COMMODITIES
Coffee rally stuns traders
Coffee’s stunning rally late this year took many traders and analysts by surprise, creating tension over where prices go from here. Arabica beans have surged 28 percent since the end of September, on pace for the best quarterly performance since 2014 and the biggest gain among major commodities in the past three months. Prices recovered after adverse weather threatened production in Brazil, the world’s top grower and exporter. “The market ran up too much, too fast, and now we’re seeing a healthy pullback,” said Josh Graves, a senior market strategist for RJO Futures in Chicago. “In the short term, high volatility is here to stay.”
CHINA
Magnet exports to US fall
The country’s exports of rare-earth magnets to the US last month fell 21.2 percent month-on-month, customs data showed yesterday, as improving trade relations between the two countries reduced demand for stockpiling. US-bound shipments of the magnets, which are widely used in medical devices, consumer electronics and defense, came in at 376 tonnes, General Administration of Customs data showed. The figure was also down 3.2 percent year-on-year. The US military plans to stockpile rare-earth magnets used in Javelin missiles and F-35 jets, according to a government document seen by Reuters, although a US policy bill bans the purchase of rare-earth magnets from China for military use in the 2019 fiscal year.
ENERGY
Crude oil above US$61
Oil settled above US$61 a barrel on Tuesday amid light volume as US President Donald Trump said a preliminary trade deal with China is “done” and ahead of government data expected to show another crude stockpile decline. Futures rose 1 percent in New York to close at a three-day high. US crude inventories last week fell by 1.5 million barrels, according to a Bloomberg survey before US Energy Information Administration data tomorrow. With prices on the rise since October, the market headed into Christmas in a completely different state from a year earlier.
CHINA
Bond defaults spark alarm
Financial regulators are calling for more efficient handling of bond defaults to restore investor confidence after repayment failures hit a record high this year. Senior officials from the central bank, the securities regulatory body, the supreme court and other departments discussed court-mediated dispute resolution concerning bond defaults at a symposium in Beijing on Tuesday, according to a report by the state-run Financial News. China’s onshore bond defaults have exceeded 130 billion yuan (US$18.6 billion) so far this year, surpassing the previous annual high of 122 billion yuan last year.
EQUITIES
Japanese stocks decline
Japanese stock prices declined and Chinese markets were little-changed yesterday, while trading in most other Asian economies was closed for Christmas Day. Tokyo’s Nikkei 225 lost 0.2 percent to 23,792.34, while the Shanghai Composite Index was at 2,983.13. Malaysia’s benchmark was down 0.6 percent, while the TAIEX gained 12 points. Markets in Hong Kong, India, New Zealand and Singapore were closed. Wall Street ended nearly flat on Tuesday in a shortened trading session before closing for Christmas Day. US markets are to reopen today.
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
CHEMICAL FIRE: 10 Indian employees were injured by smoke inhalation at a Tata Electronics plant in Tamil Nadu state that produces components for Apple Inc At least 10 people received medical treatment, with two hospitalized after a major fire on Saturday disrupted production at a key Tata Electronics Pvt Ltd plant in southern India that makes Apple Inc’s iPhone components. The fire occurred at the plant in the city of Hosur in Tamil Nadu state that makes some iPhone components. It broke out near another building inside the Tata complex, which was to begin producing complete iPhones in the coming months. The fire was contained to one building and has been extinguished fully, top district administrative official K.M. Sarayu said. No decision has been made on when
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