Key events
Gold hits fresh record high, silver also rises
Gold has continued to rise and hit a fresh record high earlier today.
Spot gold touched $3,659.10 an ounce and is now trading at $3,654 an ounce, up 0.5% on the day.
Gold prices have gained almost 39% so far this year, after rising by 27% in 2024, boosted by a weak dollar, central banks adding to their gold reserves, interest rate cuts and heightened global uncertainty. Gold is seen as a safe haven in times of turmoil.
The price of silver has also risen, as mounting expectations for interest rate cuts from the US Federal Reserve underpinned demand for precious metals. Spot silver edged 0.1% higher to $41.35 an ounce, near its highest level since 2011.
Oil prices are also up, with Brent crude, the global benchmark, trading nearly 1% higher at $66.61 a barrel. The Opec oil cartel and allies including Russia announced over the weekend that it would lift output at a slower pace than in previous.
Another factor underpinning oil prices is the prospect of fresh sanctions on Russia, a a major oil exporter. Donald Trump has threatened new sanctions on Russia after Moscow’s heaviest strikes on Ukraine since its invasion in February 2022.
Here’s our full story on Anglo American’s ‘merger of equals’ with Canada’s Teck Resources.
It comes after Anglo fended off a series of takeover attempts by its larger rival BHP last year, pushing it to radically restructure its business.
Anglo has sought to streamline its focus on iron ore and copper. This year it spun off its platinum mining business, and it has been exploring the potential sale of its renowned diamond business De Beers.
Anglo owns the Collahuasi and Los Bronces copper mines in Chile while Teck owns the Quebrada Blanca copper mine in the Andes, 15 km west of Collahuasi.
Copper is demand around the world, as electric vehicles require a substantial amount of copper in batteries, electric motors, wiring and charging infrastructure. The metal is also used in artificial intelligence data centres.
A recent BloombergNEF report predicted that copper demand from AI-powered facilities will average about 400,000 tonnes a year over the next decade, peaking at 572,000 tonnes in 2028.
France’s industrial production falls in July
Russ Mould, investment director at AJ Bell, said:
The CAC 40 jumped 0.6% despite political chaos in France. There were broad-based gains, with energy, consumer cyclical, tech and healthcare leading the way. Investors are forward-looking and they’re focused on a new prime minister bringing change to the country.
The French stock market also shrugged off a decline in industry output. Manufacturing output fell by 1.7% in July after June’s 3.5% increase, while wider industrial production fell by 1.1% following June’s 3.7% gain, according to official data from France’s statistics office INSEE.
June’s sharp rise was driven by a surge in aerospace and aviation manufacturing.
“Still, the broader picture is more reassuring: production levels across all industrial sectors remain above those seen in May, said Charlotte de Montpellier, senior economist at ING.
The decline in industrial production in July masks a fairly solid underlying trend at the start of the third quarter. However, against a backdrop of weak consumption, growing political uncertainty and pressure on public finances, the economic outlook for France remains fragile.
These figures suggest a decent start to the third quarter, but the underlying economic momentum is weak. Household consumption of goods dropped sharply in July, and business sentiment remains subdued. Political uncertainty is adding to the gloom.
Investment, hiring and consumption decisions could be delayed, further slowing economic activity. Rising market interest rates are pushing up financing costs, impacting some sectors such as real estate and construction. After a mildly positive third quarter, stagnation looks increasingly probable in the final months of the year.
Annual GDP growth is expected to slow to 0.6% in 2025, down from 1.1% in 2024. That leaves the starting point for 2026 on shaky ground, with growth likely to remain below potential. Political instability is likely to continue to weigh on France’s economic outlook in the next quarters, and growth is expected to remain below the European average. This persistent weakness will continue to weigh on public finances.
French stock market rises despite political crisis, bond yields creep higher
In the markets, the FTSE 100 index has edged 0.2% higher while Germany’s Dax gained 0.15% and Italy’s FTSE MiB rose by 0.5%.
France’s CAC climbed by 0.7%, despite political turmoil in the country. French president Emmanuel Macron is seeking his fifth prime minister in less than two years, after centre-right PM François Bayrou was ousted in a confidence vote on Monday, as expected. This toppled his minority government.
Bayrou had called the vote himself as a last-ditch gamble for support, saying he needed backing from parliament for austerity measures to reduce the public debt.
The yield, or interest rate, on French government bonds is creeping higher, amid concerns over France’s ability to get to grips with its high debt.
Asian stock markets were mixed, with Japan’s Nikkei losing 0.4% and Hong Kong’s Hang Seng up 1.1%.
Japan’s prime minister Shigeru Ishiba resigned over the weekend, and Sanae Takaichi, a veteran of Japan’s Liberal Democratic Party and a fiscal dove, has decided to run in the party’s leadership race, the news agency Kydo reported.
The dollar has sunk to a seven-week low against other major currencies, with markets betting on an interest rate cut from the US Federal Reserve next week.
Hargreaves Lansdown analyst Britzman said:
A quiet Monday masks a big week ahead for US markets, with the Nasdaq hitting an all-time high as tech and retail led a modest rebound. The S&P 500 added 0.5%, while the Russell 2000 lagged after its recent run. Treasury yields continued their descent, with the 10-year near 4%, its lowest in five months, and the 2-year hovering around 3.5%, levels last seen in 2022.
Markets are fully priced for a 25bps cut [from the Fed] this month, and expect more to come. With PPI, CPI [inflation], and a key labour revision on deck, plus long-term inflation expectations holding steady, the Fed has room to manoeuvre. But the data will dictate how far and fast easing goes.
Brent crude oil climbed above $66 a barrel this morning, still buoyed by news that OPEC+ opted for a modest 137,000 bpd output hike, far smaller than recent increases. Geopolitical risk added support, with Trump threatening tougher sanctions on Russia after its heaviest strikes on Ukraine since the war began. Gains were capped, however, as Saudi Arabia cut prices for Asian buyers, underscoring demand concerns.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said:
Anglo American’s merger with Teck Resources is its latest strategic pivot that cements copper at the heart of its portfolio. With over 70% copper exposure and a top-five global position, the combined group is positioned to ride the structural demand story tied to electrification and energy transition.
The $800m in annual cost synergies and $1.4bn EBITDA uplift from Chilean asset integration are compelling. But the real prize is growth optionality, leveraging a pipeline of brownfield and greenfield projects across the Americas. For Anglo investors, the $4.5bn special dividend sweetens the near-term picture, while the long-term upside hinges on execution and a green light from the regulator. Back-of-the-hand maths suggests Teck holders are getting a healthy premium from the deal, and shares of the Canadian miner have soared in after-hours trading.
Teck shares jumped by nearly 24% in after-hours trading as speculation swirled that the companies were close to a deal after a Bloomberg News article.
The Anglo American share price has jumped by 5.2% in early trading in London, making it the biggest riser on the FTSE 100 index.
This gives the mining company a market value of £28.4bn.
Other miners such as Glencore and Antofagasta are also among the main risers, up by more than 2%.
Mélanie Joly, Canada’s industry minister, said on X:
Introduction: Anglo American agrees mining mega merger; Londoners face commuting struggles as tube strike enters second day
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The London-listed miner Anglo American is to merge with Canada’s Teck Resources, in a deal that will create a $53bn (£39bn) giant but raises fears of job cuts.
It is the biggest mining deal in more than a decade. The FTSE 100 company said it had agreed a merger deal to create a “global critical minerals champion” and one of the world’s biggest copper producers. The combined market value of both companies is more than $53bn.
Global demand for copper is expected to keep rising, driven by the electric vehicle boom and AI-powered data centres.
Billed as a “merger of equals”, the new mining group, called Anglo Teck, will be headquartered in Vancouver, Canada, and have corporate offices in London and Johannesburg. It will have its main listing on the London Stock Exchange, with secondary listings in Toronto, South Africa and New York.
Anglo shareholders will own 62.4% of the combined company and Teck the remaining 37.6%. The deal is expected to lead to annual pre-tax savings of $800m by the end of the fourth year.
Around $60m of savings will come from “de-duplication and rationalisation of board, executive leadership and other costs associated with a listed company” and $150m from removing other overlapping functions, raising the prospect of job cuts. There won’t be any net reduction in employees in Canada, the companies said.
Duncan Wanblad, the Anglo chief executive, who will move to Canada along with the rest of the leadership team, said:
We are all committed to preserving and building on the proud heritage of both companies, both in Canada, as Anglo Teck’s natural headquarters, and in South Africa where our commitment to investment and national priorities endure.
There’s more misery for London commuters today as tube strikes enter a second day, and unlike yesterday, the Docklands Light Railway isn’t running today.
Industrial action by the RMT union has brought almost the entire tube network to a standstill, and buses and the Elizabeth line were taking the strain yesterday.
More congestion is expected today as more people still typically work from home on Mondays and Fridays.
A union organiser told the BBC yesterday that said there could be more industrial action after this week, but they hope to be in ‘meaningful discussions’ with Transport for London by the end of this week. Jared Wood said:
We have a mandate that lasts for six months under industrial relations law and our members have told us they’re ready to take more action.
But that’s not what we want to be doing. At the end of this week we hope to be in meaningful discussions where the company says, ‘alright let’s come up with a way of resolving this’.
The union’s demands include better pay and access to a travel card which gives holders ticket deals at Legoland, Thorpe Park and Chessington World of Adventures, as well as guided tours of Buckingham Palace, according to the Daily Telegraph. The rail staff leisure card gives 75% off all mainline train tickets outside London.
TfL has made a pay offer of 3.4%, which it urged the union to put to its members in a fresh ballot. It has said it cannot meet demands to cut hours below the current 35 a week.
Bike rental surged yesterday as Londoners took to two wheels. TfL’s cycle hire scheme had more than 20,000 hires by 3pm, double the previous Monday’s rate. The e-bike rental company Lime said it had 58% more users on Monday morning, while rival Forest said it had doubled its rush-hour usage.
The Agenda
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All day: TUC Congress in Brighton
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9.15am BST: Treasury committee hearing on motor finance with FCA CEO Nikhil Rathi and chairman Ashley Adler
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10am BST: EFRA hearing with water minister Emma Hardy
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10am BST: UK Treasury gilt 2043 auction
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10.30am BST: Germany 10-year Bund auction
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3pm BST: US Non-farm Payrolls annual revision
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4.15pm BST: Bank of England deputy governor Sarah Breeden speech
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