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Gold prices rise as rate-cut bets are boosted by weak ADP employment data
Gold prices rose on Wednesday, as investors awaited the non-farm payrolls report for more market signals on monetary policies. As of 1246 GMT spot gold rose 0.3%, to $3,347.59 an ounce. U.S. futures gold also rose 0.3%, to $3,358.10. The ADP National Employment Report revealed that U.S. private payrolls fell unexpectedly in June, and the job gains for the previous month were less than originally thought. After the data was released, traders raised their expectations of Fed rate reductions this year to 67 basis point, up from an earlier expectation of 64. Tai Wong, a metals trader independent, said: "The grimace inducing -33,000 print on ADP private payrolls is the first time since early 2023 that there have been net job losses." The number of U.S. jobs openings in May was unexpectedly higher on Tuesday. However, a drop in hiring confirmed that the labour market has shifted down gear. Federal Reserve Chairman Jerome Powell reiterated on Tuesday that the Fed will be patient in reducing interest rates. He did not, however, rule out that the Fed would reduce rates at its meeting this month. The monthly non-farm payrolls reports due Thursday will provide more information on the state of the labor markets. Wong said that it is not impossible for a July reduction to be made if the payroll report tomorrow is bad. Gold, which is traditionally viewed as a hedge in times of uncertainty, thrives also when interest rates are low. The uncertainty surrounding U.S. Tariffs is also a concern for traders ahead of the deadline on July 9. Trump's tax and spending bill, which is expected to add $3.3 billion to the debt of the country, will be sent to the House of Representatives to receive final approval. Spot silver increased 0.7% per ounce to $36.33, platinum rose 1.9% to 1,375.91 and palladium grew 1.9% to 1 120.87. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Chizu Nomiyama )
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IMF says Nigeria must re-calibrate its budget to lower oil prices
The International Monetary Fund (IMF) said that Nigeria must adapt its budget for 2025 to lower oil costs and increase cash transfers in order to protect the most vulnerable sections of its population. The IMF released the results of the routine "Article IV", assessment of Nigerian economic policies. It said that the economic growth was steady, but low per capita and the inflation remained high. The Fund forecast that Nigeria's economy will grow at a rate of 3.4% in this year, and 3.2% by 2026. Axel Schimmelpfennig is the mission chief of the Fund for Nigeria. He said: "The international economy environment in which Nigeria lives and operates is marked by very, very high uncertainty. In particular, the international oil price volatility affects Nigeria directly via the fiscal and external balances, as well as the inflation." He said that the complex outlook makes it even more important for policymakers to maintain buffers and be nimble to react to shocks and seize opportunities. The key challenge is now to combat high poverty and food security. In its budget for 2025, Africa's biggest oil exporter assumed that the price per barrel would be $75. Brent crude futures were last trading at just under $68 per barrel. (Reporting and editing by Dhara Raasinghe; Karin Strohecker)
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EU compensates exporting industries for Carbon Levy
The European Commission announced on Wednesday that European companies who export their products abroad will be compensated for the CO2 emission costs they incur in Europe. This is to prevent firms from moving to Europe to avoid the ambitious climate policies of the EU. The Commission announced the plans and proposed a new EU climate target for 2040, which would require heavy industries to invest much more in order to improve their production over the next decade. The Commission will propose by the end of this year a scheme to use the revenues generated from the European Union’s carbon border tax to help companies export goods to foreign countries where, unlike Europe, their competition does not pay CO2 costs. Wopke H. Hoekstra, EU Climate Commissioner, told reporters: "We are doing this for companies that risk losing out on exports." Hoekstra stated that the system is expected to provide 70 million euros ($82 millions) in compensation for next year. The EU anticipates that its carbon border tax will generate revenue of 2.1 billion euro by 2030. The EU is phasing in its carbon border tax next year, and aluminium and steel producers will lose their free carbon permits. The EU carbon market will have to charge more for permits, forcing European companies to pay more to compete on foreign markets. Commission: Compensations will be based on the reduction in CO2 allowances. The Commission has not yet finalized the design for the scheme. It will present it later this year along with measures that are intended to stop foreign companies from avoiding the EU border carbon tax. Hoekstra stated, "We want absolutely to ensure that this system will not be manipulated or abused by actors outside the European Union."
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NDTV Profit reports that India's Nykaa shareholder will sell a stake worth $150 Million.
Harindarpal Singh Banga, a Hong Kong-based investor, and his family plan to sell a stake in Nykaa worth $12.84 billion (US$149.93m) through a group deal, reported news portal NDTV profit on Wednesday. According to the report, people familiar with the situation said that the sale would likely take place at a discount of 4% from Nykaa's market price. Nykaa shares closed at 211.59 Rupees, a 2.2% increase. The company didn't immediately respond to an inquiry for comment. Exchange data revealed that Banga owned 4.97% of Nykaa as of March 2025. He invested in Nykaa prior to its public listing. In August of last year he sold 40.9 million shares in a large deal to reduce his stake. According to LSEG, the Indian market saw secondary market sales of $5.5 billion by large shareholders in listed companies last month. Reliance Industries sold a stake in Asian Paints for $1.5 billion and British American Tobacco sold a stake in ITC for $1.5 billion. ($1 = 85.6242 Indian Rupees) (Reporting and editing by Janane Vekatraman; Reporting by Manvi Pan)
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HIGHLIGHTS-Tennis-Wimbledon day three
Highlights from the third day of Wimbledon Tennis Championships on Wednesday. 1145 PLAY UNDER THE WAY Rain caused a delay of one and a half hours at the All England Club. READ MORE PREVIEW: British Wimbledon hopefuls Raducanu & Tarvet will face a tough task Sinner is ice cold as Gauff joins Pegula, Zverev and bonfire of seeds Wimbledon's AI judge receives mixed reviews from fans and players Djokovic passes Muller Test to Reach Wimbledon Second Round Gauff's out-of-sorts performance in the first round of Wimbledon is a disaster Zverev seeks therapy following shock Wimbledon first-round exit Kvitova says goodbye to the place where she was transformed from a "nobody" to a "someone". No Draper drama as British hope races past injured Baez in Wimbledon opener Zheng, the Olympic champion, is still trying to figure out how to play on grass courts Swiatek defeats Wimbledon debutant in round two Rain delays the 1045 START even further Rain will delay the start of play on all outdoor courts until 1115 GMT. Start 1000 Rain Delays Rain has delayed the start of Wimbledon's third day by 45 minutes, to 1045 GMT. After two days in which the conditions were very hot and sunny, the temperature will be around 19 degrees Celsius. WIMBLEDON ORDER OF PLAY ON WEDNESDAY (prefix number denotes seeding) The play begins at 1230 GMT. 1-Aryna Sabalenka (Belarus) v Marie Bouzkova (Czech Republic) Oliver Tarvet (Britain) v 2-Carlos Alcaraz (Spain) Emma Raducanu (Britain) v Marketa Vondrousova (Czech Republic) COURT NUMBER 1 (play starts at 1200 GMT). Cameron Norrie (Britain) v 12-Frances Tiafoe (France) Katie Boulter (Britain) v Solana Sierra (Argentina) 5-Taylor Fritz (U.S.) v Gabriel Diallo (Canada) COURT NO. TWO (play starts at 1000 GMT Olga Danilovic (Serbia) v 6-Madison Keys (U.S.) Nuno Borges v Billy Harris Naomi Osaka (Japan) v Katerina Siniakova (Czech Republic) Arthur Fery (Britain) v Luciano Darderi (Italy)
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Engie buys DNO's Norwegian gas production for four years
The Norwegian company DNO announced on Wednesday that it had sold all of its gas production from the Norwegian continental shelf over a period of four years to French utility Engie at an undisclosed price. The deal was facilitated by an American bank loan, as U.S. banks are increasing funding for the fossil fuel sector. It also said it is in talks over a similar agreement and financing facility related to its North Sea oil production. The agreement will take effect on October 1, and it covers DNO’s increased gas production following its March acquisition of assets from Sval Energi. Sval's purchase quadrupled DNO’s North Sea production, which now stands at about 80,000 barrels equivalent of oil per day. About half of this is natural gas. Engie didn't immediately respond to our request for comment. DNO has not disclosed the exact volume of its four-year contract to Engie. However, DNO and Sval Energi produced 1,82 bcm from the Norwegian continental Shelf last year. DNO has entered a financing agreement with an unnamed U.S. Bank for up to 500 million dollars. This money will be used for Sval Energi’s debts as well as for general corporate purposes. In a press release, DNO Executive Chairman Bijan Mossavar Rahmani stated that "we have received strong interest from buyers to prepurchase the enlarged North Sea Production". (Reporting from Nerijus Adomiaitis and America Hernandez, Paris; editing by Barbara Lewis.)
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The yuan strengthens as tariff uncertainty is offset
The price of copper rose on Wednesday, as the weaker dollar and stronger yuan in China, a major metals consumer, offset concerns about trade tensions around the world. By 1025 GMT, the price of three-month copper at the London Metal Exchange had risen by 0.2% to $9,951 per metric tonne. On Tuesday, the metal used in construction and power, which is valued at $10,000, tested the psychological threshold for the first three months, as positive manufacturing data from China, the top consumer, improved sentiment. Analyst Carsten Menke of Julius Baer said that this spike was due to a persistent premium in U.S. Copper Futures amid expectations that Section 232 tariffs would be imposed on imports to the United States in the future, assuming the investigation will conclude imports threaten U.S. National Security. This has led to a spike in U.S. imports of copper this year. The metal is now scarcer outside the U.S. The LME copper contract with a shorter maturity is trading at a higher premium than those with a longer maturity. Goldman Sachs stated in a report that they expect China's demand for refined Copper to increase by 6% between 2025 and 2050. They also see upside risks for their August LME copper prediction of $10,050 due to the competition for copper from China and America. Julius Baer is worried about the future demand for copper due to the pre-buying by U.S. importers. The U.S. Dollar was near its lowest level since February 2022 as traders weighed the impact of President Donald Trump’s spending bill and the looming deadlines for trade tariffs. The yuan is nearing an eight-month-high against the dollar, amid hopes of a easing in U.S. China trade tensions. LME aluminium dropped 0.2% to $2.593.50 per ton. Zinc rose 0.4% at $2.725.50. Lead increased 0.4% at $2.046.50. Tin fell by 0.6%, to $33,430, and nickel rose by 0.1%, to $15,220. (Reporting and editing by David Evans; Polina Devitt)
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Allianz: Heatwaves could reduce GDP in Europe by 0.5 percentage points
A report by Allianz Research found that recent heatwaves in Europe could slow the economic growth of Europe by half a point by 2025. The report compared a day where temperatures exceeded 32 degrees Celsius with half a days worth of strikes. In Europe, the GDP loss ranges from 0.1 percent points in Germany to 1.4 percent points in Spain, where summer temperatures are approximately ten degrees warmer. Climate change increases the frequency and intensity for heatwaves, wildfires and droughts. This has far-reaching effects on the economy. Allianz Research reported that the global heatwaves have reduced GDP by 0.6 percentage points in this year. The Allianz Research report stated that China, Spain and Italy could all see GDP declines of almost one percentage point each due to current heatwaves. Meanwhile, the U.S. might face a drop of around 0.6 percentile points and France by up to a quarter of a percentage point. Heat stress is also a factor that reduces productivity. According to the International Labour Organization, heat stress worldwide will decrease total working hours by 2,2% by 2030. Allianz Research says that heat-related productivity losses can be reduced by taking structural measures in cities to adapt to the climate and adapting workplaces.
MORNING Quote AMERICAS-Post-break Wall Street stays pumped up
A take a look at the day ahead in U.S. and international markets from Mike Dolan Wall Street looks set for a drowsy but favorable start to a. reduced week after Monday's Memorial Day break, with the. customer back in focus in May updates later today.
S&P 500 futures were higher once again ahead of Tuesday's. open after the money index eked out its 5th straight. weekly gain last week - the longest such streak considering that early. February.
U.S. consumer confidence is anticipated to have cooled a touch. this month in the Conference Board's monthly survey due later on. today, although the huge release of the week is clearly Friday's. PCE inflation gauge.
Despite The Fact That Federal Reserve rates of interest expectations have. declined to little more than one cut over the rest of the. year, more comprehensive financial conditions recorded by the Chicago Fed. index are at their easiest given that November 2021 - 4 months. before the Fed began its tightening up campaign.
This leaves the Fed with a continuous problem regarding whether. its restrictive financial policy has been enough to drag. inflation durably back to its 2% target as financial development keeps. humming. Annual core PCE inflation is anticipated to have held at. 2.8% in April - even if monthly cost gains alleviated a touch to. listed below 0.3%.
Although on the hawkish side of the Fed's policymaking. council, Minneapolis Federal Reserve Bank President Neel. Kashkari on Tuesday continued to hold out the possibility of. another rate trek if needed.
And if it is not needed, Kashkari said it would take lots of. more months of positive inflation data to provide him confidence. enough to reduce.
Another hawk, Fed board governor Michelle Bowman, even said. she would have supported either waiting to start slowing the. run-off in the U.S. central bank's balance sheet or a more. moderate tapering process than announced previously this month.
In spite of all that, and awaiting another heavy week of financial obligation. sales, Treasury yields edged lower on Tuesday. 2 and five-year. notes come under the hammer later on in the day.
Both stock and bond market volatility determines. stay suppressed.
Although the U.S. financial surprise index stays in. negative area, it has gotten substantially given that last. week's punchy May business surveys and the Atlanta Fed's. real-time economic growth price quote is tracking 3.5% for the. quarter.
Oil rates too picked up a touch on Tuesday ahead of. Sunday's online meeting of OPEC+ producers, where traders anticipate. 2.2 million barrels daily of voluntary production cuts to stay. in place.
Although U.S. retail gas rates have actually retreated this. month, they remain up about 15% for the year to date.
Taking a hint from softer Treasury yields, the dollar. was down for the third session in a row.
The euro nudged higher in spite of cash markets seeing. practically a 90% chance the European Central Bank will start its. rate cutting cycle as quickly as next week - even if more resilient. economic soundings and wage varieties of late have downsized. full-year reducing expectations a touch there too.
Barring a surprise, the first rate cut in June is a done. deal, however later on we have numerous degrees of flexibility, French. reserve bank chief Francois Villeroy de Galhau told Monday's. edition of Germany's Boersen Zeitung.
Supporting the ECB's transfer to jump the Fed weapon, studies on. Tuesday revealed euro zone household inflation expectations for. the next 12 months edged listed below 3% in April for the very first time. considering that 2021.
Abroad stock exchange more normally were controlled - mixed. in Asia and a little favorable in Europe.
Elsewhere, U.S. markets are set for a brand-new dawn of sorts on. Tuesday, when the settlement time for U.S. equities, business. local bonds and other securities will be halved to one day,. or T +1, following the adoption of a brand-new Securities and Exchange. Commission rule.
Little disruption was evident as abroad financiers. adapted to the modifications.
In corporate news, Apple's shares increased 2% ahead of. the open on information revealing its iPhone sales in China jumped 52% in. April from a year earlier as total smart device sales in the. nation increased by more than 25%.
Key journal items that may provide instructions to U.S. markets later on. on Tuesday:. * US May consumer confidence, Dallas Fed's May production. study, March house prices; Canada April manufacturer costs. * German Chancellor Olaf Scholz and French President Emmanuel. Macron speak at Franco-German summit in Schloss Meseberg north. of Berlin. * Federal Reserve Board Governor Lisa Cook and Minneapolis Fed. President Neel Kashkari speak; European Central Bank policymaker. Klaas Knot and Bank of England policymaker Catherine Mann both. speak. * U.S. Treasury sells 2- and 5-year notes, 3- and 6-month expenses
(source: Reuters)