Swati verma from Bengaluru.
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China's crude steel production in September hits a 21-month low due to sluggish consumer demand
China's crude output of steel fell to a 21-month low last September as mills struggled with a sluggish market and declining margins. Data from the National Bureau of Statistics revealed that the world's biggest producer of crude steel produced 73.49 millions metric tons of it last month. This is the lowest level recorded since December 2023. This was a 4.6% decrease from the previous year and a 5% drop compared to August's 77.37 millions tons. Calculations based on data show that the average daily production in September was 2,45 million tons. This is down from 2.5 millions tons in August. China's steel demand usually peaks in September, due to the construction boom. However, a series of powerful typhoons struck several coastal areas last month and slowed down outdoor operations, reducing the demand. Analysts said that the lower-than-expected steel demand coupled with shrinking margins deterred manufacturers from increasing production. According to Mysteel's data, mill profitability fell. Around 57% of steelmakers were operating at a loss by the end September. This is down from 64% late in August. The cost of raw materials like iron ore also increased. Pei Hao is an analyst with international brokerage Freight Investor Services. She said that the lower output was partly due to a temporary ban on mill operations in northern areas in order to reduce pollution in advance of a military display last month. Pei stated that "a shaky confidence regarding steel demand in the midst of a prolonged property market decline prompted mills to maintain an cautious production pace." The first three-quarters of this year saw a total production of 746.25 millions tons, a 2.9% decrease from the previous year. Reporting by Amy Lv, Colleen Waye and Thomas Derpinghaus.
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Trump says he will keep imposing'massive tariffs' on India until Russian imports of oil cease
U.S. president Donald Trump said on Sunday that Indian prime minister Narendra Modi had told him India would stop buying Russian crude oil. He also warned that New Delhi will continue to pay "massive tariffs" if it does not. Trump told reporters on Air Force One: "I spoke to Prime Minister Modi from India and he said that he would not be doing anything about the Russian oil." When asked about India's claim that it wasn't aware of any conversations between Modi and Trump's response was: "But, if they say that, they'll continue to pay massive duties, and they don’t want to do this." Trump has been irritated by Russian oil purchases in his trade negotiations with India. Half of his tariffs of 50% on Indian goods is in response to these purchases. U.S. officials have said that Russia uses petroleum revenue to fund its war in Ukraine. India is now the largest buyer of Russian oil shipped by sea at a discounted price after Western nations boycotted it and imposed sanctions against Moscow over its invasion of Ukraine in 2022. Trump said on Wednesday that Modi assured him the day before that India would cease its Russian oil purchases. India's Foreign Ministry said it had no knowledge of a telephone conversation between leaders on that day but that New Delhi was primarily concerned to "protect the interests of Indian consumers." An official at the White House said that India had halved their purchases of Russian crude oil. However, Indian sources stated that no reduction was immediately seen. Sources said that Indian refiners had already placed orders to load in November, with some of them slated for arrival in December. Any reductions could start to show up as a drop in imports for December or January. India's imports will increase by about 20% to 1.9m barrels a day this month, according to Kpler estimates. This is because Russia has increased its exports since Ukrainian drones attacked its refineries. (Reporting from Jeff Mason aboard Air Force One, Kanishka Singh in Washington and David Brunnstrom at the Pentagon; editing by Kim Coghill & Sonali Paul).
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Oil prices drop on worries about US-China trade tensions
Oil prices fell on Monday as a result of concerns over a global surplus. The escalating U.S. China trade tensions also added to worries about an economic slowdown. Brent crude futures dropped 24 cents or 0.4% at $61.05 a bar at 0032 GMT. U.S. West Texas intermediate futures were also down 21 cents or 0.4% at $57.33, erasing Friday's gains. The International Energy Agency has forecast a growing glut of supply in 2026, which is partly responsible for the declines. Toshitaka Takawa, an economist at Fujitomi Securities, said that fears of a slowdown in the economy due to escalating U.S. China trade tensions are driving selling pressure. The upcoming summit between U.S. president Donald Trump and Russian president Vladimir Putin will add uncertainty to the outlook. This makes it hard for some investors adjust their positions. Last week, the World Trade Organization's head said that she had urged both the U.S.A. and China de-escalate their trade tensions. She warned that a decoupling of the two world's largest economies over time could result in a 7% reduction in global economic output. Two of the world's largest oil consumers recently renewed their trade conflict, adding port fees to ships that carry cargo between them. This could cause global freight flow disruptions. Trump and Putin also agreed to meet again on Thursday, despite Washington's pressure on India and China not to buy Russian oil. After talks with Ukrainian president Volodymyr Zelenskiy on Friday at the White House, Trump implored Ukraine and Russia to stop the war "immediately," even if that meant Ukraine conceding territories. Trade sources and analysts say that the pressure from the United States and Europe on Asian buyers to reduce their Russian energy imports could result in India's oil imports being restricted as of December, resulting in cheaper supplies for China. Baker Hughes, a leading energy services company, said that the United States added oil and gas rigs last week for the first time since three weeks. (Reporting and editing by SonaliPaul; Yuka Obayashi)
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Telegraph: British troops can now shoot drones down on sight
The Telegraph reported that British troops would be given new power to shoot down drones that threaten UK military bases. This was based on an announcement made by British Defence Minister John Healey on Monday. The newspaper reported that Healey would reveal his vision for how Britain can protect its most important military bases as a response to the growing threat from Russia. The Telegraph, citing an anonymous source, reported that the British government "was not ruling out" extending the powers to other sites of importance, such as airports. According to The Telegraph, troops are currently able to use counter-drone specialist equipment that can track drones coming in, hijack their signals and divert them. The Telegraph added that the new proposal would give soldiers and Ministry of Defence Police an "kinetic option" of shooting them on-site, something they could only do in extreme situations. Healey's Office did not respond immediately to a comment request. The British defence ministry was not immediately reachable. In October, Britain announced that two Royal Air Force planes were flying a Twelve-hour Mission The U.S. and NATO troops will patrol the border with Russia alongside U.S. forces, claiming that this operation follows incursions in the airspace of NATO countries such as Poland, Romania, and Estonia. Drones are becoming more popular. Airspace disruption In recent years, unmanned aerial vehicles have repeatedly invaded Europe, causing airport closures and flight cancellations. As tensions between the West and Russia have increased over its actions, fingers have been pointed in Russia's direction. Despite Moscow's denials, there is evidence of Russian involvement in Ukraine. Monitoring service Enigma has detected at least 18 drones in Denmark, Sweden Norway and Germany since September 16. Many, but not all, were in close proximity to airports.
India's benchmark stock indexes will open higher thanks to strong earnings by lenders and global cues
Investor sentiment is expected to be boosted by better-than-expected earnings of top lenders, as well as positive global signals on the easing of China-U.S. Trade tensions.
Gift Nifty futures traded at 25,980.5 as of 7:56 am IST. This indicates that the benchmark Nifty will open above its one-year close of 25,709.85.
HDFC Bank, India's largest private sector lender, and ICICI Bank, India's second-largest private sector lender by assets, reported on Saturday that they had achieved higher profits than expected for the third quarter.
Reliance Industries, on the other hand, missed its quarterly profit forecasts due to weakness in its oil-to-chemicals legacy segment. However, revenue was above expectations.
Jefferies, a brokerage firm, said that a report stated: "Revival of retail growth and increasing visibility on low teens consolidated EBITDA in FY26 growth should help Reliance Industries" stock to re-rate.
Benchmark Nifty 50 closed last week at an all-time high, as expectations for a rate cut in December and optimism about a rebounding earnings market boosted sentiment.
According to preliminary data, foreign investors purchased Indian shares valued at 3.09 billion Indian Rupees ($35.14 millions) on Friday. It was the sixth time they bought in nine days.
Other markets in Asia were led higher by China and Hong Kong after a massive selloff last weekend, buoyed up by signs of easing Sino U.S. Trade tensions.
U.S. Treasury secretary Scott Bessent announced on Friday that he will meet with Chinese Vice Premier He Lifeng this week in Malaysia. He said he was hoping to prevent an escalation in U.S. Tariffs on Chinese Goods, which President Donald Trump has said is unsustainable.
STOCKS TO WATCH
** Middle Eastern Bank Emirates NBD is buying a 60% stake of Indian private lender RBL Bank at $3 billion
** UltraTech Cement reports a 75% increase in its consolidated net income on the back of a 20% revenue growth for the third quarter
Punjab National Bank reports higher profits for the second quarter while its asset quality is improving
(source: Reuters)