Russian Oil Cargoes Race To India As Sanctions Deadline Nears

Commodity

Economic

Summary:

The clock is ticking for India-bound tankers carrying millions of barrels of crude from blacklisted Russian suppliers Rosneft PJSC and Lukoil PJSC, with a wind-down period for US sanctions set to end this Friday.

At least 7.7 million barrels of Russia's flagship Urals crude linked to the two sanctioned producers are set to reach India's shores after the US restrictions take effect on Nov. 21, according to data from Kpler Ltd. That raises questions on whether the crude will be able to discharge smoothly, given the deadline.

The data showed most of the tankers are heading either to Reliance Industries Ltd.'s Jamnagar refinery or Rosneft-linked Nayara Energy Ltd.'s Vadinar port. Delivery dates range from the end of November and into December. Destinations can change during a ship's voyage.

Oil traders are keeping close tabs on shipments of sanctioned Russian oil to major buyer India to gauge its near-term demand for alternatives. New Delhi has been under pressure from Washington, which says the purchases help fund Moscow's war in Ukraine.

Five of India's seven refiners, including Reliance, had earlier said they would completely stop taking delivery of Russian crude after Nov. 21. State-run Indian Oil Corp. will continue buying non-sanctioned grades, while Nayara — which relies entirely on Russian supplies — is still lifting cargoes.

Meanwhile, it remains unclear if Indian companies have sought any exemptions from the US to continue buying some crude parcels from Rosneft or Lukoil after the Friday deadline. Earlier in November, Hungary won an exemption on procurement of Russian oil and gas and the US has also extended a waiver for some Lukoil transactions.

Starting Friday, four of Russia's top producers — accounting for as much as 80% of the country's exports to India — would be under sanction, leaving counterparties at risk of secondary sanctions.

Should the ships fail to arrive by Nov. 21, they could idle off India's shores while they consider their next moves, which can include ship-to-ship transfers to other tankers and diversions to new destinations such as the waters off Malaysia or even further to China.

Source: Bloomberg Europe

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Economic

Commodity

Market Uncertainty Supports Gold, But Caution Prevails

Gold remained resilient in early Wednesday trading, hovering at $4,070 an ounce following a modest 0.6% gain the previous session. This pause in price movement reflects investors’ hesitancy amid growing concern over stock market volatility especially surrounding richly valued tech stocks and evolving expectations about future U.S. Federal Reserve policy moves.

The precious metal, traditionally viewed as a safe haven during financial turbulence, has seen robust gains this year. However, its role as a short-term hedge is complicated by investor behavior in risk-off moments, particularly when leveraged equity positions are liquidated, forcing some to sell gold holdings for liquidity purposes.

Nvidia Earnings and Tech Valuation Risks Loom Large

The forthcoming earnings report from Nvidia Corp., a bellwether for the AI sector and broader tech sentiment, is a critical test for equity markets. With global equities sliding under the weight of stretched valuations especially in semiconductor and AI-linked stocks investors are watching for signs of continued profitability or a valuation reset.

Nvidia’s performance will likely influence short-term appetite for both equities and gold. A strong report could lift tech sentiment and reduce immediate demand for safe-haven assets, while disappointing results could trigger broader risk aversion, providing support to bullion.

Rate-Cut Expectations Dialed Back

Contributing to the cautious tone in the gold market is the changing outlook for U.S. interest rates. Just two weeks ago, interest-rate swaps were pricing in a near-certainty of a 25 basis-point Fed cut in December. Now, that probability has dropped to roughly 50%, following hawkish commentary from multiple Federal Reserve officials.

Since gold is a non-yielding asset, it tends to benefit from lower interest rates, which reduce the opportunity cost of holding bullion. Thus, any delay in rate cuts or uncertainty around monetary easing limits upside momentum in the near term.

Upcoming Data Releases Could Sway Sentiment

The September U.S. jobs report, delayed by the recent six-week government shutdown, is set for release on Thursday. Though slightly dated, the labor data will offer insights into the economic backdrop influencing Fed decisions. Later today, the release of the Federal Open Market Committee (FOMC) minutes from its late October meeting will also be closely scrutinized for guidance on potential balance sheet adjustments and monetary stance.

If the minutes hint at plans for liquidity injections through reserve management purchases, gold could see renewed buying interest, as increased financial system liquidity generally favors precious metals.

Gold’s Macro Resilience Remains Intact

Despite short-term fluctuations, gold has gained around 55% year-to-date, putting it on pace for its best annual performance since 1979. The rally has been underpinned by strong central bank demand, geopolitical uncertainty, currency volatility, and growing investor interest in hedging against sovereign debt risks.

According to a Bank of America survey, investors expect gold to deliver the second-best returns in 2026 among global assets, surpassed only by the Japanese yen. This reflects sustained long-term confidence in gold’s role as a strategic hedge amid a shifting global macroeconomic landscape.

As rate-cut expectations recalibrate and tech stocks dominate the volatility narrative, gold’s near-term trajectory may hinge on upcoming U.S. labor data and Fed guidance. But with structural demand and macro uncertainty intact, the longer-term bullish thesis for gold remains supported.

Source: Bloomberg

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Economic

Diplomatic Overture Ends in Frustration

The recent meeting between Liu Jinsong, director-general of China’s Asian Affairs Department, and Japanese diplomat Masaaki Kanai was intended to de-escalate rising tensions between the two Asian powers. Instead, the effort fell flat. Liu publicly expressed “dissatisfaction” with the outcome, according to Chinese media outlet The Paper, highlighting that both sides remain entrenched in their positions.

This failed dialogue is the latest chapter in a broader geopolitical confrontation triggered by Japanese Prime Minister Sanae Takaichi’s remarks linking a potential Taiwan Strait crisis to Japanese military involvement—comments that Beijing interpreted as a direct provocation.

Taiwan: The Flashpoint Driving Rhetorical Escalation

Takaichi’s statement marked a historical shift in Japan’s traditionally ambiguous stance on Taiwan. In response, China unleashed a barrage of official and unofficial retaliatory gestures. Most notably, Xue Jian, China’s consul general in Osaka, posted a threatening comment on X (formerly Twitter) about “cutting off” Takaichi’s head, drawing an official rebuke and demands for disciplinary action from Tokyo.

China, meanwhile, demanded a full retraction from Takaichi, a condition analysts say is politically untenable for Japan. This ultimatum, referred to by Eurasia Group’s Jeremy Chan as a “maximalist demand,” offers no diplomatic off-ramp and underscores Beijing’s willingness to sustain the pressure campaign rather than seek compromise.

Rising Economic Fallout: Tourism and Travel Hit First

Beyond political posturing, the tension is beginning to erode economic activity. China has advised its citizens against traveling to Japan, a warning that has already forced state-owned travel agencies to cancel pre-arranged group tours. The move caused a sharp intraday selloff in Japanese tourism and retail stocks before modest recovery set in.

Furthermore, internal guidance from Chinese state-owned firms, including banks and brokerages, has urged staff to avoid travel to Japan. These precautionary steps, while unofficial, reflect deepening mistrust and could foreshadow broader decoupling in investment and business travel between the two nations.

Symbolism and Optics Underscore Deep Historical Grievances

The optics surrounding the failed meeting have only fueled speculation that the dispute may become protracted. Chinese analysts criticized Japan for sending a mid-level diplomat, implying a lack of seriousness. Meanwhile, attention focused on Liu’s outfit, a tunic-style suit reportedly resembling those worn by protesters during the 1919 May Fourth Movement, a nationalist uprising sparked by Japan’s post-WWI territorial gains in China.

Although Liu has worn similar suits before, their association with anti-Japanese sentiment introduced an additional layer of symbolic provocation. This underscores how historical grievances continue to shape modern diplomatic theater and public perception on both sides.

No Clear Path to De-escalation

The current impasse appears durable. With Takaichi unable to walk back her statement without appearing weak domestically, and China unwilling to let the matter fade, a short-term resolution seems unlikely. This risks allowing bilateral tensions to seep deeper into economic domains, especially at a time when both countries are dealing with slowing growth and increased dependence on regional trade.

While the geopolitical temperature between China and Japan has risen many times over the years, the intertwining of Taiwan, nationalism, and economic coercion in this latest episode suggests a more volatile and possibly longer-lasting rift. Unless a diplomatic off-ramp emerges soon, the region could face renewed strategic decoupling this time with real commercial costs.

Source: Bloomberg

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Economic

A Nuclear Revival Backed by Big Tech

In a move that merges energy policy with Silicon Valley’s expanding power appetite, the Trump administration announced it will lend $1 billion to Constellation Energy to restart the dormant Unit 1 reactor at Pennsylvania’s Three Mile Island nuclear facility. The project, shuttered since 2019 due to market pressures from cheap natural gas, will now be resurrected with support from Microsoft, which has agreed to buy 100% of the plant’s output over two decades.

The revival of Three Mile Island’s non-infamous reactor (Unit 1, not the infamous meltdown-prone Unit 2) reflects growing tech sector interest in nuclear power, particularly as energy demands from AI, cloud computing, and data centers surge. Microsoft’s agreement is projected to secure 835 megawatts of clean energy capacity.

Cost and Commitment: Microsoft’s Strategic Bet

While terms of the deal remain confidential, Jefferies analysts estimate Microsoft may be paying between $110 and $115 per megawatt-hour considerably above prevailing market rates for renewable energy, even those with battery storage. However, the premium reflects nuclear’s round-the-clock reliability, which is essential for the uninterrupted operations of hyperscale data infrastructure.

This is part of a broader trend. Meta, another major tech player, recently signed a deal with Constellation to purchase the clean energy attributes of a 1.1 gigawatt nuclear plant in Illinois. These moves suggest that the industry’s focus is shifting from the cheapest green energy sources to the most dependable and scalable carbon-free alternatives.

Federal Support Through Energy Dominance Financing

The loan was issued through the Department of Energy’s Loan Programs Office (LPO), which was originally formed in 2005 to accelerate clean energy innovation. While the LPO faced scrutiny in the wake of the Solyndra bankruptcy, its overall track record is strong, with a post-recovery default rate of 3.3%. Notably, Tesla repaid its 2010 LPO loan ahead of schedule.

This new loan taps funds from the Inflation Reduction Act-era Energy Infrastructure Reinvestment program renamed the Energy Dominance Financing Program (EDF) by the Trump administration. EDF is designed to rehabilitate existing infrastructure, such as dormant fossil or nuclear plants, that can be restarted with emissions reductions or pollutant mitigation. Despite a naming error in the DOE’s press release citing the wrong legislative origin, the funding comes legally through the “One Big Beautiful Bill Act,” not the Working Families Tax Cut Act.

Strategic and Symbolic Implications

The decision to fund the Three Mile Island restart has both symbolic and practical dimensions. The site of America’s most well-known nuclear accident in 1979, Three Mile Island is now poised to become a poster child for nuclear’s second act with tech giants playing a central role.

Politically, it also highlights a continued bipartisan consensus around nuclear energy’s role in decarbonization and grid reliability, even amid differing approaches to climate policy. By leveraging Microsoft’s long-term power purchase agreement, the federal government is effectively using private-sector demand to de-risk public investment in legacy nuclear assets.

With Unit 1 of Three Mile Island set to return by 2028, the partnership between Microsoft and Constellation with government backing could shape a new model for powering the AI economy: clean, constant, and corporately driven. If successful, it may inspire similar collaborations across the tech and energy sectors as electricity demand climbs in the digital age.

Source: TechCrunch

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A Shift from Analysis to Advocacy

Atomico’s State of European Tech 2025 report, long regarded as a benchmark for gauging the health of Europe’s startup landscape, has evolved from data-driven reflection into a politically active document. Led by partner and intelligence head Tom Wehmeier, this year’s edition includes not only funding statistics and talent insights but also explicit lobbying efforts. Four central recommendations Fix the Friction, Fund the Future, Empower Talent, and Champion Risk form the foundation of Atomico’s public policy vision.

This transition reflects a broader trend: European startups are no longer content to adapt to regulatory structures they are increasingly seeking to shape them. As Europe races to remain globally competitive, particularly in AI and deep tech, Atomico and other ecosystem players are moving into the lobbying space once dominated by legacy industries and American tech giants.

Emulating Big Tech: From Letters to Legislation

European startups are now actively engaging with EU institutions, not just through policy reports but also through open letters, direct lobbying, and high-level conferences. Atomico's portfolio includes several of the continent’s most influential companies such as Klarna, DeepL, Pipedrive, and Stripe all firms with sufficient scale to warrant public affairs teams.

This year’s report is emblematic of that growing sophistication. For the first time, it features a quote from European Commission President Ursula von der Leyen, expressing her ambition that “the future of AI be made in Europe.” The inclusion signals increasing alignment between the startup sector and the highest levels of EU leadership.

Moreover, Atomico’s commentary on the proposed “28th regime” a unified pan-European corporate legal structure shows the depth of its policy engagement. The firm warns that the legal form of this initiative (directive vs regulation) could determine whether the project leads to meaningful reform or ends up lost in national interpretations, as has often been the case in European law.

Policy Friction: The Startup Sector’s Regulatory Battle

The push for the 28th regime is one example of where startup concerns intersect with deeper structural inefficiencies in the EU single market. Today, a startup expanding across Europe must navigate 27 different national legal systems. Advocacy groups like EU-INC and France Digitale argue this legal fragmentation stifles innovation, a sentiment echoed in Atomico’s report.

While these efforts are increasingly polished, the lobbying momentum also reveals a paradox: much of the general public remains disconnected from these high-level policy goals. The idea of “homegrown trillion-dollar companies” resonates in investor circles, but is not a daily concern for most Europeans. Bridging that gap may be crucial if the tech sector wants its lobbying to carry democratic legitimacy.

Tech’s Identity Crisis: Distrust and Reputation Risks

According to Alexandru Voica, corporate affairs lead at London-based AI unicorn Synthesia, a key reason for the shift toward lobbying is the European public’s wariness of Big Tech. In his words, “communications and policy are more important than 10 years ago because in Europe, there’s a deep distrust of the tech industry.” What was once a function of marketing has now become risk management.

This distrust, born of concerns over data privacy, market concentration, and job displacement, makes it essential for tech companies to engage not just policymakers, but society at large. The challenge is reputational: aligning lobbying goals with broader social interests without becoming entangled in partisan politics.

Indeed, the growing alignment between the tech ecosystem and Brussels carries political risk. If advocacy becomes too closely tied to particular political factions, public backlash could undermine the legitimacy of even well-intentioned proposals.

Europe’s Crossroads: Competing for Innovation Leadership

Atomico’s conclusion is direct: “Europe stands at a crossroads.” With strong U.S. and Chinese competition, and domestic debates around regulation, taxation, and capital access, the continent must decide whether to merely regulate technology or become a true leader in it. The rise of startup lobbying is part of this strategic inflection point. Whether it will lead to structural change or political entanglement depends on how well the sector navigates both power and public trust.

As Europe contemplates its economic future, the tech industry is making its voice heard not just in boardrooms and pitch decks, but in Brussels corridors and regulatory frameworks. Atomico’s report is no longer just a mirror; it’s becoming a megaphone.

Source: TechCrunch

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Stocks

Fidelity Defends AI Stocks Amid Growing Valuation Anxiety

Despite rising anxiety in global markets over a potential artificial intelligence (AI) stock bubble, Fidelity International maintains a bullish stance, calling current price corrections a natural phase in an ongoing structural uptrend. Joseph Zhang, a portfolio manager overseeing more than $10 billion at Fidelity, asserts that without a fundamental slowdown in capital expenditure or user demand, the AI rally will likely continue beyond recent profit-taking episodes.

According to Zhang, the current landscape is reminiscent not of a speculative bubble, but of an early-stage, transformative tech cycle. His team sees recent volatility particularly in semiconductor shares as a hedge-driven dip ahead of key earnings events, most notably from Nvidia.

Temporary Correction or Structural Peak?

Semiconductor equities, which have led much of the AI rally in 2025, have come under pressure in November. The U.S. semiconductor index dropped 9.4% this month, while Bloomberg’s index of Asian chipmakers fell over 7%, marking their worst monthly performances since March. This has triggered comparisons to the dot-com era, especially as valuations for AI giants like Nvidia have outpaced entire national stock markets.

However, Zhang views such declines as technical rather than structural. He attributes much of the downturn to increased hedging activity, especially put options bought ahead of Nvidia’s earnings release. If Nvidia delivers solid results, he anticipates those hedges will be unwound, potentially triggering a rebound.

The Fidelity view is that the AI investment ecosystem characterized by sustained hardware demand, high memory prices, and platform-wide capex remains intact. Zhang emphasized that unless there is a sudden drop in usage, profitability, or technological relevance, corrections should be seen as liquidity-driven and not indicative of a fundamental reversal.

Diverging Sentiment Among Asset Managers

Not all investors are as confident. At Pictet Asset Management, lead portfolio manager Mark Boulton warns of growing exuberance. While acknowledging AI's long-term significance, he believes markets may be ahead of themselves in pricing in expectations. Fellow Pictet manager Young Jae Lee echoed this sentiment, noting that while his team was once heavily overweight on Asian AI semiconductors with high upside potential, that conviction has faded in light of current valuations.

Still, both Fidelity and Allianz Global Investors caution against prematurely declaring an AI bubble. Hartwig Kos of Allianz noted that many investors do not yet fully grasp the breadth of AI’s potential and the investment required to build its infrastructure. As long as fundamental indicators like capex, data center utilization, and demand for compute power remain strong, the structural case for AI persists.

Valuation and Risk Metrics: Where Fundamentals Stand

While skeptics highlight stretched valuations Nvidia trades at 29 times forward earnings Zhang argues that growth expectations justify such multiples. Asian suppliers like Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics are trading at more conservative multiples, presenting potential relative value plays.

The rally has been disproportionately driven by the “Magnificent Seven” tech stocks, including Nvidia, Microsoft, and Apple, which have accounted for the majority of gains in the S&P 500 this year. Nvidia alone has reached a market capitalization exceeding the combined stock markets of Italy, Spain, the UAE, and the Netherlands, further intensifying scrutiny.

Yet, Zhang believes that as long as earnings growth continues to deliver and strategic capex supports platform development, short-term corrections present entry opportunities rather than exit signals. “It’s still in the early stage of the party,” he said, warning investors not to disengage too soon from what could be a generational technology shift.

The divergence between valuation concerns and bullish outlooks underscores the fragile equilibrium in AI investing. For Fidelity and others still committed to the long-term thesis, the current downturn is not a warning bell but a potential buying window assuming fundamentals continue to hold.

Source: Bloomberg

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Forex

Economic

A member of a key panel advising Japanese Prime Minister Sanae Takaichi said the central bank isn't likely to raise its benchmark rate before March, as authorities will need to confirm that large-scale extra spending is boosting domestic demand.

"The starting point is fiscal policy," Goushi Kataoka, a member of Takaichi's economic growth strategy panel, said in an interview with Bloomberg Tuesday. He estimated that a supplementary budget of around ¥20 trillion ($129 billion) will be necessary this fiscal year, far bigger than the ¥13.9 trillion package compiled a year ago by Takaichi's predecessor.

If the economic package — expected to be unveiled later this week — is implemented effectively, domestic demand could expand as early as the first quarter of next year, and "depending on the situation, conditions could be in place for a rate hike as soon as March," said Kataoka, who was a staunch supporter of fiscal and monetary stimulus during a previous stint as a member of the Bank of Japan's board.

Kataoka's view points to the risk of a delay in the timing of the BOJ's next rate increase even as most economists see a hike by January, especially given the recent weakening of the yen. At the same time, Kataoka's comments show there's a consensus that the BOJ's path toward higher rates should remain intact.

During a five-year BOJ board member term that ended in July 2022, Kataoka consistently called for expanding monetary easing, regularly dissenting from decisions to stand pat.

The BOJ's monetary policy "should proceed toward normalization in line with prices and real economic conditions," said Kataoka, who is also chief economist at PwC Consulting.

Kataoka pointed out that Japan's economy is "not necessarily in a favorable state," as real GDP contracted in the three months through September for the first time in six quarters. The core CPI excluding food and energy gauge remains below 2%, and he said from a logical standpoint "a rate hike by January is not highly likely."

Kataoka's view is consistent with the opinions of former BOJ Deputy Governor Masazumi Wakatabe, who also noted last week that Japan's economy isn't in good shape. Wakatabe was speaking after attending Takaichi's economic panel, and his remark appeared to reflect his opposition to an early rate hike.

While Takaichi has refrained from commenting directly on the pace of rate hikes, members of her advisory panels are highlighting the need for caution. That stance is at odds with the views of almost all BOJ watchers, who forecast a rate hike no later than January in a Bloomberg survey last month.

Takaichi held her first bilateral meeting with BOJ Governor Kazuo Ueda Tuesday. Ueda said that he explained the bank is in the gradual process of adjusting monetary easing on improved economic conditions, and Takaichi showed understanding of that stance.

The BOJ delivers its next policy decision on Dec. 19, and Kataoka said he doesn't expect Takaichi to exert any overt pressure on the central bank as prime minister. In September 2024, as a lawmaker, she said a rate hike would be "stupid."

"I don't think she will say interest rates shouldn't be raised," he said.