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Saudi Arabia reports a first-quarter loss of $15.65 billion
Saudi Arabia's first-quarter 2025 deficit increased to $15.65bn from $3.30bn a year earlier as oil revenue fell 18%, to 149.810bn riyals (about $39.95bn), the finance ministry reported on Monday. In the first quarter of this year, Saudi Arabia's total revenue dropped 10% to 263.616 riyals. However, its public expenditure rose 5% to 3222.317 riyals. Saudi Arabia's revenue has been affected by declining oil prices in recent years, as well as voluntary production cuts. Riyadh is pushing ahead with projects that are part of Vision 2030, its ambitious plan to revamp its economy and reduce its dependency on oil. Non-oil revenue in the kingdom increased by 2% from a quarter earlier, to 113.806 billion Riyals. Saudi Arabia is one of the eight members of OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia. In April they agreed to accelerate a plan for phasing out oil production reductions by increasing output in May. The Kingdom forecasts a budget surplus of 101 billion Riyals in 2025, as it continues to implement its plan for boosting growth and achieving an economic transformation requiring hundreds of billions in investment. In the first quarter, the Saudi public debt reached 1,329 trillion riyals. The kingdom has a low ratio of debt to GDP and lenders are confident in it. It was one of the largest emerging markets debt issuers by 2024. It will allocate hundreds of billions to fund large-scale projects that aim to reduce its dependence on oil while also fostering the growth of tourism and private sector. The government's top priority is to boost non-oil growth. To do this, the kingdom has increased its efforts to attract tourism investment and expand the private sectors. Saudi Arabia approved in November its budget for the year 2025, which forecasted a deficit of 101 billion Riyals.
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Tyson Foods beats quarterly profit estimates, chicken sales rise
Tyson Foods surpassed Wall Street expectations on Monday for the second-quarter profits, thanks to increased demand for chicken products and lower costs. Premarket trading saw shares fall 2% after the quarterly revenue missed estimates. The meat company was also concerned about the trade policies of U.S. president Donald Trump, as tariff disputes might affect domestic demand and American imports. The U.S. consumer's sentiment declined for the fourth consecutive month in April, amid concerns over tariffs and economic impacts. Some consumers have already switched to cheaper meat products. Tyson has said that the tariffs could lead to some disruptions in sales and that exports are less than 10%. The demand for chicken increased as the average price declined by 1.1% during the quarter ending March 29. However, an increase of 8.2% in beef prices hurt its steak and other cuts. The beef prices in the United States have increased after ranchers reduced their cattle herds because of a drought that lasted for years and dried up the pastures used to graze. Arun Sundaram is an equity analyst with CFRA Research. He said that while the beef segment continues to be challenged by a tight supply of cattle, the margins for the chicken segment are improving, thanks to strong demand. Tyson's beef business reported an operating loss adjusted to $149 million, down from $34 million the year before. The income in the chicken business increased from $160 to $312 millions. LSEG data shows that Tyson's overall earnings per share were 92 cents, compared to analysts' estimates of 82 cents. Analysts had predicted $13.14 billion for quarterly net sales. The company has confirmed its revenue forecast for the year. Stephens wrote in a letter that "Chicken is resilient and we expect it to continue." According to a regulatory filing, Tyson has increased its legal contingency account by $250 million in response to claims that its pork division was involved with price fixing. Smithfield Foods, a Tyson competitor and the largest U.S. pork producer, announced on Tuesday that China is no longer a viable marketplace due to retaliatory duties. Reporting by Neil J Kanatt from Bengaluru, and Tom Polansek from Chicago. Pooja Deai and Mark Potter edited the story.
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India's R R Kabel will see a surge in volume by 2026 due to US tariffs.
A top executive at Indian wire and cable maker R R Kabel’s said on Monday that the company expects its volume to grow by more than twice in fiscal 2026. The U.S. Tariff Policy presents "an opportunity" for trade, as China's tariffs are increasing, he added. R R Kabel's finance chief Rajesh JAIN said that the company expects volume growth to be between 16 and 18% in fiscal 2026. This is partly due to U.S. Tariff policy, which affects Indian exporters more than their Chinese competitors. India's exports are more competitive because of higher levies against China. "I had only one client until last year. Now I'm already in discussions with four or five large customers." Jain stated that China may face challenges, but we will not. Volumes grew by 7%, which was below the company's target of 15%. This is due to a slower construction pace caused by Indian elections, and disruptions on export markets resulting from tensions at the Red Sea. Jain stated that the fluctuating tariffs of President Trump, which have unstabilized global markets and threaten trade stability, were beneficial to the company. The U.S. imposed a 10% base tariff on all exports. Additional reciprocal levies include a 26% rate for India. These are scheduled to begin on July 8, 2018. China, on the other hand, faces a tariff of 145% as both countries seek to reach a trade deal. R R Kabel exports about 10% of its revenue to the U.S. Exports account for 26% of the company's sales, which is a higher percentage than its larger competitors Havells or Polycab. Reporting by Hritam mukherjee in Bengaluru and Ananta agarwal; editing by Tasim zahid
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Three police officers killed in Dagestan, Russia
Authorities in Dagestan, a southern Russian region, reported that three police officers were shot dead in a shootout on Monday after unknown gunmen opened up on their vehicle. The local interior ministry reported that the attack on the officers who were members of a traffic unit occurred at around 12:30 local time (1120 GMT). The ministry confirmed that one of the attackers had been killed. In a video that was not verified and published on Telegram, the bodies of police officers were seen lying in a street next to a police car. While passersby inspected the bodies, they heard more gunshots down the street. Another video showed a man dressed in black shooting on the street before fleeing. Unverified images of two men lying in pools blood were published by Telegram channels. Dagestan is a predominantly Muslim region that has been the victim of several deadly attacks over the past few years. Counter-terrorism forces in March killed Four militants associated with the Islamic State were allegedly plotting an attack on a regional branch office of the Interior Ministry. (Reporting and Writing by Lucy Papachristou, Gleb Stolyarov and Guy Faulconbridge; Editing by Guy Faulconbridge).
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Gold increases by more than 2% due to dollar weakness and safe-haven demand
Gold prices increased by more than 2% Monday. This was due to a weaker US dollar and a surge in safe-haven investments after President Donald Trump's new tariffs reignited fears about a global trade conflict. As of 1144 GMT, spot gold was up 2.3% to $3,313.21 per ounce. U.S. Gold Futures rose 2.4% to $3322. Gold is more appealing to other currency holders because the dollar index has fallen by 0.4%. Trump announced on Sunday a tariff of 100% on films produced outside the U.S., but provided little detail on how it would be implemented. Carlo Alberto De Casa is an external analyst for Swissquote. He said: "The U.S. Dollar is slowing down, and that's a positive thing for gold. More investors are betting the Fed will reduce rates fairly soon, after last week's U.S. Gross Domestic Product data was below expectations and now, with what's happening with oil." The U.S. Federal Reserve will likely keep rates unchanged on Wednesday. However, the market's focus will be on Jerome Powell, his remarks, and economic projections. Trump reiterated his call to the central bank for interest rate cuts, saying he would not remove Powell from his position as Fed Board Chair before Powell's term expires in May 2026. Gold that does not yield acts as a hedge to inflation and global uncertainty. It tends thrive in an environment of low interest rates. Trump said on Sunday that the U.S. met with many countries including China on trade deals and that his priority for China was to achieve a fair deal. Goldman Sachs stated in a report that "We expect gold to continue to outglitter silver, with Chinese solar production slowing due a high U.S. risk of recession and central bank gold purchases remaining strong through 2025." Other metals rose in price, with spot silver up 1.3% at $32.38 per ounce. Platinum was up by 0.1%, to $961.41, and palladium by 0.7%, to $960.13.
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Eskom's outlook for power has lifted the rand to a five-week high.
The South African rand strengthened Monday, reaching its highest level in five weeks. State utility Eskom stated that it was optimistic regarding the power outlook for the winter in the Southern Hemisphere, and aimed to avoid any electricity cuts within the next four month. Since more than a century, power outages have plagued Africa's industrialised nation. This has hampered economic growth. Investor confidence is still shaky despite Eskom's attempts to reduce power outages to the levels recorded in 2023. This is due to 14 consecutive days of blackouts in January-April Chief Executive Dan Marokane called this year's setback a temporary one. At 1110 GMT the rand was trading at 18,2850 per dollar, which is 0.7% higher than the Friday close. The dollar last traded slightly lower against a basket currency as investors awaited more details about U.S. China trade relations and the Federal Reserve policy meeting this week. Citigroup expects South Africa's currency to gain against the U.S. Dollar, as the premium on the real rate in Africa's most developed economy and the firmer commodity exports are expected to outweigh the domestic political uncertainty. Bhumika Gupta, a strategist from South Africa, and Luis Costa, a foreign exchange specialist from Brazil said that they expected the rand to weaken to less than 18 dollars per rand. Societe Generale's strategists, on the other hand, said that South Africa is still facing domestic and geopolitical uncertainty, so they predict the rand will reach 20 rand per dollar by the end of June. The S&P Global Purchasing Managers' Index will be released on Tuesday. Manufacturing and foreign reserve data are due on Thursday. Early deals showed that the benchmark South African 2030 government bond had a lower yield, which was up by 2 basis points at 8.845%. Reporting by Sfundo parakozov and Colleen GOKO. Mark Potter and Sharon Singleton edited the article.
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OPEC+’s 'healthy crude oil market' looks like catching a flu: Russell
The OPEC+ group's increased supply is not the reason for which they claim it is. On May 3, the eight OPEC+ member countries who have agreed to voluntary production cuts decided to relax their curbs for June. This time, they added back 411,000 barrels a day (bpd). Calculations show that the June increase will bring the combined April, May, and June increases to 960,000 bpd. This represents a 44% reduction of the 2.2million bpd decrease. In a statement posted on the website of the Organization of the Petroleum Exporting Countries, the eight stated that the decision to increase output was made due to "the current healthy market fundamentals which are reflected in the low levels of oil inventories." While crude inventories may be slightly lower than the five-year average, they are still far too high to cause any concern. The OPEC report for April shows that the commercial crude oil inventories of developed economies within the Organisation for Economic Cooperation and Development (OECD) were 2.746 million barrels as of the end February. This is down 16.1 millions barrels compared to the previous month and 71,000,000 barrels below their five-year average. Other words, OECD stock prices were only 2.5% lower than the average for the past five years. This seems reasonable, given the rise in crude oil prices between September and January, and the increased risk of a global slowdown following Donald Trump's return to the U.S. Presidency. China, as the world's largest oil importer does not disclose its strategic or commercial inventories. However, it is likely that the storage flow in March was significantly increased after a slight decrease in the first two month of the year. Based on official data, calculations based upon imports and domestic production as well as refinery throughput in March showed that China imported significantly more crude oil than it refined into fuels. What can we make of OPEC+'s claim of "healthy fundamentals"? ASIA IMPORTS It is instructive to look at the situation in Asia. This region is the largest importer of crude oil and accounts for about 60% of all seaborne volumes. After a weak month of February, Asia's seaborne exports rebounded in March and April. According to commodity analysts Kpler, arrivals were 25,27 million bpd & 25.28 millions bpd. It was an increase from 23,31 million bpd and 23,94 million bpd for January and February. For the first four month of 2025, Asia's seaborne exports were still 280,000 bpd lower than the same period of 2024. This is hardly indicative of a healthy demand. The increase in March-April was largely due to the increased imports from China. These were temporary factors. Arrivals in March were boosted by an increase in imports of crude oil from Iran. Refiners bought cheaper crude as they feared increased U.S. restrictions on Iranian shipments. China's imports of Russian crude oil increased in April after a decline in March due to tighter U.S. sanctions on ships carrying Russian crude. In the coming months, there is a mixed outlook for crude oil demand. The trade war started by Trump is likely to start reducing oil demand. The massive 145% import tariff from China has already reduced container shipping and is likely to affect air freight as well in the coming weeks. The decline in consumer confidence will likely affect air and road travel. Even if the trade tensions ease, the shipping slowdown is likely to continue for at least the next few months. It may even be longer because it will take some time for supply chain recovery or reworking. What is the real goal of OPEC+ in increasing output? All of the answers are valid. Saudi Arabia, the de facto leader of the group, may be trying to get other members to lower their prices in order to increase quote compliance. Saudi Arabia may also try to meet Trump's demands for lower prices. This would help him fulfill a campaign pledge to lower energy costs. However, it would come at the expense of the U.S. Oil Industry that he had promised to boost. OPEC+ could also try to limit oil production in other major producers such as the United States or Brazil due to their higher costs of production. It's difficult to argue anything but a negative case for oil, at least in the months ahead, as the likelihood of a lower demand increases. Brent futures fell as much as 3.7% during early Asian trading to a low price of $58.50 a barrel, down from a close of $61.29 a barrel on May 2. These are the views of the columnist, an author for.
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Sunoco will buy Parkland for $9 billion in a deal that consolidates the fuel suppliers in America
Sunoco LP announced on Monday that it would buy Parkland, a Canadian fuel distributor, for a total of $9.1 billion including debt. The companies claimed this deal would make Sunoco the largest independent fuel retailer in the Americas. The deal is the result of Parkland’s strategic review that was initiated in March. This followed persistent pressure by Simpson Oil, Parkland’s largest shareholder, with nearly 20%, and Engine Capital, an activist investor. Simpson Oil has not responded to our request for comment. Parkland shareholders receive C$19.80 and 0.290 Sunoco shares for every Parkland share they hold. Sunoco shares, which are involved in both wholesale fuel distribution as well as retail convenience, fell 1% on premarket following the announcement. The company stated that the deal would close in the second quarter and will generate run-rate synergies of more than $250,000,000 by the third calendar year. Sunoco is committed to investing in Parkland’s Burnaby Refinery to produce cleaner fuels with low carbon emissions. The refinery will be run for the long-term to supply fuel in the Lower Mainland of Canada. (Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
MORNING quote EUROPE-Chinese consumers shut up store
A take a look at the day ahead in European and international markets from Wayne Cole.
China has kicked off the week with some uninspiring data as retail sales in November rose just 3.0% y/y, when mean forecasts had actually been for +4.6% y/y. House costs also continued to fall, though commercial output did a minimum of hold up.
Officials continued to broach stimulus, consisting of cuts in bank reserve requirements, but credit information revealed lower borrowing expenses are no aid when no one wishes to invest.
Chinese bond yields hit another record low in response, which has the central bank contacting commercial banks on their positions. In an ill-timed coincidence for the yuan , 10-year yields there posted their most significant weekly drop since 2018, just as longer-dated Treasury yields suffered the biggest weekly increase this year.
There have actually been reports Beijing was considering whether to let the yuan fall to strengthen its economy, but that only drew a. broadside from President-elect Donald Trump's trade advisor. Peter Navarro.
Over in South Korea, the political circumstance looks rather. steadier as Han Duck-soo has taken control of for impeached President. Yoon Suk Yeol and the Constitutional Court started examining the. impeachment. The court has up to 6 months to decide whether to. remove Yoon from office or to reinstate him.
Authorities repeatedly swore to stabilise financial markets,. which saw the KOSPI hold constant on Monday.
All eyes, naturally, are on the Fed conference on Wednesday. where a quarter-point rate cut is 97% priced in, and its. vanishingly rare for the central bank to disappoint such an. frustrating market consensus.
More appealing will be the assistance from Chair Powell and. the FOMC dot plots with markets assuming they will now see only. 3 cuts next year instead of four. The terminal rate could. also increase to 3.0% or more, from 2.875% in September. Markets are. much more hawkish, suggesting a flooring for rates around 3.80%, one. reason bonds took such a pounding last week.
Of the other central bank conferences, the Bank of Japan, Bank. of England and Norges Bank are seen on hold, while the Riksbank. is anticipated to cut and possibly by 50 bps.
Another mover on Monday was bitcoin which surged above. $ 106,000 after Trump floated a plan to develop a U.S. bitcoin. tactical reserve comparable to its strategic oil reserve.
Key developments that might affect markets on Monday:
- Appearances by ECB President Christine Lagarde, Vice. President Luis de Guindos and board member Isabel Schnabel
- PMIs for Europe and U.S.
- Bank of Canada Guv Tiff Macklem speaks
- Empire State Manufacturing Survey for December
(source: Reuters)