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Stocks rally in relief after Trump suspends tariffs
On Thursday, global stocks rose, the dollar recovered its footing and the manic bond saleoff stabilized after U.S. president Donald Trump announced he would temporarily reduce the heavy duties he just imposed on several countries. After a market crash that wiped trillions from global stocks, and sent U.S. Treasury Bonds and the dollar tumbling, Trump announced on Wednesday a 90-day suspension of many of his new duties in an unexpected reversal. Overnight, Wall Street's "Magnificent 7" stocks soared again. Their market value grew by more than $1.5 trillion. S&P 500 Index and Nasdaq Composite Index posted their largest daily percentage gains for more than a decade. The U.S. Futures market turned lower Thursday with Nasdaq futures dropping 0.7% and S&P500 futures down by 0.3%. In the previous session, the dollar recorded its biggest one-day gain against the yen and the Swiss franc since five years. The dollar lost some of its gains on Thursday in Asia, reflecting market uncertainty about the longer-term outlook as well as the Sino/U.S. Trade War showing no signs of abating. Khoon Goh is the head of Asia Research at ANZ. He said: "I believe the initial move was simply massive short covering, and this gave the world a little breathing space. Except for China. Because markets started to price the worst-case scenarios." The markets are likely to figure out what to do next now that the dust is settled. Investors in Asia were still elated by the temporary tariff relief. Japan's Nikkei soared by 8% while European futures jumped. The DAX and EUROSTOXX50 futures each rose by about 8%. FTSE futures jumped 5.5%. Trump's decision to reverse the tariffs on specific countries is not final. The White House announced that a 10% blanket duty will continue to be applied to almost all U.S. imported goods. This announcement does not seem to affect existing duties on steel, aluminium and autos. He said he would also increase the tariffs on Chinese imports from 104% to 125%, which came into effect Wednesday. China raised the additional duties on American goods to 84% on Wednesday and imposed restrictions against 18 U.S. firms, mostly in defense-related industries. The Chinese equity market opened strong on Thursday with the CSI300 blue chip index up 1.6%. Hong Kong's Hang Seng Index rose 3.3%. Wong Kok Hoong is the head of Maybank's equity sales trading. The China + 1 route is still intact. "As the tariffs on the rest of world are 10% for 90 days and companies/businesses will have the time/alternatives necessary to adjust their supply chain routes." The yuan's move painted a very different picture. It fell to its lowest level since December 2007, at 7,3518 per dollar. The People's Bank of China set the midpoint, or the rate at which the yuan can trade within a 2% range, prior to the market opening. This is the lowest since September 11, 2023. SELL BONDS The steep drop in bond prices this week showed signs of slowing down on Thursday. The benchmark 10-year Treasury rate dropped to 4.2889% after reaching a high of 4.515% in the previous session. It also rose by 13 basis points. Fears of fragility on the world's largest bond market were reignited by a violent U.S. Treasury sale in previous sessions. The "sprint for cash" in COVID era was reminiscent. Lawrence Gillum is the chief fixed income analyst at LPL Financial. He said that Treasury yields are continuing to rise because of "sticky inflation, a patient Federal Reserve, potential foreign buyer boycotts and hedge fund deleveraging." The minutes of the Fed's March meeting were released on Wednesday. They showed that policymakers are not going to rush to cut interest rates because they believe higher tariffs will boost inflation. However, they also worry about Trump's trade policies affecting economic growth. The markets are now pricing just 80 basis points in rate reductions by December. This is down from over 100 basis points earlier in the week. Investors worried about the rising Sino-U.S. tensions caused oil prices to fall elsewhere. Spot gold continued to climb, and it was up by 0.5% last at $3.097.52 per ounce.
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Financial Times - April 10
These are the most popular stories from the Financial Times. These stories have not been verified and we cannot vouch for the accuracy of these reports. Headlines British Steel is preparing to shut down one of its blast furnaces Keir Starmer focuses US trade negotiations on reducing 25% tariffs on UK cars UK and India rush for trade agreement after Trump tariffs Prada reduces Versace purchase by $200M after Trump tariffs View the full article British Steel will shut down one of its blast furnaces by next week in order to conserve critical raw materials. The talks to prevent a possible collapse with UK ministers are expected to continue on a second day. Keir starmer, British Prime Minister, has switched his focus on U.S. Trade Talks to cutting the 25% tariff on British Cars. He admitted he didn't know if he would be able to convince U.S. Donald Trump to drop his new 10% tariff for all British Imports. Britain and India held discussions on closer financial cooperation as they rush to seal a trade agreement. Officials in New Delhi said that U.S. president Donald Trump's war of trade has given new impetus to negotiations. Due to the effects of President Donald Trump’s trade war, the Italian fashion group Prada has reached a deal with Versace. The discount is more than $200m.
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London metals increase as Trump's tariff reprieve calms fears of a trade war
The base metal price in London rose on Thursday due to a better market sentiment following the decision by U.S. president Donald Trump to temporarily lower his recent hefty tariffs on a number of countries. As of 1300 GMT, the benchmark three-month price for copper on London Metal Exchange (LME), was up by 3.5% to $8,910 a metric tonne. LME copper is down 12% from its peak of $10,164.50 on March 26, before the trade tensions escalated. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper rose 2.8%, to 74.540 yuan a metric ton. This is a recovery from a low of eight months on Wednesday. Trump announced on Wednesday a 90-day suspension of many of his new trade tariffs, a shocking reversal following a global stock market crash that wiped trillions of dollars off the value of stocks. Trump increased pressure on China, however, by threatening to increase tariffs on China's top metal consumer to 125%. This is an increase from the 104% rate that was set on Wednesday. Beijing had decided to increase additional duties to 84% on American products. The market was caught off guard by Trump's abrupt change in tariff policy. Investors who were initially pessimistic on economic prospects found renewed confidence after the reprieve. This boost, however, may only last a short time due to his unpredictable stance," said a base metals dealer. SHFE aluminium increased 1.9% to 19.815 yuan per ton. Zinc rose 2% to 22495 yuan. Lead gained 1.2% at 16,660 yuan. Nickel was up by 0.7% to 119,660, and tin dropped 3.0% to 251,600. Other metals include LME aluminium, which rose 4.0% to $2.407 per ton. Lead was up 2.3% at $1.882, Tin was up 4.5% to $31,150; zinc CMZN3 was up 2.6% at $2.625, and Nickel was up 2.9% to $14,485 per ton.
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Stocks rally in relief after Trump suspends tariffs
On Thursday, global stocks rose, the dollar regained its footing and the manic bond saleoff stabilized after U.S. president Donald Trump announced he would temporarily reduce the heavy duties he had imposed on dozens countries. After a market crash that wiped trillions from global stocks, and pushed down U.S. Treasury Bonds and the dollar in an unexpected reversal, Trump announced on Wednesday a 90-day suspension of many of his new duties. Overnight, Wall Street's "Magnificent 7" stocks gained more than $1.5 trillion. The S&P 500 Index and Nasdaq Composite Index also recorded their largest percentage gains for more than a decade. The U.S. Futures market turned lower Thursday with Nasdaq Futures dropping 0.67%, and S&P500 futures declining 0.17%. In the previous session the dollar recorded its biggest one-day gain against the Swiss Franc and the yen since two months, and it held most of these gains in Asia on Friday. The Nikkei soared by 8% in Japan, while European futures jumped. The EuroStoxx 50 and DAX Futures each climbed by roughly 9%. FTSE futures jumped 6%. Jeff Schulze is the head of ClearBridge Investments' economic and market strategy. He said that the news surprised the market because of its magnitude. "However, given that the tariffs have been announced and are still in place... this is still going dramatically increase the average effective rate of tariff in the U.S. up to close to 20 percent." Trump's decision to reverse the tariffs on specific countries is not final. The White House announced that a 10% blanket duty will continue to be applied to almost all U.S. imported goods. This announcement does not seem to affect existing duties on steel, aluminium and autos. He said he would also increase the tariffs on Chinese imports from 104% to 125%, which came into effect Wednesday. China raised the additional duties on American goods to 84% on Wednesday and imposed restrictions against 18 U.S. firms, mostly in defense-related industries. It is hard to imagine either side reversing their position in the coming days. We believe that there will be talks, but a complete rollback of the tariffs added since Inauguration day is unlikely. Our long-held assumption that the effective rate of tariffs on China will settle at around 60% seems to be the best bet. The offshore yuan is expected to open Chinese markets ahead of the onshore opening. The dollar was last 0.15% lower at 7.3570 per dollar after hitting a record low earlier this week. SELL BONDS The steep drop in bond prices this week showed signs of slowing down on Thursday. The benchmark 10-year Treasury rate was last at 4,3160%. It had reached a high of 4.515% in the previous session, and risen by 13 basis points. Fears of fragility on the world's largest bond market were reignited by a violent U.S. Treasury sale in previous sessions. The "dash for money" of the COVID era was reminiscent. Lawrence Gillum is the chief fixed income analyst at LPL Financial. He said that Treasury yields are continuing to rise because of "sticky inflation, a patient Federal Reserve, potential foreign buyer boycotts and hedge fund deleveraging." The minutes of the Fed's March meeting were released on Wednesday. They showed that policymakers are not going to rush to cut interest rates because they believe higher tariffs will boost inflation. However, they also worry about Trump's trade policies affecting economic growth. The markets are now pricing just 80 basis points in rate reductions by December. This is down from over 100 bps earlier this week. Oil prices in other countries rose due to optimism about the tariff pause. Spot gold continued to climb, and it was up by 0.5% last at $3.097.52 per ounce.
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Trump does not want US Steel to go to Japan
U.S. president Donald Trump said Wednesday that he doesn't want U.S. Steel Corp. to move to Japan. This suggests he doesn't support Nippon Steel in its bid to acquire the American steel manufacturer. The comment seemed to contradict recent Trump administration actions. Trump instructed a national-security panel on Monday to review Nippon Steel’s $14 billion offer for U.S. Steel in order to determine whether "further actions" are appropriate. This raised hopes that the deal might finally be approved. After Trump's comment on Wednesday, U.S. Steel shares fell 13% after-hours. Trump added, "We love Japan." Trump said, "We do not want it to be sent to Japan or anywhere else. We are working with them." U.S. Steel & Nippon Steel didn't immediately respond to comments. In January, the then-outgoing president Joe Biden blocked the merger on grounds of national security. The two companies then sued the Committee on Foreign Investments in the United States (which examines foreign investments to determine if they pose a national security risk), claiming that Biden had influenced the committee's decisions and violated their right to an impartial review. The deal, announced in December of 2023, was met with opposition from all political parties ahead of the U.S. Presidential election on November 5. Then-candidates Trump, and Biden both vowed to stop the purchase of this storied American firm. Companies had claimed that Biden was against the deal while he ran for re-election in Pennsylvania, a battleground state where U.S. Steel has its headquarters. The Biden administration defended the review, claiming it was essential for protecting infrastructure, supply chains, and security. The Trump administration filed an extension motion last month to allow the government to have more time to complete merger negotiations with the companies. The Trump administration and companies requested late on Monday that an appeals court pause the litigation until June 5, while CFIUS reviews this tie-up once again. They noted that the process could "fully resolve" their claims.
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US stocks soar, dollar gains in dramatic rally of relief as Trump pauses his tariffs
The S&P 500 recorded its biggest gain in a single day since 2008. Meanwhile, the dollar rose and Treasuries reversed their losses after U.S. president Donald Trump announced a temporary U.S. tariff pause. Trump's announcement came after a day of turmoil on the markets. Bond prices and the dollar had fallen earlier that morning amid fears the Trump administration would raise tariffs up to levels not seen in more than 100-years, which could push the economy into a recession. The president announced a 90-day pause on tariffs for many countries, even though he increased the levy of 125% on Chinese imports. The market was relieved by the news that there would be a break. The S&P 500 closed 9.5% higher while the Nasdaq gained 12.2%, its largest one-day gain in history and second-largest ever. Investors said that uncertainty about tariffs on a longer-term basis continued. Gina Bolvin of Bolvin Wealth Management Group, Boston, said: "This is a pivotal moment that we have been waiting for." The timing could not be better as it coincides with the beginning of earnings season. Bolvin said that "However uncertainty remains over what will happen after the 90-day window, leaving investors to deal with possible volatility in the future." The next U.S. quarter will provide more insight into the health and performance of American corporations. Several U.S. financial institutions, including JPMorgan Chase are due to release their results on Friday. The benchmark 10-year Treasury price also reduced its earlier losses, after the U.S. Treasury Department witnessed strong demand for the notes in an afternoon auction. The yield on the benchmark 10-year U.S. notes increased by 6.8 basis points, to 4.328%. Prior to that, it had reached a high of 4.515% - the highest since 20 February. Bond yields are opposite bond prices. The sharp drop in Treasury bond prices and the reports of large-scale liquidations have raised concerns over deteriorating liquidity on the market. Before Trump's announcement, the dollar was lower. The selling of U.S. assets has been widespread and deep since Trump announced sweeping tariffs in April. Deutsche Bank analysts said in a Wednesday note that "the market has lost trust" in them, and the world is entering uncharted financial territory. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) rose by 0.25%, reaching 103.03; the euro fell 0.08%, at $1.0947. The dollar gained 1.04% against the Japanese yen and 1.01% against the Swiss Franc. U.S. stock prices extended their gains after Trump's announcement. The Dow Jones Industrial Average rose by 2,962.86 or 7.87% to 40,608.45. The S&P 500 gained 474.13 or 9.52% to 5,456.90. And the Nasdaq Composite gained 1,857.06 or 12.16 % to 17,124.97. MSCI's global stock index rose 42.32, or 5.70%, to 785.28. The pan-European STOXX 600 ended the day down 3.5%. The news about tariffs also caused oil prices to rise. Brent futures gained $2.66 or 4.23% to settle at $65 a barrel. U.S. West Texas Intermediate Crude Futures rose $2.77 or 4.65% to $62.35.
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Aurubis, a German copper recycling company, expands its US facility
Toralf Haag, CEO of the German firm, said on Wednesday that Aurubis plans to increase its copper recycling smelter's capacity in the U.S. in this year. Haag added that Aurubis is looking forward to future investment opportunities. Aurubus invested $800 millions in the four-year project. Haag says it will process 188,000 metric tons complex copper scrap to produce 70,000 tonnes of refined metal per year. North America is a very attractive market. Haag stated in an interview at the CESCO and CRU Copper Conferences that there is currently no large recycling facility located in North America. The majority of scrap is exported. According to Trade Data Monitor, the U.S. exports nearly 960,000 tons copper scrap each year. Of that, 41% went to China, 11% Canada, and 10% Thailand. The U.S. president Donald Trump ordered an investigation into the possibility of import tariffs for copper, including scrap. This is to encourage local production of this metal that's used in construction and the power industries. Haag added that Aurubis only had one operation in the U.S., the Richmond site. Aurubis may invest in additional recycling capacity in the U.S. Copper scrap is also found in the cable industry, and by telecom companies. Aurubis anticipates that data centres will be a future source of scrap. Copper in data centres is only good for three to five year. Then it has to be replaced, because technology moves so quickly. The demand for copper is expected to increase in the future due to data centres that are used for artificial intelligence. (Reporting and editing by David Gregorio; Pratima Deai)
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What is Trump's partial tariff pause?
U.S. president Donald Trump abruptly halted part of his trade war on global trading partners on Wednesday, reducing duty rates on many goods for 90 days in order to give room for negotiations on lower trade barriers. This was done even though he raised new tariffs to 125% on Chinese goods. This latest course reversal was part of Trump's hastily announced tariff agenda. It has caused confusion over its goals. Here are the key details about Trump's latest action: "RECIPROCAL" TARIFFS ARE NOW SUSPENDED Trump's decision will have the net effect that most goods imported from other countries are subject to an import tariff of 10% for the next ninety days. The 90-day suspension of Trump's Wednesday higher reciprocal tariffs for 57 trading partner is in effect. The European Union, Japan and South Korea are among the partners that will be reverting to 10% tariffs. The "Baseline 10% Tariff Rates" that went into effect on April 5, for most countries, including Brazil Australia Britain and Colombia will continue to be in place for 90 days. CHINA RAISES TARIFF TO 125% Trump has retaliated with new tariffs after several rounds of escalating tariffs, including China's 84% tariff announced on Wednesday in Beijing. The total amount of new duties since Trump took office in January is now 125%. The new duties are on top of the tariffs that he imposed during his first term. MEXICO, CANADA AND CANADA WILL NOT CHANGE Trump's announcement of tariffs last week spared Canada, Mexico and the United States. However, their goods will still be subject to 25% fentanyl tariffs if not in compliance with the U.S. Mexico Canada trade agreement's origin rules. The USMCA compliant goods are exempt from these duties for now. AUTOS, METAL TARIFFS REMANENT Trump's pause doesn't apply to the 25% tariffs on steel and aluminium that he imposed in March, nor on autos which began on April 3. The 25% tariff on auto components will not be implemented until May 3. SECTORAL CARVEOUTS STAY Trump's first order exempted critical minerals, copper, lumber and semiconductors from global tariffs. These sectors will be subject to future trade investigations, which are likely to result in separate tariffs. Separately, Trump’s order exempted energy products such as oil, gas, and other energy from tariffs. (Reporting and editing by David Lawder)
Baltimore port: What effect will bridge collapse have on shipping?
A significant bridge collapsed in the U.S. port of Baltimore in the early hours of Tuesday after being struck by a container ship, plunging vehicles into the river listed below.
Traffic was suspended at the port until additional notification, Maryland transportation authorities said.
PORT INCLUDES
It is the deepest harbor in Maryland's Chesapeake Bay, closer to the Midwest than other East Coast ports, with 5 public and 12 private terminals, according to Maryland federal government site.
It is among the tiniest container ports on the Northeastern seaboard, handling 265,000 containers in the fourth quarter of last year, according to container shipping expert Lars Jensen.
The Port of New York City and New Jersey dealt with around 2 million containers because very same duration, and Norfolk Port in Virginia managed 850,000, so the flow of containers to Baltimore can likely be redistributed to bigger ports, Jensen said.
PRESENT STATUS OF CARGO SHIPS INSIDE PORT
More than 40 ships remained inside Baltimore port, including little freight ships, yank boats and enjoyment craft, information from ship tracking and maritime analytics service provider MarineTraffic shows.
At least 30 other ships had indicated their destination was Baltimore, the data revealed.
IMPORTS
It is the busiest U.S. port for automobile shipments, dealing with more than 750,000 lorries in 2023, according to information from the Maryland Port Administration.
The port handles imports and exports for major car manufacturers including Nissan, Toyota, General Motors , Volvo Automobile, Jaguar Land Rover and Volkswagen, including high-end models for Audi, Lamborghini and Bentley.
It is likewise the biggest U.S. port by volume for handling farm and building machinery, along with agricultural products.
Imports of farming items amounted to 3 million tonnes in 2015, consisting of 1.2 million of sugar and salt, along with plaster, fertilisers and forest products, according to Ishan Bhanu, lead farming commodities analyst at Kpler.
U.S. sugar company ASR Group, which runs a refinery near the center of Baltimore, said it does not anticipate short-term impacts to its operations.
Other leading imports were paper/paperboard and plywood/veneer/particle board, the Maryland authority site programs.
EXPORTS
The Curtis Bay Piers coal terminal is around 3 miles from the highway which ran over the bridge.
During the very first 9 months of 2023, Baltimore was the second-biggest port for U.S. coal exports, behind Norfolk, Virginia, according to the most recent data from the U.S. Energy Info Administration (EIA).
Baltimore exported about 20.3 million short lots of coal, up from 14.3 million short lots during the exact same period in 2022.
About 13.3 million short lots of exports from Baltimore during the first nine months of 2023 were steam coal and 7.0 million short heaps were metallurgical coal
The Baltimore port also exports smaller quantities of other minerals and metals.
Other top export commodities by weight in 2022 were melted gas (LNG), waste-paper, ferrous scrap, and automobiles/light trucks, according to Maryland federal government information.
Cove Point, which is upstream from the bridge, is the closest LNG terminal. Operator BHE GT&S was not instantly available for remark.
ICIS ship tracking data reveals Cove Point normally exports about 500,000 tonnes of LNG each month.
CRUISE LINER
It is likewise a cruise terminal, with operators Norwegian , Carnival and Royal Caribbean, all utilizing the port for Caribbean, Canadian, and other Atlantic destinations.
In 2023, cruises carrying more than 444,000 guests left from the port, the Maryland federal government website says.
LONDON METAL EXCHANGE STORAGE FACILITIES
In Baltimore storage facilities registered with the London Metal Exchange, there are 756 metric lots of nickel, 150 tons of tin and 50 lots of copper, LME information shows.
BUNKER FUEL
Bunker fuel traders said deliveries to the port of Baltimore and Annapolis Anchorage are likely to be affected from the suspension of traffic and ports in Pennsylvania and Virginia might function as potential bunkering alternatives.
This might affect vessel schedules and may lead to an boost in bunker fuel prices at the alternative ports, depending on for how long the port of Baltimore stays unattainable.
(source: Reuters)