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Oil gains amid Middle East supply worries amid US-Iran conflict
The oil prices rose on Thursday, mainly due to concerns that the impasse between the 'U.S. and Israel war against Iran' will continue disrupting supply from the Middle East region which is a major producer of oil. Brent crude futures were up 26 cents or 0.28% to $91.87 a barge by 0439 GMT. U.S. West Texas Intermediate futures rose 17 cents to $86.50 a barge. The more active October WTI contract rose 12 cents or 0.13% to $89.91. Brent and WTI benchmarks both gained on Thursday for the fifth consecutive session, after settling on Wednesday at their highest level since July 24. Later on Thursday, the September WTI contract will expire. "Oil prices remain elevated, as the market continues to be supported by attacks in the Middle East, but it lacks new momentum without a significant escalation," stated Hiroyuki Kikukawa. Kikukawa is the chief strategist at Nissan Securities Investment. He added that the market was "likely" to continue its gradual upward trend, given the uncertainty surrounding peace talks with the United Arab Emirates and tensions between Oman, Iran and United Arab Emirates. The UAE's decision suspending all financial and business transactions with Iran has brought the fraught relationship between Iran and the largest Gulf Arab oil producer back into the spotlight. Donald Trump, the U.S. president, said on Tuesday that no talks are taking place with Iran and that the Strait of Hormuz is open. Iran said, however, that the waterway was still closed. According to the latest shipping data, the Strait of Hormuz saw no change in the volume of shipping on Wednesday compared to the day before. This is because the talks between Iran and the United States about ending the war remained at a standstill. Prior to the beginning of the war on February 28, about one-fifth the global consumption was transported through the waterway. Current flows are far below the pre-war levels. The war?has also impacted on the supply of refined gasoline and fuels, resulting in a reduction of crude oil available to refiners. The Energy Information Administration reported on Wednesday that U.S. stocks of distillate fuels, including diesel and heating oil fell for the third consecutive week. The crude oil inventories increased by 4.4m barrels during the week ending August 14 compared to estimates of a 600k-barrel draw. (Reporting from Yuka Obayashi, Tokyo; Siyi Liu, Singapore; Editing and production by Tom Hogue and Christian Schmollinger).
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Fortescue hires a law firm to investigate allegations of sexual harassment against senior executives
Gus Pichot, the company's energy chief, said that a senior executive who is under investigation for sexual harassment and bullying continues to work at Fortescue. Fortescue hired MinterEllison, a law firm to investigate allegations that the company takes "extremely serious", it said in a press release. The Australian Financial Review first published the allegations against the senior executive who was not named earlier in the month. Pichot stated on a earnings call that "we have taken extensive legal and governance external advice, so we are quite confident that we are following the right process." In 2021, a state investigation was launched after sexual harassment at West Australian mining sites became a persistent problem. Fortescue Australia, the third largest miner in Australia, reported on Thursday a drop of 20% to 98 "psychosocial", which includes sexual harassment, ethical issues, and other incidents. The company with 16,154 employees said that 11 of them were dismissed for violating its code of conduct in relation to sexual harassment and discrimination. The company found 13 instances of inappropriate sexual contact, ten of sexual harassment, and one sexual assault. Fortescue received a class-action lawsuit in July, alleging misconduct at work, including sexual discrimination and harassment. Potential damages were not specified. The lawsuit was filed by the law firm JGA Saddler. They also brought similar class actions against Rio Tinto in 2024. These cases are still making their way through the courts. BHP's report for the year released this week shows that it terminated 109 workers for sexual harassment, and 22 for racial abuse. In the 2026 fiscal year, it saw a drop of 11% in reports of sexual harassment and a drop by 17% in reports of racial abuse. The top global mining company has 84.309 employees and contract workers worldwide. Rio Tinto reports its data on a calendar-year basis. In 2025, the company reported a 24% increase in 702 incidents to their care hub. This centre supports employees who are facing a 'variety of disrespectful and harmful workplace behaviors, including harassment. WorkSafe, the health and safety regulator in Western Australia, logged 28 incidents of sexual assaults and harassment in the first half of this year, according to the data provided. This is down from 113 in the entire last year, and 421 in 2022. The regulator attributed this drop to the dedicated team of experts that increased their response capacity after the state's investigation into sexual harassment. (Reporting by Melanie Burton; Editing by Sonali Paul)
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How long can the Bessent last?
Rae Wee gives us a look at what the European and global markets will be like today. The markets were calmer on Thursday after the U.S. Treasury put a stop to an ugly bond selloff that occurred this week. However, the respite could be short-lived. U.S. - Treasury yields in Asia were stable, while Japanese government bonds yields dropped after the U.S. Treasury announced that it would double the buyback size for 10- to 30 year Treasury debt securities up to at least 4 billion dollars per operation. Scott Bessent, the U.S. Treasury secretary, intervened again in the currency markets on August 1, joining Japan to stop the yen’s?slide. The sell-off of Treasuries wasn't without cause. The total U.S. government debt is now over $40 trillion, a record high. Investors around the world are also demanding higher compensations to cover the massive borrowing requirements of developed economies. Analysts warn that Bessent’s willingness to interfere in market forces may prove costly over time. Data showed that, on other markets, Australian employment fell unexpectedly in July, and the unemployment rate?hit its highest level since late 2021. This data added to signs of a cooling labor market, and eased pressure for another rate increase. The markets are predicting that the Reserve Bank of Australia will not raise rates next month. However, a decision by the end of this year is still viewed as a toss of the coin, and much depends on the inflation outcome. Sweden's Riksbank will keep its policy rate at 1.75%, despite the mild headline inflation due to a fossil fuel-free energy system. The following are key developments that may influence the markets on Thursday. Germany Producer Prices (July). Reopening in France of auctions for government debt with terms of 3, 5, 6, 8, 17, and 21 years - Riksbank rate decision (Editing by Jamie Freed)
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The LME copper inventory has increased to $14,000 due to the weakening dollar
Copper prices fell on Thursday but remained?above $14,000 per metric ton, as increased inventories at the London Metal Exchange (LME), eased supply concerns, and countered the?support of sharp drops in the dollar. The benchmark three-month copper price on the LME fell 0.04% to $14,043.5 per ton at 0300 GMT. The Shanghai Futures Exchange's most traded copper contract edged up 0.15% to 107140 yuan (15,934.20 USD) per ton. The LME copper stocks rose another 12,425 tons on Wednesday. This alleviated concerns about supply caused by outflows into the?U.S. Warehouses are being prepared in anticipation of a possible tariff on refined copper. Total LME - copper stocks At 235,975 tonnes, the number is 11% higher than a week ago, but it's still 40% less than three months earlier. Dollar fell to its lowest level in three months, as FX investors digested the measures announced by U.S. Treasury Department for helping calm the bond markets. Copper recovered from its two-week low Wednesday as a result of the decline. The dollar is usually cheaper to buyers who use other currencies. Aluminium prices fell elsewhere after reports that a still-under-negotiation trade deal would reduce the top line tariffs on the United States imports of light metal from Canada to 25%. After the U.S. tariffs were increased, some producers began to divert volume to Europe. LME aluminum was down by 0.65% while the SHFE metal was down by 0.7%. Nickel lost 0.69%, tin gained 0.41%, and zinc fell 0.05%. Nickel gained 0.84%, tin gained 1.466% and lead gained 0.28%.
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Gold falls after a 2-month high on US Treasury move
Gold prices fell on Thursday as investors took profits following a surprise announcement by the U.S. Treasury to support long-term bonds with liquidity. This announcement weakened dollar values and drove Treasury yields down. By 0331 GMT, spot gold had fallen 0.6% to $4495.69 an ounce. It was earlier at $4,525.79 - its highest price since June 2 - after a more 4% increase on Wednesday. U.S. Gold futures rose 0.2% to $4.553.30. Treasury Department announced Wednesday that it would double its liquidity to support buybacks of longer-dated bonds and notes. This came after investors demanded higher returns due to the increased inflationary risk resulting from the U.S. and Israeli war against Iran. The U.S. Dollar was hovering near three-month lows. Ilya Spirak, global macro head at Tastylive said: "There's going to be a certain amount of digestion in the markets after such a large move." The $4,400-$4,500 price range is now cleared. The upward momentum will likely continue if prices remain above this range. The total U.S. outstanding debt topped $40 trillion, a new record, causing fresh warnings of fiscal crisis. Edward Meir is a Marex analyst. He said that the growing concern over the financial stability of markets with debt and borrowing, and the inability to reduce spending on the fiscal side was very bullish for the gold. Minutes of the Federal Reserve meeting on last month showed that "several policymakers" were ready to increase interest rates. According to the CME FedWatch Tool, traders are currently pricing in 67% of a Fed hold and 33% of a rate increase in September. Gold is often seen as a hedge against inflation. However, rising interest rates can reduce the appeal of non-yielding gold. Silver spot gained 0.2% per ounce to $67.07, while platinum fell 1.3% to 1,802.29 and palladium dropped 0.2% to 1 328.06.
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Investors continue to assess the US-Iran War outlook as oil prices remain stable
Investors assessed the prospects for the 'U.S.-Iran War and the safety of shipping through the Strait of Hormuz in the early trading on Thursday. Brent crude futures?for October delivery?rose?25 cents?or?0.3%?to $91.87 per barrel at 0037 GMT?while U.S. West Texas intermediate crude futures?for September?slipped 2 cents?to $85.81 per barrel? The more active WTI contract for October gained 14 cents or 0.2% to $84.53. Brent and WTI benchmarks both gained for a fourth consecutive session on Wednesday. They settled at their highest level since July 24. Later on Thursday, the?September WTI contracts expire. "Oil prices remain elevated, as the market is supported by sporadic Middle East attacks, but lacks new momentum without a significant escalation," stated?Hiroyuki Kikukawa. Chief strategist at Nissan Securities Investment, an arm of?Nissan Securities. He added that the market was likely to "maintain an upward trend due to uncertainty surrounding peace talks, and tensions between the United Arab Emirates (UAE), Oman, and Iran." The UAE's decision suspending all financial and economic transaction with Iran until further notification has brought the fraught relationship between Iran and the major Gulf Arab oil producer back into the spotlight. Donald Trump, the U.S. president, said on Tuesday that no talks with Iran were being held and that the Strait of Hormuz remained open. Iran said, on the other hand, that the waterway was still closed. Data showed that shipping through the Strait of Hormuz was slowed on Wednesday. Most shipowners avoided this key waterway due to a lack of clarity on the reopening of the blockade imposed during the Iran War. The Energy Information Administration reported on Wednesday that crude and gasoline inventories in the U.S. rose last week and distillate stocks fell. Crude inventories increased by 4.4m barrels during the week ending August 14. This was a far cry from estimates of a 600k-barrel drop. (Reporting and editing by Tom Hogue; Yuka Obayashi)
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Mayor of Kyiv says that Russian missiles have killed at least three people in Kyiv.
On Telegram, Vitali Klitschko, the mayor of Kyiv, said that Russian missiles had killed three people and injured twenty others in the Ukrainian capital early Thursday morning. The missiles damaged buildings, and some parts were left without electricity. Klitschko said that a fire started 'after Russia attacked upper floors of nine-story residential buildings. People were trapped at another location as Moscow struck non-residential, apartment, warehouse, and a children’s hospital. Witnesses reported hearing "more than 12 explosions". A local official confirmed on Telegram that another person had been killed in the area surrounding the Ukrainian capital. Russia and Ukraine have been exchanging attacks on a daily basis since Russia invaded Ukraine in February 2022. Diplomatic efforts by the United States and Europe to achieve a ceasefire have failed so far. Volodymyr Zelenskiy, the president of Ukraine, said that Ukraine has presented proposals to U.S. negotiators Steve Witkoff, and Jared Kushner for a plan on how to 'end the war. Witkoff, Kushner and their delegation were last seen in Moscow at the end of January and have yet to visit Kyiv. Maria Zakharova told Izvestia that Russia had not received any specific proposals regarding possible meetings with U.S. delegates, but Moscow was ready to set up a meeting on short notice. Reporting by Daniel Flynn, Jekaterina Glubkova and Stephen Coates; Editing by Chris Reese.
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Fortescue's annual profit increases on record iron ore shipment and higher prices
Fortescue, an Australian mining company, reported a higher profit for the year on Thursday. This was largely due to a rise in iron ore shipments and a stronger realised price. The company announced a final payout of 46 Australian cents for each share. This is down from 60 Australian cents a year earlier. The miner declared its lowest final dividend?since fiscal 2018 with a payout of?65% on fiscal 2026's underlying net profit. Fortescue met market expectations for its earnings despite increased Hematite C1 costs due to higher diesel prices. The fourth largest 'iron ore miner in the world reported a 2.8% increase in its underlying net profit for the year ending?June 30. This is in line with Visible Alpha's estimate of $3.52billion and higher than the $3.37billion reported one year ago. The miner's iron ore was sold for $90.7 per dry-metric ton, compared to $84.8 per dmt one year ago. Reporting by Shivangi lahiri in Bengaluru and Nichiket sunil; editing by Shinjini ganguli
Global yields drop after US Treasury increases debt buybacks
The dollar fell and gold rose on Wednesday after the U.S. Treasury Department announced a?increase in liquidity support for securities with longer maturities. This was following a widespread sell-off that was fueled by fears about the swelling of sovereign debt. The U.S. Treasury Department announced that it would increase the liquidity support for securities with nominal coupons older than two years to $4 billion from $2 billion.
The yields on long-dated U.S. government bonds fell as much as 10 basis point, which also impacted the yields of European government bonds. U.S. Long Bonds hit their highest level in almost 20 years, Tuesday, with a rate of 5.34%. This reflects growing concerns over inflation and debt.
Michael Lorizio is the head of U.S. Rates and Mortgage Trading at Manulife Investment Management, Boston.
The Treasury started the buyback program on?May 20, 2024, to improve liquidity in the $32 trillion Treasury Market. Older securities that are traded less often, or "off-the-run" securities have the lowest demand.
When bond prices drop, yields increase. Since long-end sovereign rates are used to price nearly all other asset classes, including mortgages, a sharp increase in yields poses a greater risk for the economy.
Stocks rose due to the drop in yields. The Nasdaq Composite rose by 0.31%. The S&P 500 gained 0.41%. And the Dow Jones Industrial Average grew by 0.29%. The MSCI index of global stocks increased by 0.06%.
The retreat in yields has weighed on the 'dollar, but gold and cryptocurrency have risen sharply. This divergence reflects the growing concern over the trajectory of U.S. government debt. Investors are often driven to gold and other hard assets by concerns about escalating government debt.
The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.75%, while the euro rose by 0.79%, reaching $1.1666. The dollar fell 0.73% against the Japanese yen to 158.46.
Bitcoin rose 5.63%, to $68,191.56, and ethereum jumped 9.23%, to $2.088.95.
Hopes for peace in Iran are fading. Oil prices rose as the prospects of an agreement to end the Middle East conflict receded.
U.S. crude climbed 1.78%, to $86.45 per barrel. Brent increased to $92.23 per barrel. This is a rise of 1.32% for the day. The cost of borrowing long-term from the U.S. for Germany and Japan has risen as investors become more concerned about inflation and the ballooning government debt.
German and French long-term bond yields fell on the day, after reaching their highest levels in 15 and 18 year respectively.
Jeremy Stretch, CIBC's head of G10 strategy, stated that "we have seen the long end of bond market selling off in recent days and it could be problematic to play through other asset classes." The Treasury Secretary has clearly made changes to address these risks. The dollar is now cheaper because the yields on 30-year Treasury bills have fallen sharply.
The rise in Japan's 10-year benchmark bond yield to 3% is a warning for global debt markets, which have relied for years on low Japanese interest rates to drive a constant flow?of?Japanese investments abroad. The minutes of the Federal Reserve meeting in July, released on Wednesday, showed that the concern over inflation had grown. "Several" policymakers were ready to raise interest rates. "Many" said a rise in borrowing costs was needed if the inflation rate did not fall to the 2% target set by the U.S. Central Bank. The Federal Reserve left interest rates unchanged last month. However, Chairman Kevin Warsh unnerved the markets by giving few clues as to how policymakers would respond to persistent inflation.
(source: Reuters)