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Stocks in MORNING BIDDING EUROPE take a break
Stella Qiu gives us a look at what the future holds for European and global markets. Investors have come to terms with the fact that valuations are too high. Wall Street was down for a second consecutive day, and this provided little direction to Asia. Stocks here stayed mostly in tight ranges. The exception was the Chinese bluechips which were up by 0.9% and caught up with the global AI boom. The EuroSTOXX futures are also little changed. Wall Street futures rose 0.2%. It could have been rebalancing flows at the end of the month or quarter - after all, Asian shares had rallied by 9% in a quarter and Japan's Nikkei was up 13%. It could also be that Fed speakers are sounding more cautious about the prospect of rate cuts. The Fed is still expected to cut rates in October by 92%, but the amount of easing that was previously anticipated has dropped from 125bps to 100bps. Mary Daly, the San Francisco Fed president, echoed central bankers in saying that while rate cuts were needed they are not yet certain when to occur. John Williams from New York will also be speaking, as will other Fed officials during the day. We will see how many doves are there under Donald Trump's unprecedented scrutiny. Next week, Treasury Secretary Scott Bessent is expected to begin interviewing candidates for the Fed chair position that will replace Jerome Powell. Dollar's short-term technical outlook remains dim. The bounce is still leaving yen bulls in a state of shock after traders took positions to buy long yen following last week's Bank of Japan policy meeting. The Swiss Franc hit a new high against the yen, while the euro was hovering just above a one-year record at 174.66. The next week will bring us the weekly U.S. unemployment claims, the final estimate of the U.S. second quarter GDP and, finally, the crucial Personal Consumption Expenditures on Friday. A sharp increase in unemployment claims, which is of particular importance given the recent focus on the labour markets, would support the case for two more cuts to be made this year. In addition, a positive result would boost the dollar and push short-term rates higher. The following are key developments that may influence the markets on Thursday. Data on the U.S. economy, including weekly unemployment claims, durable goods, trade and more Six Federal Reserve officials are scheduled to speak. U.S. Treasury auctions off $44 billion in 7-year notes
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Oil drops from 7-week peak as traders consider supply-demand uncertainty
The oil prices fell in Asian trade Thursday. They had risen to a seven-week-high in the previous session, but investors pulled their money out of the market due to the uncertainty surrounding the outlook for supply and demand. Brent futures dropped 26 cents or 0.4% to $69.05 per barrel at 0350 GMT. U.S. West Texas Intermediate crude futures also fell 27 cents or 0.4% to $64.72 per barrel. The benchmarks both gained 2.5% Wednesday, reaching their highest level since August 1. This was due to a drop in U.S. crude oil inventories that surprised many and fears about the impact of Ukraine's attack on Russia's infrastructure on energy supplies. "Oil appears to have hit a ceiling with softer demand (seasonal), and increasing OPEC+ supply into Q4. The recent gains are more sentimental than fundamental. Therefore, unless a new surprise emerges, Brent will likely consolidate, with a slight downward bias, said Priyanka Sackdeva, Senior Market Analyst at Phillip Nova. Sachdeva said that morning deals saw some profit-taking. He added that the return Kurdish supplies has reignited "fears about an oversupply narrative" and is driving a drop in prices from their near seven-week-highs. Eight oil companies reached an agreement with the federal government of Iraq and the Kurdish region government on Wednesday to resume exports. Haitong Securities reported in a recent report that despite some concerns about Russian supply disruptions on the market, oil prices have remained resilient due to a lack of downward pressure in recent weeks from fundamentals such as supply and demand. The report stated that as the peak season of demand gradually ends, prices have not yet reflected the expectations for mounting oversupply. A J.P. Morgan report released on Wednesday showed that the U.S. passenger throughput in September was only 0.2% higher than the same month last year. This is a significant slowdown compared to the robust growth of 1% seen over the two previous months. The analysts at JP Morgan said that "the U.S. gas demand has also started to decline, reflecting the general moderation of travel trends".
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Bankers report that India's JSW Group is planning to issue bonds worth $790 million to fund an acquisition.
Three merchant bankers on Thursday said that India's JSW Group intends to raise 70 billion rupees (790 million dollars) by issuing zero-coupon bond before the end September in order to finance an acquisition. The bankers announced that JTPM Metal Traders will be issuing the bonds. They are due to mature in four and seven-months. Bidding for the bonds will begin on Monday. The notes have a yield at 8.50%, and will feature call and put options after three years. The funds will be used to support JSW Paints in its acquisition of up 75% of the Indian unit of Dutch paint manufacturer AkzoNobel, a deal that was approved by the Competition Commission of India last week. JSW Group has not responded to an email from. The bankers asked to remain anonymous as they weren't authorized to speak with media. Merchant bankers and investors have said that Indian companies are increasingly turning to bond markets to fund acquisitions due to the robust demand of mutual funds. Bankers say that eight major mutual funds and other entities will act as anchor investors for the JSW bond issue, contributing approximately 21 billion rupees. Crisil and Care ratings have rated the notes AA. Crisil says that proceeds from the bond issue can also be used to infuse capital into the operating companies of the group, or for debt restructuring.
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The Asian stock market rally stops for breath as the yen battles against crosses
Investors positioned themselves for the month-end and quarter-end flows on Thursday, as Asian shares took a break from their recent rally. The Japanese yen also tested new lows against a surging Swiss Franc and the euro. After surging by over 2% to seven-week highs overnight, oil prices fell as a sudden drop in U.S. inventories exacerbated supply concerns amid issues with Iraq, Venezuela, and Russia. S&P 500 and Nasdaq Futures gained 0.1% in advance of Federal Reserve officials whose views on interest rate will be closely monitored. San Francisco Fed president Mary Daly stated that further rate cuts are likely to be required, but timing is still unclear. Fed Chair Jerome Powell has struck a cautious note about future rate cuts after the central banks first easing of the year, which was only last week. MSCI's broadest Asia-Pacific share index outside Japan fell 0.2% after gaining 5.5% in a month and 9% during the quarter. Japan's Nikkei index rose by 0.1% after a 7% month-to-month gain and a 13% quarter to quarter. Hong Kong's Hang Seng fell 0.2%, but Chinese blue-chips were flat. Tony Sycamore is an analyst at IG. He said that depending on whether funds have been mandated to rebalance quarterly or monthly, the rebalancing flow should result in sales in U.S. indices and Japanese indices. While the German and Australian markets are likely to benefit from rebalancing purchasing. Wall Street closed down for the second consecutive session overnight as investors took profits on record-high stock prices. The Fed is still expected to cut rates in October by 92%, but the amount of easing that's anticipated has decreased from 125bps to 100bps. The focus will then shift to U.S. Economic Data, which includes the Fed's preferred inflation gauge, the Personal Consumption Expenditures Report on Friday, and the final estimate of second-quarter GDP, on Thursday. Meanwhile, a potential government shutdown looms. The Treasuries markets sawsawed, as the markets digested a large amount of increased corporate and government bonds. The yield on the benchmark 10-year Treasury bill in the United States was unchanged at 4,1408% after rising 3 basis points over night, reversing a Monday fall. Treasury Department will sell $44 billion worth of seven-year bonds on Thursday. This follows the sale of two-year, five-year, and five-year bonds earlier this week. The dollar dropped 0.1% on the foreign exchange market to 148.77yen after gaining 0.9% overnight. Overnight, the yen lost the most, falling to a new low against the euro of 174.78 yen, which is just above the record low of 175.9. The yen also reached a record low against the Swiss Franc, at 187.30. It is expected that the Swiss National Bank will hold its policy interest rate at zero in the afternoon, marking its first pause on this front since late 2023. On commodity markets, the spot price of gold was flat at $3.739 per ounce. It had fallen 0.7% overnight due to a strong dollar. U.S. crude fell 0.4% to $64.73 per barrel while Brent dropped 0.3% to $69.11. Vivek Dhar is a commodities analyst at Commonwealth Bank of Australia. He said that Brent oil futures continued to be supported in the range of $65-70/bbl despite forecasts of an oversupply of crude in Q4 2020 and Q1 2026. Dhar said that there was a slight downside risk in his prediction of a further fall in Brent prices next quarter to $60 per barrel.
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Investors wait for key US economic data to see if gold prices will rise or fall
Gold prices held steady Thursday as investors awaited important U.S. data to gain further insight into Federal Reserve policies. A slightly weaker dollar also helped support bullion. As of 0202 GMT, spot gold was unchanged at $3,734.04 an ounce. U.S. Gold Futures for December Delivery were unchanged at $3.765.20. Bullion priced in greenbacks is now cheaper for foreign buyers. Mary Daly, the president of the San Francisco Federal Reserve Bank, said that she "fully supports" the Fed's decision to reduce its policy rate by a quarter last week. She also expects more reductions in the future. The move could reflect the expectation that the Fed will run the U.S. Economy hot while it rebalances the focus on the labour market, said Ilya Spirak, head of global macro for Tastylive. Initial support levels are around $3,700 to $3,600. If the resistance is broken at the recent high of $3,790, it could expose $3,870-$3,875, then $4,000." Fed Chair Jerome Powell stressed on Tuesday the need to balance the inflation risks with a weakened jobs market when making future policy decisions. Investors will be looking for more interest rate clues in the Personal Consumption Expenditures (PCE) Price Index Report, the Fed’s preferred inflation measurement, due out on Friday. According to a survey, the report will show an increase of 2.7% on a year-over-year basis and 0.3% month-over-month for August. Brian Lan, MD of GoldSilver Central, said: "I don’t think inflation data will have a significant impact on (gold), unless it is exceptionally high." The longer-term outlook for the market is very bullish, according to our quantitative view. The weekly U.S. unemployment claims data due on Thursday may give insight into the labour market's conditions. The markets expect that the Fed will cut rates by 25 basis points twice this year in October and December. On Tuesday, safe-haven bullion – which thrives in an environment of low interest rates – reached a new record high. Silver spot was down by 0.2% to $43.83, platinum dropped 0.1% to 1,470.66, and palladium increased 0.1% at $1,210.96. (Reporting and editing by Subhranshu sahu in Bengaluru.
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After a seven-week high, oil prices fall as investors profit from the dip
Oil prices fell as investors booked profit after an earlier jump to a seven week high on the back of a sudden drop in U.S. crude oil inventories. They were also concerned about Ukraine's attack on Russia's infrastructure for energy. Brent futures LCOc1 fell 18 cents or 0.26% to $69.13 per barrel at 0013 GMT. U.S. West Texas Intermediate crude futures (WTI) CLc1 also dropped 20 cents or 0.31% to $64.79 per barrel. Both benchmarks rose by 2.5% the previous session. After testing and rebounding from the bottom of the recent range this week, crude has retreated back to the upper limit of the recent range. Tony Sycamore is a market analyst for IG. He said that we will likely see some profit-taking this morning. The Energy Information Administration reported on Wednesday that U.S. crude oil inventories dropped by 607,000 barrels during the week ending September 19. The American Petroleum Institute, according to market sources, reported a draw of 3.8 million barrels on Tuesday. This was less than analysts' expectations. The Russian war in Ukraine also contributed to the rise of oil prices. In recent weeks, Ukraine increased drone attacks against Russian energy infrastructure, focusing on refineries and export terminals in order to reduce Moscow's revenue. Russia also faces a shortage of certain fuel grades and could be forced to restrict fuel exports if necessary. Haitong Securities reported in a recent report that despite concerns about Russia's supply disruptions the oil price has remained resilient due to the fact that fundamentals such as supply and demand have not been under significant downward pressure in recent weeks. Haitong Securities stated in a recent report that prices have not yet reflected the expectations of a rising oversupply. J.P. Morgan reported on Wednesday that global oil demand has grown by 800,000 barrels a day year-to date through September 23 compared to an estimate of 830,000. According to the report, global oil demand for September was 104.4 million barrels per day. This is in line with J.P. Morgan's estimate. Reporting by Sam Li, Trixie Yap and Jamie Freed
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New York law limiting radioactive Indian Point discharges annulled by US judge
On Wednesday, a federal judge ruled that a New York state law intended to limit the potential contamination of Hudson River by a nuclear power plant was overridden by federal law. The state law was declared unconstitutional by U.S. District judge Kenneth Karas of White Plains, New York because it severely restricted Holtec International in its decision-making regarding the safe disposal of radioactive material. Holtec filed a lawsuit to block a law that was signed by Governor Kathy Hochul in 2023, which made it illegal for radioactive materials to be discharged into the Hudson as part of the decommissioning process. This came after environmentalists raised safety concerns. The company has offices in Camden (New Jersey) and said that its plan to dispose millions of gallons tritiated, a form of radioactive water, complied the licenses of the Nuclear Regulatory Commission. The New York law may also delay the planned decommissioning of Indian Point until 2041. The office of New York Attorney-General Letitia J., which defended state law, didn't immediately respond to comments. Indian Point, which is scheduled to close in 2021, was a target of opposition by nuclear opponents in part due to its proximity with New York City. The complex is situated in Buchanan (New York), about 45 miles north of Midtown Manhattan. JUDGE: NEW YORK CAN'T BAN WHAT FEDERAL LAW ALLOWS Karas stated in his 32-page ruling that the law "categorically prohibits Holtec from using a federally approved method of disposal." He added that "by requiring Holtec change the way it disposes tritiated wate," "the statute directly affects and significantly impacts decisions regarding radiological safety levels." Karas rejected New York's claim that Holtec had to have provided alternative methods of complying with the discharge laws. Holtec expressed its satisfaction with the ruling and said that the NRC and federal government should be responsible for regulating radiological water discharge. Holtec said, "We will continue decommissioning the Indian Point site responsibly and in collaboration with local, federal and state stakeholders." Politico reported earlier this month that Holtec had floated the possibility of restarting Indian Point for an estimated cost of $10 billion, if the administrations Hochul and U.S. president Donald Trump supported the idea. Holtec International et al v New York is the case. U.S. District Court for Southern District of New York No. 24-02929. (Reporting and editing by Daniel Wallis in New York, Jonathan Stempel)
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Minister: Chile will curb budget growth while Codelco accelerates recovery
The new Chilean finance minister said on Wednesday that the country will have a budget for 2026 with a "responsible increase" while the state-run Codelco tries to recover from production problems. Nicolas Grau, who was appointed by President Gabriel Boric in August, told reporters in his Santiago office that the budget for 2026, which is due to Congress, will have a "limited" increase in spending. Boric will announce the exact amount, but budget increases have been declining since 2023, when they grew by 4.2%. Grau stated that the average annual growth rate would be around 2% with this budget. He said that he would work with Congress to define a budget that is responsible, addresses the needs of the country and gives the next administration enough flexibility. Chile will hold a presidential vote in November, and Boric is not eligible to run again for reelection. CODELCO’S RECOVERY OF COPPER Chile is the largest copper producer in the world, and its primary source of revenue. Codelco, the state-owned company, has struggled to increase production for many years. It cut its production target in August due to an accident that killed a worker at the mine's flagship El Teniente. Grau reaffirmed his confidence in Codelco’s strategy to close the production gap in previous years and highlighted initiatives such as its partnership with Anglo American for two adjacent deposits. Grau stated that "Codelco is creating public-private partnerships to allow it maintain its leadership in copper." SPEEDING UP PERMITTING WILL BOOST INVESTMENT According to Grau, he is confident that the economy will grow by 2.5% this coming year. This growth will be boosted by a 5% increase in investment for carbon-neutral initiatives such as clean energy and digital infrastructure. Grau has made reducing unemployment a priority for his final months in office. Jeannette Jara is the coalition candidate for the leftist government in the upcoming elections. "The latest data show that the unemployment rate is down a bit, but 8.7% still represents a high rate of unemployment. Grau stated that "we believe this rate must be reduced". He said that policies such as pension reform and better permitting, a demand of large miners such as BHP and renewable companies like TotalEnergies, have led to greater economic growth. He acknowledged, however, that environmental permitting reform has made less progress than other categories. He said that although the executive branch made "significant" efforts to advance the reform, he could not predict if it would be approved under this administration. (Report by Fabian Andres Cambero, Editing by Alexander Villegas & Richard Chang)
TotalEnergies, RWE Win France’s Largest Offshore Wind Tender
The consortium formed by TotalEnergies and RWE has won the Centre Manche 2 (AO8) offshore wind tender to develop 1.5 GW project off the coast of Normandy. However, RWE has expressed its wish to exit the consortium, while TotalEnergies remains committed to pursue the project.
Located more than 40 km off the coast of Normandy, this will be the largest renewable energy project ever developed in France. Once built, it will generate approximately 6 TWh per year and supply green electricity to the equivalent of over 1 million French households.
The electricity will be sold at a competitive price of €66/MWh ($77.83/MWh), as set by the tender.
The project will represent an overall investment of approximately $5.3 billion (€4.5 billion), the largest made by TotalEnergies in the country in the past 30 years.
TotalEnergies will be the operator of the project, relying on its expertise in offshore wind and the management of large-scale marine energy projects.
The company said it will continue the necessary studies to reach a final investment decision by early 2029. Electricity production is expected to begin in 2033, in line with RTE’s grid connection schedule.
As part of a strategic review of its investments, RWE has expressed the wish to exit the consortium, subject to French authorities’ approval. In any case, TotalEnergies will pursue the project, assuming all the commitments of the consortium, and will propose to bring a new partner into the project, the company said.
The location of the 1.5 GW offshore wind farm (Credit: TotalEnergies)
“We are very proud to have won this tender for the construction of the largest renewable energy park in France to date. It embodies Total’s transformation into TotalEnergies in France. This project will be the largest investment made by TotalEnergies in France in decades and reflects our company’s deep commitment to our country.
“We will work to support the local industrial ecosystem, which has already developed skills through the first offshore wind projects currently being installed. Finally, this project strengthens our development in green electricity production to offer competitive prices to our French customers”, said Patrick Pouyanné, Chairman and CEO of TotalEnergies.
Up to 2,500 people will be employed during the three years of construction, and TotalEnergies has committed to offering 500,000 hours of work to apprentices and individuals in professional reintegration.
TotalEnergies said it will also implement crowdfunding financing that will allow local residents and authorities in the Normandy region to invest in the project and directly contribute to the energy transition of their territory. Additionally, TotalEnergies will fund a $11.8 million (€10 million) territorial fund to support initiatives in training, education, and culture in Normandy.
Finally, TotalEnergies has committed to making this project exemplary in terms of recycling offshore wind farm components, with recycling, reuse, or repurposing rates of blades, towers, and nacelles equal to or greater than 95%, and 100% of generator magnets being recycled or reused.