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Trump claims that the US and Pakistan have reached a trade agreement
Donald Trump, the U.S. president, said that his administration had struck a deal on Wednesday with Pakistan under which Washington would work with Islamabad to develop South Asia's oil resources. Trump posted on Twitter: "We just concluded a Deal with the Country of Pakistan whereby Pakistan will work with the United States to develop their massive Oil Reserves." We are currently in the process to choose the Oil Company who will lead this Partnership. Trump's post on social media did not give any further details about the deal between Pakistan and the U.S. The Pakistani Embassy in Washington did not immediately respond to a request for comment. After meeting with Marco Rubio, the Secretary of State, Ishaq Dar, Pakistani foreign minister, said that a deal between the United States, Pakistan and could be reached within days. Trump has tried to renegotiate with many countries the trade agreements that he had threatened with tariffs due to what he called unfair trade relationships. Many economists disagree with Trump's description. Separate statements released by the U.S. State Department, and the Pakistani Foreign Ministry, after Rubio met with Dar last week, stated that the two diplomats discussed the importance of expanding the trade and ties between the two countries in the mining and minerals industries. Dar, speaking last week of U.S. and Pakistan talks, said that "our teams have been here discussing in Washington. We've had virtual meetings. And a committee was tasked by Prime Minister to fine-tune now."
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Grupo Mexico evaluates US investments following the reduction of copper tariff
A senior executive of Grupo Mexico, the world's largest copper producer, said in a Wednesday call that the company is planning to invest in projects within the United States over the next three to five year period. This comes as Washington prepares tariffs for some copper products. After an order by President Trump, the price of U.S. Copper plunged on Tuesday. The shortfall Copper input materials like ores, concentrates, and cathodes were not included in the expected sweeping restrictions. Grupo Mexico said earlier that it saw the proposed tariffs for Mexico as an Investing in the future is a great opportunity Asarco's local subsidiary in Arizona is investing $6 billion to expand copper projects, including the reopening of a closed smelting facility. Leonardo Contreras told analysts on a conference call that, "We're constantly evaluating whether or not we should restart our Hayden operations" in light of recent developments. Contreras said, "We will continue monitoring how these global shifts happen on a day-to-day basis." The tariff was meant to encourage domestic development, but the United States relies on imports to meet nearly half its refined copper requirements. Homegrown projects can take many years to be completed. Currently, the main suppliers are Chile, Canada, and Mexico, although China is their largest buyer. Grupo Mexico stated that while the trade war between China and the U.S. could have an impact on global economic growth, and therefore demand for copper in Asia, it still maintained a “very positive” outlook for the long-term growth of copper in Asia. (Reporting and editing by Natalia Siniawski; Sarah Morland)
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GRAINS-Soybean Futures extend losses due to favorable US weather and weak demand
Analysts said that Chicago Board of Trade soy futures declined for a fourth session in a row on Wednesday. The decline was attributed to favorable weather conditions across the U.S. Midwest, and weak export demand. Wheat futures also declined, while corn futures increased. Forecasts of cooler temperatures and regular rainfall in the Midwest have boosted expectations for large U.S. corn and soy harvests. According to Vaisala, rain over the last week has improved the conditions for crops. In a daily weather forecast, the U.S. Department of Agriculture stated that "most Midwestern crops are well-watered." The most-active soybean futures fell 13-3/4 cents to $9.95-3/4 per bushel, their lowest price since the 9th of April. Farmers will harvest a large crop, as President Donald Trump’s trade dispute against China, the top importer of U.S. goods, is putting pressure on export demand. On Tuesday, U.S. officials and Chinese officials reached an agreement to extend their 90-day trade truce. Trade sources say that China's appetite will likely weaken for soybeans during the peak U.S. season later this year. Record imports in 2025, and tepid animal feed demand have led to a rise in soymeal stocks at home. CBOT soymeal contracts set new contract lows while soyoil contract highs were retreated from. Dhaka official: In other news on demand, Bangladesh approved the purchasing of approximately 220,000 metric tonnes of U.S. Wheat as part of efforts made to reduce trade tensions. CBOT Wheat ended at $5.23-3/4 a bushel down 6 cents, while K.C. Wheat finished higher. CBOT Corn closed 1-1/2 cents higher, at $4.11-1/2 a bushel. Short covering and technical purchases helped support prices. The Asian corn market has also seen a strong demand. The USDA will release weekly U.S. grain export sales data on Thursday. Traders said that the USDA will likely increase its estimate of U.S. corn production in a crop report to be released on August 12. The traders have already cranked up a yield of 181 bushels per acres above the latest estimate by the agency.
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Trump imposes scaled-back copper tariff, US prices plunge
Donald Trump announced on Wednesday that the United States would impose a tariff of 50% on copper pipes, wires, and other copper products. However, the details of this levy were not as comprehensive as expected, and did not include copper input materials like ores, concentrates, and cathodes. U.S. Comex Copper Futures fell 19.5% following the announcement. This quickly unwinded a premium that had been growing over the London benchmark in recent weeks, as traders assumed U.S. mines would benefit financially from the tariff. Trump teased his tariff for the first time in early July. He implied that the tariff would be applied to all types red metals, from cathodes made by mines and factories to wire and other products. In a proclamation issued by the White House however, the administration stated that the tariff would only apply to semi-finished products of copper and other products for which copper is used heavily, beginning on Friday. Trump's proclamation stated that "Copper imports into the United States are being made in such quantities and in such conditions as to threaten the national security of the United States." Copper concentrates, mattes cathodes anodes will be excluded from the tariffs. These are some of the most important products produced by copper mines and smelters. This move will essentially boost Chile and Peru, the two largest copper-mining countries in the world. Gracelin Baskaran is the director of the Center for Strategic and International Studies' critical minerals security program. She said that the newly announced copper tariffs were far from the universal tariffs about which the markets were worried. It's not as punitive as the markets originally expected. Trump had ordered an investigation by the U.S. under Section 232 in February. According to the proclamation, Commerce Secretary Howard Lutnick delivered the report to the White House in June. Trump has said that he could still impose additional tariffs and asked Lutnick for an update of the domestic copper market before June 2026. Trump will then decide whether to impose an import duty of 15% on refined copper starting in 2027 and 30% starting 2028. The order also calls for measures to support the U.S. copper industry. This includes requiring that 25% of the high-quality scrap produced within the U.S. be sold in the U.S. Freeport-McMoRan is the biggest copper producer in the United States. It said that it would make a comment once it had thoroughly reviewed Trump's orders. Codelco in Chile, the largest copper producer in the world, has hailed the decision to exclude cathodes from the copper production process as a positive step for both the company and Chile, the country that is the leading supplier of refined copper for the U.S. BHP, the company that operates the largest copper mine in the world, and Antofagasta - which exports copper from Chile to America and wants to construct a U.S. mine - did not respond to comments immediately. (Reporting from Daina Beth Solon in Santiago, Ernest Scheyder, in Houston, Divyarajagopal, in Toronto, Pratima Deai, and Polina devitt in London, with additional reporting by Ismail Shakil, in Ottawa. Writing by Ernest Scheyder, editing by Veronica Brown and Marguerita Choy.
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Sources say Shell-led LNG Canada is facing problems when it ramps up its production.
Shell-led LNG Canada has been experiencing technical difficulties as it ramps production up at its liquefied gas plant in Kitimat. One LNG tanker was diverted away from the plant without superchilled fuel, according to data provided by LSEG and four sources. The facility is the first major LNG-export facility on the West Coast of North America and Canada, providing access to Asia, which is the largest LNG market in the world. When fully operational, the facility will convert approximately 2 billion cubic foot of gas each day (bcfd), which is what market participants hoped would boost Canadian natural gas pricing. Western Canadian natural gas remains depressed due to a persistent glut of supply that hasn't yet been reduced by new demand from LNG Canada, which started on July 1. According to LSEG, the daily spot price for the Alberta Energy Company storage hub was $0.22 per mmBtu, compared with the U.S. Henry Hub reference price of $3.12. Two of the sources stated that LNG Canada's first plant (also called a train) is operating at less half its capacity. According to two industry sources, the facility's Train 1 experienced technical problems with a gas-turbine and a Refrigerant Production Unit. All sources spoke under condition of anonymity as the information was not publicly available. A spokesperson for LNG Canada responded that a facility of the size and scope of the joint venture may experience operational setbacks while it ramps production up and stabilizes. Shell diverted an empty LNG tanker to Peru while other tanks remained close to the facility. This was shown by LSEG ship tracker data. According to LSEG data, Ferrol Knutsen is a 170.520 cubic meters LNG vessel that was heading to Kitimat but changed direction and now is off the coasts of California, on its way towards Peru. LNG Canada is a joint-venture between Shell, Malaysian Petronas and PetroChina as well as Japan's Mitsubishi Corp. According to statements from the company, when fully operational LNG Canada will be able to export 14,000,000 metric tons per year (mtpa). The facility has so far exported four cargoes. Its first shipment was on July 1. A spokesperson for LNG Canada said that another shipment will be expected in the next few days. As the plant moves from its early stages of operation to a regular shipping schedule, the pace of exports will increase. The spokesperson said that "in regular operations, we expect to load one export cargo every two days from our facility." Tom Purdie is a senior LNG analyst with Energy Aspects. He said that any decrease in JKM-TTF prices above two cargoes a month would be bullish. This refers to the Asian and European benchmarks. Purdie stated that "further Canadian supply losss would tighten up the Pacific market and compound the impact of ongoing Australian shortages and robust Asian demand".
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US sanctions Brazilian High Court Judge
The U.S. imposed sanctions Wednesday on a Brazilian Supreme Court judge overseeing the trial for former President Jairbolsonaro. They accused the judge of authorizing arbitrarily pre-trial arrests and suppressing free expression. Justice Alexandre de Moraes presided over Bolsonaro's criminal case. Bolsonaro is accused of plotting to overturn Brazil’s presidential election in 2022. On Wednesday, U.S. president Donald Trump also signed an executive ordering imposing a tariff of 50% on Brazilian goods. He said that this was to stop the witch hunt against his right-wing allie Bolsonaro. Moraes received a sanction under the Global Magnitsky Act. This act allows the U.S. impose economic sanctions against foreigners they consider to have a history of corruption or abuses of human rights. Marco Rubio, the Secretary of State at the time, told legislators in June that Washington considered sanctions against this judge. Scott Bessent, U.S. Treasury secretary, said that "Alexandre de Moraes took it upon himself as judge and jury of an unlawful witch-hunt against U.S. citizens and Brazilian companies." Moraes is responsible, he claimed, for an oppressive censorship campaign, arbitrary arrests that violate the human rights and politically motivated prosecutions - including those against former president Jair Bolsonaro. The sanctions include the freezing of all assets owned by Moraes in the United States and the prohibition for U.S. residents to do business with him. Moraes and the Supreme Court of Brazil did not immediately comment. This month, Moraes Bolsonaro was ordered to wear a bracelet around his ankle, not contact foreign officials, and stop using social networking sites over the allegations that he courted Trump’s interference in Bolsonaro's Supreme Court trial. Bolsonaro referred to Moraes as a "dictator", and he called the recent court orders "cowardice." Bolsonaro denied taking part in a coup attempt but admitted to attending meetings that aimed to reverse the election results. Flavio Dino, the Brazilian Supreme Court justice, expressed his "personal solidarity' to Moraes through social media. He said that his colleague was "only doing his job in a honest and dedicated manner, following Brazilian Constitution." He said that the court's review had confirmed his decision. Washington increased pressure on Brazil's highest court following the latest restrictions against Bolsonaro. It imposed U.S. Visa restrictions on Moraes and his family, as well as other unnamed officials of the court. Luiz inacio Lula da Silveira, the Brazilian president, denounced these measures on July 18 as "arbitrary" et "baseless" and called foreign interference with the judiciary "inacceptable." In a statement, the leftist leader claimed that U.S. actions violated fundamental principles such as sovereignty and mutual respect. In a post on social media, Gleisi Hoffman, a member of Lula’s cabinet, described the additional sanctions against Moraes as "a violent and abrasive act." The government "totally repudiated the latest absurdity," the post read. Ivar Hartmann is a professor of law at the Insper business school in Sao Paulo. He said that the sanctions against Moraes may lead the Supreme Court "to stiffen their resolve" to show they will not be bowed down to them. He said that the sanctions could be used as a justification by Trump in Washington to re-examine tariffs against Brazil. Welber Baral, former Brazilian trade minister, said that it was difficult to determine if Magnitsky sanctions, which were designed to address violations of human rights, would have an impact on Trump's tariffs. Tariffs are usually a response to trade imbalances. Brazil is among the few major economies that the U.S. has a surplus with. Reporting by Matt Spetalnick, Ottawa; Luciana Magialhaes, Sao Paulo. Editing by Brad Haynes and Doina Chiacu.
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According to a lobby group, uncertainty over tariffs has halted oil shipments from Brazil into the US.
Roberto Ardenghy of the oil lobby group IBP told reporters on Wednesday that energy companies in Brazil have suspended oil exports to the United States following President Donald Trump's announcement of 50% tariffs against Brazil. The U.S. is Brazil's largest export market. Oil was exempted from the 10% tariff on Brazilian exports in April, but it remains unclear if the commodity will be exempted under the new tariff of 50% that is set to take effect on Friday. Ardenghy said, "This time there is no way to know." IBP represents Brazilian oil companies such as Petrobras, Shell, TotalEnergies ExxonMobil, Equinor, and TotalEnergies. Ardenghy stated that "business involving cargo which has to leave Brazil and go to the U.S.A. is suspended." Ardenghy stated that instead of shipping oil to the United States companies store it on production vessels floating or cargo ships. He said that because it takes about 21 days for an oil shipment from Brazil to reach the U.S., it was stopped when it became impossible to get to their destination by August 1. He said that if there was no exemption, Brazil would likely redirect shipments towards Europe and India. He added, "But for now, all is on hold as we wait for the 1st of August." According to data collected by StoneX, the consultancy group, government data shows that Brazil will export 1.78 million barrels of oil per day in 2024. Of this, 243,000 barrels of oil per day are going to the United States. Petrobras, Brazil’s state-owned oil company and the country’s top oil producer and supplier, said that it had exported 8% of the oil in its second quarter. Magda Chambriard, Petrobras' Chief Executive, said earlier this month that the company could redirect oil sold to the U.S. to Asia and Pacific if higher U.S. Tariffs on Brazil are implemented. (Reporting and writing by Marta Nogueira, editing by Leslie Adler).
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US reverses key climate findings, creating uncertainty for businesses
Lawyers and trade groups say that the Trump administration's plan to undo U.S. Climate Regulation is a way for them to save money, but this could backfire and force automakers, utilities and manufacturers to face a future filled with regulatory uncertainty and litigation risks. The Republican administration of President Donald Trump announced Tuesday that it would rescind a long-held finding that greenhouse gases endanger the health of humans, thus removing the legal basis for U.S. regulations on greenhouse gas emissions. Environmental Protection Agency Administrator Lee Zeldin stated that the move would save companies up to $52 billion on environmental compliance costs. The move would eliminate limits on greenhouse gases pollution from vehicle exhaust pipes, power plants and smokestacks. Lawyers said that companies who have already made significant investments to reduce emissions in order to meet government standards, as well as the demands of many shareholders, worry the proposal could lead them into a regulatory and judicial void. Meghan Greenfield, a partner at Jenner & Block, and former EPA Counsel, who represents clients in the auto sector, said: "Industries with GHG standards established by EPA are long-time compliers and do not want them stripped away." The stability of the regulatory framework is important to industry as a base. Zach Pilchen said that if the endangerment determination is repealed, companies will be required to adhere to a patchwork state law on climate change, rather than a single federal standard. Camille Pannu is an associate professor of law at Columbia University. She said, "I believe that the administration has overlooked the fact that most industries have already retrofitted themselves for regulation." "The industry did want deregulation but perhaps not through this mechanism." Sources from the former Trump administration said that during Trump's first tenure, the EPA declined to accept the endangerment findings because of the strong opposition from the industry and the risk involved in undermining federal authorities on this matter. Three sources within the auto industry privately stated that the EPA’s proposal to repeal vehicle efficiency standards was much broader than expected. The proposal also eliminates air conditioning standards and requirements for battery monitoring. Albert Gore is the executive director of Zero Emission Transportation Association. He said that the EPA's action to reverse a long-established law comes at a time when "clean" vehicle sales are steadily increasing and driving a boom in U.S. battery manufacturing and vehicle manufacturing. According to Environmental Defense Fund, over the past decade manufacturers have invested $197.6 Billion in U.S. EV manufacturing and battery production facilities. Gore stated that "taking backward steps, adding regulatory uncertainty, will harm consumers, unsettle markets, and complicate business decisions for automakers." LUKEWARM REACTION The industry groups' reactions to the EPA announcement have been reserved, with most saying that they will review the proposal in the coming weeks and provide comments. Edison Electric Institute (EII), the main lobbying group for the electric utility sector, has said that it supports the EPA in establishing clear, consistent regulations to encourage infrastructure and investment. EEI spokesman Jeremy Ortiz said: "It's essential that EPA uses its authority to create flexible regulations that take into account impacts on reliability and customer costs." Around a quarter (25%) of U.S. greenhouse gases are emitted by the power industry. Over the past decade, this sector has reduced its carbon emissions steadily by replacing coal-fired generation with natural gas and solar. EEI had sided in favor of the EPA (then part of the former president Joe Biden administration) in a Supreme Court case from 2022 in which West Virginia questioned the agency's power to regulate power stations. In its brief, it stated that "Violating this authority could upset that predictability and consistency and potentially expose individual GHG emitters the idiosyncratic wishes of individual district courts judges." The Alliance for Automotive Innovation is a group of auto industry professionals that welcomed the deregulation of tailpipes and said they were digesting a broader proposal for the repeal of the endangerment findings. Both the American Trucking Associations and the American Petroleum Institute praised the proposed repeal of vehicle exhaust rules. The U.S. Chamber of Commerce also opposed repealing the law because of its effect on members. Marty Durbin said Tuesday that the Chamber's Energy Institute, the Chamber's president, was reviewing the proposal and consulting with its members to provide constructive feedback.
Investors unfazed with Trump's tariff moves, Asian shares are up on Nvidia.
Asian stocks rose on Thursday on the back of optimism following Nvidia's rise to a record $4 trillion valuation. Investors also shrugged off President Donald Trump's recent tariffs.
U.S. Copper Futures increased their premium over the London benchmark overnight, after Trump announced his plans to impose 50% tariffs on copper. Later, on Wednesday, he said that the tariffs would be in effect from August 1.
Trump's trade anger also turned against Brazil on Wednesday, as he issued notices of tariffs and threatened a 50% punitive tariff on Brazilian exports to the U.S.
The recent moves have not caused much of a stir in the markets. MSCI's broadest Asia-Pacific share index outside Japan is up 0.4%.
The Nikkei Index fell by 0.6%. China's blue-chip CSI300 index increased by 0.4%, and Hong Kong’s Hang Seng Index gained 0.1%.
The FTSE Futures and EuroStoxx 50 Futures both gained 0.4%.
Nvidia, a designer of artificial intelligence chips, became the first company in the world to reach a market cap of $4 trillion on Wednesday. This solidified its position as arguably one Wall Street's favourite stocks. Chipmaker Disco, with a 4.3% increase in value, was the biggest gainer in Japan.
U.S. Stock Futures Weakened in Asia on Thursday. Nasdaq and S&P 500 Futures each fell about 0.2% after both indexes had closed higher overnight.
Jeff Ng of SMBC, Asia macro strategy head, said that investors are "numb" about the constantly changing situation.
"They know there is still room to negotiate." Many of these announcements start with impressive numbers but are not final and are subject to change. "Even if implemented, these changes could be reversed within the next few months or even a year," said he.
Expectations of Federal Reserve rate reductions later in the year also kept stocks supported.
The minutes of the Fed meeting held last month showed that "most participants" expected rate cuts to occur later this year. Any price shocks from tariffs are expected to be "temporary and modest".
Ng stated that markets do not currently price in a large chance of a full blown recession, as the labour market is still quite resilient. However, they are aware that there is a lot pressure on policy rates to drop, which could reduce the opportunity costs of holding stocks.
DOLLAR EASES
The dollar fell against the euro on Thursday, but held its own against yen, at 146.27. This was after Trump imposed 25% tariffs on Japan earlier in the week.
The euro rose 0.17%, to $1.1742. Sterling gained 0.11%, to $1.3605.
The Brazilian real was an exception, as it sank to a low of 5.5826 dollars per Brazilian real in response to Trump's threat of tariffs on Latin America's biggest economy.
Julia Wang, Global Market Strategist at J.P. Morgan Private Bank, said: "Despite the S&P 500’s impressive rally the U.S. Dollar continues to retreat. This highlights a changing global macro narrative."
We believe that the dollar is still 5-15% undervalued. We expect further weakness as cyclical trends and capital reallocation play out.
Bitcoin was near its record high at $111 085, ether rose 1.3% to $2 779.
"We are seeing our clients adopt a more measured strategy, investing in cryptocurrencies that have real utility rather than chasing short-term movements. Bitcoin is still the most popular choice on OKX Singapore's platform," stated Gracie Lin.
Brent crude futures fell 0.16% on Thursday to $70.08 a barrel. U.S. crude dropped 0.22% to $68.02 a barrel.
Spot gold increased 0.3% to $3322.69 per ounce.
(source: Reuters)