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Bitcoin joins the party at MORNING BID EUROPE
Ankur Banerjee gives us a look at what the future holds for European and global markets When cryptocurrencies are on fire, you know that markets are risky. Bitcoin has joined global stocks in scaling a new record high as the near certainty of U.S. rate cuts boosts risk sentiment. Bitcoin, the world's most popular cryptocurrency, has many things going for it. It is likely to see lower interest rates in the future, as well as a more favorable regulatory environment and strong institutional investor flows. Ether has also been on a charge. It is hovering at its highest level since November 2021 and has become the token of preference for those seeking more active returns. In fact, the ether price is up by 42%, which is more than triple that of bitcoin. After a week of explosive gains, Asian stocks took a break. Japanese shares dropped after reaching a record-high, while Taiwanese and South Korean stocks eased off after recent highs. Investors bet that the Federal Reserve is going to start cutting interest rates again from next month. Traders have started pricing in odds for a 50 basis point cut following comments by Treasury Secretary Scott Bessent. If we had seen these numbers in May or June, I think we would have been able to cut rates in June and/or July. Bessent told Bloomberg Television that this tells him that a rate cut of 50 basis points is likely to occur in September. Fed Chair Jerome Powell - who has been repeatedly slammed by U.S. president Donald Trump - is expected to give a speech at a central banking research conference in Wyoming, next week. The focus will be his tone regarding policy direction. Bessent said that the Bank of Japan is likely to raise interest rates, as it has fallen behind in addressing the inflation risk. This led to a strong rise in the yen which was at its highest level in 3 weeks. Investors will focus on economic data during European hours, which will provide a glimpse at the uncertainty surrounding tariffs and their impact on the economy. The following are key developments that may influence the markets on Thursday. Economic events: Euro zone flash Q2 GDP, UK prelim Q2 GDP
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Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard
The First Steel Cutting ceremony took place at Saipem’s Karimun fabrication yard, marking the official start of construction activities for the Tangguh UCC project, awarded by bp Indonesia.The event was attended by representatives of the client, local and national government bodies, together with key members of Saipem’s management team gathered to celebrate this significant milestone achievement.The Tangguh UCC project, located in Papua Barat province, Indonesia, is a national strategic project that includes the development of the Ubadari gas field, increasing gas acquisition through carbon capture, utilization, and storage (CCUS) technology, and onshore compression. It is expected to unlock around 3 trillion cubic feet of additional natural gas resources from the Ubadari offshore field.Saipem's activities include the engineering, procurement, construction and installation and commissioning of two wellhead platforms, a CO2 reinjection platform, and approximately 90 km of associated pipelines, cables and tie-in to existing brownfield facilities.The Karimun Yard, recognized as Saipem’s strategic fabrication centre in Southeast Asia, is Saipem’s largest one worldwide and one of the largest in the Southeast Asian region, with over 5,000 employees and approximately 1.4 million square meters area including the marine base and docks.
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Steel prices and weak China data are lowering iron ore prices
Iron ore futures fell on Thursday as a result of signs of weaker demand, after China's new loans in yuan unexpectedly contracted for a first time in 20 years, and steel prices dropped due to high supplies and seasonal lower consumption. By 0259 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange fell by 1.88% to 783.50 yuan (109.25 dollars) per metric ton. The benchmark iron ore for September on the Singapore Exchange fell by 0.78% to $102.7 per ton. China's new loans in yuan contracted in July, for the first time since two decades. This indicates a weak demand from the private sector amid ongoing trade negotiations with Washington. The central bank has not loosened policy despite the first contraction of new yuan loan since July 2005, and the largest decline in credit since December 1999. The Chinese consultancy Mysteel stated that the demand for steel construction in China is expected to be stable in August. This will be supported by new projects. However, recent bad weather has affected outdoor construction. Galaxy Futures, a broker, says that despite speculative demands for finished steel products the high supply of crude steel and seasonal lower demand is pushing prices down. Galaxy said that despite reports of production restrictions at steel mills for the rest of this month, the 90-day extension on a tariff truce with China and the "anti involution" campaign aimed at reducing price wars, prices were still supported by Galaxy. Coking coal and coke, which are used to make steel, also fell, by 5.17% and 3.59 %, respectively. Mysteel reported that China's coking market softened after a shopping spree. End-users increased material cost control, Mysteel stated in a separate report. The benchmarks for steel on the Shanghai Futures Exchange have fallen. The Shanghai Futures Exchange saw a decline in steel benchmarks. ($1 = 7.1713 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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US explores cooperation with Pakistan in critical minerals and hydrocarbons
In a statement released by the State Department to mark Pakistan's Independence Day, Secretary of State Marco Rubio stated that Washington was looking forward to exploring collaboration with Pakistan in relation critical minerals and hydrocarbons. WHY IT IS IMPORTANT Washington hailed an agreement last month between Islamabad and Pakistan, which Pakistan claimed would lead to lower tariffs and more investment. Jam Kamal, Pakistan's Commerce minister, has stated that Islamabad is offering U.S. companies the opportunity to invest in mining in Balochistan and other areas of southwest Pakistan through joint ventures. Reko Diq is one of the largest gold and silver mines in the world, and it's run by Barrick Gold. KEY QUOTES Rubio stated late on Wednesday that he was looking forward to exploring new economic areas, including hydrocarbons and minerals of critical importance, as well as fostering dynamic business relationships. The United States is deeply appreciative of Pakistan's efforts in counterterrorism and trade. CONTEXT Prior to President Donald Trump’s administration, Islamabad’s relationship with Washington had cooled over the past few years as, among other things, the U.S. moved closer to Pakistan’s traditional rival India in order to counter China’s rise. Washington was also angry with Islamabad for Afghanistan, particularly under the administration of former President Joe Biden, who oversaw the chaotic withdrawal of troops from Afghanistan and tookover of the nation by the Taliban, whom Washington had accused Islamabad to be supporting. Pakistan denied this charge. Washington's relations with Islamabad improved in recent months. Trump credited him with a ceasefire in India and Pakistan in May after both countries engaged in hostilities following an attack on India-administered Kashmir in April. Pakistan has praised Trump, while India maintains that New Delhi and Islamabad must resolve their differences directly between themselves without external involvement. Tuesday, the U.S. held a round of counterterrorism discussions with Pakistan in Islamabad. Washington has declared the separatist militant Balochistan Liberation Army a "foreign terror organization." Michael Kugelman is a Washington-based South Asia expert and writer at Foreign Policy magazine. He said: "The US-Pakistan Counterterrorism Dialogue joint statement is the most positive and effusive that I've heard from these countries in quite a number of years."
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The Fed's rate-cutting drumbeat brings the dollar down; Asian stocks are taking a break
The U.S. Dollar was under pressure Thursday, as traders bet that the Federal Reserve would resume lowering interest rates in January. Bitcoin reached a new record high while regional stocks saw a pause from their explosive rally. MSCI's index of Asian stocks excluding Japan remained near its highest level since September 2021. It took cues from Wall Street where the S&P 500 Index and Nasdaq Index hit new closing highs on the second consecutive day. On Wednesday, the MSCI All Country World Index reached a new record for the second consecutive session. Japan's Nikkei index fell following a six-day rally which saw it surpass the 43,000 level for the first. Korea and Taiwan also saw a slight decline in their shares. Hong Kong's shares and China's blue chip index both gained. The dollar dropped to a 2-week low versus a basket major counterparts on changing expectations of U.S. interest rate cuts. Comments from the U.S. Treasury secretary also helped bolster expectations for an outsized cut of 50 basis points. Early trading saw the Japanese yen reach a three-week peak of 146.38 to the dollar. Treasury Secretary Scott Bessent stated on Wednesday that a half-point reduction in September was possible after the revised labour market figures from last week revealed that job growth in May, July and June had been sharply slowed. Goldman Sachs stated on Wednesday that it expects three interest rate reductions of 25 basis points this year, and two additional ones in 2026. The odds of a 50% cut have risen to 7% from 0% one week ago. While the tame U.S. Inflation Report this week has boosted the case to cut rates, some analysts cautioned that market complacency may be a result of upcoming data. Carol Kong, an economist and currency analyst at Commonwealth Bank of Australia, said: "We are not as confident as the financial markets that a 25bp FOMC interest rate cut will be implemented in September, let alone 50bp." Kong stated that "another CPI and payrolls reports will be released before the September meeting, which can make or break a case for a cut in rates." BITCOIN AND GOLD Analysts also point to recent financial reforms for a boost to the asset class. Bitcoin is up 32% in 2025. Ethereum, the second-largest cryptocurrency, is up 41%. It's just a little bit shy of its November 2021 high. Gold prices increased 0.5% on commodity markets to $3371. Crude oil prices also edged upwards after hitting a low of two months on Wednesday, as investors focused on the Friday summit between U.S. president Donald Trump and Russian President Vladimir Putin. Trump warned on Wednesday that "severe consequences would follow" if Putin refused to agree to peace in Ukraine. He also stated that the meeting could be quickly followed by another one, which would include Ukrainian president Volodymyr Zelenskiy. Trump has previously said that both sides would have to exchange land in order to stop the fighting, which has resulted in thousands of deaths and millions of displaced people. Goldman Sachs analysts wrote that while a lack of progress on a ceasefire could lead to new threats of secondary oil sanctions/tariffs, they saw a limited risk of major disruptions of Russia's supply. They said that the large volumes of Russian energy exports and the potential for deeper price discounts in order to maintain demand as well as the eagerness of India and China to continue their energy cooperation will likely prevent major disruptions. Trump signed a executive order last Friday, imposing an additional 25% on India's imports into the U.S. He claimed that India directly or indirectly imported Russian crude oil. He has hinted that he may impose similar tariffs against China.
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Gold prices continue to rise as Fed hopes for rate cuts and a weaker dollar drive the price up.
Gold gained for a third consecutive session on Thursday. This was boosted by expectations that the U.S. Federal Reserve will cut interest rates in September due to the tame inflation figures, which also weighed down on the dollar. As of 0156 GMT, spot gold increased 0.4% to $3367.53 an ounce. U.S. Gold Futures for December Delivery increased by 0.3% to $3416.70. Markets are pricing the possibility that the Fed will cut 50 basis points this September. The dollar is weakening and gold has risen as a consequence. Yields have also fallen, said Kyle Rodda. The technical setup for gold is very positive. The trend is still upward. "We just need to see the market consistently break through the $3,400 mark." Dollars of rival currencies were at multi-week lows, making gold cheaper for those who hold them. Benchmark 10-year Treasury yields in the United States held at a one week low. The U.S. consumer price index rose marginally only in July, boosting expectations for a Fed rate reduction next month. Treasury Secretary Scott Bessent noted that there's a good possibility the central bank would opt for a 50% reduction. LSEG data shows that traders now consider a September 17 cut as a near-certainty. They even place odds of around 6% on a half-point reduction. Gold that does not yield is more likely to thrive in an environment with low interest rates. Investors await the U.S. Economic Data due this week. This includes the U.S. Producer Price Index (PPI), weekly claims for unemployment and retail sales. These data will provide clues as to the Fed's future rate path. In the geopolitical arena, Ukrainian President Volodymyr Zelenskiy warned U.S. Donald Trump before his meeting with Vladimir Putin about the Russian leader's "bluffing". Spot silver rose 0.3% per ounce to $38.59, platinum gained 0.1% to $1340.55, and palladium climbed 1.5% to $1139.52. (Reporting and editing by Sumana Nady and Subhranshu Sahu in Bengaluru.
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Court officer overseeing Citgo's auction requests adjournment
The court officer overseeing the Delaware auction of shares of Citgo Petroleum, the Venezuelan-owned refiner, has requested to adjourn the final hearing of the sale, which was originally scheduled for the week after next. This is so that the winner of the auction can be decided. This request was made after two bids, including those from Elliott Investment Management affiliates and Vitol commodities house, were submitted recently. The court officer recommended that a unit of Gold Reserve miner submit a different offer. Due to parallel court cases, procedural complications, and disagreements with creditors pursuing the same assets and debts in Venezuela in the past, the auction by the court of the seventh-largest U.S. refiner has been delayed. Gold Reserves opposes the adjournment request made by Robert Pincus, the court officer. Pincus will submit an updated proposal this week on how to proceed in the sale hearing. He told the court.
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The Lithium Rally promises a breather to struggling Australian miners
Sources and analysts say that the recent rise in lithium prices may ease pressure on producers in Australia who are struggling to reduce their exposure to battery materials, causing them to abandon plans to sell certain projects. The shares of Australia's lithium mining companies have increased by up to a third in the past month. They also extended their gains this week, after news that China had cut back on its supply sparked hope for a turnaround. This follows years of falling prices due to slower sales than expected. Lithium companies were forced to close down operations, and in recent times to sell assets to rebuild balance sheets. Sources, who spoke on the condition of anonymity said that Australia's Mineral Resources and Chile's SQM had tried to sell stakes this year. IGO is looking to restructure its joint venture for lithium refining with China's Tianqi Lithium. Analysts say that despite the fact that speculators have fueled this rally, it will calm down producers who are burning through their cash. This could remove assets from the market once they are listed, denying buyers the opportunity to buy them at a low point in the business cycle when the West is racing against China to create a battery supply network outside of China. Analyst Dan Morgan from Barrenjoey, Sydney, said: "The common thread is the diabolical price and market conditions." All Australian producers would breathe a huge sigh... They may have to put some of the less-than-pleasant and permanent options that they were considering back into the bottom drawer. The lithium-bearing hard rock spodumene mineral has rebounded from its four-year lows of $610 per tonne, reached in mid-June. However, it is still far below the peak of $6000 that will be achieved by 2022. E&P Financial, in a report, said that it was difficult to determine whether the supply cuts were temporary or permanent. The giant Chinese electric vehicle battery manufacturer Contemporary Amperex Technology said Monday that it had suspended its mining operations in Yichun, a southern region, after a licence to mine expired on August 9. Analysts said that the surge in share price was likely fuelled by rallies to cover shorts. Shortman, a data provider, reports that Australian lithium miner companies are among the five most-shorted ASX stocks. Selling Potential Two sources, who spoke on condition of anonymity, said that MinRes, a debt-ridden company, tried to sell its Mt Marion lithium assets and Wodgina Lithium assets in Western Australia but failed because buyers balked at a price of over $2 billion. A company spokesperson said that "MinRes does not comment on speculation in the market as a matter of policy." He added, "MinRes is always looking for opportunities to maximize returns to shareholders." Reports in March indicated that four Indian state-owned firms were in negotiations with SQM to acquire a 20% stake in two of its lithium projects in Australia, for $600,000,000, as New Delhi sought to secure supplies for the metal used in EV batteries. SQM has not yet responded to the request for comment. Analysts expect that IGO will sell its shares. IGO said in the last month it would be reviewing all options for the lithium refinery, which is losing money. IGO has declined to comment. As Australia has been the hardest hit by the global production cutbacks, the supply can return to normal, lowering prices. Due to the persistent weakness of spodumene, Pilbara Minerals put its Ngungaju facility in Western Australia on care and maintenance late last year. Dale Henderson, Pilbara's CEO, told journalists on August 1 that if the conditions improve, it could take as little as 4 months to ramp up production. (Reporting and editing by Clarence Fernandez; Melanie Burton)
South Korea announces plan to restructure the petrochemical industry facing a 'grave situation'
Kim Jung-kwan, South Korea's Industry Minister, said that the government would announce a plan to restructure its petrochemical industry this month. The sector is in a "grave situation".
Kim stated that South Korean petrochemical firms should learn from the restructuring of shipbuilding in late 2010, which involved liquidating assets and streamlining areas in a time when orders were down sharply.
Kim, who spoke at a shipyard in South Korea, told the Industry Ministry that the petrochemical sector needed to take voluntary steps, such as "adjusting" facilities.
Media reports have raised concerns about the financial health and future of South Korea's Yeochun NCC Co. a petrochemical manufacturer based in Yeosu. The company, which is losing money, faces a debt of 180 billion won (about $130 million) at the end August.
The margins of petrochemical firms in South Korea, and around the world, have plummeted due to the oversupply in oil products that has been caused by the relentless addition of capacity in the past decade. This is especially true in China, the largest petrochemical marketplace. The demand has been slow in the past three to four year.
Analysts predict that global petrochemical profit margins will not recover until 2027.
(source: Reuters)