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There's a gulf between market expectations and reality in MORNING BID Europe
Wayne Cole gives us a look at what the future holds for European and global markets. The?day following, reality has begun to erode market expectations of peace and prosperity?in the Middle East. The?dollar is flat, while Asian stocks are down and Wall St. futures are off, despite holding a majority of yesterday's gains. Treasuries did not match the gains in European bonds. Fed members sounded in no rush to reduce rates, and some flirted with tightening. Iran questions the purpose of the talks scheduled for Saturday with the U.S., when Israel continues to attack Lebanon. The 10-point and 15 point plans presented by the two sides are virtually identical. According to reports, the English version of Tehran's plan does not even match its Farsi translation. It is important to note that the Strait of Hormuz does not have a full opening and ships do not sail through it freely, as some US officials claim. Officials are making claims. Any ship tracking site will show that vessels are still clogging both sides of strait with only a few?moving, then through Iran's?toll gate to the north of narrow channel. Before the war there were around 138 vessels per day that used to transit, but now only 10 or fewer. Iran's Revolutionary Guards test the limits of the newfound power they have over the waterway. They insist that tankers must be approved and checked for just $1 per barrel or $2 million for VLCCs. This is to be paid either in yuan, or crypto. For those who are worried about the end of the petrodollar, this is a big no. Shipowners are also in a bind, as even if willing to pay they would still be violating many different sanctions from many countries. There's also the issue of freedom of the oceans, which is a fundamental element of global trade. Why can't China or Yemen charge a fee for using the?Bab el-Mandeb, if Iran can charge for ships passing through the Hormuz Strait? South Africa might even charge a fee for the Cape of Good Hope, and Chile could charge a fee for the Cabo de Hornos. This would allow tolls to be imposed on all seaways around the world, and another link in the supply chain to be broken. The following are key developments that could influence the markets on Thursday. Weekly jobless claims and the third release of Q4 GDP German industrial production for February IMF Managing director Kristalina Georgieva gives a curtain-raiser address ahead of the IMF/World Bank Spring Meetings
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Russell: Refined fuel prices in Asia are declining, but supply is still stressed.
The price of refined fuels has fallen sharply, in line with the declines seen in crude oil after the tentative ceasefire agreement between the United States & Iran. However, the prices remain at levels that indicate a shortage. The prices of gasoil and jet fuel in Singapore, the Asian trading center, all dropped by?double digits on Wednesday amid relief from the market that the 'deal' may lead to the reopening of Strait of Hormuz. The 'ceasefire' and commitment to peace talks announced by the United States in separate announcements looks already to be on its way out. Tehran said it was "unreasonable to continue talks with the United States to form a permanent agreement as long as Israel continued to attack Iran-aligned Hezbollah in Lebanon. Some vessels have been reported to have passed through the Strait of Hormuz after the agreement, but it is yet to be seen if more ship owners are willing to risk transiting this narrow waterway, through which up to 20% of crude oil, refined products and liquefied gas were transported before the U.S.-Israeli attack on Iran, on February 28, 2008. Even if tanker traffic picks up in Asia, the market for refined physical products?still appears stressed and is likely to remain that way for a long time. Brent crude futures, the global benchmark for crude oil prices, closed at $94.75 per barrel on Wednesday. This is a 13.3% drop from their previous close. Brent finished at $72.48 in February, meaning that it has gained 30.7% since the beginning of the Iran Conflict. The price increase for refined products in Asia is much higher than the Brent rise. Jet fuel has been the hardest hit, as it is harder to store. Singapore jet fuel On Wednesday, the price of a barrel ended at $193.53. This is down 14.2% compared to its previous closing and 20% lower than the record high?of $242.06 achieved on March 30. It is still more than twice the price of $93,45 that it closed on the 27th February, the day before Israel and the U.S. launched their aerial attack against Iran. Gasoil (the building block of diesel) ended Wednesday at $145.02 per barrel, a drop of 17.1% from its previous close. However, it remains 59% above the closing price on February 27. Gasoline The price of a barrel finished Wednesday at $120.80, down 13% compared to the previous close. Light vehicle fuel has increased by 52% since the February 27th close. MARKET TIGHTENS The premiums that refined fuels command over crude futures indicate that many Asian refiners struggle to obtain enough oil to maintain their operating rates. According to Kpler, data from commodity analysts Kpler, seaborne crude imports in?Asia were estimated at 19,22 million barrels a day (bpd). The three-month moving median of 25.0 millions bpd was recorded in the first quarter 2026. The last vessels to leave the Strait of Hormuz before its closure was effective after the conflict began were seen arriving in April. Even if more tankers begin to pass through the Strait, seaborne arrivals in the top-importing area are likely to be lower than usual in May. Kpler data estimates April exports by Asian refiners to be 6.61 million bpd. This is down from 7.32 million bpd in march. Kpler data shows that April and march were the two smallest months in Asia for refined fuel exports since April 2017. They are also down significantly from the 11,1 million bpd in February. Fuel prices are high because of the loss of 5 million bpd in refined product exports to Asia. Even if oil starts to flow out of the Middle East again at the pre-conflict level, it will take several months for the supply chain to catch up. There is a risk that the situation will worsen in the near future, particularly if the ceasefire does not work and the Strait of Hormuz continues to be off limits for most vessels. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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METI reports that the April-June crude output in Japan is expected to drop by 0.7% due to a lack of demand.
The Ministry of Economy, Trade and Industry said that Japan's crude steel production is expected to fall 0.7% from a year ago in the April-June period due to slack demand in the construction and manufacturing industries. The fourth largest steel producer in the world is expected to produce?20.0 metric tons over the next three months. This would be the lowest production since the July-September quarter 2025, when it dropped to 19.93 metric tons. The annual crude steel production for the fiscal year ending on March 31, is estimated at 80.68 million tons. This is the lowest output since fiscal 1968 when Japan was experiencing high growth. METI stated that the construction industry's demand is unchanged, due to a lack of labour and increasing material costs. The METI expects the demand from automotive and other manufacturing industries to?stay flat. The?ministry, citing a?survey of the industry, said that consumption of steel products - including exports - is expected to fall 1.5% year-on-year in April-June to 17.98 millions tons. Exports only are expected to decline by 1.0%. Manabu Nabeshima of METI's Metal Industries Division told reporters that the crisis in Iran could reduce Japan's export to the Middle East. Reporting by Kantaro Kommiya, Yuka Obayashi and Shri Navaratnam. Editing by Shri Navaratnam.
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Andy Home: The drop in copper imports from China marks a change in the market's power.
The two-week Iranian ceasefire has helped to dispel some of the macroeconomic doom that had been engulfing the copper markets. But there could be an even greater problem for the copper bulls. China, which is the largest consumer of metals, has shown that it will not pay the high prices of January when the London Metal Exchange's three-month copper reached a nominal record of $14,527.50 a metric ton. According to the World Bureau of Metal Statistics which compiles trade data from customs statistics, the country's net imported of refined copper fell to 125 350 tons in February. This is the lowest monthly tally recorded since April 2011. It is natural for buyers to react to high prices in any commodity. However, China's influence over copper pricing has been steadily growing, due to its increasing domestic production capacity. Import SLumps, Export Surges Since September, the LME copper prices have been rising and reaching their January peak. Inbound shipments continued to slow, falling to 454,000 tonnes in the first two month of 2026. This is a drop of 25% compared to the same period in 2025. Chinese smelters are also increasing exports to take advantage of the strong price. The outbound shipments increased to 172,000 tonnes in January-February, up from 49,000 tons during the same period last year. China's net copper draw from the rest was only 283,000?tons combined in January and february, the lowest start to any year since 2006. Exports to Europe and America, in particular, are likely to have come from China’s bonded warehouse stock as traders filled the supply-chain gap left by last year’s?U.S. Tariff trade sucked metal to the United States. Chinese metal is also flowing directly to LME storage in South Korea, Taiwan and other countries. According to the LME monthly report, the amount of Chinese-brand Copper on LME warrant increased from 87 475 tons at end of December, to 155 600 tons at end of February. The big changes in China's trade in copper explain why LME stock levels of 385,275?tons are above their peak in 2018 and have returned to?levels seen last in 2013. HOLIDAY HIGH The massive build-up of copper in Chinese domestic stocks is remarkable given the sharp decline in imports. Shanghai Futures Exchange's (ShFE) stock always increases around the Lunar New Year period, but this year was more than usual. Early March saw a peak of 433,500 tonnes, up from a holiday record of 268,300 last year. The previous record for the season was 380,000 tonnes in 2020 when holidays coincided in China with COVID-19. ShFE stocks are down to 301,000 tonnes. There's still plenty of metal left to be used before we can start importing. Yangshan Copper Premium The usual bounce after the holidays has been seen in, an indicator closely watched of spot demand for imported vehicles. Shanghai Metal Market, a local data provider, estimates the premium over LME base prices at $65 per tonne, up from $ 20 in January but still a long way off $ 89 this time last year. The Chinese manufacturing sector has grown for four months in a row, but the impact on the market is being mitigated due to high inventories. GROWING POWER The expansion of China's domestic smelting capacity is the key to China's increasing resilience against high prices. Macquarie Bank estimates that the country's refined copper output will grow by 9% annually in 2025. This translates into an additional million tons of metal. Chinese smelters consistently outbid Western counterparts to secure raw materials in a competitive copper concentrates market. Macquarie estimates a modest growth of?1.8% in global mined production from 2025 to 2025. China's copper concentrate imports increased by 7.8% during the same time period. Imports for recyclable copper, another possible refinery feedstock, rose by?4% on an annual basis. China's ability, to secure enough raw materials to fuel the country's rising self-sufficiency of refined copper at a price for everyone else. Macquarie estimates that Western smelter output will shrink by 5.1% between 2025 and 2030. China is better able to resist higher prices by reducing imports and increasing exports. Copper?bulls would be roaring again if the Iran war de-escalated. Don't expect China will follow the bull script. Andy Home is a columnist at. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Trump warns of action if Tehran does not comply with the deal if US military stays around Iran
Donald Trump, the U.S. President, said that on Wednesday "its military ships and planes will remain around Iran" and threatened to start "shooting again" if Tehran did not fully comply with the agreement reached with Washington. "All U.S. "All U.S. The president added, "If it is not possible, which would be highly unlikely, the "Shooting Starts" will be bigger, better and stronger than anyone else has ever seen. Iran said earlier on Wednesday it would be "unreasonable", to continue talks with the United States to create a permanent peace agreement after Israel struck Lebanon on Wednesday with its most intense strikes to date, killing hundreds of people. Both sides seemed to have different views on Iran's nuclear programme, with Trump claiming that 'Iran has agreed to stop enriching Uranium', while 'Iran's Parliament Speaker Mohammed Bager Qalibaf said it was permitted to enrich uranium in accordance with the terms of the ceasefire. Trump said in a late Wednesday Truth Social post that "it was agreed a long time ago and despite the fake rhetoric claiming the opposite - NO NUCLEAR ARMS" will be used.
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Iron ore falls to a one-month low due to rising supply and China's demand concerns
Iron ore prices fell on Thursday, to their lowest level in more than a year. This was due to a combination of rising supply and concerns about the prospects for demand in China's top consumer. Iron ore, the most traded contract on China's Dalian Commodity Exchange(DCE), fell 2.14% and is now 753 yuan per metric ton. This is its lowest price since March 5. Instead of May, the September contract is now most traded. The benchmark May ore price on the Singapore Exchange dropped 2.1% to $1003.55 per?ton at 0333 GMT after hitting its lowest level since March 10 when it was $103 earlier in the session. Iron ore prices are under pressure due to higher shipments, according to analysts at broker Jinyuan?Futures in a recent note. They said that low profitability among steelmakers will disincentivise the mills to ramp up production. This would suggest a "limited upside" for demand. Analysts and traders, who spoke on condition of anonymity due to the sensitive nature of the issue, also said that speculation that China's iron ore buyer, the state-owned China Iron Ore Company, and the global miner BHP could potentially come to an agreement for a 2026 contract term contract weighed heavily on the prices. This is because a resolution to the long-running dispute will increase the availability of spot cargo at ports. The China Mineral Resources Group, established in 2022 with the goal of centralising iron ore procurement to win better terms from mines, is locked in a supply contract negotiations with BHP. This has banned domestic steel mills from buying some brands of iron ore. Brandon Craig, the incoming CEO of BHP, met on Wednesday with the Chairman of Chinalco, a Chinese aluminium giant. Craig had stated last month that he was focusing on strengthening BHP's relationship in China. Coke and other steelmaking ingredients are mixed. The benchmark steel prices on the Shanghai Futures Exchange have been moving sideways. Rebar fell 0.19%, while hot-rolled coils dipped 0.06%. Wire rod grew 0.49%, and stainless steel gained 0.6%. Reporting by Beijing Newsroom and Lewis Jackson, Editing by Subhranshu sahu
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Gold prices steady as investors watch US-Iran talks and prepare for inflation data
The gold price held steady on Thursday, as investors remained cautious over the direction of the U.S. Iran ceasefire talks. A key U.S. Inflation report is due later that day and will provide clues about interest rates. As of 0311 GMT, spot gold was not much changed at $4713.79 an ounce. U.S. Gold Futures for June Delivery fell 0.8% to $ 4,736.50. It doesn't appear that gold is doing much at the moment. Brian Lan, Managing Director of GoldSilver Central, said that there is still much speculation about what will happen after the ceasefire. Lan predicted that gold would?consolidate in the near-term between $4,607 to $4,860. Israel's heaviest strike yet on Lebanon, which killed hundreds, prompted a retaliatory threat from Iran. Prices of oil rose on Thursday amid concerns that supplies from the Middle East's key producing region might not resume fully, and doubts about the durability of the two-week ceasefire agreement between the U.S. Since the U.S. and Israel war against Iran began on 28 February, spot gold has fallen more than 10%. Higher energy prices have fueled inflation fears which led to markets reassessing interest rate expectations. Gold that does not yield a return tends to perform well in low interest rate environments. The minutes of the Federal Reserve meeting held on March 17 and 18 revealed that a greater number of policymakers believed that rate increases could be needed to combat inflation that continues to exceed the central banks' 2% target, especially in light of the Iran War. Investors will be watching for the key U.S. indicators of inflation, such as the Personal Consumption Spending data for February, due later today, and the March consumer price data, due on Friday, to get clues about the Fed's future policy. Standard Chartered said in a Wednesday note that "aside from near-term liquidity requirements, we expect gold will continue to rebuild its gains over the next?months, amid heightened geopolitical risks." (Reporting by Pablo Sinha and Noel John in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu) (Reporting from Noel John and Pablo Sinha in Bengaluru, Editing by Sumana Nady and Subhranshu Sahu.)
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Ampol and Viva will boost fuel supply by leveraging the export credit agency of Australia.
Australia's export credit agency will underwrite spot market purchases by Ampol and Via?Energy through its largest suppliers. This was announced by Prime Minister Anthony Albanese on Thursday. The new laws were passed by the parliament last week to allow Export Finance Australia (EFA) to finance fuel imports as a response to shortages caused by the Iran War. Since the U.S. and Israel war against Iran began late in February, Australia has been experiencing localised shortages. Albanese said at a press conference that "Export Finance Australia has agreed to terms with two of our largest suppliers...to enable them to?bring more petrol to Australia". This is an additional supply in Australia that they can source. As part of the agreement, government can decide where that supply will go. Albanese also plans to travel to Singapore on Friday to meet with Prime Minister Lawrence Wong as part of diplomatic efforts to boost fuel supply. Energy Minister Chris Bowen stated that volatile oil prices, and "speculations about what will happen in Middle East", had made purchasing more risky for companies. He said that the arrangement would allow companies to purchase fuel that they otherwise wouldn't be able to buy, and to do so for Australians. Oil prices fell?below $100 a barrel? on Wednesday after news of a two-week ceasefire. They rose on Thursday, however, amid fears that Middle East supply may not be fully resumed due to the?Strait of Hormuz being largely blocked. Bowen stated that the government would not dictate to Viva and Ampol where they could get their fuel. "Obviously, the closer you are to Australia, the faster it will be for you to arrive here, whether from Singapore, Korea, or Malaysia. Bowen added that there are also opportunities to be found in North America, and Mexico specifically. (Reporting and editing by Sonali Paul in Sydney, Christine Chen is reporting from Sydney)
Mexico constitutional reforms more likely with super-majority in sight
Mexican Presidentelect Claudia Sheinbaum's ruling coalition is close to protecting a. twothirds bulk in both chambers of Congress, which would. pave the way to passing questionable constitutional reforms on. its own.
Preliminary arise from Sunday's election program Sheinbaum's. leftist Morena celebration and its allies will have the super-majority. in the lower house, but likely came up short in the Senate when. brand-new legislators are seated in September.
Sheinbaum will take workplace one month later on in October.
Below are possible reforms that have markets and investors. concerned, and resulted in a sharp decline in Mexican possession prices on. Monday.
LAST-DITCH EFFORT
Sheinbaum's coach, outgoing President Andres Manuel Lopez. Obrador, proposed a series of constitutional reforms in. February, some of which critics argue would remove essential. oversight bodies, wear down judicial self-reliance and concentrate. more power in the executive branch.
The 128-member upper home will have at least 82 senators. from Morena and its junior partners in the Green Celebration and Labor. Celebration, simply except a two-thirds majority, according to a. government presentation utilizing initial election results. In. the 500-member lower house, meanwhile, Morena and its allies. will have at least 365 members, or 73% of the body.
Lopez Obrador will overlap with the newly-elected lawmakers. in his last month in workplace in September, and on Monday he. suggested he will make a desperate effort to enact the reforms. before handing the baton to Sheinbaum.
I'm going to talk it over with Claudia ... to see which of. those efforts we can push for and get authorized, said Lopez. Obrador.
Issue about the shakeup sent stocks falling over 6%. and the peso as much as 4.3% lower.
INDEPENDENT OVERSIGHT BODIES
Amongst his propositions to eliminate what he has referred to as. ineffectiveness and inefficient costs, Lopez Obrador has proposed. to scrap the constitutionally-enshrined flexibility of information. body INAI, federal anti-trust company COFECE, advancement. examination firm Coneval and telecoms regulator IFT.
It would also put the energy ministry in charge of energy. regulators CRE and CNH, both of which are now independent.
Sometimes, he has implicated some of the agencies of promoting. corruption.
OVERHAULING THE ELECTIONS AUTHORITY
Throughout his administration, Lopez Obrador frequently berated. the agencies, also including the national electoral authority. INE, which he is seeking to totally revamp.
As lots of as 700,000 individuals filled the streets of Mexico City. in February to protest the proposed taking apart of the INE.
The reforms are a method of instituting electoral reform to. cement Morena's political hegemony, said Nicholas Watson,. handling director of consulting firm Teneo.
Lopez Obrador likewise proposes reducing the minimum required. level of voter participation for binding citizen referendums, a. method he utilized in the past when just a small portion of the. public got involved, and require they be scheduled on same day. as elections.
JUDICIAL, LEGISLATIVE MODIFICATIONS
Lopez Obrador also desires big changes in the judicial system,. consisting of the popular election of Supreme Court judges, other. magistrates, plus electoral authorities. Critics argue such. chosen roles would erode their current self-reliance.
The number of Supreme Court judges would even more be cut to. 9, from 11, and all judges would require to be renewed in an. remarkable election to happen in 2025, which has likewise. been slammed as a struck on an independent court system.
Lopez Obrador has actually argued the modifications are required because the. current judiciary serves a minority and sometimes arranged. crime at the expense of society.
Regarding the legal branch, the reforms would also cut. the variety of members of the lower house of Congress to 300,. from 500, and slash the number of senators to 64 from 128.
S&P Global Scores stated while higher centralization of. political decision-making and mixed political signals under. Lopez Obrador had actually decreased the independence of numerous firms,. essential checks and balances stayed.
Steps that deteriorate checks and balances could affect. private-investor self-confidence by producing perceptions of higher. risk, potentially affecting economic growth and sovereign. credit reliability, it alerted.
LAUNDRY LIST
Lopez Obrador may need to be narrow his list of reforms. provided the tight window between the last legislative session. under him and Sheinbaum's October inauguration. Still more. proposed constitutional reforms include:
-- Expanded retirement advantages for senior citizens 65 years. or older and disabled individuals, which some specialists alert might include. to long-lasting pressures on public finances
-- Paid occupation training for youths in between the age. of 18 and 29
-- a restriction on genetically modified corn that critics. state could deepen a present corn disagreement with the United States
-- a ban on water rights in locations dealing with drought
-- a ban on open pit mining and fracking
If enacted, a few of the reforms might intensify a spending plan. deficit which analysts say is likely to be a significant concern for. Sheinbaum when she takes office.
Investors are not just concerned that these constitutional. amendments will now be passed, but perhaps that Sheinbaum, Lopez. Obrador and MORENA may try to more entrench their brand name of. politics and economics into the constitution, said Jason Tuvey,. deputy chief emerging markets economic expert at Capital Economics.
(source: Reuters)