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Dollar gains and optimism about US/UK trade deal boost global stock markets
Dollar and Treasury yields rose on Thursday, after U.S. president Donald Trump announced a trade deal with Britain a day after the U.S. Federal Reserve opted to wait and see on interest rates. Bitcoin gained 4.83%, reaching $101,440.22. Ethereum grew by 14.72%, to $2 063.23. The U.S. and British trade agreement is the first announced deal since Trump initiated a 90-day pause in tariffs imposed by his administration on many U.S. Trading Partners a month earlier to give time for negotiations with other countries. Investors also await planned talks between U.S. officials and Chinese officials scheduled for the weekend in Switzerland. This could be a first step to reducing the damaging trade conflict between the two largest economies in the world. Investors have shown signs of frustration over the lack concrete details this week, despite being enthusiastic about the Trump administration's signals that it is in trade negotiations over the last month. Gene Goldman said that investors are relieved to see that progress is being made on trade agreements. He added that it "seems like the administration is going in the right direction." Goldman added that the U.S. and British agreement, which is still under development, "provides some optimism heading into weekend negotiations with China." Indexes on Wall Street extended gains following the announcement. At 11:51 am (1551 GMT), Dow Jones Industrial Average rose by 573.16, or 1.39 percent, to 41.685.11, S&P 500 gained 77.14, or 1.37 percent, to 5,708.56, and Nasdaq Composite increased by 311.92, or 1.76 percent, to 18,050.09. The MSCI index of global stocks rose by 5.72 points or 0.68% to 849.75, while the pan-European STOXX 600 rose by 0.44. Investors are still digesting Wednesday's U.S. Federal Reserve policy update, in which it maintained its interest rate range at 4.25%-4.5% for the third consecutive meeting. As it navigated the economic uncertainty caused by Trump's policies, the U.S. Central Bank warned of increased risks for higher inflation and unemployment. The pound has lost ground in terms of currencies after the recent trade agreement and the widely anticipated quarter-point cut by the Bank of England. Sterling fell 0.14% to $1.327. The dollar index measures the greenback in relation to a basket including the yen, the euro and other currencies. The price of 100.44 rose by 0.55%. The dollar gained 1.16% against the Japanese yen to reach 145.49. Sweden and Norway have also hinted that they may also lower rates in the second half of this year. The Swedish crown fell 0.48% against the dollar, to 9.704. The yield on the benchmark 10-year U.S. notes increased 5.5 basis point to 4.33% from 4.275% on Wednesday. Meanwhile, the 30-year bond's yield increased 2.9 basis points, to 4.8011%. The yield on the 2-year note, which moves typically in line with Fed expectations for interest rates, increased 7.3 basis points from 3.793% to 3.866%. On the commodities market, oil futures, which had dropped by more than $1 Wednesday, rose on Thursday on hopes that the United States will reach a trade agreement with China, the two biggest oil consumers in the world. U.S. crude climbed 3.29%, to $59.98 per barrel. Brent rose to $62.93 a barrel, up by 2.96% for the day. Spot gold dropped 1.09% to $3.327.49 per ounce. U.S. Gold Futures dropped 1.48% to an ounce of $3,331.30. (Reporting and editing by Sinead carew, Johann M Cherian and Marc Jones, with Chizu Nomiyama, Will Dunham, and Will Dunham).
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What is the US-UK Economic Deal?
The United States announced on Thursday a deal with Britain to lower tariffs for some goods. U.S. duties on steel and cars will be reduced, and both sides will gain better access to the agriculture market. Here are some key points of the agreement. Basic 10% Tariff Howard Lutnick, the U.S. Secretary of Commerce, said that the basic tariff rate of 10% would remain in effect. CAR TARIFFS The British government announced that the agreement will reduce tariffs for some British-made vehicles from 27,5% to 10%. The British government announced that British carmakers would be allowed to export 100,000 cars per year at a lower tariff rate. This is almost what Britain exported in the past year. STEEL TARIFFS The British government has also announced that the 25% tariffs on British steel exported to the U.S. would be reduced to zero. PLANES Lutnick stated that British companies will now be able export parts of planes to the United States without tariffs. Boeing planes worth $10 billion are expected to be purchased by a British airline in return. AGRICULTURAL TARIFFS The British government announced that there would be a "reciprocal access to the market on beef", with British farmers receiving a quota of 13,000 metric tons free of tariff. Britain will also eliminate tariffs on U.S. beer ethanol. MOVIES The U.S. president Donald Trump has said that the talks with Britain about his plan to impose a tariff on film imports will take place separately from the agreement. He said, "James Bond is not in danger." SPEAK UP AGAIN Both sides will try to reach an agreement on a wider deal, which will include pharmaceuticals as well as a reduction of the remaining tariffs. The U.S. also agreed to give the UK preferential treatment for any future tariffs imposed in Section 232 investigations, which gives the U.S. President the power to restrict imports if it is found that they threaten national security. The UK Digital Services Tax is unchanged.
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Proxy advisor opposes Holcim Chairman's $58 Million compensation package
Ethos, a proxy advisor, has urged Holcim shareholders not to accept the company's proposed remuneration. It said that Jan Jenisch would be the highest paid manager in Swiss blue-chip firms by 2024 if he received the estimated compensation of 48 million Swiss Francs ($58 million). Ethos calculated Jenisch's realised compensation based on his share options in 2020. Since the announcement that the company intends to spin off its North American business by January 2024, these options have gained significant value. Vincent Kaufmann (CEO of Ethos Foundation) said that Jan Jenisch's variable compensation for 2024 is unacceptable. It is 25 times the base salary he received as Holcim CEO. He called on the board to eliminate the option plan. Ethos reported that Holcim is one of only a few Swiss companies still granting share options with a leveraged effect. Holcim's response to Ethos' misleading framing Jenisch's compensation was given by Holcim when asked for comment. Holcim's spokesperson stated that Ethos had misrepresented the value of the option scheme, as it was based on a rolling five-year program reflecting record performance for a period of five years, and not an annual compensation. According to Ethos, share options that were worth 890'001 Swiss Francs in 2020 are now valued at more than 36,6 million Swiss Francs. The proxy advisor stated that the package totaled 48 million Swiss francs when you add up Jenisch's compensation for his four months in the CEO role last year, his chairman compensation for the eight remaining months of 2024 and the other shares awards. This figure is dwarfed by the 19.2 million Swiss francs that Novartis CEO Vas Nairsimhan received in compensation, which prompted criticism at its AGM. $1 = 0.8249 Swiss Francs (Reporting and writing by Oliver Hirt; editing by John Revill, David Evans, and Ariane Luthi)
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What is the US-UK Economic Deal?
The United States announced on Thursday a deal with Britain to lower tariffs for some goods. U.S. duties on steel and cars will be reduced, and both sides will gain better access to the agriculture market. Here are a few of the key points in the agreement. Basic 10% Tariff Howard Lutnick, the U.S. Secretary of Commerce, said that the basic tariff rate of 10% would remain in effect. CAR TARIFFS The British government announced that the agreement will reduce tariffs for some British-made vehicles from 27,5% to 10%. The British government announced that British carmakers would be allowed to export 100,000 cars per year at a lower tariff rate. This is almost what Britain exported in the past year. STEEL TARIFFS The British government has also announced that the 25% tariffs on British steel exported to the U.S. would be reduced to zero. PLANES Lutnick stated that British companies can now export parts of planes to the United States without paying tariffs. Boeing planes worth $10 billion are expected to be purchased by a British airline in return. AGRICULTURAL TARIFFS The British government announced that there would be a "reciprocal access to the market on beef", with British farmers receiving a quota of 13,000 metric tons free of tariff. Britain will also eliminate tariffs on U.S. beer ethanol. SPEAK UP AGAIN Both sides will try to reach an agreement on a wider deal, which will include pharmaceuticals as well as reducing any remaining tariffs. The U.S. also agreed to give the UK preferential treatment for any future tariffs imposed in Section 232 investigations, which gives the U.S. President the power to restrict imports if it is found that they threaten national security. The UK Digital Services Tax is unchanged.
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Talen Energy considers alternative options for data center supply after Amazon's setback
Talen Energy, the U.S. energy company, is looking at alternative arrangements for supplying electricity to data centres after regulators rejected a plan that would have fuelled an Amazon data centre directly from Talen’s Pennsylvania nuclear plant. The prospect of striking direct deals with Big Tech data centers has sparked a huge interest in independent U.S. energy producers such as Talen. This is what has pushed the shares of these companies to new highs. Co-located arrangements in which power plants are located near or at the data centers could eliminate the year-long waiting times for connecting to the wider electrical grid. Nevertheless, some companies are now making alternative plans after the Federal Energy Regulatory Commission ruled against their arrangements. Mac McFarland, CEO of Talen, said that there were multiple ways to power data centers during a conference call with investors. Talen is also considering data center deals that include the connection of the centers to grids as part of commercial power contracts. Giant Independent Power Producer Constellation Energy earlier this week After considering co-located deals for data centers at a number of its nuclear plants, the company said that it would also focus on more conventional power arrangements in data centers. Talen and Amazon's co-located data center agreement, announced in 2024, is a world first. Talen's power agreement with Amazon would see the nuclear plant in Susquehanna supply electricity to the data center up to 960 megawatts. FERC ruled in response to this deal last year that the power Amazon uses for its data center would be limited to 300 megawatts. This was due to concerns over power reliability and cost for the broader community. Talen executives confirmed that they continue to supply electricity to Amazon's data center and plan to reach 120 Megawatts by the year end. Talen is appealing FERC’s decision, and anticipates a court date on the case within the next few weeks. (Reporting and editing by Laila K. Kearney)
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Why is Saudi Arabia interested in a nuclear civil deal with the US
Saudi Arabia and the United States are discussing a deal to cooperate on the kingdom's ambitions to develop a civil nuclear industry, talks that have long been complicated by regional politics and concerns over weapons proliferation. Here are some of the main issues at play: WHY DOES SAUDI ARABIA WANT A NUCLEAR PROGRAMME? As the world's largest oil exporter Saudi Arabia may not seem an obvious candidate for nuclear power, but it aims to reduce carbon emissions and free up crude for export under Crown Prince Mohammed bin Salman's Vision 2030 economic plan. The U.S. Energy Information Administration said last year that 68% of Saudi electricity was generated by burning gas and 32% by burning oil, with 1.4 million barrels a day of crude being used for power generation during the peak month of June. Atomic power could displace some of that, including for energy-intensive water desalination and air conditioning, allowing the kingdom to make more money from oil sales. However, Saudi Arabia has also said that if old foe Iran develops a nuclear weapon it would have to follow suit - a declaration apparently aimed at ramping up pressure on Tehran, but which has also fuelled concern about its own ambitions. In January it said it would enrich uranium - a process that can also be used as part of a military programme - to create 'yellowcake' fuel for nuclear power generation that it could sell. Any deal with Washington would likely address safeguards to assuage worries about military ambitions, on top of Saudi Arabia's existing commitment not to pursue a bomb under the nuclear Non-Proliferation Treaty (NPT). WHAT'S IN IT FOR THE UNITED STATES? There could be strategic and commercial gains. Civil nuclear cooperation was an important inducement along with security guarantees in an effort by Trump's predecessor Joe Biden to broker a deal for Saudi Arabia and Israel to normalize relations. However, those two issues are now uncoupled, has reported, though a nuclear deal could be a sweetener in U.S. diplomatic efforts with the kingdom. Riyadh has ruled out normalizing ties with Israel without Palestinian statehood. U.S. Energy Secretary Chris Wright met Saudi Energy Minister Prince Abdulaziz bin Salman in April and said the two countries were on "a pathway" to a civil nuclear agreement. He made no mention of a wider deal over other issues such as normalisation. A deal would put U.S. industry in a prime spot to win contracts to build Saudi nuclear power plants as well as providing insight into the kingdom's atomic programme that could alleviate any U.S. worries over weapons proliferation. Under Section 123 of the U.S. Atomic Energy Act of 1954, the U.S. may negotiate agreements to engage in significant civil nuclear cooperation with other nations. It specifies nine nonproliferation criteria those states must meet to keep them from using the technology to develop nuclear arms or transfer sensitive materials to others. U.S. law stipulates congressional review of such pacts. SAUDI ARABIA HAS OPTIONS Should the U.S.-Saudi talks fail, several countries with established nuclear industries have expressed interest or are seen as potential partners for Saudi Arabia's nuclear programme. State-owned China National Nuclear Corp (CNNC) reportedly submitted a bid in 2023 to construct a nuclear plant. Russia's state nuclear firm Rosatom, which built a nuclear plant in Egypt, has also signed preliminary cooperation agreements with Riyadh. Other potential contenders include South Korea, which built reactors in the neighbouring United Arab Emirates, and France. The choice of partner will likely depend on technological offerings, financing, and geopolitical alignment, including conditions related to nuclear fuel handling. URANIUM ENRICHMENT A key issue is whether Washington might agree to build a uranium enrichment facility on Saudi territory, when it might do so, and whether Saudi personnel might have access to it or it would be run solely by U.S. staff in a "black box" arrangement. Without rigorous safeguards built into an agreement, Saudi Arabia, which has uranium ore reserves on its territory, could theoretically use an enrichment facility to produce highly enriched uranium, which, if purified enough, can yield fissile material for bombs. Another issue is whether Riyadh would agree to make a Saudi investment in a U.S.-based and U.S.-owned uranium enrichment plant and to hire U.S. companies to build Saudi nuclear reactors. There are diplomatic issues too: Washington's top regional ally Israel has repeatedly voiced opposition to the idea of a Saudi civil nuclear programme.
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Gold reserves in London vaults increase in April due to the return of US bullion
London Bullion Market Association reported on Thursday that the amount of gold in London vaults at the end April was 8,536 metric tonnes, an increase of 0.6% over the previous month. This is because more precious metal was returned to London from New York after being dislocated. After months of being high, the premium between the COMEX gold spot prices and the most actively traded COMEX futures prices was normalized in April when the Trump Administration excluded precious metals from the broader U.S. tariffs. In the period between December and March, market players increased their gold deliveries to the U.S. to cover COMEX positions in anticipation of possible import tariffs by the U.S. These additional stocks were sourced from Switzerland and London, which is the largest gold trading hub in the world. This reduced liquidity on the London market. This led London's bullion traders to borrow gold from the central banks that store their bullion at the Bank of England vaults. The LBMA, the London Market Authority, said that while gold stocks at Bank of England decreased at a similar rate to March, the number of holdings in commercial vaults throughout London increased again by a month. This trend confirms that gold continues to leave CME's warehouses, as the tariff fears have eased and arbitrage possibilities disappeared. COMEX gold stocks According to COMEX data on Wednesday, the outflows were 925,559 troy-ounces (28.8 tonnes) valued at $3.1 billion. The LBMA reported that there were 22,859 tonnes of silver in London vaults as of April, an increase by 3.3 % compared to March. The LBMA reported that silver holdings in London increased for the first since October 2024. (Reporting and editing by Paul Simao; Polina Devtt)
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NY Fed survey shows deteriorating household financial situations
The Federal Reserve Bank of New York reported on Thursday that Americans' perceptions of their financial situation, including their future expectations of earnings and income and their views about inflation outlook, deteriorated in April amid mixed opinions. The bank's latest Survey of Consumer Expectations found that, last month, when President Donald Trump launched a trade war with the rest of world, household perceptions of both their current and future financial situation "deteriorated dramatically." Survey respondents also predicted slower income and earnings gains in April compared to March and higher unemployment and a harder time finding a job. The bank found that spending expectations rose from March to April. Inflation was mixed. The survey respondents expected inflation to be 3.6% in the year ahead, the same as March. However, the expectation for three years ahead rose from 3% to 3.2%. Survey respondents expect inflation to be 2.7% in five years, compared with 2.9% in March. In the report, it was found that consumers expect a rise in rent, gas and college costs. They also anticipate a 3.3% increase in home prices over the next year, up from 3%. The New York Fed released its report after the Fed announced on Wednesday that it would hold the short-term rate target constant amid high economic uncertainty and growing risks. The Fed believes that the economy is doing well, but the Trump administration's trade tariff policy has changed the outlook. Many economists expect it to increase inflation and unemployment while slowing down growth. In a press briefing following the Fed policy meeting, Fed Chair Jerome Powell stated that "despite increased uncertainty, the economy remains in a strong position." Powell warned that the data on consumer sentiment was not a reliable indicator of consumer spending. Fed calculations have been heavily influenced by the state of inflation expectation data, because Fed officials are generally in agreement that what people expect for price pressures has a big impact on their current situation. New York Fed data have not shown the same increase in inflation expectations as other surveys, such as those from University of Michigan. In recent weeks, many Fed officials said that it is important to maintain expectations amid the uncertainty and inflation risk caused by Trump's agenda. (Reporting and editing by Andrea Ricci; Michael S. Derby)
Russell: Iron ore is a very different story from the China tariffs pain narrative
The United States has imposed massive tariffs on Chinese goods, and the Chinese economy faces a huge blow. However, the commodity that is most vulnerable is not affected.
China is most exposed to iron ore, as it buys over 70% of the seaborne volume, which it uses for just under half of the global steel.
Iron ore prices have remained relatively stable since U.S. president Donald Trump began his trade war with China. The United States now imposes tariffs of up to 145% on China, its biggest trading partner.
On Wednesday, iron ore contracts on the Singapore Exchange closed at $99.35 per metric ton. This is after they had risen from a low of $96.20 per metric ton that was reached on May 1.
Since October, the price has traded in a relatively small range. The high was $110.55 at the beginning of that month and low was at the beginning of May.
China's iron ore imports have also slowed slightly. Customs data shows that first quarter arrivals were down 7.8% compared to the same period last year, at 285.31 millions tons.
While this figure may seem low, it is largely due to weather conditions in Australia that cut off shipments by China's largest supplier.
China's port stocks are a clear indication of the supply disruption
Stockpiles reached 147.5 million tonnes in mid-February. This shows that steel mills are using their inventories to continue production during the period when supply from Australia is disrupted.
Analysts Kpler expect China's imports to have recovered from March, when they recorded 93.97 millions tons.
China's steel production is also stable, with the 92.84 millions tons produced in March representing a 10-month-high and a 4.6% increase from the same period in 2024.
Overall, the iron ore market has been relatively stable this year. Any import weakness can be attributed to disruptions in supply. China's demand is also fairly steady.
Iron ore imports should also be expected to continue beyond April if China's stocks are to reflect the normal seasonal build-up leading into the summer steel peak in the north.
DEMAND FOR STEEL
If there is such concern over the negative impact on China of U.S. Tariffs, then why are iron ore, and steel, holding up? Are they about to decline in price?
Answer: A large part of China's demand for steel is found in industries less exposed to international trade.
Property and infrastructure are the two largest steel-consuming industries, accounting for almost 60% of total demand.
The property market has been struggling in recent years. However, early signs suggest that Beijing's stimulus measures are beginning to stabilize it.
Machines, automobiles and household appliances are the trade-exposed segments of steel demand, accounting for almost a third.
Even here, China's exports are not primarily destined for the United States. Instead, the majority of vehicles and machinery is shipped to Asia, Europe and South America.
The United States is more exposed in the manufacturing of toys, clothing, and other items that do not use much steel, but rely more on chemicals, plastics, and rubber.
The official purchasing managers' (PMI), which measures the level of activity in the private sector, fell to 49.0 in April from 50.5 in march.
Beijing's recent stimulus measures were likely also influenced by the PMI slump, as they announced on Wednesday a reduction in interest rates and an increase in liquidity.
It's clear that some parts of China are feeling the pain from the tariffs, but other parts are doing well.
Beijing's message is geared towards positives, but the U.S. administration is more likely to hear the story of pain.
These are the views of a columnist who writes for.
(source: Reuters)