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Asian shares continue to fall, bond market turmoil stokes new anxiety
Asian stocks continued to fall for a third day on Wednesday, dragged down by increased tensions surrounding U.S. threats of acquiring Greenland in advance of President Donald Trump’s Davos address. However, a global bond sell-off appeared to have slowed for the moment. The fear of the "Sell America" trade - which emerged in the wake of last year's "Liberation Day tariff announcements" in April – gripped the markets overnight as Wall Street fell over 2% and the U.S. Dollar suffered its largest fall in more than a month. Investors fled to gold and silver which had both reached record highs. Mantas vanagas, senior economist at Westpac, said that the'sell America trade' was driving the major market movements overnight. Investors were looking to reduce their exposure to the U.S. as they viewed it as an unreliable and self-defeating partner. Trump has however redoubled his rhetoric on Greenland. He said that there is "no turning back" from his goal of controlling the island and refused to rule out taking control by force. Trump's threat to impose tariffs on Europe also reignited fears of a trade war. On Thursday, the European Union will convene a summit to discuss this issue. The long-standing U.S./EU alliance is clearly in danger. The World Economic Forum is in Davos, where Trump will deliver a speech Wednesday. MSCI's broadest Asia-Pacific index outside Japan dropped 0.3% in early trading. Japan's Nikkei fell 1.2% for the fifth consecutive day. Nasdaq and S&P futures both rose 0.2% overnight after Wall Street experienced its biggest drop in three months. The S&P500 fell by 2.06%, while the Nasdaq Composite dropped by 2.4%. The Euro STOXX50 futures and the DAX futures both fell by 0.4%. JAPAN'S BOND RULE PAUSES FOR NOW The global bond markets were still recovering from a brutal selling off, caught in a perfect hurricane of concerns over U.S. exposure and an increase in Japanese government bonds yields. Bond yields in Japan soared to new records due to fears of increased government spending by Prime Minister Sanae Takayichi. Investors tried to catch their breathe in the early trading. The 40-year Japanese Government Bond yields fell 6 basis points to 4.145% on Wednesday, after surging 26 basis points a day earlier and reaching a record high 4.215%. Other tenors remain thinly liquid. Treasury yields in the United States were also stable on Wednesday. The benchmark 10-year rate fell 1 bp, to 4.285%. It had jumped overnight by 7 bp to reach a five-month peak of 4.313% on the back of "Sell America". Danish pension fund AkademikerPension announced on Tuesday that it will sell its holdings of U.S. Treasuries worth about $100 million by the end this month. It blamed weak U.S. Government finances. The U.S. Dollar remained at 98.56 per dollar against major peers after dropping 0.5% over night - the largest daily drop since early December. The yen was stable at 158.19 dollars, but it lost out in a few crosses. The Swiss franc hit a record-high of 200.19 yen. Bank of Japan will meet on Friday. Though a rate increase is not expected, policymakers may tighten up the monetary system as early as April. The oil prices dropped as geopolitical tensions, and the expected increase in U.S. crude stocks outweighed a temporary stoppage of production at two large Kazakh fields. West Texas Intermediate crude prices fell by 1.31% in March to $59.57 per barrel. Silver prices also rose, but only by 0.4%, to $95.01, falling short of the record of $95.87 set on Tuesday.
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Can you price a global regime shift? McGeever
The latest trade war and foreign policy salvos from Donald Trump are upsetting the global markets. But the question is if these ructions escalate or fade, as they did in the past 12 months. It is more likely that the latter, but it is clear that investors struggle to price the fundamental shifts in geopolitical plates. The changes that have already occurred in 2026 will be truly astounding. The Trump?administration appears to have?removed Venezuela's leader and is now the Latin American nation's defacto ruler. The threat of an American response is still present after a violent crackdown in Iran on protests has resulted in the deaths of thousands. Trump is also trying to buy Greenland by any means from Denmark, another NATO ally. The U.S. - Europe alliance and the rules-based world order that has been built up since World War Two are in danger. It is also a minefield on the economic and financial front. Trump has made a number of interventionist decisions on everything from mortgage-backed securities to credit card rates, and he's also pressed U.S. oil executives into investing billions in Venezuela. We should not forget that his Justice Department continues to threaten to indict Federal Reserve Chairman Jerome Powell. This "Trumpian attack" on the U.S.-based rules-based order, to borrow Matt King's phrase, the founder of?Satori Insights, seemed at odds with relative calm in the markets. This calm is breaking apart. Stocks, bonds, and the dollar have been impacted by a sell-off triggered by Trump's escalating spat with many of America’s closest European allies. Gold, the safe-haven, has risen to $4,700 an ounce. It looks like the 'Sell America" trade is back. If last year's performance is any indication, the market jitters could turn out to be speedbump on the road to new highs instead of roadblocks. The fundamentals matter, right? Wall Street will not stay down long if we ignore the geopolitical drama. The consensus expectation for U.S. corporate profits and economic growth is high. The International Monetary Fund on Monday raised its 2026 U.S. growth estimate ?to 2.4% from 2.1% in October, due in part to ?the huge sums being plowed into artificial-intelligence data centers, chips and power generation. Early indications of the fourth quarter earnings are also encouraging. So far, 84.8% of the 33 S&P 500 companies that have announced earnings have surpassed expectations. If the LSEG consensus estimates for year-onyear earnings growth of 9,0% materializes, this should put upward pressure to equities. Remember that high levels of uncertainty aren't always bad for profits or growth. In some cases it can even be positive. Imagine the amount of money needed to fund the global rearmament or the race for energy independence and AI independence. No room for LIMBO The relative calm of the markets over the last year could be attributed to a virtuous circle - or, put another way, a false illusion. The steady flow of money from passive investment funds into the credit and equity market helps to keep volatility down and prices high. Investors will continue to dance as long as there is music playing. The confusing trends in the past year, including simultaneous rallies of both risk-on and risk-off assets, also show that it's very hard to accurately price a risk of this magnitude. What is the value that an investor places on the demise of NATO, the U.S. Europe alliance or the rise of a multi-polar world divided into three "spheres" of influence headed by the U.S. China and Russia? For investors, regime changes are difficult to navigate. You are either at war, or you're not at war. Matt King, Satori 'Insights, says that there is no limbo. The risk rally is consistent, but not necessarily driven. It's very strange. It's not hard to explain, but it has a certain vulnerability. It also applies to corporate profits. It's assumed that earnings in tech and other areas will stay at their current levels. Analysts' forecasts don't seem to capture threats to the cycle, such as excessive AI capacity due competition from China or regulation pressure from the EU. These risks are still present. Maybe Trump's move for Greenland is the straw that breaks the backs of investors, and current market anxiety will become a real correction. It's possible that you don't want to bet. The opinions expressed in this article are those of the columnist, who is also the author. Check out Open Interest, your new essential source for global commentary on finance. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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WTI oil price falls as Kazakh production risks subside
West Texas Intermediate crude prices fell on Tuesday as geopolitical tensions, and an expected increase in U.S. oil inventories overshadowed a temporary stoppage of production at two "large fields" in Kazakhstan. WTI for the month of March dropped 79 cents or 1.31% to $59.57 per barrel at 0008 GMT. The contract increased by 90 cents or 1.51% in the previous session. Brent crude for the month of March hasn't started trading yet on Wednesday, but the previous session saw the contract gain 98 cents or 1.53% to $64.92. Contracts rose after Kazakhstan, a?OPEC+ member, temporarily halted production at the Tengiz oilfield and Korolev oilfield, and on'strong China economic data. Three industry sources said that oil production could be stopped for 7-10 more days at the two Kazakh fields after they shut down on Sunday. Tony Sycamore, IG's market analyst, said that the oil production halts at Tengiz and Korolev - two of the largest oil fields in the world - are temporary. The broader market pressures due to geopolitics? and an expected increase in U.S. oil inventories?will instead continue, he added. Donald Trump, the U.S. president, said that he would "never go back" in his desire to control Greenland. Trump's earlier threat to impose new tariffs on certain European nations in the event of a failure to reach a deal with Greenland could lead to lowered economic growth. A preliminary poll on Tuesday showed that U.S. crude and gasoline stocks?were likely to have increased last week while distillate inventory levels probably fell. This was ahead of Thursday's Energy Information Administration report. (Reporting from Katya Golubkova, Tokyo; Editing done by Christian Schmollinger).
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Energy Fuels will buy Australian Strategic Materials for $300 million
Energy Fuels, a producer of uranium and critical minerals, will purchase rare earth producer Australian Strategic Materials. The two parties announced the deal in separate statements released on Wednesday. The deal would see shareholders of Australian Strategic Materials receive 0.053 shares of Energy Fuel for every ASM held. They also get a special dividend up to A$0.13 for each ASM, which represents a total implied value A$1.60. This is a 121% premium on ASM's closing price from January 20. If the transaction is completed, it would create an international mid-tier producer of rare earth elements outside China, with a presence also in South Korea, Australia, and the United States. Rare earth elements play a vital role in wind turbines. They are also used for smartphones, missiles, and electric vehicles. Western countries are scrambling to reduce their dependence on China, which has led to an increase in the price of rare 'earths. Australia is considering a 'price floor' and new international partnerships in order to build alternative supplies, support rare earth projects, and reduce dependence on China. Lynas Rare Earths, based in Australia, is currently the world's leading rare earths manufacturer outside of China. Reporting by Himanshi Ahand in Bengaluru. Melanie Burton contributed additional reporting from Melbourne. Alan Barona, Chris Reese and Chris Reese edited the story.
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UK announces $20 billion plan to reduce energy bills and heat homes
Britain announced a 20 billion pound plan on Tuesday to reduce energy bills by implementing home upgrades and other efficiency measures. Below are some details. The government has announced that solar panels will be standard in all new homes by early 2026. Solar panels, heat pumps, and batteries can be purchased with low or zero interest loans. According to the government, the move will 'triple the number of homes with solar panels on their roofs by 2030. The government will spend £5 billion to upgrade the technology of low-income homes. * Some families may receive full funding for the installation of solar 'panels' and batteries, which would cover an average cost of 9,000 and 12,000 pounds. * Financial breakdown: 2.1?billion?pounds?for consumer loans; 2.7?billion?pounds?for a boiler upgrading scheme; 1.1?billion?for heat networks. 2.7? Warm Homes Fund and 1.5?billion to other programmes and the devolved administrations
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Australia's Lynas Rare Earths reports a quarterly revenue increase on higher prices
Lynas Rare Earths, an Australian company, reported a 43% increase in revenue for the second quarter on Wednesday. Higher selling prices helped to offset a production shortfall due to power interruptions at their Western Australia processing plant. Western countries are scrambling to reduce their?dependence upon China, which has led to a rise in the price of rare earths. Australia is mulling over a new price floor, and new partnerships in order to support rare earth projects and create alternative supplies. The average price per kilogram of Lynas products was A$85.6 during the quarter. This is higher than A$49.2 a year earlier. The total output of rare earth oxides was 2,382 tons, a decrease from last year's 2,617 tonnes. Production of mixed rare-earth carbonates also decreased compared to the previous quarter due to power supply interruptions at the company's Kalgoorlie plant in Western Australia. The largest rare earths producer outside China reported a sales revenue of A$201.9 (US$135.98) million for the quarter that ended December 31, up from A$141.2 in 2012. ($1 = 1.4848 Australian dollars) (Reporting by Rajasik Mukherjee and Jasmeen Ara Shaikh in Bengaluru; Editing by Sahal Muhammed)
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Rio Tinto's fourth quarter iron ore shipment rises 7%
Rio Tinto announced a 7% increase in its fourth-quarter iron-ore shipments, Wednesday. This was aided by a record quarterly production from the?Pilbara operation and strong rail and ports outload performances. Iron ore prices rose in the third quarter, boosted by a resilient demand from China, its top consumer, where strong steel exports helped to sustain buyer interest. Iron ore was shipped by the world's biggest producer of steel-making material, the Pilbara operation of Rio Tinto, in the three months ending December 31, up from 85.7 Mt last year. This exceeded the?Visible Alpha estimate of 88.2Mt. Rio shipped 326.3 metric tons of iron ore in 2025 from its Pilbara operations, which is at the lower end its forecast range of 323-338 metric tons. Rio Tinto is negotiating a takeover with Glencore and has reported that its mined copper production grew by 5% in the first quarter. This was higher than Visible Alpha's consensus estimate of 214,400 tons. The potential partnership with Glencore would accelerate Rio's expansion of copper, as the demand for the metal is increasing due to artificial intelligence and the energy transition.
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Venezuelan oil revenues have brought in $300 million, the acting president of Venezuela says
Delcy Rodriguez, Venezuela's interim President, said that Caracas had received $300 million in 'oil sales', the first proceeds of Donald Trump's announced 50-million barrel oil supply agreement with Caracas. This follows the capture earlier this month of President Nicolas Maduro. Trump announced separately on Tuesday that his country has taken 50 million barrels of oil out of Venezuela and is selling some of it to the open market. However, shipping records show the volume hasn't yet been exported. Last week, it was reported that the Venezuelan government had notified four banks that $300 million in oil revenue would be deposited into an account in Qatar. This would allow them to sell dollars in order to Venezuelan firms that needed foreign currency to pay for material. Rodriguez told an audience in Caracas that the funds were derived from oil sales. "We have received $300 million of $500 million." These first funds will be used by the national banks, the central bank and the exchange market to consolidate the market, protect incomes and purchasing powers of our workers, and stabilize it. On Tuesday, Rodriguez's sister, Jorge Rodriguez, a lawmaker, stated that a reform to the main oil law of the country, which is expected to be debated this week for the first-time, will be based upon a partnership structure first introduced under President Nicolas Maduro, but he did not provide any details. Interim President Rodriguez told legislators?last week? that the government was in favor of changes to the 'hydrocarbons laws to encourage foreign investment. The law uses a model for joint ventures that is controlled by the state company PDVSA. However, in recent years, the country has introduced so-called "productive participation contracts" to create new partnerships. Jorge Rodriguez, a journalist, told journalists that these contracts were "a fundamental component to be expressed in the reform of the law". Reporting by
Shareholder rights could be weakened by the new Trump order that reins in proxy advisors
Corporate governance analysts and lawyers said that a new White House directive aimed at reining in proxy advisory firms is a major step in a Republican effort to weaken investors' role and give more power to CEOs. U.S.?President Donald Trump last week told the U.S. Securities and Exchange Commission and others agencies to increase oversight over proxy advisers Institutional?Shareholder?Services and?Glass, Lewis & Co, who help mutual fund companies and big institutional investors decide on how to vote in corporate elections.
They are able to influence their clients because they hold important positions in Fortune 500 companies around the world.
Trump's order said the proxy firms often use their power "to advance and prioritize radical politically-motivated agendas," including supporting environmental and social issues at the expense of shareholder returns. The directive is at the core of a debate which has divided U.S. shareholders and European investors: How much should climate change or diversity in the workforce factor into investment decisions?
More than Money
"This is more than just fiduciary duty." Sarah Wilson, CEO at British proxy adviser Minerva Analytics, said that this is a geopolitical "warfare" through the financial markets. She said that Minerva’s clients are primarily based in Europe and the United Kingdom. They want to maintain their Russell 3000 investments, but they worry about Trump’s?order, and similar actions taken by Republican-led state.
Wilson explained that "our clients are not rabid socialists, but they do want to get good returns in the long run with a risk-adjusted return."
Trump's order directs, among other things the SEC to "revise?or repeal all rules" relating to shareholder proposals. This has investor activists worried that one of their main tools to pressurize companies could be taken from them.
Shareholders are often seen as being more accountable when they support proxy measures that call for limits on CEO compensation or voting for board directors. The agencies could reduce shareholder power if they follow Trump's orders. This would make it more difficult for investors to influence companies via proxy campaigns. Sanford Lewis, an attorney representing shareholder activists, stated that the order is based on premise issues such as diversity or the environment do not relate to financial performance.
Lewis stated that the White House is "trying their view on investors".
Take Politics Away
U.S. trade groups have praised the order as it will remove politics from business decisions and protect profits. Charles Crain is the managing vice president of the National Association of Manufacturers and said that Trump's plans will protect against the firms' excessive influence. He also addressed issues such as what he called the "investment advisors' over-reliance" on these entities.
Michael Littenberg of Ropes and Gray said that the order was part of a larger debate about?how investors can be protected while markets are robust.
He said, "We're in the middle of what will likely be a once-in a generation governance recalibration." Unnamed White House officials said that the order was meant to increase investors' focus on maximising returns.
"The only thing this executive order interferes with is the monopolistic ?practices of foreign-owned proxy advisors that seek to advance radical politically-motivated agendas," the official said.
PUNCHING BAGS
In 2020, Deutsche Boerse will buy the majority of Institutional Shareholder Services, a top proxy advisor. Glass Lewis is owned and operated by Canadian private equity firm Peloton capital, headed by Stephen Smith. Trump and his appointees began to reduce shareholder influence as soon as they took office. They have given boards greater control over annual meeting ballots, and put new filing requirements for index fund managers BlackRock or Vanguard, if management exerts pressure. Top CEOs such as Elon Musk, Jamie Dimon and other top executives have targeted proxy advisers. They also received support from pension fund and Democratic leaders. The firms took steps to reduce environmental shareholder resolutions in response to a larger backlash against their support for ESG investing. These shifts didn't spare them from ongoing scrutiny, even before Trump’s order. They also faced criticism from Republican-led states.
Dan Crowley is a partner at the Washington law firm K&L Gates. He said that Trump's executive order has continued to reduce shareholder engagement.
The order "perpetuates a fiction that investors are either concerned about ESG on the one hand, or about pecuniary return on the other. In reality, most large investors are concerned about ESG because of their potential impact on long-term risk-adjusted financial returns."
(source: Reuters)