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Copper increases by more than 1% following Fed rate cuts
Copper's price rose more than 1% compared to its peers on Thursday, thanks to a weaker dollar following the U.S. Federal Reserve's decision to lower interest rates. By 0203 GMT the most-traded contract for copper on?the Shanghai Futures Exchange had risen 1.17%, to 92 730 yuan per metric ton ($13 1333.07), trading near the record high of 9 3300 yuan reached on December 8. Benchmark three-month Copper on the London Metal Exchange increased 1.33% to $11,710 per tonne. On December 8, it reached an all-time record high of $11,771. The?dollar eased on Wednesday after the Fed cut policy rates by a quarter-point, which was in line with most expectations. Dollar-priced goods are cheaper for buyers using currencies other than the U.S. dollar. The Fed said that it would also begin buying short-dated government bonds from Friday in order to manage the market liquidity and to maintain firm control of its interest rate target system. "It is not only the Fed's rate cut but its balance sheet expansion stance that boosted copper prices," Xiao Jing said, a Beijing based analyst with broker SDIC Futures. Investors will continue to digest this theme in the "short-term." The lower output of copper from Chilean miner Codelco also contributed to the price decline. Aluminium also posted gains, as global producers of aluminium sought premiums between $190 and $203 per ton for primary metal shipments from Japanese buyers. This is up 121%-136% compared to the current quarter. The benchmarks for SHFE and LME both rose by 0.55% et 0.66%. SHFE Nickel slipped 0.09%. Lead?gained 0.7 %. Tin jumped 1.14%. Zinc was flat. Other LME metals also gained. Nickel gained 0.6%, while lead advanced by 0.7%. Tin climbed 1.11 percent and zinc increased 0.65%.
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Oracle stocks fall as Fed message affects dollar
The stock market in Asia was teetering on Thursday, after disappointing earnings from U.S. cloud computing company Oracle sent a warning about AI profitability. Bonds were strong and the dollar suffered losses following a Federal Reserve interest rate cut. Oracle shares fell more than?11% in Asia trading. S&P futures were down 0.3% and Nasdaq futures about 0.5%. AI-related stocks suffered the most in Tokyo as Oracle missed its profit and revenue forecasts, and executives cited higher spending as a sign infrastructure investments aren't turning into profits at the rate investors hoped. Japan's Nikkei Index traded between flat and slightly higher in the morning session, with a 5% decline in the AI-exposed SoftBank Group holding the index back. Hong Kong's Hang Seng gained 0.8% in the early trading to push MSCI's broadest Asia-Pacific share index outside Japan up by 0.5%. Overnight, the Fed, as anticipated, lowered its benchmark fund rate by 25 basis point to 3.5-3.75%. Fed Chair Jerome Powell, however, was able to sound balanced in his outlook during a "news conference", calming market nerves over a hawkish statement. Wall Street indexes rose after the rate reduction and the S&P 500 gained about 0.7%. Powell said: "I don't believe a rate increase is anyone's baseline case." The euro was able to break through the chart resistance, and move above $1.17. Bonds received a boost after the Fed announced that it would begin buying short-term Treasuries on Friday in order to help support liquidity. Benchmark U.S. two-year yields have fallen by around seven basis point to 3.54%. The money markets were volatile in the last few weeks. This led to an increase in short-term interest rates due to the tightening of liquidity. Jack Chambers, senior rates strategist at ANZ, said that the Fed is not keen on this type of thing continuing because it hinders the transmission of monetary policies. DOLLAR SLIDES The price of oil rose on Thursday for the second consecutive session after the U.S. seize a sanctioned tanker off the coast of Venezuela, increasing tensions and raising concerns over supply disruption. Brent crude futures and U.S. oil futures both rose more than 30 cents, to $62.53 a barrel and $58.85 per barrel respectively. The Fed's decision to cut interest rates and the policymakers' median projection of a rate cut in 2026 or 2027 has opened the door for dollar sellers on the foreign exchange market. In Asia, the yen recovered from a recent drop and rose to 155.66 against the dollar on Thursday. The euro reached a two-month peak?of $1.1707, boosted by comments from Christine Lagarde, President of the European Central Bank. She said that another upgrade to European growth projections is possible. All three currencies, the Australian dollar, New Zealand dollar and the sterling made gains in the Asia session before settling. Analysts at ING wrote in a report that the next important indicator will be November's non-farm payrolls released on 16 December. They asked whether a low number could keep market pricing for two more rate cuts in 2020 intact. The dollar is weakening into the year-end season and now that the Fed event has passed, EUR/USD may be able to reach 1.1800. (Editing by Shri Navaratnam).
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Russian air defences shoot 31 drones bound for Moscow in the evening/overnight. Mayor says
The?mayor of Moscow said that the?Russian air defences shot down 31 drones on their way to Moscow Wednesday evening and over night. Sergei Sobyanin reported that the drones were 'downed over a period of approximately 3-1/2 hours. One drone was brought down 'in the afternoon. Sobyanin stated that emergency crews were dispatched in order to examine the debris on the ground. He did not mention any injuries or damage. Rosaviatsia - Russia's civil Aviation Authority - said that operations had been suspended at all airports in the Moscow region. Pulkovo Airport in St. Petersburg -?Russia's largest city - said on Telegram that it handled flights diverted from the capital. A number of airports in central Russia have also suspended arrivals, departures, and other activities. (Reporting and Editing by Chris Reese).
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ADB approves $500 mln loan to support a sustainable Philippine blue economy
The Asian Development Bank approved a $500-million policy-based loan for the Philippines to help support its blue?economy. This will focus on protecting the marine ecosystem from threats such as extreme weather conditions and plastic pollution. The?programme will be cofinanced by Agence Francaise de Developpement (French Development Agency) and Germany's KfW Development Bank, each contributing about $235 millions. It aims to ensure environmental resilience as the Philippines taps into its ocean resources via industrial fishing, tourism -and offshore energy. In a press release, ADB Philippines Country director Andrew Jeffries stated that this is ADB’s first extensive multi-sectoral program focused on fostering the?national blue economic development in the area. We are committed to helping our host country achieve its low-carbon and climate-resilient objectives. The program will tackle plastic pollution in the Philippines where 750,000 tons of plastic enters the ocean every year from coastal areas like Manila Bay. The ADB stated that the programme will help enforce the Extended Produce Responsibility Law by introducing uniform, clear labels on recyclables and plastic products, aligning local waste management guides, and promoting the circular economy. The program also aims to?build a strong legal framework and institutional framework in order to manage coastal and marine resources. As the Philippines is one of the most vulnerable countries on the planet, it faces threats such as typhoons and rising seas. In the last year, the Philippines experienced six deadly typhoons within a month. Four tropical cyclones developed at the same moment in November. This suggests that storms are now occurring over shorter periods of time.
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After Fed cut interest rates, stocks rise and yields and the dollar fall
The Federal Reserve cut rates on Wednesday as expected and investors remain hopeful of further reductions, even though the central bank has indicated it is likely to pause the cuts for the time being. The U.S. dollar was lower than major currencies. The U.S. central bank cut rates by a quarter percentage point, and projections issued ?after ?its two-day meeting showed the median policymaker sees just one quarter-percentage-point cut in 2026, the same outlook as in September. Fed Chair Jerome Powell refused to give any indication in his press conference following the announcement of the interest rate reduction. He did say that the U.S. labour market is a very volatile one and the Fed does not want to reduce job creation with its current policy. Following Powell's remarks, stocks gained and Treasury yields fell. Jake Dollarhide is the CEO of Longbow Asset Management, a Tulsa-based asset management firm. Investors can take heart from the fact that there is a possibility of a cut in 2026. This is much better than dire predictions of a lack of cuts in 2026. Dollarhide stated that the weakening of the job market was more concerning than the inflationary trend. He added there were "tremendous concerns" about bond vigilantes hijacking the 'bull market rally. The Dow Jones Industrial Average rose by 497.46, or 1.5%, to 48.057.75. The S&P 500 gained 46.17, or 0.67 percent, to 6,886.68. And the Nasdaq Composite increased by 77.67, or 0.33 percent, to 23,654.16. Santa rally is the last two weeks of December, when the S&P 500 tends to perform better than usual. Investors are settling their books for the year. The MSCI index of global stocks rose by 5.30 points (0.53%) to 1,011.74. The pan-European STOXX 600 ended the day 0.07% higher. Markets have priced in 78% of the chance that the Fed will keep rates the same next month. This is compared to a 70% likelihood just before the announcement. The rate futures market has still priced in two rate cuts for 2026, even though the Fed's forecast was only one next year. Three people disagreed with the Fed's 25 basis point rate cut. The recent U.S. shutdown has caused a lack of data, and the November payroll report will be delayed until December 16th. Inflation figures are due after that. The yield of the benchmark 10-year Treasury bill in the United States fell 4.3 basis point to 4,143%. It had fluctuated between a low session of 4.137%, and a high three-months ago of 4,209%. The 10-year Treasury yield was about to end a streak of four consecutive sessions of gains. This is the longest streak of gains since?five weeks. The yields on bonds have risen in recent weeks as central banks around the world signaled that they were nearing the end of easing cycles. Meanwhile, the Bank of Japan will likely raise rates next week at its policy meeting. The U.S. Dollar fell against other major currencies, including the Euro, Swiss Franc, and Japanese Yuen. Powell's remarks that the U.S. central bank is unlikely to raise rates next time were also a drag on the greenback. The dollar fell 0.8% in late afternoon trading against the Swiss Franc, to?0.8000 Swiss franc. It was also down 0.6% against the Japanese yen at 155.92. The dollar index, which measures greenbacks against a basket including yens and euro, fell?0.6% at 98.66. After the Fed cut rates, gold prices began to climb. Spot silver prices have risen 113% this year to reach a record high of $61.85. Oil prices increased on the energy market after the U.S. government claimed to have seized a tanker of oil off the coasts of Venezuela. Brent crude futures rose by 27 cents or 0.4% to settle at $62.21 a barrel. U.S. West Texas intermediate crude futures also gained 21 cents or 0.4% to close at $58.46 a barrel.
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Researchers say that climate change is a major factor in the deadly November Asian storms.
Scientists said that the storms which devastated Sri Lanka in late November, Indonesia, Malaysia, and Thailand were'supercharged' by increased sea temperatures, and made worse by rapid forest destruction, according to a new study. Tropical Cyclone Senyar, which formed in the Malacca Strait and devastated Southeast Asia, killed nearly 1,200 people, 969 of whom were on Sumatra, an island in Indonesia. For the damages to be repaired, at least $3 billion is needed in relief funds. Sri Lanka has been hit by flooding and landslides due to Tropical Cyclone Ditwah. The death toll is over?600, and the economic losses are estimated at $7 billion. Researchers with the World Climate?Attribution Group said that the sea surface temperature in the North Indian Ocean was 0.2 degrees Celsius above the average for 1991-2020, giving the storms more heat and energy. They estimated that if it wasn't for the 1.3C increase in global temperatures since pre-industrial times, the surface of the sea in the area would have been one degree cooler in late November. Scientists say that there is no evidence to suggest climate change has increased the frequency of tropical storms, but they do say that higher sea temperatures make individual events more damaging. The study's author and climate researcher Sarah Kew said, "What isn't normal is the?intensity of these storms. They are affecting millions and killing hundreds of people." Researchers were unable to determine climate change's exact contribution to storms, but they did say that the increased extreme rainfall in the Malacca Strait could be 9-50% higher than normal and up to 28-160% more in Sri Lanka. Scientists warn that extreme weather could affect more areas as storms move to new locations and take different paths. Scientists said that Senyar was the only storm to ever land in Malaysia after it crossed the Malacca Strait from the west. (Reporting and editing by Topra Chopra; David Stanway, reporting)
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Wall Street indexes rise after Fed lowers interest rates
Wall Street closed higher on Wednesday after the Federal Reserve cut rates by a quarter of a percentage point, as expected. Investors bet that the Federal Reserve will continue to ease interest rates in the future. However, the central bank indicated it would pause further cuts for the time being. Before making its next policy decision, the central bank will look for more clear signals on the direction the economy is taking and the inflation rate that "remains somewhat high." The Fed's two day meeting was followed by projections that showed a median expectation of another quarter point cut in 2026. This is in line with the expectations from the September meeting. Policymakers also raised their estimates of 2026 GDP growth from 1.8% to 2.3% and maintained their expectations for a 4,4% unemployment rate by the end of next year. Fed Chair Jerome Powell refused to give any indications in his press conference as to whether another rate cut will occur soon. Investors gained a 'little hope of easing? from Powell's comments about the significant downside risks in the labor market and the central bank not wanting its policy to slow down job creation. Lindsey Bell is the chief investment strategist of 248 Ventures in Charlotte, North Carolina. She said that Powell's discussion on the labor market was a good thing for the market, as it would support further cuts next year. U.S. Treasury Yields also "lost steam" when Powell spoke and this helped support stock price gains. Markets were muted before the Fed's statement, as investors feared that, despite widely expecting a rate cut, the Fed might adopt a more hawkish stance on policy. Even before Powell's remarks, some investors had been looking at more rate cuts because of labor market concerns. The market is picking up on the fact that the Fed's policy could be eased further, even though expectations for 2026 are unchanged with a 25 basis-point price in, said Michael Rosen, chief Investment Officer, Angeles Investments. The S&P 500 ended the day up 46.17, or 0.67% at 6,886.68, aiming to return to its record-breaking closing high of October 28, but falling short. The Dow Jones Industrial Average increased 497.46, or 1.5%, to 48.057.75. Meanwhile, the Nasdaq Composite rose 77.67, or 0.33 percent, to 23,654.16. Russell 2000, a small-cap index sensitive to interest rates, outperformed the large cap Russell 2000 with a gain of 1.3% and a record closing high. All but two of the S&P 500’s 11 major industries sectors showed growth. The Industrials sector saw the largest gain, gaining 1.8%. The biggest boost came from energy equipment maker GE Vernova. It surged by 15.6% following a forecast of higher revenue in 2026. This signaled strong demand for AI-related infrastructure. Consumer staples barely fell, while defensive utilities were the biggest losers. On the NYSE, there were 496 highs and 52 lows. On the Nasdaq 3,164 stocks rose, while 1,642 fell. The ratio of advancing issues to decliners was 1.93:1. The S&P 500 recorded 45 new 52-week lows and seven new highs, while the Nasdaq Composite registered 185 new highs. In the United States, 16.91 billion shares were traded compared to the 17.41 billion average moving price for the past 20 sessions. Reporting by Sinead carew, Laura Matthews and Caroline Valetkevitch, in New York; Johann M Cherian, Pranav Kashyap and David Gregorio, in Bengaluru. Editing by Tasimzahid, Shinjiniganguli and David Gregorio.
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Silver reaches all-time high after Fed rate reduction
After the Federal Reserve cut rates, gold prices rose on Wednesday, but uncertainty about next year's policies remained. Silver also reached a record high. At 3:17 pm, spot gold was up 0.7% to $4,236.57 an ounce. ET (2017 GMT). U.S. Gold futures for delivery in February settled at $4,224.70, down 0.3%. In another divided vote, the Fed reduced interest rates. However, it signaled that they will likely hold off on further reductions of borrowing costs until officials receive clearer signals regarding the direction the job market and inflation is taking. Metals trader Tai Wong said, "Gold traders are pleased with the results today. It's trading near its day-highs after having survived a bout of profit-taking." Investors are more likely to be interested in non-yielding investments when interest rates are lower. Majority of U.S. central banks believe that they will have to reduce short-term rates next year. However, the amount is widely divided. Three rate increases are penciled in by three central bankers, but a large majority of them oppose any interest rate cuts. Fed Chair Jerome Powell has said that the central bank's rate policy is positioned well to respond to the challenges facing the economy. He declined to give any further indication as to whether another cut will be made in the near future. "Powell danced around the raindrops and coaxed another rate reduction from a divided panel with only three dissenters, and major market are rallying through his press conference. "It is unclear whether gold will reach new highs," said?Wong. Spot silver reached a new record high of $61.85. The price of silver has risen 113% this year due to a combination of factors including a rising industrial demand, falling inventories and the designation by the U.S. as 'critical mineral. In a recent note, analysts at SP Angel stated that "in our opinion, the outperformance of silver is due to speculative funds flowing into a levered-up play after gold's decline." Silver is also benefiting from tightening physical markets, after a shortage in October. Palladium fell 2%, to $1475.94, while platinum dropped 2.4%, to $1654.55. (Reporting and editing by Shailesh Kuber and Krishna Chandra Eluri in Bengaluru. Ashitha Shivaprasad and Anushree Mukherjee, both from Bengaluru)
After US seizes tanker near Venezuela, oil gains continue
The price of oil rose on Thursday for the second consecutive session after the U.S. seize a sanctioned tanker off Venezuelan coast. This heightened tensions between both countries, and raised concerns about further supply disruptions.
Brent crude futures were up 27 cents or 0.4% to $62.48 a barrel at 0101 GMT. U.S. West Texas Intermediate was up 33 cents or 0.6%, to $58.79 a barrel.
WTI crude oil prices are rising after the news that an oil tanker was seized by the U.S. off Venezuela's coastline, according to IG's Tony Sycamore. He also noted that reports that Ukraine had struck a vessel of Russia's'shadow fleet' added support.
Sycamore stated that "these developments will likely keep crude oil above the $55 support level until year's end, barring a surprise peace deal in Ukraine."
Donald Trump, the U.S. president, said that on Wednesday "we have seized a large tanker off the coast of Venezuela. It is a very large tanker.
Officials from the Trump administration did not identify the vessel. British maritime risk management company Vanguard reported that the tanker Skipper is believed to have been captured off Venezuela.
Sources in the industry and traders say that Asian buyers are demanding steep discount on Venezuelan crude. They're under pressure from a surge of sanctioned oil coming from Russia and Iran, and increased loading risks as the U.S. increases its military presence?in the Caribbean.
Ukrainian drones also disabled a tanker that was involved in the trade of?Russian Oil as it passed through Ukraine's exclusive zone economic in the Black Sea.
Investors continue to be focused on the progress of peace talks in Ukraine. Investors remain focused on developments in Ukraine peace talks.
A Federal Reserve that is deeply divided has cut interest rates in the United States. Lower interest rates can lower consumer borrowing costs, boost the economy and increase oil demand. Reporting by Ashitha shivaprasad from Bengaluru, editing by Tom Hogue
(source: Reuters)