- Ford Says 7,000 U.K. Factory Jobs at Risk in No-Deal Brexit
Ford Motor Co. warned of dire consequences for U.K. factories employing more than 7,000 people if British politicians fail to agree on a plan to avert a no-deal split from the European Union.
While cautioning that it has yet to reach any decision, the U.S. auto giant said a hard Brexit would be “catastrophic” for the U.K. auto industry and its own production facilities in a statement Wednesday.
“We have long urged the U.K. government and parliament to work together to avoid the country leaving the EU on a no-deal-, hard Brexit-basis,” the Dearborn, Michigan-based carmaker said in the release. “We will take whatever action is necessary to preserve the competitiveness of our European business.”
Ford made the comments after Britain’s Times newspaper reported earlier that the manufacturer had used a telephone call with Prime Minister Theresa May to reveal that it had stepped up preparations to move production out of Britain. There’s currently a political impasse around the premier’s plan as she seeks to renegotiate its terms with the EU to win backing from a majority of lawmakers.
Ford employs 13,000 people in Britain, more than half of them at plants in Bridgend, Wales, and Dagenham, near London, which make engines for gasoline- and diesel-engine vehicles respectively.
The company said last month when announcing thousands of job cuts across Europe that it would merge its U.K. head office with a nearby technical center to cut costs, while warning that measures in the event of a no-deal Brexit would be significantly more dramatic.
BMW AG said separately Tuesday that it’s taking Brexit-related decisions “as late as operationally possible” as the clock counts down to the March 29 split without a negotiated settlement in sight. Auto-industry investment in the U.K. dropped 46 percent last year to the lowest since the global financial crisis as other brands with British plants put key decisions on hold.
While carmakers are stockpiling parts to safeguard U.K. output should supply chains be disrupted after a no-deal break, many have also brought forward planned maintenance stops to April to help eke out components at such a critical time. The German company will idle its Oxford Mini plant from April 1.
Jaguar Land Rover, Britain’s biggest carmaker, said last month it would scrap 4,500 posts in response to a sales slowdown blamed on Brexit, as well as a drop in China sales and slumping diesel demand. PSA Group’s Vauxhall Ellesmere Port site is in doubt as it mulls plans for the next Astra.
In the biggest blow to date, Nissan Motor Co. this month reneged on plans to built the X-Trail sport utility vehicle at the U.K.’s largest car plant in Sunderland, northeast England.
Gold Prices Rise as Soft Dollar Supports Safe-haven Appeal
Gold prices firmed on Monday, propped up by a subdued dollar and slight retreat in the U.S. Treasury yields, with investors gearing up for a week of speeches from U.S. Federal Reserve policymakers for cues on the central bank’s rate hike path.
Spot gold was up 0.5% at $1,759.06 per ounce, as of 0400 GMT, while U.S. gold futures were up 0.4% at $1,759.00.
While the dollar index softened, the benchmark 10-year Treasury yields eased after hitting their highest since early-July. A weaker dollar offered support to gold prices, making bullion cheaper for holders of other currencies.
“Gold is still looking slightly precarious where it is right now, and it’s probably bouncing off key technical level around $1,750,” IG Market analyst Kyle Rodda said.
“Gold remains an yield story and that yield story is very much tied back to the tapering story.”
A slew of Fed officials are due to speak this week including Chairman Jerome Powell, who will testify this week before Congress on the central bank’s policy response to the pandemic.
“There’ll be a lot of questions being put to Fed speakers about what the dot plots implied last week and weather there is higher risk of heightened inflation going forward and that rate hikes could be coming in the first half of 2022,” Rodda added.
A pair of Federal Reserve policymakers said on Friday they felt the U.S. economy is already in good enough shape for the central bank to begin to withdraw support for the economy.
Gold is often considered a hedge against higher inflation, but a Fed rate hike would increase the opportunity cost of holding gold, which pays no interest.
Investors also kept a close watch on developments in debt-laden property giant China Evergrande saga as the firm missed a payment on offshore bonds last week, with further payment due this week.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased 0.1% to 993.52 tonnes on Friday from 992.65 tonnes in the prior session.
Silver rose 0.9% to $22.61 per ounce.
Platinum climbed 1.3% to $994.91, while palladium gained 0.7% to $1,985.32.
Brent Crude Oil Near $80 Per Barrel Amid Supply Constraints
Oil prices rose for a fifth straight day on Monday with Brent heading for $80 amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions.
Brent crude was up $1.14 or 1.5% at $79.23 a barrel by 0208 GMT, having risen a third consecutive week through Friday. U.S. Oil added $1.11 or 1.5% to $75.09, its highest since July, after rising for a fifth straight week last week.
“Supply tightness continues to draw on inventories across all regions,” ANZ Research said in a note.
Rising gas prices as also helping drive oil higher as the liquid becomes relatively cheaper for power generation, ANZ analysts said in the note.
Caught short by the demand rebound, members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, have had difficulty raising output as under-investment or maintenance delays persist from the pandemic.
China’s first public sale of state oil reserves has barely acted to cap gains as PetroChina and Hengli Petrochemical bought four cargoes totalling about 4.43 million barrels.
India’s oil imports hit a three-month peak in August, rebounding from nearly one-year lows reached in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand.
Oil Holds Near Highest Since 2018 With Global Markets Tightening
Oil held steady near the highest close since 2018, with the global energy crunch set to increase demand for crude as stockpiles fall from the U.S. to China.
Futures in London headed for a third weekly gain. Global onshore crude stocks sank by almost 21 million barrels last week, led by China, according to data analytics firm Kayrros, while U.S. inventories are near a three-year low. The surge in natural gas prices is expected to force some consumers to switch to oil, tightening the market further ahead of the northern hemisphere winter.
China on Friday sold oil to Hengli Petrochemical Co. and a unit of PetroChina Co. in the first auction of crude from its strategic reserves said traders with the knowledge of the matter. Grades sold included Oman, Upper Zakum and Forties.
Oil has rallied recently after a period of Covid-induced demand uncertainty, with some of the world’s largest traders and banks predicting prices may climb further amid the energy crisis. Global crude consumption could rise by an additional 370,000 barrels a day if natural gas costs stay high, according to the Organization of Petroleum Exporting Countries.
“Underpinning the latest bout of price strength is a tightening supply backdrop,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.
Various underlying oil market gauges are also pointing to a strengthening market. The key spread between Brent futures for December and a year later is near $7, the strongest since 2019. That’s a sign traders are positive about the market outlook.
At the same time, the premium options traders are paying for bearish put options is the smallest since January 2020, another indication that traders are less concerned about a pullback in prices.
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