Latest News
-
Seattle shooting leaves two dead and five injured, according reports
Local news reports said that at least two people were killed and five others, including an?2-year old child, 'were injured' in a shooting on Sunday, which took place during a food festival in downtown Seattle. The police said that multiple people were shot in the United States. On Sunday evening, the downtown area of the city was a scene of violence. Seattle police posted on social media X that "Please avoid the Area" in reference to the?Seattle Center where the Bite of Seattle festival was taking place. Police are investigating an incident. Multiple shooting victims. Seattle Center shot at by gunfire. Seattle Fire Department, Seattle Times and KOMO local TV reported that two people had been killed and five others?injured. The Seattle Times reported that witnesses heard several shots around 6 p.m. (0100 GMT).
-
Bankers claim that India's UltraTech Cement is planning to raise its largest rupee debt financing.
Two bankers familiar with the matter said on Monday that India's UltraTech Cement was in discussions?with merchant banks and arrangers about raising?its largest rupee bond funding. It is looking to tap the debt markets before the central bank makes its policy decision next Thursday. Sources who requested anonymity because the talks were still private said that the country's biggest cement producer by production capacity planned to raise 50 billion rupees (517.80 million dollars) in bonds with maturities of two-and a half years, three and a half years, and five years. The target is?15 billion each for the two shorter tranches, with annual coupons of 7.22% and 7.23% respectively, as well as 20 billion rupees on the five-year tranche, at 7.25%. Bankers stated that UltraTech wanted to close the deal before the Reserve Bank of India made its monetary policy announcement on August 5, The company didn't respond to an email asking for a comment after regular business hours. Bankers said that the bonds were rated AAA by Crisil, and they may be in demand from mutual fund managers looking for high-quality credits. UltraTech will raise 10 billion rupees in March 2025 through bonds with a coupon of 7.34 percent per year. The country has outstanding bonds worth 35 billion rupees, of which 5 billion rupees are due in the next month. Cement maker reported nearly 17% increase in first-quarter profits earlier this month. It used its'scale and market position' to absorb higher fuel costs related to the Middle East Conflict better than smaller competitors.
-
As oil prices fall, the Australian and New Zealand dollar rates are rising.
The Australian and New Zealand dollar strengthened on Monday, as hopes for a diplomatic resolution to the Middle East conflict sent oil price?lower. This eased inflation concerns and helped boost global bond markets. The Aussie gained 0.2%, to $0.7001, following a 0.3% gain on Friday. It is little changed from last week. The Aussie has moved away from its three-month-low of $0.6867. Resistance is seen at the one month peak of $0.7026. New Zealand's dollar rose 0.2%, to $0.5798, after finishing last week down by 1%. This was primarily due to losses against the Australian dollar. The 200-day moving median of $0.5822 is seen as a resistance. The Aussie rose 0.1% to NZ$1.2068 against the Kiwi after gaining 1% in one week. The gains were supported by a stronger-than-expected ?jobs report that led markets to almost fully price in a fourth interest-rate increase from the Reserve Bank of Australia this year. Investors will be focusing on the quarterly inflation data due Wednesday. Economists expect that the trimmed measure of core inflation will rise by 0.9% in the second quarter and bring the annual rate up to 3.7%. This would still be above the RBA target range of 2%-3%, but lower than the central bank's expected 3.8%. Paul Bloxham is the chief economist of HSBC. He said that if core inflation does not surprise in a significant way this week, then RBA will be able hold steady. "However inflation is still high and the job market is likely to still be considered 'a bit tight' despite loosening. The board may still decide that tightening of the monetary policy is necessary. The markets have lowered the likelihood of a RBA rate increase next month from 40% to 30%, while a November hike remains "around 80%" priced in. RBA Governor Michele Bullock will speak on Tuesday, and she could adopt a hawkish tone in light of the recent 'escalation' of the Gulf Conflict. Australian government bonds recovered from heavy losses last weekend. After a surge of 23 basis points, the yield on three-year bonds fell by 9 basis points, to 4.635%. The yield on 10-year bonds dropped by 7 basis points, to 5.015%. New Zealand's key two-year swap rate fell 6 bps, to 3.7219% after a 20 bps jump last week. Markets now expect 3.0% in December and 3.5% at the beginning of next year.
-
CXMT chipsets soar 470% in Shanghai debut to lead China's valuation
?Shares in CXMT Corp soared 470% at?their Shanghai debut?on Monday, in Asia's largest IPO of the year. This catapulted the chipmaker to China's top stock market by valuation despite a selloff of global tech stocks. Stocks began trading at 49.50 Yuan, compared to the 8.66 Yuan sale price per share. CXMT's market cap increased sharply in the first minutes, from $85.5 million during the IPO to 3.3 trillion yuan (487.31 billion). The shares briefly fell to 38.11 Yuan before quickly recovering and were trading at 49.51 Yuan by 0236 GMT. CXMT's explosive debut has made it the most valuable listed company in China. It now surpasses the previous market leader,?Industrial and Commercial Bank of China. CXMT's initial rally easily?surpassed the more than doubling of China?Resources New Energy following its $3.6 billion IPO earlier this month in China. Investors will be able to gauge how much money they are willing pay for an iconic Chinese chip company, while local markets continue to navigate the volatility that has followed a selloff triggered by AI, and as money is shifted between high-growth tech names and safe sectors. CXMT (formerly ChangXin Memory Technologies) raised 57.92 bn yuan (8.6 bn dollars). The proceeds could reach 66.61 bn yuan, if the over-allotment feature is used in full. CXMT's IPO price was 579 billion yuan, or $85.5 billion, before?the exercise of the over-allotment options. This made it one China's biggest listed semiconductor companies. CXMT’s expanded share capital is largely locked up, so only 6.73% was available for trading at the time of listing. The initial float of a small amount could lead to a large number of price fluctuations and high turnover. HSBC Qianhai Securities stated in a report last week that 'the offering could drain the liquidity from the broader Chinese market both before and during its debut, but past technology listings have suggested a recovery could occur the following trading day.
-
Oil slips and shares, bonds, and bonds gain a cautious profit
The share markets responded with a cautious response Monday, as the pause in fighting around the Gulf brought oil prices down. This lowered inflation risks while boosting bonds in anticipation of a busy week filled with central bank meetings and earnings reports. Iran announced on Sunday that it would cease its "own" attacks as long as the United States followed suit. The U.S. army was reportedly worried about the dwindling supply of ammunition. Yemen's Houthis, who are aligned with Iran, have still continued to attack Saudi oil installations on the Red Sea Coast, a threat to another vital waterway for the global oil trade. Sally Auld is the group chief economist of NAB. She said, "It appears that developments in the Middle East moved in a more positive direction this weekend. This lends some credence to the idea that oil prices above $100 per barrel seem to encourage de-escalation from both sides." Brent crude fell 5.2% to $91.73 per barrel during the lull of fighting over the Strait of Hormuz, while U.S. Crude dropped 5.4% at $84.45. Oil's decline has eased inflation concerns and caused markets to reduce the likelihood of Federal Reserve rate increases. Markets indicate that the central bank will meet on Wednesday, and a rate hike is around a 1 in 3 chance. However, most analysts do not believe Chair Kevin 'Warsh will be supportive of such a move. Goldman Sachs analysts noted that investors see the outcome of July's meeting as "unusual uncertain" because of recent divisions within the Fed, Warsh’s position is unclear and some of re-escalation of tensions with the?Iran took place during the blackout. "There is likely to be at least one dissident in favor of a hike this week, but the majority of voters are unlikely to do so after the June inflation figures were softer." Bank of England meets on Thursday, while Bank of Japan meets on Friday. Both are expected to remain cautious and hold their ground despite the softer inflation data for June. Earnings from TECH BULLS S&P futures rose 0.7% and Nasdaq futures 1.1% as equities found comfort in the decline in oil prices and yields. In Europe, EUROSTOXX Futures rose by 0.4% while DAX Futures rose by 0.6%, and FTSE Futures were flat. South Korea's index of chips-heavy stocks, the Chip Index, fell 1.1%. The broadest MSCI index of Asia-Pacific stocks outside Japan remained unchanged. Chinese blue chips rose 0.4% after?chipmaker CXMT Corp surged by 470% on its Shanghai trading debut, having raised $8.6 billion through Asia's largest initial public offering. According to data from?LSEG, IBES, about a third of S&P500 companies will report earnings this week. Earnings are expected to increase by 26.5% compared to last year. Even blockbuster results might not be enough to satisfy investors, given the high expectations and the mounting concern over AI capex. A WSJ article reported that Nvidia had been in talks with OpenAI to provide a $250 billion backstop as part of a project for a data centre. Tech darlings Microsoft, Meta Platforms, Amazon, iApple, and Qualcomm are among the companies reporting. Also included in this list are a number of industrial, healthcare, and defence stocks. The U.S. Q2 GDP is a highlight, with growth accelerating to 1.5% on an annualised basis after a softer start to the year. The 'daily' also includes the PCE price index for June, personal income, consumption, weekly unemployment claims, Q2 Employment Cost Index, and July Michigan Consumer Sentiment. The Euro Zone's schedule includes the flash Q2 GDP (Gross Domestic Product), July economic sentiment, consumer confidence and flash inflation. The drop in oil prices helped the 10-year Treasury yields to fall by 4 basis points, from 4.63% to 4.63%. This also pushed the dollar down. The euro rose 0.3% to $1.1408 while the dollar fell 0.2% against the yen, to 163.54. The Singapore dollar grew after the central bank of the country unexpectedly tightened its monetary policy, allowing the currency to appreciate at a faster rate. The drop in yields has helped gold that does not pay interest to climb by 1.3%, reaching $4,103 per ounce.
-
Iron ore slumps as China's demand falters, despite stimulus hopes
Iron ore prices fell on Monday as a result of a seasonally 'faltering' demand, and the thinning margins in steel production in China, the top steel consumer. This tempered hopes that Beijing would announce stimulus measures later this week to boost China's economy. Iron ore, the most traded contract at China's Dalian Commodity Exchange(DCE), recovered earlier losses and was trading up 0.07% to 743.5 Yuan ($109.89). As of 0251 GMT, the benchmark August iron ore traded on Singapore Exchange was down?0.61% at $97.55 per ton. After steel demand seasonally declined and margins shrank, several Chinese steelmakers began equipment maintenance. Data from Mysteel revealed that the average daily hot metal output, which is a measure of iron ore consumption, fell for the third consecutive week by 0.6% compared to the previous week. This was the lowest level since April 3. Analysts at Everbright Futures stated in a report that the market is focusing on the Politburo meeting scheduled for end-July, when policymakers are expected to strengthen countercyclical policies and introduce incremental measures to stabilise economic development. Coking coal and coke both increased in price, but other steelmaking?ingredients remained mixed. The benchmarks for steel on the Shanghai Futures Exchange mostly moved up. Rebar gained?0.33%; hot-rolled coils advanced?0.43%; wire rod gained 0.21% while stainless steel fell 0.24%.
-
Gold prices rise on US-Iran truce; Fed decision is imminent
Gold prices rose by a little more than 1%?Monday, as oil prices fell due to a pause of Middle?East hostilities, easing inflation fears. Investors awaited U.S. Federal Reserve policy announcement. By 0200 GMT, spot gold had risen 1.4% to $4110.56 an ounce. U.S. Gold Futures rose 1% to $41,112.10. Gold is clearly a beneficiary of today's dual price action of oil and the U.S. Dollar, which both dropped due to de-escalation expectations between the U.S. Tim Waterer said that lower oil prices are easing inflation concerns. The U.S. Dollar Index was down by 0.3%. This made greenback-priced gold more affordable to other currency holders. Iran will cease its attacks as long the United States also does,?a senior Iranian official said on Sunday. This comes at a time when the United States has paused its bombing campaign, after Donald Trump's advisors informed him that they had run out of targets. They also expressed concern about the depletion of the U.S. nuclear arsenal. The oil price was down by more than 4% on the day. Oil prices have risen since the beginning of this conflict, causing inflation fears and central bank rate increases. Gold, despite being traditionally seen as a hedge against inflation, has been impacted by this. Higher rates increase the opportunity costs of holding the metal. "Longer-term, I remain constructively optimistic about gold. Waterer said that the fate of gold is closely tied to where oil prices are headed. The path upward is likely to be volatile and heavily influenced geopolitical headlines until a more durable peaceful takes hold. Investors and economists are also focusing on the Federal Reserve meeting, which is taking place this week. They expect rates to remain unchanged. According to the CME FedWatch Tool, traders are pricing in an 80% chance that rates will rise in September. (Reporting by Ashitha Shivaprasad and Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu and Ronojoy Mazumdar) (Reporting and editing by Subhranshu Sahu, Ronojoy Mazumdar and Pablo Sinha from Bengaluru)
-
Russell: Crude oil futures prices are a measure of market adaptability and not a sign of Iran peace.
Since the beginning of the Iran War, there has been a debate about whether crude oil futures accurately reflect the stress in the physical markets of oil and refined products or if traders are blindly optimistic peace is on the horizon. The Iran War between the United States of America and?Iran is continuing on its volatile and unpredictable course, with renewed hope that an 'interim pause' in the strikes could be possible. This small glimmer of optimism was sufficient to drive Brent futures down in the early Asian trading on Monday. Brent futures fell by nearly 5%, to $92.06. The Strait of Hormuz is still at best contested. Shipping volumes have dropped through the narrow waterway after surging in mid-June during a three-week ceasefire between the Trump Administration and Tehran. After the collapse of the deal and the renewed U.S. attacks on Iran, Tehran responded with a series of strikes against U.S. bases and vessels trying cross the Strait of Hormuz. Tehran appears to have also successfully activated the Houthi allies to target Saudi oil tankers that are trying to cross the Bab el-Mandeb Strait. This eliminates a route that Saudi oil could have taken to reach refineries on the Asian continent via the Red Sea port Yanbu. Alternative routes include a much longer and more complex route via the Suez Canal. This involves partial discharging of cargoes, and the use of the SUMED Pipeline due to?draft restriction in the canal. Exports of physical crude from the Middle East are still constrained. Only limited volumes pass through the Bab el-Mandeb and Hormuz straits. A lasting peace agreement also seems distant? with the United States of America and Iran being far apart in key areas and having a deep mistrust for one another. UKRAINE LESSON This situation seems to call for a much stronger reaction than what has been seen in the oil futures market. Brent?dropped to $70.14 per barrel during the short ceasefire on July 2. It then rallied by 45%, reaching a high price of $102.00 on 23 July before falling back. This may seem like a big rally, but it is still well below the $139.13 peak Brent achieved in the weeks following the Russian invasion of Ukraine in February 2022. At the time, this event raised concerns about the disruption of Russia's exports, as they were the second largest crude shipper. These fears were not justified, as the crude markets quickly adapted. They rerouted Russian oil towards buyers in China and India, while Europe increased its imports of American oil?and African oil. The Iran conflict differs in that there is a real disruption of crude supply. And the longer the situation persists, the more the buffers created by inventory drawdowns as well as China's reduction of imports are strained. The argument is that crude futures are not high enough to reflect the risk of a prolonged disruption in Middle East crude supply, which appears to be more likely. It's likely that the crude futures market is pricing adaptability, rather than pricing the worst-case scenario or even the best-case scenario of lasting peace. The market has effectively bet that it will handle disruptions through rerouting of flows and increasing alternative sources. The Suez Canal is a more expensive and time-consuming way to transport Saudi Arabian Red Sea crude oil from Yanbu into Asia, but if the market demands it, then this is what will be done. Other smaller workarounds, like Iraq sending fuel oil to Turkey are also emerging. These, when combined, help reduce the loss of crude and products worth around 10 million barrels a day (bpd). It is possible that the market has bet that traders of crude oil and refined products will be able mitigate the worst effects of the Iran Crisis. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
U.S. makers emerge from depression, set to boost fuel usage: Kemp
U.S. manufacturers have finally taken out of the long, shallow depression that started in the middle of 2022, which will support petroleum intake specifically for diesel and other middle distillates in the months ahead.
The Institute for Supply Management's purchasing supervisors index for the production sector reached 50.3 in March ( 34th percentile for all months because 1980) up from 47.8 (18th. percentile) in February.
For the first time in 17 months, the index increased above the. 50-point limit dividing expanding activity from a. contraction, putting an end to an abnormally prolonged however. shallow cyclical downturn.
The production sub-index rose to 54.6 (45th percentile) up. from 48.4 (15th percentile) in February and was at its highest. level given that May 2022.
New orders were also positive at 51.4 (27th percentile). signalling the growth need to have momentum in the near term.
The manufacturing sector appears to have actually passed the worst of. the slump in the middle of last year and shows early indications. of recovering.
Chartbook: U.S. manufacturing and fuel usage
In contrast, the much-larger services sector, which has also. been far more resilient, showed an unanticipated deceleration,. after a strong growth previously in the year.
The purchasing index for the services sector, including genuine. estate, building and construction, mining and farming, slipped to 51.4 (14th. percentile) in March from 52.6 (20th percentile) in February and. 53.4 (27th percentile) in January.
In general, nevertheless, the U.S. economy continued to broaden last. month, with a greater balance in between production and. services.
Reflecting the boost in business activity as well as. employment gains and persistent inflation, traders have pared. back their expectation for a decrease in interest rates later on. this year.
Futures prices reveal an approximately equal possibility the reserve bank. will cut overnight rate of interest two or three times by an overall. of 50 basis points or 75 basis points by the end of 2024.
3 months ago, the central bank was expected to cut rates. as much as 6 or 7 times by an overall of 150 or 175 basis. points.
FUEL USAGE
More powerful manufacturing and the associated increase in. freight are likely to improve petroleum consumption especially for. diesel and similar middle extract fuel oils.
More than three-quarters of distillate fuel oil is utilized for. freight transportation and manufacturing, so fuel consumption. generally tracks modifications in business cycle measured by the. making index relatively carefully.
Extract consumption was down by around 2% in the 3. months from November to January compared to the exact same period a. year earlier.
However the winter season was abnormally moderate, cutting intake of. distillate heating oil, and growing usage of biodiesel and. sustainable diesel has actually been munching away at the market for. petroleum-derived distillates.
Even if biodiesel and eco-friendly diesel are taken into. account, total distillate usage was essentially flat in. the November-January period compared to a year ago.
Nevertheless, if the production healing profits, extract. consumption must start to rise through the rest of 2024.
DISTILLATE INVENTORIES
Stocks of extracts were 13 million barrels (-9% or -0.73. standard variances) listed below the previous 10-year seasonal average at. completion of January, according to the most recent month-to-month information from. the Energy Information Administration.
Since then the deficit has actually stayed broadly steady with. stocks 15 million barrels (-11% or -0.90 requirement. deviations) below the 10-year average at the end of the week. ending up on March 29.
Drone and missile attacks on tankers in the Red Sea and Gulf. of Aden have led to substantial re-routing of extract trade. in between The United States And Canada, Europe and Asia, for the most part resulting. in longer voyages.
But there has actually been little or no impact on the actual. schedule of distillates in the United States, confusing. expectations stocks would tighten and rates would increase.
Futures prices for ultra-low sulphur diesel provided in May. 2024 are trading around $30 per barrel over U.S. petroleum. provided in the same month, however the premium or fracture spread has. narrowed from $40 in early February.
The crack spread has been up to its narrowest since in the past. Russia's intrusion of Ukraine in February 2022, an indication supply is. comfortable for the minute.
Hedge funds and other cash supervisors have actually offered the. equivalent of 23 million barrels of U.S. diesel over the six. weeks because the middle of February.
The fund neighborhood has moved from a relatively bullish position. on diesel in the middle of February to a slightly bearish one by. the end of March.
Fund sales have actually likely prepared for, sped up and. enhanced the weakening of extract rates relative to crude. triggering the fracture infect narrow.
OUTLOOK FOR 2024
Extract stocks have actually not fallen as quickly as. anticipated previously in the year as the marketplace has adjusted to the. disruption of tanker routes.
However inventories show a strong cyclical component so the. producing recovery is likely to lead to a more exhaustion. of stocks and put upward pressure on spreads and costs. later on in 2024.
Ukraine's drone attacks on Russia's refineries could likewise. lessen global materials later in the year because Russia is a. major diesel exporter.
The relatively low level of diesel stocks indicates there. is little cyclical slack acquired from the slump in 2022/23.
Restored intake development in 2024/25 is most likely to tighten. fuel supplies quickly and cause early upward pressure on. rates.
Together with a tight labour market, the limited extra. capacity in diesel and other energy markets is one factor. central banks are required to be mindful in cutting interest. rates.
Related columns:
- Distillate futures see huge outflow of speculative money. ( April 2, 2024)
- International freight acceleration will lift fuel prices (March. 27, 2024)
John Kemp is a market analyst. The views expressed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.
(source: Reuters)