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FOREX-Yen surges against US dollar
The Japanese yen rose sharply in value against the U.S. dollar. The?dollar was down on Wednesday after having lost approximately half its gains made following a rare joint action by the U.S. The reason for the move was not immediately apparent. The yen had fallen to a record low of 163.98 yen per dollar before the intervention. It then rose as high as 155.21, before reversing some of its gains. The yen last rose 0.92% to 158.72 dollars per yen on Wednesday. Chris Scicluna is the head of economics research at Daiwa Capital Markets. He said: "It would be convenient for 'the U.S., or Japan to at least conduct a monetary rate check after Bank of Japan's comments this morning." Hajime Takata, a hawkish member of the BOJ Board, said that on Wednesday the central bank needed to act quickly to combat inflationary pressures. He suggested that they should not follow a semi-annual schedule set by the markets. It is difficult to determine what is driving the dollar/yen move, but I suspect that it is more of a rate-check than an intervention to shift the trend as the recent intervention failed to do so," said?Scicluna. BOJ Governor Kazuo Ueda also indicated on Tuesday that a significant chance exists of an increase?this month. Treasury Department reported that Ueda and U.S. Treasury Sec. Scott?Bessent had a discussion in which he expressed strong support for "decisive monetary" steps to combat the yen's weakness.
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Sources say that OPEC+ is likely to maintain its oil production policy on Sunday.
Three sources 'close to the issue' told us that OPEC+ will likely keep its oil production?policy for October unchanged at a meeting this Sunday. The producer group has completed the unwinding one layer of cuts in production and is now focusing on 2027 quota negotiation. The Iran War continues to disrupt oil exports via the Strait of Hormuz. This reduces OPEC+’s influence on prices and market share. The group's decisions on supply now have less impact on the market than in the past. The meeting on Sunday will include seven core OPEC+ countries: Saudi Arabia (and Russia), Kuwait, Algeria and Kazakhstan. Since the beginning of this year, these countries have been increasing their monthly production quotas. Two of the sources have said that their online meeting will begin at 1100 GMT. The actual production has fallen short of the planned increases in quotas due to the disruptions caused by the wars in Iran, Ukraine and the Gulf. OPEC+ is made up of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia. OPEC and its main producer Saudi Arabia did not respond immediately to comments. This month's increase, agreed in early August, completed a phased rollback of a 1.65 million-barrel-per-day supply cut first agreed in 2023, when the ?group still included the United Arab Emirates, which left OPEC in May. OPEC+ has another layer of cuts in production that will cover most of the?21 country group until 2026. The group is also reviewing member's oil production capacity to establish baselines for 2027, which will form the basis of quotas. One of the sources stated that DeGolyer and MacNaughton in Texas, who is conducting the review of most members, will?submit their report to OPEC by the end of September. This could lead to difficult negotiations, before the group establishes new production benchmarks at its end-of-year meeting. Iraq and other?members have called for?higher production quotas. The UAE left OPEC partly because they felt their quota didn't reflect their growing production capacity. Bloomberg News reported that Venezuela was also considering leaving OPEC.
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Andy Home: The squeeze on zinc at the LME and ROI signals a deepening of supply risks in the West
A record low smelter treatment term, a year of underperformance by mines and a scramble to get metal at the London Metal Exchange. If you think this is the description of the copper markets, then think again. Zinc is under pressure now, even though copper may face a structural shortage in the future. LME zinc for three months hit a four-year-high of $3,990 per ton on Monday. LME stocks have remained low throughout the year. The registered inventory is 100,525?tons but nearly a third are in the form?cancelled warrants? awaiting physical loading-out. The time-spreads will be emphasized in a similar manner. Cash premiums over metals for three months Last week, flexed to more than $230 per ton. The situation has eased slightly, but $139 per tonne still indicates acute shortages. This was not what I expected. The global mining output also dropped sharply in the first half this year. Zinc's unexpected rally is being driven by a shortage of raw materials. If this trend continues, it could turn into a structural problem for Western buyers. SHORT-LIVED RECONSTRUCTION Last year, the world's mines of zinc increased their output by 4,8%. This ended a three-year trend of declining production. The International Lead and Zinc Study Group, which met in April, expected that some of this momentum would carry over into the current year, albeit with a 0.3% slower growth rate. According to the Group's most recent assessment, the reality is that production declined by 2.6% on an annual basis in the first half 2026. As they progress through the lower-grade ore bodies, big mines such as?Antamina? in Peru and Red Dog? in Alaska have seen their output fall. Other people have been hit by unexpected events. After seismic events in September of 2025, the 29Metals Golden Grove mine and Boliden Garpenberg mine both in Sweden and Australia have had to alter their mine plans. The increase in output last year is now starting to appear as a small blip within a larger downtrend. According to ILZSG, global mine production dropped by 8.6% from 2015 to 2025. Smelter production, on the other hand, remained essentially unchanged during this period. The mismatch in mine output and smelter capacities is increasing again, leading to intense competition between smelters for concentrates. Profit Explosions Smelters are charging more for the conversion of concentrates to refined metal. Shanghai Metals Market (SMM)'s assessment of spot prices for imports of zinc concentrate Last month, the price per ton fell to minus $113. This is a new low. Silver and sulphuric acids are used by smelters to compensate for the loss of revenue that should have been their main source. Some lucky ones will have been able to secure annual supplies for this year's benchmark price of $85 per tonne. This is still a low number compared to historical standards, and may even fall further if spot markets don't improve by next year's contract negotiations. Although Chinese smelters struggle with margin compression, they still perform better than their Western competitors. Imports of Chinese zinc concentrate grew by 30% annually in 2025, as smelters stocked up on the?concentrates' market. Imports increased again by 5% during the first seven-month period of 2026. This suggests that China has taken a greater share of available volume in a tight market. According to ILZSG, China's national production of refined zinc increased by 5.9% in the first half 2026. The rest of the world's production?decreased by 3.4%. STRUCTURAL TIGHTNESS Western smelters also have suffered unexpected blows, such as a fire in Kazakhstan's biggest zinc facility. Margin compression caused by low processing fees can be a challenge for a company, especially if they are accompanied by high power costs. The Australian government already provided financial assistance to Trafigura’s Hobart Zinc Smelter in Tasmania. The company can now progress with studies to modernise the facility and look at potential co-products like germanium?and indium. Richard Holtum, Trafigura CEO, stated in a blog post from May about the dire state of European smelters that "markets will not be able to solve this". The West's zinc-smelting problem will be exacerbated by the current market dynamics of limited concentrate availability and bombed out treatment terms. The LME squeeze is a reflection of the divergent fortunes between Western and Chinese smelters. London is running out of refined zinc. China has plenty of metal but at the moment is only drip-feeding it into LME storage warehouses. This will ease but not eliminate the shortage. This could be an 'ahead of time' sign, as the West becomes increasingly dependent on China in order to balance its structural deficit. You like this column? 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Pearl Sweet is the name given to Uganda's crude oil ahead of production
Uganda named its blended crude grade "Pearl Sweet" on Wednesday, a major step in preparation for the planned commercial oil production by the East African nation at the end of this year. Uganda discovered commercial crude reserves in the Albertine Rift basin along its border with Democratic Republic of Congo two decades ago. The lack of infrastructure has repeatedly delayed commercial production, as have disagreements between government officials and international oil companies about development plans. The name was revealed by President Yoweri Mueveni at a ceremony held in the Kikuube District, located about 250 km (155 mi) west of Kampala. He said "Sweet", which refers to crude oil's low sulfur content, is derived from Uganda's description of itself as "Pearl?Africa", popularised by the former British Prime Minister Winston Churchill. UNOC, the state-owned oil company, said that after the names are announced, the companies developing the fields would begin "outreach activities to refineries and market intelligence, as well as commercial negotiations with interested parties." Uganda's recoverable reserves of oil are estimated to be 6.65 billion barrels. Peak production is expected to reach 230,000 barrels a day. TotalEnergies, a French company, owns the largest stake in the fields, with 56.67%, and its Chinese partner, CNOOC, has 28.33%. UNOC is the owner of the remaining fields. The $5 billion East African Crude Oil Pipeline will export Pearl 'Sweet Crude' from Uganda to the port of Tanga in Tanzania on the Indian Ocean. This pipeline is touted as the longest crude oil pipeline that uses electrical heating. UNOC stated that Pearl Sweet is similar to other waxy and sweet blends such as Chad's Doba, South Sudan's Nile & Dar crudes and Sudan's Nile & Dar crudes.
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Source: Prediction market Kalshi will file for US crude oil "perps"
Source familiar with the matter says that Kalshi will soon file a permanent?West Texas Intermediate crude contract with U.S. regulatory authorities, which would expand the offerings of the prediction market startup beyond cryptocurrencies and metals. The filing with the U.S. The filing with the?U.S. If approved, WTI crude oil would be the first perpetual oil futures product to trade on a U.S. regulated platform. This follows a strong demand for similar instruments on offshore decentralized markets such as Hyperliquid. Perpetual futures (or "perps") are derivatives with no expiration date. This allows traders to keep positions open indefinitely, without having to roll them over. These products offer investors high levels of leverage that allow them to magnify both gains and losses from market movements. This'move' is part of Kalshi’s strategy to compete with traditional exchange operators, by expanding past event contracts and into asset classes via perpetual futures. Kalshi has filed with regulators for perpetual contracts linked to equity indexes and metals. According to reports in the media, Kalshi has also filed for perpetual foreign exchange and interest rate contracts. The CFTC said that contracts linked to new asset classes will be reviewed case-by-case. The CFTC approved the first perpetual futures contracts for the United States in early this year, for the cryptocurrency exchange 'Coinbase' and prediction -market startup Kalshi. LEGAL LIMITS Source: Kalshi designed its new contract in order to avoid regulatory concerns raised by a CFTC examination of?24/7 energy futures contracts and perpetual energy contracts. The'regulator' set a deadline of August 26 for public comments to be submitted on a proposal which would allow round-the-clock trading in standard?futures and perpetual?contracts that are linked to physical delivered or storable energy commodities. Earlier this summer, the CFTC halted listing of a crude oil futures contract that CME Group would have been able to trade round-the clock.
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Abel, Berkshire CEO, says AI will help drive growth
Greg Abel, CEO of Berkshire Hathaway, said on Wednesday that he saw significant opportunities for Berkshire Hathaway from the building out of AI data centres after Berkshire Hathaway made Alphabet its third largest common stock holding. Abel said that the housing market would be "bumpy" in the short term due to the high inflation rates and mortgage rates. Abel, speaking on CNBC, called Alphabet "a significant player" in AI. This was the reason he and Berkshire Chairman Warren Buffett authorized an additional $10 billion three months ago, to help Google and YouTube build out AI infrastructure. Abel stated that "we are all feeling and seeing the impact" AI. Berkshire had approximately 106,000,000 Alphabet shares valued at $37,8 billion by the end of June. Apple and American Express were its largest investments. Abel stated that Berkshire Energy's business could also be a beneficiary of AI growth due to the increasing amount of electricity required to run data centres. He estimated that in Iowa, where Berkshire Hathaway Energy's headquarters is located, about 8% came from data centres last year. Abel stated, "I have always believed that energy would be the main constraint." "We still see this as an important opportunity for Berkshire Hathaway Energy and Berkshire." Buffett initiated Berkshire’s investment in Alphabet, but Abel claimed credit for the new?investment made at a discount of 6.5% to Alphabet’s stock price. Abel manages Berkshire’s cash stake and allocates the capital with Buffett’s help. As of June 30, this totaled a whopping $364.7 billion. ABEL SAYS THAT CONSUMERS?ARE STRETCHED Berkshire announced its Alphabet investment one day after paying $6.8 billion to purchase Taylor Morrison. Also, it invests in homebuilders Lennar D.R. Horton. Abel believes Taylor Morrison will be a very strong asset in five to ten years, as more people become homeowners. Abel stated that "we didn't see any signs of immediate recovery" for housing. It was going to be bumpy for a long time. According to the Department of Commerce, the Census Bureau, U.S. single family housing starts fell to their lowest level since November 2022 in July, due to higher mortgage rates, and the economic uncertainty caused by the Iran War. Abel stated that "there's still a consumer who is clearly feeling the pain and struggling and has to stretch that dollar a lot farther." JAPANESE INVESTMENTS ARE BUFFETT LIKE ABEL Abel spoke from Tokyo where he said Berkshire had more than 10% stakes of Japanese trading houses Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. In March, Berkshire took a 2.49 % stake in Tokio Marine, as part of "a strategic partnership". Abel stated that Berkshire intends to hold its trading houses investments for "many years" and would be interested in pursuing a transaction with Tokio. He refused to comment on an article that suggested Suncorp Insurance Australia Group and Insurance Australia Group could be potential targets for Tokio. Abel travelled to Tokyo on Monday after celebrating the 96th Birthday of legendary investor Buffett with his family. Buffett visited Japan himself in 2023. Abel stated that Warren loves Japanese investments. "It was not easy for Warren to send me off to Tokyo." Berkshire's dozens of companies include the BNSF railway, Geico auto insurance, manufacturing firms and retail brands like Brooks, Dairy Queen and Fruit of the Loom.
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Mexico launches anti-dumping investigation against Japan's steel sheet
Mexico has launched an investigation into the imports of steel sheets from Japan. This was revealed in a resolution that appeared in the official gazette on Wednesday morning. Grupo Acerero, which claimed that unfair international trade practices were taking place, specifically, price discrimination on imported steel sheets made in Japan, requested the investigation. The investigation was accepted by Mexico's Ministry of Economy. In the resolution published in official gazette, it was stated that the anti-dumping investigation would be conducted on all steel sheet imports from Japan, regardless of the country they are exported to. Grupo Acerero alleged that Japanese steel sheets "entered Mexico at a price discrimination, causing?material harm to the domestic industry." After the investigation, Mexico’s Economy Ministry may decide to impose definitive antidumping duties on the products involved. The resolution established the investigation period until 2025 and the damage analysis period from January 2023 to December 2025. The investigation is expected to take a total of '23 business days' for producers or those involved in the investigation to establish their legal interest, submit arguments and evidence, and provide responses.
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PG&E reviews its spending and defers $2 Billion after wildfire bill setback
PG&E, the utility, announced?on Tuesday that it would defer about $2 billion of 2027 expenditures, leaving a 'capital plan?of about $11.4 bn. It is launching a strategic review due to wildfire liability concerns. The review is coming at a time when PG&E is facing renewed uncertainty about liability costs. A Senate bill 'amendment' did little to reduce utilities exposure to expenses'related to the fires' or address the long term solvency 'of California's fund. The company planned to spend $13.4 billion by 2027. Patti Poppe, CEO of Patti Poppe, said that California's wildfire liability framework continues to create financing risks, which drive up costs, impact customer affordability and limit investments in the energy systems. "Something must change in order to better serve our customers." PG&E stated that the review is aimed at helping?reduce costs for customers associated with higher financing 'expenses. It added?that it would reduce its debt financing requirements by $2 billion. The review will evaluate the entire range of 'options' that are reasonably available in terms of regulatory, financial and operational options, as well as the full range of 'options relating to how the company is organized.
Vertiv buys Utility Innovation Group up to $2.6 Billion in data center push
Vertiv Holdings announced on Wednesday that it would purchase Utility Innovation Group, a microgrid and advanced 'power control' company for $1.45 billion. An additional $1.15 billion could be paid if certain targets are met.
Vertiv expects that the deal will add capabilities to its customers' data center projects, by securing energy through grid-connected sources and onsite power sources.
Gio Albertazzi is the CEO of a power and cooling equipment manufacturer.
Data center operators are increasingly interested in onsite power and microgrids as they seek to find alternatives to the?constrained utility?grids in light of an AI-driven surge in power demand. Data centers can combine utility power with onsite generation, energy storage and energy storage using microgrids. This improves reliability and helps bring new facilities on line more quickly.
Vertiv will be able to add a range of capabilities, including microgrid control, onsite power generator orchestration, specialized switches, and power architecture behind the meter, with the acquisition of North Carolina's Utility Innovation Group.
Energy management and onsite power solutions have also benefited from the high AI workloads that are a major factor in data centers.
Vertiv purchased liquid-cooling company CoolTera in?2023, while Schneider Electric acquired liquid-cooling specialist Motivair?in 2024.
Vertiv's acquisition of Utility Innovation Group should close by the fourth quarter of 2026.
Vertiv increased its forecast for the annual adjusted profit per share to $6.65-$6.75, from an earlier estimate of $6.30-$6.40.
(source: Reuters)