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BOJ to make decision on Iran deal in the near future
Asian stocks climbed a little on Tuesday, after rallying the previous session due to news of a peace agreement between Iran and the U.S. Investors turned their attention to'several' central bank decisions such as an expected rate increase from the Bank of Japan. Early trading in this region followed a familiar trend, as markets began to take a more measured approach on Gulf developments after the initial excitement surrounding the preliminary agreement reached between Washington and Tehran started to fade. Brent crude futures rose 51 cents or 0.6% to $83.74 per barrel, reflecting the cautious approach. Shipping companies in Asia and Europe say it could take several weeks to rebuild confidence that transit will resume through the Strait of Hormuz. MSCI's broadest index of Asia-Pacific stocks outside Japan gained 0.2% with Korean shares leading the gains. Japan's Nikkei was down by 0.2% from its record high, as the e-mini S&P 500 futures fell 0.1%. Although the announcement by Donald Trump of a nuclear deal with Iran brought relief to investors on Monday, Washington is now on a collision course with Israel. Analysts from Westpac said in a research report that while the deal was a diplomatic success, its durability would be tested over time. Many sticking points were left for future negotiations, such as the fate of Iran’s nuclear program. Stocks and bonds rose overnight on Wall Street on the optimism surrounding the deal. The S&P 500 rose 1.7%, the Nasdaq Composite soared 3.1% and both the Dow Jones Industrial Average (DJIA) and STOXX 600 closed at new records. Traders are waiting for several important central bank decisions. This includes the Bank of Japan which will raise interest rates on Tuesday to a record high. After the meeting, Deputy Governor Shinichi Uchida is scheduled to hold a briefing for journalists. Governor Kazuo Ueda has been undergoing medical treatments and will not be able to attend. In a research report, analysts at Mitsubishi UFJ stated that they did not expect any major changes in the Bank's assessment on current conditions. The note stated that "We expect the Deputy Governor Uchida press conference and the reasoning he uses for his rate-hike announcement to be heavily influenced by Governor Ueda’s speech on June 3," "Mr. Uchida will also follow the governor's remarks in discussing future policy decisions." According to a survey of economists, the Reserve Bank of Australia is likely to stop its tightening cycle at a later meeting. The?U.S. The dollar index, which measures greenback strength against a basket six currencies, has held steady at 99.66. The yield of the 10-year Treasury Bond in the United States was up by 0.8 basis points at 4.475%. Gold rose 0.2% to $4,313.87. Bitcoin fell 0.3% to $66,245.97 while ether dropped 1.2% to $1.793.70. (Reporting and editing by Shri Navaratnam.)
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Concerns about US-Iran Peace Deal, Restored Supply, and Oil Prices are causing a rebound in the price of oil
The oil prices rose on Tuesday due to concerns over the lack of detail in a preliminary agreement that would end the war between Iran and the U.S. Brent crude futures rose?26 cents or 0.3% to $83.42 per barrel. U.S. West Texas Intermediate was up 46 cents or 0.3% to $81.12 per barrel as of 0108 GMT. Oil prices dropped by almost 5% on Monday to their lowest level since March 4. U.S. president Donald Trump announced that a memorandum-of-understanding had been signed to end the U.S. and Israeli war with Iran. The conflict shut down the Strait-of-Hormuz, which carried about one-fifth the world's supply of oil before the conflict. The full details of the memo have not yet been made public and there hasn't been a truce permanent. Early indications are that the agreement will reopen the Strait of Hormuz, which has been closed for the past 60 years. It will also extend the ceasefire period by 60 days. This would allow negotiators the opportunity to address difficult issues such as the future of Iran’s nuclear program. Masoud Pezeshkian, the Iranian president said that the U.S. and Iran memorandum was "an important step" towards stopping the fighting. However, a final agreement on a lasting ceasefire "has yet take shape." Tim Waterer is the chief market analyst for KCM Trade. He said that the market will likely show some restraint in regards to the further unwinding the risk premium in energy markets. According to a senior Iranian official, Iran will freeze its nuclear activities until a final deal is reached. This includes refraining from further enriching uranium or expanding nuclear facilities. It is unclear, even with the current agreement how quickly the curtailed supplies will be able return to the market. Tony Sycamore is a market analyst at IG. He said, "The path to normal supply flow remains far from'straightforward. Sycamore said that clearing mines, restoring marine insurance coverage and allowing vessels and operators to feel comfortable returning to the Gulf would all take some time.
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US Air Force B-52 Bomber Crashes in California, 8-member Crew Presumed Dead
The base reported that the U.S. Air Force B-52 Stratofortress Bomber crashed Monday, shortly after takeoff, from Edwards Air Force Base, located in Southern California's Mojave Desert. All eight crew aboard are presumed dead, according to the base. Edwards stated in a press release issued four hours after it crashed that the eight-engine jet aircraft was on a test mission. It had been designed to carry conventional and nuclear bombs. Aerial footage from the crash site, located about 100 miles north of Los Angeles (161 km), showed a large, smoldering area of desert floor, roughly the size of an American football field. An emergency vehicle could be seen driving around the perimeter of the scene. The footage did not show any large debris. Air Force B-52 Stratofortress with eight passengers on a routine testing mission crashed after take-off today at 11:20 am (PDT). The base posted an 'update' on X saying that initial indications were that the crash would not be survivable. The Air Force said that an "emergency response" team was at the scene and that officials were "working hard to account for all personnel." The Air Force stated that the cause of this crash is under investigation. Boeing's Stratofortress is a subsonic, long-range aircraft. According to the U.S. military, it has been the backbone for the strategic bomber force of the U.S. According to an Air Force factsheet, the swept-wing aircraft can carry munitions such as cluster bombs and "gravity bombs" at heights up to 50,000 feet (15.166 meters). The fact sheet stated that the B-52 is capable of performing strategic attacks, close-air-support, air interdictions, offensive counter-air, and maritime operations in a conventional conflict. According to the Bureau of Aircraft Accidents Archives in Geneva, an organization that collects data on global aviation accidents, Monday's crash was the first of its kind since the same type of bomber crashed onto the island of Guam back in May 2016. The seven crew members on board the aircraft all survived. The Air Force only has the H-model B-52 in its inventory. According to the military, it is assigned to both the 5th Bomb Wing in Minot Air Force Base (North Dakota) and the 2nd Bomb Wing in Barksdale Air Force Base (Louisiana), both under the Air Force Global Strike Command. It also reports to be assigned to Barksdale's 307th Bomb Wing of the Reserve Command. Steve Gorman reported from Los Angeles, and Phil Stewart reported from Washington. Additional reporting was provided by Costas Pitas, Jasper Ward and Bill Berkrot; editing by Bill Berkrot & Jamie Freed.
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Industry group warns that the UK's defence and auto supply chains are threatened by the escalating scrap aluminum exports
Manufacturing trade body Make UK warned that the soaring exports of scrap?aluminum could leave Britain without a critical material required for defence, digital technologies, clean energy and the automotive industry. The UK could face a serious crisis if scrap exports continue to increase, as industry moves abroad to find better scrap markets. This puts jobs, investments and supply chain resilience at risk. Make UK stated that domestic industry may need up to 6 million metric tonnes of "available scrap" for recycling in order to meet the 8 million tonne aluminium demand projected by 2035 under the government's "Critical Minerals Strategy" and Modern Industrial Strategy. Daniel Paterson said that the UK Aluminium (Scrap) Collection and Sorting?needs to grow by 25 percent each year. This important opportunity will be lost if UK continues to export critical materials that are essential for our future growth sectors, national security, and resilience. Data from the information provider Trade Data Monitor shows that UK exports of aluminum waste and scrap reached 624,314 tons in 2016, a 43% increase from 2016. In the same time period, UK scrap aluminium shipments to India increased by 94%. The UK's aluminium scrap exports in the United States reached 23,560 tonnes last year, a jump of 989% since 2024. Make UK stated in a press release that "UK exports increased dramatically to the U.S. after Section 232 Tariffs excluded aluminium scrap from their scope." In June of last year, U.S. president Donald Trump imposed tariffs of 50% on aluminum imports. Make UK called on the government to invest in sorting and preprocessing capabilities in the UK, for stronger standards of collection and enforcement and targeted measures that would keep certain alloys of aluminium in Britain. It also called on the government to "engage urgently" with the EU in order to "secure equal treatment" if Brussels introduced aluminium scrap export restrictions. After warning that scrap exports could leave EU metals industries without material for recycling and decarbonisation, the European Commission has begun to develop measures to reduce aluminium scrap leaving Europe.
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U.S. gasoline drops below $4 per gallon for the first time since April
U.S. retail gasoline prices fell below $4 per gallon for a first time since mid-April. This was due to optimism that a preliminary deal between the U.S., Iran, and other countries would lead to the reopening of Strait of Hormuz – a vital passageway for oil supplies around the world. Crude oil prices fell by more than $4 per barrel after U.S. president Donald Trump announced the U.S.-Iran had signed a Memorandum of Understanding to end the near four-month conflict. However, it is still unclear whether this agreement will last. The drop in fuel prices may provide some relief for the Trump administration. They had promised to reduce energy prices. Trump and Republican lawmakers who are fighting to maintain their narrow majority in both chambers of the U.S. Congress during the midterm elections in November have been criticized over the increasing cost of fuel. The $4 per gallon threshold has been viewed by many as a psychological barrier that causes consumers to change their behavior. For example, they may reduce fuel consumption. Trump said that the text of this deal would be made public after the formal signing ceremony, which took place on Friday. He also announced the full reopening of the Strait of Hormuz. Experts say that it could take several weeks before shipping can resume normality. This is because removing the mines from waterways is a complicated process. Patrick De Haan is the head of GasBuddy's petroleum analysis. He said that the real test will be in the Strait of Hormuz. Any reopening of the Strait and the resumption normal oil flow would signal the durability of this relief. For now, the average national price could continue to fall, as long as there is no drastic reversal, and both the U.S. & Iran continue in the right direction. GasBuddy reports that the average U.S. retail gasoline price fell to $3.997 per gallon Sunday. This is the lowest it has been since mid-April. Prices are still 90.8 cents higher than the same time last year. According to the American Automobile Association, the national average price was $4.065 for Monday. De Haan stated that as of Monday, Americans had collectively spent $46 billion on gasoline since the beginning of the war. Late March, gasoline prices rose above $4 after Iran closed the Strait of Hormuz to most shipping. The Strait of Hormuz is responsible for nearly a fifth of global oil flows. For the first time since three years, consumer inflation rose to 4% in May. According to the Labor Department, falling gasoline prices have led to a moderated expectation of inflation among consumers this month. It is not yet clear if the relief will last. Bjarne Shieldrop, SEB's chief commodities analyst said: "This is fragile." It can easily fall apart. Schieldrop stated that there may be certain details in the U.S.Iran Memorandum which are impossible to overcome. U.S. gasoline is in a supply crunch. The 'robust' fuel exports and the resilient domestic demand are threatening to squeeze already thin inventories and drive up gasoline prices. According to government data, in the first week of June, gasoline inventories fell to their lowest level for a decade. They were just 215.1 millions barrels. Tom Kloza is the chief energy advisor at Gulf Oil. He said that if no progress was made in clearing the strait and reinstating insurance for vessels, or in curbing the violence of Iranian proxy forces, then the reprieve could be short-lived. Reporting by Nicole Jao, New York; editing by Sanjeev Mikleni
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Newmont announces new CFO and COO as part leadership overhaul
Newmont announced Monday a series of 'executive appointments', including the appointment of Brian Tabolt to its finance chief. The gold miner is reshaping its top management, under a new CEO. Tabolt was Newmont's group head of finances and chief accounting officer before joining the company. He joined Molson Coors Beverage in 2021. Tabolt replaces Peter Wexler who served as the interim CFO of the company. His appointment takes effect on July 1. The company also announced the appointments of David Thornton, chief technical officer and Mark Rodgers, chief operating officer. Newmont is undergoing a boardroom shake-up after Natascha Vijoen was appointed CEO in September, and Karyn Ovelmen left her position as Finance Chief in July of last year. The new rules come as gold prices are above $4000 per ounce. Investors are pressing miners to increase profits despite rising costs and tougher government regulations. The company stated that it was well-positioned to improve performance, maintain cost discipline and execute effectively, as well as deliver long-term value for its shareholders. (Reporting and editing by Anil D’Silva in Bengaluru, Sumit Saha from Bengaluru)
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Vale, a Brazilian company, plans to invest $2.6 Billion in decarbonization initiatives
A sustainability report released on Monday revealed that Brazilian miner Vale will invest up to 13 billion reais (2,56 billion dollars) in decarbonization projects to achieve its voluntary emission reduction targets and mitigate climate-related risks. The company has not specified the timeline for the investment. The investment includes up to four billion reais in decarbonizing operations. The 8 billion reais are allocated to the construction of industrial complexes focusing on low-carbon technology, including steelmaking technologies and iron ore briquettes. The firm stated that the remaining 1 billion reais would be used for research and development. Vale has invested 9 billion reais between 2020 and 2025 in initiatives to reduce carbon emissions. Vale's executive vice president for sustainability, Grazielle Parentsi, told a reporter that the company could see financial and environmental benefits from these initiatives. She said that Vale's governance structure evaluates all projects and decisions with this level of importance based on an environmental, social and governance matrix which identifies the potential risks and opportunities associated with each one. Carbon?pricing mechanisms could cost the company up to 22 billion reais, at current?value. This is expected to have a significant impact from 2030. $1 = 5.0686 Reais (Reporting and Writing by Fernando Cardoso, Editing by Aurora Ellis).
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The US Strategic Petroleum Reserve has its lowest oil stock since 1983
According to Department of 'Energy data released on Monday, crude oil stocks in the U.S. Strategic Petroleum Reserve have fallen to 340.3m barrels. This is the lowest level since 1983. It signals a?shortage of supplies at a time when?the u.s. Iran and the United States agree to a deal that will end the war in the Middle East and open up the Strait of Hormuz. The government's emergency stock fell by 8.9m barrels. This is the third-largest draw in history. The U.S. agreed to "loan" 172 million barrels to the facility in order to lower fuel prices which have risen to multi-year levels over the past few months. U.S. crude stock levels have dropped sharply over the past few weeks due to high demand for American oil in refining, and to fill supply gaps created by the Iran War. Overall,?U.S. After the beginning of the war at the end February, inventories including commercial and SPR stock have dropped by 79 million barrels to 77,6 million, the lowest level since 2023. Cushing, Oklahoma's main oil storage hub and pricing point for U.S. West Texas Intermediate Crude Futures, has seen its inventories drop to 21.6m barrels. This is near the operational lows. There are concerns about a tight supply. Stocks in the SPR fell below levels reached during the tenure of former president Joe Biden. They hit a low of 346.8 millions barrels. Republican lawmakers raised concerns at the time that the sale of the?180m barrels of oil, the largest amount ever sold from the Strategic Petroleum Reserve after Russia invaded Ukraine, was being used as a 'political instrument' and had damaged the?delicate sal caverns. The Biden administration denies these claims. The latest SPR loan requires companies to borrow oil 'to return the original volumes, plus a premium, in the form of extra oil. The Department of Energy says the system will stabilize markets without costing U.S. tax payers.
MORNING BID AMERICAS-Hormuz haze hits markets
By Mike Dolan
March 3rd -
Mike Dolan is Editor-at-Large for Finance and Markets.
The world's markets continue to be rattled by the Middle East conflict, which is now in its third day. There are still no signs of an end date or location for the regional conflict.
Energy prices are still at the center of financial transmission. Crude oil is rising again as?shipping and oil and gas installations, military and civilian targets, and oil and gasoline pipelines continue to be hit by Iran in retaliation for the weekend strikes.
Below, I'll go into more detail. Check out my most recent column about what's driving the recent dollar rally. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
HORMUZ HAZEL HITS THE MARKETS Brent oil hit a 14 month high, and at $82.37 a barrel, is $10 more than Friday's closing price. U.S. crude oil hit an 8-month high at $75.55 a barrel. However, markets are waiting for a government announcement scheduled on Tuesday about plans to mitigate the impact of this on U.S. consumer.
Details are not clear, but they could include the release of U.S. Strategic Petroleum Reserves or domestic subsidies. Wall Street stocks rebounded on Monday, with the S&P 500 returning to its opening levels. The tech sector led the way. But that felt like programmatic trading based on 'buy-the-dip' models based on the relatively brief energy price spikes experienced in recent Middle East conflict. This one is very different. Wall Street index futures have fallen?almost 2 percent. Today, stocks in Europe and Asia fell sharply. Japan's Nikkei index, the eurozone Stoxx and Britain's FTSE 100 each fell about 3%. South Korea's high flying?Kospi plunged 7% after Seoul returned from its holiday on 'Monday.
The 10-year Treasury bond yield is up 13 basis points since Friday's closing.
The markets are not expecting a Federal Reserve rate reduction until September. There are also doubts that there will be another this year, with only 42bps of cut priced in by the end of December. The traders are also busy pricing in any future rate cuts by the European Central Bank. The report released on Monday showed that U.S. manufacturers had already seen a spike in input costs in February, to the highest levels since 2022. This was even before the latest oil price surge. ECB watchers also digested a higher than expected flash inflation reading in the eurozone last month. The dollar is still favored by default in calculations of relative energy impacts, while the euro has fallen to its lowest level in six weeks due to 'worrying price increases for natural gas in the EU. The benchmark price of natural gas in the region hit its highest level in three years on February 2nd - an increase of?30% over the previous year. The Bank of Tokyo?warned about possible interventions to arrest the yen's weakness. Meanwhile, the Swiss National Bank stated that it would be more willing to interfere to counteract the rise of the safe-haven currency franc. The subsequent fallback of the franc coincided with a strange retreat in gold.
Chart of the day
Qatar, as the Middle East conflict gripped all of the region this week and condemned Iranian attacks on their territory, said that it "reserved a right to respond".
Qatar, the third largest exporter of natural gas liquefied in the world, has seen its natural gas prices rise this week due to attacks on its energy infrastructure. On Tuesday, European benchmarks for natural gas reached their highest level in three years.
Watch today's events
* Neel Kahkari, Neel Williams and Jeffrey Schmid of the Kansas Fed all speak
* U.S. Corporate earnings: Best Buy Target CrowdStrike
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(source: Reuters)