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Dollar soars as Fed rate cuts bets are lowered, causing Asia shares to struggle
The Asian stock market was under pressure Wednesday, while the dollar rose to its strongest level against the yen in early April. This is after U.S. Inflation suggested that tariffs were pushing up prices, dampening expectation for Federal Reserve policy ease. The yield on U.S. Treasury bonds reached its highest level in over a month. This lifted the dollar, especially against the yen. However, tech shares remained resilient following a 4% rally in artificial-intelligence darling Nvidia overnight. Brent crude has remained at $69 per barrel. The data released on Tuesday shows that U.S. consumer price rose by 0.3% in the month of June. This was in line with expectations, but it was also the biggest gain since January. Economists attribute the increase in prices of goods like coffee and home furnishings, to the Trump administration’s increasing import tariffs. The Fed has kept interest rates at the same level as it waited to see if the tariffs would have an inflationary effect, which Jerome Powell said he anticipated in the summer. Taylor Nugent is a senior economist with National Australia Bank. In a podcast, he said: "We know that Fed Chair Powell and a few colleagues are waiting for the tariff effects to be seen. This data has bolstered that view." Nugent stated that the markets have seen "a pretty significant reduction in Fed expectations" regarding rate cuts. The traders are currently pricing in a 43 basis point rate cut for the remainder of this year. There is a 56.5% chance of achieving a quarter-point reduction in September. Investors will be closely monitoring the producer price data, due on Wednesday. They are looking for any signs that inflationary pressures may also be building in factories. As of 0127 GMT, Australia's benchmark equity index and South Korea's KOSPI both lost about 0.6%. Blue chips in Mainland China fell 0.1%. The Nikkei, Japan's technology and exporter-heavy index, was flat following a series of small gains and losses. Nvidia's success and the weakening yen were both supportive. Taiwan's benchmark index rose 0.5%, while Hong Kong's Hang Seng gained 0.8%. Both added to the 1.6% rally on Tuesday. U.S. S&P futures declined by 0.2% after a 0.4% drop in the cash index overnight. Earnings season is another important factor for investors, aside from the Fed and President Donald Trump's tariffs. JPMorgan Chase's and Citigroup's results were better than expected, but the market reaction was mixed. Wells Fargo lowered its net interest income forecast for 2025, despite exceeding expectations in the second quarter. Goldman Sachs Morgan Stanley, and Bank of America are among the banks that will be reporting earnings on Wednesday. The 10-year Treasury yields in the United States rose to a record high of 4.495% Wednesday, the highest level since June 11. The dollar remained close to its multi-week high versus major peers. The dollar index was barely changed at 98.545, after reaching a high of 98.699 for the first since June 23. The U.S. dollar was unchanged at 148.785 Japanese yen and had earlier risen to 149.04 yen for the first since April 3 in the wake of Trump's "Liberation Day tariff announcement". The euro has risen 0.1% to $1.1612 in an attempt to recover from the three-week low reached on Tuesday of $1.1593. Bitcoin, the cryptocurrency, added about 1% this week to $117 696. It stabilised after its 6% drop earlier in the week from its all-time high of $123,153.22 on Monday. Gold increased by 0.3% to $3,332. Brent crude futures dropped 5 cents, to $69.16 per barrel. U.S. West Texas Intermediate futures also fell 9 cents, to $66.69 per barrel. Both contracts closed more than $1 lower the previous session.
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Copper prices remain unchanged as markets wait for the impact of US tariffs
The London Metal Exchange and Shanghai Futures Exchange saw little movement on Wednesday as the markets awaited President Donald Trump’s trade tariffs that are scheduled to go into effect on August 1. The LME's three-month copper fell 0.04%, to $9,641.5 a metric ton, by 0102 GMT. Meanwhile, the SHFE's most traded copper contract rose 0.08%, to 77990 yuan (10,872.87) per ton. A metals trader at a Beijing futures company stated that there was not much news to move the market today. The first-half Chinese economic data is out. There's little to worry about, except for the persistently slow property market. U.S. will not cut interest rates soon, with the June CPI. Tariffs are next." In June, U.S. Consumer prices increased by 0.3%. This was the highest increase in five-months. The Federal Reserve may decide to delay any rate changes until September due to the uptick in inflation caused by tariffs. Trump announced on Tuesday that the U.S. will impose a tariff of 19% on goods coming from Indonesia, under a new deal with the Southeast Asian nation. Additional deals are expected to be signed soon. After the European Union, a major U.S. trade partner, prepared retaliatory actions in the event that talks with Washington were unsuccessful, the U.S. President revealed new details on planned duties on pharmaceuticals. LME nickel rose by 0.36%, to $15,200 per ton. Tin increased 0.16%, to $33,365. Lead fell 0.3%, to $1,990. Zinc and aluminum remained flat at $2.698 and 2.582.5 respectively. SHFE nickel recovered from the drop of Tuesday, adding 1.31% per ton to 121.020 yuan. Tin rose 0.06% and aluminium gained 0.12%. Lead fell 0.65% to 16,900 yuan, and zinc dropped 0.5% at 21,995 yuan. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 0600 UK Core CPI, UK CPI June 0600 UK Services CPI June 0900 EU Total Balance SA May 1230 PPI US Machine Manufacturing June 1315 Industrial Production US MM June (1 = 7.1729 Chinese Yuan) (Reporting and Editing by Sumana Niandy; Reporting by Hongmei LI)
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Prices of oil rise on expectations of demand amid improved economy
The price of oil rose on Wednesday, as the U.S., China and other major oil consumers are expected to continue using their products. Brent crude futures were up 29 cents or 0.42% to $69 per barrel at 0105 GMT. U.S. West Texas Intermediate Crude Futures rose 40 cents or 0.6% to $66.92. The market has downplayed any potential supply disruptions following the threat by U.S. president Donald Trump to impose tariffs on Russian oil purchases. Prices have been fluctuating in a narrow range, as the combination of signs that demand is steady due to an increase in summer travel in the Northern Hemisphere has fought against concerns about U.S. tariffs imposed on its trading partners slowing economic growth and fuel consumption. The major oil producers, however, are pointing out an improvement in the economic growth of the second half year. Chinese data also showed that growth was consistent. In a recent note, LSEG analysts stated that "strong seasonal demand" is driving up oil prices as the summer season brings a peak in industrial and travel activity. The increased gasoline consumption, especially during the Fourth of the July holiday in the U.S., has helped offset the bearish pressures of rising inventories and concerns about tariffs. Data from China showed that growth in the second quarter slowed, but not as much as was previously thought, partly due to frontloading in order to avoid U.S. Tariffs. This eased concerns about the economy in the world's biggest crude importer. Data also revealed that China's crude throughput in the month of June increased by 8.5% compared to a year ago, which indicates a stronger fuel demand. Consultants said that this was the highest level since September 2023 as state-owned refining facilities increased their operations and experienced a profit recovery. In a report published on Tuesday, the Organization of Petroleum Exporting Countries predicted that the global economic outlook would improve in the second half of this year, thereby boosting oil demand. The report stated that India, China, and Brazil outperformed expectations, while the U.S., EU, and EU recovered from last year. Reporting by Colleen Waye, Editing by Christian Schmollinger
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Trump: Vietnam trade deal is "pretty much set"
Donald Trump, the U.S. president, said that an agreement on trade with Vietnam is almost complete. Trump told journalists at Joint Base Andrews, near Washington, that he was willing to release the details of the Vietnam Trade Agreement but did not feel it necessary. The U.S. President announced this month that he has struck a preliminary deal with the Communist Country, which will reduce planned U.S. Tariffs on Imports from Vietnam from the level of 46% he threatened in April. Trump said at the time that goods Washington considered to have been illegally transshipped to other countries through Vietnam would be subjected to a 40% tax. Details of the agreement have yet to be finalized, and questions remain about how Washington will define illegal transshipments and how much Vietnam must add value to imported products in order to avoid the tariff. The exact products that would be subject to Trump's tariff of 20% are also unclear. Vietnam hasn't confirmed specific tariff rates but is celebrating an agreement it called a "joint statement" about a framework for trade. When asked if he intended to reveal details about the trade agreement with Vietnam, Trump replied, "Well I might." It doesn't matter how much information you release about the deal. "We have a Vietnam agreement, and I'd say that this deal is pretty well set." Since the beginning of the U.S. - China trade war, in 2018, when the Trump administration first imposed tariffs on Beijing that were so high they pushed some manufacturers to relocate production to Vietnam, Vietnam's exports have nearly tripled. Data from the U.S.A. and Vietnam shows that at the same time Vietnam has greatly expanded its imports from China. Their inflow is almost identical to the value and swings in exports to the United States. Each totaling around $140 billion by 2024. (Reporting and editing by Leslie Adler, Stephen Coates and Andrea Shalal)
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Indigenous groups ask Chilean court to stop community review of Codelco/SQM lithium deal
According to documents reviewed by, two indigenous groups in northern Chile asked a local judge to suspend the state-led process of community review that was required to approve a partnership between copper miner Codelco and lithium mining company SQM. Last week, the Indigenous community of Coyo and Atacameno Association of Irrigators and Farmers of San Pedro de Atacama filed separate legal challenges with the Chilean Appeal Court in the Antofagasta Region. They accused the Chilean Economic Development Agency Corfo of failing to properly conduct a consultation process for their input regarding the partnership. This is the last condition for the deal that will see state-run Codelco take over SQM's lithium mine operations on the Atacama Salt Flat. The Coyo Community and the Atacameno Association of Irrigators and Farmers (which has Indigenous members) said that they needed more time and information to give informed consent to the plan. According to a document filed in court, the Antofagasta Court accepted their challenges on Friday. The court ordered Corfo, to respond within 15 days to the allegations and asked Codelco to comment. Corfo said that the consultation process is still ongoing. The agency released a statement saying that the "Indigenous consultation process" with the Atacama Indigenous Organizations is progressing and was carried out according to the regulations. Codelco refused to comment while SQM didn't immediately respond to a comment request. The Indigenous Consultation, led by Corfo, and including a few dozen local community groups around the Atacama Salt Flat, was expected to end around late July. SQM, Codelco and other communities in the vicinity of the salt flats are holding separate talks to discuss a model that will allow Indigenous communities to oversee lithium extraction. Both the Coyo Community and the Atacameno association of Irrigators & Farmers asked the court for a suspension until a new method to review the community could be implemented and more information was provided. Both groups claimed that Corfo did not provide enough details about the proposed Codelco-SQM contract and that the timeline of the consultation between November 2024 to July 2025 is too short for a detailed analysis. The report also stated that Corfo did not always act in good faith and did not adhere to the standards of the International Labour Organization (a U.N. agency). The Coyo Community said that "this situation directly affects fundamental rights by limiting the Community's influence over decisions affecting its territory, its environmental surroundings, and its collective rights, thus violating constitutional protections," in its court filing. (Reporting and editing by Jamie Freed; Daina Beth Solon)
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Rio Tinto misses estimates for iron ore output, copper forecast upbeat
Rio Tinto reported a smaller-than-expected increase in iron ore shipment for the second quarter but forecast copper production at the upper end of the range. Rio Tinto's iron ore shipment is recovering following a series tropical cyclones that slowed operations during the first quarter of March. The miner's Pilbara operations shipped 79.9 Mt of iron ore in the three-month period ended June 30. This is a 13% increase from the previous quarter, but still below the Visible Alpha consensus estimation of 81.98Mt. Rio Tinto exported more iron ore of lower quality, SP10 grades. SP10 levels made up 29% of Pilbara exports. The company expects to achieve full-year production of copper at the upper end of its guidance range, and unit costs in the lower half. This is due to the ramp up from its Oyu Tolgoi mine in Mongolia. The miner confirmed its forecast for iron ore shipments in the full year at the lower end, between 323 Mt and 338Mt. Rio Tinto named Simon Trott as its new CEO on Tuesday. He succeeds Jakob Stausholm who announced unexpectedly in May that he was stepping down after four and a half years. (Reporting from Roshan Thomas in Bengaluru and Shivangi lahiri; editing by Devika Syamnath).
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Two people killed in New Jersey floods by severe storms near New York City
As severe storms ravaged the New York City region on Monday and Tuesday night, flooding cars and subway stations submerged in New Jersey. Intense rainfall has caused travel disruptions across airports, highways, and railways in the region. According to Mayor Eric Adams, more than 2 inches (5cm) of rain fell in Manhattan's Central Park in just one hour, making it the second-most rainfall in 60 minutes in history. On Monday night, videos showed flooding at several subway stations. One station in Manhattan's West Side had a geyser-like water stream. The subway system, according to officials, was overwhelmed by the rain in a very short time. Rohit Aggarwala said that the antiquated sewer network can only handle about 1.75 inches (4.44cm) of rainfall per hour. This is compared to a rate exceeding 4 inches per hour during the storm. Adams stated, "I don't think I can remember seeing such a level of rainfall before." New Jersey Governor Phil Murphy has declared a state-of-emergency and announced that two people have died in Plainfield after their vehicle was washed away by floodwaters. Murphy, a reporter, said that the victims were discovered in a car submerged. Murphy stated that some locations had experienced flooding for the very first time. The governor blamed climate changes for the increased frequency and intensity extreme weather events. He said, "That's a new reality." Authorities in Westchester County north of the city conducted numerous water rescues, as cars submerged under floodwaters and highways were closed due to flooding. According to the National Weather Service, Nanuet, a suburb in Rockland County near New York City, recorded over 5 inches (12.7cm) of rainfall. (Reporting by Joseph Ax; Editing by Sandra Maler)
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Blackstone and US utility PPL will build gas power stations in a JV partnership
The companies announced on Tuesday that they have formed a joint-venture to build natural gas power stations for data centers, under long-term agreements to provide energy services. Vincent Sorgi, President and CEO of PPL, said in a press release that he was excited to use the expertise PPL and Blackstone Infrastructure have to bring new dispatchable generation to Pennsylvania in order to meet new data center loads. The announcement was made at the Pennsylvania Energy and Innovation Summit, held in Pittsburgh. Government, technology and energy officials announced investments of approximately $90 billion to advance data centers and other aspects in the artificial intelligence boom. The U.S. president Donald Trump was expected in attendance. According to the companies, PPL and Blackstone Infrastructure, which own 51% of the joint venture, will sign long-term agreements for energy services with large data centers companies. There has not yet been any agreement of this nature. The joint venture has engaged in active engagement with landowners and natural gas pipeline companies, as well as turbine manufacturers and secured multiple land parcels for this new generation buildout, according to the announcement.
EU envoys are expecting to resolve the blockage of new Russia sanctions by this week
The European Union said that they expected to reach an agreement during a summit of the EU this week regarding an 18th package against Russia. Slovakia and Hungary use it as a bargaining tool for concessions about Russian energy.
The European Commission proposed the package to encourage Russia to negotiate with Ukraine a ceasefire after EU leaders demanded "massive sanction" in May. The package aims to target more of Russia's revenues from energy by listing its banks and destroying its shadow tanker fleet.
Hungary and Slovakia announced on Monday that they will not support new sanctions unless the proposal to prohibit imports of Russian oil by 2027 is changed.
The ban will be discussed by EU leaders at the European Council in Brussels on Thursday and Friday.
Ignacy Niemczycki is a Polish EU minister. He said, "We're waiting to see the result of the summit on Thursday, and I think that the conversation will be easier afterward." "We remain optimistic."
Slovak PM Robert Fico, however, reiterated that a vote be postponed until Slovakia's concerns about the energy ban have been addressed. He also said he would block sanctions if Slovakia did not address its concerns.
Slovakia claims that shutting down the Russian pipeline will increase prices, particularly in central Europe. Last week, Economy Minister Denisa Sakova stated that the country also wanted a mechanism for capping EU transit fees and guarantees in the event of a shortage.
A diplomat who is familiar with the talks said that Slovakia and Hungary are seeking "different treatment" for countries which have landlocked borders.
One diplomat said: "Hungary's not a big problem." If Slovakia lets go, then so will Hungary."
SPP, the state-owned gas company in Slovakia, said that Gazprom could demand compensation even if SPP declared force majeure if EU imports are banned. SPP's Russian gas contract, which ends in 2034, is valued at approximately 16 billion euros ($18.6billion) at current prices.
The lawyers have warned that it would be difficult to eliminate claims if the Commission went ahead with its plan of using trade measures to ban the product instead of formal sanctions which require unanimous approval.
A spokesperson for the European Commission said: "We've been working very closely" with member states that are most affected by the phaseout. $1 = 0.8623 Euros (Reporting and editing by Kevin Liffey, Julia Payne, Jan Strupczewski Jan Lopatka, Marek Strzelecki)
(source: Reuters)