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The ethics committee of the Norway Fund reviews Israeli bank stakes in West Bank settlement loans
The ethics watchdog of Norway's $1.9 trillion fund is reviewing the practice by Israeli banks to underwrite Israeli settlers' commitments to build houses in the occupied West Bank. This review could lead up $500 million in divestments. The Council on Ethics (a public body established by the Ministry of Finance) has decided to not object to the Fund’s investments in platforms like Airbnb, which offer rentals in Jewish settlements. The Norwegian parliament has set ethical guidelines for the companies in the portfolios of the largest wealth fund in the world. Svein Brandtzaeg, the Council's head in an interview on May 22 said that the Council was looking at how Israeli banks provide guarantees to protect Israeli settlers money if a company building their homes in the West Bank were to fail. He said that other practices were also being examined, "but so far this is what we have seen". "This is what has been well documented." He refused to give a time estimate for the review. Brandtzaeg didn't name the banks, but at the end 2024 the fund will own shares worth about 5 billion crowns (500 million dollars) in five of the largest Israeli lenders. This is an increase of 62% over the past 12 months. Hapoalim Bank Leumi Israel Discount Bank Mizrahi Tefahot Bank First International Bank of Israel and Bank Leumi did not respond to requests for comments. They have been listed in the list of companies that are linked to settlements within the occupied Palestinian Territories, compiled by the U.N. mission that assesses the implications on Palestinian rights. Investors have become increasingly concerned in recent years about a 19-month Israeli offensive that has resulted in the deaths of more than 50,000 Palestinians, and the destruction of the Gaza Strip as a response to an attack launched by Hamas militants which killed over 1,200 Israelis. In the West Bank and East Jerusalem, 2.7 millions Palestinians live alongside 700 000 Israeli settlers. Some Israeli companies serve both Israelis as well as Palestinians. Last year, the top court of the United Nations ruled that Israeli settlements on land seized in 1967 are illegal. Israel called this ruling "fundamentally incorrect", citing historical or biblical ties with the land. Accommodation Rentals in West Bank Settlements The Council on Ethics will begin a new assessment of investments related to the West Bank & Gaza in mid-2024. The report examined 65 companies and recommended that only the petrol station chain Paz, as well as the telecoms company Bezeq be divested. This resulted in shares being sold. The Council also examined some multinationals' activities in the West Bank to determine if they met its guidelines. Airbnb, Booking.com and Expedia were among the platforms that made the U.N.'s list, and accounted for approximately $3 billion of Fund investments. In a joint interview, Eli Ane Lund said that the Council would not recommend the creation of watchlists or divesting from these. She said that "the company's activities must have some sort of influence on (ethical violations)." "It is not enough to just have a connection. It must have some sort of influence on the (ethical) violation. The Council makes recommendations to the central banks, who are not required to follow these but usually do. The decision to sell investments is made public after the sale is completed, in order to avoid alarming the markets. Pro-Palestinian activists say that the Council's recommendation for divestments is too high. They also claim that the Norwegian Government should instruct the fund in order to divest from Israel, just like it did with Russia three days after the invasion of Ukraine by Moscow. Most lawmakers, however, support the Council approach and will formally endorse on Wednesday a decision by a parliamentary committee to not order a boycott. Reporting by Gwladys Fauch in Oslo, Stefania Spezati in London, and Steven Scheer from Jerusalem; editing by Kevin Liffey
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Meta signs power deal with Constellation Nuclear Plant
Meta Platforms announced on Tuesday that it had reached an agreement with Constellation Energy, which will keep one of its reactors in Illinois operational for the next 20 years. This is the first time a Big Tech company has made a deal with a nuclear plant. Why it's important The Big Tech Companies are seeking to secure electricity, as the U.S. demand for power has risen for the first two decades due to artificial intelligence and data centres. Illinois is subsidizing Constellation's Clinton Clean Energy Center nuclear plant with a program of zero emission credits funded by ratepayers. This program awards benefits for the generation of electricity virtually free of emissions of carbon. This agreement expires 2027 when Meta's Power Purchase Agreement will provide an unspecified amount to support the plant for re-licensing, and operation. This deal could be a template for other Big Tech firms to use to support their existing nuclear power while also planning to power their data centers using new nuclear energy and other sources. KEY QUOTES Urvi Parekh is the head of global energy for Meta. He said: "One thing that we hear from utilities very clearly is that they want certainty that power stations operating today will remain operational." Joe Dominguez said, "We are definitely in conversations with other clients not only in Illinois but across the nation, to step up and do what Meta did, which was essentially to give us a backup so that we could invest in the needed investments to relicense these assets and to keep them operational." Bobby Wendell is an official with the International Brotherhood of Electrical Workers. He said that the agreement would provide a "stable working environment" for the workers in the plant. By the Numbers Constellation can also expand Clinton by 30 MW, which is a plant with a 1,121-megawatt capacity. The plant can power the equivalent of 800,000 U.S. households. Clinton started operating in 1987, and Constellation renewed its license with the U.S. Nuclear Regulatory Commission last year. (Reporting and editing by Leslie Adler; Timothy Gardner)
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Copper prices fall as China's manufacturing activity falls short of expectations
The copper price fell on Tuesday, as the top metals consumer China failed to meet expectations. This indicates that U.S. trade tensions are affecting this manufacturing superpower. The benchmark three-month copper price on the London Metal Exchange fell 0.5%, to $9.571 per metric tonne at 0952 GMT. The most actively traded U.S. Comex Copper futures dropped 1.9% to $4.76 a pound. This reduced the premium over the LME benchmark from $1,074 to $914 a tonne, down from Monday's level of $1,074. Comex futures reached $4.9495 on Monday, the highest level since April 3. This was due to concerns that U.S. president Donald Trump's plans to double tariffs for steel and aluminum imports from Wednesday to 50% would lead to new U.S. tariffs on copper, which are subject to an investigation that is ongoing in Washington. Ole Hansen is the head of commodity strategy for Saxo Bank. He said: "Traders are questioning whether these levels can be sustained after another round of disappointing China data over night." A private sector survey revealed that China's manufacturing activity has shrunk for the first eight-month period. The Caixin/S&P Global Manufacturing PMI dropped to 48.3 last month, the lowest level in 32 months. China's official PMI for May showed a decline in factory activity for the second consecutive month. Traders were waiting on a possible phone call between Trump, the Chinese leader Xi Jinping, and U.S. manufacturers, who also contracted in May for a third consecutive month. The White House said that they would likely speak this week. The 21-day moving-average, which is currently $9,526 and the continued outflows of stocks from LME registered warehouses, are supporting the LME copper. LME daily data revealed that the inventory had fallen to 143.850 tons after 4.600 deliveries. This was the lowest level in over a year. Other LME metals include aluminium, which fell by 0.8%, to $2446.50 per ton. Zinc also declined, down 0.3%, to $2690. Lead dropped 0.5%, to $1971.50. Nickel shed 0.8%, to $15,415. Tin rose 0.3%, to $30,745. (Reporting and editing by Janane Vekatraman; Polina Deitt)
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BP invests in Azerbaijan Caspian projects
BP announced on Tuesday that the owners of the Shah Deniz field in the Azeri-Caspian Sea, led by BP, have made a decision to invest $2.9billion on increasing the output from the project. Shah Deniz produced more than 4,000,000 tonnes of condensate last year. This is equivalent to around 35,000,000 barrels of gas, according to BP. Other owners include Russia's LUKOIL and Turkey's TPAO. Azerbaijan SGC, NICO, and Hungary MVM are also involved. Shah Deniz's expansion project aims to increase production by approximately 25 million barrels and 50 billion cubic meters (bcm). BP, after a failed foray in renewables that began in 2020, has reduced its spending and redirected investments back to oil and gas. It also pledged to reduce its debt until 2027. These projects are completely within BP's budget. Shah Deniz Compression was one of 8-10 major projects that BP expects to begin between 2028 and 2030. It is expected that it will contribute to BP's upstream global production reaching 2.3-2.5 millions barrels of oil per day by 2030. The capacity for this to grow further until 2035. Separately, BP announced on Tuesday that the company had acquired stakes in offshore exploration and production blocks in the Azerbaijani portion of the Caspian Sea. BP announced in a press release that the agreements for finalising the deal had been signed by BP, and SOCAR (Azeri state-owned energy company). No immediate indication was given as to the possible production volume. Azerbaijan relies primarily on mature oilfields along the Caspian Sea. The country aims to maintain oil production at around 582,000 barges per day in the next five year with the help of Western energy companies. Ilham Aliyev, the President of Azerbaijan, announced on Monday that Azerbaijan intends to increase its natural gas exports by eight billion cubic meters by 2030. Azerbaijan exported natural gas of 25 bcm in 2024. Exxon Mobil announced on Monday that it had signed an agreement with the Azeri State Energy Company SOCAR to explore oil and gas production on land in Azerbaijan. (Reporting and writing by Nailia bagirova, Gleb Stolyarov, Felix Light and Mark Trevelyan; editing by David Evans and Mark Trevelyan)
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Poland's LPP announces its expansion into Central Asia
The Polish fashion retailer LPP has announced that, as part of the strategy it unveiled in April, the company will begin the next phase of its international expansion by focusing primarily on Central Asia. Why it's important LPP's expansion in Central Asia aligns with its development plan. The group is focused on enhancing the Sinsay brand which will account for 75% by 2027. By the Numbers LPP expects to open its first Uzbekistan store by early August, and to have more than 20 stores in the country by the end of the year. The company also plans to expand significantly in Kazakhstan by adding 60 new stores this year. Sinsay is set to debut in Azerbaijan, Georgia and Moldova during the third quarter. KEY QUOTE "Sinsay aims at being as close to the customer as possible, and that is why it offers a comprehensive Design & Value offer tailored to meet their needs - stylish, but practical, all for an affordable price. Marcin Piechocki, LPP's deputy CEO, said in a release that this is the brand the price-sensitive Central Asian consumers are waiting for. (Reporting and editing by Frances Kerry. Julia Kotowska)
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Dollar slips, shares cautious as trade concerns persist
The dollar hovered around a 6-week low on Tuesday as the erratic U.S. policies of trade clouded the market's sentiment. Investors also took a defensive stance ahead of important developments in the coming week. The White House announced on Monday that U.S. president Donald Trump and Chinese President Xi Jinping would likely speak this week. This comes after Trump had accused Beijing of breaking an agreement to reduce tariffs and trade barriers. Markets will closely monitor the call between the leaders, as tensions in trade between the two world's largest economies continue to simmer due to tariffs. Data released on Monday revealed that U.S. manufacturers contracted for the third consecutive month in May, and that suppliers were taking longer than ever to deliver inputs due to tariffs. A private sector survey released on Tuesday showed that China's factory activities in May were also down for the first eight-month period. This indicates that U.S. Tariffs are beginning to affect manufacturers. U.S. Futures fell, failing to maintain the gains made overnight on Wall Street during the cash session. Nasdaq and S&P futures both fell by about 0.5%. The STOXX 600 fell by 0.45% in Europe while London's blue chip FTSE 100 dropped by 0.36%. Matt Simpson, City Index's senior analyst and market strategist, said that Trump has the sentiment of the country in his palms once more. He said that he expected to hear Trump and Xi talk about a "really great call" or something to that effect. We'll have to wait until China confirms, as they tend to be slow on this matter. Price action may be unstable until we receive concrete confirmation. We also need to consider the June 4, deadline for "best trade deals" from U.S. Trading Partners. The Trump Administration wants all countries to submit their best offers on trade negotiations before Wednesday. Officials are trying to speed up talks with several partners in order to meet a deadline they set themselves of five weeks. PAYROLLS ON DECK The dollar dropped to its lowest level in six weeks against a basket currency early on Tuesday. This was ahead of U.S. data on job openings later that day, and the U.S. nonfarm employment figures on Friday, which will provide a timely read on the state of the U.S. economic health. The Federal Reserve could ease policy again if unemployment increases, for example, despite investors' largely giving up on any cut in this month or the next. The Treasury market would benefit from a softer U.S. employment report. 30-year yields are still flirting with the 5% mark as investors continue to demand higher premiums to offset the growing supply of debt. This week, the Senate will begin considering a tax and spending bill that would add $3.8 trillion (approximately) to the $36.2 trillion federal debt. The dollar index closed the session marginally higher, at 98.89. This was a slight improvement from its earlier losses. After the Swiss inflation rate fell to zero in May, the currency rose to 0.8181 Swiss Francs. This was the first time in more than four-years that consumer prices had fallen. The Swiss National Bank is now under pressure to reduce its interest rates by a large amount later in the month. Kenneth Broux is the head of corporate FX and rates research at Societe Generale. Broux explained that if countries like Switzerland, where the inflation rate is falling and the differentials between rates are increasing, this could prompt an intervention to reduce the depreciation and appreciation of the Franc. A currency's value will usually increase if the rates in its home country are higher than elsewhere. The euro reached a six-week high before falling to $1.1416 on the day, while sterling fell 0.2% to 1.3525. Data released on Tuesday showed that euro zone inflation fell below the European Central Bank target in December, confirming expectations of another rate cut this coming week. Brent crude futures rose 0.34% to 64.885 per barrel while U.S. Crude gained 0.46% at $62.81 a barrel. Spot gold fell from its four-week high to $3,361 per ounce.
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Dealers say that India's palm oil imports in May rose 87%, reaching a six-month record.
Five dealers report that India's imports of palm oil in May reached a six-month record, due to lower inventories, and the discount offered by palm oil over rivals soyoil or sunflower oil. India, which is the largest buyer of vegetable oil in the world, may increase its palm oil imports and U.S. soybean oil futures. According to dealers, palm oil imports rose 87% in May compared to the previous month, to 600,000 tons. This is the highest level since November 2024. The Solvent Extractors' Association of India said that India imported more than 750,000 tonnes of palm oil per month on average during the marketing period ending in October 2024. It plans to publish its import data for May by mid-June. According to Rajesh Patel of GGN Research, a trader in edible oils, palm oil imports dropped sharply between January and April because it was more expensive than soyoil. This led to a decrease in stock levels. Patel stated that Indian buyers had returned to palm oil since palm oil began selling at a discounted price last month. According to SEA, India's stocks of vegetable oil fell to 1,35 million tonnes on May 1, the lowest level since July 2020. Dealers reported that soyoil imports rose by 10% in May, compared to the previous month, reaching 398,000 tons. This is the highest level since January. Imports of sunflower oil, on the other hand, increased by 2%, to 184,000 metric tonnes. Dealers estimate that the increase in palm oil and soybean oil imports boosted India's edible oil imports by 37% compared to a month earlier, to 1,18 million tons. This is the highest level since December. Sandeep Bajoria is the CEO of Sunvin Group. A vegetable oil brokerage. He says that palm oil imports will likely rise to 750,000 tonnes in June, and to 850,000 tons by July. Bajoria stated that the recent reduction in import duties and correction of palm oil prices is likely to boost Indian consumption. India reduced the basic import duty on crude edible oil to 10% last Friday in an effort to lower food prices and support the local refinery industry. India imports mainly palm oil from Indonesia and Malaysia. It also imports sunflower oil and soyoil from Argentina, Brazil and Ukraine. GGN Research estimates that Nepal imported 132,000 tons of edible oil in May. This is up from 87,000 tonnes in April. (Reporting and editing by Kim Coghill; Rajendra Jadhav)
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Solar spot prices rise as forecasts are cloudy.
The European spot electricity prices rose on Tuesday, as the solar power supply is expected to decrease throughout the region. LSEG data show that the German contract for day-ahead electricity rose by 13.1%, to 84.80 Euros ($96.76), while the French contract, which is equivalent, was up by 2.1%, at 24 Euros/MWh. LSEG data indicated that on the supply side Germany expected wind output to increase by 2 gigawatts to 12.4 GW while French output was predicted to grow 840 megawatts to 4.5 GW. The data revealed that the German solar power was expected to decline by 2.1 GW and reach 13.7 GW. In France, solar power would be expected to decrease by 1.4 GW and reach 3.4 GW. LSEG data shows that the German demand for power is expected to increase by 500 MW on Wednesday to 53.7 GW. In France, it is forecast to rise 130 MW to 42 GW. Marcus Eriksson, LSEG analyst, said that the residual load is expected to decrease for the first 8 hours, and then increase for the remainder of the day. The country will be a net exporter for the entire day. The French nuclear capacity fell by two percentage points, to 69% total capacity, as the Chinon 3 Reactor went offline due to an unplanned shutdown. Operator EDF reported that the Chinon 3 nuclear reactor was disconnected from the network Monday because of a problem with the electrical substation on the site. The German baseload contract for the year ahead rose by 0.5%, to 87.50 Euros/MWh. The French position for the year ahead fell by 0.1%, to 61.55 Euro/MWh. The benchmark contract for the European carbon market in 2025 rose by 0.9%, to 71.60 Euros per metric ton. Ingvild Sörhus, analyst at Veyt, says that carbon prices will likely continue to move sideways in the coming week. However there are early signs of a downward trend. Experts on the market have stated that Britain will struggle in the next seven months to link its market with the EU to avoid UK firms facing annual bills of around 800 million pounds ($1.08billion) and the EU's border tariff for carbon. ($1 = 0.8764 euro) (Reporting and editing by David Evans; Forrest Crellin)
Stocks and Treasury yields fall as Trump's interview fuels concerns about growth
MSCI's global equity gauge fell 1.7% on Monday after hitting a two-month-low earlier in the day. U.S. Bond yields also dropped, as investors became concerned about an economic slowdown following Donald Trump's refusal to rule out a recession related to tariffs.
Investors began seeking safety even as early as the Sunday after Trump, in an interview with Fox News, talked about a "period transition". He declined to predict if his tariffs against China and Canada would lead to a U.S. economic recession.
Robert Pavlik is a senior portfolio manager with Dakota Wealth, in Fairfield, Connecticut. He cited concerns about tariffs, including Trump's recent interview, as the main factors for Monday's risk off mood.
When he says that there will be pain, he is telling you it may not be a short-term situation. Pavlik said that this may not be a tactic for negotiation.
Tariffs can create uncertainty about costs, inflation, and economic growth. "You don't have a clear idea of the final goal and the outcome," he said. How do you prepare for this? How can you invest in the future if you do not know what it holds?
The S&P 500 index was down 114.82, or 1.99%, at 5,655.38, and the Nasdaq composite was 641.86 or 3.48% lower at 17,562.91, both reaching their lowest levels since Sept.
The Dow Jones Industrial Average dropped 370.16 or 0.86% to 42,431.56,
MSCI's global stock index fell by 14.79 points or 1.74% to 837.31, its lowest point since mid-January.
The pan-European STOXX 600 fell by 0.99% and reached its lowest level for a month.
After the Trump interview, investor confidence was shattered and yields dropped on U.S. Government bonds.
Will Compernolle is a macro-strategist at FHN. He said: "If the White House occupant himself is not optimistic about the short-term expectations for growth, then why should the markets be optimistic?"
The yield on the benchmark 10-year U.S. notes dropped 9.9 basis points, to 4.219% from 4.318%, late Friday.
The 30-year bond rate fell by 8.7 basis point to 4.5299%, while the 2-year yield, which is typically in line with the Federal Reserve's interest rate expectations, dropped by 7.9 basis points, to 3.923%.
The U.S. Dollar fell 0.68%, to 147.03 Japanese yen. The euro fell 0.04% to $1.0828, while sterling dropped 0.09% at $1.2909.
Prices of oil fell on concerns about the impact U.S. Tariffs and increased production from OPEC+ producers. However, sanctions against Iranian oil exports prevented prices from dropping further.
U.S. crude oil fell by 0.75%, to $66.54 per barrel. Brent dropped to $69.81 a barrel, a drop of 0.78%.
Gold prices fell as profit-taking offset support from safe haven demand. Attention is also focused on the U.S. Inflation print due later this week.
Spot gold dropped 0.31% to 2,901.73 dollars an ounce. U.S. Gold Futures rose 0.1% to 2,907.50 per ounce. Copper fell 0.76% to $9540.00 per metric ton.
Bitcoin fell by 3.54%, to $80 140.80.
The U.S. executive orders on creating a reserve of strategic cryptocurrencies was issued on Friday. However, many investors were disappointed by the fact that there would not be any additional purchases of bitcoin.
Data showed earlier that deflationary pressure was present in China. The consumer price index for February missed expectations, and dropped at the fastest pace in 13 month, and producer prices deflation continued, as seasonal demands faded, and as households were cautious in their spending due to job and income concerns.
The benchmark Hang Seng Index in Hong Kong fell 1.9%, while China's blue chip CSI300 Index ended 0.4% lower. (Reporting and editing by Sinead carew, Nell Mackenzie, and Kevin Buckland, Kirby Donovan, and Andrew Heavens).
(source: Reuters)