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REalloys and U.S. Critical Materials Sign MoU to Build Domestic Rare Earth Supply Chain
Rare earths developers REalloys, and U.S.?Critical?Materials Corp. have signed a?memorandum of understanding to create a?domestic?supply chain for the?key?materials? in the U.S. This is in line with Washington’s goals to reduce its reliance on China. The agreement will allow REalloys to secure up 10% of the Sheep Creek Rare Earth Deposit in Ravalli County (Montana) owned by U.S. U.S. efforts have intensified to reduce reliance?on China to supply the critical materials. This has prompted a rush by miners and processors?to?build local rare?earth?supply chains. The Sheep Creek deposit is rich in elements like dysprosium and Terbium that are used for high-performance permanent magnetic components on F-35 fighter planes, missile guidance systems, and radar platforms. REalloys CEO Lipi Sternheim said: "We are identifying strategic assets that will plug into our advanced midstream ecosystem and downstream ecosystem to fortify supply chain security in protected and strategic markets. There is no Chinese involvement at any stage." REalloys, U.S. Critical Materials and U.S. Critical Materials said that they would also advance the?testing work to improve heavy rare earth processing and finalize a long term offtake agreement within one year. (Reporting and editing by Jonathan Ananda in Bengaluru)
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Fuel hikes are driving the largest increase in consumer prices since over 30 years.
Official data released on Wednesday showed that the increase in fuel prices in Peru was the sharpest since December 1993. The higher fuel prices were attributed to a rupture in a natural gas pipe and the conflict in Middle East. According to the national statistics agency INEI, consumer prices in the third largest copper supplier in the world rose 2.38% from the previous month. This is a sharp acceleration from a 0.69% rise in February. According to the agency, the main cause of the increase in inflation was the 9.06% rise in transportation prices. Fuel supplies were disrupted by a rupture of the Transportadora de Gas del Peru pipeline, which forced the transportation industry to switch to more expensive fuels. In a recent report, INEI noted that the price of vehicle fuels has also increased due to the Middle East conflict. Prices for non-alcoholic drinks and food also rose by an impressive 3.24%, due to the frost and rain which affected the production of vegetables, legumes and potatoes. In a poll, the monthly inflation index?also came in above the median prediction of 1.08%. The Lima metro area's 12-month inflation ended February at 3.8%, above the central banks 1%-to-3% target range. According to the latest forecast by the monetary authority, Peru's inflation rate was 1.5% in 2018. The central bank predicts that the rate will be 2.4% at the end of 2026, as it believes the current price pressures are temporary. Reporting by Aida Fernandez and Marco Aquino from Barcelona, Additional reporting by Anusha Shah in Bengaluru. Editing by Tomasz and Nick Zieminski.
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US retail sales were strong in February, but the Iran war is expected to affect spending
Retail sales in the United States increased the most since'seven months' in February, as motor vehicle purchases recovered and temperatures rose. However, rising gasoline prices due to the Middle East war could limit spending in months ahead. Commerce Department's delayed report from?Wednesday indicated that the economy had been on a solid footing before?the U.S. and Israel war with Iran. The conflict that began at the end February has caused global oil prices to surge by more than 50%. This week, the average national retail gasoline price surpassed $4 for the first time since more than three year. Economists have warned that a prolonged war or further increases in gasoline price could offset the expected boost to consumer spending as well as the overall economy from tax reductions. The conflict was expected to have a negative impact on the economy in the second quarter. Stephen Stanley, Santander U.S. Capital Markets' chief U.S. economic, said: "I expect consumers to spend less in the first half than they would have without the gasoline price spike. But I predict that energy prices will fall significantly within a few months and allow real expenditures to rebound in second half of year." Census Bureau of the Commerce Department reported that retail sales increased?0.6%. This is the biggest increase since July last year, following a downwardly revised 0.1% drop in January. The economists surveyed by predicted retail sales, which are mainly goods and not adjusted for inflation but are a measure of the overall economy, would rise 0.5%, after an earlier reported 0.2% decline in January. SALES INCREASE WORLDWIDE Census Bureau still has a lot of data to release after the government shutdown last year caused delays. The increase in retail sales was partly due to higher gasoline prices that had been rising in anticipation for the Middle East War. After a 0.7% decline in January, motor vehicle dealerships saw their receipts rebound by 1.2% amid promotions and discounts. The sales of building materials, garden supplies, and equipment retailers increased by 0.4%, and those of electronics and appliances stores rose by 0.5%. Clothing and clothing accessory stores saw their receipts increase by 2.0%. Online retail and nonstore sales increased by 0.7%. Service station sales increased by 0.9%. Sales in?sporting good, hobby, musical instruments and?book shops increased 1.3%. Furniture store sales and food and beverage store receipts both dropped by 1.0%. The report's only service component, which is a measure of discretionary expenditure, was the sales at drinking and food establishments. They rose 0.4%. Economists see dining out as an important indicator of household finances. This is now threatened by the conflict that lasted for a month and wiped $3.2 trillion off the stock market. Consumer spending has been led by higher-income households, backed up by robust wealth levels. Retail sales, excluding automobiles and gasoline, as well as building materials,?food services, and other?food products, increased by 0.5% in February, after increasing by 0.2% in January. The core retail sales are the ones that most closely match consumer spending in the gross domestic product. The fourth quarter saw a slowdown in consumer spending, which helped to limit GDP growth to 0.7% on an annualized basis. In the third quarter, the economy grew by 4.4%.
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Gold continues to rise on the back of a weaker dollar, but Iran remains in focus
The 'U.S. dollar' fell, and gold rose for the fourth?straight?session? to a?peak? of nearly two weeks on Wednesday. Dollar?slid, as traders focused on the Middle East war and its implications for the global monetary policies. Gold spot was up 1.3% at $4,728.75 an ounce by 1300 GMT after reaching its highest level since the 19th of March earlier in session. U.S. Gold Futures rose 1.7% to $4.755.70. The U.S. dollar fell for the second day in a row, making bullion priced in greenbacks more appealing to holders of foreign currencies. Bob Haberkorn is a senior market analyst at RJO Futures. He said that if the U.S. dollar continues to fall, gold prices could rise above $5,000 an ounce. Rate-cutting expectations may creep back into the market. He added that the focus was on Iran and Strait of Hormuz - "how this conflict develops and what the future looks like." U.S. president Donald Trump stated in a Truth Social posting that Iran's new leader has asked for a ceasefire from the U.S. "We will reconsider when the Hormuz Strait opens, is free and clear." "We are blasting Iran to oblivion until then," he said. Spot gold dropped more than 11% during March, as the Iran war and higher energy prices stoked inflation fears. This led to a reduction in expectations of looser monetary policies. Bullion is often seen as a safe haven during times of geopolitical unrest and inflation. However, high interest rates can reduce the appeal of this non-yielding material. The end of the conflict may prove to be a double-edged blade (for gold). Tony Sycamore, IG's market analyst, said that a lasting peace accord would eliminate the geopolitical safe haven bid which supported gold prices prior to the conflict. Sycamore said that lower oil prices and an easing of inflation could also revive expectations for Fed cuts in 2026. The ADP's National Employment Report showed that private payrolls in the United States increased steadily during March. Retail sales in the U.S. rose strongly in February. However, the rising gasoline prices caused by the war may have an impact on spending in the coming months. Spot silver dropped 0.5% per ounce to $74.70, platinum fell 0.3% to 1,942.80, and palladium eased by 0.8% to 1,464.88. (Reporting and editing by Paul Simao in Bengaluru, Ashitha Shivaprasad from Bengaluru)
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Argentina delays fuel tax increases in order to reduce the impact of global prices pressures
In a Wednesday decree, the Argentine government announced that it would delay the implementation of tax increases scheduled for liquid fuels, carbon dioxide and other pollutants. This was done in response to the global instability brought about by the U.S./Israeli war on Iran. The decree stated that the move was intended to "support economic growth by sustainable fiscal measures". The decree also stated that the measure would delay the anticipated?tax increase on liquid fuels, carbon dioxide, and other gases for a month, to the end of April. The decree added that this is the second step taken by President Javier Milei in recent days to combat the 'energy price disruptions' caused by the conflict. On?Friday the government relaxed some gasoline quality standards. Local refiners can now blend up to 15 percent ethanol in gasoline to reduce their dependence on petroleum. Analysts warn that rising fuel prices could affect consumer and transport prices. Official data show that Argentina's inflation rate remained stable in February but was still?above expectation due to sharp increases in housing prices, including rent and utility costs. Private analysts had already increased their 'inflation forecasts' for 2026 prior to a surge in crude oil prices late February. Regional Responses Other countries in Latin America are also taking steps to deal with the uncertainty caused by the conflict in the Middle East. Colombia's policymakers raised the benchmark interest rate by 100 basis points on Tuesday to combat inflationary pressures. Chile's central banks minutes show that they briefly considered raising interest rates during their March meeting, whereas Mexico has reached an agreement with gas stations to limit fuel costs, according to the President Claudia Sheinbaum.
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Are central banks selling Treasuries to the public? McGeever
Are central banks selling Treasuries in the midst of the controversial U.S. war in "the Middle East"? It's likely yes, but the situation is complex. The foreign Treasuries in the custody of the New York Federal Reserve have just fallen to their lowest level in 16 years, below $3 trillion. This indicates that foreign central banks are dumping assets at a 'increasingly fast pace. The decline in Fed "custody' holdings, as I wrote last Monday, has been eye-catching. Deutsche Bank strategists estimate the $75 billion drop in the four-week period ending March 19, pointed to $60 billion net selling by central bankers. This would be some of the most aggressive sales ever. The official U.S. Treasury International Capital figures - which are the gold standard data for foreign holdings in U.S. Treasuries – show that central bank sales abroad were minimal last year, but that net purchases were the highest in 13 years in January. What is it then? Selling or shifting? Fed custody data can be a good proxy for foreign central bankers and their treasuries but it is not perfect. The vast majority of the custody holdings are foreign central banks, but they also include quasi-official agencies like sovereign wealth funds or multilateral agencies. Fed custody changes don't always reflect the amount or if central banks are actually buying or selling. Custody holdings, for example, fell by $238 billion in the last year. This suggests central banks are dumping U.S. debt at a breakneck pace. Official TIC data revealed that the net sales by foreign central banks of Treasury notes and bonds last year were only $34 billion. This is less than 1% of the $3.5 trillion in their vault. How can we square this? Changes in exchange rates and bond prices can explain changes in custody data. Some of the "selling", however, can be explained by central banks moving their holdings from U.S. jurisdictions to other parts of their network or non-U.S. jurisdictions. Brad Setser, of the Council on Foreign Relations, has long argued that the recent decline of China's holdings in Treasuries is due to the fact Beijing has funneled vast amounts of foreign assets into its state-owned banks. China's actual holdings are likely to be much higher than what the official figures suggest. Footprints shrinking at nominal highs The official TIC data will be released in May, and we'll know if central banks sold in March. The decline in custody holdings and the weak foreign demand for recent Treasury auctions as well as the falling bond prices suggest that they did. It's still worth remembering that the latest official TIC data, released in mid-March, showed that foreign central bank bought a total of $50.6 billion in Treasuries during January. It was a rare instance where the official demand was higher than private-sector demands. This was also the second largest monthly purchase by central banks in 13 years. In recent years, the private sector has been an important buyer of U.S. In recent years, investors have been a major buyer of?U.S. Treasuries. Foreign ownership of Treasuries is at an all-time high. In the last year, foreign investors owned $9.23 trillion in U.S. government bonds, including $7.78 trillion in bonds and notes and $1.45 billion of bills. All of these are record highs. As a percentage of all Treasuries, foreign ownership has been declining. Morgan Stanley analysts claim that in the fourth quarter last year it dropped to 32%. This is the lowest level since 1997. Central?banks likely sell Treasuries at a margin, not in large?size. It's not yet. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Preliminary data indicates that South Africa's tax revenue increased by 8% in the last fiscal year
Preliminary figures released on Wednesday showed that South Africa collected net tax of 2.01 trillion Rand ($119.73 Billion) in the fiscal period that ended on March 31. This was 8.4% more than the previous year. SARS (South African Revenue Service) reported that the amount collected was 24 billion rands higher than the budgeted amount for 2025. In a statement, the agency stated that the increased collection reflected its focus of compliance initiatives, improved efficiencies?and contribution from the mining sector. The statement said that "these results were achieved despite the challenges of a sluggish economic, geopolitical conflicts, global supply-chain interruptions, and proliferation of the illegal economy." Edward Kieswetter, SARS commissioner, said at a press briefing that the mining sector contributed about 5 billion dollars of the 24.7 billion collected. SARS expects to collect about 2,13 trillion rand for the fiscal year 2026/27, which begins on April 1. This represents a 5.8% rise. SARS stated that South Africa's trade was very minimal with Israel and Iran, but shipping disruptions in the Strait of Hormuz might have a major impact on imports of petroleum products. A presentation showed that more than 70% of the refined petroleum imported in 2025 would come from the Middle East. Oman (26%) and Saudi Arabia (16%) are the countries that send the most refined petroleum to South Africa. The United Arab Emirates (15%) is also a top exporter. Johnstone Makhubu, Deputy Commissioner of Customs in Oman, said that imports were not at risk because the country is located at the exit of the Strait of Hormuz. Nigeria and Angola accounted for more than half of South Africa's crude imports in the past year.
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Retail sales in the US increased by a solid amount in February
Retail sales in the U.S. increased in February, as motor vehicle purchases rebounded. Temperatures also warmed. However, rising gasoline prices due to the war in the Middle East may?cripple spending in upcoming months. The Commerce Department's Census Bureau reported on Wednesday that retail?sales increased 0.6% following a 0.1% decline in January. The economists polled had predicted that retail sales (which are mainly goods and not adjusted for inflation) would rise 0.5% following a 0.2% decline in January. After the government shutdown last year, the?Census Bureau has yet to release data. U.S./Israeli conflict with Iran pushed global oil prices up more than?50%. The national average retail price of gasoline topped $4 a gallon for the first time in over three years. Some worry that rising gasoline prices could reduce the expected boost in consumer spending and overall economic growth from tax reductions. The conflict that lasted a month has also?reduced the household net worth. In March, both the S&P 500 and Dow Jones Industrial Average posted their largest?monthly drop in a very long time. Wealthier households are driving consumer spending. Retail sales, excluding automobiles and gasoline, building supplies, food, and other services, increased by 0.5% in February, after increasing by 0.2% in January. These core retail sales are the closest to the consumer spending component in gross domestic product. Consumer spending declined in the fourth quarter. This helped to slow GDP growth down to 0.7% on an annualized basis. The third quarter saw the economy grow at a rate of 4.4%. (Reporting and editing by Chizu Nomiyama; Lucia Mutikani)
Russell: Crude oil futures are not in line with reality, as the Asia physical market collapses.
Crude oil futures prices'reflect a view of the market that it can successfully navigate through the Iran War, while the prices for physical cargoes or refined products signal an imminent crisis.
One of these signals is not the case in the paper oil market.
Brent crude futures for the global benchmark ended Wednesday at $91.98 per barrel, an increase of 4.8% over the previous close, but down from the brief spike that occurred on March 9, when they reached $119.50 - the highest price in almost four years. On the physical market, on Wednesday the premium of a physical cargo containing Middle East benchmark Dubai oil over its paper counterpart rose to nearly $38 per barrel, the highest level since Russia's invasion of Ukraine in 2022.
The paper oil traders appear to be believing the rhetoric of U.S. president Donald Trump and certain members of his administration, that the campaign against Iran was going well and that there is no threat to oil and products shipments through Strait of Hormuz. The traders also seem to think that the International Energy Agency's record release of 400 million barrels from its stockpiles would help with some supply disruptions. The current problems cannot be resolved by political leaders' comments that are disconnected from reality.
As long as the Strait of Hormuz is effectively blocked, the situation will only worsen and accelerate.
It is particularly the case that Asia takes the majority of the 18 to 20 million barrels of crude oil and products per day (bpd), which flowed across the Strait before the U.S. launched an aerial campaign on Iran on February 28, 2008.
System Breaking
Prices for crude and refined products reflect the stress that is already being felt in Asia's supply chains. On Wednesday, the premium for a bar of cash Dubai crude compared to paper swaps rose $4.17, to $37.87, a new high not seen since Russia's invasion of Ukraine. This event also sparked fears of an oil shortage as Western buyers stopped purchasing Moscow's crude. The main difference between the Russian invasion in Ukraine and the conflict in Iran today is that there was not a real shortage of oil in 2022. Instead, the flow of Russian crude was redirected to China and India.
The current situation, however, is very different. Even the rerouting of crude oil exports from the Gulf into the Red Sea port of Saudi Arabia and the United Arab Emirates' facility in the Gulf of Oman are not enough to compensate for the effects of the Strait of Hormuz closure.
The problem in Asia is not only the crude supply, but also the tightness of refined products. This is quickly becoming a major issue for countries like Australia, Indonesia, and New Zealand that import oil. Some refineries in Asia have cut processing rates, and others, like China, are limiting fuel exports to meet domestic demand. The price of refined products is rising, and the cash difference for diesel is increasing.
Jet kerosene is a similar case.
The physical crude markets and product prices in Asia indicate that the supply chain has 'buckled' and will only get worse as more countries begin to hoard fuel and crude.
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These are the views of the columnist, an author for.
(source: Reuters)