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Copper, precious metals and oil are down as global tensions decrease;
The prices of commodities such as crude oil, silver, and gold, all fell on Thursday after the leaders of China, the United States, and Iran spoke by phone. Investors reduced their positions due to a stronger dollar in which commodities are priced. Silver fell almost 15%, while gold, crude and copper dropped about 2%. Tony Sycamore is an analyst at broker IG. He said, "We have seen extreme volatility this week in precious metals, other commodities, and we are now experiencing some aftershocks." He added that "talks between Iran and United States seem to be on track again, which has reduced some of the geopolitical premium in commodity markets, especially oil." The tensions in the trade front also eased after the call between Trump & Xi. Investors are tempted to sell gold when it is at these levels. The dollar was stable at the beginning of Asian trading ahead of the interest rate decisions of the European Central Bank and Bank of England. Both are expected to hold rates later in the day. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, traded at a near-two-week high. The dollar's strength makes commodities more expensive for buyers of other currencies. Prices dropped on Monday, after U.S. president Donald Trump announced Kevin Warsh's nomination as the new Fed chair. This triggered a sell-off of risk assets. The dollar is boosted by a hawkish outlook from the U.S. central banks, while gold and silver are at a higher cost of opportunity. VOLATILE COMPONENTS Spot silver also plunged from its earlier session high of?nearly one week. Last week, silver reached a new record of $121.64 and gold reached a record of $5,594.82 per ounce. Christopher Wong is a strategist with OCBC. He said, "Sentiment has become soggy in?most asset categories, as losses feed into each other and create a feedback loop that reinforces itself amid low market liquidity." He added that precious metals and cryptocurrencies, as well as regional equity, reflect such expectations. After the U.S. agreed to hold talks with Iran in Oman, the oil prices dropped about 2%. This eased fears of a possible military conflict disrupting supply from the Middle East's key producing region. Copper was also under pressure due to concerns about demand and the increasing stock in London Metal Exchange warehouses. The metal, which is widely used in the construction industry, had already recovered from a two session slump. This was aided by China's plans to increase its strategic copper reserves. Soybeans have bucked trend and reached a two-month peak, spurred by Trump's comments that China may consider buying cargoes of soybeans from the United States. High inventories also contributed to a 2% decline in iron ore. (Reporting and editing by Clarence Fernandez; Additional reporting in Bengaluru by Ishaan arora; Reporting by Naveen Thural)
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Sources: Nippon Steel is considering a convertible bond issue of $3.2 billion, according to sources
According to two sources familiar with the matter, Japan's Nippon Steel may sell convertible bonds worth up to 500 billion yen (about $3 billion), in the largest transaction of its kind ever in Japan. Sources declined to name themselves as they did not want the information made public. Reports the potential issue for the first. Nippon Steel stated in a press release that "nothing is decided yet". Following the release of the report, shares in the company fell by 6%. According to LSEG data, at 500 billion yen the convertible bond issuance would be the largest in Japan. One source said that the issuance amount could be reduced, or the plan reconsidered. Sources said that Nippon Steel prefers to issue the convertible bonds in order to avoid a capital raise which would result in immediate share dilution. Also, as domestic interest rates are rising, they can be issued as zero-coupon bond. Convertible bonds are able to be converted into shares for a set price. The steelmaker needs capital to expand its overseas business, including in the U.S. and India, as well as for decarbonisation projects. Sources said that the company needs long-term financing to replace its?bridge loan? it took out last year for its acquisition by U.S. Steel, which totaled around 2 trillion yen. Steelmaker's performance has declined due to tariffs imposed by U.S. President Donald Trump on imports of steel and the competition from Chinese exports. Sources also stated that the Japan Bank for International Cooperation (JBIC) is looking at lending funds totaling approximately 1 trillion yen (6.37 billion dollars) to Nippon Steel. JBIC didn't immediately respond to an inquiry for comment.
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Morning bid Europe-Skeptic investors haunted with tech sell-off
Stella Qiu gives us a look at what the future holds for European and Global markets on February 5th: Investors were confident that the major U.S. tech firms would deliver a strong quarter with rosy forecasts. They increased their exposures ahead of this earnings season. This has proven to be a costly error. Google Alphabet Released It delivered solid results, but also surprised analysts when it announced that capital expenditures would be between $175 billion and $185 billion in this year - far above Wall Street's expectations. This only fueled fears about the?explosion of artificial intelligence investment. The valuations of artificial intelligence are already high and there are signs that many jobs in software or data analytics are being automated. There seems to be only one direction to go: down. Alphabet's shares fluctuated wildly in the hours after closing - dropping over 6% once - before settling at 0.4% lower. You would think that the increasing AI spending would benefit a chip manufacturer like?Nvidia. Nvidia's shares rose 2% following the bell. However, equipment suppliers in Asia have been hit hard by the recession, with South Korea down a staggering 3.5%, and Taiwan down 1%. Wall Street futures tried to recover but lost momentum quickly as the selling spread to precious materials, with gold and silver both falling below $5,000 an ounce. European futures indicate a lower opening ahead of the policy decisions of the European Central Bank and the Bank of England. Both are expected keep rates the same. The ECB will likely indicate that no policy moves are imminent, even if recent euro-dollar surges fuel concerns that inflation could undershoot target. BoE is expected to keep its options open as to when it will reduce rates again, waiting to see if a weakened jobs market will help to lower inflation pressures. The following are key developments that may influence the markets on Thursday. ECB-BoE Policy Meeting, January PMI Data for Euro Zone, Germany and France
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China's gold consumption in 2025 drops for the second consecutive year
The 'China Gold Association' reported that China's gold demand dropped for the second year in a row, but the sales of bars and coins, fueled by a growing demand for safehavens, surpassed jewellery purchases for the very first time. The state-backed association reported that China's gold demand in 2025 will fall by 3.57%, or 950.096 tons. This is the second annual decline after the 98.58% drop in 2024. China's gold purchases in 2025 will surpass jewellery sales for the first time, as consumers view gold more and more as an investment. The purchase of gold jewellery has dropped sharply, by 31.61 percent, to 363.836 tonnes in 2025. This represents only 38.29% of the total consumption. The purchase of gold bars and coins, on the other hand, increased for a second consecutive year by 35.14 percent, reaching 504.238 tonnes, which is more than half of all gold consumption. The decrease in gold jewellery sales outweighed the increase in bars and coins purchased by 37 tons. The Shanghai Futures Exchange contract is also expected to rise by?nearly 60 percent in 2025. The price increase has slowed the demand for jewelry, but boosted the demand for bars and coins that investors prefer. The gold price has been extremely volatile since the end of January. On January 30, the spot price fell nearly 10%, its steepest drop since 1983. However, on Tuesday, it made its largest daily gain of 5.86%, since 2008. The association reported that gold production using domestic raw materials increased by 1.09% on an annual basis to 381.339 tonnes. (Reporting and editing by Jacqueline Wong, Clarence Fernandez and Liz Lee in Beijing; Dylan Duan and Shanghai newsroom)
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Maas Group falls on AI pivot after $1.2 billion materials outflow spooks investor
Maas Group, an Australian company, announced on Thursday that it would be selling its building materials division up to A$1.70billion ($1.19billion) in order to pivot to artificial intelligence infrastructure. This caused its shares to drop by more than 26%. Maas Group is selling its Construction Materials (CM), a?unit, to Heidelberg Materials' local subsidiary, HMA. It will also invest A$100m in Nvidia AI infrastructure?firm Firmus Group, for a 1.7% share. The conglomerate was founded by former rugby player Wes Maas over 20 years ago. It is now selling an unit that generated approximately half of the A$219 millions in core operating profits?in fiscal year 2025. The firm's shares plunged by as much as 26,1%, the steepest drop in a single day ever. Meanwhile, the benchmark index dropped 0.4%. Ron Shamgar is the head of Australian equity at TAMIM Asset management. He said that the market was surprised by the fact that the company will be exiting its construction business in Queensland. The population growth and Brisbane Olympics are driving the expansion. The money will be spent on the AI/Datacenter sector, which is a capex-intensive industry. The divestment was part of a broader shift by the Australian construction materials and equipment provider towards data center construction. This sector has been attracting investor interest, as the demand for AI-supporting facilities is growing. Goodman Group, a data center owner in Australia, has already begun a shift towards data center development. Maas Group has invested A$100m in Firmus, following earlier deals with the company. Firmus Technologies signed a A$200m electrical infrastructure contract in mid-December. It said that after the?completion of the transaction?, approximately 1,140 employees would transfer to HMA with the construction material business and ensure the?continuity? of operations. The transaction will be completed by the end of 2026. It is still subject to shareholder and regulatory approvals. ($1 = 1,4292 Australian Dollars) (Reporting from Sherin Sunny, Bengaluru; additional reporting by Roshan Thomsen; editing by Alan Barona, Rashmi aich and Rashmi Aich).
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Sources: Nippon Steel is considering a convertible bond issue of $3.2 billion, according to sources
According to two sources familiar with the matter, Nippon Steel Japan is looking at selling as much as 500 billion dollars ($3.2 billion) in convertible bonds. This would be a major transaction in Japan. Sources said that the steelmaker was considering making a decision this month. They declined to be named because the information isn't public. Is reporting the potential issue for the first time. Nippon Steel didn't immediately respond to our request for a comment. According to LSEG data, at 500?billion yen the convertible bond issuance would be largest of its type in Japan. One of the sources stated that the issuance amount might be reduced, or even reconsidered. Sources said that Nippon Steel prefers to issue the convertible bonds in order to avoid a capital raise which would result in immediate share dilution. Also, as domestic interest rates are rising, they can be issued as zero-coupon bond. At a set price, convertible bonds can be turned into shares. The steelmaker needs capital to expand its overseas operations, including in India and the U.S. Sources said that the?company needs long-term financing to replace a loan taken out last year for its acquisition of U.S. Steel, which was worth around 2 trillion yen. Business performance of the?steelmaker has declined due to tariffs imposed by President Donald Trump on imports of steel and increased competition from China. Sources also claim that the Japan?Bank of International Cooperation (JBIC) is looking at lending Nippon Steel funds totaling approximately 1 trillion yen (6.37 billion dollars). JBIC didn't immediately respond to an inquiry for comment.
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Oil drops 2% after US and Iran agree to talks
The?U.S. The?U.S. Brent crude futures dropped $1.44 or 2.07% to $68.02 per barrel at 0335 GMT. U.S. West Texas Intermediate Crude prices also fell by $1.34 cents or 2.06% to $63.80 per barrel. After a report in the media that suggested planned talks between Iran and the United States on Friday might collapse, oil prices rose by about 3%. Later in the day, officials from both countries said that talks will take place on Friday even though topics of discussion are not yet settled. Mukesh Sahdev is the CEO of XAnalysts, an energy consultancy. He said that the oil price had erased a part of the geopolitical premium following the US-Iran meeting in Oman last Friday. The two sides are still far apart in their views on what should be included in the discussions. Iran is willing to discuss?its nuclear program, including uranium enrichment, with Western nations, while the U.S. wants to also include Iran's missiles, support for armed proxy group in the Middle East, and treatment of its people. Sahdev stated that it is possible for these discussions to reveal new differences, and that the risk premium would rise again in the near future. There are fears that despite the upcoming talks U.S. president Donald Trump will still follow through on his threats to attack Iran, the Organization of the Petroleum Exporting Countries' fourth-largest oil producer, potentially risking an even wider conflict in the oil rich region. Exports from other Gulf producers could also be affected, in addition to the disruption of Iranian production. Around a fifth of all oil consumed in the world passes through the Strait of Hormuz, which is located between Oman and Iran. Saudi Arabia, Kuwait, Iraq, United Arab Emirates and other OPEC countries export the majority of their crude oil via the strait. Analysts said that the strength of the U.S. Dollar and volatility in precious-metals also weighed down on commodities?and risk sentiment in general on Thursday. Data from the Energy Information Administration showed that oil inventories in the U.S. fell last week, after the winter storm gripped large parts of the country.
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Ardea Resources, Australia's nickel producer, is eyeing a $700 million government grant for its nickel project
Australia's Ardea Resource said that on Thursday, its Kalgoorlie Nickel Project received separate letters from Export Finance Australia (A$1 billion) and the U.S. Export-Import Bank to support a possible funding of up A$1 Billion ($699.90 Million). The funding will be used to support Kalgoorlie Nickel’s Goongarrie hub?project in Western Australia. This project is expected to supply nickel and cobalt which are both critical minerals in lithium batteries. Ardea shares jumped 9.6% by 0058 GMT to A$0.745, their highest level for nearly two weeks. They also snapped out of three sessions in losses. The 'Trump administration' has increased efforts to secure U.S. supply of 'critical minerals. They have proposed measures such as a price floor mechanism and announced new funding to miners in order to compete with Chinese dominance on supply chains. Washington convened dozens allied nations this week to form a critical-minerals-trading bloc, and the EU proposed a U.S. EU partnership as part of moves aimed at sourcing and securing mineral outside China. Investor confidence has been boosted by the promise of government support, which has brought fresh capital to the?sector, and pushed several projects towards construction. This is laying the groundwork for a?new?wave? of domestic supply that will be online around 2028. Ardea CEO Andrew Penkethman said that the strong interest from government-backed institutes underscores the strategic importance of the Goongarrie Hub in supplying both nickel for stainless?steel, and the rapidly growing EV and energy-storage battery markets. Export Finance Australia?has indicated an interest in providing a total of A$500m, while U.S. Export-Import Bank has indicated that it could provide up to $350m under its Supply Chain Resiliency initiative.
Dollar higher as global stock index drops with tech under pressure
MSCI's global equity gauge fell on Wednesday, with technology stocks leading the losses on Wall Street. The dollar rose broadly after the latest U.S. data on economic growth and silver outperformed the gold price following their recent drop. Oil prices rose for the second day in a row as U.S.-Iran appeared to be at odds on certain elements of their nuclear talks plan, which is expected to take place on Friday.
Tuesday, crude prices spiked after the U.S. shot a drone carrying an Iranian flag and armed boats approached U.S.-flagged vessels in a key waterway.
Investors reacted to economic data by increasing the yields on U.S. Treasury bonds. ADP's earlier national employment report revealed a slower-than expected growth in January. The Institute for Supply Management reported that the U.S. service sector remained stable in January. However, businesses spent more on inputs. This suggests services inflation may pick up following a slowdown in recent months.
CME Group's FedWatch tool shows that traders still believe the Federal Reserve will not cut rates again before June.
The data released this morning is neither too hot nor too cold, and it doesn't change the outlook for the Fed or direction of the economy, said Emily Roland. She pointed out that the stock market has seen a healthy increase in participation, often relying on technology stocks to support the market.
Wall Street saw value stocks outperform growth stocks. The market was dominated by a selloff of global providers of professional services, data analytics and?software after Anthropic launched plug-ins on Friday for its Claude Cowork Agent, causing concern about AI-driven disruption in these industries.
The U.S. Software and Services Index dropped by 0.4% on Wednesday, after dropping more than 12% in the last five days.
"A week back, the markets were able to see the future clearly. Robert Phipps is a director of Per Stirling Capital Management, in Austin, Texas. He cited the concerns over AI disruption and the nominations made by the U.S. president last Friday.
Donald Trump
Kevin Warsh
As his less dovish pick than expected to lead the Federal Reserve.
"In a way, the stock exchange was like a bug looking for a windshield. From an euphoric standpoint, something was going to knock it off. Warsh was a great nomination, but it was only part of the windshield. Agentic AI played a big role in the shift, said Phipps. He cited a "significant change from growth stocks to value, from large caps to small and medium cap."
The S&P 500 growth index fell 1.7%, while the value index rose 1%.
At 3:02 pm. At 03:02 p.m. ET (2002 GMT), Dow Jones Industrial Average rose by 315.17 or 0.64% to 49,554.17. The S&P 500 dropped 19.67 or 0.31% to 6,896.65 while the Nasdaq Composite lost 287.49 or 1.25% to 22,965.01.
The MSCI index of global stocks fell by 2.75 points or 0.26% to 1,041.23.
EUROPEAN EQUITIES REACH RECORD HIGHS Earlier the pan-European STOXX 600 closed up 0.03%. This was barely able to achieve its third record high in a single row. The strength of telecom and consumer stocks were countered with weakness in software companies...and a saleoff at healthcare company Novo Nordisk following a disappointing outlook.
Gold prices were near flat, while silver gained, both of which are below their session highs. The dollar was firm and the focus remained on geopolitical events.
The price of both precious metals rose on Tuesday following a two-day meltdown caused by Warsh’s nomination. It is believed that the former Fed Governor will?look to reduce the Fed’s balance sheet which would place pressure on precious metals with no yield.
Spot silver increased 2.12%, to $87.01 per ounce. Spot gold was up 0.02% at $4,939.42. The dollar grew against the yen and pushed the Japanese currency towards its fourth daily decline.
The dollar index measures the greenback in relation to a basket including the yen, the euro and other currencies.
The euro fell 0.09% to $1.1807, while the dollar rose 0.22%.
The dollar gained 0.71% against the Japanese yen to 156.83.
Bitcoin fell by 3.33%, to $73,600.92. This is its sixth drop in the last seven sessions.
Fixed income traders continued to assess the impact Warsh could have on the monetary policy while waiting for delayed economic releases by the government. The yield of the benchmark 10-year U.S. notes increased 0.3 basis points from late Tuesday to 4.276%. Meanwhile, the yield on 30-year bonds rose by 1?basis point to 4.9149%. The yield on the 2-year note, which is usually in line with Federal Reserve interest rate expectations, dropped 1.3 basis points, to 3.559%. On the energy markets, U.S. Crude Oil Futures settled at around $2 as traders followed the back and forth between the U.S. U.S. Secretary Marco Rubio stated that the United States will need to discuss Tehran's nuclear programme and other issues in order for meaningful talks with Iran.
U.S. crude oil settled at $65.14 per barrel, an increase of 3.05% or $1.93, and Brent reached $69.46, an increase of 3.16% or $2.13 for the day. (Reporting from Sinead carew in New York; Amanda Cooper in London; Rae Wee, in Singapore. Editing by Nia Zieminski and Nick Zieminski.
(source: Reuters)