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Gold rises as the dollar falls; Iran deal hopes to temper inflation and oil concerns
As the dollar eased, and markets assessed the impact of a proposed ceasefire in the U.S. - Israel war against Iran on oil prices and inflation expectations, gold prices rose in thin European trading. Many markets in Europe were closed for Easter Monday, so spot gold was 0.1% higher than it had been earlier, at $4,678.58 an ounce. U.S. gold futures for June delivery rose 0.6% ?to $4,706 per ounce. Kyle Rodda is a senior financial market analyst for Capital.com. He said: "We saw a gain in headlines about the potential ceasefire." The substance of that statement is questionable. However, it seems to have unwinded a little bit of the bid for oil. Crude oil prices fell more than 1% but remained above $108 per barrel. Dollar index fell 0.1% making gold more affordable for those who hold other currencies. The rise in oil prices can cause inflation to increase as businesses pass higher costs on, and central banks are unable to cut interest rates. Gold is often seen as a hedge against inflation, but high interest rates can reduce its appeal. According to CME's FedWatch, traders have priced out the possibility of the U.S. Federal Reserve reducing rates this year, as opposed to expectations for two 25-basis point reductions prior the Iran War. Iran claimed that it formulated its demands and positions in response to ceasefire offers conveyed by intermediaries and that negotiations are "incompatible" with ultimatums or threats of war crimes. U.S. officials and Iranians have received a framework for a ceasefire plan, with Iran rejecting a reopening of Strait of Hormuz immediately after President Donald Trump's threat to "rain hell" on Tehran should it not reach a deal before Tuesday. Rodda said that the next 48 hours were crucial, because if strikes are made on Iranian power plants it will be chaos and there is a guarantee of volatility. Silver spot rose 0.5%, to $73.37 an ounce. Platinum spot increased 0.7%, to $2,003.59 and palladium was 0.7% higher at $1,512.80. (Reporting by Ishaan Arora in Bengaluru; Editing by Kirsten Donovan)
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Energy Minister: Greece will provide aid to industries that are facing increasing energy costs
Stavros papastavrou, the Greek energy minister, announced on Monday that Greece would offer a 100-million-euro ($115-million) aid each year for the next five to help smaller businesses and industries cope with rising energy costs. Papastavrou said that the country also received subsidies totaling 200 million euros through the EU Modernisation Fund. These will be given to the industries of aluminium, copper and iron, as well as wood, cement, and gbvcement. Papastavrou said in a television statement that the package was a significant one to boost competitiveness. "We are on alert, because it is obvious that the severity and scale of the Middle East Crisis affects us all." Greece is heavily dependent on Middle East oil imports. Papastavrou told an energy conference on Monday that Greece's energy supply is secure for the next few months, but any estimate depends on future developments which no one can predict. Athens announced?last?month subsidies for fuel, fertilisers, and ferry tickets worth a total of?300 million euros ($346.68million)?in April or May. This was to assist consumers and farmers. Greece has also placed a?cap on profit margins on fuel and on products in dozens of supermarket shelves up until the end June.
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Russian drones kill a mother and her 2-year-old child in Odesa, Ukraine
The regional governor revealed that Russia had launched a drone strike on Ukraine's Black Sea Port of Odesa over night on Monday. It killed a mother, 30, and her two-year old daughter. Oleh Kiper said that the enemy had attacked Odesa again overnight, injuring 16 people including a pregnant women and two young children. Officials in Ukraine?added that residential buildings, energy infrastructure and a kindergarten had been hit. DTEK, the energy company, said that about 16,700 homes in Odesa districts are without electricity. They added that the damage is extensive and repairs will take time. Television footage showed firefighters and rescue workers removing debris from one of the strike locations - a residential home with a badly damaged central part. Two drones hit our house, one at the roof of the house and the other in the middle. "Our staircase collapsed and completely blocked our exit," said Danylo (21), who lives at the house. The war is now in its fifth year. Moscow has intensified its attacks against Odesa. Odesa is a major logistics hub for southern Ukraine, and also the largest port in the country, which handles the bulk of Ukrainian grain exports and other maritime exports. In a social media post, Volodymyr Zelenskiy said that Russia had launched 140 drones in overnight 'attacks' on Ukraine and also hit energy infrastructure in Chernihiv and Sumy regions. He reiterated his call for increased air defence. Zeleniskiy stated that "Russia does not intend to stop." Over 2,800 drones have been used in the last week. Nearly 1,350 guided aerial weapons and over 40 missiles are also included. Reporting by Iryna Nazaarchuk in Odesa and Olena Harma in Kyiv. Editing by Kate Mayberry, Janane Venkatraman.
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Gold rises as the dollar falls; Iran deal hopes to temper inflation and oil concerns
The gold price ticked upwards in thin European trading, as the dollar eased and markets assessed the impact of a proposed ceasefire in the U.S. - Israel war against Iran on oil prices and inflation expectations. After falling 1% on Easter Monday, spot gold rose 0.35% to $4,691.86 an ounce at 1040 GMT. U.S. Gold Futures for June Delivery rose by 0.83%, to $4.718.20 an ounce. Kyle Rodda is a senior financial analyst at Capital.com. He said: "We saw a gain around headlines referring to a possible ceasefire." The substance of that statement is questionable. However, it seems the move has unwinded a bit the bid for oil. Crude oil prices fell more than 1% but held above $107 per barrel. Dollar index fell 0.2%, making gold more affordable for those who hold other currencies. The rise in oil prices can cause inflation to increase as businesses pass higher costs on, preventing central banks from reducing interest rates. Gold is often seen as a hedge against inflation, but high interest rates can reduce its appeal. According to CME's FedWatch, traders have priced out the possibility of the U.S. Federal Reserve reducing rates this year. This is compared to expectations that two 25 basis-point reductions would be made before the Iran War began. Iran claimed that it had developed?its demands and positions in response to ceasefire offers conveyed by intermediaries and that negotiations were "incompatible" with ultimatums and threats of committing war crimes. U.S. officials and Iranians have received a framework for a ceasefire plan. Iran immediately rejected the reopening of Strait of Hormuz after President Donald Trump had threatened to "rain hell" on Tehran should it not reach a deal before Tuesday's end. Rodda said, "The next 48 hours are critical - if there is a strike on Iranian power plants it will be chaos and volatility (and therefore) guaranteed." The price of spot silver increased by 0.3%, to $73.21 an ounce. Spot platinum rose 0.35%, to $1,995.98. Palladium rose 0.51%, to $1,510.63. (Reporting by Ishaan Arora in Bengaluru; Editing by Kirsten Donovan)
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India court rejects request to halt Adani's F1 track and real estate deal
India's highest court rejected a billionaire Anil. Agarwal's. Vedanta plea on Monday to halt the acquisition of a bankrupt real. estate giant by the. Adani group, which included a $4 billion collection of prized assets. This includes India's one Formula One track. Agarwal Vedanta has filed a lawsuit against a lender's panel's decision to give assets from bankrupt Jaiprakash Associates' group to Gautam Adani. This will lead to a fight between billionaires over assets such as homes, cement plants, and India's only Formula One track. Vedanta’s appeal to the?Supreme Court? was denied as the judges stated that a lower court is more suited to hearing the concerns of Vedanta and the top courts does not have to intervene in the proceedings. Vedanta claims that its $1.8billion bid was superior, but the lender's panel decided in Adani’s favour as its $1.5billion bid had higher upfront payments. Adani's plans for real estate in Mumbai could be boosted by the?acquisition. This includes its other 'key' projects, such as Dharavi, one of Asia's biggest slums. Karan Adani Adani's eldest son said at a public event last month that "he is very personally engaged" in bringing F1 to India after 13 years. (Reporting and editing by Arpan chaturvedi)
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The Kremlin claims that the entire Middle East is on fire
The Kremlin said on Monday that the 'Iran War is escalating in both geography and economic impact. And that the entire Middle East region is "on fire" because of the U.S. attacks and Israeli attacks against the Islamic Republic. In an expletive-filled Easter Sunday social media post, U.S. president Donald Trump threatened to attack Iran's bridges and power plants on Tuesday, if the Strait of Hormuz was not reopened. The Kremlin's spokesman, Dmitry Peskov, told reporters when asked about?Trump?s remarks that Russia had already seen them and that they preferred not to make a direct comment. Peskov stated, "We are aware that tensions in the region continue to rise." "In reality, the entire region is on fire." All of these are very dangerous and negative effects from the aggression against?Iran. The geography of the 'conflict' has grown, and we now know that there are very negative consequences for global economic growth. Reporting by Dmitry Antonov; Writing by Felix Light; Editing by Gleb Brianski/Guy Faulconbridge
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As Asia and Europe compete for supplies, US crude prices have reached record highs.
Industry sources say that spot premiums for U.S. West Texas Intermediate crude are at all-time highs due to the fierce competition for oil supply between Asian and European refiners. This is in response to Middle Eastern oil flow disruptions caused by the Iran War. Europe is the biggest importer of U.S. oil, but the competition has increased as Asian buyers are searching for supplies from the Americas and Africa to Europe to replace Middle Eastern crude that cannot move through the Strait of Hormuz. Sources and analysts say that the increase in crude oil prices has increased costs for refiners and led to a 'widening of losses' on both continents. This puts severe pressure on firms, including state-owned companies, which are required by governments to continue producing fuel for their national security. In a note from April 3, Paola Rodriguez Masiu, Rystad's chief oil analyst, said that Asian refiners are aggressively bidding for "every barrel" in the Atlantic Basin, because they have been cut off from Middle Eastern supplies. 'EVERY DAY THERE'S A NEW ?PRICE' The premiums on WTI Midland crude for delivery to North Asia by very large crude carriers in July ranged from $30 to $40 per barrel, depending on the benchmark, traders reported. One trader put the premium at 34 dollars a barril over Dubai quotes, while another said it was $30 above Brent dated. Two other traders said that offers were closer to $40 a barron above the August ICE Brent base. These levels are higher than the premiums paid by Japanese refiners, including Taiyo Oil, for WTI crude in late March or early April. One of the traders stated that "every day, there is a new price", adding that Asian refiners suffer severe losses from the premiums. One trader suggested that refiners should reduce crude runs in order to buy?products, if any?are available. The spot premiums increased after the WTI monthly spread reached its largest backwardation Thursday. Backwardation is when the current price of a product is higher than that in future months. The demand for U.S. Gulf Coast tankers has also increased due to the wider discounts offered on U.S. Crude Oil compared with the global benchmark Brent. This has reduced vessel availability and pushed up freight rates. On Thursday, the bids for WTI Midland delivered to Europe reached a record high of nearly $15 per barrel compared to Brent dated. According to Rodriguez-Masiu, "At the current physical differentials as well as freight rates, European refiners who buy spot crude cannot make any money by running these barrels through their system."
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Dollar gains as gold falls due to raging Iran conflict and strong US job data
As markets awaited the U.S. President's remarks, gold prices fell on Monday. A stronger U.S. Dollar, boosted by a "strong" U.S. employment report, dampened bets for rate cuts. Donald Trump is facing an escalating conflict between Iran and the United States. Gold spot fell 0.4% at $4,658.90 an ounce as of 0706 GMT. U.S. gold for April delivery rose by 0.1% to $4684.30. Kelvin Wong is a senior analyst at OANDA. He said that markets are looking for a second so-called headline threat to be revealed later. Trump also threatened to "rain hell" on Tehran, if the Strait of Hormuz is not reopened by Tuesday. However, recent U.S. Intelligence assessments indicate that Iran will be unlikely to reopen this 'crucial waterway for oil shipping any time soon. Investors also considered an Axios article that stated that the U.S. and Iran, along with a group mediators, are discussing the possibility of a 45-day truce that could pave a way for the permanent end of the war. Brent oil prices rose as the war disrupted global energy supplies and fuelled inflation fears. Gold is often viewed as a hedge to inflation. However, high interest rates can dampen the demand for this non-yielding investment. The yield on the 10-year U.S. Treasury and the dollar index both rose, boosted by Friday's data showing that U.S. payrolls for non-farm workers in March increased to the highest level since December 2024. Meanwhile, the unemployment rate dropped to 4.3%. Tim Waterer is the chief market analyst at KCM Trade. He said that "the latest robust NFP has reinforced hawkish Central Bank nerves while persistent oil-driven fears of inflation continue to crowd out Gold's traditional "safe-haven" sparkle." The odds of a U.S. Federal Reserve rate reduction this year are almost non-existent, as compared to the two cuts that were expected before the Iran War began. Palladium rose 0.7%, while spot silver dropped 0.9%. (Reporting from Bengaluru by Pablo Sinha; Additional reporting by Swati verma; Editing and production by Sumana Nandy, Mrigank Dhaniwala).
Bonds hold steady, shares gain on tariff relief
Asia shares rose Tuesday, but futures showed weakness in Europe and America after President Donald Trump said he could grant exemptions to auto-related tariffs.
U.S. Treasury Bonds steadied after staging a recovery over night following last week’s historic selloff. Meanwhile, the dollar continued to lose favour with investors.
Trump said Monday that he is considering a change to the 25% tariffs on imports of foreign autos and auto parts from Mexico, Canada, and other countries. These tariffs can increase the cost of a vehicle by thousands of dollars. Trump stated that car companies need "a little time" to manufacture cars in the United States.
This followed Trump's Friday decision to exempt some electronics, including smartphones, computers, and other electronic devices from his "reciprocal tariffs" in the U.S. His administration stepped up investigations into semiconductor imports after Trump announced on Sunday that he would announce the tariff rate in the coming week.
The Trump administration is also conducting investigations into the importation of pharmaceuticals.
Illiana Jain is an economist with Westpac. She said, "When we see these exemptions flowing through, it helps the markets to think that tariffs aren't going to be something that will be all-encompassing and that they may actually be reprieved."
Shares rose after investors seized on any good news that they could find following last week's massive selling. The broadest MSCI index of Asia-Pacific stocks outside Japan rose 1%.
Japan's Nikkei index rose by 1%. Shares of automakers Toyota and Denso, which makes auto parts, were among the biggest gainers.
Gains were modest as the uncertainty surrounding Trump's trade policy and his back and forth on tariffs continued to cloud markets and global economic outlook.
U.S. Futures fluctuated between losses and gains, closing the last trades lower following an overnight gain in Wall Street.
Nasdaq Futures dropped 0.2%, while S&P futures declined 0.13%. In Europe, EUROSTOXX futures fell 0.1% while FTSE Futures rose 0.12%.
Bank of America, Citigroup and other big banks will be reporting earnings this week. The numbers from chipmaker TSMC will be a highlight later in the week.
Hong Kong's Hang Seng Index and China's CSI300 blue chip index both declined by 0.2%.
Bharat S. Sachanandani is the head of flow strategies and solutions in Asia Pacific for Societe Generale.
The asset markets seem to indicate that higher prices will lead to a reduction in demand, and the probability of a recession is increasing.
U.S. RATE
After a wild selloff that caused the biggest weekly rise in borrowing costs since decades, U.S. Treasuries managed to hold onto their overnight gains on Monday. Bond yields are inversely related to bond prices.
The benchmark 10-year rate remained at 4,3505% after falling nearly 13 basis points the previous session.
The yield on the two-year bond was also little changed, at 3.8574%. It had dropped 12 basis points Monday.
Analysts have attributed the decline in yields to comments made by Federal Reserve Governor Christopher Waller.
He said that on Monday, the Trump administration’s tariff policies were a major shock for the U.S. Economy and could cause the Fed to lower rates in order to avoid a recession, even if the inflation rate remains high.
Raphael Bostic of the Atlanta Fed Bank, on the other hand, suggested that U.S. Central Bank should remain on hold until more clarity is available.
The markets are pricing in a 84-bps easing of rates by December. Most expect the Fed to keep rates at current levels next month.
The dollar was near its three-year low against the euro, at $1.1356. It was also not far off from the decade-low it had reached against the Swiss Franc.
Sachanandani, of SocGen, said that the U.S. Dollar's behaviour has changed recently. It now ignores rate differentials and responds more to capital flow.
The U.S. Dollar does not like the prospect that U.S. companies will be less profitable and U.S. consumers will face higher inflation. Foreign investors' appetite for U.S. assets is also declining. assets."
The latest exemptions from tariffs announced by Trump helped to boost oil prices. Brent crude futures rose 0.28%, to $65.06 a barrel. U.S. crude oil was up 0.36% at $61.75.
Gold spot was nearing a record at $3,224.56 per ounce.
(source: Reuters)