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Asian stocks reach a six-week high on the hope of US-Iran Peace Talks
As oil prices remained below $100 a barrel, Asian stocks followed Wall Street's lead on Wednesday. The dollar also stabilized after seven consecutive days of declines. The European markets are bracing themselves for a muted opening, with the pan-regional futures down by 0.2% and FTSE Futures barely changing. Wall Street futures were unchanged after a strong rally Tuesday. Donald Trump has said that talks with Iran may resume in Pakistan within the next two day after Washington imposed a blockade against Iranian ports following the failure of the weekend negotiations. Both Pakistani and Iranian officials said that negotiations could resume. The markets were calmed by signs that the diplomatic?engagement will continue. Brent crude futures rose 1% to $95.77 per barrel after falling almost 5% overnight. MSCI's broadest Asia-Pacific index outside Japan gained 1.5%, reaching its highest level in six-weeks. Japan's Nikkei climbed 0.9%% ?while South Korea's KOSPI rallied 3%. Hong Kong's Hang Seng index rose 0.7% and the blue-chip index in China gained 0.2%. It is becoming increasingly evident that the U.S. Blockade of the Strait of Hormuz was a negotiation gambit, said Michael Brown. The 'direction' of travel remains largely towards a US-Iran Peace Deal. Wall Street saw the Nasdaq climb 2% overnight to reach its 10th consecutive day of gains, while the S&P 500 flirted close to a new record. U.S. producer price inflation data was also encouraging, as prices increased?by less that economists had expected in March. This helped to temper fears about war-driven inflation. Investor optimism about the 'Iran War' coming to an end soon helped Treasuries recover from recent inflation concerns. After falling 3 basis points overnight, the yield on two-year U.S. Treasury bonds fell 1 basis point to 3.746%. The 10-year yield also fell 1 basis point (bp) to 4.2439% after falling 4 bps overnight. The U.S. Dollar, a safe haven currency, has stabilised overnight after falling for the seventh consecutive session. The euro remained at $1.1791, after hitting a six-week high of $1.1811 over night. Gold prices fell?0.3%, to $4.824 per ounce. The International Monetary Fund lowered its outlook for growth on Tuesday, warning that the global economy could be on the verge of recession if conflict intensifies. Stella Qiu, Kevin Buckland, and Kim Coghill edited the article.
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Gold falls on increased risk appetite, US-Iran talks are in focus
Gold prices fell slightly after reaching a one-month high earlier in the session, as the prospect of a second round of talks between Iran and the U.S. boosted risk appetite. Meanwhile, rising oil prices contributed to inflation problems. As of 0501 GMT spot gold was down by 0.3%, at $4,826.13 an ounce. It had previously reached its highest level since March 18. U.S. Gold Futures for June delivery remained unchanged at $4,850.40. Donald Trump, the U.S. president, said that talks to end the Iran War could resume in Pakistan within the next two days after weekend negotiations failed. Marex analyst Edward Meir said that gold prices are reacting to headlines from the Middle East in the short-term with the hope that both countries will engage in dialogue. If things go wrong again, we could revert back to the pre-ceasefire pattern, which was characterized by lower gold prices, a stronger US dollar, and lower stock prices. Bullion has gained 1.6% this week. Investor optimism about the Iran War boosted Asian stocks to a six-week high. Oil prices rose amid uncertainty about crude supply coming from Middle East, the region that produces the most oil. The Strait of Hormuz is still largely closed. Inflation is fueled by higher crude oil prices because they increase transportation and production costs. Gold is a hedge to inflation but higher interest rates are affecting the demand for this non-yielding material. The U.S. Military announced late Tuesday that American forces have 'completely halted the economic trade going into and leaving Iran by sea via a blockade on Iranian ports. In the U.S. traders now see a 29% chance that a rate cut of 25 basis points will occur this year. This is up from 13% last week. Prior to the war, two rate cuts were expected for 2026. In a recent note, analysts at OCBC stated that "while gold and silver rallied overnight, the overall signal was a 'risk-on' rather than defensive position." (Reporting by Noel John in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Harikrishnan Nair) (Reporting by Noel John in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Harikrishnan Nair)
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Kenya increases retail fuel prices in response to the Middle East conflict driving up crude costs
Kenya's energy regulator announced late Tuesday that retail fuel prices had risen by up to 24.2% due to a spike in crude oil prices and a squeeze on?petroleum supply caused primarily by the Middle East conflict. The Energy and Petroleum Regulatory Authority, which sets maximum retail prices monthly for different products, released a statement that showed a litre of petrol had been increased by 16.1%. It now costs 206.97 Kenyan shillings (about $1.60). Diesel was raised by 24.2%, to 206.84 Kenyan Shillings. Kerosene remained at 152.78 Kenyan Shillings. The regulator justified the increase in retail prices by citing the rising cost of imported goods, which they claimed had increased up to 68.7%. In March, EPRA kept prices the same, saying that the impact of war hadn't yet been reflected in retail price. Kenya imports nearly all of its fuel products from the Middle East ?via government-to-government deals with Persian Gulf suppliers, including Saudi Aramco Trading Fujairah, Abu Dhabi's ADNOC Global Trading ?Ltd, and Emirates National Oil Company Singapore Ltd. The new prices were set to take effect on late Tuesday night, but motorists in Nairobi's capital rushed to fill their tanks up, creating long queues. EPRA said that it has reduced the value-added (VAT) tax on petrol, diesel and kerosene, from 16% down to 13%, "to cushion consumers from the high...cost?of petroleum products due to the escalating prices on the international market."
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Report: LKAB's plan to mine rare earths in Sweden could violate Sami rights
LKAB plans to open an iron ore mine and rare earths project near the Kiruna mine in Sweden's far 'north' could be a violation of rights for the Sami reindeer herders, according to a Stockholm Environment Institute report published on Wednesday. Per Geijer is located near LKAB’s?existing Kiruna Mine and is one of the?European Union’s flagship projects as part of its strategy to reduce reliance upon China for rare Earths needed for clean energy, defense, and electric vehicle production. The Sami reindeer herders, however, say that it will end their traditional lifestyle and have promised to take the mine to court. Rasmus Klocker Larsen is a senior research fellow with the non-profit SEI. He said that LKAB's.project carries a risk of violating indigenous rights for the Sami members. SEI stated that LKAB plans for Per Geijer violated Sweden's obligations?under the United Nations International Covenant on Civil and Political Rights and the U.N. Declaration on the Rights of Indigenous Peoples. The mine would?prevent herders from moving reindeer between winter and summer pastures. LKAB claimed it hadn't reviewed the report. The company stated that "we understand our plans for a new deposit will have an impact, and we want dialogue with the Sami villages to develop appropriate and extensive measures for compensation as well as to identify different solutions moving forward." The conflict shows the tensions between Europe's economic goals and commitments to human right. Geijer is Europe's largest rare earth find, with its 1.2 billion tonnes total mineral resources. Of these, 2.2 millions tonnes are rare Earth Oxides. The EU has designated it a strategic project, which means that permits should be accelerated. Sweden wants to be a leader in a "green" industrial era and has cut red tape for new mines. LKAB said Per 'Geijer was crucial to the long-term viability and sustainability of the Kiruna Mine -?the largest underground iron ore mining in the world. Last year, it applied for a mining license. It would still require an environmental permit to begin operations if granted. Both could be appealed. The Sami claim they are not against mines as long as they do not threaten their culture. Lars-Marcus Kuhmunen is the chairman of the Gabna Sami. (Reporting and editing by Paul Simao; Simon Johnson)
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Iron ore prices rise on the optimism that Iran's resolution will revive steel demand
Iron ore futures rose on Wednesday, as renewed interest in the Iran War?lifted metals market sentiment. A ceasefire is expected to restore Middle Eastern demand for Chinese steel. As of 0246 GMT, the most-traded contract for September iron ore on China's Dalian Commodity Exchange was trading 0.53% higher. It stood at 760.5 Yuan ($111.51). On the Singapore Exchange, the benchmark May ore was up 0.24% to $103.75 per ton. Metals have rallied due to renewed interest in ending the conflict in the Middle East. Zhuo Guqiu, a Jinrui Futures analyst, stated that the war had disrupted trade flows through the 'Strait of Hormuz. This led to lower steel shipments into the Gulf and, consequently, the annual 'lower steel shipment in March. As other countries erected trade barriers, the Gulf became China's second largest steel export destination in 2013. Donald Trump, the U.S. president, said that talks to end the Iran War could resume in Pakistan within the next two weeks, following the failure of the weekend negotiations, which led Washington to stop shipping to and from Iran. A note from Shanghai Metals Market stated that iron ore consumption in China is currently?near peak levels', which provides strong support to iron ore price. The World Steel Association announced on Tuesday that global crude steel demand is expected to increase by 0.3% to 1.72 billion metric tons this year. Coking coal and coke, which are used to make steel, also grew by 1.6% and 2.56% respectively. A separate note by 'Shanghai Metals Market' stated that due to the rising production of hot metals, demand for coking coal and coke was high. Steel mills had relatively low levels of coke in stock, which led to an urgent purchase?of cargoes. The Shanghai Futures Exchange steel benchmarks mostly rose: Rebar was up by 0.23%; hot-rolled coils were up 0.3%; and stainless steel gained 1.89%. Wire rod, on the other hand, lost 0.12%.
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Gold falls from a one-month high due to a stronger dollar and US-Iran talks.
The gold price fell on Wednesday, after reaching a 'one-month high in the previous session. As of 0249 GMT spot gold was down 0.3%, at $4,828.07 an ounce. It had earlier reached its highest level since March 18. U.S. Gold Futures for June Delivery were unchanged at $4,851.30. The dollar has recovered from its lowest level in more than a month, making commodities denominated in greenbacks such as bullion more expensive for holders of other currencies. dollar rebounded from its lowest level in more than a month, making the greenback-denominated commodities, such ?as bullion, more expensive for holders of other currencies. Oil prices dropped while stocks soared as investors hoped that Iran would resume talks with the U.S. in order to end the conflict which has closed the Strait of Hormuz - one of the major waterways used for the transportation of crude and refined products. Marex analyst Edward Meir said that gold prices will react to Middle?East headlines over the next few months, in hopes of two countries engaging in talks. Gold prices rose 1.6% this past week despite a slight decline, on renewed hope for U.S. Iran peace talks. Meir said that if things go wrong again, they can return to the pattern before the ceasefire, which was lower gold prices, a stronger US dollar, and lower stock prices. Donald Trump, the U.S. president, said that talks to end the Iran War could resume in Pakistan within the next two day after the weekend's failed negotiations prompted Washington to impose an Iranian port blockade. The?U.S. The?U.S. military announced?late Tuesday that American forces had completely stopped economic trade entering and leaving Iran via sea due to a 'blockade. The chance that the U.S. will cut its interest rate by 25 basis points this year has increased from 13% to 30%, compared to last week. Prior to the war, two rate cuts were expected for this year. Analysts at OCBC stated in a report that "while?gold? and?silver? rallied strongly overnight? the broader signal was decidedly risk-on, rather than defensive positioning." (Reporting by Noel John in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu) (Reporting and editing by Rashmi aich and Subhranshu Sahu in Bengaluru.
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Former US Treasury Secretary Yellen: One Fed rate cut this year
Janet Yellen, former U.S. Treasury secretary, believes that the Federal Reserve could cut interest rates this year. This is despite the fact that the 'Iran War' has created supply shocks in the global economy which are putting pressure on inflation. "Short-term expectations of inflation are slightly up, but they will be watching all that very closely, and I believe they have an open mindset," Yellen said Wednesday at the HSBC Global Investment Summit held in Hong Kong. If I were to write down one thing on paper before the next FOMC meeting, where forecasts are made, my guess is that there might be a reduction later in the year. Fed policymakers chose to maintain benchmark interest rates in their current range of 3.50% to 3.75 percent in March. A majority also predicted that at least one rate cut was likely to be appropriate for this year. Kevin Warsh is the nominee of President Donald Trump to replace Jerome Powell. He has repeatedly criticized Powell for failing to implement the rate cuts that he feels are necessary for the U.S. Economy. Yellen stated that the Middle East conflict has intensified economic uncertainty. She said that "it puts upward pressure on inflation, and we've seen it in recent reports of inflation. But we're more likely to see this," she said. "This is a broad supply shock." Investors are evaluating the impact of the six-week Iran War on interest rates and inflation in the major economies in the world. Crude oil prices have risen by more than 30% since the conflict began. U.S. consumer price increases?increased by the most since nearly four years, in March. This was due to a record increase in gasoline and diesel prices. The Fed has cut its interest rate by a quarter since the beginning of this year. Traders are no longer betting on this happening. (Reporting and writing by Kane Wu in Hong Kong, Scott Murdoch and Jacqueline Wong; editing by Kevin Buckland and Jacqueline Wong)
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Copper prices are at a six-week high on the back of renewed US-Iran discussions
The copper price rose on Wednesday, hovering near a six-week high as renewed U.S. - Iran 'peace talks' sparked hopes for a deescalation of the Middle East conflict. As of 0222 GMT, the most traded copper?contract at the Shanghai Futures Exchange rose 2.16% to reach 102,880 Yuan ($15,090.35) a metric ton. The contract reached its highest level since March 3, at 103.130 yuan, earlier in the session. Benchmark three-month Copper on the London Metal Exchange rose 0.56% to $13,358.5 per tonne after reaching its highest level since March 2, at $13,392.5. Donald Trump, the U.S. President, said that talks to end the Iran War could resume in Pakistan within the next two day after the weekend's failed negotiations led Washington to impose an economic blockade on Iranian ports. Oil prices fell, alleviating concerns about inflation and a global recession that could dent the demand for industrial metals. Demand for red metal, which is used in construction, manufacturing, and power generation, has also improved, which will help to keep prices down. A researcher from the state-owned China Minmetals Corp stated on Tuesday that refined copper consumption could increase by 3.7% per year in China over the next decade. China's plans to stop exports of the acid have stoked concerns about a possible impact on copper and nickel producers who use it. Nickel prices also advanced as a result of the shortage of sulphur caused by disruptions caused by the Iran War. This forced several Indonesian nickel processing companies to reduce their output by at least 10% from?last week. Shanghai nickel prices rose 2.57%, while London prices firmed by 0.38%. SHFE lead climbed 0.45%. Tin jumped 3.94%. Zinc grew 0.49%. Aluminium?shrank 0.12% due to easing supply concerns. The price of aluminium rose by 0.72%. Lead gained 0.28%. Tin increased 0.27%. Zinc grew 0.28%. $1 = 6.8176 Chinese Yuan (Reporting and editing by Amy Lv, Tony Munroe)
MORNING BID EUROPE-Stocks rise, blockade holds, talks may resume
Gregor Stuart Hunter gives a look at what the day will bring for the European and global markets. Global equities are edging higher, with new record highs in 'view.
Investor confidence remains intact, despite the fact that Iran has not confirmed when it will announce its decision. The MSCI All-Country World Index gained 0.2% on Wednesday to extend its winning streak for a ninth day in a row. Meanwhile, S&P 500 futures were stable just above the 7,00 mark. This is the level that the cash benchmark briefly reached at the end of January.
Brent crude rose 0.6% to $95.33 a barrel after the U.S. Military said that its blockade had completely stopped economic trade into and out Iran by sea.
Investors also weigh warnings from the International Monetary Fund (IMF), which reduced its global growth forecast on Tuesday. Meanwhile, some traders have warned that complacency could be setting in.
The U.S. earnings report season 'painted a picture? of a financial sector that was able to profit from the volatility in the first quarter. Banks reported booming trading revenue, even though they warned about the impact of higher oil costs on their clients.
ASIA LEADER IN GAINS
The MSCI Asia-Pacific Index outside Japan, the broadest measure of Asian shares, rose 1.5%. Korea's Kospi index led the gains with a 3% increase to surpass its previous record. Taiwanese stocks rose by 1.9%, setting new all-time records.
EUROPE MORE GARDED
Early European trade was more skeptical. Pan-regional futures fell 0.1%. German DAX Futures slipped?0.1%. FTSE?futures rose 0.1%.
Kevin Warsh is also on course to break a record, as he has disclosed assets of more than $100 million. If confirmed, he would become the richest Fed chair ever. The following are key developments that could impact the markets on Wednesday.
Earnings of the company
ASML Holding NV Bank of America Corporation Morgan Stanley
Economic Events
France: CPI for the month of March
Euro Zone: industrial output for February and reserve assets for march
Debt auctions:
Germany: 26 and 30 year government debt
(source: Reuters)