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November 13, 2022 – rdspinvestments

November 13, 2022

Biden pleased with election turnout, says reflects quality of party’s candidates

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World 1 hour ago (Nov 13, 2022 01:45AM ET)

Biden pleased with election turnout, says reflects quality of party's candidates© Reuters. U.S. President Joe Biden makes a statement about the U.S. midterm elections during his visit in Phnom Penh, Cambodia November 13, 2022. REUTERS/Kevin Lamarque

By Nandita Bose

PHNOM PENH (Reuters) -Joe Biden said on Sunday he was “incredibly pleased” with the turnout in the U.S. election after Democrats clinched control of the Senate, a major victory for the president as he looks to his next two years in office.

Speaking to reporters in Cambodia ahead of an East Asia Summit, Biden said the turnout was a reflection of the quality of candidates his party was fielding, after Senator Catherine Cortez Masto was projected to win re-election in Nevada, narrowly beating Republican challenger Adam Laxalt.

A Democratic victory in a Georgia runoff next month would then give the party outright majority control of a 51-49 Senate, while a Georgia defeat would still keep Democrats in charge of a 50-50 Senate, with Democratic Vice President Kamala Harris able to break tie votes. The additional seat would mean Democrats could spare a vote on key nominations and bills.

“We’re focusing now on Georgia. We feel good about where we are. And I know I’m a cockeyed optimist. I understand that,” Biden told reporters. “Again, I’m not surprised by the turnout. I’m incredibly pleased. And I think it’s a reflection of the quality of our candidates.”

Control of the House of Representatives has still not been decided. Biden acknowledged such a victory would be “a stretch” for the Democrats, but Republicans have fallen well short of predictions they would sweep to power in Washington.

Biden had framed the midterm election as a test of U.S. democracy at a time when hundreds of Republican candidates embraced former President Donald Trump’s false claims that the 2020 presidential election was stolen.

Trump has repeatedly used his appeal among hard-right conservatives to influence candidates nominated by the Republican Party for congressional, gubernatorial and local races.

He has, however, been blamed for boosting candidates who were unable to appeal to a broad enough electorate, resulting in a lacklustre performance for the Republicans.

The results have also signalled exhaustion with the kind of chaos fomented by the Republican former president, raising questions about the viability of his possible 2024 White House run.

Laxalt, who lost in Nevada, was a former state attorney-general endorsed by Trump.

Biden told reporters the elections showed the Republican Party “is going to have to decide who they are”.

Some Republicans expressed discontent as they faced at least another two years in the minority. “The old party is dead. Time to bury it. Build something new,” Sen. Josh Hawley tweeted.

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Chinese premier says economy on ‘upward trend’, vows further support

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Economy 3 hours ago (Nov 13, 2022 12:50AM ET)

Chinese premier says economy on 'upward trend', vows further support© Reuters. FILE PHOTO: Chinese Premier Li Keqiang attends the ASEAN summit held in Phnom Penh, Cambodia November 11, 2022. REUTERS/Cindy Liu

BEIJING (Reuters) – China’s economy has grown 3% over the past three quarters and is stabilising on an “upward trend”, Chinese Premier Li Keqiang said, vowing to continue to support the economy with policy measures.

The comments were made in a meeting with International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Saturday during the ASEAN summit in Cambodia, according to a statement released by the Chinese foreign ministry on Sunday.

Premier Li also said China was working hard to keep market operations, employment and prices stable, the statement said.

“We will continue to promote the comprehensive implementation of a package of policies and measures for stabilising the economy with full effect …and strive to achieve better results throughout the year,” Li said.

While the government has sought to support the world’s second-largest economy with more than 50 measures since late May, the latest figures out of China have pointed to a slowdown.

Recent data showed exports and imports unexpectedly contracting, inflation slowing and new bank lending tumbling.

China on Friday also eased some of its strict pandemic restrictions, offering some respite from the zero-COVID strategy that has curbed economic and industrial activity in the country.

China has created more than 10 million new urban jobs in the first 10 months of the year, Li said. China aims to keep the urban jobless rate below 5.5% and to create more than 11 million new urban jobs this year.

“Countries should strengthen cooperation and macroeconomic policy coordination, so as to form synergy to maintain the stability of the world economy and prevent recession,” Li said.

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IMF chief warns on U.S.-China rivalry, calls Trump-era tariffs counterproductive

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Economy 1 hour ago (Nov 13, 2022 02:15AM ET)

IMF chief warns on U.S.-China rivalry, calls Trump-era tariffs counterproductive© Reuters. FILE PHOTO: China’s and U.S.’ flags are seen printed on paper in this illustration taken January 27, 2022. REUTERS/Dado Ruvic/Illustration/

By Kanishka Singh

(Reuters) – The head of the International Monetary Fund warned of risks to the global economy from the rivalry between China and the United States, while describing tariffs put on Chinese imports under then-President Donald Trump as counterproductive.

“We may be sleepwalking into a world that is poorer and less secure as a result,” IMF Managing Director Kristalina Georgieva told the Washington Post in an interview published on Saturday.

“I lived through the first Cold War on the other side of the Iron Curtain. And, yeah, it is quite cold out there,” Georgieva, who was born and raised in Bulgaria, said in the interview. “And to go in a second cold war for another generation is … very irresponsible.”

President Joe Biden has yet to resolve the key policy issue surrounding tariffs on Chinese goods established by his predecessor that cost U.S. importers billions of dollars.

“It is important to think through actions and what they may generate as counter actions carefully, because once you let the genie out of the bottle, it’s hard to put it back in,” Georgieva said of the Trump-era tariffs.

Biden’s team wrestled for months with various ways to ease the costs of duties imposed on Chinese imports as it tries to tamp down inflation.

China’s military exercises around Taiwan led Biden administration officials to recalibrate their thinking on whether to scrap some tariffs or potentially impose others on Beijing, people familiar with the matter told Reuters in August.

Beijing staged the war games that month after U.S. House Speaker Nancy Pelosi visited Taipei, and has since continued military activities nearby including almost daily fighter jet crossings of the sensitive median line in the narrow Taiwan Strait.

Relations between the world’s two largest economies have strained in recent years over issues like tariffs, Taiwan, intellectual property, cyber security, the removal of Hong Kong’s autonomy and the origins of the coronavirus outbreak, among others.

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China regulators order more financing support for property firms -sources

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Economy 46 minutes ago (Nov 13, 2022 07:45PM ET)

China regulators order more financing support for property firms -sources© Reuters. FILE PHOTO: Surveillance cameras are seen near residential buildings under construction in Shanghai, China July 20, 2022. REUTERS/Aly Song/

BEIJING (Reuters) -Chinese regulators have told financial institutions to extend more support to property developers to shore up the country’s struggling real estate sector, two sources with direct knowledge of the matter said on Sunday.

A notice to the institutions from the People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) outlined 16 steps to support the industry, including loan repayment extensions, in a major push to ease the deep liquidity crunch which has plagued the property sector since mid-2020.

The move, first reported by Bloomberg, comes as cash-strapped property developers struggle to tap sources of funding to finish projects and pay suppliers.

Several developers have defaulted on their offshore debt obligations over the past year, fuelling a property downturn which has weighed on the world’s second-largest economy.

Chinese regulators are telling financial institutions to allow real estate companies to defer repayment of some loans, such as property development and trust loans, the sources said.

The sources quoted the notice as saying that if a loan is due to mature within six months, real estate companies can be allowed to defer repayments for one more year.

According to the notice, trust companies are instructed to provide financing for real estate firms on projects such as rental housing construction and mergers and acquisitions, the sources said.

The sources declined to be named because the notice was confidential. The PBOC and CBIRC did not immediately respond to Reuters’ requests for comment.

The new policy “could be a game-changer for being the first comprehensive supportive policy from central authorities, unlike previous piecemeal steps,” Citi analysts wrote in a note.

China’s property sector, once a pillar of growth, has slowed sharply this year as the government sought to restrict excessive borrowing by developers. The clampdown has triggered falls in property sales and prices, bond defaults and the suspension of housing construction, angering homeowners which have threatened to stop mortgage payments.

Goldman Sachs (NYSE:) said in a note that the basic principles of the property measures are not new.

“That said, on the back of the COVID 20 ‘measures’, the property ’16 measures’ may generate notable market reactions without dramatically changing the current economic fundamentals,” Goldman Sachs analysts wrote, referring to steps announced on Friday to ease some of China’s coronavirus curbs.

More than 200 local governments have taken steps to prop up the distressed sector this year, mainly targeting homebuyers, including by providing subsidies, cutting mortgage rates and allowing for smaller down payments. Overall demand, however, remains fragile.

The notice comes as policymakers recently ramped up support for cash-strapped developers. Chinese regulators expanded a key financing support programme designed for private firms, including real estate companies, to about 250 billion yuan ($35.18 billion) this week.

“The Chinese authorities provided a slew of supportive measures over the weekend to support the property sector, which is likely to improve the market sentiment towards the Chinese economy,” said Hao Zhou, chief economist at Guotai Junan International.

“Weak property sales and investment suggest that a turnaround of (the) property outlook remains uncertain over the foreseeable future, which justifies the recent supportive measures from the Chinese authorities.”

($1 = 7.1066 renminbi)

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Binance halts FTT deposits, CEO says

Stock Markets 2 hours ago (Nov 13, 2022 02:50AM ET)

Binance halts FTT deposits, CEO says© Reuters. FILE PHOTO: Changpeng Zhao, founder and chief executive officer of Binance, attends the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 16, 2022. REUTERS/Benoit Tessier/File Ph

(Reuters) – Cryptocurrency exchange Binance has stopped accepting deposits of FTX’s FTT token on its platform, its chief executive Changpeng Zhao said on Sunday, urging other rival exchanges to do the same.

FTX, which filed for bankruptcy on Friday, was engulfed in more chaos on Saturday when the crypto exchange said it had detected unauthorized access and analysts said hundreds of millions of dollars of assets had been moved from the platform in “suspicious circumstances”.

“(Binance) has stopped FTT deposit, to prevent potential of questionable additional supplies affecting the market. We will monitor the situation,” CEO Zhao said in a tweet.

“FTT contract deployers moved all remaining FTT supply worth $400 million, which should be unlocked in batches. Not too sure what’s going on,” he added, in another tweet.

Tesla says it will assist police probe into fatal crash in China

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Stock Markets 2 hours ago (Nov 13, 2022 03:31AM ET)

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Tesla says it will assist police probe into fatal crash in China© Reuters. FILE PHOTO: A Tesla car pictured at a charging point in Beijing, China, April 13, 2018. REUTERS/Thomas Peter/File Photo

2/4

BEIJING (Reuters) – U.S. automaker Tesla (NASDAQ:) said on Sunday it will assist Chinese police investigating a crash involving one of its Model Y cars after local media reports said two people had died and three were injured when the driver lost control of the vehicle.

The incident on Nov. 5 in the southern province of Guangdong killed a motorcyclist and a high school girl, Jimu News reported, posting a video of a car driving at high speed crashing into other vehicles and a cyclist.

“Police are currently seeking a third party appraisal agency to identify the truth behind this accident and we will actively provide any necessary assistance,” Elon Musk’s electric vehicle maker told Reuters in a message on Sunday, cautioning against believing “rumours”.

China is Tesla’s second-largest market, and the crash was among the top trending topics on the Weibo (NASDAQ:) social media platform on Sunday.

Jimu News quoted traffic police as saying the cause of the incident in Chaozhou city had not been identified and an unnamed family member of the driver who said the 55-year-old had issues with the brake pedal when he was about to pull over in front of his family store.

Tesla said videos showed that the car’s brake lights were not on when the car was speeding and that its data showed issues such as there being no action to step on the brakes throughout the vehicle’s journey.

Calls to police in Raoping, the county where the accident happened, went unanswered on Sunday.

Tesla has faced claims of brake failure in China before.

In its statement to Reuters, the company said a Chinese car owner had been ordered by a court to publicly apologise and compensate the firm after it ruled that comments he had made to the media about issues with his brakes were inconsistent with the facts and had harmed Tesla’s reputation.

Reuters could not immediately verify Tesla’s assertion.

Last year, an unhappy customer caused a social media stir by clambering atop a Tesla at the Shanghai auto show to protest the company’s handling of her complaints about malfunctioning brakes involved with a car accident.

In that instance, Tesla said speeding violations were behind her crash but promised to improve how it addressed customer complaints.

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Leaders land in Indonesia for G20 summit; US seeks no conflict with China, says Biden

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World 9 hours ago (Nov 13, 2022 10:02AM ET)

Leaders land in Indonesia for G20 summit; US seeks no conflict with China, says Biden© Reuters. U.S. President Joe Biden makes a statement about the U.S. midterm elections during his visit in Phnom Penh, Cambodia November 13, 2022. REUTERS/Kevin Lamarque

By Nandita Bose and Fransiska Nangoy

NUSA DUA, Indonesia (Reuters) -U.S. President Joe Biden said on Sunday his country will maintain open communication lines and seek no conflict with China, ahead of what are expected to be tense talks on a range of geopolitical issues at the G20 summit in Indonesia this week.

Biden and Chinese counterpart Xi Jinping are on Monday set to meet face-to-face for the first time since Biden took office, as bilateral relations languish at their worst in decades. Jake Sullivan, a national security adviser to Biden, told reporters the meeting could last “a couple of hours”.

Biden, who landed in Bali island after meeting Southeast Asian and East Asian leaders in Cambodia, said the United States would “compete vigorously” with Beijing while “ensuring competition does not veer into conflict”.

Russia’s Foreign Minister Sergei Lavrov also arrived in Bali from Cambodia earlier on Sunday.

The war in Ukraine and its economic fallout is expected to dominate discussions in Bali and at the Asia-Pacific Economic Cooperation (APEC) forum in Bangkok at the end of the week, alongside climate commitments, food insecurity and tensions over the Taiwan Strait, the South China Sea and North Korea.

Earlier, Lavrov accused the West of militarising Southeast Asia to contain Chinese and Russian interests in a geostrategic battleground.

“The United States and its NATO allies are trying to master this space,” Lavrov told reporters.

Lavrov is representing President Vladimir Putin at the summits and is expected to hear stinging rebukes from within the G20 over the invasion of Ukraine, which Moscow calls a special military operation.

Ukraine is not a G20 member but has been invited by host Indonesia as an observer. Its president, Volodymyr Zelenskiy, will address the meeting virtually.

Russia’s foreign ministry on Sunday said the G20 was not the forum to handle security issues and should instead focus on pressing global economic challenges.

‘AGGRESSIVE’ PROVOCATIONS

Biden held a trilateral meeting with leaders of allies Japan and South Korea and said the three countries were “more aligned than ever” on North Korea.

South Korea President Yoon Suk-yeol said the North’s recent provocations showed its regime’s “nature against humanitarianism”, adding it had become more hostile and aggressive based on confidence in its nuclear and missile capabilities.

Japan counterpart Fumio Kishida said Pyongyang’s actions, which included a recent firing of a ballistic missile over Japan, were unprecedented.

“This trilateral summit is timely given we are expecting further provocation,” Kishida said.

Kishida also took a swipe at China for what he called violations of Japan’s sovereignty in the East China Sea and said Beijing was responsible also for heightening regional tension in the South China Sea, a conduit for at least $3 trillion in annual trade.

At a separate news conference, Australian Prime Minister Anthony Albanese said his brief discussions the previous day with Chinese Premier Li Keqiang were constructive and positive, amid anticipation of a formal summit with Xi.

Like ally the United States, Australia’s ties with China have also deteriorated in recent years.

“I have said repeatedly about the relationship with China that we should cooperate where we can,” Albanese said. “And that dialogue is always a good thing.”

‘MATURE’ TALKS

Eighteen countries accounting for half the global economy attended Sunday’s East Asia Summit, which was held behind closed doors, attended by the ASEAN nations, Japan, South Korea, China, India, the United States, Russia, Australia and New Zealand.

The summit’s chair, Cambodian Prime Minister Hun Sen, said the plenary meeting handled some heated discussion, but the atmosphere was not tense.

“Leaders talked in a mature way, no one left,” he told a news conference at the end of the three-day summit led by the Association of Southeast Asian nations (ASEAN).

Leaders also called on Myanmar’s military rulers to follow a peace plan they agreed to with the Association of Southeast Asian Nations (ASEAN), while condemning North Korea’s missile launches and Russia’s “brutal and unjust” invasion of Ukraine.

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Energy & precious metals – weekly review and outlook

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Commodities 22 hours ago (Nov 13, 2022 05:32AM ET)

Energy & precious metals - weekly review and outlook

By Barani Krishnan

Investing.com – The Randy Newman song ‘You’ve Got a Friend in Me‘ could well be the backdrop for the historic U.S.-China summit that opens Monday at the G20. Xi Jinping once called Joe Biden “my old friend” and the U.S. President responded with a similar endearment.

Lately, however, Biden called Xi “a thug”, after China made clear that not even the United States could stand in its way of acquiring Taiwan. Despite such adversity, White House officials are counting on the one-time personal connection between the two men to resurface at the summit and lead to Sino-American cooperation in areas with common goals. In fact, Xi might already be assisting a Biden goal in the strangest way possible: Low oil prices via China’s Covid-zero policy.

Unless you’ve been living under a rock, there’s little chance that you’d have missed the almost daily headlines on the Xi administration’s whack-a-mole way of dealing with the coronavirus now, three years after the virus had its first outbreak in the Chinese city of Wuhan.

Using snap lockdowns, mass testing, extensive contact tracing and quarantines to stamp out infections as soon as they emerge, the Covid-zero policy has taken a heavy toll on the world’s number two economy and led to angry backlashes from its people.

Thus, Friday’s move to reduce the quarantine period for travelers in China, along with the scrapping of a restriction on international flights, appeared to be a compromise by Beijing to appease a population that had become weary of one lockdown after another – a phenomenon no longer happening in any other country.

Many suspect Xi ultimately has no intention to do away with the policy – a conviction arising not just from his renewing of his no-Covid vow when he was sworn in for a historic third term as president.

Some say China’s reasons for the policy go beyond health – into the territory of national pride, for instance.

Beijing relies entirely on home-grown vaccines for Covid – which, according to experts interviewed by Western media, aren’t as effective as globally-trusted brand names such as Pfizer, Moderna Novavax, and J&J.

A Hong Kong study cited by Barron’s suggests that Chinese-produced Sinovac needs three injections to provide equivalent protection to Pfizer and Moderna’s vaccines. Sufficient data to disprove this is difficult to come by, as China keeps a tight lid on information-sharing.

Beijing is now trying to develop its own mRNA vaccine, similar to Pfizer and Moderna’s, but it’s fallen far behind as a result, media reports have said.

Others cite pure financial or economic reasons, saying pandemic-emergency responses limit any sort of run on Chinese banks and allow Beijing to bypass U.S. sanctions on Russian oil to buy limitless amounts of this at rock-bottom prices.

China saved about $3 billion in buying Russian oil versus other imports between April and July, according to Reuters’ calculation based on customs data. On average, China paid about $708 per tonne for Russian crude while the value of imports from the rest of the countries was $816 per tonne.

Biden, of course, doesn’t give a rodent’s rear to what China is doing to fight Covid; how many Chinese are in undeserved lockdowns and whether local vaccines will save them or cause irreversible damage over time (sorry for the bluntness).

But if the sum of all actions by Beijing brings the price of oil down, we can assume the U.S. president will be happy.

China is the world’s largest importer of crude: last year, it imported 11.8 million barrels per day, outpacing the United States, which takes in 9.1 million barrels per day.

Back in May, the oil price rally came to a screeching halt after Beijing adopted a zero-Covid strategy and announced strict containment measures that included major lockdowns. But the restrictions also had a severely negative impact on Chinese consumer demand and manufacturing output.

According to year-on-year (y-o-y) figures for April, retail sales fell by 11.1%, industrial production by 2.9% and manufacturing by 4.6%. Meanwhile, the and the Currency Index both fell in tandem in April.

In the past two weeks, China’s Covid-zero policy was back in the headlines as OPEC+ – the Saudi-led and Russia-assisted global oil producing alliance – got down to observing a 2 million-barrels-per-day output cut. Brent crude came within cents of revisiting $100 a barrel on Monday before tumbling 6% on the week. The oil market’s drop came after reports of an explosion in new Covid cases in China’s export-heavy Guangdong province raised fears that the authorities could reintroduce tough Shanghai-style lockdowns instituted earlier this year.

The People’s Bank of China, or PBOC, is still acting cautiously due to concerns about further yuan weakness, which can potentially trigger large capital outflows in a Fed rate hiking cycle. The yuan and corporate bond yields fell sharply after the PBOC announced a cut in banks’ reserve requirements in mid-April. Since then, the currency has stabilized, but bond yields have started climbing again. Net debt issuance by the government clocked in at more than 700 hundred billion yuan ($104 billion) in both May and June, the two highest monthly totals since mid-2020, and more liquidity will be required from the PBOC if the rapid clip of local government debt issuance is going to continue.

Beijing will now be forced to either bring forward a larger part of next year’s planned quota or take other strong measures to bolster local government finances. It can also allow more off-the-book borrowing by city governments, although that would be difficult due to high bond yields. Unless Chinese policymakers act to sharply bolster local government finances and the PBOC is willing to risk more yuan depreciation, a weak rebound in the second half of the year is seen as the most likely scenario.

There are now growing signs that the Chinese economy may be entering a prolonged era of slow growth.

The world’s second-largest economy is projected to grow just 2% this year, significantly lower than the above 6% it maintained over the past decade.

Maintaining a Covid-zero policy has been slowing the economy and adding huge additional costs to the government budget, leaving Beijing in a dilemma about whether to boost debt or tolerate weak economic growth.

Even before the spending pressures brought on by the pandemic, the Chinese economy was in trouble, most notably due to a slump in land sales revenue amid a housing slowdown, compounded by tax relief to businesses that cut government income. Official data shows the wide-ranging budget deficit reached a record nearly 3 trillion yuan ($448 billion) in the first five months of the year.

China is still facing severe economic uncertainty, and oil imports are one barometer.

All these are taking a toll on China’s demand for crude.

OPEC itself has predicted that Chinese buying of oil will decline by 60,000 barrels per day this year, after forecasting an increase of 120,000 bpd only a month ago thanks to new lockdowns. OPEC has cut its demand growth view for 2022 by 460,000 bpd to 2.64 million bpd and for 2023 by 360,000 bpd to 2.34 million bpd, citing “the extension of China’s zero-Covid-19 restrictions in some regions, economic challenges in OECD Europe, and inflationary pressures in other key economies.”

Inflation has been the proverbial albatross around Biden’s neck all year prior to October, with more than 80% of Americans polled before this month’s midterm elections citing concerns about high gasoline and energy prices. If China can somehow keep oil prices from escalating and driving inflation back towards June’s 40-year highs, that will work splendidly for the U.S. president.

Summer-time record highs of $5 a gallon for gasoline were what drove Biden to drain nearly half of America’s emergency oil reserve. Now, having brought a gallon to well below $4, the president has to think of a way of refilling the reserve. If China’s Covid-zero policy can keep a barrel from revisiting the much-feared $100-and-above-a-barrel, Xi will be a friend indeed.

Oil: Market Settlements and Activity

Crude prices climbed out of a three-day hole as U.S. inflation at 9-month lows suggested the Federal Reserve could do a in December that could benefit businesses as a whole, including oil drillers and refiners.

Most commodities rallied strongly between Thursday and Friday on the prospect of the Fed rate pivot. But the rebound in oil on the day wasn’t enough though to prevent the market from posting a weekly loss.

“It’s been quite the volatile week for oil, with Chinese rumors [over Covid] not going away, [and] restrictions and mass testing being undertaken once more,” said Craig Erlam, analyst at online trading platform OANDA.

New York-traded , or WTI, for delivery in December did a final trade of $88.86 per barrel on Friday after settling the official session at $88.96, up $2.49, or 2.9%, on the day.

WTI, however, ended the week down 6.6%, after two back-to-back weekly wins of about 5% and 3.5%. The decline was mostly due to a net drop of 7% between Monday and Wednesday.

London-traded for January did a final trade of $95.78 after settling Friday’s session at $95.99, up $2.32, or 2.5%, on the day. For the week, the global crude benchmark fell 2.6% after gains of about 3%, 2.5% and 2% over the three prior weeks.

Oil Price Outlook: WTI

WTI’s inability to rebound from its losses for the week denotes larger problems for the U.S. crude benchmark, says Sunil Kumar Dixit, chief technical strategist at SKCharting.com.

“WTI’s weekly Relative Strength Indicator at 47 is below neutrality while its weekly stochastics at 59/59 also favors neutrality and awaits triggers,” said Dixit.

For the week ahead, if WTI fails again to clear the 50-week Exponential Moving Average of $90.60 and the weekly Middle Bollinger Band of $90.90, it will stay under bearish pressure, with 84.70 likely to be retested and prices can drop further to 100 week SMA 80.80.

On the flip side, accumulation of momentum above 80.80 followed by a revival above 91.00 will witness another return to a bullish channel that aims 97 and 105 in the mid-term.

Gold: Market Settlements and Activity

Gold bulls had their biggest week in 30 months as their two biggest tormentors – the dollar and cryptos – were vanquished this week.

U.S. gold futures’ benchmark contract did a final trade of $1,774.20 an ounce on Friday, after settling the official session at $1,769.40 – up $15.70, or almost 1%, on the day on New York’s Comex.

More importantly, it rose $92.80, or 5.5% on the week – its most since a 6.5% jump during the week to April 3, 2020.

The , which is more closely followed than futures by some traders, settled at $1,771.42 an ounce, up $15.81, or 0.9%.

Gold has rocketed since Thursday as U.S. inflation registered its slowest annual reading in nine months, heightening speculation that the Federal Reserve will back off from the aggressive rate hikes it has executed since March, sending the dollar crashing.

The Dollar Index, which pits the greenback against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, was down 4.1% on the week, its most since a 4.8% weekly drop in March 2020.

Cryptocurrencies, meanwhile, are in a crisis of their own after industry leader fell over 20% on the week as crypto-exchange FTX headed for bankruptcy.

Gold is probably winning at least some of the money that had exited cryptocurrencies this week, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

“There’s no hard data to corroborate fund flows from crypto into gold now but I’d be surprised if that isn’t happening,” Streible said.

“Normally, it’s the other way round as gold seldom finds love from the crypto crowd. But gold looks relatively safer now than digital currencies and imagine it has gained new respect that could mean higher allocations that may have been meant for crypto.”

Erlam joins a legion of analysts around the world who expect gold to get to $1,800 at least after clearing resistance at between $,1770 and $1,780.

“Gold bulls have been waiting for this week for a long time: a week (or so) in which the Fed signaled a potential slowing of rate hikes and the CPI data displayed a significant and broad-based decline,” Erlam said.

The CPI, or , registered in October its slowest annual growth in nine months, expanding just 7.7% over a 12-month period, versus a growth of 8% forecast by economists and against the previous yearly growth of 8.2% to September.

Gold: Price Outlook

Seven months of relentless beating and being pushed to the wall seemed enough for gold bulls, who are now fighting back, said SKCharting’s Dixit who tracks bullion’s spot price.

“We’ve seen multiple drops in spot gold since the first quarter, and each time $1,615 came to support the metal,” Dixit said. “Gold bulls seem to be saying ‘don’t take us for granted’ this time around.”

Dixit said oversold monthly stochastics supported by divergence in weekly stochastics led to a decisive price breakout in gold, at above the previous month’s high of $1,730.

The short-term trend also turned bullish, testing the 50-week Exponential Moving Average of $1,771.70, he said.

“The short-term bullish rebound is very likely to test the monthly Middle Bollinger Band of $1,797 and the 200-Day Simple Moving Average of $1,804, which is 100-week SMA as well.”

Dixit cautioned about the possibility of correction as the daily Stochastics and the Daily Relative Strength Indicator reach overbought conditions, respectively at 99/93 and 70. This can cause spot gold to pull back towards support areas of $1,750 and $1,730, he said.

“Whatever bearish pressure descends on gold now, the short-term trend turns bullish if traders interpret the pullback as a means to execute value buying,” said Dixit. “If gold gains acceptance above $1,805 as a result of this, expect the next targets to be $1,850 and $1,875.”

Disclaimer: Barani Krishnan does not hold positions in the commodities and securities he writes about.

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Democrats defy ‘red wave’ forecasts to keep Senate control, eye Georgia

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Democrats defy 'red wave' forecasts to keep Senate control, eye Georgia© Reuters. U.S. Senate Majority Leader Chuck Schumer (D-NY) and U.S. House Minority Leader Kevin McCarthy (R-CA) speak to the media in Washington, D.C., U.S. August 7, 2022 and July 27, 2022 in a combination of file photographs. REUTERS/Ken Cedeno, Elizabeth Frantz

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By Tim Reid and Kanishka Singh

PHOENIX (Reuters) – Democrats took a victory lap on Sunday after retaining control of the U.S. Senate, defying Republican hopes for a “red wave” in the midterm elections, and turned their attention to Georgia where a run-off contest could strengthen their hand in Congress.

Democratic leaders portrayed the better-than-expected performance as vindication of their agenda and a rebuke of election denialism and extremist candidates on the right, even as Republicans edged towards control of the House of Representatives with a handful of key races yet to be called.

“We were on the edge of autocracy and thank God the American people pulled us back in this election,” Senate Majority Leader Chuck Schumer said at a news conference on Sunday.

Senate control was clinched late Saturday by Nevada Senator Catherine Cortez Masto, who defeated former Nevada Attorney General Adam Laxalt who was endorsed by former President Donald Trump. That put Democrats in charge of a 50-50 Senate, by virtue of Vice President Kamala Harris holding the tie-breaking vote.

A Democratic victory in a Georgia runoff on Dec. 6 between Democratic Senator Raphael Warnock and Republican challenger Herschel Walker would give the party outright majority control, bolstering its sway over committees, bills, and judicial picks.

“We’re focusing now on Georgia. We feel good about where we are,” President Joe Biden said on the sidelines of a meeting of Southeast Asian heads of government in Cambodia on Sunday.

Republicans, however, remained close to seizing control of the House as officials continued counting ballots, with returns still flowing in for several races, including many in liberal-leaning California.

As of Sunday, Republicans had won 211 seats and the Democrats 206, with 218 needed for a majority. It could take several days before the outcome of enough House races is known to determine which party will control the 435-seat chamber.

Republicans were set to take their tally to 212 house seats by picking up Oregon’s 5th congressional district, which includes suburbs of Portland and Salem, the Associated Press projected Sunday evening. Republican Lori Chavez-DeRemer, a former mayor of Happy Valley, a Portland suburb, defeated progressive Democrat Jamie McLeod-Skinner, according to the AP.

House Speaker Nancy Pelosi, 82, told ABC News and CNN that she would not make any announcements about whether she planned to remain in House leadership until after control of the chamber was decided. There had been speculation she would resign if Democrats lost the majority, especially after her husband was attacked by an intruder at their San Francisco home last month.

House Republicans, should they prevail, have pledged to try to roll back Biden-led legislation to battle climate change and want to make permanent a series of 2017 tax cuts set to expire. They also have vowed investigations into Biden administration activities and probes of the president’s son, who has had business dealings with Ukraine and China.

Jim Banks, a Republican congressman from Indiana, said on Sunday that he expected his party to win a slim majority in the House and serve as “the last line of defense to block the Biden agenda,” while launching investigations into the U.S. withdrawal from Afghanistan, the origin of COVID and pandemic lockdowns.

“That has to be a focal point of every single committee in the Congress, especially in the House under Republican control,” Banks said in an interview on “Fox News Sunday”.

FOCUSING ON GEORGIA

Hovering over the 2022 midterm elections all year has been Trump, who used his continued popularity among hard-right conservatives to influence the candidates the Republican Party nominated for congressional, gubernatorial and local races.

With Republicans’ lackluster performance – even if they win a narrow majority in the House – Trump has been blamed for boosting candidates who were unable to appeal to a broad enough electorate.

A Republican loss in Georgia could further dampen Trump’s popularity as advisers say he considers announcing this week a third run for the presidency in 2024.

The outcome may increase the chances that Florida Governor Ron DeSantis, who routed his Democratic opponent on Tuesday, opts to challenge Trump for the 2024 presidential nomination.

In one of the most high-profile races yet to be called, Arizona Republican gubernatorial candidate Kari Lake is trailing Democrat Katie Hobbs by 1.5 percentage points, with an estimated 89% of the vote counted, according to Edison Research.

Lake is one of hundreds of Republican nominees who promoted Trump’s baseless claims that the 2020 presidential election was fraudulent. She is also at risk of joining a sizeable group of Trump-endorsed candidates that have gone down in defeat.

The results suggest Democrats had success in portraying Republicans as extremist, pointing in part to the Supreme Court’s decision to eliminate a nationwide right to abortion, which was enabled by conservative appointments to the bench.

Pelosi attributed her party’s performance to Democratic candidates knowing their districts and maintaining focus on the issues voters cared about even as pundits in Washington predicted big losses and called for a change in approach.

“They knew the value of a woman’s right to choose. They knew how important it was to protect our democracy. They knew the contrast between themselves and their opponents,” Pelosi told ABC.

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Yellen says U.S. debt ceiling hike by lame-duck Congress would be ‘great’

Yellen says U.S. debt ceiling hike by lame-duck Congress would be 'great'© Reuters. U.S. Treasury Secretary Janet Yellen speaks during her interview with Reuters in New Delhi, India, November 11, 2022. REUTERS/Altaf Hussain

NUSA DUA, Indonesia (Reuters) – The U.S. Treasury Secretary Janet Yellen on Sunday said that the Democrats’ clinching of U.S. Senate control makes things easier for the Biden administration, but she would still like to see a debt ceiling increase approved before year-end in Congress’s post-election “lame duck” session.

Yellen told reporters on the sidelines of G20 summit meetings in Bali that Senate control by Democrats would ease the path for approving nominations and other legislative actions.

“We want to see the debt ceiling get done. If it got done in the lame duck, that would be great, as far as I’m concerned,” Yellen said.

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