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Gold gains for the week as US job data weakens rate hike betting
Gold gained on Friday and was set for a weekly gain following four consecutive weeks of declines. Weak U.S. job data dampened expectations that the Federal Reserve will raise rates in the near future. Gold spot was up 1.3% to $4,174.21 an ounce by 1241 GMT after reaching its highest level since June 23. Bullion is above its 21-day average and has gained over 2% this week. U.S. Gold Futures for August Delivery?Delivery gained 1.5% to $ 4,186.80/oz. Data released on Thursday revealed that nonfarm payrolls in the U.S. rose by just 57,000, below the 110,000 economists had predicted. Han Tan, Bybit's chief market analyst, explained that the gold rally was fueled by a sharp drop in U.S. hiring last month. The immediate price reaction seems justified for the moment, as the markets are reducing their bets on a Fed rate increase in September. According to CME FedWatch, traders now expect a rate hike in September of about 54%, down from a previous estimate of 66%. The lower interest rates will reduce the cost of holding assets that do not yield income, such as?gold. Due to the recent jobs data, the U.S. Dollar is on course for its largest weekly loss since last April. This makes greenback-priced gold more affordable for holders of other currencies. World Gold Council data released on Thursday shows that central banks added a total of?41 metric tonnes to their gold reserves in May. Tan said that central banks will continue to be a major demand for spot prices in the long term. However, some have recently sold their holdings to protect currencies. Gold demand on the physical market in India slowed this week as prices recovered, while purchasing interest?in China increased slightly. Silver spot rose by 1.9%, to $62.19 an ounce. Platinum gained 2.3%, to $1653.30. Palladium increased 0.8%, to $1278.36. The three metals are on track to make gains this week. (Reporting and editing by Subhranshu sahu in Bengaluru, Sonia Cheema and Subhranshu sahu)
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Global stocks climb as US jobs data cools Fed hike fears
Global stocks continued to rise on Friday, after a lackluster U.S. employment report tempered expectations of an imminent rate hike by the Federal Reserve. Meanwhile, regional activity gauges indicated an economic expansion in June. Europe's broadest index reached a new record and was on track for its largest weekly gain in more than a month. The pan-European STOXX600 reached 651,77 before stabilizing at 650.29. The DAX in Germany rose by 0.4%. The French index was stable and the UK index fell 0.2%. The broadest MSCI index of world stocks rose by 0.4%. Dan Coatsworth of investment platform AJ Bell said in a report that "Europe's Stoxx 600 finished the week with a bang" as investors snatched up utilities, basic materials and industrials stocks. He added that "while these movements indicate a more optimistic investor, it is important to continue watching the U.S. technology stocks as many are emerging from the "boil". South Korea's Kospi fluctuated between gains and losses, before closing around 6 percent higher as investors pounced upon battered chipset stocks. The Purchasing Managers' Index data (PMI), released on Friday, indicated an increase in activity throughout Asia. After stalling in May, the Japanese services sector resumed growth in June. China's service sector expanded at a slower rate, but the overseas demand grew?at its fastest pace in 20 months. Capital Economics analysts said that the Chinese data showed "the PMIs are still healthy and imply a stronger economic momentum throughout Q2". U.S. LABOUR MARKET COOLING According to data released Thursday, the U.S. employment growth has slowed dramatically in June, and payroll gains from the two previous months have been revised downward. This indicates a cooling of labour markets. The lackluster jobs data dampened traders' expectations for an imminent rate increase and increased the likelihood that the Fed would keep rates on hold till October. Fed funds futures indicate a 46.8% implied probability that the U.S. Central Bank will maintain rates at its September 15-16 meeting, compared to 35.8% a day before. This is according to CME Group's FedWatch. Inflation remains a major concern. James Rossiter is the head of global economics for TD Securities. He said that shipping was their biggest risk this year. This includes the Iran War. He said in a telephone call that the closure of the Hormuz Strait had caused ships to be rerouted around the globe, "leading to less shipping capacity globally." The price effects were still being felt by the global economy. U.S. Futures were up, with S&P and Nasdaq futures each rising by 0.3% and 1,1%. The U.S. stock market will be closed for Independence Day on Friday. The U.S. Dollar held steady at 161, despite the fact that the dollar had lost some of its earlier gains due to the holiday, which drained the market's liquidity. Traders were also on the lookout for any possible intervention. This week, the Japanese?currency was choppy after it was reported on Thursday that authorities might have adopted a?new approach to their forays in the market. The U.S. Dollar Index, which measures greenback strength in relation to a basket six currencies, fell 0.2%, closing at 100.76. In commodities, Brent crude futures steadied at $71.75. Gold rose by just under 1.3% to $4,178. Bitcoin's value increased by 0.1%, to $62,090.78. (Reporting and editing by Thomas Derpinghaus, Jan Harvey and Nell Mackenzie; Gregor Stuart Hunter and Nell Mackenzie)
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Aluminium under pressure as Middle East risk premium declines
The market was expecting a better supply of aluminium from the Middle East as a U.S. Iran interim peace agreement appeared to be holding. In official open-outcry trade, the benchmark three-month 'aluminium' on the London Metal Exchange was?down by 0.2% to $3,086 per metric ton. Citi analysts said that "weaker demand, eased geopolitical risk and increasing expectations of future supplies have led to a sharp price correction over the last month." Citi expects aluminium prices to recover towards $3,300 per ton between September and December before hitting a bottom within a week. Metal touched $3,040 on Thursday, its lowest since February 19. However, it managed to remain above a psychologically important level of $3,000 due to a weaker U.S. dollar, which eased concerns about an impending interest rate increase in the U.S. following disappointing U.S. job data. In an effort to ease concerns over future production in the Middle East - which produces 9% of world supply -?Emirates Global Aluminium announced on Thursday that it would be restoring production earlier than expected at one its complexes damaged by Iranian missile attacks in March. Two sources said that Japanese aluminium buyers have agreed to pay global producers a premium of $395 per tonne over the benchmark price for July-September shipments. This is an increase of 12-13% compared to the previous quarter. The higher premiums in Japan indicate that there is still some tightness on the global physical market, but analysts expect this to loosen up in July-August and resume in September. Copper, another LME metal, rose by a mere 0.1% to $13,342 per ton, in official activity. This was supported by the weaker dollar, and continued outflows of LME stocks. Shanghai Futures Exchange . China's Yangshan Copper Premium The price of, which represents the buying appetite in the largest consumer market, reached $74 per ton this week, its highest level since mid-April. LME tin?jumped 2.1%, to $52,005. Stocks of tin in SHFE-monitored warehouses jumped 2.1% to $52,005. This week, the number of tons fell 18% to a record low of 6,222 tonnes. Lead climbed 0.7%, zinc gained 1.3%, nickel increased 0.4%, to reach $16,320. (Reporting and editing by Harikrishnan Nair; Additional reporting by Solomon Cefai)
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Severstal, the Russian steelmaker, is considering another investment cut
According to a presentation made to investors on Friday, Russian steelmaker Severstal could 'cut back' its investment program by a further 24% in 2027 to approximately 85 billion roubles (about $1.10 billion), due to the?falling demand for steel. The company stated that the measures would help to ensure a positive cash flow. According to the presentation, this forecast is only preliminary and will be reviewed until?the?end of 2026. Steel demand has dropped by 30% since 2023. This is due to Western sanctions, high interest rate and weak steel demand. The demand for steel in Russia's key sectors of?construction and energy, automotive, and machinery -- which are the largest consumers -- is declining as companies delay investment due to high interest rates designed to curb inflation. Severstal, one of the top four steelmakers in Russia, predicts that this year's steel consumption will decline by 7%-9%. In March, the company announced that it would be taking cost-cutting steps in response to a weakening market and the decline in demand. It also reduced its investment program for 2026 by 24% from the original 147 billion roubles. It also said it would continue to implement major strategic projects. Forbes ranked Severstal owner Alexei Mordashov as Russia's richest businessman. He warned that Severstal would continue to cut investment once it slipped into a negative cash situation.
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Scientists say climate change is to blame for the sweltering World Cup.
According to the World Weather Attribution group, climate scientists, the use of fossil fuels has caused climate change that led to extreme heat and humidity. At least one World Cup match was deemed a danger zone. Saturday's match between?France? and Paraguay? is scheduled to begin at 5:00 pm. The temperature in Philadelphia is above FIFPRO's recommended safe playing temperatures. A heat dome has settled over the U.S. The U.S. National Weather Service has warned that the heat dome, a high pressure system that traps hot air below it, could cause heat indexes to reach 105-115 degrees Fahrenheit on parts of the Midwest and East Coast. Many World Cup host locations may also be affected. Conditions are likely to impact outdoor Fourth of July celebrations of the 250th anniversary of the United States. In a press release, Friederike Otto said that it shouldn't be necessary to conduct another study in order for people to realize the importance of climate change. Climate change is already here and will only get worse as we delay the inevitable transition to net zero emissions. The sweltering heat and high humidity has become the main talking point at the tournament, a year after FIFPRO, the players' union of the world, raised the alarm about the dangers of extreme heat during the Club World Cup in the U.S. FIFPRO, in December, praised FIFA for its efforts to "align competition schedule planning and the venue selection with concerns about player health"?at the World Cup. However, it said that there were still games which?had a risk attached. FIFPRO stated that "heat conditions will be a more important factor in future tournament and league schedule decisions" as the planet warms. The world's governing body for soccer does not have a rule that automatically causes a match to be postponed due to extreme heat. FIFA did not respond to a request for comment. Reporting by Amy Tennery, New York; additional reporting by Rohith Niair; editing by Ken Ferry
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US oil companies report big profits jump and prepare for a clash with Trump over pump prices
U.S. Oil Companies are expected to report their highest quarterly profits in recent years. This could lead to a clash with President Donald Trump who has been pressuring his longtime ally Big Oil, to lower gasoline prices in advance of the midterm elections, which will be held in November. Exxon Mobil, Chevron and other oil companies are expected to announce second-quarter earnings that are triple the first-quarter figures in the next few weeks. This comes after months of Americans complaining over the pain they feel at the pump. After the U.S. and Israel's war against Iran began late in February, oil prices spiked. Global fuel supplies also tightened. Profits for oil companies are expected to reach their highest level since 2022. The anticipated bonanza may complicate Trump's relationship with the oil industry. This is an important financial supporter of Trump and his Republican Party. The higher gasoline prices have fueled Democratic calls for affordable gas and lowered Trump's popularity rating, as fewer Americans believe the Iran War was worth the cost. The U.S. Justice Department has been urged to investigate any possible price gouging of gasoline. Treasury Secretary Scott Bessent has warned that the White House may take administrative action against producers and refineries if prices at the pump do not drop sharply. We know that the industry is talking and preparing for what lies ahead. Unidentified industry executives said, "We understand the politics." Trump said that since shipping through the Strait of Hormuz was resumed last week, he wanted the national average gas price to drop to $2.50 per gallon. This is well below the current $3.85 average and 11% lower than the lowest point of his presidency of $2.81 in late December. According to eight interviews with lobbyists and officials from the oil industry, lobbyists are increasing their outreach to lawmakers and officials to counter criticism. The oil executives say that they have a limited impact on retail gasoline prices. Crude oil prices make up nearly half of what consumers pay for gasoline at the pump. The rest is determined by taxes, refining, marketing, distribution and distribution. Even though benchmark crude prices are back to pre-war levels, U.S. gas prices remain 22% higher. Analysts and industry associations cite tight fuel markets and limited gasoline inventories as the main reasons for low crude oil prices. Bob McNally of Rapidan Energy Group said that the divergence highlights structural pressures on supply and demand. Bethany Williams, spokesperson for the American Petroleum Institute, said that gasoline prices do not move in lockstep to crude oil, particularly during a global disruption which affects supply, refining, and inventories. American Fuel & Petrochemical Manufacturers cited regulatory costs as a reason why policymakers play a part. The group stated that "refineries don't set the price for finished gasoline and crude oil is only one of many inputs." The Renewable Fuel Standard, for example, requires retailers to sell certain percentages of fuel containing biofuels or ethanol. The White House stated that Trump's number one priority is to lower gasoline prices. They cited falling oil prices after the Iran deal and increased coordination between the oil industry and the government on permits and regulations. Exxon refused to comment. Chevron referenced an interview that CFO Eimear Bonner gave to CNBC on June 25, in which she said,?it would take time for gas prices to normalize. Analysts predict that Big Oil's earnings for the second quarter will be at their highest level since 2022 when Russia's invasion in Ukraine caused a stir on energy markets. According to LSEG's analyst estimates, Exxon Mobil will report a net profit of $15.9 billion, which is more than triple the first quarter earnings. Chevron's forecast is $9.9 billion. This is also more than three times its previous quarter. A part of the growth will be due to the reversal in first-quarter losses related to derivatives used to hedge crude oil and refined products exposure. Analysts say that the gains are due to a stronger market. TPH, an energy advisory firm, estimates that U.S. gasoline crack spreads - the difference between crude oil prices and fuels made from them - averaged $25 per barrel in the U.S. second quarter. This is up about $16 from the previous quarter. Diesel crack spreads increased by about $15, to approximately $45 per barrel. This is the highest margin since mid-2022. The strong demand for U.S. products boosted gains, as refiners overseas were left short of supplies due to the 'war. BMO Capital Markets analysts expect that despite the pain of the U.S. motorists, oil companies will accelerate their share buybacks during the second half 2026. This is a continuation of the post-pandemic emphasis on returns rather than production growth. One executive said, "Being the boogeyman was not fun." We need to inform officials that the industry is cyclical and that the risks are all ours. (Reporting from Jarrett Renshaw, Washington; Sheila Dang, Houston; Additional reporting and editing by Arathy S. Somasekhar; David Gregorio and Nathan Crooks)
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French maize crop ratings plummet to a 13-year low during heatwave
After last week's record-breaking heatwave, the ratings?for France’s maize crop plummeted to their lowest level in 13 years, according to official data released on Friday. The continued hot and dry weather is threatening more damage to this harvest. France, as the largest grain producer in the European Union, has observed maize to be the cereal crop that is most vulnerable to extreme weather conditions because it's?at a critical phase of its growing seasons. Heat and drought will cause a steep?fall in planting, causing a 30 % drop in French maize production. In a weekly report, FranceAgriMer reported that the share of grain maize crops in excellent/good condition fell to 58% on June 29 from 76%?the week before. This was the lowest score in the last three years. The hot, dry weather that is forecast in France for the next two weeks could cause maize to be stressed as it approaches the pollination phase. FranceAgriMer reported that as of Monday, 16% (of the grain maize crops) had been pollinated. The French crop is waning, which has led to a rally on Euronext Maize. On Friday, new-crop November contracts set a new contract high?at EUR229.75 (262.93) per metric ton. Last week, the conditions of wheat and barley crops also declined while harvesting increased. Soft wheat, France's biggest cereal crop, was rated as good or excellent in 68% of cases. This is down from 74% just a week ago, but still higher than 67% from a year earlier. The soft wheat harvest reached 26% completion, which is well above the five-year average for that same week of 5%. Many market participants expect moderate losses for wheat, even though?some areas may suffer from very low yields. Grain handler Soufflet Agriculture expects a soft wheat production between 31.5 and 32 million metric tonnes, compared to 33.4 million last year. Last week, winter barley harvesting reached its final stages. 83% of the crop was harvested by Monday, compared to a five-year median of 39%.
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Germany assumes that tankmaker KNDS still plans to pursue IPO despite pause
A spokesperson for the German government said that the Franco-German Defence Group KNDS would still consider an IPO, said a Berlin-based official on Friday. The company had put its plans on hold earlier this week, citing a need for improved market conditions. The spokesperson said that the federal 'government' respects the decision of the French 'partners in leading the company to a successful future. The spokesperson said that the German government, along with?France, German and German shareholders?, had set out?key points? for taking a stake, based on the expectation of a successful IPO. At the same press conference, an official from the Economy Ministry said that Germany would continue to'stand by' its agreement to purchase a 40% stake in KNDS because it is a very important asset to the country's security. KNDS said it would resume the process as soon as the market conditions permit.
UN weather agency: Strong El Nino to develop quickly in the coming months
On 'Friday, the United Nations weather agency raised its forecast of the rapid emergence in the coming months of a strong El Nino. It warned that this 'phenomenon will likely drive global temperatures up.
El Nino, a periodic heating of the sea surface temperature in the eastern and central Pacific Ocean that lasts typically between nine and twelve months, can increase global temperatures, and increase the risk for extreme weather.
Alvaro Silva is a WMO scientist. He said, "El Nino has emerged in the Equatorial Pacific. There is remarkable agreement between forecast models on the strength of this El Nino."
Silva stated that the intensity of El Nino was important as it increased the probability of extreme weather events and climate changes in different parts of the globe.
Early June, the WMO?had predicted a moderate El Nino or a?possibly strong El Nino. However, recent forecasts have given the WMO more confidence that conditions for a strong El Nino are developing in equatorial waters of the Pacific. WMO could revise its forecast further if later information indicates a very powerful El Nino.
WMO seasonal forecasts show a "strong and robust" pattern of El Nino. This includes drier conditions than normal in many parts of the world including Central America, Caribbean and North and South America. In South Asia, during the monsoon, drier patterns are predicted in Indonesia and South East Asia.
El Nino will also boost global temperatures. Silva stated that we 'know' that global temperatures usually reach a?record level during El Nino.
Experts said that Europe experienced the worst heatwave ever recorded between June 20 and 28. This caused disruptions to electricity generation, infrastructure damage, and overwhelmed healthcare systems. Scientists said that climate change was most likely to blame for the 'extreme heat'.
Silva said that El Nino's effects will be felt across the globe until 2027. (Reporting and Editing by Linda Pasquini and William Maclean, with Olivia Le Poidevin)
(source: Reuters)