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Copper prices rise to a 2-month high
Prices in London fell from their 'previous day highs, but they remained stable on Wednesday. The benchmark three-month copper price on the?the?London Metal Exchange fell 0.24% to $14,033 per metric ton at 0300 GMT. The Shanghai Futures Exchange's most traded copper contract rose by 0.75%, to 107 120 yuan (about $15,877.39). Prices reached a two-month peak on Tuesday and surpassed the psychological $14,000 per tonne for the first since early June. Analysts from Chinese broker Everbright Futures stated in a report that high copper prices have begun to weigh on demand and raise questions about the strength in seasonal demand for the second half of the year. Yangshan Copper Premium SMM, a data provider, reported that the indicator of physical demand in China's largest consumer, China, dropped to $110 per ton on Tuesday. Red metal prices have been boosted by falling inventories, as more material has been brought into the U.S. in anticipation of possible tariffs on refined Copper. The total copper stock in LME registered warehouses On Wednesday, the number of tons of coal produced fell by nearly 40% compared to May's end. Daniel Hynes is a senior commodity analyst at ANZ. He said in a recent note that the US imported over 200,000 tons in July. This was the 'biggest monthly import since 2014'. The LME spread from cash to three-months reflected the supply pressure on physical materials The price of a ton was $102.38, a steep decline. Hynes stated that "the shift in inventory?has caused a squeeze on the short-term supply." Aluminium ticked up 0.05%, Zinc ticked up 0.14%, Lead added 0.32% and Tin dipped by 0.28%. Aluminium, zinc, lead, and nickel all rose in price. Tin, however, fell 0.9%.
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Oil prices continue to fall as investors wait for the outcome of US-Iran negotiations
After steep drops in the two previous trading sessions, oil prices continued to 'decline' on Wednesday as investors waited for signs that efforts to end the?Iran war and restore traffic through the blockaded Strait of Hormuz were making progress. Brent crude futures fell 92 cents or 1.2% to $78.44 per barrel at 0330 GMT. The price has fallen by more than 12% this week. U.S. West Texas Intermediate Futures fell $1.07 or 1.4% to $74.70 per barrel, and are down over 11% for the week. Qatar announced on Tuesday that mediators are making progress to end the conflict, which is driving down oil prices, although Tehran has denied U.S. president Donald Trump's claim that talks were underway. Brent oil prices fell more than 5% on Tuesday, falling below $80 for the first since July 13th. Priyanka Sackdeva, Phillip Nova's head of market insight, said that while the geopolitical premium had dissipated, the broader picture of supply "warrants caution". Sachdeva said that if diplomatic efforts fail and the physical supply is affected, then the current pullback may be short-lived. Tighter inventories will amplify the impact of future supply shocks. Before the start of the war, around 20% of all oil and gas liquefied in the world transited the Strait. Prices rose by 50% just in March. The main sticking point seems to be if Iran will insist on a certain degree of control over waterways, and if the U.S. is willing to stand firm and refuse this?outcome," analysts at IG stated in a recent note. Trump and Qatar's Emir, Sheikh Tamim Bin Hamad Al-Thani, discussed efforts to narrow the differences between Washington DC and Tehran as well as improve prospects for a long-lasting settlement in a telephone call on Tuesday. Market sources reported on Tuesday that U.S. gasoline and crude inventories increased last week while distillate stocks decreased. They cited data from the American Petroleum Institute. Sources, who spoke on condition of anonymity, said that crude stocks increased by 2.7 million barrels during the week ending July 31. The U.S. Energy Information Administration will release official numbers at 10:30 am ET (1430 GMT) on Wednesday. ET (1430 GMT), on Wednesday.
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South Korean shares extend their gains due to the rally in US AI and lower oil prices
South Korean shares rose again on Wednesday. This was boosted by gains made by?chipmakers following a rally of U.S. AI-related stocks, and by lower oil prices that eased inflation concerns. By 0256 GMT the benchmark KOSPI index had risen as high as 5%, to 6,674.66. This was its highest level for more than a month. It closed 1.6% higher Tuesday. Samsung Electronics, a maker of memory chips, gained 2.9% while SK Hynix, a rival company, added 5.6%. These two stocks account for over half of the KOSPI Index and are the main drivers of the recent volatility in Korean markets. Both the S&P 500 as well as the Dow closed overnight at record highs. This was helped by strong earnings from AI companies such Caterpillar and Palantir Technologies that soothed concerns about demand. The Nasdaq Composite, which is dominated by tech companies, ended 2.6% higher. James Ooi is a market strategist with Tiger Brokers. He said that the renewed strength in U.S. semiconductor and technology stocks seems to be broadly supportive of South?Korean chipsmakers at this time as many of these same catalysts are applicable. Both SK Hynix (SK) and Samsung Electronics (Samsung Electronics) benefit from the robust hyperscaler cloud demand. Oil prices held firm below $80 per barrel, despite a drop of more than 12% in the two previous sessions. Crude oil prices have fallen significantly from their peak in July, when they were hovering around $100 per barrel. Qatar announced on Tuesday that mediators are making progress to end the U.S. war with Iran, despite Tehran's denial of President Donald Trump’s claim that talks have already begun. Minutes of the Bank of Korea meeting in July showed that policymakers felt a need to tighten up, but?the timing of rate increases will depend on new data. Hyundai Motors and its sister automaker Kia Corp both rose by?3.3% apiece. POSCO Holdings, a steelmaker, rose 1.9% while Samsung BioLogics, a drugmaker climbed 0.8%. According to data from the stock exchange, foreigners bought shares worth 502.7bn won ($353.47m) on Wednesday after selling 9.862trn won in July. The?won appreciated a third day in a row and closed at 1,421.9 dollars on the settlement platform onshore, which was 0.5% more than its previous close of 1,429.0. On the money and debt markets, September futures for three-year Treasury bonds rose?0.24 points to 103.57. The benchmark 10-year yield dropped by 10.3 basis to 4.146%, while the most liquid Korean three-year treasury bonds yield fell by 7.1 points to 3.671%.
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Asia shares rise as oil prices retreat and tech sentiment swings
The Asian stock market soared?on a Wednesday, as Wall Street reached record highs on the back of robust earnings and a renewed interest in tech. Meanwhile, hopes of progress regarding?opening of the Strait of Hormuz drove down oil prices and bonds yields. South Korea's Nikkei added 4.1% to its wild swings. MSCI's broadest Asia-Pacific share index outside Japan rose by 2.4% while Chinese blue chip stocks gained 0.7%. The rally in tech came despite AMD's setback. AMD fell 8.8% following hours, as its earnings exceeded Street expectations but fell short of the sky-high investor expectations. SpaceX, a satellite company and AI group, lost 7.5% on concerns that capex would eat up its entire cash flow. The rising borrowing costs in the AI sector have been a constant concern for all AI stocks. Chris Weston is the head of research for broker Pepperstone. He said that "SpaceX's ambitious investment program?means that additional capital will most likely be needed in the medium- to long-term." Investors will continue to be interested in how management finances that growth and at what cost. Nasdaq's futures were unchanged on earnings, but S&P futures rose 0.3% on Tuesday after reaching all-time highs. EUROSTOXX Futures?gained 0.4 %, DAX Futures rose 0.8%, and FTSE Futures added 0.3%. OIL SLIDES BOOST BONDS Qatar's statement that mediators are making progress to end the U.S. - Iran war, but with no details, boosted sentiment. Brent crude dropped by 1.4% to $78.27 per barrel. This is a far cry from the peak of $102 in July, while U.S. Crude fell by 1.7% to $74.50. John Oh, a CBA energy economist, said that ship tracking data suggested that oil flow through the Strait of Hormuz was more resilient than initially thought. It may have reached 40% to 45% of its pre-war level last week. He wrote that "we estimate traffic flows need only return to 50%-60% of pre-war levels in order to assert oversupply in global oil markets." This explains why Brent oil futures have moved so quickly into the $70s, as the markets are justified in pricing in oversupply concerns when there is hope that the Strait will officially be reopened. Oil prices have dropped, easing inflation concerns. Bond yields are now down to 4.603% from the previous week's peak of 4.747%. The markets also reduced the probability of a Federal Reserve rate hike in September to just 57%, down from 67%. Jeff Schmid, President of the Fed Bank of Kansas City, spoke on Tuesday and called for tighter policies to bring inflation back up to 2%, which is the central bank's target. The New Zealand dollar fell 0.3%, but other currencies were relatively quiet. The euro remained flat at $1.1537. It was just below its recent high of $1.1559, which occurred six weeks ago. Dollar was slightly lower against the yen, at 157.43. The?threats of intervention' loomed over traders. U.S. Treasury secretary Scott?Bessent stated that he is confident Bank of Japan Governor Kazuo Ueda will "do what's best" for Japan's economy. This was interpreted by markets as an encouragement to increase interest rates. Last week, Japan and the United States conducted a rare joint intervention to buy yens and promised to take additional action to stabilize the currency if necessary. The drop in yields has helped gold that does not pay interest to rise 1.3%, reaching $4,130 per ounce. (Reporting and editing by Edwina G. Gibbs, Shri Navaratnam, and Wayne Cole)
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Markets await US job data as gold extends its gains due to lower oil prices and a softer dollar
Gold rose for a third consecutive session on Wednesday. This was helped by a softer dollar and lower crude oil prices. Investors were waiting for U.S. job data to get clues about the interest rate outlook. As of 0253 GMT, spot gold rose 1.3% to $4,127.04 an ounce. U.S. Gold Futures increased 0.8% to $4184.40. Holders of currencies other than the U.S. Dollar will find greenback-priced precious metals more appealing. After two steep drops, oil prices have stabilized. Lower oil prices can ease inflation fears that often fuel expectations of higher interest rate. Qatar claimed that mediators are making progress in ending the U.S. - Iran war. However, Tehran denied U.S. president Donald Trump's claim that talks have already begun. Gold's relationship with oil remains intact, as oil prices exert a huge impact on the global economy when it comes to inflationary pressure. Gold prices may rise if we have a roadmap for further de-escalation of tensions," said Kelvin Woong, senior market analyst at OANDA. The probability that the Federal Reserve will raise interest rates at its meeting on September 15-16 has dropped from 67% to 59%. In a high-interest rate environment, gold tends to lose appeal despite its role as an inflation hedge. It yields no return. Anna Paulson, President of the Federal Reserve Bank of Philadelphia, said that she was keeping an open mind about the future of monetary policy and an outlook which could lead to higher rates. The ADP Employment Report, due later that day, and the July payrolls reports scheduled for Friday were on the minds of traders. TD Securities analysts said that they expected gold to'remain range bound near current levels. Spot silver rose 1.9% to 60.64 dollars per ounce, and platinum rose 1.4% to 1,758.35 dollars, its highest price since mid-June. Palladium gained 0.9%, to $1,365.62. This is the second session of gains. Ashitha Shivprasad reported from Bengaluru, Rashmi ich and Subhranshu Sahu edited the article.
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Colombia resumes power exports to Ecuador and enables export contracts
Edwin Palma, the outgoing Energy Minister, said that Colombia would resume electricity exports to Ecuador on Wednesday. He added that the government had also enabled mechanisms for export contracts between companies of both countries. Palma, in a Tuesday post on X, said that the exports will cover more than 8% of Ecuador's demand for electricity and use about 78% total capacity of interconnection?links. Palma stated that the exports are being'restarted' to help secure the?Ecuadorian electricity system. He said that Colombia only authorized the flow after it was sure the measure wouldn't compromise the domestic energy security. This included protecting the water levels in the hydroelectric reservoirs as the country prepared for El Nino. * He said that the government has also put in place a 'conditionality for the power sector companies of the two countries to sign export contracts. This, he claimed, could help stabilize the price of the exports. Palma stated that Colombia had taken steps to allow electricity to flow across the border once again. He called on Ecuador to follow suit. Reporting by Luis Jaime Acosta, Editing by Jacqueline Wong
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Asia shares rise on tech mood shift, oil retreats
The Asian stock markets rose on Wednesday, as Wall Street reached record highs on the back of strong earnings and a renewed demand for technology. Meanwhile, hopes of progress in opening the Strait of Hormuz had a negative impact on oil prices and bond yields. South Korea's Nikkei added 3.4% to its wild swings, while Japan's Nikkei gained 3.0%. MSCI's broadest Asia-Pacific share index outside Japan rose by 1.5%. Some tech companies have benefited more than others. Even though AMD's results exceeded expectations, investors appeared to be taking profits. After the bell, shares of the chipmaker fell 9%. SpaceX, a satellite company and AI group, lost 7.5% on fears that capex expenditures were eating into its cash flow. All AI stocks have been concerned about the rising borrowing costs and the high cost of computing power. Chris Weston is the head of research for broker Pepperstone. He said that "SpaceX's ambitious investment program?means that additional capital will most likely be needed in the medium- to long-term." Investors will continue to be interested in how management finances that growth and at what cost. Nasdaq Futures fell 0.1% after the earnings results. S&P futures rose?0.2%, having reached all-time highs Tuesday. EUROSTOXX Futures rose by 0.3%. DAX Futures rose by 0.5%, and FTSE Futures increased 0.1%. OIL SLIDES BOOST BONDS Qatar's claim that mediators are making progress to end the U.S./Iran War, but without providing details, boosted sentiment. Brent crude slipped 0.4% to $79.02 per barrel, far from its peak of $102 in July. U.S. crude fell 0.5% to 75.35. The drop in oil prices has provided some relief from inflation concerns and helped boost bonds worldwide. 10-year Treasury yields are now at 4.6187% - down from the high of last week, which was 4.747%. The probability of an increase in Federal Reserve interest rates for September has also been sharply reduced from 67% to 57%. Jeff Schmid, President of the Fed Bank of Kansas City, spoke on Tuesday and called for tighter policies to help bring inflation to its 2% target. The currencies were mostly quiet. However, the New Zealand dollar fell 0.2% following data showing that unemployment reached a decade high of 5.6% during the second quarter. The euro was unchanged at $1.1532, a little below its recent six-week high of $1.1559. The dollar was slightly lower against the yen, at 157.53, with traders still threatening to intervene. U.S. Treasury secretary Scott Bessent stated that he is "sure" Bank of Japan Governor Kazuo Ueda would "do what is best" for Japan's economy. This was taken as an encouragement by markets to increase interest rates. Last week, Japan and the United States conducted a rare joint intervention to buy yens and promised to take additional action to stabilize the currency if necessary. The drop in yields has helped gold that does not pay interest to edge up by 0.1%, reaching $4,080 per ounce. (Reporting and editing by Edwina G. Gibbs; Reporting by Wayne Cole)
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Investors focus on Hormuz traffic as oil prices recover after a two-day drop
Investors waited to see whether the U.S. - Iran war was ending and if the Strait of Hormuz would be reopened. Brent crude futures rose?26 cents or 0.33% to $79.62 per barrel at 0110 GMT. U.S. West Texas Intermediate Futures rose by 0.16% or 12 cents to $75.90 per barrel. Qatar announced on Tuesday that mediators are making progress to end the conflict, which is driving down oil prices. However, Tehran has denied U.S. president Donald Trump's claim that talks have already begun. Brent closed below $80 per barrel on Tuesday for the first time since last July 13. The main sticking point seems to be whether Iran 'will continue to insist that it has some control over the waterway and whether the U.S. is going to stand firm -and refuse this outcome," analysts at IG wrote in a report. Brent ended?more that 5% lower than Monday after the comments by Qatar. This extended Monday's steep loss on hopes of an agreement being reached soon. Before the start of the war, 20% of world oil and LNG transited the Strait. Prices rose by 50% in March. Trump and Qatar's Emir, Sheikh?Tamim Bin Hamad Al Thani, discussed Tuesday efforts to narrow the differences between Washington and Tehran as well as improve prospects for a long-lasting settlement in a phone call. Trump stated on Monday that talks had begun with Tehran and Iran was facing a "last opportunity" to strike a deal. Iranian officials said that no negotiations were taking place with the U.S. Market sources reported on Tuesday that U.S. crude, gasoline, and distillate inventories increased while falling last week. They cited data from the American Petroleum Institute. On condition of anonymity, sources said that crude stocks increased by?about 2.7 million barrels during the week ending July 31. The EIA (the statistical arm of the U.S. Department of Energy) will release official numbers at 10:30 am ET. ET (1430 GMT), on Wednesday. Helen Clark (reporting; editing by Muralikumar Aantharaman).
MORNING BID EUROPE - Semis fly again while AI capex shoots to the moon
Wayne Cole gives us a look at what the future holds for European and global markets.
Asian markets followed Wall Street's record-breaking close by gaining in major semiconductor stocks. They ignored setbacks for SpaceX and AMD, which failed to meet high expectations.
The Kospi grew by 4.0%, but by recent'standards, that was a tame increase, led by SK Hynix, and Samsung. As a sign that the competition is intensifying in the memory industry, the tech giants have been reported to be evaluating the chipmaking equipment of China's Advanced Micro-Fabrication Equipment for use at their Chinese plants.
It could be a bad thing for Applied Materials, Lam Research and other companies that currently export etching tools to the United States.
SpaceX's problems seem to be a lack of cash flow. Capex increased by?over $18 billion. Nearly $16 billion was spent on AI. Analysts were concerned that the company would be burning through its cash at such an ferocious rate, it would need to return to the market to raise more funds through debt or shares.
In recent weeks, its bonds have been beaten up. On Thursday, 911.5 millions insider shares and employee stock will be available for sale. SpaceX stock was down 7.5% in after-hours trading, wiping out the gains of 9.4% made during regular trading.
AMD also lost 8.8% of its share price after-hours as its outlook and sales surpassed the Street's, but not enough to justify its 142% rise in shares so far this year.
Brent oil fell another 1.5% to $78.24 per barrel, a far cry from the 'lofty' peak of $102 in June. The decline in bonds pushed 10-year Treasury yields to 5.60%. Markets also reduced their tightening expectations, with implied odds for a September rate hike dropping to 57%.
Qatar announced on Tuesday that mediators are making progress to end 'the U.S. - Iran war', though details are hard to come by and Tehran will not confirm its participation in the talks.
Investors are concerned that the market will quickly shift to oversupply if the Strait of Hormuz opens even slightly.
In Europe, Siemens Energy, Infineon and Heineken will be reporting earnings in the near future, as well as a number of banks. U.S. earnings include DoorDash and eBay as well as?Uber. Eli Lilly, Honeywell Kraft Heinz SanDisk Western Digital?and Walt Disney.
The following are key developments that may influence the markets on Wednesday.
- Federal Reserve Board Governor Lisa Cook speaks
Data includes EU S&P Service PMIs for the month of July, EU Producer Prices for June, US Services ISM, S&P Services PMI and ADP Employment for July
(source: Reuters)