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Philippine inflation at three-year high confirms rate hike path
Philippine annual inflation increased to a 3-year high in April as fuel prices surged?as a result of the Middle East conflict, raising the possibility of further policy tightening. The statistics agency announced on Tuesday that consumer prices increased 7.2% last month. This is the highest rate since March 2023. This was higher than the median forecast of 5.5% in an economist poll. The central bank had forecast a range between 5.6% and 6.4% for April. Emilio Neri is the lead economist for Bank of the Philippine Islands. He said the BSP might be forced to hold another off-cycle and raise rates in order to stem inflation. "Yes, we will not rule out a strong intermeeting increase." In this volatile environment, we can't rely solely on the supply-side?solutions. Because the Philippines is heavily dependent on Middle -East oil, it is vulnerable to price fluctuations and supply shocks during times of geopolitical conflict. The average inflation rate for the first four month of this year is now 3.9%, increasing the pressure on the Philippine Central Bank as it nears the upper limit of their 2%-4% range. According to government data, diesel inflation rose by 122.7 percent and gasoline inflation by 60 percent in the last month. The statistics agency reported that higher food, transportation and utility costs were also responsible for the increase in consumer prices last month. The inflation rate was 2.6% on a monthly basis, which is the highest since 26 years. The 'Bangko ng 'Pilipinas raised its interest rate last month to 4.50% in order to curb rising inflation. They warned that inflation would likely reach 6.3% by the end of this year. Governor Eli Remolona hinted at the possibility of a further rate increase to combat price pressures. The next meeting of the central bank's policy committee will be held on June 18. The last 'off-cycle' meeting was held on March 26. It was the first Asian central bank to hold one. Last month, the annual core inflation rate (which excludes volatile energy and food prices) was 3.9%.
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Gold recovers from a one-month low, but inflation worries cap gains
Gold prices increased on Tuesday after a session low of more than one month. However, gains were 'limited' by high oil prices, which kept inflation concerns alive and impacted the outlook for U.S. rates. As of 0230 GMT, spot gold was up by 0.5%, at $4,541.39 an ounce. In the previous session, gold fell by more than 2% and reached its lowest level since last March 31. U.S. Gold Futures for June Delivery rose?0.4% at $4,550.70. Ilya Spirak, global macro head at Tastylive said that prices are settling down after the return to the "war trade" across the markets sent gold lower on Monday. Gains were however capped, as "yields" and the dollar rose as crude oil's rebound stoked inflation concerns. This weighed against gold that was not interest-bearing or anti-fiat, said Spivak. Brent crude oil was hovering above $113 per barrel, as the U.S. continued to negotiate a truce with?Iran while exchanging blows in the Strait of Hormuz. Dollar-priced materials become more expensive to holders of currencies other than the U.S. dollar. While higher crude oil costs can increase inflation, they also increase the probability of higher interest rates. Gold is considered a hedge against inflation, but high interest rates can make other assets with higher yields more appealing, which reduces its appeal. Markets now see a 37% likelihood of a U.S. Federal Reserve hike in March 2027 compared to 27% who expected a rate reduction a week ago. U.S. and Iran launched new attacks in the Gulf on Sunday as they fought for control of the Strait of Hormuz through maritime blockades. This shook a fragile ceasefire. The?U.S. The?U.S. Investors are now awaiting a number of important U.S. statistics this week. These include the ADP Employment Report, April payrolls data, and U.S. Job Openings. Silver spot edged up 0.4% to $73.03 an ounce. Platinum gained 1.3% at $1,970.85 and palladium rose 1.2% to $1,497.91.
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Oil prices rise as US-Iran truce prospects dim
The stock market in Asia fell on Tuesday, while oil prices eased and remained above $100 per barrel. This is as the U.S. continues to work with Iran towards a ceasefire while also trading blows across the Strait of Hormuz. The yen was also in traders' sights after it briefly jumped during the previous session. This fueled speculation about another round of intervention by Tokyo. The broadest MSCI index of Asia-Pacific stocks outside Japan fell by 0.3%. In a thinned Asia market, shares in Australia dropped 0.4%. Markets in Japan and South Korea had a holiday. Nasdaq and S&P futures both fell about 0.1%, while EUROSTOXX futures dropped 0.2% and FTSE Futures dropped 0.75%. U.S. and Iran launched a new attack in the Gulf Monday, as they fought for control of the Strait of Hormuz through dueling maritime blockades. This comes just a few days after U.S. president Donald Trump announced a new initiative to help stranded ships and tankers pass the crucial energy-trade chokepoint. Maersk has confirmed that the Alliance Fairfax, an American-flagged vehicle ship operated by Farrell Lines, left the Gulf on Monday via the Strait of Hormuz, accompanied by U.S. Military assets. The renewed hostilities still jolted the markets and served to remind us that the Middle East war is far from over. Tony Sycamore is a market analyst for IG. He said, "We began yesterday with high expectations that 'Project Freedom,' as it's called, would be a success, on the ground. It was being marketed more as a humanitarian endeavor." As we could see, the Iranians didn't take that bait. This really indicates that the stalemate is still in place, and it has been a very shaky beginning." Brent crude futures dropped 0.5% to $113.85 per barrel, while U.S. Crude fell 1.3% to $105.03 after spiking in the previous session due to increased concerns about supply disruption. Investors were also preparing for this week's earnings reports, as Advanced Micro Devices, Pfizer, and others would be releasing results in the afternoon. S&P Global Market Intelligence data shows that 83% of S&P500 companies have already reported and have beaten their EPS estimates. 78.2% have also beaten their revenue estimates. Jeff Buchbinder is the chief equity strategist of LPL Financial. He said that AI-driven expenditure will continue to drive S&P 500 earnings growth. YEN INTERVENTION WORT After Monday's brief surge, which saw the Japanese currency reach an intraday peak of 155.69, the yen has been stable at 157.22. Satsuki Katayama, Japanese Finance Minister, spoke Monday against speculation in foreign exchange trading. Market participants are on high alert for any further intervention. Tokyo intervened on Thursday to support?its currency. Abbas Keshvani is Asia Macro Strategist for RBC Capital Markets. He said that authorities may intervene again, if the dollar/yen keeps testing 160, which they have historically protected. In 2022, Tokyo fired three volleys in just a few short weeks. He said: "We believe that the intervention will only act as a cap on USD/JPY and not a catalyst to protracted yen strength." The Australian dollar, in other currencies, eased by 0.06%, to $0.7163, ahead of Reserve Bank of Australia’s interest rate announcement later that day. A hike is widely anticipated. In the meantime, the U.S. Dollar firmed up on a?safe haven demand. A number of data, including the nonfarm payrolls report for April on Friday, could'move' Federal Reserve policy. The U.S. economy is expected to have gained 62,000 jobs after March's 178,000-strong gain. However, problems with seasonal adjustments create much uncertainty. The markets currently expect that the Fed will leave its interest rate policy on hold for this year due to the inflationary pressures from the global energy crisis. Spot gold, meanwhile, rose 0.2%, to $4,529.19 per ounce. This is well within the ranges of recent trading. (Reporting and editing by Christopher Cushing; Rae Wee)
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Regis, a gold mining company in Australia, will take over Vault and create a $7.7 billion gold miner
Regis Resources will take over Vault Minerals, a smaller competitor in Australia. This merger is expected to create Australia's third largest listed gold producer with a market value of around A$10,7 billion ($7.67billion). Both boards would support the combination to create an entity that would have five mines operating in Western Australia, and two expansion projects. This entity would produce 700,000,000 ounces per year of gold. Executives of both companies stated on Tuesday that the deal will unlock more than A$500 Million?in tax benefits for corporations and provide scale to improve procurement and capital cost savings for the combined entity. The deal was made amid a recent surge in bullion price that has encouraged consolidation by mid-tier producers. Central banks are also increasing their gold reserves to diversify away from fiat currency amid geopolitical uncertainties. According to a joint press release, Regis offered 0.6947 percent of its shares for each Vault share. This equates to A$5.15 Billion in value. The offer represents an increase of 10.7% over Vault's Monday closing price of A$4.50. Vault shares jumped up to 6.4%, their largest intraday gain since early April. Regis stock dropped as much as 6,1%, hitting a new low. The companies stated that Regis shareholders will own approximately 51% and Vault shareholders, the remainder. On an analyst call, Regis CEO Jim Beyer said, "By merging the two businesses, we are creating a'stronger company, with greater scale, better diversification, and a stronger balanced sheet." Broker Ord Minnett described the deal as "a positive step" due to the "increased size of the merged entity," which offered "a powerful platform for enhancing?the portfolio through potential M&A/growth opportunities." Ramelius Resources acquired Spartan Resources, a smaller competitor, in an A$2.4 billion deal last year. The move was part of a consolidation wave?in this sector, driven by the rallying gold prices. The boards of Regis and Vault unanimously approved the merger, if no better offer was presented. (1 Australian dollar = $1) (Reporting and editing by Sahal Muhammad and Subhranshu Sahu; Additional reporting by Melanie Burton, Melbourne)
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IAEA: drones damaged equipment at Zaporizhzhia Nuclear Plant in Ukraine
The International Atomic Energy Agency reported that a drone had 'damaged' the meteorological monitoring equipment in a Russian-owned Zaporizhzhia Nuclear Power Plant located in southeast Ukraine. In the first weeks of Moscow’s invasion of Ukraine in February 2022, Russian forces seized Zaporizhzhia, Europe's largest nuclear power plant with six reactors. Since then, both sides have accused each other of taking military actions that could compromise the safety of the plant. IAEA posted on X that?a team from its experts visited the station's External Radiation Control Laboratory?, a day after Russian management claimed the plant had been struck by a drone. The IAEA's nuclear watchdog said that the team had observed damage to the laboratory's weather monitoring equipment, which was "no longer operational." In the statement, IAEA Director-General Rafael Grossi issued a new appeal for "maximum military restraint around all nuclear facilities in order to avoid safety risk". Since the start of the conflict, drones have 'hit the plant several times. On Sunday, the plant's management said that damage was?minor and operations were unaffected. The IAEA announced last week that it was attempting to arrange a local truce to allow repair work to be done. Grossi has made several visits to the Zaporizhzhia nuclear plant since it came under Russian control. The IAEA also has observers in place at Zaporizhzhia as well as Ukraine's other three working nuclear stations. (Reporting and editing by Nia William, Ron Popeski, Christopher Cushing and Abu Sultan in Bengaluru)
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California investigates Trump administration's deal to cancel offshore Wind Lease
California's energy officials opened an investigation on Monday into the Trump Administration's agreement with an offshore wind company?to cancel a planned project?off its central coast. The state is seeking information on the $120 million government payment to determine if it violates the law. The recent strategy of President Donald Trump to undermine the nation's young offshore wind industry includes refunding offshore lease payments in exchange for fossil fuel investments. California Energy Commission has issued a subpoena to Golden State Wind LLC. This is a joint venture between Ocean Winds and London-based offshore investment firm Reventus Power. Ocean Winds is a joint venture between France's ENGIE, and Portugal's EDP Renewables. David Hochschild, CEC's?Chairman, said in a press release that Californians "deserve immediate answers" about the nature and amount of this payment. Taxpayer dollars are better spent on building a sustainable energy future than paying to make projects disappear. California wants to achieve its climate change goals by installing 25 gigawatts offshore wind power by 2045. The state announced that it had spent more than $100,000,000 to develop the port and transmission infrastructure needed for offshore wind. Golden State Wind and Interior Department representatives were not available to comment immediately. (Reporting and editing by Stephen Coates; Nichola Groom)
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IMF chief Georgieva warns a'much more worse outcome' is the Middle East war drags on into 2027
The head of the International Monetary Fund warned on Monday that inflation is already increasing and the global economy could suffer a "much more serious outcome" if the Middle East war drags into 2027, and oil prices reach $125 a barrel. IMF's Kristalina Georgieva stated that due to the continued war, the "reference scenario", which assumed a short-lived crisis and forecasted a slight growth slowdown of 3.1% as well as a minor rise in prices at 4.4% was no longer feasible. Georgieva stated that "this scenario is moving further and farther behind the mirror in the rear view" with each passing day. She said that the "adverse scenarios" of the IMF were already in place due to the continuation of the conflict, the forecasted oil price of $100 or more per barrel and the rising inflationary pressures. She said that long-term inflation expectations were anchored, and financial conditions weren't tightening. But, this could change if war continued. She said: "If this trend continues and oil prices are $125 higher or less in 2027, we can expect an even worse outcome." "We will then see inflation rising and then, inevitably, 'inflation expectations' would begin to de-anchor." IMF released three scenarios last month for global GDP growth in 2026-2027, amid the uncertainty surrounding the Middle East war - a "reference scenario", a "middle adverse scenario", and a much worse "severe" scenario. The adverse scenario predicted global growth slowing down to 2.5% by 2026, and headline inflation at 5.4%. The severe scenario predicted growth of only 2% with headline inflation of 5,8%. Mike Wirth, Chairman and CEO of Chevron, spoke on the same panel. He said that the Strait of Hormuz would be closed, which is where 20% of global oil supplies passed before the war. Wirth stated that economies will start shrinking in Asia first as the demand is adjusted to "meet the supply" while the strait is closed due to the U.S. Israel war against Iran. Georgieva stated that the IMF is closely tracking the slow-moving effect of the conflict on supply chain, as fertilizer was already 30% to 40% higher in price, which would "drive food prices between 3% and 6 percent." Other industries may also be affected. She said: "I want to emphasize that this is a serious issue." She expressed concern about the fact that many policymakers still act as if the crisis will end in a few months, and are putting measures in place to reduce the impact on businesses and consumers, which is keeping the demand for oil high. She said, "Don't put gasoline on the fire." Everyone in this room understands that when your supply decreases, demand will follow.
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Oil prices rise, while stocks fall as Iran tightens its grip on the Strait of Hormuz
Oil prices rose 6% and stocks fell on Monday as Iran intensified its military campaign, attacking several ships in Strait of Hormuz?and?setting a UAE port of oil ablaze. Brent futures rose by $6.27 or 5.8% to $114.44 a barrel. U.S. West Texas Intermediate crude (WTI), however, rose $4.48 or 4.4% to $106.42. The move came after U.S. president Donald Trump announced over the weekend that U.S. Navy forces would open the strait, leading to the biggest escalation of the war since the ceasefire was declared. Since two months, the Strait of Hormuz has been seriously disrupted. It is through this strait that a fifth of all oil and gas transported by sea in the world normally passes. The Dow Jones Industrial Average?was down 1.13%. The S&P 500 was 0.41% lower. And the Nasdaq Composite fell 0.19%. The longer oil prices remain above $100 per barrel, the less the fiscal stimulus from the tax cuts that were passed in 2025 will be a stimulus and more likely to act as a shock-absorber, said Brock Weimer. MSCI's broadest?global share index outside Japan dropped 0.22%. German automakers in Europe weighed on regional equity after Trump announced on Friday that he would "raise tariffs" on European cars. The STOXX 600 index for the whole of Europe fell by 0.99%. The benchmark 10-year bond rate for the Euro Zone, Germany, increased 5 basis points, to 3.08%. London's markets were closed due to a public holiday. CENTRAL BANKS TURN HAWKISH AFTER OIL FANS INFLATION FEARS Oil-driven inflation has pushed bond rates higher and complicated global monetary policy outlook. Markets are no longer expecting the Federal Reserve to reduce rates this year and have started pricing in increases from the European Central Bank (ECB)?and Bank of England. Barclays, along with other brokerages, forecasted on Monday that the Fed would not ease policy in 2019. The Friday April payrolls report may further alter expectations. The yield on the benchmark U.S. 10 year notes increased?6 basis points to 4.438%. FOREX TRADERS ARE KEPT ON THE EDGE BY YEN VOLATILITY The currency markets were also unsteady, as traders closely watched for signs of a?Japanese Intervention to Support the Yen. In Asian trading, the dollar dropped sharply against yen before turning around. The Japanese yen last fell 0.04% against greenbacks at?157.12 each. Analysts think Tokyo could have intervened in the last week for around $35 billion. Roberto Cobo Garcia is the head of G10 'FX strategy' at BBVA. He said: "The case for intervention?is strong given the inflationary effect of a weaker yen through import prices, a U.S. Administration that is generally comfortable with such an action, and Japan’s abundant FX reserves." The Euro fell by 0.24% at $1.1692, while the Sterling fell by?0.29% at $1.3532. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) rose by 0.28%, reaching 98.44. On the commodity markets, gold dropped 2.13% to $4,515.27 per ounce.
Dominican Republic President halts GoldQuest mine project after protests
After thousands of protesters raised environmental concerns, President Luis Abinader ordered the suspension of all activities related to GoldQuest Mining’s gold and copper project.
GoldQuest Canada is developing the Romero Project in San Juan Province. The company had earlier announced that it was aware of the demonstrations, and committed to transparent development.
The company did not respond immediately to a request for a comment about Abinader’s order to stop work. On Sunday, thousands of people took to the streets in protest. They walked about 20 km through San Juan, to reach the Sabaneta Dam. This is a vital water source they fear will be affected by the mine.
Abinader stated that "when citizens express concerns and worries, it is our duty to act with transparency and caution." He said that although exploratory concessions had been granted in 2005, the project still has not received a permit to be exploited.
Abinader stated in a video that "Under the administration of our government, the initiative remained exclusively in the environmental evaluation phase."
Many in San 'Juan Province are concerned that mine pollution will damage their farmlands.
Ruben Moreta is the leader of the local water protection movement. He warned on Sunday that protests will continue if the president does not act. He said that "a cross-section of society" had come out to protest. This included teachers, doctors and agronomists as well as lawyers, street vendors, taxi drivers, lawyers, and engineers.
Barrick Gold, a Canadian company, owns the majority of Pueblo Viejo in the Dominican Republic, Latin America's largest gold mine.
(source: Reuters)