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Oil prices soar as stocks fall on a gloomy economic outlook due to Middle East war
On Friday, the global stock markets declined and oil prices increased due to the lack of progress made in ending the Middle East conflict which has been raging for four weeks and is now affecting consumer and business confidence. In recent days, the global equity market has been in a downward spiral as U.S. president?Donald? Trump's comments about negotiations have become less significant than the Gulf situation, where Iran continues to block the Strait of Hormuz and attacks continue. Wall Street's three main indexes are trading lower, with shares in consumer discretionary, technology, and financial companies leading the way. The disruption of world oil supplies due to the conflict will have a negative impact on global growth and inflation, according to economists and business leaders. The Dow Jones Industrial Average dropped 1.6%. The S&P 500 fell 1.6%. And the Nasdaq Composite lost 2.1%. The broad market S&P is down 9% since its January record close. Matt Britzman is a senior equity analyst with Hargreaves Lansdown. He said that words alone don't cut it at the moment, as President Trump's decision to extend the pause in the energy strike against Iran has failed to raise the mood. "Tangible proof of progress is needed." Trump has extended the deadline for Iran's reopening of the Strait of Hormuz. However, Iran has not given any?direct indications that it is willing to negotiate. The Islamic Revolutionary Guard Corps of Iran reiterated that it will continue to disrupt shipping in the Strait, through which approximately one-fifth the world's supply of oil and natural gas is transported. Brent crude futures increased by 4.2% to $112.57 per barrel. U.S. West Texas Intermediate Futures closed up 5.4% to $99.64. Dan Boston, global director of the small business team at Polar Capital Florida, said: "The longer the Strait of Hormuz remains closed the greater the disruption and the uncertainty surrounding oil prices." You can see that everything from transportation to food costs are affecting inflation expectations. "As those expectations increase, consumer sentiment begins to decline as well." The University of Michigan’s index of U.S. Consumer Sentiment fell more than anticipated in March and reached a three-month high. The pan-European STOXX 600 Index fell by 0.95%. Germany's DAX fell by 1.4%, while London's FTSE 100 index dropped by 0.05%. MSCI's index for Asian shares outside Japan dropped 0.9% overnight. MSCI's global stock index fell by 1.34%. NASDAQ ENTERES CORRECTION TIERRA The Nasdaq Composite, a tech-focused index, entered correction territory after dropping 2.4% Thursday. It is now down almost 11% since its record closing in late October. James St. Aubin is chief investment officer of Ocean Park Asset Management. He said that the unbridled enthusiasm that propelled Nasdaq's stock to record highs during the fourth quarter has faded as the macro-background deteriorates and the uncertainty surrounding the impact AI will have on the tech ecosystem in general clouds the horizon. BOND YIELDS ARE RISING The yields on government bonds rose as central banks were seen as being more likely to increase interest rates in order to prevent an inflationary shock caused by higher energy prices. As prices drop, yields also rise. The yield on the 10-year U.S. Treasury, which is used to set borrowing costs in?the rest of the world, increased by more than one basis point, reaching 4.432%. Money markets see roughly 60% of the U.S. Federal Reserve raising?rates in 2019. This is a dramatic change from February, when traders bet on two rate cuts for 2026. The yield on Germany's 10-year bonds rose by 0.7 basis points, to 3.105%. The U.S. Dollar was slightly higher compared to major peers such as?the Euro, Japanese yen, and Swiss Franc. The dollar has risen to its highest level since July 2024. The yen was last up 0.35% at 160.365. The dollar rose 0.50% to 0.79800 versus the Swiss Franc. The euro fell 0.15% to $1.151250. The U.S. Dollar Index, which tracks currency against six other currencies, increased 0.27% to $100.16, marking the fourth consecutive session of gains. Spot gold rose 3%, to $4,513.73 an ounce.
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Canada eyes Mercosur pact by autumn
The minister of international commerce for Canada said on Friday that he hoped to sign a?free-trade agreement with South America's Mercosur bloc in the autumn. "We are?accelerating the timelines for negotiations a bit. We'll try to have our negotiations every six or seven weeks, and we hope we can finish by fall. Maninder Sidhu said on the sidelines a World Trade Organization Ministerial Conference in Cameroon that this is the goal we've set for our partners. The Minister said that he had 'bilateral meetings' with Argentina, Paraguay and Brazil. He will also meet with Brazil, Uruguay and the WTO meeting in Yaounde on Friday, where a?potential Mercosur Canada trade agreement is part of the talks. We're ambitious. He said, "I think we can do it." An Argentine official had said that the agreement would be signed around September or October, roughly a year after negotiations formally resumed. A diplomat based in Brazil also said that negotiations were going at record speed. He confirmed 'the countries would probably reach an agreement this year. Canada has increased its efforts to diversify the trade amid uncertainty over tariffs imposed by U.S. President Donald Trump. The diplomat in Brazil said that South America and Brazil are trade partners Canada can't do without. Reporting by Olivia Le 'Poidevin, Yaounde. Additional reporting by Lucinda Ell in Montevideo. Lisandra Paraguassu and Promit Mukherje from Ottawa.
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AFP reports that the missing sailboats of the Cuba aid convoy have arrived safely.
AFP reported Friday that two'sailboats' which went missing during a convoy transporting humanitarian aide from Mexico to Cuba landed safely in Cuba. The U.S. Coast Guard was cited by AFP. The convoy spokesperson said that he was unable to reach the U.S. Coast Guard for verification. Coast Guard can verify the information. James Schneider, spokesperson for the company, said: "It is not confirmed." The two boats were part of a larger grassroots volunteer effort to deliver food, medicine, baby formula, and other supplies?to an energy-strapped Cuba. Requests for comment from the U.S. Coast Guard or?Mexico’s Navy were not immediately responded to. The Cuban state news program at 1 pm local time repeated President Miguel Diaz-Canel’s concern about the missing boats. At a press conference held earlier that day, the?Mexican president Claudia Sheinbaum stated that the search was still?ongoing and nine people were on one of the vessels.
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Portugal offers diesel subsidies to reduce the cost of energy during Iran's war
Portugal announced a temporary subsidy of 10 cents per litre for diesel in key sectors like?agriculture and transportation? on Friday to 'ease fuel costs due to the Iran War. The subsidies, which could amount to up to 450 millions euros (519 million dollars) over three month, will only be paid if the diesel prices are more than 10 cents higher than the average price for the first week of March when the war with Iran intensified. The subsidies will run between April 1 and June 30, and they still need parliamentary approval. They will support sectors such as agriculture, forestry and fishing,?public transportation and taxis and be capped to a maximum diesel consumption per vehicle. Luis Montenegro, Prime Minister of Spain, said that the financial support was only temporary and that the state budget must be managed responsibly and with caution. Portugal's National Statistical Institute (INE), which released its figures on Thursday, reported a budget surplus that was higher than expected, at 0.7% of the gross domestic product. This is up from 0.6% of GDP in 2024. It predicted a surplus in 2026 of 0.1%. Montenegro's?government said it is examining additional measures to support fuel and essential goods prices if the conflict in Iran escalates and puts further pressure on them. He added that there are no plans to reduce the VAT on food or fuels.
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GRAINS-Chicago Soy is slipping on profits ahead of revised US Biofuel targets
Chicago soybean futures fell on Friday due to profit-taking ahead of a White House announcement expected later that day?of revised U.S. Biofuel targets which is 'expected'to be?bullish?for soybeans. These are often used as biofuel feedstock. Wheat and corn prices were volatile due to the uncertainty surrounding the Iran War. Corn was also pressured pre-weekend by technical selling. As of 10:50 am, the most active soybean contract traded on the Chicago Board of Trade had lost 9 cents. It was now $11.64-3/4 per bushel. CT (1750 GMT). Randy Place, an analyst at Hightower Report, said: "We are a little weaker in beans. It's probably profit taking before the weekend, and headline risk?depending on how negotiations go and what happens with Iran." Investors have responded cautiously to the latest remarks made by U.S. president Donald Trump on ending the conflict that has lasted for a month. Trump said that on Thursday, talks to end the war are going "very smoothly" and he will delay the threatened attacks 'on Iran energy plants for an additional ten days. Oil prices rose on Friday, as traders weighed Trump's remarks against Iran's criticisms of U.S. proposals as well the ongoing disruption in energy markets. The price of grains and oilseeds has largely tracked the fluctuations in crude oil prices during the conflict. This is due to the use corn and soyoil as biofuels, and the knock-on effect on crop production that rising energy and fertiliser prices can have. CBOT corn fell by 2-3/4 cents, to $4.64 per bushel. Grain participants are adjusting positions ahead of Tuesday's U.S. Department of Agriculture acreage estimates. The war in the Middle East may increase the cost of fertilizer, which could lead to more acres being planted with soybeans. Fertilizer is needed to provide a significant amount of nitrogen for corn. The CBOT wheat price dropped by a half-cent to $6.04-12 a bushel. Prices have been supported by dry conditions in part of the U.S. wheat belt. The traders are closely watching the drought in the southern U.S. Plains. Hot weather this week could cause more crop stress, before rains arrive next week. Kansas Wheat Futures have seen sharper gains this week compared to Chicago wheat prices due to the parched conditions.
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India eases the rules to allow some state-owned firms to purchase critical equipment from China
After easing restrictions, India allowed some state firms, including Bharat Electricals and the Steel Authority of India, to purchase critical equipment from China on Friday, according to both a government source and a document. Last month, it was reported that India would ease restrictions on purchasing Chinese equipment after a deadly border clash in 2020. This would allow state-run coal and power companies to import limited quantities of Chinese equipment as shortages and delays grew. India has also since eased its investment restrictions on China. The government order stated that Bharat Heavy Electricals, India's biggest state-run power equipment manufacturer, can now purchase 21 types of critical equipment from China under the new?rules. Steel Authority of India has also been granted a similar authority to source critical components and coal-gasification equipment from other state-run companies, according to a government source. New Delhi tightened rules on Chinese investments and procurement in response to the deadly clashes between Indian and Chinese soldiers along the Himalayan border. However, a global realignment sparked by U.S. trade tariffs has led India to consider an adapted reset with China to maintain supply chains and attract investment. In August last year, Indian Prime Minister Narendra Modi travelled to China for the first time in seven years. He met with Chinese President Xi Jinping and discussed improving ties. After this, New Delhi relaxed visa requirements for Chinese business professionals. According to the government order, which was issued this month and seen by, Chinese bidders who are participating in state contracts do not have to register with a government panel for political and security clearances. New Delhi eased its restrictions on Chinese investment in certain sectors earlier this month to help ease the capital squeeze. This marked a significant reset of our economic ties. (Reporting and writing by Sarita Changanti and Nikunj Ahri; editing by Jan Harvey, Susan Fenton and Shivangi Acharya)
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US consumer confidence hits three-month low after war fuels inflation fears
U.S. consumer confidence fell more than anticipated in March, reaching a three-month low as inflation fears and the war in the Middle East cast a cloud over the economy's?outlook. The decline reported by 'University of Michigan Surveys of Consumers Friday' occurred across a range of age and political party groups. Middle- and high-income consumers, as well as stockholders, saw the largest decreases. Oil prices have risen by more than 30% since the U.S. - Israel war against Iran, which has lasted for a month. AAA data showed that retail gasoline prices rose $1, to average $3.98 a gallon. The S&P 500 index fell 6.7%. Although the correlation between consumer spending and sentiment is weak, rising gasoline prices, falling stock values and a stagnant job market could reduce consumption and impede economic growth. The wealthiest households are the ones who have been driving 'consumer spending. Oren Klachkin is a financial market analyst at Nationwide. He said: "We are looking for negative sentiment effects to add to the drag caused by lower real purchasing power, and?wealth effect and pull down consumer spending growth in the second half." The University of Michigan's Consumer Sentiment Index fell to 53.3, its lowest reading since last December. It was 55.5 in January. The economists polled at? had predicted that the index would drop to 54.0. It was 56.6 in Feb. The short-term economic outlook indicator fell 14% while the measure of expected personal finances for the year ahead dropped 10%. The survey found that long-term expectations declined at a more moderate pace. Joanne Hsu is the director of University of Michigan Surveys of Consumers. She said that these patterns indicate that consumers are not expecting recent negative developments to continue for a long time. These views may change if the Iran Conflict?becomes prolonged or if increased energy prices are passed on to overall inflation. The S&P 500 index and Nasdaq Composite Index dropped to levels not seen in six months. The dollar was steady against a basket currency. The yields on U.S. Treasury bonds were mixed. Expectations of Inflation Inflation expectations for the next year, as measured by the survey, jumped from 3.4% in March to 3.8% in February. Consumers' expectations of inflation in the next five years dropped to 3.2%, down from 3.3% last month. This month, the Federal Reserve kept its benchmark overnight rate at 3.50% to 3.75%. In updated projections, released along with the decision by U.S. Central Bank policymakers, they predicted higher inflation and only one reduction in borrowing costs for this year. John Ryding is the chief economist at Brean Capital. He said that, "the evidence appears to indicate that, for now, the inflation impact from high 'gas prices will be temporary. However, it would appear that year-ahead expectations are set to jump over 4% in April's preliminary report." From a Fed perspective the majority (of the policy-setting) committee may interpret this as meaning that rates should remain unchanged.
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Mercosur, Canada to reach free-trade agreement in April after talks
According to sources familiar with these talks, Canada and South 'America's Mercosur are moving towards a free trade agreement. It could be signed before the end of this year. One official from Canada, Argentina, and Brazil said that they expect the deal to be completed in 2026. Another stated that discussions are progressing well, and could be finished before September. An official from the Argentinean government said that an agreement would be expected to be signed by September or October. This will mark roughly a year after formal negotiations were restarted. A second diplomat based in Brazil also confirmed that negotiations were proceeding at record speed. He said the countries will probably reach an agreement this year. TRUMP TARIFFS HAS?SPURRED TRADE DIFFERENTIFICATION The Canadian diplomat in Brazil stated that Canada is intensifying its efforts to diversify its trade as a result of the uncertainty caused by tariffs imposed on U.S. President Donald Trump. South America, particularly Brazil, was a partner Canada could not do without. A deal with Canada could help Mercosur, which is a major exporter in the areas of beef, minerals and soy, gain access to more developed markets, and attract investment into key industries like mining. Sources in Brazil say that Canadian Prime Minister Mark Carney will visit Brazil next quarter. Source: Although neither government intends to announce an agreement during the visit, this could serve as a push for a finalized one as soon as possible. The office of Mercosur in Montevideo has not responded to comment requests immediately. A spokesperson from the Canadian Trade Ministry said: "Negotiations for a free-trade agreement are progressing with momentum and we are encouraged by what is being achieved." Canada is committed in concluding a comprehensive, ambitious (Mercosur), agreement that will create real opportunities for Canadian workers, businesses and investors. On Friday, a Canadian official involved directly in the negotiations said that the Canadian trade minister, Maninder Singh Sidhu was "very eager" to complete the deal by the end of this year, and would be meeting his Brazilian counterpart at the World Trade Organization Meetings in Cameroon, on March 28. RENEWED MOMENTUM After months of technical exchanges, Canada and Mercosur decided last year to restart the talks which had been stagnant since 2021. Mercosur consists of Argentina, Brazil Paraguay, Uruguay and Bolivia, with Bolivia to be a full member by 2028. In March, Ontario trade officials, who are central to Canada's economic growth, visited Argentina and Uruguay to help lay the foundation for a future trade agreement and to show their support for increased bilateral trade. As part of his trip, Ontario's Minister of Economic Development, Job Creation and Trade, Victor Fedeli met with representatives of the technology and mining industries. This follows a trip to Brazil at the end of last year. Fedeli said Ontario is stepping up its outreach to South America in part due to the "Trump Acceleration" effect. He noted that approximately 80% of Ontario's trade with the United States. Fedeli told Montevideo in an interview that "we're building on this momentum". He added that the Canadian government was serious about diversifying from the U.S. After 25 years of negotiation, Mercosur concluded a trade deal with the European Union last January. The European Commission announced that key elements of the trade agreement, which have been controversial in Europe, would be applied on a temporary basis as of May 1. Lucinda Elliot in Montevideo and Lisandra Paraguassu, in Brasilia, with additional reporting from Lucila Sigal, in Buenos Aires, and Promit Mukherje, in Ottawa. Editing and production by Cassandra Garrison and Lisa Shumaker.
GRAINS-Chicago's soy profits slip after US biofuel targets are revised
Chicago soybean futures dipped on Friday after the White House announced revised U.S. Biofuel targets earlier in the afternoon.
Many traders had already bought soybean futures anticipating bullish news.
Wheat and corn were both volatile on Friday amid the uncertainty surrounding the Iran War, while corn was also impacted by technical selling before the weekend.
The Chicago Board of Trade's most active soybean contract settled at $11.59-1/4 per bushel, down 14-1/2 cents.
Randy Place, an analyst at Hightower Report, said: "We are a little weaker in beans and it's likely profit-taking ahead of the weekend, as well as headline risk, depending on what happens with Iran and how negotiations go."
Investors have responded cautiously to the latest comments made by U.S. president Donald Trump on the talks to end a month-old conflict.
Trump said that the talks to end war are going "very well" and he will delay his threatened attacks against Iran's nuclear energy plants by a further 10 days.
Oil prices rose on Friday, as traders weighed Trump's remarks against Iran's criticisms of U.S. proposals, and the ongoing disruption in energy markets.
The price of grains and oilseeds has tracked crude oil fluctuations during the conflict. This is due to the use corn and soyoil for biofuels, and the knock-on effect on crop production caused by rising energy and fertiliser costs.
CBOT corn settled at $4.62 a bushel as grain participants adjusted their positions ahead of Tuesday's U.S. Department of Agriculture acreage estimates.
The war in the Middle East may increase the cost of fertilizer, which could lead to more acres being planted with soybeans. Fertilizer is needed to provide a significant amount of nitrogen for corn.
The CBOT wheat price remained unchanged at $6.05 a bushel.
Prices have been supported by the dry conditions in part of the U.S. Wheat Belt. Traders closely monitor the drought in the southern U.S. Plains. Hot weather this week has increased the risk of crop stress, before rain is expected next week.
Kansas Wheat Futures have seen sharper gains this week compared to Chicago wheat prices due to the parched conditions.
(source: Reuters)