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The weekly losses in long-dated UK gilts are due to the rebounding oil prices
Oil prices rose again on Friday, causing a loss for long-term British government bonds. This wiped out the gains made earlier in this week by the gilt market following a ceasefire agreement between Iran and 'the United States. The performance of gilts was below that of similar U.S. debt, German debt and French bonds. This reflects Britain's vulnerability due to the fallout caused by rising energy costs. Britain is heavily reliant on natural gas, and its public finances are stretched, making it difficult to provide state support. Long-dated gilts have been increasingly affected by fiscal worries. The yield on 20-year bonds, which moves in the opposite direction to the price of the bond, rose 11 basis points today at 14.45 GMT, and is on course for a four basis point weekly rise despite the fact that it had fallen on Wednesday following the news of the ceasefire. The optimism that the ceasefire would hold gave a modest boost on Friday to the share prices. However, the global bond markets were impacted by the rising oil price on the back of reports that attacks on Saudi energy plants had reduced the kingdom's production. The Strait of Hormuz is also largely closed to tanker traffic. Emma Moriarty said that spikes in gilt rates have become more common in recent years, as the UK economy has been left vulnerable by high public debt levels and anaemic growth. She said inflation-linked bonds performed better than conventional gilts, unlike the "mini-budget crisis" of 2022 that was triggered by concerns about the fiscal costs of former Prime Minister Liz 'Truss tax reduction plans. Investors have been willing to pay more for inflation-protected bond, especially at the short end where our funds are located, Moriarty stated. The yields on short- and medium-dated bonds rose by 6-8 basis points in a single day. Investors fully priced in a quarter-point increase in the Bank of England's interest rates over?the rest of 2026, and roughly 60% of a subsequent one. Investors bet on four rate increases by December at one point in the last month. (Reporting and editing by Sharon Singleton, Christina Fincher and Andy Bruce)
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Sources say that the US is likely to extend its waiver on Russian oil to reduce the shock of the Iran war.
Two sources with knowledge of the matter said that President Donald Trump’s administration will likely extend a waiver as early as Friday allowing countries to purchase some sanctioned russian oil and petroleum. Since mid-March, the U.S. Treasury Department allows purchases of Russian oil at sea through a 30-day waiver. This waiver expires April 11. It is part of efforts by the U.S. and Israel to control global energy costs during?the U.S./Israel war against Iran. Kirill Dmitriev, the Russian presidential envoy, had stated that this move would "free up 100 million barrels" of Russian crude oil. This is equivalent to almost one day's global production. Treasury Secretary Scott Bessent and Trump met in the Oval Office Thursday to "talk about extending waivers" and both agreed that it was a good idea. The White House and Treasury Department officials did not immediately respond to a request for comment. The partial closure of Strait of Hormuz has caused oil prices to spike since the Iran War, due to the fact that 20% of world oil and gas used daily was transported through this strait before the conflict. Trump and the Republican Party are concerned about rising fuel prices as they prepare for November's midterm elections. The International Energy Agency, a 32-nation organization, has stated that the Middle East war is causing the largest oil supply disruption in history. The waivers could complicate the West's attempts to deny Russia revenue for its conflict in Ukraine, and put Washington at odds?with its allies. The European Commission's President, Ursula von der Leyen, has stated that it is not time to relax sanctions on Russia. (Reporting and writing by Timothy Gardner, Richard Valdmanis and Jarrett Renshaw; Reporting by Jarrett Renshaw, Dmitry Zhdannikov)
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Swedish government to buy majority stake in Videberg Kraft
The Swedish government announced on Friday that it intends to 'take a 60% share in the nuclear development company, 'Videberg Kraft. It is looking to start construction of a newest generation of reactors to replace its old atomic power plants. The government said that nuclear power was vital for meeting the expected increase in electricity demand as industries and transport sectors move away from fossil fuels. The critics say that renewables such as onshore wind are cheaper and quicker to construct. "Sweden has a nuclear nation." In a recent statement, Deputy Prime Minister Ebba busch stated that the government is now clarifying its role and responsibility in the development of nuclear energy. The government said that it would ask the parliament for approval to purchase shares in Videberg Kraft as well as a capital infusion at a cost of approximately 1.8 billion Swedish crowns (about 195 million dollars) in the near future. The government will also seek an?order for funding to the company in the amount of up 34.4 billion dollars during the construction period for new reactors. Videberg Kraft, owned by Swedish energy group Vattenfall to 80% and a group of Sweden’s largest companies to 20% by a group. The government wants Sweden to build the equivalent of 10 full-size nuclear reactors to replace the six that are currently operating by 2045. The government is offering cheap loans to developers and price guarantees for 5,000 MW to overcome the unwillingness of the private sector to fund new reactors. Recent builds in France and the UK have been 'hit with massive cost overruns and delays. Vattenfall’s 'Videberg Kraft' subsidiary is planning to build several small modular reactors with a combined capacity of around 1,500 Megawatts at its Ringhals Nuclear Facility in south-west Sweden. It applied for funding in December. Sweden's electricity generation is largely fossil-free. Around 40% of the power comes from hydroelectric power, while 29% is from nuclear power, 21% wind power, 8% thermal power, and 2% solar power.
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US consumer sentiment plunges to record low in April amid Iran War
A survey released on Friday showed that U.S. consumers' sentiment fell to a "record low" in early April and they expect inflation to rise?in the coming 12 months. Surveys of Consumers at the University of Michigan reported that its Consumer Sentiment Index fell to a new low of 47.6 in April, from a final reading of 53.3 last month. Economists surveyed by had 'predicted the index to ease to 52.0. The survey found that the decline in'sentiment' was a result of age, income, and political party membership, but noted?that most responses were made before a ceasefire agreement negotiated earlier this week between the U.S., Israel, and Iran. Oil prices have risen by over 30% since the start of the war. The national average retail price for gasoline has surpassed $4 per gallon, the highest it's been in three years. Joanne Hsu is the director of Surveys of Consumers. She said, "Open ended comments shows?that many consumers are blaming the Iran conflict for unfavorable economic changes." Inflation expectations by consumers for the coming year increased from 3.8% to 4.8%, up from March's 3.8%. Consumers' expectations of?inflation in the next five-year period rose from 3.2% to 3.4% last month. (Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
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Weekly gain on gold heads, US-Iran truce at the forefront
The gold price rose a little bit?on Friday, and is on track for a weekly increase as the U.S. The?dollar weakened after the U.S. - Iran truce. Market participants continue to assess whether it will last and what its implications are for interest rates. As of 9:29 am, spot gold was up 0.3% at $4,778.89 an ounce. ET (1329 GMT). This week, it has gained more than 2%. U.S. Gold Futures dropped 0.3% to $4804.00. The?tentative truce has helped gold buyers to reclaim the narrative. Each day, they are achieving higher lows. "There will be a major battle before $5,000. A break above that level could reignite the bull market," said independent metals trader Tai Wong. The ceasefire, which has been in place for two days, has stopped a U.S.-Israeli air campaign against Iran. However it is yet to relieve the Strait of Hormuz blockade or calm a parallel conflict between Israel and Iran's Hezbollah ally in Lebanon. David Meger is director of metals at High Ridge Futures. Gold priced in greenbacks is now cheaper for those who hold other currencies. The?war increased?oil price and tariffs continued to pass through, according to data. A persistently high level of inflation restricts the ability of central banks to reduce interest rates. Although bullion can be viewed as a hedge to inflation and geopolitical unrest, its appeal dwindles in an environment of high rates due to the lack of yield. Gold demand picked up in India a little 'this week, ahead of an important festival. However, the high prices dampened sentiment. In China, premiums were also reduced. Silver spot rose by 1.7% per ounce to $76.34, platinum fell 2.5% at $2,050.99 and palladium dropped 2.5% at $1,518.66. All three metals are expected to post gains this week. Ashitha shivaprasad reports from Bengaluru, Ni Williams edits.
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South Korea approves an extra $17.7 billion budget to cope with Iran War
South Korea's Parliament approved a supplementary budget for the government of $26.2 trillion won (17.7 billion dollars) on Friday in order to reduce the domestic economic impact of the Iran War. The government's initial proposal in late March is the second additional budget under President Lee Jae Myung's liberal administration, who assumed office in June 2025. The government intends to implement the "extra budget" as soon as it can to minimize the economic shock?caused by a rise in oil prices. The package includes Lee’s consumer voucher handout program, which provides payments from 100,000 won up to 600,000 won per person, for those who earn the lowest 70% of income. Budget also includes funding to maintain national fuel price caps introduced last month, for the first time for nearly three decades. This is for about six months in a country whose energy supply is almost completely imported. South Korea's consumer inflation accelerated in March amid high oil prices. Policymakers warned of potential risks for the future. The?costs of imports increased at the fastest pace since September 2022. The central bank of the country held interest rates steady on Friday. It maintained a cautious stance, as the conflict in Iran threatens inflation and growth. $1 = 1,482,5000 won (Reporting and editing by PhilippaFletcher; Kyu-seok? Shim, Jihoon Lee)
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Investors balance Iranian and Chinese demand as copper claws reach a three-week high
On Friday, copper prices reached their highest level in over three weeks as investors weighed up signs of increased demand from China's top metals consumer against the uncertainty surrounding a fragile ceasefire during?the Iran War. In official open-outcry trade, benchmark three-month copper on the London Metal Exchange rose 0.6% to $13,755 per metric ton and reached its highest level since March 17, at $12,845. The week was expected to close with a gain of about 4%. LME copper rose 1.2% after the official rings, when a Federal Reserve official stated that a rate reduction was possible if oil prices fell. LME copper is up 10% since March 23 when it fell to its lowest level in three months on hopes that the Middle East war would end. Ole Hansen is the head of commodity strategy for?Saxo Bank, Copenhagen. He said: "I do not think that there's a desire to invest in commodities where there's a risk of deterioration?ahead?of those negotiations in Islamabad." Investors were cautious as a fragile ceasefire agreement between the U.S., Iran and other countries that has been in place for two weeks showed signs of strain on Friday. This was a day before negotiations are scheduled to take place in Pakistan. Markets were supported by signs that demand was improving in China. Copper inventories in SHFE-monitored warehouses fell 11.5% in the past week after falling 37% in the last three months. Data showed that the Yangshan copper price premium, which represents demand for copper imported to China, has risen to $73 per ton. This is its highest level since June of last year. Hansen explained that "even though there is concern about Iran, actual numbers on the ground point the opposite direction. The market tries to navigate between these two elements." He added that the key technical resistance to the upside is $12800. This is based on the retracement of February and March, as well as the?50 day moving average. The copper price rose to its highest level since December 2013 despite a new increase in LME inventories. LME aluminium official activity rose by 1.1% to $3,482.50 per ton as the ongoing closure of the Strait of Hormuz brought to light?supply problems in the Gulf which account for?about 8% of the global production. Nickel gained 0.5% at $17,175 while tin increased 0.7% to 48,000.
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The Lithium Bulls are set to crash the Copper Party in Chile
Chile will break from 'precedent' and host a panel on lithium at its annual global gathering of copper next week, in an effort to radically diversify its economy beyond the red metal which has been?powering it for decades. On Monday, the World Lithium Conference, organized by the International Lithium Association and the consultancy 'CRU', will launch what the copper industry calls CESCO Week. After months of stagnation, lithium prices have risen to levels not seen in two years as renewed interest in the metal is sparked by concerns about oil supplies in the Middle East. The lithium supply is tightening as a result of the closing of a major mine in China, the export ban in Zimbabwe and the dwindling stocks in lithium carbonate. According to the U.S. Geological Survey, Chile is home to 13 million tonne of lithium, the third largest in the world after Argentina and Bolivia. NEW PRESIDENT, NEW EXPECTATIONS Five mining companies including Rio Tinto are vying for rights to develop the country's vast deposits. The new Chilean president, Jose Antonio Kast is spoilt for choices. Ignacio Mehech is CEO of CleanTech Lithium. He said, "The lithium strategies rolled out by 2023 were a good direction. We hope the new government will take it up, and make?it easier and faster to award contracts." CleanTech, a London-listed company, has received a licence to produce lithium. However, it needs to obtain an environmental permit before mining. It is raising money to build a $750m mine at the edge of the rich lithium-rich Salar de Laguna Verde. DEMAND FOR MORE MINE AND MORE MINES According to CRU, there is a strong movement behind lithium. The number of active mining operations has doubled in the last four years, and will reach 80 mines by 2026. Martin Jackson, CRU's director of lithium and batteries, stated that the demand for stationary lithium batteries is continuing to increase, which helps to offset the weakness in EV markets. He said that lithium will continue to be the most competitive energy-density technology for many years. According to CRU the average lithium carbonate price in China is expected to be around $22 per kilo this year. This represents a 135% increase from last year. Investors are also optimistic. Macquarie, an investment bank, estimates that global lithium demand is expected to increase by over 20% a year until the end of this decade. This will be due to energy storage demand. Asad Farid is the director of?J's strategic materials equity funds. Safra Sarasin Sustainable Asset Management. US-CHINA TENSIONS WEIGH Chile's diversification of its lithium industry comes at a moment when tensions between China, the U.S. and other natural resource rich regions like South America are "spilling over". China's share of the global lithium market has increased steadily over the last four years from 75% to almost 90%. The Guangzhou Futures Exchange lithium price has become a benchmark for the industry. Chile has already tasted the diplomatic balancing act that is required when it pursues the China Mobile-backed fiber-optic connection between the wine-town of Valparaiso, and Hong Kong, despite U.S. opposition. "With President Trump's current approach, we may have to think twice about going for Chinese investors," said Marcelo Adwad. A mining veteran from Chile, he advises?Wealth Minerals a Toronto Stock Exchange listed lithium company. Wealth Minerals has been in talks with India’s state-run Coal India Limited regarding a possible joint venture and is seeking investors for its $750m lithium mine. Some people believe Chile should maintain its neutrality. Mehech, CleanTech's CEO, said that Chile could not afford to pick one country. Reporting by Fabian Cambero in Toronto, Divyarajagopal in London, and Tom Daly, with editing by Veronica Brown and Ernest Scheyder.
Weekly gain on gold heads, US-Iran truce at the forefront
Gold prices rose on Friday - and headed for a week's gain - as the U.S. Dollar weakened.
Gold spot rose 0.4%, to $4.780.22 an ounce at 11:11 am. ET (1511 GMT). This week, it has gained more than 2%.
U.S. Gold Futures dropped 0.3% to $4.805.40.
Gold buyers are carefully reclaiming the narrative this week, with higher lows each day. The tentative ceasefire is helping. Tai Wong, an independent metals trader, said that a significant battle is expected ahead of $5,000. A break above this level could re-ignite a bull run. The ceasefire, which has been in place for two days, has stopped a U.S.-Israeli air strike campaign on Iran. However it has not yet 'eased the blockade of Strait of Hormuz and quell the parallel conflict between Israel and Iran’s Hezbollah allies in Lebanon.
David Meger is director of metals at High Ridge Futures. He said that as tensions in Middle East have de-escalated, the dollar has come under pressure. This has led to gold being well supported.
The U.S. Dollar?was on course for a drop of a week, making gold priced in greenbacks cheaper for holders other currencies. The data showed that U.S. consumers prices rose by the most in four years during March, as war-related oil prices soared and tariffs continued to be passed through.
A persistently high level of inflation restricts central banks' ability cut interest rates. Although bullion can be seen as a hedge against inflation, geopolitical unrest and uncertainty, it loses its appeal in an environment of high interest rates due to the lack of yield.
Gold demand in India increased slightly this week, ahead of a major festival, despite the fact that elevated prices weighed down on sentiment. Premiums in China, however, decreased.
Silver spot rose by 1.8% per ounce to $76.45, platinum dropped 1.9% to 2,062.25 and palladium also fell 1.9%, to $1,528.41. All three metals are expected to see gains this week. Ashitha Shivprasad reports from Bengaluru, Ni Williams edits.
(source: Reuters)