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US Dollar pressured by Trump Trade War as China NPC begins
The U.S. Dollar dropped to a three-month high versus major counterparts on Wednesday, while Asian shares were mixed following the latest round U.S. Tariffs and countermeasures by Canada and China. This stoked concerns of an escalating Trade War. China's Yuan was steady in offshore trading after a rally of 0.7% the previous session. The annual National People's Congress sessions began with Beijing maintaining a 5% growth target for 2025. As German political parties agreed on a 500 billion euro infrastructure fund, the euro reached a four-month high. Sterling was also at a near three-month high. After a volatile and erratic week, crude oil fell to its lowest level in six months. Meanwhile, bitcoin settled around $87,000. Kyle Rodda is a senior financial market analyst at Capital.com. He said that fears about a weaker U.S. economy and a global one are manifested in the markets. Cyclicals are driving the sell-off. The uncertainty keeps investors on edge, and American consumers are likely feeling the same. The Australian stock market fell 0.9% while the Nikkei 225 index in Japan dipped 0.2%, reversing small gains. The futures for Hong Kong Hang Seng rose 0.6%. Overnight the U.S. S&P500 fell 1.2% but Wednesday's futures rose by 0.6%. The MSCI world equity index rose 0.1% but was still 1.9% lower than the previous week. Tuesday, U.S. President Donald Trump imposed 25% tariffs on imported goods from Mexico and Canada. The doubled 20% duties on Chinese products also took effect. China and Canada responded, while Mexican President Claudia Sheinbaum promised to retaliate in the same way without providing details. The U.S. Dollar Index, which measures currency against the Euro, Sterling and four other major rivals, was little altered at 105.60 after a two day 1.9% decline that brought it down to 105.49, for the first time in December. In the most recent session, the euro reached a high of $1.0637 in its latest session for the first since November 13. The pound was stable at $1.2786. This is not far off the peak seen on Tuesday of $1.27995, which was last seen in December. The conservatives and social democrats in Germany announced plans to create a 500 billion-euro infrastructure fund and change borrowing rules for increased defence spending. China's offshore Yuan fell by about 0.1%, to $7.2604 per US dollar. U.S. West Texas Intermediate crude (WTI), which is a benchmark for U.S. crude oil, fell 0.6% to $66.73. Reporting by Kevin Buckland, Editing by Muralikumar Aantharaman
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Andy Home: Tin bulls retreat as Myanmar flags the return of a key mine
The Wa State in Myanmar, a semiautonomous region, has finally broken a year-long silence about the fate of Man Maw Tin Mine. The mine is a jewel in Myanmar's crown of tin and its suspension, since August 2023 ostensibly to conduct an audit, has cut the flow of raw tin materials into Chinese smelters thereby reducing the output of refined metal. The Wa authorities now say they are ready for applications to be submitted for mining and processing licenses at Man Maw. This indicates that it is likely to return in the second half of this year. The International Tin Association confirmed the news and the London Metal Exchange's (LME) tin prices have fallen. MAN MAW RETURNS Myanmar, after China and Indonesia, is the third largest producer of tin in the world. Man Maw was the largest tin mine until it was suspended. As the Wa State, which controls Myanmar’s tin industry, does not have smelters, all of the tin mined is sent over to China’s Yunnan Province. The raw material shipment patterns were not much different in the first few months after the suspension of Man Maw operations, as the above-ground stock was processed. China's imports of Myanmar products have dropped significantly in the last nine-month period, from 54,900 metric tons during the first half of this year to 94,600 metric tons for the previous year. Some smaller tin mining operations have reopened but they are nowhere near as important as Man Maw. Chinese producers have tried compensating by reducing imports of other countries, such as Australia, Bolivia and the Democratic Republic of Congo. The total imports of raw tin materials in 2024 were down 36% on an annual basis, and were at 156.700 tons the lowest since 2010. Lack of raw materials has impacted smelter margins, and is a major factor in China's refine metal production. BULLS WITH WRONG-FOOTED Unsurprisingly, the news of Man Maw’s return caused a sale in London's tin market. LME's three-month metal soared to a four month high of $33,790 a ton on the 21st of February. Tin was the top performer of the LME base materials with gains to date of 15.8%. Funds have been increasing their bull bets steadily on higher prices. At the end of last weekend, long positioning had reached a new record of 5,172 contracts. This is equivalent to nearly 26,000 tons. Last week, after the ITA confirmed that Man Maw would return, the price of a ton dropped to $31,050. This week it has risen to as high as $32,145. It is not unreasonable to expect a partial price recovery, given that it could be several months until the mine starts producing tin once again. RISK OF STRUCTURAL SUPPLY The Wa State's announcement that it is ready for licenses is just the first step in a complete reopening. The ITA states that even after licenses have been granted, it may take a few months for workers, mainly those from China, in order to obtain work permits and return to Myanmar. After such a long period of suspension, it is likely that the mine will need to be dewatered. This means that the shipments into China will only begin to pick up in the second half. Chinese smelters continue to face a shortage of raw materials and the production of refined metal will be affected until raw material flow returns to its pre-suspension level. The M23 rebels' advances to the east of Congo is a major concern for the tin supply market. So far, the Bisie mine in this country, which produced 17,324 metric tons of tin-contained concentrates last year, is unaffected. The mine is about 200 km west of the insurgent-controlled area, but Alphamin Resources Corp. has warned the increased risk at Bisie. This highlights tin’s structural supply issues. The market, which is touted to be a major beneficiary of the energy transition as well as the internet of things, is still dependent on a small number of global suppliers. The structural supply risk is not changed by the return of Man Maw. The author is a columnist at
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Sources say that the US and Ukraine are now planning to sign a mineral deal.
Four people with knowledge of the situation on Tuesday said that the U.S. administration under Donald Trump and Ukraine planned to sign a mineral deal, but it fell through following a disastrous Oval Office Meeting Friday during which Ukrainian President Volodymyr Zelenskiy was ejected from the building. Three sources confirmed that Trump told his advisers he planned to announce the agreement during his speech to Congress on Tuesday night. However, they cautioned that the deal was not yet signed and that it could change. According to a Fox reporter's post on X, U.S. Treasury Sec. Scott Bessent said on Tuesday that there was no signing planned for the deal. The White House has not responded to a comment request. The Ukrainian Embassy in Washington and the Ukrainian Presidential Administration in Kyiv did not respond when asked for comments. After a heated meeting in the Oval Office between Trump and Zelenskiy, the deal was put on ice on Friday. The Ukrainian leader left the White House immediately after the contentious encounter. Zelenskiy traveled to Washington for the signing of the deal. In this meeting, Trump, and vice president JD Vance, reprimanded Zelenskiy for asking for more aid in front the U.S. press. Trump stated, "You are gambling with World War Three." According to a person familiar with the situation, U.S. officials spoke to officials in Kyiv in recent days about signing the mineral deal despite the Friday blow-up. They also urged Zelenskiy’s advisers convince the Ukrainian President to openly apologize to Trump. Zelenskiy said on X Tuesday that Ukraine is ready to sign the agreement and called the Oval Office Meeting "regrettable." Zelenskiy wrote in his blog that "our meeting at the White House in Washington on Friday did not go as it was intended." "Ukraine will come to the table to negotiate as soon as it is possible in order to bring lasting peace nearer." Uncertainty remained about whether the agreement had changed. The agreement that was supposed to be signed by last week did not include any explicit guarantees of security for Ukraine, but it gave the U.S. a way to access revenues from Ukraine's mineral resources. The deal also included the Ukrainian government donating 50% of future monetization from any state-owned resources to a U.S.Ukraine-managed reconstruction investment fund. Trump said in a press conference that Ukraine should be "more appreciative" of the agreement. Trump said, "This country has stood by them through thick-and-thin." "We have given them more than Europe and Europe should give more than us," Trump said. France, Britain, and perhaps other European countries offered to send peacekeeping forces to Ukraine in case of a ceasefire. However they would need support from the U.S. Moscow has rejected the proposal for peacekeeping forces. Daniel Fried, former senior White House official, and ambassador to Poland said that the process of getting the minerals agreement done was messy. But it would bring two solid victories for Trump: Zelenskiy’s statement of regret, and the agreement by Britain and France to provide boots on the ground and security. "Trump should and can win. Fried, a fellow with the Atlantic Council, said that Fried would be able "to say that he... got the Europeans standing up for an issue of European Security, which they have never done before." (Reporting from Erin Banco, Gram Slattery, and Andrea Shalal at Washington; Additional reporting from Yuliia Dyesa in Kyiv. Editing by Don Durfee & David Gregorio).
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Stocks drop on Trump tariffs, but euro increases as Germany invests
The major stock indexes dropped on Tuesday, as the United States slapped Canada, Mexico, and China with high tariffs. Meanwhile, the euro reached a three-month high against the U.S. Dollar, as German parties agreed to create a 500 billion euro fund for infrastructure. Tuesday, U.S. President Donald Trump imposed 25% tariffs on imported goods from Mexico and Canada. Duties on Chinese products were also doubled. China and Canada responded, while Mexican President Claudia Sheinbaum promised to do the same without providing details. Investors were worried about the economic impact of the tariffs. A group of automakers and trade representatives warned that Trump's new 25% tariffs on imported goods from Canada and Mexico will result in drastic price increases. Jake Dollarhide is the CEO of Longbow Asset Management, located in Tulsa. He said that he was concerned about what tariffs would mean for prices. He said that the consumer has driven and saved the economy. The Nasdaq closed down 9.3% compared to its record high closing on December 16. The Dow Jones Industrial Average dropped 670.25, or 1.55% to 42,520.99. The S&P 500 declined 71.57, or 1.22 %, to 5,778.15 while the Nasdaq Composite was down 65.03, or 0.35 %, at 18,285.16. The MSCI index of global stocks fell by 9.67 points or 1.13% to 846.14. The pan-European STOXX 600 fell by 2.14%. Uto Shinohara is a senior investment strategist with Mesirow, based in Chicago. He said that Trump's "tit-fortat" approach to trade has increased fears of a worldwide trade war. This has led to heightened pressure on risk assets and boosted safe havens. The price of gold rose due to the increased demand for safe havens. Spot gold rose 0.6% to $2,911.88 per ounce. The conservatives and social democrats in Germany announced plans to create a 500-billion-euro fund for infrastructure, and change borrowing rules with the aim of increasing defense spending. The euro reached $1.0623 for the first time since December 6. The euro reached a new two-week high against the yen. Last, it was up 1.2% to 158.64yen. German Bund futures dropped on the news from Germany that came after the closing of European markets. German and European shares are expected to rise on Wednesday as futures rose after falling earlier on the day due to the U.S. Tariff worries. The news from Germany reversed the earlier declines in longer-dated U.S. Treasury rates. The yield on U.S. benchmark 10-year Treasury notes rose by 2.6 basis points, to 4,206%. It had previously fallen to 4,106%. This was its lowest level since October 21. Investors digested another report, citing sources familiar with the situation. The report stated that Trump's Administration and Ukraine planned to sign the highly-debated mineral deal after a disastrous Oval Office Meeting on Friday. After the news of tariffs and reports that OPEC+ planned to increase output in April, oil prices fell to a multi-month low. Brent futures closed 58 cents or 0.8% lower at $71.04 per barrel. The session low for the day was $69.75 per barrel, its lowest level since September. The price of U.S. West Texas Intermediate crude (WTI) fell by 11 cents per barrel or 0.2% to $68.26. The benchmark had previously fallen to $66.77 per barrel, its lowest level since November. Caroline Valetkevitch, Additional Reporting by Laura Matthews and Alun John from New York and London; Additional Reporting by Iain Withers. Editing by Jan Harvey & Lisa Shumaker
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Early indications of Trump tariffs include key US sour crude grades
Dealers said that spot prices for an important U.S. sour grade crude oil surged by about 60% on February 2, a sign early indication that President Donald Trump’s tariffs against Canada and Mexico are beginning to disrupt the global oil trade. Trump's tariffs of 10% on Canadian oil imports and 25% on Mexican imports took effect on Tuesday night. The combined oil exports from the two countries represent about one quarter of the crude oil that U.S. refiners use. This move will force buyers to look for alternative cargoes or pay more money for their usual supplies. Brokers said that Mars Sour, an American medium sour oil produced in the U.S. Gulf of Mexico region, traded intraday for a premium of $3.60 to U.S. Crude Futures. This was compared to a premium of $2.25 on Monday. Later in the session, the grade eased to a $2.75 premium per barrel. A trader stated that Mars is a more attractive alternative than grades like Isthmus (a sour crude from Mexico), which has led to its price increase. The density and sulfur content of crude grades determines their properties and uses. Some refineries are better suited to accept certain grades due to their complex infrastructure. This makes matching alternative options a key part of the equation for trading crude. Prior to the tariffs, Canada's grades were under pressure. On Monday, the discount between U.S. crude oil futures and Western Canada Select heavy crude widened to $13.60 per barrel. One trader in Latin America said that dealers were "pray[ing] for another pause" in the tariff implementation. He added that prices were largely stable, as most of the cargoes for Latin America's top grades for delivery April were sold out. Trump's administration ordered on Tuesday that Chevron be denied a license to export and operate oil in Venezuela. This is expected to further reduce the amount of heavy grades available to U.S. refiners. Rory Johnston is a Toronto-based energy expert and the founder of Commodity Context's newsletter. He said that the real tariffs effect has been slowly creeping into the market for some time. Now the question is how long this will last and what we do next. Another trader stated that some of the volatility Tuesday was due to panic buying, since the market had been waiting until now to see if Trump would go ahead with tariffs. A fourth trader stated, "The shoe has dropped and traders have begun to price in tariffs." Energy Information Administration data show that the United States imported oil at a rate of nearly 6.6 millions barrels per day in December. Canada shipped 4.2 million barrels per day, and Mexico 451,000. (Reporting and editing by Nia William, Arathy McCartney Georgna McCartney Marianna Pararaga, Amanda Stephenson, Stephanie Kelly)
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US Supreme Court limits EPA's power to regulate water pollution discharge
The U.S. Supreme Court delivered a major blow to the Environmental Protection Agency on Tuesday in a case involving a wastewater-treatment facility owned by San Francisco. This ruling could make it more difficult for regulators and law enforcement to monitor water pollution. In a decision of 5-4, the justices ruled that the EPA had exceeded its authority in a landmark antipollution act by including vague restrictions on a permit for the wastewater treatment plant, which empties directly into the Pacific Ocean. The city sued the EPA to challenge its restrictions. The decision, written by conservative Justice Samuel Alito in San Francisco, overturned a ruling by the 9th U.S. Circuit Court of Appeals. Circuit Court of Appeals had previously upheld the permit. Alito wrote in his letter that the EPA had exceeded its authority under the landmark Clean Water Act (1972) by imposing on permit holders undefined standards for water quality within the receiving water body. Alito wrote: "This case involves provisions which do not specify what a permittee is required to do or refrain from; they instead make the permittee accountable for the quality in the water of the body of water that the permittee discharges contaminants into." Alito said that "when a permit has such requirements, the permittee who follows the permit to the letter may still face crushing penalties" if the water quality in the receiving waters is below the standards. State water quality standards must be approved by the federal government. Amy Coney Barrett, a conservative justice on the court, wrote a dissent to which three members of the liberal court also signed. Barrett wrote that "EPA must issue the limits necessary to ensure the water quality standards have been met." If EPA is denied a tool, it may be harder for them to issue permits to municipalities and businesses to ensure that their discharges are legal. In recent years, the Supreme Court has weakened the EPA’s power as part of a number of rulings that have lowered the federal regulatory agencies’ authority.
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Venezuelan oil exports increased in February ahead of Chevron’s license termination
Data from vessel monitoring showed that Venezuelan crude and fuel exports rose to their highest level since November. The U.S. was preparing to cancel a license which allows the oil giant Chevron, to ship and operate crude out of the country. Since Chevron received the license late in 2022, Venezuela's oil production and exports are on the rise. This is a source of reliable revenue for President Nicolas Maduro. In January, the company shipped more than 30% the South American nation’s total exports to the U.S. The U.S. Treasury Department announced on Tuesday that Chevron will wind down its activities in Venezuela over the next 30 day after President Trump claimed Maduro had not made progress in electoral reforms or migrant return. Last month, the state-owned energy company PDVSA of Venezuela and its joint venture partners exported an average 934 465 barrels of fuel and crude oil per day. According to data, China was the biggest market for Venezuelan oil, with an average of 503,000 barrels per day. The U.S. ranked second with 239,000 bpd. Europe was third with 69.200 bpd. India was fourth with 68,000. Chevron’s exports from its joint ventures to the U.S., and other destinations, fell from 294,000 bpd to 252,000 in February. Cuba, Venezuela's political partner, is receiving 42,000 bpd in crude oil and fuel. Cuba is currently struggling to maintain the lights during a severe crisis of energy. Venezuela exported 315,000 tons of petrochemicals and oil byproducts including methanol, which is a decrease from the 360,000 tonnes shipped in January. Data showed that the country imported fuel at a rate of 86,000 bpd through swaps with PDVSA partners. This is down from 132,000 bpd in January. Since Washington imposed the first oil sanctions against Venezuela in 2019, PDVSA relies on little-known intermediaries who buy its oil for a discount and supply it to China. The intermediaries charge PDVSA high fees for shipping, ship-toship transfers and discharge. Analysts have predicted that PDVSA will send more oil through these intermediaries to China in the next few months, as there are no incentives for them to continue to deliver cargoes under the terms of the new license, which the U.S. Treasury has yet to detail. The license withdrawal is expected to have a negative impact on U.S. refiners of crude oil, especially those in the Gulf of Mexico. This comes at the same moment that Trump imposes tariffs against Canada and Mexico, who are the U.S.'s top oil suppliers.
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Euro gains from German investments; stock losses reduced
The Nasdaq index turned positive and major stock indexes reduced losses. Meanwhile, the euro rose after German political parties agreed on a 500 billion-euro infrastructure fund. It also gained momentum following news that the U.S. administration of President Donald Trump and Ukraine planned to sign a mineral deal. According to people familiar with the matter, the Trump administration and Ukraine are planning to sign a controversial minerals deal after a disastrous Oval Office Meeting on Friday. The conservatives and social democrats in Germany announced plans to create a 500-billion-euro fund for infrastructure, and change borrowing rules with the aim of increasing defense spending. The euro reached a new three-month record of $1,0599. The last 1% increase was at $1.0593. The euro rose 0.4% against sterling. The German Bund futures plunged sharply after the European markets closed due to the news about Germany. Last time, they were down 1%. German and European stocks futures rose after falling earlier on the day due to U.S. Tariff worries. German Dax futures fell by 1.5% in the last hour of trading after the benchmark Dax closed the day down 3.5%. Investors were worried about the economic impact of the United States' tariffs on Canada, Mexico, and China, which led to a sharp drop in stock indexes such as the S&P 500. Jake Dollarhide of Longbow Asset Management, Tulsa in Oklahoma, stated that tariffs are a factor contributing to consumer concerns over higher prices. The consumer has driven and saved this economy. He said that the increase in grocery costs was a concern for consumers. The Dow Jones Industrial Average dropped 244.06 points or 0.57% to 42,945.28, while the S&P 500 declined 10.27 points or 0.19% to 5,838.61. Meanwhile, the Nasdaq Composite grew 128.78 or 0.68% to 18,478.97. The MSCI index of global stocks fell by 3.05 points or 0.36% to 852.76. Trump's new tariffs of 25% on imports from Mexico, Canada and China and the doubling in duties on Chinese imports may cause a ruckus with nearly $2.2 trillion of annual trade between the U.S. and its three biggest trading partners. China responded immediately with 10%-15% of tariffs on some U.S. exports starting March 10, and a number of new restrictions on the export of certain U.S. entities. Meanwhile, Justin Trudeau, Canadian Prime Minister announced that Ottawa would impose 25% of tariffs on C$30 Billion ($20.72 Billion) of U.S. imported goods. The yield on the benchmark 10-year U.S. notes increased 3.4 basis points, to 4.214% from 4.18% at late Monday. (Reporting and editing by Jan Harvey, Lisa Shumaker, and Lisa Harvey; Additional reporting in London by Alun John; Additional reporting from Iain Withers.
US pump prices to rise as Trump tariffs take effect
Analysts and traders predict that U.S. gasoline retail prices will rise in the next few weeks due to new tariffs implemented by President Donald Trump's administration, which increase the cost of imported energy.
The outlook highlights a potential unintended consequence to Trump's protectionist policies. They are intended to boost the U.S. economic but could lead to higher bills for consumers.
On Tuesday, the Trump administration imposed a 25% tariff on all Mexican imports, a 10% tax on Canadian energy and doubled duties on Chinese products to 20%. The Trump administration also imposed tariffs of 25% on all Canadian imports.
According to fuel distributor TACenergy, this has already caused a spike in wholesale gasoline in the U.S. Northeast. This region relies heavily upon Canadian shipments for gasoline, heating oil, and diesel.
Retail fuel experts say that this hike could increase the price of a gallon by 20-40 cents.
The Energy Information Administration reports that New England gasoline retail prices hovered around $3 per gallon last week.
GasBuddy analyst Patrick De Haan wrote in a Tuesday blog that "if you fill up in the Northeast you will see prices increase first and most significantly."
De Haan, a spokesperson for Irving Oil Canada, which is the largest refiner of fuels in the Northeast, said that the company increased its fuel prices on Tuesday, to reflect the new tariff costs.
A representative from Irving Oil was not available for comment. Irving Oil has said that tariffs will increase its prices for U.S. consumers.
Irving's 320,000-barrel-per-day refinery in Saint John, New Brunswick, exports more than half its finished fuels to the Northeast, the company's website shows.
There is no easy replacement for the products that are shipped out of Irving Oil's Refinery. TACenergy stated in a Tuesday morning market commentary that this is the primary supply source for the multiple terminals located in the area.
Consumers will likely pay the increased cost of imported materials if inland refiners continue to use Canadian crude.
The price of Brent crude and West Texas Intermediate crude futures, benchmarks for the United States, could rise if refiners switch from Canadian crude to light sweet crude. Both benchmarks are light-sweet grades.
Experts predict that fuel prices will soon rise in other regions, too. These areas rely heavily upon crude oil imported from Canada and Mexico.
The U.S. imports about 4 million barrels of Canadian oil per day, of which 70% is processed in Midwest refineries that are specially designed to run Canadian grades.
U.S. refiners around the Gulf Coast of the U.S. import over 450,000 barrels per day (bpd) of Mexican oil.
De Haan stated that the impact of crude oil on fuel prices could take longer in these regions as crude oil first has to be refined into fuel.
Alex Ryan, Energy Director at Kansas-based Oasis, said that parts of the Midwest may see a 10 to 15 cent increase in the price of gasoline over the next couple weeks.
As of Tuesday, the average U.S. gas pump price was $3.099 per gallon. This is unchanged from Monday's $3.097 per gallon. The American Automobile Association reported that they were still about 8% less than they were a year earlier.
AAA's spokesperson stated that it was difficult to predict the impact of tariffs in the future on gas prices. Other factors could also have an effect.
She said that "Tariffs play a part in the gas price, but other factors such as the crude oil prices are also important."
The oil industry has said that it is against the tariffs as they increase the costs for the industry.
Chet Thompson of American Fuel and Petrochemical Manufacturers said, "Imposing tariffs to energy, refined products and imports of petrochemicals will not increase our energy security or lower the costs for consumers... We continue to hope that a quick resolution can be reached with our North American neighbours," in a Tuesday statement. (Reporting from Nicole Jao, New York; Additional Reporting by Shariq KHan; Editing by Nia Zieminski and Nick Zieminski).
(source: Reuters)