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• Stocks fall, bond yields increase; Fed maintains rates but projects hike later this year

  The Federal Reserve kept the benchmark rate unchanged and officials now expect to raise borrowing costs later this year due to rising inflation fears. Kevin Warsh, the Fed's new chief, took over last month and opened a whole new era. In his first press conference, he said that the forward guidance wasn't "well-suited" to current economic conditions. Officials projected that the policy interest rate would increase by a quarter percentage point at the end of the year. The rate has been in the range of 3.50-3.75 since December last year. A revised policy statement did away with language that indicated the possibility of "further reductions" in borrowing costs for this year. According to CME Group’s FedWatch tool, after the meeting, the short-term U.S. rate futures priced in a higher probability that the Fed would raise rates as soon as September, rather than keep them at their current level. Kay Haigh is global head of Fixed Income and Liquidity Solutions at Goldman Sachs Asset Management, New York. She said that today's meeting confirmed the Fed's recent shift to a hawkish stance was not only about higher energy prices. "Despite recent oil price declines, half of members of the FOMC are expecting rate hikes this year due to strong inflation and labor market data." The 10-year Treasury yield rose 3 basis 'points to 4.461%, and the 2-year Treasury yield, which is most sensitive to market expectations of Fed rate actions, jumped 16 basis points to 4.207%. This was its highest level since February 2025. Treasury yields had been little changed in the morning. The Dow Jones Industrial Average dropped 507.12 points or 0.98% to 51,492.55, while the S&P 500 lost 91.25 or 1.21% to 7,420.10, and the Nasdaq Composite declined 354.69 or 1.34% to 26,021.66. SpaceX shares are down for the very first time since their debut on the market last Friday. The stock fell 4.9%. MSCI's global index of stocks fell 7.18 points or 0.64% to 1,121.12. The pan-European STOXX 600 ended the day up 0.52%. As with the Fed, the Bank of England will meet on Thursday, and no policy change is expected. Instead, the focus will be on the tone of the policymakers' comments. Following the Fed announcement, the?dollar gained strength across the board. The dollar index (which measures the greenback versus a basket currencies, including the yen, and the euro) rose by 0.5% to reach 100.01, its highest level in almost a week. The euro dropped 0.5% to $1.1549. The oil prices rose. U.S. president Donald Trump defended the interim agreement he made with Iran. He said it had prevented a global economic disaster, but warned he would launch new attacks if Tehran did not honour its commitments. Brent crude futures rose 59 cents or 0.75% to settle at $79.55 per barrel. U.S. West Texas Intermediate increased 74 cents or 0.97% to $76.79. Recent drops in oil prices have begun to calm fears of an economic slowdown, especially in Europe which imports energy. International Energy Agency (IEA)?said that the oil market would move into a significant surplus in 2027, after recovering from the Strait of Hormuz closure. Gold spot fell by 1.71%, to $4255.97 per ounce. Investors digested the data that showed U.S. Retail Sales jumped by 0.9% in May after a downwardly-revised 0.4% increase in April.

• As traders await Warsh, oil prices drop on Iran's supply prospects

  Crude prices falling on news that Iranian oil may soon reach global markets sparked a fall in bond yields on Wednesday. Stocks and currencies were quieter before Kevin Warsh's first meeting as Federal Reserve Chair. Brent crude 'futures' plunged below $80, the cheapest since March when the 'U.S. - Iran conflict began. According to a senior U.S. Official, the U.S. has agreed to waive sanctions against Iranian oil as part of the agreement that ends the war. This could lead millions of barrels more of Iranian oil being supplied. U.S. bonds yields dropped and rates in Asia followed, with 10-year Japanese rates down 1.5 basis points to 2.63 percent and 10-year Australian rates down almost 5 basis points to 4.78 percent. Kim Fustier is a senior oil and Gas analyst at HSBC. The bank believes it will be until the 'end of September before the markets price in a complete normalisation of the?flow of the Hormuz. The U.S. and Iran agreement is due to be signed this Friday. However, few details have been confirmed. A three-month blockade of the 'Strait of Hormuz' has drained the oil reserves of the United States, which are now at their lowest level since 1983. Overnight, Wall Street investors reduced crowded bets made on semiconductor and tech stocks, bringing the Nasdaq index down by 1.15%. Meanwhile, the Dow reached a new record, thanks to a rise in financial and industrial stocks. Futures in Asia were slightly positive, but chip-heavy markets like Taiwan and South Korea slid lower. MSCI's broadest Asia-Pacific share index outside Japan also fell by about 0.3%. Japan's Nikkei rose 0.4%. Hong Kong and Shanghai stock markets were largely steady. FED?ON HOLD WARSH IN FOCUS The dollar has been held in a state of anticipation as traders wait to see if Warsh can balance his dovish presidency with the expectations of the markets for a rise this year. The euro was only slightly firmer?this past week to hover around $1.16. The expected rate increase in Japan on Tuesday failed to lift the Japanese yen. However, the downside was protected due to the possibility of an official intervention. The Fed funds rate is unlikely to change, so focus on the committee's projections and the press conference. In March, most members predicted that rates would be cut this year. "We expect Warsh will downplay 'forward guidance' and instead advocate patience on policy rate?and inflation – leaning dovish in relation to market pricing," said Xiao Cui senior economist at Pictet Wealth Management. If Warsh does not oppose market pricing and embraces the possibility for rate increases, it could be perceived as hawkish. (Reporting and editing by Jacqueline Wong; Tom Westbrook)

• Stocks soar as SpaceX fever boosts technology; the yen remains flat following BOJ rate hikes

  The global?stocks rose on Tuesday, following a rally on Monday on the news of a U.S. - Iran peace deal. Meanwhile, the dollar remained steady against the yen after the Bank of Japan increased rates to a '31-year-high. The markets have taken a more measured approach to Gulf developments, as the initial excitement surrounding the preliminary agreement reached between Washington and Tehran has begun to fade. Investors were encouraged by the blockbuster IPO of SpaceX, which took place late last week. Its shares rose nearly 20% on the following Monday and pushed the market value of the space exploration firm past $2 trillion. In premarket trading, they were up 10.7% on Tuesday. Nasdaq Futures rose by 0.1% while S&P500 e-mini Futures were flat. After the Japanese central banks voted 7-1 in favor of raising its benchmark policy rates to 1% levels last seen in 1995, the Nikkei 225 reached the 70,000 level for the first time. The yen remained flat at 160.31 against the dollar. The STOXX 600 index in Europe rose 0.6% and hovered near the record high of Monday. This was led by gains made by Schneider Electric, a company that caters to data centers, and ASML. Nvidia, world's largest maker of AI chips, shocked investors by tapping bond markets for 25 billion dollars. The company said that the money would be used to fund general corporate needs and the debt sale would serve as a benchmark for future issuance. Nvidia's shares fell a little in premarket trade. Mitch Reznick is the group head of Fixed Income at Federated Hermes. He said: "We're one-step closer to codifying the optimism of this market." He added that the key question is how much systemic inflation we have, its impact on consumers, and whether it has spread throughout the economy. The price of oil fell another 2.2%, to a low of just over $81 per barrel. Shippers in Asia and Europe have said that it could take several weeks for them to rebuild their confidence in returning transit through the Strait of Hormuz. According to ING's Warren Patterson, oil consumers are likely to scramble to replenish their inventories that have been depleted during the war. This means prices will not be able to drop much in the short term. The announcement by U.S. president Donald Trump of a nuclear deal with Iran on Monday brought relief to investors, but also put Washington on a collision course with Israel. Westpac analysts said in a research note that while the deal was an important diplomatic breakthrough, it would be tested over time. Many sticking points were left for future negotiations, such as the fate of Iran’s nuclear program. The dollar index, which measures the U.S. dollar against six other currencies, was stable at around 99.6. The euro increased by 0.1%, to $1.1605, and the pound traded at $1.342, two days before a Bank of England meeting, where it is unlikely that monetary policy will be changed. The Australian dollar is little changed after Reserve Bank of Australia held interest rates at the same level as expected. Its currency was 0.4% weaker, trading at $0.707. (Additional reporting by Gregor Stuart Hunter in Singapore; Editing by Shri Navaratnam and Jacqueline Wong) The yield on U.S. Treasury notes 10-years fell 2 basis points, to 4.45%. Gold, which is sensitive to U.S. expectations of interest rates, increased 0.9%, to $4,344 per ounce. (Gregor Stuart Hunter contributed additional reporting from Singapore; Shri Navaratnam, Jacqueline Wong and Jacqueline Navaratnam edited the article.)

• BOJ to make decision on Iran deal in the near future

  Asian stocks fell on Tuesday, as investors focused on 'central bank decisions. This included an expected 'rate hike by the Bank of Japan. The markets have taken a more measured approach to Gulf developments, as the initial excitement surrounding the preliminary agreement reached between Washington and Tehran has begun to fade. Brent crude futures rose 0.1% to $83,25 per barrel, reflecting the cautious approach. Shipping companies in Asia and Europe say it could take several weeks to rebuild confidence that the Strait of Hormuz will be open for business again. MSCI's broadest Asia-Pacific index outside Japan has lost gains and is now trading flat. Stocks in Hong Kong are weighing down the benchmark due to weaker-than-expected data on retail sales from China, as well as fixed-asset investments. Japan's Nikkei was down by 0.3% from its record high, while S&P 500 futures fell 0.1%. Although the announcement by Donald Trump of a nuclear deal with Iran on Monday brought relief to investors, it also put Washington on a collision course with Israel. Westpac analysts 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. WALL STREET RALLY 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 major central banks decisions.?Including the Bank of Japan which is expected Tuesday to increase interest rates to their highest level in 31 years. After the meeting, Deputy Governor Shinichi Uchida is scheduled to hold a briefing for the media. Governor Kazuo Ueda will miss this because he's undergoing medical treatments. 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 to base his press conference and the reasoning he uses for the rate hike decision on the Governor Ueda speech of June 3rd." "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. Dollar Index, which measures the strength of the "greenback" against a basket six currencies, has been firmly anchored at 99.69. It is still firmly in the same tight trading channel that it has been in for the last three sessions. The yield of the 10-year Treasury bond in the United States was up by 0.2 basis points to 4.469%. Gold rose 0.1% to $4,311.12 per ounce. Bitcoin was down by 0.3%, at $66,281.99. Ether fell 1.3%, to $1,791.39. (Reporting and editing by Gregor Stuart Hunter, Shri Navaratnam, and Jamie Freed).

• 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.)

• S&P 500 drops, yields increase following Fed announcement

  On 'Wednesday, major stock indexes declined, bond yields rose and the U.S. dollar extended gains against the euro after the Federal Reserve kept the benchmark interest rates steady. New projections revealed that officials expect to raise borrowing costs in the second half of this year due to rising inflation fears. This was the first rate announcement under new Fed chairman Kevin Warsh. As was widely anticipated, there is a good chance that rates will not be cut in this year. "This further confirms it," said Ryan Detrick. Chief?market strategist for Carson Group, Omaha. Detrick asked, "Now we have to ask ourselves: Will there be a real hike this year or will the Fed take a break for the remainder of the year?" Treasury yields had not changed much earlier in the morning. The yield on the benchmark U.S. 10 year notes last increased by 3.91 basis points to 4.467% from?4.428% on Tuesday. The Dow Jones Industrial Average fell by 525.67, or 1.00 percent, to 51.474.20. The S&P 500 dropped by 96.15, or 1.28 percent, to 7,415.20. And the Nasdaq Composite declined 382.32 points or 1.54%, to 25,994.03. SpaceX shares are down for the very first time since Friday, when the stock was listed. Last week, the stock fell 1.8%. MSCI's index of global stocks fell by 4.04 points or 0.36% to 1,124.26. The pan-European STOXX 600 ended with a gain of 0.52%. The dollar index (which measures the greenback versus a basket of currencies, including the yen, and the euro) rose by 0.44%, while the euro fell 0.48% to $1.1551. The price of oil rose after U.S. president Donald Trump stated that his new ceasefire deal with Iran is not final and he can resume the war at any time if he's unsatisfied. Recent drops in oil prices have begun to calm fears of an economic slowdown, especially in Europe which imports energy. International Energy Agency stated that the oil market would move into a significant surplus by 2027 after recovering from the Strait of Hormuz closure.

• Nippon Steel's US Steel earnings are boosted by a strong American steel market

  Nippon Steel is the world's third largest steelmaker. Vice Chairman Takahiro Mori, the vice chairman of U.S. Steel, said that he expects the American steel market to be buoyant. This is supported by import tariffs and resilient consumer demand. "We're confident that the U.S. "We are confident that?U.S. He predicted that U.S. Steel will generate a profit of between 300 billion and 400 billion yen per year in the long term. Mori described U.S. market conditions as favourable. Hot-rolled steel sheets are priced at more than $1,200 per ton. This is double what they cost in Asia. U.S. steel reopened an Illinois blast furnace that had been idle in March to take advantage of the favorable pricing environment. It is now operating it at full capacity. His comments follow a year after Nippon Steel completed the $14.9 billion purchase of U.S. Steel, following an 18-month battle in Washington over political and regulatory issues. Mori stated that about 100 Nippon Steel employees seconded to Japan are working on operational improvement initiatives. These initiatives help boost yields and create synergies. Mori said that U.S. Steel has approved about one-third the $11 billion Nippon Steel investment package through 2028. Returns are expected to grow to $3 billion per year by 2035. Mori acknowledged the risks of inflation-driven costs pressures and labour shortages, as projects compete to attract workers. But he said that?U.S. The government has not interfered with management decisions since the deal closed, even though it holds a golden stake. Mori stated that Nippon Steel will continue to pursue overseas growth, "focusing on the U.S.A., India Thailand and Europe." Mori stated that the company aims to increase its overseas profit to 500 billion yen (nearly five times fiscal 2025 level) by 2030. Mori, the person who led negotiations for U.S. Steel's acquisition, stated that global structural changes had made it more important for overseas companies to establish relationships with government officials, and align their investments and operations with industrial policies.

• Oil and stocks are higher following recent losses.

  The U.S. Dollar and major stock indexes gained on 'Wednesday, ahead of Kevin Warsh making his debut as Federal Reserve Chair. Oil prices also rose after doubts arose over the U.S. Iran peace deal. At the first Fed meeting, which will be chaired Warsh, the Fed is expected hold the interest rate steady. A new policy statement as well as economic projections are likely to reflect the growing concern over the inflation caused by the Iran War even after the recent peace agreement. In March, most committee members projected that they would cut rates. Adam Sarhan of 50 Park Investments, New York said: "This is Warsh’s first time in the Fed chair. There's a great deal of anticipation not only on what he'll do today... but also his communication." Donald Trump, the U.S. president, said that his new ceasefire with Iran was not final. He could resume war if unsatisfied. Israel has launched new airstrikes on Lebanon. Prices of oil rose this week after dropping earlier in the week. Prices had started to lower fears of an economic slowdown, especially in Europe which imports energy. According to the?International Energy Agency, the oil market will move into a significant surplus in 2027 once it recovers from the Strait of Hormuz closure. U.S. crude climbed 0.85% to $76.70 per barrel. Brent rose to $79,51 per barrel. This is a 0.7% increase on the day. The Dow Jones Industrial Average rose by 202.89, or 0.39 percent, to 52.202.56. The S&P 500 gained 6.80 points or 0.09% to 7,518.15 while the Nasdaq Composite grew by 17.05 points or 0.07% to 26,393.40. The MSCI index of stocks around the world rose by 2.81 points or 0.25 percent to 1,131.11. The pan-European STOXX 600 rose by 0.52%. BMW shares fell after the German carmaker slashed their 2026 outlook. They cited a 'downturn in China' and the U.S./Israeli war against Iran. SpaceX shares are down for the first time since the stock debuted on the market last Friday. Last week, the stock fell 2.3%. DOLLAR HOLDS FIRMS The dollar rose in anticipation of the comments Warsh would make. The dollar index (which measures the greenback versus a basket including the yen, the euro and other currencies) rose by 0.14%, to 99.69. Meanwhile, the euro fell 0.14%, to $1.1591. The dollar fell 0.16% against the Japanese yen to 160.19. The yield on the benchmark 10-year U.S.?notes increased 0.75 basis points to 4.436% from?4.428% at late Tuesday. The euro zone government bond market rallied for a fifth consecutive day on the back of lowered inflation expectations. This is their biggest rally since February. German 10-year yields, which are used as a benchmark in the Eurozone, fell to their lowest level since early April. (Reporting from Caroline Valetkevitch and Danilo Maasi in New York; additional reporting by Tom Westbrook, Editing by Thomas Derpinghaus and Kirsty Donovan; Nia Williams and Thomas Derpinghaus)

• Trump Administration pivots towards buying stakes of critical sectors

  As part of its efforts to reduce its dependence on China, the Trump administration is stepping up efforts to secure U.S. supplies chains for essential minerals and semiconductors. Federal grants are being converted into equity stakes within companies. The U.S. Department of Commerce awarded $500 million on Wednesday to SandboxAQ, a company backed by Nvidia. This money will be used to develop new materials to make chips. The following companies are linked to the strategic investments push: SANDBOXAQ In exchange for a small stake in the company, the U.S. Commerce Department awarded $500 million to SandboxAQ, a Nvidia-backed company. The money was used to develop new materials?for semiconductor manufacture. SandboxAQ didn't disclose the size of government stake, but said it did not include voting rights or board seats. If SandboxAQ develops materials in four focus areas, and licenses the formulas to industrial partners for mass-production, the department will receive royalty payments. QUANTUM COMPUTING COMPANIES The Trump administration is investing $1 billion in IBM to launch Anderon, America's first dedicated facility for manufacturing quantum chips. IBM will invest $1 billion into Anderon. The government did not reveal the stake that it holds in Anderon. - GlobalFoundries The U.S. is investing $375 million to help accelerate the development of quantum technology solutions. The government has agreed to invest an equity stake in the company of approximately 1%. - D-Wave, Rigetti Computing, Infleqtion , Atom Computing, PsiQuantum, Quantinuum The Trump administration is investing $100 million in each company to help?solve key technical obstacles that have slowed down the development of powerful quantum computers. They will also take minority equity stakes, but not control. Diraq The government will take a stake in the company in exchange for funding of up to 38 million dollars to help develop and scale up quantum computing technology. USA RARE EARTH Project: rare earth mine to magnet supply chain Sources familiar with the situation said that the Trump administration would take a 10% stake as part of a debt-and equity investment package. Details:?USA Rare Earth is building an integrated U.S. Rare Earth and Magnet Production Chain supported by $1.6 Billion in proposed CHIPS Act Funding. Strategic Value: This effort aims to increase U.S. rare-earth processing capability and strengthen domestic supply chain in critical minerals. KOREA ZINC Stake purchased: around 10% Project: $7.4 billion smelter in Tennessee Details: A joint venture between U.S. and Korean partners will build a $7.4 billion smelter for Korea Zinc in Tennessee. The U.S. Department of Defense holds a 40% stake, and the Commerce Department provides $210 million in subsidies through the CHIPS Act. Korea Zinc will distribute $1.9 billion in new shares to the JV and strategic investors from the United States, giving them about 10% of the company. The JV and strategic investors in the U.S. will receive about 10% of the new shares, worth $1.9? The remainder $5.5 billion will be derived from $4.7 The remaining $5.5 billion will come from $4.7? Construction will begin in 2026 with phased operation starting in 2029. Strategic Value: This project will strengthen U.S. supply chain and reduce reliance on China. China dominates the global supply of critical minerals and has recently restricted antimony and Germanium exports to the United States. TRILOGY METALS Investment includes warrants for an additional 7.5% Project: Upper Kobuk Mineral Projects in Alaska. A JV between Trilogy Metals, an Australian miner South32 and Trilogy Metals. Details: The White House is investing approximately $35.6 million to develop critical mineral resources in the UKMP located in Alaska’s Ambler mining district. Trump signed a second executive order that directed his administration to allow an access road into the Ambler Mining District. Ambler Mining District is a mineral-rich area that has copper, lead and zinc deposits. CRITICAL METALS The stake under discussion is approximately 8% Project: Tanbreez rare earths deposit, Greenland Four people with knowledge of the discussions said that Trump administration officials had discussed taking a stake on Critical Metals. Washington would gain a direct stake in the Greenland rare earths project, which is the Arctic territory Trump had suggested buying. LITHIUM AMERICAS Stakes acquired: 5% of parent company and 5% of the joint venture with General Motors, Thacker Pass Project: The lithium mine at Thacker Pass, Nevada Strategic Value: This project is seen as an important part of Washington’s efforts to increase U.S. lithium production, a metal that can be used to produce batteries for electric cars and other electronic devices. MP?MATERIALS Stake purchased: about 15% Project: Mountain Pass Rare Earth Mine,?California MP operates the sole U.S. rare-earths mine, and is working on boosting domestic processing and magnet manufacturing. The U.S. Department of Defense is the largest shareholder of Las Vegas-based MP. This will be Washington's highest-profile investment in the vital minerals sector to date. INTEL CORP Stake purchased: 9.9% Strategic Value: Intel will use the investment to expand its advanced manufacturing capabilities in the U.S. and strengthen supply chain security. Reporting by Arunima Kumna, Vallari Srivastava and Sumit Saha in Bengaluru, and editing by Maju Samuel, Anil D'Silva and Shilpa Majumdar.

• Why tropical commodities are exposed to a strong El Nino

  Forecasters predict that a strong El Nino pattern will develop in the second part of the year. This pattern is expected to boost temperatures, disrupt?rainfall, and pose risks to crops around the world. What is El Nino? Why are soft commodities, or those grown in tropical areas, particularly vulnerable? EL NINO El Nino occurs when trade winds weaken, causing a periodic increase in sea surface temperature. El Nino occurs in nature every two to seven year and lasts between nine and twelve months. Weather patterns typically result in hotter temperatures around the world, droughts in some regions, such as Australia, South and Southeast Asia and Southern Africa, but heavy rain in others, including southern South America and United States. Last week, the U.S. National Oceanic and Atmospheric Administration announced that El Nino had arrived. It also said that the weather pattern will intensify with a 63% probability of a "super El Nino", or a very powerful El Nino, heading into 2027. El Nino's dryness, heat and excess rains will be a major blow to farmers who are already struggling with price shocks for diesel and fertilisers due to the?U.S./Israeli war against Iran. Soft commodities have seen consistent price increases during previous El Nino episodes. According to WisdomTree, every strong El Nino over the past 55 has led to a reduction in cocoa production. West Africa, the top cocoa-growing region, was hit with double its usual rainfall during El Nino. This left trees vulnerable to a fungus disease. In 2024 the weather pattern reversed and West Africa experienced intense heat and Harmattan wind that was unseasonably strong and dry. This caused the trees with disease to lose their flowers. Everyone thinks El Nino only affects West Africa. This is not necessarily true. Climate change can sometimes result in too much initial rain. Jim Roemer, of the consultancy Best Weather, said that this was his biggest concern at present. Ivory Coast, which is the second largest bean producer in the world, and Ghana are responsible for about half of the global cocoa production. Ecuador, the third largest bean producer in the world, is prone to excess rain during El Nino episodes. Cocoa prices almost tripled by 2024, after the West African harvest was a failure. By late 2024 they had reached record prices of over $12,000 per metric ton, making chocolate more expensive than most industrial metals. COFFEE El Nino can be particularly problematic for robusta as it brings increased temperatures and decreased rainfall to the top coffee-growing country Vietnam, and No. From the middle of the season onwards, Indonesia is the No. 3 coffee producer. During the development of the crops, the adverse weather affects both countries that together account for around 50% of global robusta production. The effects are felt in the fourth quarter during harvest. Analysts at Citi said that the dryness in Vietnam and Indonesia may reduce robusta coffee yields. El Nino has a more subtle impact on arabica coffee. Nearly half of it is grown in Brazil. El Nino, according to Carlos Santana of EISA's trader ECOM, could be positive for the crops Brazil is harvesting right now, as higher temperatures may prevent damaging winter frosts. El Nino, on the other hand, is more likely to affect output in 2027. It will bring heat and dryness to Brazil's coffee-growing regions during the fourth quarter, when the new crop is being developed. El Nino is a phenomenon that brings excessive rains in the second half the year. This can cause the sugar harvest to be disrupted and reduced in quality in Brazil, the top producer. The No. In contrast, the weather pattern in India, which is the world's second largest sugar producer and Thailand, its No. 2 exporter reduces rainfall during summer monsoon. Thailand is the No. India's 2026 monsoon is expected to bring the lowest rainfall for 11 years. Showers during the period of June-September crop development will be 90% below average. Carlos de Mello of Hedgepoint, the head of sugar at Hedgepoint, estimates that a moderate El Nino would cut India's production by around 1 million metric tonnes. The above-average rainfall that El Nino brings to Brazil's sugar region could benefit the crop next year. Hedgepoint's de Mello stated that it was "hard to imagine a bull-market scenario for El Nino", because of the potential benefits El Nino could have on Brazil's sugar crop in 2027. Brazil exports about half the world's total sugar.

• Stocks steady, oil continues to fall as traders await Warsh

  The news that Iranian fuel could soon be available on global markets prompted a drop in?bond yields on Wednesday. Stocks and currencies also remained quiet ahead of Kevin Warsh’s first Federal Reserve meeting. Brent crude futures are now trading below $80, and have fallen more than a third from their peak after news that the U.S. would lift sanctions against Iranian oil as part of the agreement to end the conflict. Even though the conflict has depleted strategic oil reserves, the prospect of additional supply helped to push yields down on U.S. Treasuries and a rally of global bonds. Luka Belobrajdic is an economist with Westpac. He cautioned that sanctions are unlikely to be lifted immediately and depended on the sustainability of peace. The yields on ten-year Japanese bonds fell by four basis points, to 2.61%. In Australia, the yields on ten-year Australian bonds dropped by almost six bps, to 4.78%. The U.S. and Iran agreement due to be signed this Friday has been confirmed in public only a few times. A three-month blockade of the 'Strait of Hormuz' has pushed U.S. crude oil reserves down to their lowest level since 1983. Wall Street futures in Asia traded slightly higher, while FTSE and European futures declined 0.2%. The chipmaker-heavy'markets' in Tokyo and South Korea brushed off a negative lead overnight from U.S. semiconductor share sales, but a 1.7% drop for Taiwan's TSMC dragged Taiwan benchmark 1% down. MSCI's broadest Asia-Pacific share index outside Japan was largely flat, and in China AI gains were able to offset the sagging consumer stock prices in response to weak retail sales figures. FED ON HOLD WARSH IN FOCUS The dollar has been held in a state of stagnation by traders as they wait to see how Warsh balances his dovish presidency with the markets that?expect an increase this year. The euro is barely moving this week. It's hovering around $1.16. The expected rate increase in Japan on Tuesday failed to lift the yen. However, the downside was protected due to the possibility of an official intervention. It remained at 160.3 per dollar. The Fed Funds rate is unlikely to change, so focus on the press conference and Warsh's voting, as well as the committee members' projections in March, when most of them expected rates to be cut. "We expect Warsh to downplay the forward guidance and instead advocate patience on policy rate and inflation - leaning dovish in relation to market pricing," said Xiao Cui senior economist at Pictet Wealth Management. If Warsh accepts the possibility that rates will rise and doesn't push back against market pricing, it could be interpreted as "hawkish." The Riksbank of Sweden is expected to "stay on hold" but still forecast an increase, whereas the British "inflation rate is projected to accelerate to 3% annually due to higher oil prices. Gold, which is down by more than 20% since January's peaks, bounced from support at $4,000 per ounce to $4,300 on Wednesday. Bitcoin, meanwhile, found support just above $64,000, trading just below $65,900. (Reporting and editing by Jacqueline Wong; Tom Westbrook)

• Stocks surge as SpaceX fever boosts technology; yen flattens after BOJ rates hikes

  The?dollar remained steady against the yen, despite the Bank of Japan raising rates to a record high of 31 years. The markets shifted to a more measured approach on Gulf developments, as initial excitement about the preliminary agreement reached between Washington and Tehran started to fade. Investors were encouraged by SpaceX's massive IPO, which boosted its shares nearly 20% Monday. The market value of the space exploration company now exceeds $2 trillion. In premarket trading, they were up 10.5% on Tuesday. Separately the company announced that it would purchase Anysphere, the software giant behind the popular AI coding agent Cursor for $60 billion in an effort to increase its presence on the enterprise AI market. Nasdaq e-minis futures increased by 0.3% while S&P 500 futures grew 0.1%. Nikkei225 reached 70,000 for the first-time after the Japanese central banks voted to increase its benchmark policy rate from 1% to 1%. This was a level not seen since 1995. The yen remained flat at 160.31 against the dollar. STOXX 600 in Europe rose by 0.4%, hovering near the record high of Monday. Nvidia is the most valuable AI chip maker in the world. It surprised investors when it sold bonds for $25 billion. The company stated that the money would be used to fund general corporate needs and the debt sale would establish a benchmark for future debt issuance. Nvidia's shares fell a bit in premarket trading. Mitch Reznick is the group head of Fixed Income at Federated Hermes. "The important thing is how much systemic inflation we have, its impact on the consumer, and to what extent it has spread throughout the economy." Oil fell another 2.2%, to a 3-month low of just over $81 per barrel. Shippers in Asia and Europe said it could take several weeks for them to rebuild confidence about resuming transit in the Strait of Hormuz. According to ING's Warren Patterson, oil consumers are likely to scramble to replenish their inventories that have been depleted by the war in recent weeks. This means prices will not be able to drop much in the short-term. Investors were initially relieved by Donald Trump's announcement on Monday of a deal between the United States and Iran, but now Washington is at odds with Israel. Westpac analysts said in a research report that while the deal was an important diplomatic step forward, its durability would be tested in the future. Many sticking points were left to be resolved during future negotiations, such as the fate of Iran’s nuclear program. The dollar index (which tracks the U.S. Dollar against six other currencies) was stable around 99.6. The euro rose by 0.1% to $1.1605, and the pound traded at $1.342, two days before a Bank of England meeting which is unlikely to result in any changes to monetary policy. The Australian dollar, which was expected to remain unchanged at $0.707, was also little changed. The yield on the 10-year Treasury note in the United States fell 2.6 basis point to 4.44%. Gold, which is also sensitive U.S. rate expectations, increased 0.7% to $4 336 per ounce. (Gregor Stuart Hunter contributed additional reporting from Singapore; Shri Navaratnam, Jacqueline Wong and Jacqueline Navaratnam edited the story.)