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Gold's record rally stops as investors cash out gains
Gold prices fell on Thursday, after a steep rise the previous day, as investors booked their profits before a long weekend. However, a softer dollar, and the escalating U.S. China trade tensions, kept gold above the $3300 per ounce mark. As of 8:58 am, spot gold was down 0.5% at $3,326.51 per ounce. ET (1258 GMT), the session ended with a record-high of $3,357.40. Bullion is up nearly 3% in the last week. U.S. Gold Futures fell 0.2% to $3,339.90. Tai Wong is an independent metals dealer. He said that gold may experience a short-term decline given its dramatic surge this week. There is a risk that there could be a deal announced this weekend, possibly with Japan. Gold's trajectory is still higher, however, given the deep uncertainty and concern that continue to plague asset markets. Gold prices rose 3.6% on Tuesday, mainly due to the U.S. president Donald Trump's decision to launch a probe on potential tariffs for all imports of critical minerals, as well as reviews on pharmaceuticals and chips imports. In one of the few face-to-face meetings since Trump's barrage of tariffs on global imports caused a market uproar and stoked fears of recession, Trump announced "big progress" on Wednesday in his negotiations with Japan. The dollar index rose on Thursday but still headed for a weekly decline. Gold becomes cheaper for other currency holders when the dollar weakens. We remain bullish on gold. Metals Focus, a consultancy, said that near-term corrections will likely occur as players tactically take profits or may experience margin calls due to another round of equity liquidity. Other metals, such as spot silver, fell by 0.9%, to $32.46 per ounce. Platinum dropped 1%, to $957.18. Palladium declined 2.3%, to $949.72.
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Italy will meet NATO's defence spending target of 2% GDP this year
Giancarlo Giorgetti, the Economy Minister at a Thursday hearing in parliament, said that Italy would meet NATO's target of 2% GDP on defence expenditures this year. According to NATO, Italy's projected defense budget for 2024 is 1.49% GDP. This is one of the lowest levels of any country in the alliance. The United States are putting pressure on Italy to increase its expenditures. Giorgetti, speaking to lawmakers about Italy's multiyear budget plan, said: "We are acutely conscious of the need for this expenditure to increase in the coming year." Giorgetti stated that Italy's accounting criteria would need to be adjusted to conform to NATO rules, and items previously excluded from defence spending will now be included. Included in this are moneys spent on certain civil technologies and pensions for retired soldiers. Donald Trump, the U.S. president, is pressuring NATO allies to increase military spending up to 5% of their GDP. This was something that Italy's Minister of Defence Guido Crosetto called "unthinkable" this week. The European Commission proposed that member states could increase defence spending by 1,5% of GDP every year for four consecutive years without any disciplinary measures, which normally kick in when a government's deficit reaches 3% of GDP. Giorgetti stated that Italy, which is heavily indebted, does not plan to use this leeway at the moment. GROWTH PROBLEMS The central bank of Italy, which also testified before the parliament on Thursday, stated that defence spending could be increased partly by borrowing extra and partly by other budget savings and tax increases. The government's latest economic targets, released last week by the Ministry of Finance, committed to keeping its budget deficit under control even though it cut its growth forecasts this year and the next due to uncertainty surrounding U.S. tariffs. The UPB, the Italian parliamentary budget watchdog, forecasted on Thursday that Trump tariffs would lower Italy's GDP 0.3 percentage points. This could lead to a loss of 68,000 jobs. The report did not specify a timeline. The Bank of Italy has warned that delays in the allocation of the money, which was supposed to happen by 2026, could lead to missed targets. The government has set ambitious goals to recover lost ground. It spent around 72.81 billion euros (66.81 billion dollars) in March, or 34% of EU funds available. Budget framework projects EU COVID fund expenditures of 40 billion euro in 2025. Next year, the budget forecasts 80 billion euro and 12 billion in 2027. Giorgetti stated that it was inevitable that a part of the expenditures would have to be accounted for beyond 2026.
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Putin's envoy to Russia says that Witkoff's contacts with the Russians are extremely productive
Putin's investment representative said that the meeting between Russian President Vladimir Putin and U.S. president Donald Trump's Special Envoy Steve Witkoff, was very productive. However, various countries were trying to disrupt dialogues between Moscow Washington. Putin and Witkoff spoke for nearly five hours in St. Petersburg, the former imperial city. Yuri Ushakov and Kirill Dmitriev, Putin's investment envoy, were also present. Kirill Dmitriev, a reporter in the Kremlin at the time of a visit to Moscow by Qatari Sheikh Tamim Bin Hamad al-Thani, said that "the meeting was extremely fruitful." Dmitriev added that a variety of unidentified media spread misinformation. "A very constructive dialogue is taking place." The dialogue is taking place in difficult circumstances - there are constant attacks and misinformation. Witkoff, after the meeting with Putin told Fox News it was now clear what Putin wants for a lasting peace in Ukraine. Witkoff said that the Russia-U.S. relations could be "very, very significant for the world." He added that the relationship between the two countries also offered "very compelling business opportunities". (Reporting and editing by Guy Faulconbridge; reporting by Vladimir Soldatkin)
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Sources say that TK Elevator owners are weighing up the US dollar for a potential multi-billion euro IPO.
Three people familiar with the matter said that TK Elevator owners are considering the United States for a possible initial public offering (IPO) next year, despite the market turmoil caused by U.S. Tariffs, which has slowed the pace of dealmaking. The people, who spoke on condition of anonymity as the matter was private, said that the discussions are still at an early stage, and the preparations will be formalised by the end of 2025 with a view of conducting a company sale or listing next year. People said that the business would likely be valued at over 20 billion euros in a transaction. However, there is no certainty about a deal, and the timing may change based on the market's developments. One person said that the United States is TK Elevator’s largest market. It is also home to the sector leader Otis which commands the highest multiplier among its peers. This is one of many reasons it is being considered for an IPO. Thyssenkrupp sold its elevator business in 2020 - renamed TK Elevator subsequently - to a consortium led by private equity firms Advent and Cinven, as well as Germany's RAG Foundation - for 17,2 billion euros. Advent, Cinven, and RAG declined to comment. TK Elevator did not respond to a request for comment immediately. The recent actions of Titan Cement International and Holcim, both Swiss companies, have highlighted the hotly debated issue. Fourth largest The London Stock Exchange is trying to discourage companies from going to the U.S. LSEG data shows that TK Elevator ranks fourth in the world for elevator sales, behind U.S.-based Otis and Schindler, as well as Finland's Kone. These companies trade at an average EV/EBITDA multiplier of 14.8, according to LSEG. This ratio, based on an adjusted EBITDA (Earned Before Interest and Taxes) of 1.5 billion euro in fiscal year 2023/24, would give TK Elevator a value of over 22 billion euros. Since the fiscal year 2020/2021, TK Elevator's sales have increased by over 16%. Its adjusted EBITDA has also increased by over a third. This has resulted in an operating margin around 16%. The strong global demand, and stable service business, are to thank for this. Alat, a Saudi tech company, bought a 15% share in TK Elevator in February. It also launched a 160-million euro joint venture for elevator and escalator systems in Saudi Arabia. Thyssenkrupp said last year that a minority share it still held in the elevator business had a book valuation of 1 billion euro. It added it was flexible about its options, which depended largely on what TK Elevator’s majority owners did.
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Sources say that Brazil's Petrobras is considering outsourcing the operation of its fertilizer plants.
Three sources with knowledge of the talks said that Brazil's state oil company Petrobras was considering holding a tender for a company to run its nitrogen fertilizer facilities in Bahia State and Sergipe State. The move is intended to restart production at these facilities. On condition of anonymity, sources stated that the board of the company is expected to meet Thursday to evaluate this proposal. This would involve Petrobras taking back management of the two units currently leased by Unigel. Petrobras didn't immediately respond to an inquiry for comment. Petrobras leased the two units to Unigel for 10 years in 2019, but since 2023, they've been paralyzed as Unigel claimed that Brazil's high natural gas prices made it uneconomical. A source said that the board meeting to find a solution on how to resume the units was rescheduled multiple times over the past few weeks due to the lack of consensus between board members. Brazil is heavily dependent on imported fertilizers. Prior to the current proposal was the possibility that Petrobras could directly engage Unigel for the operation and maintenance of the units, a measure which would have already had Unigel's consent. Another source said that board members rejected this option, arguing that the state-owned firm cannot do this without a proper tender. Petrobras, Unigel and other parties are in dispute over the lease contract. It wasn't immediately clear whether the current proposal included a negotiated resolution between the parties. Reporting by Marta Nogueira, Rodrigo Viga Gaier and Isabel Teles. Editing by Ana Mano & Alison Williams.
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Shortsellers target a wider range of companies before Trump's "Liberation Day"
Hazeltree, a data and technology firm, said that shortsellers had targeted a broader range of equity sectors before President Donald Trump announced his "Liberation Day", or April 2, tariff announcement. They also raised negative bets against a group of large tech stocks. Super Micro Computer was the most popular security. It knocked oil and gas producer Chevron from the top spot it held for two months. Prior to this, tech stocks dominated the top 10 list of most-shorted U.S. Large Caps. Hazeltree reported that only five of the top 10 stocks most shorted in March were tech shares, compared to eight in February. Tim Smith, Hazeltree's managing director for data insights, said: "We saw signs that tariffs were being signaled to markets in March." Our analysis of shorting activities in the Americas suggests short sellers started reducing their exposure to tech in anticipation of full tariff implementation -- a possible sign of an early repositioning. Hazeltree’s list of the top 10 most-shorted shares includes IBM, MicroStrategy and ON Semiconductor. Capital One Financial, sportswear maker Lululemon, and other non-tech stocks. A stock is shorted when shares are borrowed to be sold at a certain price, then repurchased for a lower price. Hazeltree's report stated that the more funds short a bet, then the greater the percentage. Super Micro Computer shares, which are one of many stocks that have been exposed to artificial-intelligence, surged by 45% to reach six-month highs in February, before falling in March. Hazeltree gives a score out of 100 based on how many investors have sold short a particular company's stock. Super Micro Computer's rating in March was 99, up 91 points from February. IBM had a score of 93, compared to 85 in February. MicroStrategy also scored 93 versus 85 in March. Hazeltree reported that Gucci's owner Kering was Europe's top shorted stock for the third consecutive month in March, followed by H&M, a fast-fashion retailer. Hazeltree said that H&M's institutional supply usage rate was the highest at 99%. Hazeltree explained that this metric is the percentage of institutional investor's supply of a particular security being lent. The higher the percentage the greater the demand among investors for borrowing that stock, and the harder it will be to open new short positions. Disco, a Japanese company that makes chipmaking devices, was Asia's most-shorted large cap stock for the third consecutive month. (Reporting and editing by Dhara Ranasinghe, Elaine Hardcastle and Amanda Cooper)
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Japan's crude imports for FY2024 down 7.1%; second consecutive year of decline
The Ministry of Finance (MOF), on Thursday, reported that Japan's crude oil imports cleared by customs in 2024 fell 7.1% from the previous year, and the value of the imported crude oil dropped 5.7%, to 10.65 trillion Japanese yen ($74.7billion), due to the lower oil price. The preliminary data show that Japan, which is the fourth largest crude buyer in the world, imported 2,32 million barrels of crude oil per day (134,67 million kilolitres), for the period ending March 31. The MOF reported that this was the second consecutive decline in value and volume year-over-year. The volume of Japan's LNG imports rose by 1.5% in the past financial year to 65.87 millions metric tons, while the value increased 2% to $6.17 trillion yen. The data revealed that imports of thermal coal used for power generation rose by 7.4%, to 105.46 millions tons. However, the value of the thermal coal imported fell by 11.9%. The MOF reported that crude oil imports for March fell by 13.6%, to 2,19 million bpd (or 10,78 million kilograms). Japan's LNG imports totaled 5,15 million tons in the last month. This is down 7.2% compared to a year ago. The data shows that imports of thermal coal used in power generation rose by 8.8% to 8,31 million tonnes in March. The following is a breakdown of the energy imports in Japan for last month. Volumes of crude oil, petroleum products, gasoline/naphtha, LNG, LPG, and coal are in millions of kilolitres, and values are in millions of yen. FY2024 figures Fuel Volume Yr/Yr (%) Value Yr/Yr (%) Mineral Fuels n/a 25074,903 -3.6% Crude Oil 134.671 10,650,207 -75.7 Oil Products n/a 2 970 054 11.0 (Mogas/Naphtha) 27.988 -0.5 2,141,629 8.1 LNG 65.874 1,5 6,171,814 2. LPG 9.98 0.2 952,291 11. Coal 165.3 1 0 4,282,331 (- 15.8) (Thermal Coal) 105.458 7.4 2,428,864 -11.9 March figures Fuel Volume Yr/Yr (%) Value Yr/Yr (%) Mineral Fuels 1,917 329 -12.5 Crude Oil 10,777 -13.6 805,831 -17.2 Oil Products n/a (Mogas/Naphtha) 2.294 6.2 164,411 0.9 LNG 5.151 -7.468.500 -11.6 LPG 1,192 40,618 44,9 Coal 12.29 -6.4 265,283-31.2
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Copper trades at a low volume as the dollar edge up
The copper price fell in London Thursday, under the pressure of a stronger dollar. However, it remained within a narrow range, despite lower trading volumes before a four-day break for Easter. There was also no sign that the trade war between China and the U.S. had de-escalated. By 1019 GMT, the benchmark three-month price of copper on London Metal Exchange was down by 0.9% to $9,120.50 per metric tonne. Metals that are important for growth have lost 6% this month due to an escalating global trade war. The two biggest economies in the world have imposed triple-digit import duties on each other. This is threatening global demand and growth. In a recent research note, Citi analysts said that "Tariffs may have peaked but de-escalation has not yet been seen." China's Commerce Ministry on Thursday called on the U.S. not to put "extreme pressure" against Beijing, and demanded that any trade negotiations be conducted with respect. However, both sides are still unable to agree on who will initiate these talks. China is the top metals consumer in the world. Citi forecasts that global growth will slow to just 2.1% in 2018, down from a little under 3% the previous year. In 2026, growth is projected to only rebound slightly, to 2.3%. This is because of the continuing effects of U.S. wide tariffs. Since the U.S. announced their tariffs early in April, copper prices have fallen below its major moving averages. These are now at resistance level. The 100-day moving is $9,284. The dollar's rise on Thursday pushed up the price of metals for buyers who use other currencies. LME aluminum fell by 0.3%, to $2.375 per ton. It is already subject to a 25 percent U.S. tariff on imports, and it has fallen 7% this year. Alcoa, a major U.S. producer, said that the U.S. still faces a shortage of 3.6 millions tons of aluminum even if the entire idle smelting capability in the country was restarted. The company expects U.S. Tariffs on Aluminium Imports from Canada will cost it $90 million in the third quarter. Nickel fell 0.6% at $15,595. LME zinc dropped 0.8%, to $2,561 per ton. Lead lost 0.2% to $1,904. Tin rose, however, by 0.6%, to $30,880. The LME will be closed for Easter on Friday and Monday. Reporting by Polina Devlin in London, Editing by Rachna uppal
Wall Street's tariffs crash resumes following morning recovery failure
The S&P 500 fell below 5,000 for the first time since almost a full year. This was a reversal of a strong morning rally, as expectations faded that there would be any delays or concessions from the U.S. on tariffs before a deadline at midnight.
The benchmark index dropped 1.6% on Monday, marking a loss of $5.8 trillion in market value. This is the largest drop since President Donald Trump announced hefty tariffs on U.S. trading partner countries on Wednesday. The biggest percentage drop in four days since the pandemic was more than 12%.
It was also on the verge of a 20% drop that would indicate a bear market. The Dow Jones Industrial Average dropped 0.84% and the Nasdaq Composite fell 2.15%.
Comment: MARK MALEK, CHIEF OFFICER SIEBERT FINANCIAL NEW YORK. "This kind of market closing is not good. We could, and should, have had a more positive close, even though the rally slowed down in the afternoon. The market has already priced in a possible trade war, and the new news was not enough to cause a further decline in stocks. Many technical traders will be scratching their head tonight.
"But I am still somewhat positive, which has been rare for me lately." "I think the body-language coming from the Administration signals that they would rather negotiate. That the 104% tariffs against China that we heard later in the session were a negotiation tactic."
Early in the morning, the market had a hint that the tariff issue might be resolved sooner than last week. As the day progressed and news was released, this thought disappeared and uncertainty about the future - earnings, tariffs - grew. The market then sold off.
"I have no idea how to estimate (earnings for) many companies at this time. ... Any earnings estimate for many companies, and the S&P 500 is fraught with a huge amount of potential for change. Most likely to the downside. It's hard to value many stocks before you are confident about the future earnings." CHRIS GRISANTI, CHIEF MARKET STRATEGIST, MAI CAPITAL MANAGEMENT, NEW YORK
"I found today's market reaction troubling. We were delighted to see a strong market in the morning. But then, it made this end even worse because it turned our joy into sadness.
"But from a technical perspective, it makes sense, because you can't make any meaningful investments now, when there is so much uncertainty. You need to have a certain amount of humility to acknowledge that we don't really know everything. At this point, I think 'caution is the better watchword' than 'looking at opportunities'.
"I believe it would be very difficult for the economy not to go into a recession even if tariffs were removed tomorrow. Because I believe things are very slowed down, which means that things aren't moving because businesses don't have any idea what to do. They're not taking any decisions. I believe we are just about past the point of return. We will start to see first quarter results on Friday. I wouldn't at all be surprised to see companies rescinding their January guidance. "There's still a lot that could go wrong in the next few weeks."
(source: Reuters)