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Morning bid Europe-stocks are buoyant, but Japan's vote is a risk
Stella Qiu gives us a look at what the future holds for European and global markets. The share markets continue to defy the laws of gravity. Wall Street closed yet another record-high as investors seized on positive economic signals. This sparked a rally that has continued in Europe and most Asian markets. A new worry has emerged in Japan. An upper house election this Sunday could threaten the majority of Prime minister Shigeru Shiba's ruling alliance. Japanese stocks, bonds and yen are all falling due to the increased political risk. The broadest MSCI index of Asia-Pacific stocks outside Japan reached its highest level since late 2021, but Tokyo's Nikkei fell 0.3%. Meanwhile, the yen is headed for a third straight week of losses. It's down 0.7% at 148.45 to dollar, near a 2-month low. The yields on 10-year JGBs fell 1 basis point on Friday to 1.545%, but are still not far off the 17-year-old high of 1.585% that was reached earlier in this week. The opening of the European stock markets is expected to be higher, with EUROSTOXX futures rising by 0.3%. The Sunday elections in Japan could be the most important upper house elections in many years. They may add to the political instability in a period of rising concerns over fiscal sustainability, uncertainty about interest rates and lack of progress in trade negotiations with the U.S. Japan's core rate of inflation fell in June, but it remained above the central bank target of 2%. This highlights the high cost-of living that is plaguing Ishiba. Investors are also happy about the robust earnings of U.S. corporations and the resilient U.S. economic situation. Wall Street futures have firmed up a bit, while Netflix's results exceeded expectations, partly due to the weaker dollar. This could be good news for export earnings. For the rest of today, the economic and events calendars are mostly empty. Fed Governor Christopher Waller reiterated support for a cut in interest rates at the end this month. He cited mounting risks to the economic. Fed funds futures indicate that there is little chance of any movement on the 30th July, while a rate cut in September is about 60% priced-in. This year, a total easing of 45 basis points is expected. The following are key developments that may influence the markets on Friday. Germany PPI for the month of June The German Finance Minister Lars Klingbeil, and the Bundesbank President Joachim Nagel spoke on the sidelines at the G20 in Durban U.S. University of Michigan consumer Sentiment survey
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Dalian iron ore to gain fourth weekly on demand optimism
Dalian iron ore prices rose on Friday, heading for a fourth straight weekly gain as a positive demand outlook and expectations of further support from Beijing lifted market sentiment. As of 0320 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange rose by 0.7% to reach 787.5 Yuan ($109.67), per metric ton. This week, the contract gained 3.01%. The benchmark August Iron Ore at the Singapore Exchange rose 0.57% to $101.4 per ton this week, an increase of 2.19%. Analysts from ANZ stated that traders are optimistic about improved steel margins after Beijing's signal to reduce overcapacity. Hopes for new stimulus in the property sector have also boosted market sentiment. ANZ said that lower inventories of both iron ore, and steel, are fueling expectations for restocking to occur in the months to come. SteelHome, a consultancy, says that total iron ore stockpiles across Chinese ports fell by 0.76% in a week to 130.9 millions tons on July 18. This has further supported prices. Galaxy Futures, a broker, reported that the current demand for iron is strong, while steel consumption remains high in the manufacturing industry. Galaxy said that the prices are further supported by expectations of reforms to supply-side policies. BHP, a mining giant, reported an annual record iron ore output of 290 millions tons. The fourth quarter production was 77.5 million tonnes, exceeding the market's expectations. Strong retail sales data boosted the dollar. Dollar-denominated investments become more expensive to holders of other currencies when the greenback is stronger. Coking coal and coke both rose by 2.55% and 0.8% respectively. All steel benchmarks at the Shanghai Futures Exchange gained ground. Hot-rolled coils and stainless steel gained 0.24% and 0.88% respectively. ($1 = 7,1807 Chinese yuan). (Reporting and editing by Rashmi Liew)
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High-Voltage Substation for RWE’s Thor Wind Farm Sails Away from HSM Offshore
HSM Offshore Energy has completed the buildout and delivery oof the Thor offshore high voltage substation (OHVS) for RWE’s Thor offshore wind farm in Denmark.The completed yard constructed and delivery marked the achievement of three major milestones - the load-out of the jacket, the load-out of the topside, and the sail-away of the jacket and substation, which have now left the Schiedam yard and are en route to its final destination off the Danish coast.Thor is a joint 1.1 GW offshore wind project of RWE (51%) and Norges Bank Investment Management (49%).The Thor OHVS is a critical component of Denmark’s largest offshore wind project to date, which will be capable to supply more than one million Danish households with clean electricity.Positioned approximately 22 kilometres off the west coast of Jutland, the substation will collect and transform power from 72 wind turbines before transmission to the onshore grid at Volder Søndervang.Awarded in 2022, HSM Offshore Energy was entrusted with the full EPCIC (Engineering, Procurement, Construction, Installation, and Commissioning) contract including HV equipment for both the topside and jacket foundation.The topside measures 39 by 36 by 18 metres and weighs approximately 2,600 metric tonnes, while the jacket spans 40 by 40 by 50 metres and weighs approximately 2,500 metric tonnes.“Delivering the Thor substation from first steel to sail-away has been a highly rewarding and technically complex journey. This achievement reflects the deep dedication, expertise, and teamwork across all disciplines, partners and subcontractors. The Thor project demonstrates what’s possible when innovation and integration come together - and it sets a new benchmark for what offshore substations can and should be,” said Koen Moons, Project Manager at HSM Offshore Energy.The installation of the Thor OHVS is expected to take place later in summer 2025, with the commissioning to follow, Günther Fenle, Project Director for Thor at RWE added.
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Solstad’s Normand Pioneer CSV Up for Petrobras Job
Norwegian offshore vessel owner Solstad Maritime has secured work for its Normand Pioneer construction support vessel (CSV) for the end-client Petrobras.The vessel will be on a bareboat contract from Solstad Maritime to Solstad Offshore (SOFF), which is the contract holder with Petrobras.Normand Pioneer CSV will be mobilized with a heave compensated E-type gangway system from Ampelmann to the contract that will beging in October 2025.Duration of the contract is 180 days firm and has a gross value of approximately $17 million, including mobilization.Built in 1999, Normand Pioneer features UT 742 design, and is capable of accommodating 73 people.
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Platinum reaches its highest level in over a decade, gold drops weekly
The dollar was stronger and the U.S. economy showed solid results. Gold prices were flat and headed to a weekly decline. Platinum reached its highest level since august 2014. As of 0156 GMT, spot gold was unchanged at $ 3,337.59 an ounce. U.S. Gold Futures declined 0.1% to $3343.20. Bullion is down 0.5% this week. The dollar was 0.1% weaker against its rivals last Friday but it was on track for a second consecutive weekly gain. The dollar's strength makes bullion priced in greenbacks more expensive for holders of other currencies. Kelvin Wong, senior market analyst at OANDA, said: "We're starting to see some data that still supports a somewhat vigilant U.S. economic outlook. Market participants may still be looking for a situation in which we don't expect a Fed that is very dovish." Data released on Thursday showed that U.S. Retail Sales rose more than anticipated in June. The sales increased by 0.6% after a 0.9% decline in May, which was not revised. Initial U.S. jobless claims dropped 7,000, to 221,000 seasonally adjusted for the week ending July 12. The economists polled had predicted 235,000 claims. The data were strong and showed that the largest economy in the world was on stable ground. This supported the Federal Reserve's hesitation to resume monetary policy ease. Fed Governor Christopher Waller, however, said that he still believes the U.S. Central Bank should reduce interest rates by the end of the month due to mounting risks for the economy. In a low interest rate environment, gold, which is often seen as a safe-haven in times of economic uncertainty tends to perform well. Investors closely monitored trade negotiations as U.S. president Donald Trump expanded his tariff war. Palladium rose 1.4% to 1,297.78 per ounce to its highest level since August 2023. Spot platinum also rose by 1%, to $1472.20 an ounce. Silver was unchanged at $38.12. (Reporting and editing by Rashmia Aich, Subhranshu Sahu, and Brijesh Patel in Bengaluru)
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Copper prices rise on positive US data and China's demand expectations
Copper prices on the London Metal Exchange and the Shanghai Futures Exchange rose on Friday, supported by stronger-than-expected U.S. economic data and expectations of increased Chinese buying after the recent price dip. The most traded copper contract on SHFE gained 0.5%, to 78.290 yuan per ton. However, it was still 0.19% down this week. The U.S. data is encouraging and has boosted the hopes for better demand for copper. This also reduces the likelihood of immediate interest rate reductions, according to a metals analyst in Beijing at a futures firm. Retail sales in the United States increased by 0.6% in June, after a 0.9% decline in May that was not revised. The number of Americans who filed new unemployment benefit applications fell last week. This indicates that job growth has been steady so far this month. The LME copper stock has been increasing, especially at its Asia warehouses, as traders are betting that China will buy more with the recent price drop, but it is unclear whether or not this will happen. The total copper stock at LME registered warehouses As of Thursday, the number of tons of coal in Asian warehouses, such as Gwangyang, Taiwan, and Gwangyang, had risen by 34.8%. The market is still waiting for the confirmation of the deadline of August 1, and the details of the U.S. 50% tariff on copper imports. LME tin rose by 0.47%, to $33,170 per ton. Aluminium gained 0.41%, to $2,588.5. Lead climbed 0.28%, to $1,978.5. Zinc advanced 0.24%, to $2,743.5. Nickel fell 0.04% to $16,090. SHFE zinc rose 1.18%, to 22,340 Yuan per ton. Tin gained 0.77%, to 263,760 Yuan. Nickel grew by 0.67%, to 120,430 Yuan. Aluminium grew by 0.47%, to 20,520 Yuan. Lead dropped 0.3% to 16 820 yuan. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 1230 US Housing starts Number June 1400 Preliminary US U Mich Sentiment July (Reporting and Editing by Sumana Niandy; Reporting by Hongmei LI)
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Japan's core inflation slows, but remains above BOJ target. This keeps bets on a hike alive
Japan's core rate of inflation, while slowing in June, has remained above the central bank target of 2% for more than three years. This highlights the lingering pressures on prices that support market expectations for future interest rate increases. The data shows the difficulty the Bank of Japan faces when determining how soon it will resume raising rates from their still low levels, while balancing the mounting pressure on inflation and the risks that U.S. Tariffs pose to an already fragile economy. Data released on Friday showed that the core consumer price index, which excludes volatile costs of fresh foods, increased 3.3% from a previous year in June. This was consistent with a market consensus. The increase was lower than the 3.7% in May, mainly due to the resumption gasoline subsidies. However, it remained above the 2% target set by the central bank for the 39th consecutive month. Separate index which excludes both fuel and fresh food costs, closely monitored by the BOJ to measure domestic demand-driven price increases, rose 3.4% from a previous year in June after rising 3.3% in May. "Underlying Inflation remains elevated and will almost certainly exceed the Bank of Japan forecasts." The BOJ may be hesitant to act for a longer period of time than expected, given the trade tensions that are threatening the economy. The BOJ is expected to review the data at its next policy session on July 30 and 31. At this meeting, the board will revise its inflation forecast as part of a quarterly assessment. Food prices, excluding volatile fresh foods like vegetables, increased 8.2% from a year ago in June, an acceleration from the 7.7% increase in the previous month, which is a sign that cost of living pressures are increasing in households. Data showed that the cost of rice staples nearly doubled compared to the previous year, resulting in a 19% increase in the price of rice balls and a 6.5% rise in the prices of sushi. The data revealed that service-sector prices rose by 1.5% from 1.4% in may, indicating that companies passed on higher labour costs, albeit at slower rate than goods. The BOJ ended a ten-year-old, radical stimulus program last year. In January, it raised the short-term rate to 0.5% on the belief that Japan is on the verge of achieving its 2% inflation goal. The central bank may have signalled that it is willing to increase rates, but the impact of increased U.S. Tariffs on the economy forced them to lower their growth forecasts for May. This complicated the decision-making process around when to raise the rate next. The first quarter of the year saw Japan's economy shrink as higher living costs impacted consumption. Exports dropped in May, the first drop in eight months. This stoked recession fears. In a poll conducted in June, a slight majority of respondents expected that the BOJ would not raise rates this year.
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The Women's Euro semi-finals will be decided by the result of the sensational penalty shootout between England and Sweden.
England defeated Sweden 3-2 on Thursday in a stunning penalty shootout which featured 14 attempts. The reigning champions had fought from 2-0 to force the match to extra time. The game was thrilling, as England was on the verge of being eliminated only to win the match. The Sweden goalkeeper Jennifer Falk was able to save four penalties. However, she missed the winning penalty, which England seized with glee. Lucy Bronze put the holders in the lead, before Swedish teenager Smilla Homberg sent her shot high over the crossbar and ended the match. The Swedes looked different as they took an early lead. Stina Blackstenius set up captain Kosovare Aallani, who scored in the second after England had given the ball away for cheaply. Blackstenius outran Jess Carter and scored herself with a confident finish in the 25th. The Swedes were comfortable in the first half, while England struggled. Sarina Wiegman made a number of changes after the break. She brought on Beth Mead in the 70th and Esme Morgan a few minutes afterwards. Bronze scored a goal for England in 79th minute. He met Kelly's corner and headed home from a close angle. This re-ignited the white-clad crowd. Agyemang then levelled the score two minutes later, with a poacher finish. The game went to extra-time. The game was decided by penalties after extra time, with both sides having their chances. Falk's excellent saves put the Swedes in the lead, even though they missed their first penalty kick. Bronze was the winner, despite the fact that she had saved Grace Clinton from a certain defeat. Holmberg's 18-year old self was under pressure after Sofia Jakobsson missed. She fired over. When asked about her feelings after the dramatic win, England goalkeeper Hannah Hampton said, "Right Now, I Don't Know, I Don't Know." You can see the excitement all around. At the final whistle, Wiegman exhaled a sigh. It was difficult. It was one of the most difficult games I have ever seen. Extremely emotional. We could have been sent off four or five more times during the match. "It's bad to be 2-0 down by halftime," she said. "We started off really bad and then we improved at the end the first half and we improved in the second but we didn't produce anything so we needed to change our shape. We scored two goals, which was already crazy. She added, "We go into extra time, with some players injured, others cramping up, Hannah Hampton covered in blood, and then we move on to penalty shootouts, where we miss but they miss more, and we are out." The final will be held in Geneva, Switzerland on Tuesday. (Reporting and editing by Pritha Sakar, Philip O'Connor)
Oil prices fall as bond yields increase and global stock indexes dip
MSCI's global equity index fell on Monday due to the latest uncertainty surrounding tariffs, while oil prices dropped on the prospect that production would increase and U.S. Bond yields increased.
The yields on U.S. Treasury bonds were slightly higher following data showing that the services sector of the world's biggest economy was resilient in January, with prices, a measure of inflation, reaching a two-year peak.
The gold price rose, driven by a lower dollar and demand for safe havens ahead of the U.S. Federal Reserve’s rate policy announcement due later this week.
After nine sessions of gains, MSCI's global stock index fell by 3.04 points or 0.36% to 846.21.
The overall trading was subdued due to public holidays in many countries, including Britain China and Japan. The pan-European STOXX 600 Index closed earlier up 0.16%.
Wall Street's three major averages all ended lower, with the S&P 500 index and Dow Jones Industrial Average ending nine-session winning streaks.
Sahak Manuelian said that the stock market was taking a break on Monday after having moved higher for two weeks from early April's lows. He also noted that trading volumes were low. Equities opened lower due to renewed uncertainty over U.S. president Donald Trump's policies on trade after he announced that a 100% tariff would be imposed on movies produced outside of the United States, but provided little clarity about how it would be implemented.
Adam Sarhan of 50 Park Investments, Orlando, Florida, said: "Markets love certainty. And investors woke (Monday) up with even more uncertainty about what could happen with tariffs."
Shares of video streaming services such as Netflix, Paramount Global and Netflix fell after the news about movie tariffs.
Sarhan stated that investors are worried about the possibility of more industries being targeted "if investors awaken to another 100% or a 200% levy against some other industry, which is integral to our economic." Sarhan said investors are concerned that more industries could be targeted "if investors wake up to another 100% or 200% levy on some other industry which is integral to our economy."
In recent days, optimism about a possible de-escalation in trade tensions between China and the United States had boosted market sentiment. European shares were trading at levels just below those seen before Trump’s major tariff announcement on April 2, which roiled markets. Wall Street stocks saw the Dow Jones Industrial Average fall 98.60, or 0.24% to 41,218.83. The S&P 500 dropped 36.29, or 0.64% to 5,650.38, and the Nasdaq Composite lost 133.49, or 0.74% to 17,844.24. Oil prices dropped more than $1 a barrel in energy markets after OPEC+ announced over the weekend that they would increase oil production. This sparked investor concern about more supply at a time when demand is uncertain.
Brent crude ended the day at $60.23 a barrel, down by $1.06 (1.73%) or $1.06 per barrel.
The Taiwan dollar has seen a second session of strong gains against the U.S. Dollar, which reached a low of 28,815 and last traded at 29,104. The increase in the Taiwan dollar fueled speculation that Asian currencies would be revalued to gain concessions from the U.S.
The dollar index measures the greenback in relation to a basket including the yen, the euro and other currencies.
The price of 99.82 fell by 0.06%.
The dollar fell 0.8% against the Japanese yen to 143.77.
The yield on the benchmark U.S. 10 year notes increased 2.9 basis to 4.349% from 4.32% on Friday. Meanwhile, the 30-year bond's yield rose 4.1 to 4.8356%.
The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Fed and moves as such, increased 0.3 basis points from Friday's 3.84% to 3.843%. Spot gold increased by 2.82%, to $3,331.35 per ounce. U.S. Gold Futures rose by 2.42% to an ounce of $3,310.10.
(source: Reuters)