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Trump attempts economic reset while Republicans worry about high gas prices
The U.S. president Donald Trump is going to try and brush off concerns over the economy and the sagging prospects of his Republican Party this week during a campaign style swing through battleground states Nevada and Arizona, while the war with Iran drives gasoline prices higher. Trump will use his Thursday stop in Las Vegas?to tout?his immigration and tax bill, which includes campaign promises tailored for hourly workers and hospitality workers. The soaring prices across the country -- from groceries to gas, to housing and insurance -- has shaken up the U.S. economic system. And with it Trump's ability to rally conservatives for November's midterm election. Five Republican strategists said they are concerned that the White House is losing control over the affordability debate. This could neutralize the political boost from the tax law and the resilient economy, which has been able to overcome Trump's previous military interventions and trade war. David Damore is a professor of political science at the University of Nevada in Las Vegas. He said that "the cost of living will trump everything -- no pun intended-- over any small changes in tax returns." Trump's advisers are more optimistic. They predict that Trump will reach a deal soon with Iran in order to reopen the crucial?Strait of Hormuz, and that economic anxiety related to this will subside before the midterm elections. White House spokesperson Kush Desai stated that Trump was always clear about the economic impact the Iran War would have in the short term. The tax benefits he delivered "reflect the Administration's continued focus on delivering our affordability agenda here at home." Higher fuel prices will lead to a sticky inflation of all consumer goods and services. This?presents pronounced risk for Republicans who face an increasing hostile reelection maps in the House of Representatives, and Senate. TRICKY MIDTERM MAPS According to Amy Walter of the Cook Political Report, an expert in election forecasting, Democrats are favored for the House majority, but key Senate races are moving in favor of Republicans in North Carolina and Georgia. Even the conservative state Nebraska is moving in their direction. Trump's approval ratings in late-March/Ipsos surveys fell to 36%. This marks a low in his second term. Nevada and Arizona have also?competitive Senate or House races. Trump will 'participate' in an event in Phoenix hosted by the conservative group Turning Point USA on Friday. Republicans hoped that provisions of the One Big Beautiful Bill Act, which included no tax on tips or overtime pay and was enacted by Trump and Republicans last year to a $4.1 trillion agenda, would resonate with voters looking for economic relief. "I don't think it will happen," said a Republican strategist who consults on congressional races. They spoke anonymously because they were discussing sensitive issues. In recent weeks, the challenge Republicans face has been exacerbated by Trump's focus in Iran and his public disagreement with Pope Leo. Trump announced last week that the White House would be sending senior adviser James Blair to help with midterm campaigning. This is a sign that he was growing concerned about the party's prospects. WEST COAST SLING Trump will host on Thursday a roundtable focused on his policy of eliminating federal taxes on tipping, a measure aimed at service employees in a city dominated by hospitality jobs. Supporters claim it will increase take-home pay of restaurant, hotel, and casino workers that rely heavily upon gratuities. Trump's tax law for 2025 includes a provision that allows workers who qualify to deduct tip income up to $25,000. However, payroll taxes will still apply. The benefit is phased out as higher-earners earn more. Analysts estimate that about 4 million Americans are employed in 'tipped jobs. They estimate an average benefit of $1,400 per year for those who qualify. Karoline Leavitt, White House spokesperson, said that more than 53 million taxpayers claimed at least one tax cut signature by Trump this filing season. She said the average tax refund was over $3,400. Gas prices are still a concern. Trump has sent mixed messages about how long the higher fuel costs will last. At times, he suggested that Americans might have to suffer for a prolonged period of time due to global supply disruptions. Other times, he said prices would fall dramatically once the war ends. People familiar with the discussions in and around the White House say that the administration has limited options for lowering energy prices, beyond a complicated diplomatic effort linked to the Strait of Hormuz. Officials released oil from the Strategic Petroleum Reserve and adjusted shipping rules. They also eased sanctions against Russian and Iranian oil. Prices remain high, with benchmarks globally exceeding $90 per barrel. One oil executive involved in the discussions stated, "All that's left are bad options. We have asked the White House to not pursue them." Trump has tried to calm expectations by portraying midterm elections losses as a normal occurrence for the party currently in power while insisting that his administration can reverse this trend. He told Fox Business Network’s "Mornings with Maria", a program that aired on Wednesday, "Even if you have a fantastic president, midterm elections tend to be lost." "So, we're trying to turn it around." There's no good reason for the Republicans to lose. (Reporting by Jarrett Renshaw and Jacob Bogage; additional reporting by Humeyra Pamuk, Editing by Colleen Jensen, Rod Nickel).
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Stocks return to record highs on Middle East peace hopes
The world stock market rose for the 10th consecutive day, hitting new records on Thursday. This was after a six-week turnaround from the massive selloffs caused by Israel and the United States attacking?Iran. The optimism about a possible deal to end the conflict was boosted by both Washington and Tehran's comments. With oil at $95 per barrel, MSCI’s main world stock index rose 0.25%. The U.S. S&P500 rose above 7,000 points Wednesday after global bank earnings reassured investors. This capped an 11 percent increase for MSCI world. Manpreet Gil, Standard Chartered Chief Investment Officer, Africa, Middle East, and Europe, said that the U.S. Tech stocks and the easing oil prices were the main drivers of the rebound. The European stock market is not back at its pre-war levels, but it has also gained 0.2%. As traders lowered their bets on higher interest rates, the region's government loan costs also fell. Bonds are still well below pre-conflict highs. Gill said that if the spike in energy costs fades and the impact of inflation is a temporary one, the leading central banks will likely try to "look past" this move. He said that everyone would be "quite cautious" about any possible second-round effects. OIL ON BOIL Brent crude was hovering just above $95 per barrel on the oil market after a Tehran-briefed source said that Iran could allow ships to freely sail through the Omani Side of the Strait of Hormuz, without any risk of attack, as part of its proposals in "negotiations" with the United States. After eight days of declining values, the U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, gained 0.1%. In addition to war-watching, U.S. president Donald Trump reignited the spat with Fed chair Jerome Powell by threatening him to be fired from his seat as a member of the Board of Governors of the U.S. Central Bank if he does not vacate his seat when his term ends on May 15th. The dollar's movement also caused the euro to lose traction. It had been within touching distance from its highest level, $1.182325, since the beginning of the war. The yen strengthened to 158.71 yen after Japan's Finance Minister said that Tokyo and the U.S. agreed?to increase communication regarding exchange rates, following her Wednesday meeting with U.S. Treasury Sec. Scott Bessent. Khoon Goh is the Asia Research Head at ANZ. He said that markets are looking beyond the conflict to pricing and a possible settlement. As markets price out the war premium, the dollar could come under more pressure and resume the downward trend that has been established for the past year. China's yuan traded at a near three-year high of 6.8152 to the dollar on offshore markets, and Chinese stocks rose more than 1% following data that exceeded expectations showing the economy grew by 5.0% in the 1st quarter. Strong exports were offset by still-sluggish consumption. AUSSIE DOLLAR AND GOLD GAIN MSCI's broadest measure of Asia-Pacific shares rose by 1.2%, while Japan's Nikkei225 surged 2.4% for a new record. Taiwan and Korea were not far behind, as Taiwan Semiconductor -Manufacturing Company (TSMC), a key player in the AI sector, reported a 58% increase in quarterly profits. Goldman Sachs analysts wrote in a report that they "remain constructive" about emerging market stocks, as the "underlying profit growth will likely be strong". Gold fell 0.8%, to $4,825.79, while bitcoin rose?0.3%, at $75,084.56, and ether dropped 0.2%, at $2,359.89. The Aussie Dollar also rose by 0.3% to a four-year-high of $0.71890. Data showed that Australian employment increased broadly in line with the expectations in March, as firms hired more workers full-time. However, the unemployment rate remained at 4.3%. Capital Economics analysts wrote in a report that the latest data would confirm the RBA's assessment, which is that the upside risks of inflation are greater than the downside risks of the labour market. (Reporting and editing by Hugh Lawson; Reporting by Marc Jones)
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Gold rises on the back of a weaker dollar as US-Iran hopes for peace deal rise
Gold prices rose Thursday due to a weaker dollar and lower Treasury yields. Investors were 'optimistic' about a possible end to the Middle East conflict, which had stoked inflation fears. By 0723 GMT, spot gold had risen 0.7% to $4821.96 an ounce. U.S. Gold Futures for June Delivery gained 0.4%, to $4843.40. The U.S. dollar hovered around its lowest level in six weeks, making greenback-denominated ?commodities, including bullion, more affordable for holders of other currencies. The benchmark 10-year U.S. Treasury rate fell by 0.1%, as?hopes for a U.S. Iran peace deal reduced bets on higher U.S. rates over the long term. Kelvin Wong is a senior analyst at OANDA. He said that the primary driver for gold is?the optimism regarding a U.S.Iran ceasefire, which is pushing down global longer-term bond rates. This has created a lower 'opportunity costs of holding gold and Silver. If we begin to see a break over $4,900 then further upside potential cannot be ruled in towards the next resistance zone at the psychological level $5,000. The Trump administration and a Pakistani mediator in Tehran have been expressing optimism that a deal could be reached to open the Strait of Hormuz. A senior Israeli official said that Israel's cabinet had met on Wednesday, six weeks after its war against Iran-backed Hezbollah, to discuss the possibility of a ceasefire in Lebanon. The spot gold price has fallen by more than 8% since the Iran War began late in February, amid fears that high energy prices will feed inflation and keep global interest rates up. Gold is seen as a hedge against inflation but higher interest rates are affecting its demand. In the U.S. traders see a 29 percent chance of a 25 basis-point cut in interest rates this year. There were two expected reductions in interest rates for this year before the war. Silver spot rose 1.4%, to $80.12 an ounce. Platinum gained 1%, to $2,130.25. Palladium increased 0.9%, to $1,587.25. (Reporting by Noel John in Bengaluru; Editing by Subhranshu Sahu and Harikrishnan Nair)
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Aluminum demand rises on hopes of US-Iran agreement
Aluminum rallied Thursday on expectations of an acute supply shortage due to the Middle East Conflict, as growing hope for a U.S. Iran peace deal improves demand outlook. Benchmark?three month aluminium at the London Metal Exchange rose 1.27% by 0705 GMT to $3,667.5 a metric ton, its highest since March 24, 2020. The Shanghai Futures Exchange's most traded aluminium contract closed the daytime trading up 2.89% to 25,635 Yuan ($3,760.62), its highest since March 9. The optimism grew as a key Pakistani facilitator in Tehran and Trump's administration talked up hopes for a pact that would open the Strait of Hormuz, a crucial waterway in the Middle East. According to a research report dated April 13, JP Morgan predicted a 1.9 million tonne primary aluminium shortage in 2026. This is the biggest deficit since 2000. The Iran war has affected the supply of aluminium in the Gulf, which accounted for 9% before the war. Some local aluminium smelters either reduced output or sustained damage from the attacks. Analysts at JP Morgan expect the price of aluminium to reach $4,000 within the next few months. Falling inventories were one of the factors that supported aluminium prices and tightened supply. Stocks of aluminium in LME-approved storage facilities Since late February, the price of oil has dropped by about 15%. Other than that, there are?aluminium stockpiles at three major Japanese port cities In March, the number of people in Canada who travelled abroad fell by 7.4% compared to the previous month. Analysts said that the hopes of?growing overseas orders for Chinese aluminum and a 'drawdown in Chinese stock also fueled price rise. SHFE copper increased by 0.39%. Nickel?added 0.52 %, lead increased 0.69%. Zinc?advanced 0.86 %, while Tin was not much changed. The price of copper increased by 0.76%. Nickel rose 1.31%. Lead edged up by 0.08%. Tin gained 1.2%. Zinc also climbed 0.79%. $1 = 6.8167 Chinese Yuan (Reporting and editing by Amy Lv, Tony Munroe)
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Sources say that India-Zambia talks over critical minerals are stalled due to mining rights.
Two sources with knowledge of the matter said that India's discussions with Zambia about critical minerals mining have stalled due to a lack of?assurances from Lusaka regarding mining rights. India received a?allocation?of 9,000 sq km (3,474.92 sq miles) last year to explore cobalt, a component of batteries used in electric vehicles and cell phones, as well as copper. Copper is widely used in electronics, power generation and construction. India sent a geologist team last year, which has since returned with samples, including copper and cobalt. New Delhi planned to invite the private sector to participate in the exploration programme in Zambia after three years. This was subject to the acquisition of mining rights. Why Zambia withheld mining rights assurances was not immediately apparent. One source said that New Delhi is attempting to restart talks with Zambia but the situation remains uncertain. The discussions were not public, so they declined to identify themselves. The Indian federal Ministry of Mines has not responded to a comment request. India has been in talks with several African ?countries to acquire critical mineral blocks on a government-to-government basis, while also exploring opportunities in Australia and Latin America. Last year, the Indian government held discussions internally about its growing vulnerability to a tightening global copper market. They also discussed ways of securing supplies from countries with abundant resources during ongoing trade talks. India's copper exports have risen dramatically since Vedanta closed its?Sterlite Copper Smelter in 2018. In the fiscal year that ended?March 2025 India imported 1.2 million tons of copper, an increase of 4% over?the prior year. Government data revealed that India's cobalt imports are almost entirely dependent on the country. Shipments of cobalt dioxide will increase 20% by 2024-25, to 693 tons. (Reporting and editing by Mayank Bhadwaj, Janane Venkatraman and Neha Arora)
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Stellantis will stop car assembly in France's Poissy factory by 2029
Stellantis announced on Thursday that it would stop producing new cars at its Poissy factory near Paris in a period of?three to four years as it works to reduce excess manufacturing capacity across Europe. Jeep and Peugeot are facing a 'chronic' overcapacity problem in the region where auto sales still haven't returned to pre-pandemic numbers. Stellantis' situation has been exacerbated by rapid gains made by Chinese low-cost competitors, as well as slower than expected progress towards electric vehicles. Stellantis was forced to announce a $25 billion write-down in the first quarter of this year. After talks with the unions, a Stellantis spokesperson said that production of the DS3 in Poissy and the Opel Mokka at Poissy will cease by the end of the year 2028. The site will then no longer manufacture new vehicles but continue to?manufacture auto parts for Stellantis' other factories. Stellantis told the unions during the meeting that the end date for production was penciled in at 'the end of 2028. This would be confirmed later. Stellantis will spend 100 million euros (117.96 millions) on the Poissy facility to upgrade it. This will enable new activities, such as 3D-printing for parts, or reconditioning, and recycling, used vehicles. An industry source familiar with the situation said that the future of this plant has been uncertain. Production is expected to drop and will be at 68,000 units by 2026, and 65,000 by 2027. This is well below 145.800 units in 2023. Stellantis refused to comment on volume forecasts. The factory was built by Ford in 1940 and acquired by Chrysler in the 1950s. It was then taken over by Peugeot in the 1960s, and Stellantis took it over in 2021. The plant was at its height in 1976 when it employed 27,000 workers and produced over 500,000 cars annually. Around 1,600 people currently work for 'Poissy. This number is expected to fall to 1,200 workers by 2030, due to the aging of its workforce. A spokesperson said that around 1,000 new jobs will be required by 2030 in order to accommodate new businesses. Training programmes have also been implemented.
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Iron ore prices rise as positive economic data from China lifts sentiment
Iron ore futures soared on Thursday, boosted by positive economic data from China. Meanwhile, a lack of domestic crude steel production fueled hopes that global steel prices would be lifted and Chinese steel mill margins improved. The September contract for iron ore on China's Dalian Commodity Exchange traded 3.1% higher, at 782.5 Yuan ($114.79). As of 0708 GMT, the benchmark May iron ore traded on Singapore Exchange was $106.15 per ton higher. The 'Trump Administration' expressed optimism about a possible deal with Iran on Wednesday, but warned of increased economic pressure if Tehran continues to be defiant. Metals markets rose on Thursday as optimism about the end of the Iran War fueled positive sentiment. Official data released on Thursday showed that?China?s economy grew by 5% from a year earlier in the first three months of the year, exceeding analysts' expectations, as policymakers prepare for the aftermath of the Iran War. China's crude-steel output also fell 6.3% year-on-year in March, to its lowest monthly level since 2020. Margins were thinned out and exports decreased amid the Middle East conflict. The National Bureau of Statistics (NBS) announced on Thursday that the world's biggest steel producer produced 87.04 metric tons crude steel in December. Steel prices could rise globally if China reduces its steel production. China's high export volumes historically have suppressed the price of steel, making it difficult for steel mills to profit. In March, the country pledged to reduce?overcapacity within its steel industry. Coking coal and coke, which are used to make steel, also gained on the DCE. They were up by 2.32% and respectively 1.94%. The Shanghai Futures Exchange's steel benchmarks have mostly advanced. Rebar, hot-rolled coil, and wire rod all gained, while stainless steel remained unchanged.
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The US coal industry is given a reprieve by the US government, but this will not last long: Jenarthan & Jain
Coal has been given an unlikely reprieve by the combination of U.S. support and the Iran War. Don't call this a comeback. In the first weeks of Tehran’s war against the U.S., and Israel, the global seaborne thermal prices of coal rose by over 25%. Prices rose to the highest level since late-2024, adding new momentum to a 'unexpected' rebound. This price rise reflects short-term market conditions, not a structural improvement in the?coal economy, as is evident by the fact that prices are only 15% higher than pre-war levels. These recent steps come after coal achieved several positive milestones in the last year. The U.S. consumption increased 10% in 2025. This ended a 15-year downward trend, and was largely due to an increase in natural gases prices, President Donald Trump’s support for the policy, and record electricity demands from data centers and artificial intelligence infrastructure. The global coal production and consumption increased marginally last year, mostly due to the growing energy demand of emerging economies. Thermal coal prices fell to a four-year-low in the first half 2025, however, as demand did not keep up with the production boom that followed Russia's invasion. China, the world's biggest coal consumer and a country that accounts for 56% of global demand, has fueled most of the additional consumption through domestic production, leaving the seaborne market with an oversupply. The U.S. coal sector has endured a tough few decades, punctuated with bankruptcies and restructurings. More than 60 U.S. coal companies, including the biggest in the industry filed for bankruptcy between 2012 and 2022. At least eight others have since been added. The future is not much brighter. The International Energy Agency predicted in December that coal demand worldwide would likely plateau by 2030 and then drop slightly due to the?slowing Chinese demand, as renewables and nuclear power erode China's dominance of power generation. This projection was made before the Iran energy crisis, but there are no signs that it has changed much. The long-term trend is clear. Despite the short-term gains of "black gold" last month, coal is the largest source for global carbon emissions and is on the decline structurally in the U.S., with a likely stagnation globally. BAD ECONOMICS The U.S. coal industry was once a major source of electricity. However, its importance has been declining for many years in the largest economy on earth. Over the last decade, there has been little new investment. Alaska is the only state in which a new coal plant has been built since 2013. The majority of U.S. operators instead retire coal-fired power plants, because they are no longer economically viable to operate and maintain. The Trump administration is trying to combat this. The Trump administration has prioritized expanding energy production to provide the massive amount of electricity required to fuel the AI Revolution. Even though Energy Secretary Chris Wright stated in September that Washington was in talks with U.S. utility companies and expected most of the dozen or so coal plants in the United States nearing retirement would delay their closure, it may be just postponing what is inevitable. This is because keeping old plants running can have real costs for ratepayers. The risk is illustrated by a case study on a Michigan coal power plant. The Environmental Defense Fund concluded that allowing the coal plant to remain uneconomical shifted costs on customers and discouraged investment in more cost-effective energy sources. Grid Strategies estimates that federal mandates for coal plant extension could cost ratepayers up to $6 billion annually. Further, the extension of coal plant operations will require continued policy intervention and cost recovery measures. It may also be necessary to issue emergency orders. This support will be unlikely to continue after the 2020 election, when the White House is likely to switch parties. The outlook for the future is also too uncertain to justify long-term investments. Even if U.S. Federal policy boosts coal supply in the next few years, this does not guarantee that demand will follow suit. This is especially true given the stiff competition of natural gas and renewables. A mismatch between supply and demand will lead to a glut of coal, which in turn will result in lower prices. That's exactly what happened after the post-Ukraine-invasion supply surge. CLEAR-EYED CAPITAL After shunning coal for over a decade, institutional capital is now returning to it. This is largely due to the fact that coal companies have cut costs and returned cash back to shareholders over the past few years. Their share prices recovered from low levels and have outperformed broader equity indexes over the last five years. This outperformance will not last. The cost of environmental liability and litigation is increasingly being priced into the valuations of coal companies, which has a negative impact on their long-term performance. Investors may continue to be attracted by the Middle East energy crisis and U.S. executive action in favor of coal, but this will only temporarily boost the industry's structural problems. The recent performance of coal companies is unlikely to last, as the current coal equity prices - now at levels 'below prewar levels' - already indicate. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. 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BBC reports that Bank of England's Bailey is 'not going rush' to make decisions on rate increases.
Andrew Bailey, the Governor of the Bank of England, told BBC News that "the Bank of England will not rush to judgement" regarding interest rate increases, as central banks around he world are dealing with a soaring energy price due to 'the iran war.
Bailey, who was in Washington at the spring meetings of the International Monetary Fund, said that higher oil and gasoline prices would undoubtedly feed through into prices. However, other factors make a decision about rates "very difficult", according to?the report.
Bailey stated that "there are really difficult judgments to make." We're not going rushing to judgements because there's a lot to be uncertain about.
IMF cut its growth outlook on Tuesday, citing energy price spikes and disruptions caused by war. The IMF also warned that the global economy may be pushed to the edge of recession if war intensifies and oil prices remain above $100 a barrel until 2027. The UK suffered the biggest downgrade of all large, rich economies.
Alexander Demarco, a policymaker at the European Central 'Bank, echoed Bailey's comments, saying that policymakers should be patient and take their time when making decisions, while acknowledging the possibility that the euro 'zone economy could be heading towards the ECB’s negative scenario.
Both policymakers' comments emphasized a cautious approach in monetary policy, due to the uncertainty surrounding the economic impact of the?energy price shock. They also followed the IMF’s advice to central banks, which was to indicate an objective "protecting price stability but don't hurry".
Bailey stated in 'March, when the central banks?held interest rates' that the financial markets were?getting ahead of themselves by expecting rate increases after the decision. The next meeting of the bank to decide on rates will be held on April 30. Reporting by MuvijaM, Editing by Andy Bruce
(source: Reuters)