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Dollar nears pre-war level on hope of US-Iran settlement
Investors bet on the resolution of the Middle East conflict even as the U.S. blocked Iran’s ports following the collapse of the peace talks over the weekend. Negotiating teams of?the?U.S. Four sources say that Iran and the United States could return to Islamabad in the coming week. Days after the highest level talks between the two nations since the Islamic Revolution of 1979 ended without a breakthrough, the most recent high-level discussions took place in Pakistan's capital. U.S. president Donald Trump stated that Iran is willing to reach a deal but added that he will not accept any agreement which allows Tehran to possess a nuclear device. The S&P 500 has returned to its pre-war level, largely due to gains in large tech stocks. Earnings season for the first quarter is just beginning. The STOXX Europe 600 index rose 0.7% on Monday, but is still 2% below the pre-conflict levels. Markets are trading in hope, not in resolution. "The failed weekend talks didn't?produce any deal, but also they did not close the doors on diplomacy. And that is enough to keep equities pushing higher for now," Charu Chanana said, Saxo’s chief investment strategist. She added, "The issue is that the markets are pricing in the possibility of a de-escalation quicker than it has been proven. I still expect a choppy and headline-driven tape, rather than a clear risk-on trend." Nasdaq Futures rose 0.4%, and S&P500 futures rose 0.2% before a series of earnings from JPMorgan and Wells Fargo. The dollar is 'on track for its seventh daily decline against a basket of major currencies and was nearing levels seen before the war. Bank of America’s global fund manager survey conducted between April 2 and April 9, covering 193 asset management firms with $563 billion in assets, revealed the most negative sentiment since June of last year. "Expectations of growth (are down) the most since March 20,22. For inflation, they are the highest since May 20,21. All contrarian -positive for risk assets so long as the ceasefire sends oil price below $84 a barrel, but not a 'close-eyes-and-buy'," strategists led by Michael Hartnett said. Investors expect oil prices to drop from $98 per barrel at the moment to $84 by year's end. The U.S. has started a blockade of Iran’s ports. This angers Tehran and adds uncertainty around the Strait of Hormuz. However, shipping data shows that a U.S. sanctioned Chinese oil tanker crossed the waterway Tuesday. Trump said that Washington would block Iranian vessels, as well as any ships that pay tolls demanded from Tehran. He also stated that any Iranian 'fast-attack' ships that came near the blockade? would be destroyed. Prices fell as expectations of a further dialogue on the end of the war overshadowed concerns about supply disruptions. Brent crude futures dropped 1.5% to $97.90 per barrel while U.S. oil futures fell by 2.3% to $96.78 a barrel. In China, data on ?Tuesday showed exports slowed in March as demand linked to an artificial-intelligence boom ran up against the effects of the ?war. DOLLAR ON BACKFOOT The euro rose by 0.2% to 1.1782, and sterling reached a six-week-high of $1.353, which puts the pound at a level above that before World War II. The yields on U.S. Treasury bonds have been moving lower. The two-year yield was last?down by 1.7 basis points to 3.7637%, and the benchmark 10-year yield is now at 4.279%. This is a drop of around 1.6 basis points. Energy prices are on the rise, which has fueled inflation fears and caused investors to be prepared for the possibility of several major central banks moving towards rate hikes. This would be a dramatic reversal in expectations from before war. The yields on two-year Treasury bills are now almost 40 basis points higher than late-February's levels. Away from the U.S., spot gold increased by nearly 1%, to $4,784 per ounce. Rae Wee contributed additional reporting from Singapore. Jamie Freed, Mark Potter and Mark Potter edited the article.
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Bunge, Riksbank's Bunge, says that low inflation allows Sweden to have margins in the event of supply shocks.
Aino Bunge, deputy governor of the central bank, said that Sweden's low inflation would?give it some room to deal with supply-side shocks. But if the war in the Middle East continues, this will also affect Sweden, he added. The war has caused a record rise in the price of gasoline and diesel, as well as increased global unrest and significant changes in financial markets. Consumer prices in Sweden were down 0.6% in march compared to the previous month and up 1.6% compared to the same period a year ago, which was much lower than expected. Bunge stated on Tuesday that "the inflation was significantly lower" than expected. She said: "We had a low starting level and we now have a reading which confirmed that. This gives us a margin in case there are supply-related shocks." Sweden, a country that has seen a tepid price rise despite the Iran war, is an exception to the rest of Europe and America. Bunge said that the prolonged conflict in the Middle East and the rising prices around the world will eventually affect the price of goods in Sweden. "We are not immune," she said. In March, the Riksbank maintained its main interest rate of 1.75%. It said that it expected this level to remain for some time. The next rate announcement will be made on May 7.
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Copper prices rise, and there are hopes for renewed US-Iran talks
On 'Tuesday, copper rose to its highest level in over a month as concerns about rising energy costs grew - and the dollar weakened on the hope of easing tensions in the Middle East. The Shanghai Futures Exchange's most traded copper contract ended the daytime session up 2.5% at 101.190 yuan (14,844.43) a metric ton after reaching 101.450 yuan earlier in the trading session, its highest level since March 11. By 0718 GMT, the benchmark three-month copper price on London Metal Exchange had risen 0.97% to $13,180 per ton. It reached its highest level since March 3, at $13,208. Analysts cite the concern that the Middle East war's soaring energy costs would increase the cost of metal, which is used in construction, manufacturing and power. Codelco has already seen its costs rise by 10 cents a pound. Antofagasta is concerned about'mounting input and fuel costs. Copper and nickel prices could be affected by tight sulphuric supply. This was exacerbated when reports emerged that China, the largest supplier, would stop exports in May. The Yangshan premium and a firm China demand boosted copper prices. The price of a ton of metal, which is a measure of the country's appetite to import it, increased 76% from week to week to $74 per ton on the 13th April, the highest level since June 2025. Shanghai nickel rose 3.91%, reaching its'strongest level since March 13'. London prices reached their highest levels since March 2,?at $17.840 per ton? after a major supplier Indonesia changed the formula for determining mineral reference price. Base metals were also supported by a softer Dollar amid hopes that tension between the U.S. and Iran would be eased. Four sources reported on Tuesday that negotiating teams from the U.S., Iran, and other countries could return to Islamabad in the coming week. This comes after days of talks between these two countries, which ended without any?breakthrough. SHFE Aluminium gained 0.75%. Lead gained 0.51%. Tin rose 2.52%. Zinc advanced 0.95%. Aluminium, lead, tin, and zinc all advanced on the LME. $1 = 6.8167 Chinese Yuan (Reporting and editing by Amy Lv, Colleen Waye)
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Gold prices rise as the dollar weakens and oil prices fall, easing inflation fears
Gold prices increased?on a?Tuesday?, aided by a softer Dollar and easing fears of inflation. Oil prices fell on the hope that further U.S. Iran peace talks would be held. As of 0755 GMT, spot gold rose 0.8% to $4,775.20 an ounce. U.S. Gold futures for delivery in June rose by 0.7% to $4 798.40. Oil prices?fell under $100 a barrel after signs of possible talks to end U.S.-Iran War?eased fears about supply risks arising from the U.S. ban on Iranian ports. Increased crude oil prices increase transportation and production costs, which in turn contribute to inflation. Gold is often used as a hedge to inflation but higher interest rates can reduce its demand. Ilya Spirak, the head of global macro for Tastylive, stated that markets appear to believe?that it's not too late?to reach a deal with Iran. Reports on Tuesday indicated that the U.S., Iran and their respective negotiating teams could return to Islamabad in the coming week after the talks between these two countries failed to produce a breakthrough. The U.S. dollar fell to its lowest level in more than a month on hopes for a diplomatic breakthrough, ?making the greenback-denominated gold more affordable for holders of other currencies. Near-term, the U.S. - Iran headlines could be the driving force due to a "thin macro calendar". This sets up choppy prices for the moment," Spivak said, adding that resistance to gold's price could be around $4,850. The current market expectation is that there will be a 25 basis-point rate cut in the United States this year. This was up from 13% last week. Before the war there was a belief that this year would see two rate cuts. Silver spot rose by 2.9%, to 77.73 dollars per ounce. Platinum gained 0.8%, to $2,086.15, while palladium rose 0.7%, to $1,585.42. (Reporting and editing by Subhranshu sahu, Varun H. K. and Noel John from Bengaluru)
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CEE ECONOMY - Romanian inflation spikes to highest level since mid-2023, but still below expectations
The Iran 'war caused fuel prices to surge, clouding the outlook for rate cuts. Data from the National Statistics Board on Tuesday showed that consumer prices increased by 9.87% over the year in March. This is up from 9,31% in February, but still below analyst expectations of 10,35%. Prices increased 0.78% over the month. The inflation rate reached double digits in the second half last year, after the broad coalition government of Romania raised the value-added taxes and other levies in order to reduce the biggest budget deficit in Europe. Analysts had predicted that policymakers would begin reducing interest rates in the second half 2026, when the effects of higher taxes and electricity prices would have faded. The economic fallout of the Middle East conflict has added uncertainty to inflation forecasts. In May, Romania's central banking, which has set an inflation target of 1,5%-3,5%, will publish its updated forecasts. Prior to the start of the war, policymakers expected that inflation would return to the target by the second half 2027. BCR Bank said that "with the short-term profile of inflation shifting upwards, the central bank will consider?eventual rates cuts at the earliest meeting scheduled for November", BCR bank. The ECB's moves and expectations (on inflation) are likely to be closely watched by the central bank. The government has reduced the excise tax on diesel by 0.30 lei ($0.0679) a litre to cushion consumers and businesses. It also capped fuel markups, and limited exports. The government is also compensating some transport companies for diesel costs. It has also extended the cap on household gas prices to April 2027 by one year. The 2026 budget approved in March aims to reduce deficit from over 9% to 6.2%. It is based on a 1% economic growth assumption. (Reporting and editing by Sumana Niandy; Luiza Ilie)
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China lifts the ban on BHP cargoes, resulting in a fall in iron ore
Iron ore futures fell on Tuesday after China's state-owned iron ores buyer lifted previous bans on the shipment of a?key ingredient for steelmaking from Australian miner BHP. This increased the supply available to domestic steel mills. The September contract for iron ore on China's Dalian Commodity Exchange traded 0.07% higher at 758.5 Yuan ($111.27). As of 0720 GMT, the benchmark May iron ore was down 1.1% at $103.5 per ton on the Singapore Exchange. China, the largest consumer of iron, has lifted its bans on purchasing the mineral from mining giant BHP, according to sources. The dispute, which had lasted for months, was resolved after the top executives of the miner visited their largest customer. Two sources who requested anonymity said that the state iron ore buyer, China Mineral 'Resources Group' (CMRG), notified domestic steel mills of their freedom to?purchase BHP seaborne cargoes. China's imports of iron ore in March increased 11.5% compared to the previous year, according to data released by the country's General Administration of Customs on Tuesday. Mysteel data showed that global iron ore shipments rose by 844,000 tons from April 6-12, compared with the previous week. The biggest increases were in shipments coming from Australia and Brazil, which grew by 2.335 million tons. The data from consultancy Mysteel showed that new bank lending in China increased less than expected, but the broad money and funding growth was still sufficient to support economic expansion. Coking coal and coke were both mixed in the DCE, each contributing 0.33%?and 0.24% respectively. The benchmarks for steel on the Shanghai Futures Exchange have mostly been in positive territory. Rebar was little changed. Hot-rolled coil rose 0.12%. Wire rod gained 0.61%. Stainless steel grew by 0.38%.
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What will a US Naval Blockade of Iran Mean for Oil Flows?
The U.S. Military began blocking shipping traffic in and out Iran's port. This would prevent approximately two million barrels per day of Iranian oil from reaching the global?markets. Here's a look at the details of the "blockade" and its impact on oil markets. WHAT HAS BEEN ANNOUNCED? After the weekend talks between the U.S., Iran and other negotiators in Islamabad ended without agreement, President Donald Trump announced that the U.S. Navy would "begin the process of BLOCKADADING any and ALL ships trying to enter or leave the Strait of Hormuz." U.S. Central Command announced on Monday that vessels not authorised to enter or leave the blockaded area would be subjected to "interception, divertison, and capture". The U.S. Central Command said that it would not interfere with the freedom of navigation by vessels transiting through the Strait of Hormuz from or to non-Iranian port. Iran's Revolutionary Guards warned Trump that any military vessel approaching the Strait would be treated as a breach of ceasefire and punished harshly. What is the impact on oil flows? Blocking Iranian oil shipments would remove a major source of oil from world markets. Iran exported 1.84 million barrels of crude oil per day in March, and has shipped 1,71 million barrels of crude so far in April. This compares to an average of 1.68 millions bpd by 2025. Kpler data revealed that a spike in Iranian production before the start of the war on February 28 had led to a near-record level of Iranian oil being loaded onto?ships. As of early this month, more than 180,000,000 barrels were either in transit or in floating storage. Kpler data showed that more than 180 million barrels of Iranian oil were in transit or floating storage as early as this month. OIL FLOWS from other Gulf producers? The shipping traffic through the Strait of Hormuz has been largely stopped despite the two-week ceasefire announced by Washington and Tehran on April 7. Two more vessels crossed the strait with the Chinese tanker on Tuesday. It was the first time a tanker has passed through the strait since the U.S. blockedade. Two Pakistani flagged tankers, Shalamar, and Khairpur entered the Gulf on Sunday to load cargoes coming from the United Arab Emirates (UAE) and Kuwait. A third Liberian flagged ship, Mombasa B was also transiting the strait and ballasting in Gulf. The Malta-flagged VLCC Agios Fanourios I turned back after trying to pass through the Strait of Hormuz on Sunday in order to load Iraqi crude oil bound for Vietnam. Kpler reports that as of April 7th, 187 tankers containing 172 millions barrels of crude and refined oil were in the Gulf. Which importers are most affected? Prior to the war, China was the largest crude oil importer in the world. The U.S. announced a waiver of sanctions last?month that has allowed other buyers to import Iranian crude oil, including India. Ship tracking data from LSEG & Kpler revealed that India is?set to receive India's first crude shipment from Iran since seven years this coming week. Before the war, around 20% of the world's oil and gas exports went through the Strait of Hormuz. Most of the cargoes were headed for Asia, which is the biggest importing region.
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Stegra receives $1.7 billion in funding from Wallenberg-led Group
Stegra, the Swedish green steel startup, announced on Tuesday that it had raised 1.4 billion euro ($1.65 billion), a funding consortium led by Sweden's influential Wallenberg family. This will allow the company to finish the construction of their plant. Stegra CEO, Henrik?Henriksson, said in a press release that "this financing reflects strong confidence in Stegra's model of business among both new and existing investors as well as lenders." Stegra, who in 2024 claimed to have?secured 6 billion euros in loans, equity and other sources, revealed in October of last year that they were seeking additional funding for the completion of their flagship hydrogen-based steel facility in northern Sweden. The company, which was previously known as H2 Green Steel?had also stated that it had?begun advanced discussions about outsourcing certain operations. The steelmaker said that Wallenberg Investments is leading the financing round. Wallenberg Investments has formed a group of investors who will take a leadership position in Stegra through this transaction. The consortium also includes Temasek, IMAS and Wallenberg Investments. The Wallenberg Family is Sweden's?most powerful business dynasty. They control firms worth hundreds billions?dollars including SEB and Ericsson. The vast family holdings of the Wallenbergs are managed by a 'complex mix' of private companies and foundations, including Knut and Alice Wallenberg Foundation and other foundations, which ultimately own FAM and unlisted investment firms. Stegra stated that the?new financing was agreed in principle and would be subject to final approval from lenders as well as completion of documentation.
Philippines asks US for extension on waiver to purchase Russian oil
On Tuesday, the Philippines' Energy Secretary Sharon Garin announced that her country is asking for an extension of a waiver allowing it to buy Russian oil and petroleum.
Garin told a news briefing that he was awaiting the response of the other party, but he was confident about getting this 'other window.' The waiver had expired on April 11.
Garin stated that the government is confident about obtaining the extension, but is also preparing alternative?supply arrangements in the event the request is denied.
She said that the Philippines is diversifying its energy supply sources, and the options do not just stop at Russia. The government is also looking to producers in South America including Argentina and Colombia, as well Canada and even the United States.
We wanted more options, so we opened the Russian window. She said, "We need diversification."
Jose Manuel Romualdez said that the Philippine ambassador to the United States was working with Washington last month to secure waivers and exemptions that would 'allow Manila to purchase oil from sanctioned U.S. countries. Reporting by Karen Lema, Nestor Corrales and David Stanway; Editing by John Mair & David Stanway
(source: Reuters)