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The US corporate bond market is again closed due to Trump tariffs
After only one bond issue on Tuesday, the U.S. Corporate Bond Market has closed again. Spreads during the week following President Donald Trump’s Liberation Day Tariffs have increased the most since the regional banking crisis of 2023. Since Trump's announcements of tariffs on April 2 - exactly one week before, the corporate bond spreads or cost to borrow have increased to their highest level in almost two years. According to Dan Krieter of BMO Capital Markets, the spreads between investment-grade bonds and junk bonds have been the widest in a week since March 2023, when regional banking stresses led to the troubles of Silicon Valley Bank, among other banks. On Tuesday, the bond market saw its first new deal for three days, a three-part $4.2 billion transaction from Paychex, a human resources provider. This was the first new deal since Holcim, a Swiss cement manufacturer, issued a four-part $3.4 billion bond on April 2. According to ICE BofA's indexes, high-grade bond spreads widened by 2 basis points Tuesday. They were last at 118 bps after the market closed. The spreads on junk bonds were also 4 basis points tighter, at 457 basis points. The spreads between high-grade bonds and junk bonds may have increased again on Wednesday, due in part to the early morning volatility in the U.S. Treasury markets, when Chinese and other Asian funds sold large volumes of Treasuries. A senior banker told a syndicate that Paychex bonds started the day a few basis points lower, but by midday were quoted 3-4 bps higher. The yields on the benchmark 10-year U.S. Treasury notes jumped to an all-time high of 4.515% Wednesday. "Risk sentiment has dropped again this morning. This is likely keeping borrowers at bay as issuers wait for any semblance calm, which remains elusive," stated Krieter. (Reporting and Editing by Matthew Lewis in Washington)
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As tariff war intensifies, gold prices rise and are on track for their best day since March 20, 2023
Gold rose more than 3% Wednesday, and was on track for its best day in March 2023. Supported by a drop in the dollar as well as safe-haven flows amid rising U.S. China trade tensions following Beijing's announcement of more tariffs on U.S. products. As of 11:23 am, spot gold rose 3.4%, to $3,086.04 per ounce. ET (1523 GMT). U.S. Gold Futures rose 3.7%, to $3.101.70. "Gold is still seen as a hedge in the face of instability." "We have a situation in which tariffs are becoming a major problem and inflationary expectations are going up, and this is manifested through higher yields," Bart Melek said, head of commodity strategy at TD Securities. Melek continued, "As long as this trade situation persists, people might bet that over time the US dollar will become less dominant in global trade." Gold became more appealing to other currency holders as the U.S. Dollar weakened in relation to safe-haven currencies, including the yen. China will impose an additional tariff of 84% for all U.S. products from April 10. This is up from 34% announced previously, China's Finance Ministry said. The tariffs are in response to President Donald Trump imposing reciprocal tariffs earlier that day. Investors worried about tariffs stoking inflation and hampering economic growth sold stocks and industrial commodities, and sought refuge in gold. Due to central bank purchases and strong demand for safe havens, gold, which is used as an investment in times of political and economic uncertainty, has increased by more than $400 since 2025. On April 3, it reached a new record high of $3167.57. Investors are now waiting for the minutes from the Federal Reserve policy meeting that will be held later today to get more information on the path of rate cuts. On Thursday, the U.S. Consumer Price Index is also due. According to the CME Fedwatch Tool, traders are pricing in 55% of a Fed rate reduction in May. In a low-interest rate environment, zero-yield gold tends to flourish. Silver gained 1.9% at $30.4 per ounce. Platinum fell 0.1% to $820. Palladium rose 0.2% to $908.46.
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US sanctions against Iran increase as Trump calls for talks
Treasury Department announced that the United States issued new sanctions against Iran on Wednesday. This comes two days after Donald Trump had announced direct talks between the United States and Iran over its nuclear program. In a press release, the U.S. Treasury Department said that it had imposed sanctions against five entities based in Iran and on one individual based in Iran because of their support for Iran's nuclear programme. The aim was to deny Tehran a nuclear bomb. In a statement, Treasury Secretary Scott Bessent stated that "the Iranian regime's reckless pursuit" of nuclear weapons remained a grave danger to the United States as well as a threat to regional stability and international security. Treasury will continue to use our tools and authority to disrupt any Iranian attempt to advance its nuclear programme and its destabilizing agenda. The Iranian mission at the United Nations, New York, did not respond immediately to a comment request. Trump announced on Monday, in a surprising announcement, that the United States was ready to start direct talks with Iran on Tehran's nuke program. However the Iranian foreign minister stated the discussions would only be indirect. Trump warned that "Iran will be in great peril" if talks between geopolitical enemies failed. Treasury officials said that those who were targeted on Wednesday had supported the Atomic Energy Organization of Iran and its subsidiary, the Iran Centrifuge Technology Company. Both entities have been previously sanctioned for managing and overseeing the country's nuclear program. Among the targets were a company which manufactures aluminum for TESA; an AEOI subsidiary responsible for a variety of nuclear reactor projects; and a firm tasked with developing thorium fuelled reactor technologies. U.S. Energy Sec. Chris Wright stated on Tuesday that Iran could expect more sanctions if they do not reach an agreement with Trump regarding its nuclear program. The dispute between Iran and the West over its nuclear program has been raging for 20 years. Iran claims that it is only for civilian purposes, but Western countries believe it to be a precursor for an atomic weapon. Trump ripped up the 2015 Iran deal with six world powers, including the U.S.A., Russia China, France, Britain, and Germany, during his first year in office. Since then, talks have stagnated. Iranian officials said on Tuesday that Tehran approaches weekend talks with the United States about its nuclear program with caution, having little confidence in progress. They also have deep suspicions regarding U.S. intent. Reporting by Doina chiacu, Editing by Brendan O'Brien Ed Osmond Ros Russell
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US sanctions against Iran increase as Trump calls for talks
Treasury Department announced that the United States issued new sanctions against Iran on Wednesday. This comes two days after Donald Trump had announced direct talks between the United States and Iran over its nuclear program. Treasury issued a press release stating that the department had designated five entities, and one individual, based in Iran, for their support of Iran’s nuclear program. The goal was to deny Iran a nuclear bomb. Treasury stated that the designated groups had played a vital role in supporting the Atomic Energy Organization of Iran and its subsidiary, The Iran Centrifuge Technology Company. Trump announced on Monday, in a surprising announcement, that the United States was ready to start direct talks with Iran on Tehran's nuke program. However the Iranian foreign minister stated the discussions would only be indirect. Trump warned that "Iran will be in great peril" if talks between geopolitical enemies failed. Treasury stated in a press release that the Iran Centrifuge Technology Company was crucial to Iran's efforts at uranium enrichment through its production of centrifuges. Treasury says that the person targeted by these new sanctions is Majid Moallat, the managing director of Atbin Ista Technical and Engineering Company. Treasury claims this company helps it acquire components from suppliers abroad. In a statement, Treasury Secretary Scott Bessent stated that "the Iranian regime's reckless pursuit" of nuclear weapons is a grave danger to the United States as well as a threat to regional stability and international security. (Reporting and editing by Brendan O'Brien, Ed Osmond and Doina Chiacu)
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Which U.S. products will be hit by tariffs in the EU?
Next Tuesday, the European Union will introduce countermeasures against President Donald Trump’s steel and aluminum tariffs by imposing additional duties on imports worth 23 billion dollars (21 billion euros) from the United States. Trump has a policy of imposing tariffs on countries that he believes impose high barriers against U.S. imports. The tariffs will be 25% for steel, aluminum and cars as well as a new, broader 20% tariff for most other goods. The counter-tariffs approved on Wednesday are specifically a response to the U.S. Metals Tariffs that were imposed by the U.S. on March 12. The EU is still assessing the best way to respond to "reciprocal" car tariffs and other broader tariffs. The EU plan is divided into three phases. Most tariffs will not be in effect until May. APRIL 15, 2019 The first phase will include 3.9 billion euro worth of U.S. goods, such as steel, aluminium, rice, motorcycles and motorboats, dishwashers and washing machines, orange juice, and corn (maize). This is a re-imposition of the tariffs that were imposed by the EU in 2018, when Trump imposed a less comprehensive set of tariffs on European products made of steel and aluminum. Both sides lifted the tariffs as part of a truce under U.S. president Joe Biden. This time, U.S. whisky is not included, as some countries were worried about retaliation by the U.S. against European wine imports. Diamonds are subject to a 10% tariff, but some products such as most of the affected ones will be charged 25%. May 16th The new U.S. tariffs on metals are much more extensive than those of 2018. Therefore, the EU's trade policy coordination commission compiled a list of U.S. goods that would be subject to additional retaliation. The list originally included 21 billion euros worth of U.S. imports, but this was reduced to 17 billion euro after removing dairy products, wines and spirits. On May 16, additional 25% tariffs will be applied to 13.5 billion euro worth of goods. These include poultry, beef and fruit as well as cereals like wheat, barley, and oats. Other items include wood, plastics carpets clothing glassware tools and chewing gum. DUE DECEMBER 1, a further 3.5 Billion Euros of U.S. products, including soybeans and almonds, will be subject to duties. Which companies could be affected? EU officials are hoping that a broad range of products will make U.S. companies press Washington to reduce its trade war. U.S. producers of the affected goods include Whirlpool , Stanley Black & Decker, Mohawk Industries , Harley-Davidson, Ralph Lauren, Tyson Foods and Archer-Daniels-Midland ($1 = 0.9045 euros) (Reporting by Philip Blenkinsop;)
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Mali gold mining revenues to jump 52.5% by 2024
A new mining code, which came into effect in Mali, led to an increase in the tax collection rate and dividend payments, which helped boost state revenue. Mali is Africa's largest gold producer and home to mining firms including Barrick Gold and B2GOLD, Resolute Mining Endeavour Mining Hummingbird Resources. According to a document shared with the. In 2023, Mali passed a new code of mining that allowed it to increase its stakes in gold concessions. It also removed tax exemptions from mining companies when they were in their exploitation phases. According to the Ministry, the revenue increase in 2024 is mainly due the higher taxation introduced by the new code. The increase in state revenues comes despite the fact that industrial gold production will plunge by 23% in Mali by 2024. Barrick Gold, Mali’s largest gold producer suspended operations at the Loulo-Gounkoto Complex in mid-January, 2025, after the military-led Government seized three tons of its gold reserve. The government has been blocking exports since early November. In a separate document from the Mines Ministry, seen by us in March, it was stated that the government predicted a small recovery in gold production this year. Its estimates were based upon the assumption that Barrick will resume operations in march, which they did not. The operations at Loulo Gounkoto are suspended. ($1 = 595.5000 francs CFA) (Editing done by Anait Miridzhanian and Barbara Lewis).
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Treasuries and the U.S. Dollar are falling as Trump's trade war fuels recession fears
On Wednesday, the latest escalation of the trade war between China and the United States rattled the global markets. Treasuries fell and the U.S. Dollar dropped in a saleoff of certain U.S. assets. U.S. shares edged up in New York's early trading. However, the Nasdaq rose by more than 1%, and technology led gains in S&P 500. The U.S. President Donald Trump imposed tariffs of 104% on China on Wednesday. Beijing responded with a swift 84% duty on U.S. imported goods. U.S. Treasuries were under renewed selling pressure on Wednesday, a sign investors are dumping their safest investments and moving to cash. The sudden and violent drop in Treasuries recalled for many the panicked rush to cash at the beginning of COVID-19 in March 2020. It also reignited concerns about the fragility of the world's largest bond market. Investors fear that Trump's tariffs are severe enough to cause a recession, forcing the Federal Reserve to cut interest rates. They sold their Treasury holdings and drove up yields when bond prices fell. According to George Saravelos, head of Deutsche Bank's foreign exchange research, the seemingly wholesale withdrawal of Treasuries from the market and the dollar as the "backbone" of the global financial systems could be indicative of a general decline in investor interest in holding U.S. assets and the end of an era. We are seeing a simultaneous fall in the value of all U.S. assets, including stocks, dollar against alternative reserve currencies and the bond markets. He said that we are entering uncharted waters in the global financial systems. Investors fled from the dollar, which is often seen as a safe-haven currency in turbulent times, to the Swiss Franc and gold. The ING economists said that "this seemingly'sell America trade' is now dominating the theme of rising recession risks that would normally have pushed yields downward." The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.5%, while the euro rose 0.78%, reaching $1.1037. The dollar fell 0.98% against the Japanese yen to 144.84. The dollar fell 1.01% against the Swiss Franc to 0.839. Gold spot rose by 3.03%, to $3.074.35 per ounce. The yield on the benchmark 10-year U.S. notes increased by 12.4 basis points, to 4.384% from 4.26% at late Tuesday. The auction of 10-year notes on Wednesday, following a disappointing three-year note sale the previous day, could add to the pressure. It is a litmus test for investor interest in U.S. Government debt. US STOCKS RISE EARNEST Investors weighed whether recent sharp sales were overdone. Trading remained choppy, as it has all week. According to LSEG, as of Tuesday's closing, S&P companies had lost $5.8 billion in stock market value following Trump's announcement on tariffs late last Wednesday. This is the largest four-day decline since the benchmark's creation in the 1950s. The Cboe Volatility Index, Wall Street's fear gauge was down. It reached its highest level since August this week. The Dow Jones Industrial Average climbed 65.18 points or 0.18% to 37,710.77. The S&P 500 gained 20.39 points or 0.42% to 5,003.55 while the Nasdaq Composite jumped 180.63 points or 1.18% to 15,448.54. The MSCI index of global stocks fell by 1.90 points or 0.26% to 741.06. The pan-European STOXX 600 fell by 2.97%. Analysts at JPMorgan thought that the rapid escalation of U.S. Tariffs against China would be disruptive enough to send the global economy into a recession. In a client note, they stated that "given the import bill from China the China tariff is equivalent to a whopping tax hike of $400 billion on U.S. businesses and households." The currency will likely be used as a release valve by China's policymakers. The oil prices fell as concerns over the future of global energy demand outweighed geopolitical worries. U.S. crude dropped 3.83%, to $57.30 per barrel. Brent was down to $60.51 a barrel.
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Nigeria posts $6.83 billion payments surplus amid reforms, rising confidence
The Central Bank of Nigeria announced on Monday that Nigeria had a surplus of 6.83 billion dollars in its balance of payments in 2024. This was due to the impact of the reforms, improved trade performance, and renewed investor faith in the economy. Bola Tinubu, who took office in 2023 and has been president since then, has cut back on expensive petrol and electricity subsidies. He also devalued twice the naira to increase Nigeria's decade long sluggish production. Tinubu is currently focusing on the overhaul of the state oil company and tax system in order to increase revenue and efficiency. CBN released a statement comparing the surplus in balance of payments to deficits in 2023 of $3.34bn and in 2022 of $3.32bn. Nigeria's capital and current accounts showed a surplus in 2024 of $17.22bn, mainly due to a surplus on goods trade of $13.17bn. CBN reported that remittances were a major support to the economy, with a rise of 8.9% last year to $20.93billion. CBN reported that gas exports increased 48.3%, to $8.66billion. Non-oil exports also grew 24.6%, to $7.46billion. Fuel imports dropped by 23.2%, to $14.06billion. Non-oil imports were also down 12.6% at $25.74billion during the same time period. Olayemi Cardoso, Governor of the Central Bank said: "The positive turnaround is evidence of our effective policy implementation and unwavering commitment towards macroeconomic stability." Nigeria's account revealed a net asset acquisition of $12.12billion, largely due to a boom in portfolio investments, which increased by more than twice as much, reaching $13.35billion. This was offset slightly by a drop in foreign direct investments, which dropped by 42.3% and reached $1.08 billion. CBN: Nigeria's reserves of foreign currency will increase by $6 billion, to $40.19 Billion by 2024. Reporting by Elisha Gbogbo, Camillus Eboh and Alison Williams; Editing by Franklin Paul, Alex Richardson and Alison Williams
Saudi petroleum supply to China set to fall in Feb vs Jan, sources state
Saudi Arabia's crude oil supply to China is set to decrease in February from the month in the past, trade sources said on Thursday, after the kingdom treked its prices and as OPEC+ prolonged production cuts in the very first quarter.
State oil firm Saudi Aramco will deliver about 43.5 million barrels to China in February, a tally of allocations to Chinese refiners revealed, down from January's 46 million barrels, a three-month high.
China's state majors CNOOC and PetroChina and personal refiner Hengli Petrochemical will be lifting less unrefined in February, while Saudi Aramco will increase its supply to Sinopec and Sinochem, they said.
Aramco decreased to comment on its February allocation to China.
OPEC+, which pumps about half the world's oil, chose in early December to
push back
the start of oil output increases by three months until April and extended the complete relaxing of cuts by a year until completion of 2026 due to weak need and growing production outside the group.
With tighter supply, Aramco has likewise increased official selling costs to Asia for the first time in three months.
Earlier this week, it raised the main market price ( OSP) for flagship Arab Light crude by 60 cents to $1.50 per barrel above the Oman/Dubai benchmark average, slightly above market expectations.
Asian refineries, mainly China and India, are wanting to buy more Middle East grades after wider sanctions by Western nations tightened up materials and rose the costs of Russian and Iranian oil.
Saudi Arabia is the No. 2 unrefined provider to China after Russia.
China's crude imports from Saudi Arabia amounted to 72.27 million heaps (1.44 million barrels each day) for the very first 11 months of 2024, down 9.6% from the same period a year previously, Chinese custom-mades information showed in December.
(source: Reuters)