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Australian shares rise on the back of gold stocks
Australian shares rose Tuesday as gold miners reached a record high following the bullion’s record rally. Other sectors also gained from broad-based purchasing and investors were focused on earnings reports of several heavyweight corporations. S&P/ASX 200 Index rose 0.2%, to 8,502.9 at 0008 GMT. The benchmark index fell 0.3% Monday. Gold miners on the broad market gained up to 2.6%, reaching a new record high. The safe-haven market drove gold prices to a record high and they broke the $2,900 barrier for the first. Northern Star Resources increased by 3.1% while Evolution Mining grew by 2.5%. Financials increased by 0.1%, with Westpac up 0.5%. Macquarie, the country's biggest asset manager, rose by 1.7% following a profit that was largely flat for nine months. Investors are now awaiting the earnings of Commonwealth Bank of Australia due on Wednesday. Oil prices soared nearly 2% Monday, after a third consecutive week of declines. Brent crude futures settled $1.21 or 1.6% at $75.87 per barrel while U.S. West Texas intermediate crude rose $1.32 or 1.9% to $72.32 per barrel. The healthcare sector rose 0.4%. This was mainly due to biotech giant CSL which grew 1.7% following a growth in its half-year profits. The Dow Jones Industrial Average in the United States rose 167.01 or 0.38% overnight, to 44,470.41 on Monday. The S&P500 gained 40.45, or 0.67, and Nasdaq gained 190.98, or 0.98%. Diversified investor SGH, among individual stocks rose as high as 9.4% after its first-half earnings easily exceeded analysts' expectations. The benchmark S&P/NZX50 index in New Zealand rose by 0.2% to 12,898.8.
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Trump's latest trade war salvo includes tariffs on steel and aluminum imports
On Monday, President Donald Trump raised the tariffs on imports of steel and aluminum to a flat rate of 25% "without any exceptions or exclusions". This was done to help struggling industries. However, it increased the risk that a multi-fronted trade war would occur. Trump signed proclamations increasing the U.S. aluminum tariff rate to 25%, from 10%. He also eliminated country exceptions, quota agreements and hundreds of thousands product-specific exclusions. An official at the White House confirmed that these measures would go into effect on March 4th. Tariffs will be raised to 25% for millions of tons imported steel and aluminum from Canada, Brazil Mexico, South Korea, and other countries, which had previously entered the U.S. without duty. Trump told reporters that the move would simplify tariffs for metals, "so everyone can understand what it means." "It is 25%, without exemptions or exceptions." All countries are included, regardless of where they come from. Trump said that he would "consider" Australia's request to be exempted from the steel tariffs. These proclamations are extensions of Trump’s Section 232 Tariffs from 2018. They were made to protect domestic aluminum and steel producers on the basis of national security. An official at the White House said that the exemptions have weakened the effectiveness of the measures. Trump will also impose a North American standard that requires steel imports be "melted, poured", and aluminum imports be "smelted, cast" in the region. This is to reduce U.S. metal imports from China and Russia. A White House official confirmed that the order extends tariffs on downstream products using foreign-made steel. This includes fabricated structural steels, aluminum extrusions, and steel strands for pre-stressed cement. Trump signed the order in the White House and announced that he would announce reciprocal tariffs for all countries who impose duties on U.S. products over the next two business days. He also said he had his eye on tariffs for cars, semiconductors and pharmaceuticals. When asked about the threats of retaliation from other countries in response to his new tariffs Trump replied: "I'm not bothered." Peter Navarro, Trump's adviser on trade and commerce, said that the new measures will help U.S. producers of steel and aluminum and strengthen America's economy and national security. He told reporters that the steel and aluminium tariffs 2.0 would put an end foreign dumping and boost domestic production, as well as secure America's steel and Aluminum industries. This isn't about just trade. It's to ensure that America will never have to depend on foreign countries for critical industries such as steel and aluminum." In 2018, Trump began imposing tariffs on steel and aluminum under an anti-Cold War national security law. Later, he granted exemptions to several countries, including Canada and Australia. He also struck duty-free deals with Brazil, South Korea, and Argentina, based on their pre-tariff volume. Joe Biden, the former president of the United States, who succeeded Trump, negotiated a similar duty-free tariff for Britain, Japan, and EU. "We applaud President Obama for instituting the 25% tariffs on imports of steel and eliminating exclusions, carving outs, and quotas based on outdated data," said Philip Bell of the Steel Manufacturers Association. Bell explained that these figures were based upon import levels from 2015-2017, which no longer reflect the current dynamics of the market. Shares of U.S. and European steel and aluminum producers soared before the announcement, while those of European and Asian steelmakers declined. According to data from government and industry, the top three sources of U.S. imports of steel are Canada, Brazil, and Mexico. South Korea, and Vietnam follow. In the first eleven months of 2024, Canada's extensive hydropower resources, which aid its metal production and manufacturing, accounted 79% of U.S. imports of primary aluminum. U.S. Trade Partners warned that the new barriers will hurt U.S. Automakers, Shipbuilders and Other Industries. Don Farrell, Australian Trade Minister, said that Australian steel and aluminium create thousands of American jobs and are vital to our common defense interests. The U.S. Distillers warned the EU that steel tariffs may prompt them to increase duties on American whiskey. Chris Swonger is the CEO of the Distilled Spirits Council of the United States. He said that a 50% tariff on America’s native spirit would have catastrophic consequences for the 3,000 distilleries in the United States. The European Commission stated that it did not see any justification for these tariffs. President Ursula von der Leyen will meet U.S. vice president JD Vance on Tuesday in Paris during an AI Summit. The South Korean Industry Ministry invited steelmakers to South Korea to discuss ways to minimize tariffs' impact. RECIPROCAL TARIFFS Trump has also promised to provide detailed information about his reciprocal tariff plan on Tuesday or on Wednesday. He has complained for years about the EU's tariff of 10% on auto imports. This is much higher than the 2.5% U.S. rate. The U.S., however, applies a tariff of 25% on pickup trucks. This is a major source of profit to Detroit automakers such as General Motors. According to World Trade Organization statistics, the average U.S. tariff rate, weighted by trade, is 2.2%. This compares to 12.0% for India, 6.7% in Brazil, 5.1% in Vietnam, and 2.7% within the EU. Indian officials claim that Indian Prime Minister Narendra Modi has been preparing tariff reductions ahead of his meeting with Trump on Wednesday. These could increase American exports. Trump called India "a very big abuser" of trade in the past, and his top economist Kevin Hassett referred to India as having "enormously" high tariffs during a CNBC interview. Trump had threatened to impose 25% tariffs on all imports coming from America's largest trading partners Canada and Mexico. He said they needed to do more to stop the flow of migrants and drugs across the U.S. Border. Trump suspended the tariffs on March 1 after making some concessions in border security. Data from the United States showed that last year, demand for aluminum far exceeded production in the country. This left it largely dependent on imports.
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Trump announces reciprocal tariffs in the next two days
Donald Trump, the U.S. president, said on Monday that he will announce plans to impose tariffs against other countries in the next two weeks. This is a confirmation of comments he made Sunday. In the Oval Office, the Republican President spoke with reporters as he signed proclamations that ended all exemptions from steel and aluminum tariffs imposed in his first term. He also raised duties on both metals by 25%. Trump also said that he would be looking into tariffs on automobiles, semiconductor chips, and pharmaceuticals. An official in the United States said that under former president Joe Biden, the exclusion process started under Trump had become out of control. This resulted in hundreds of thousands specific product exclusions being approved. When asked about the possibility that other countries could retaliate against U.S. Tariffs, Trump replied: "I don’t mind." In an interview given to Fox News, Trump claimed that other countries have been imposing duties on US imports for years. He said, "It is not fair that we have been exploited by other countries for so long, and suddenly, we are not allowed to charge tariffs." Trump said in an interview with Fox News that he will announce a "very complex plan" to deal with the reciprocal tariffs on Monday or Tuesday. Steve Holland, Andrea Shalal and Leslie Adler edited the story.
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Trump will consider an exemption for Australia in steel tariffs, Prime Minister says
After what Prime Minister Anthony Albanese called a constructive telephone call with Trump, U.S. president Donald Trump agreed to look into exempting Australia of his steel and aluminum tariffs. Trump announced on Sunday that he would impose new tariffs of 25% on all imports of steel and aluminum into the U.S. on top of metals duties already in place. This is another major step up in his trade policy overhaul. Albanese, a reporter, said: "I presented Australia’s case for an exception and we agreed on the wording to be publicly stated which is that President Obama agreed that an exemption would be considered." "But we will continue to engage in a constructive manner... It was another very warm and constructive discussion with President Trump." Albanese and Trump's conversation comes just a day after Australia’s trade minister claimed that Australia’s exports of steel and aluminum to the U.S. create "good-paying American Jobs" and are key to shared defense interests. Albanese said that he was confident that a deal with Trump could be reached. Albanese stated, "If you look at what we have achieved so far, it has been an incredible start to our relationship." Penny Wong, the Foreign Minister of Hong Kong, attended Trump's inaugural ceremony. Richard Marles, the Defence Minister of Hong Kong met with U.S. Secretary Pete Hegseth last week in Washington. Hegseth has hosted Marles as the first foreign counterpart since he was confirmed in his role. According to the United Nations Comtrade Database, Australia, which is a major U.S. ally for security in the Indo-Pacific region, exported $237 million in steel and iron to the U.S. by 2023 and $275 millions in aluminium to the U.S. by 2024. The Australian government announced last year that the largest U.S. shipbuilder purchased Australian-processed metal as Australia, Britain, and the U.S., partners in the AUKUS defense pact, seek to integrate supply chains for defence.
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US Judge says Trump Administration violated order to lift spending freeze
A U.S. Judge on Monday said that President Donald Trump’s administration had violated an order of the court Lifting a wide freeze U.S. district judge John McConnell of Providence, Rhode Island had already blocked funding with a temporary restraint order on January 31, but a number of Democratic state attorneys who sued to stop the move Last week The government is still holding back funds. This ruling appears to be the first time a judge has found that the Trump administration violated an order from a court halting a new policy. On Monday, the Trump administration announced that it would appeal. McConnell stated on Monday that the broad categorical freeze of federal funding is likely unconstitutional, and it has caused irreparable damage to a large portion of the country. "These pauses of funding violate the plain language of the TRO." McConnell stated that all funding should be restored, at least until McConnell can hold an hearing on the motion of the states for a more long-term order. A lawyer from the office of Democratic New York attorney general Letitia James informed McConnell on Feb. 6 that state agencies still had difficulty accessing federal funding, including billions for infrastructure projects funded under the Inflation Reduction Act. The Trump administration told the states that it did not believe the order applied to certain infrastructure and environmental spending and that payments were being delayed due to "operational and adminstrative reasons." McConnell, however, said that his order was "clear and unequivocal" when it came to the funding frozen as a result of Trump's executive orders. Originally, the states sued the White House over a memo from the Office of Management and Budget that announced a broad freeze on federal spending. OMB quickly rescinded the memo shortly after the lawsuit. The memo is part of an effort by the Trump administration to reduce federal spending and reform the federal bureaucracy. This has led to a spate of lawsuits. Federal employee unions accuse the Trump administration in a separate case of violating an order by a court to reinstate USAID employees who had been placed on administrative leave. Reporting by Brendan Pierson, New York. Editing by Mark Porter and Alexia Garamfalvi.
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The dollar rises and stocks advance after the latest tariff threat
Dollar rose for the third consecutive session on Monday, after U.S. president Donald Trump warned about more tariffs including steel and aluminium. A gauge of global stock prices advanced, shrugging aside concerns over another round of duties. Trump is expected on Monday or Tuesday to announce 25% tariffs on U.S. imports of steel and aluminum, and will reveal other reciprocal duties shortly after. China's retaliatory duties on certain U.S. imports will take effect Monday. There is no sign that Beijing and Washington are making progress towards a new trading arrangement. The dollar index (which measures the greenback in relation to a basket of currency) rose 0.2%, reaching 108.30. Meanwhile, the euro fell 0.18%, at $1.0308. Marc Chandler, Bannockburn Global Forex's chief market strategist in New York said: "This is very early days." The market is just choosy and not really directional at the moment. The dollar gained 0.34% against the Japanese yen to 151.91, while the pound fell 0.37% to 1.2363. Shigeru Shiba, the Japanese prime minister, expressed optimism Sunday that his nation could avoid a tariff war with the United States and higher U.S. duties. The Canadian dollar fell 0.1% against the greenback, to C$1.43, and the Mexican peso was down by 0.2% versus C$20.607 as the greenback retreated from its earlier highs. Wall Street closed with gains, led by the tech and energy sectors. The S&P 500 Materials index increased 0.5%. Steel companies like Nucor and Steel Dynamics, both up 5.6% each, were the main contributors. After McDonald's reported its quarterly results, shares of the fast food restaurant rose 4.8%. Investors are saying: 'Hey let's get back to the areas that have worked.' Sam Stovall is the chief investment strategist of CFRA Research. He believes that earnings are one reason why investors remain optimistic. MSCI's global stock index rose by 4.16 points (0.48%) to 873.60. This is its fourth increase in five sessions. The STOXX 600 Index for Europe rose by 0.58%, closing at a new record high of $545.92. This was mainly due to a 1.5% increase in the oil and natural gas sector. Stocks of European steelmakers reversed their early declines. ArcelorMittal in Luxembourg, for example, closed 0.6% lower and Salzgitter in Germany, closed unchanged. Analysts are worried that tariffs will rekindle inflation in the United States, which would reduce the flexibility of the Federal Reserve, to lower interest rates. This is a potential outcome, and has supported the U.S. Dollar since Trump's election. According to CME's FedWatch Tool, the markets expect the Fed to keep rates unchanged at its meeting in March. Expectations for a rate cut of at least 25% basis points will not rise above 50% until June. The Fed chair Jerome Powell will be speaking to the Senate Banking, Housing and Urban Affairs Committee on Tuesday. It is likely that his comments on inflation and tariffs will be closely watched. Investors awaited new economic data, such as the latest consumer price reading and a wave of fresh supply. Oil prices recovered despite persistent fears of a global trade war. U.S. crude oil settled at $72.32 per barrel, an increase of 1.86%. Brent crude rose to $75.87 a barrel, an increase of 1.62%.
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Coffee sales in New York rise 6%, a new record high amid 'panic purchasing'
Coffee futures in New York increased by more than 6% Monday on the ICE exchange, reaching a new all-time record above $4.30 a pound. Some market participants cited panic in the market due to limited coffee availability. Arabica coffee futures have reached a new record for the thirteenth consecutive trading session. The new price peaks were fueled by reports of a hot, dry weather system that was forming in Brazil's coffee growing areas. Farmers are also reluctant to sell. Bob Fish, the co-founder and owner of Biggby Coffee in various states, said that prices would continue to increase. "There are two things that will stop this. One, Brazil and Vietnam having a good year of yield (which is not expected before August 2026). In a note he wrote about the rally, he stated that there was enough destruction of demand in the consuming countries due to the price hikes. Fish said that American coffee shops should raise their prices or face the risk of seeing their profits "evaporate". The coffee futures contract in New York is a benchmark for global prices. It hit a record price of $4.2410/lb before closing at $4.211/lb, up 6.2%. The spot contract that expires in march reached a high of $4.3195/lb. The prices are up about 35% this year, after skyrocketing 70% last year. Market concerns about the low stock levels in Brazil, a country that produces almost half of the world's arabica, are growing. Farmers in the area have already sold 85% of their current crop, and they are not looking to sell any more. A coffee broker said that the coffee in the balance sheet could be on the "wrong" side of the globe, at the hands strong Brazilian producers, suggesting that the farmers are well-financed in Brazil. Dealers claim that the rally has become a self-perpetuating phenomenon and is out of step with fundamentals. Icona Cafe, a trader, said that some people believe the Brazilian harvest next year could be better than anticipated. Not so much to surpass last year's but enough to brighten the outlook. Icona reported that Hedgepoint expects Brazil will produce more coffee than it did last year, estimating 64.1 million bags for 2025/26, compared to an estimated 63.4 millions for the previous season. ICE arabica speculators – who are driving the current price rise – have reduced their net long positions, or bets that prices will continue to increase, by 3,130 contracts, to 50,333 in the week ending February 4. Robusta, an alternative to arabica that is used to make most instant coffees, increased 2.4% to $5,697 per ton after reaching its highest level ever on January 31, at $5840. Other soft commodities were also traded. New York cocoa dropped 2.3%, to $9,878 per ton after a loss last week of 7%, and London cocoa was down 1.7%, to 7,919 pound per ton. White sugar futures increased 0.3% to $519.40 per tonne, while raw sugar futures increased 0.7%. (Reporting and editing by Andrea Ricci; Alison Williams, Mohammed Safi Shamsi and Marcelo Teixeira)
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FOREX Dollar gains slip, while others are affected by tariff threats
The U.S. Dollar gained on Monday, after President Donald Trump announced 25% tariffs on imports of aluminum and steel. Meanwhile, the Canadian dollar, Japanese Yuen, Euro and Sterling all fell on worries about any new trade levies. According to data from the American Iron and Steel Institute and government, Canada is one of the top exporters of steel and aluminum to the U.S. along with Brazil Mexico South Korea and Vietnam. The yen fell on fears that Japan might also be hit with tariffs. Marc Chandler, Bannockburn Global Forex's chief market strategist in New York, said that there is "a bit of catching up and this idea that perhaps Japan was going to avoid the worst and could now be hit with steel and aluminum tariffs." Shigeru Shiba, the Japanese prime minister, expressed his optimism on Sunday about the possibility of avoiding higher U.S. Tariffs. He said that Trump "recognised the huge investment that Japan has made in the U.S.A. and the American job that this creates." Trump announced on Sunday that he would impose new tariffs of 25% on all steel imports and aluminium exports to the U.S. on top existing metals duties. He had said that he would announce reciprocal tariffs with many countries on Monday or Tuesday. The Canadian dollar fell 0.11% against the greenback, to C$1.4307 a dollar after reaching $1.4379 earlier. The U.S. Dollar strengthened by 0.38%, to 151.97 Japanese Yuen. The dollar index increased by 0.21%, to 108.31. The euro fell 0.2% to $1.0305. The U.S. ranks second in the world for EU steel imports. The dollar fell 0.36%, to $1.2364 Britain Details have not been seen A spokesman for Keir starmer, the British Prime Minister, said that he was aware of President Donald Trump's proposal to impose steel and aluminum tariffs in the United States and would continue to work with him as necessary. The U.S. is Britain’s second-largest steel export market, after the European Union. The main focus of this week's U.S. economy will be the consumer price inflation figures for January, due Wednesday. According to economists surveyed by, both headline and core consumer price indexes are expected to have risen by 0.3% in the last month for a gain of 2.9% & 3.1% respectively. Jerome Powell, the Federal Reserve chairman, is due to appear before Congress on both Tuesday and Wednesday. Chandler said, "I believe Powell will tell Congress that, because the economy is still doing well, and is growing above trend, the Fed is given time." "The Fed is able to be patient as the restrictive monetary policies helps bring inflation down to its target over time." New York Fed's survey of the U.S. population on Monday revealed that their expectations for near-term inflation were mostly stable in January. Bitcoin gained 1.42% in cryptocurrencies to reach $97,378.84.
Modi's US Visit raises Industry Hopes amid Tariff Threats
The Indian Prime Minister Narendra Modi is on a two day visit to the United States starting Wednesday. He will be expected to suggest tariff reductions and increased imports of energy and defence during a meeting between President Donald Trump.
Modi wants to avoid a trade war by boosting trade relations after Trump threatened reciprocal duties on many countries. This included a 25% duty on all imports of steel and aluminum.
The following are the key issues that will be discussed at the bilateral meeting.
Imports of Energy
India intends to increase energy product imports from the United States by over $11 billion during the first eleven months in 2024 to reduce trade imbalances.
India, the fourth-largest importer of LNG in the world, may encourage its oil companies to buy more U.S. gas after the Trump administration lifted the export bans on new projects.
Sandeep Gupta, chairman of GAIL India Ltd, said that the company is looking to buy a stake in an American LNG plant or secure long-term contracts.
DEFENCE IMPORTS
Modi will most likely finalise the deal for a fighter jet's engine and negotiate a purchase of combat vehicles.
India and the U.S. have been in long-running talks about the coproduction of General Dynamics Stryker combat vehicle.
In the next few weeks, officials from India's Hindustan Aeronautics Ltd. (HAL), a state-owned company, will meet with U.S. representatives and General Electric's aerospace unit to finalise this deal.
ILLEGAL MIGRATION
Both countries will discuss India's concerns over the treatment of illegal Indian immigrants in the U.S. and the U.S. deportation policy.
Mukesh Aghi, President of the US-India Strategic Partnership Forum(USISPF), stated that the industry was addressing misuse of H-1B Visas and seeking to increase legal migration in order to fill the professional shortage of the United States.
MARKET ACCESS & LEVEL PLAYING FIELDS
U.S. officials will likely raise the issue of "market accessibility and a level playing field" for U.S. companies, citing increased import tariffs on some goods.
Elon Musk will meet Modi in the near future to discuss bringing Tesla cars to India, and accelerating the allocation of satellite frequency for his Starlink Project.
INVESTMENTS BY INDIAN COMPANIES
India is likely to propose that the U.S. facilitate investments by Indian firms, highlighting their multi-billion dollar investments in the steel, garment and contact manufacturing industries.
Strengthening Strategic Ties
Indian officials and business groups believe Modi's trip will strengthen strategic and economic relations with the United States.
New Delhi wants to increase investments by U.S. firms in the manufacturing and service sectors, including insurance, as China's threats escalate.
(source: Reuters)