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Hungary will give subsidies to diesel car owners
The government of Hungary will provide a 'targeted subsidy' to households that use diesel-powered cars as fuel prices have increased. However, the price cap won't be introduced as it could lead to a shortage in supplies. Magyar stated in a post on Facebook that Europe was experiencing a?diesel crisis unprecedented in its history. The global diesel market has tightened dramatically in recent weeks. Industry executives have warned that the supply will remain constrained through 'winter, due to Russia's export embargo, and the approaching peak of 'heating demand. Magyar stated that his government will "provide direct and effective support to the owners of one-million diesel-powered cars and their families." He said that by December, diesel-powered vehicles up to 150 horsepower would receive a total compensation of 20,000 forints (63.96 dollars). Farmers will also get help through refunds of excise taxes. The Middle East has seen its supplies curtailed by the Iran War and the reduced shipping through the Strait of Hormuz. Hungarian oil group MOL's main Danube refining facility has been operating at reduced capacity since an October 2025 fire damaged one unit.
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German union demands Volkswagen commit to 2024 Labour Agreement
A leading union representative in Germany said that IG Metall demands Volkswagen honour a landmark labor deal signed in 2024. He cited fears of mass job losses due to a recent turnaround agreement. Thorsten Groeger, a Hanover-based reporter, told reporters that IG Metall members 'decided on Friday to invoke a clause in the agreement signed?in December of 2024. This move is a significant step in the 'fight for Volkswagen's Future', where management has been pitted against state governments and workers over a plan to double layoffs and dramatically cut production. Volkswagen did not immediately comment on the move. Daniela Cavallo is the head of Volkswagen's works council. After mass walkouts the 2024 agreement resulted in wage concessions and 35,000 layoffs. However, it prevented immediate plant closures by securing job and investment assurances from management. Existing labour agreements prevent IG Metall from striking until the end the year. In recent months, tensions have flared up between the two sides over Oliver Blume's plans for a major overhaul, which includes four threatened plant closures in early 2020. This is as Europe's largest carmaker struggles with Chinese competition, mounting duties and high manufacturing costs. Cavallo called the criticism of German manufacturing costs by management "finger-pointing". Cavallo called for more comprehensive policies to protect the industry from heavily subventioned competitors from China. The labour chief stated that "we in the automotive industry are in fierce competition with players who enter the market under totally different competitive conditions. We simply cannot keep up."
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Copper to experience first weekly decline since June due to US tariff concerns
The copper price was headed for its first weekly decline?since June. They also stabilized on Friday after a steep drop in the previous session following reports?that White House had not yet made a decision on imposing tariffs on the metal. The London Metal Exchange's three-month copper was unchanged at $14,230 per metric ton during the official open outcry. It fell 3.6% on Friday after reaching a record high price of $14,875; it is expected to finish the week at a loss of?1.6%. This would put an end to its 10-week winning streak. Alastair Mudro, senior base metals analyst at Marex said via email that the market had been "caught long". He said that copper stocks were still tight in certain areas and it would take time to move large amounts of money. "We see the potential of further tightness but for now, it's about risk management." Sucden Financial stated that heavy volumes on the decline of Thursday showed "meaningful reduction in risk" but agreed with the fact that fundamental tightness underpinning any selloff should be limited. Copper stocks available on the LME Shanghai Futures Exchange stocks in China, the top metals consumer, were unchanged at 117.600 tons. The weekly decline in exports was 13%, to 54,780 tonnes, the lowest level since January 2024. Stocks on the U.S. COMEX Exchange The price of copper in the United States has dropped, but it is still rising. Three-month LME Copper Spread On Thursday, the market structure?flipped into a contango, where future prices?are higher than those?for immediate delivery, signaling a easing of concerns about near-term supply. Cash contract last traded at a discount of $5.50 per ton from?the forward three-month contract. As rising borrowing costs and inflationary concerns roiled the markets, the rest of the LME Complex was in the red. Aluminium dropped 1.4% to $3.249 per ton. Zinc fell 0.6% to $3.870, and lead lost 0.3% to $1.895. Nickel fell 1.5% to $16,410 and reached a new two-month low. Tin dropped 0.7% to $53,950 and hit its lowest level since July 28.
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Inflation in the US increases in August
U.S. consumer price increases accelerated in August as gasoline prices rebounded after two consecutive monthly drops. This boosted financial market expectations of a rate hike by the Federal Reserve next week. Bureau of Labor Statistics of the Labor Department announced on Friday that Consumer Price Index rose 0.4% in August after increasing by 0.1% in July. Consumer inflation increased by 3.4% in the 12-month period ending August after increasing by the same amount in July. The economists polled predicted that the CPI would increase by 0.4% in the month of August and 3.4% on an annual basis. The CPI increased 0.3% in August after increasing 0.2% the previous month. The core CPI rose 2.4% on an annual basis in August, after increasing 2.5% in July. For its 2% target, the U.S. Central Bank tracks Personal?Consumption Expenditures Price Indexes. The government announced on Thursday that the Producer Price Index rose in August. This was due to strong increases in several key components?that are used in calculating PCE inflation. This, along with the robust August employment report released last week, has boosted expectations for a rate increase next week. After comments made by Fed Governor Christopher Waller last week at a NEXT Newsmaker Event, he said he would be inclined to advocate for a rate hike if the data showed that inflation pressures had cooled. The oil price rose above $100 per barrel again on Thursday. Diesel prices are also at record levels, indicating that inflation is likely to continue and spread. Frustration over inflation is growing Tariffs on imports, including the most recent ones against Canada, one United States' largest trading partners, have caused some economists to see price pressures continuing. The frustration over rising prices, particularly for gasoline and foods, has caused a sharp decline in the approval rating of President Donald Trump and could cost him control of the U.S. Congress during?the midterm elections in November. Following Thursday's PPI, economists estimated that August's core PCE index would rise by as little as 0.15 percent to as much as 0.28%. In July, core PCE inflation increased by 0.2%. The estimates for the increase in core PCE inflation over the past year ranged between 3.2% and 3.3%. Core PCE inflation increased by 3.3% over the past 12 months. Some economists believe that the August?PCE report on inflation will include changes in the methodology. This could reduce the core inflation rate a few basis points. According to the CME's FedWatch, the financial markets had priced in a 70% chance that the Fed would raise rates by 25 basis points at its policy meeting on September 15-16. The Fed's overnight benchmark interest rate currently ranges between 3.50% and 3.75%. Fed Chairman Kevin Warsh said last month that the central bank would "have work to be done" if they don't get the confidence needed to believe inflation will?go down to 2%. Trump has been pressuring the Fed for a rate cut, and posted on social media "LOWER THE RATES OR I'LL STOP TRADER WITH COUNTRIES WHERE WE HAVE A DEFICIT." Economists blamed the rise in yields of long-term U.S. Government bonds on what they called political intimidation. Some people expected the Fed would tighten its policy on Wednesday in order to demonstrate its independence.
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German environmental group sues to block Rosatom-linked nuclear fuel permit
BUND -Niedersachsen, a German environmental group, has filed a lawsuit against the Lower Saxony government to stop the expansion of the Lingen nuclear power plant. They claim that the involvement of Rosatom, based in Russia, poses a security risk. The case challenges the clearance by the regional state for a French subsidiary, Framatome, to produce nuclear fuel in Lingen, a northern German town. This was done under a license agreement with a state-backed Russian company. Lower Saxony’s environment?ministry with the guidance of the federal environment ministry had approved approval subject to certain terms and conditions despite political concerns about Russia’s war in Ukraine. BUND, in collaboration with the anti-nuclear.ausgestrahlt group, claimed that the permit was "the result of procedural mistakes and would pose a risk to security because of Rosatom’s role." They claim that the environmental screening was based on outdated documents, and that Rosatom wasn't fully disclosed. Olaf Bandt, BUND Germany's Chair, said that production and inspection could have been manipulated because Rosatom machines are used in Lingen for both manufacturing and quality control. Berlin said that it viewed the collaboration critically. However, the decision was in line with the current laws. The instrument to address these concerns would be?stricter EU sanctions. Lower Saxony's environment ministry stated that the?legal challenges would be?thoroughly evaluated. The letter also referred to a statement made by Lower Saxony’s environment minister Christian Meyer in July, stating that he was 'fundamentally opposed to working with Rosatom' but 'that there were no legal grounds to deny administrative clearance. Rosatom has not responded to all requests for comment. Framatome said that the collaboration was an interim measure to help customers who operate Russian-designed reactors to diversify their purchases away from direct Russian purchase until it develops own production technology.
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Nabiullina, the Russian central bank's Nabiullina, on interest rates and economy
Elvira Nabiullina, Governor of the Russian Central Bank and Alexei Zabotkin, Deputy Governor held a press conference on Friday following the bank's decision to leave its benchmark interest rate at 14%. Nabiullina and Zabotkin both spoke Russian. The following quotes were translated by into English. NABIULLINA POLICY OPTIONS DISSCUSSED, AND NEXT STEPS We discussed the issue of maintaining the current interest rate. This meeting was different from the last one in that we did not discuss a rate reduction. We will update our assessment of the future room for rate cuts in the October forecast update. We do, however, note that pro-inflationary risk has?increased, and continues to be dominant, and will continue to take this into consideration going forward. NABIULLINA ON THE BUDGET PARAMETERS We haven't yet changed our assumptions, estimates or working hypotheses in relation to our budget and the impact on the fuel market. We haven't received any new information about fiscal policy, and we anticipate that the parameters of the "three-year budget" will be finalized this month. If these parameters differ from those in our "baseline scenario", which assumes a 2% budget deficit this year, and a 1% deficit next year. A 0.5% budget deficit is projected for 2028. And a balanced budget by 2029. We will consider that in the revised forecast we release in October.
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Wall St. futures rebound as oil falls ahead of inflation test
U.S. index futures rebounded on Friday as oil prices dropped and investors hoped that the consumer inflation report would end a 'rough' week on a positive. Oracle's premarket price jumped by nearly 7% after it surpassed estimates for its quarterly results on Thursday. This reassured investors that their AI investments are paying off. Nvidia gained 0.8%. The market is weakened by fluctuating interest rates expectations as the stock markets navigate through a convergence of factors, such as the Middle East conflict intensifying and the elevated Treasury yields. After Thursday's slightly higher-than-expected Producer Price Index, which did not reassure investors, the market is now facing a Consumer Price Index report, another data point, that could change rate expectations. Said Haidar is the founder of Haidar Capital Management. He believes that the Federal Reserve must act quickly to prevent a repeating of the high inflation of 1970s. This would be yet another failure in discretionary monetary policies. At 6:58 am ET, the Dow E-minis were up 286 points or 0.55% and S&P 500 E-minis were up 40.5 points or 0.53%. ET, S&P 500 E Minis rose 40.5 points or 0.53% and Dow E-minis gained 286 points. Nasdaq E-minis rose?175.25 or 0.6%. The blue-chip Dow Jones was heading for its steepest drop since March, and the S&P 500 benchmark was on course for its largest weekly loss since last June. Some investors wonder how far this year's rally will go. Jeff Schulze is the head investment strategist of Franklin Templeton Institute. He wrote that history shows that strong starts are likely to continue. According to Schulze, since 1950, when the S&P 500 index gained more than 10% by the end of August in the year, it continued to gain from September to December in 25 out of 28 cases. Brent crude futures fell more than 3%, but were still over $103 per barrel. West Texas Intermediate crude futures fell 3.5%, but were still close to $100 a barrel. Bill Adams, Fifth Third Commercial Bank's chief U.S. economist, said that the surge in energy costs since the beginning of the month created a new risk for inflation. According to GasBuddy, the average national price of diesel in the U.S. on Thursday exceeded $6 per gallon for first time. Separately the yield on 10-year U.S. Treasury notes dropped 0.16 basis points but was still at 4.9424% - its highest level since 2023. Stocks are less appealing when Treasuries have high yields. Adobe's premarket price dropped by more than 4% after its midpoint revenue forecast for the fourth quarter fell short of expectations. ACV Auctions shares soared by 44% following the agreement of online vehicle auctioneer Copart to purchase it for nearly $1.9 billion.
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Weekend Reads: Oil-Patch AI, data-tampering, and critical-minerals risk
Looking for inspiration? Weekend Reads is a weekly roundup of what the Open Interest Team has been reading, watching, and listening to. This week's top picks include?span?data integrity, China’s decarbonisation drive, AI-powered oils fields and more. This weekend we are reading... MIKE DOLAN is a ROI Finance & Markets columnist. This article by Jed Kolko, at the Peterson Institute for International Economics (Washington) examines the corrosive effects of political'meddling' in official government statistics. GAVIN MAGUIRE is the ROI Global Energy Transformation Columnist. The latest analysis by UK think tank Ember tracks China's progress towards reducing its fossil-fuel dependency across all of its energy-intensive industries. This is a must read for anyone who's interested in global industrial production, carbon emissions and green technology. Andy HOME, ROI Metals columnist: This OECD?report examines the issue?of?traceability of critical minerals which is crucial for creating resilient supply chain. The report examines both the current situation and the challenges ahead. It focuses on lithium in Argentina, Chile and Indonesia as well as nickel in the Philippines. Listening to... RON BOUSSO is the ROI Energy Columnist. In this podcast, Bassam Fattouh, Director of the Oxford Institute for Energy 'Studies, and energy analyst Paul Horsnell discuss?changes? in oil -trading since the collapse on the 17th June ceasefire between the U.S. and Iran. We're always watching. CLYDE RUSSELL is a columnist for ROI Asia Commodities & Energy. This podcast, "Digital Innovations - in Oil and Gas", from consultant Geoffrey Cann examines how AI can revolutionize the management and maintenance of oilfields. Opinions expressed are solely those of the authors. These opinions do not represent News's views, which are committed to independence, integrity and neutrality under the Trust Principles.
Shock to the equity supply?
What is important in the U.S. and international markets today by Mike Dolan Editor-at-Large of Finance and Markets
The 'global markets' appeared to be calm early on Tuesday. However, the latest AI twist and another set of confusing signals regarding the Iran conflict were hidden. Anthropic, an AI startup, stole the show Monday when it announced that it had confidentially 'filed' for an IPO. It seemed to beat rival OpenAI and catch the slipstream of SpaceX IPO which is expected in this upcoming month.
Below, I'll get into this and more. Check out my most recent column about how the AI frenzy may be a greater inflation concern than the Iran energy scare. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
EQUITY SUPPLY SHOCKS? Alphabet raised $80 billion in equity funding, including $10 billion through a private placement with Berkshire Hathaway, while investors analyzed the Anthropic announcement. After hours, the Alphabet share price dropped by about 2%.
These 'hyperscalers' have already raised tens and tens billions in new debt for their AI investments. But raising equity is another twist. The bigger question is whether investors will be able to stomach all of this new equity, especially at such'sky-high' valuations.
The numbers are staggering. Anthropic's most recent funding round valued it at $965 billion, which is higher than OpenAI, and SpaceX's $75 billion planned offering valued it at $1.75 billion.
It is important to know where this leaves the leaderboards of the top companies, the relative index weightings, and the concentrations of AI within equity benchmarks. Remember that in the past, huge IPOs have often been the culmination of speculative markets. Away from Wall Street the real AI demand continues to be strong. STMicroelectronics, Europe, rose 10% on Tuesday, its highest level since 2000, after it doubled their data-center revenue estimate for this year to $1 billion.
Investors are increasingly concerned about how the AI scramble and chip buildout is impacting input and consumer costs, particularly as the U.S.-Iran talks on peace stall. Brent crude prices have retracted a bit from yesterday's 5% increase after President Donald Trump said that the talks with Iran will continue and could reach a conclusion this week. We've been in this situation before. On Monday, the fear was that Iran would maintain its red line and continue military exchanges.
Oil prices may be down a little today, but year-end futures are still 30% higher than they were before the war began. This, along with the AI story, was summarized in the hot U.S. Manufacturing reading for the ISM survey. The headline factory activity index reached its highest level in four years. However, some questioned whether it was inflated by precautionary stockpiling. Input price component fell a little but is still high. Euro zone inflation increased to 3.2% as expected in May. A rate hike by the European Central Bank is expected to take place later this month. STMicro helped Europe's major stock indexes rise?early Tuesday, and Asian markets again benefited from the tech-driven excitement of Wall Street on Monday. Wall Street stock futures had fallen from Monday's record-breaking closing high. Long-dated U.S. Treasury rates were also a bit softer. Currency markets remained calm.
Chart of the Day The S&P 500 Software Sector Index logged its largest monthly gain since November 2002 in May. It ended last week at its highest levels since late January, after strong results from Dell. The sector, which suffered a steep decline earlier this year due to concerns that AI agents might threaten traditional business models has nearly recovered all of its losses from 2026. Stocks like ServiceNow, IBM Adobe, Salesforce, Workday and others have continued this rally in the past week. The index also grew another 4% on Sunday.
Watch today's events
* U.S. JOLTS April job openings (10 am EDT)
Beth Hammack, Cleveland Fed, speaks
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(source: Reuters)