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Mike Dolan: Orban's fall removes another roadblock to European markets
The rejection by Hungary of Viktor Orban, a right-wing nationalist after 16 years at the helm?is a shot in arm for its internal markets. It should also lift EU Assets more broadly, removing an ongoing roadblock for a now-alone bloc. Budapest was hit by a series vetoes and the freezing of 18 billion euros in EU funds as a result of the outgoing PM's "illiberal" democracy. Orban's open embrace of Moscow in issues ranging from Ukraine, energy and foreign policies complicated the EU’s rapid rearmament program to counter the Russian threat to its east since the Ukraine invasion 2022. His removal comes despite, and some would say partially because of, U.S. president Donald Trump's endorsement. It only highlights the electorate’s decision to return towards the EU centre at a time when Transatlantic ties have weakened and the EU must increasingly fend itself in defence and trade. Peter Magyar's centre-right Tisza, which has won a supermajority, giving it the power to reverse Orban’s constitutional changes, is not going to solve Hungary's issues overnight. There will be battles with Brussels about?budgets and frozen funds, as well as the speed of reforms. Relations with Ukraine also need to be handled carefully. On Monday, it was clear that there is a sense of relief in EU capitals. The frustrations of Orban's time may finally be over. Hungarian 10-year government borrowing rates fell by a half-point to their lowest level since 2024. The stock market also gained nearly 5%. Investors viewed the latest twists in the Iran war and the energy shock as a way to reinforce?European's continued performance. Lauren van Biljon is a senior portfolio manager with Allspring Global Investments. She said: "It's an excellent result for Europe." It sets Europe up for an even more cohesive position - from NATO, to everyday European business and also Ukraine. 'UNDERAPPRECIATED' Morgan Stanley sees the implications of the Hungarian domestic market as obvious. The unfreezing of EU funding alone, which amounts to around 8% of Hungary’s annual Gross Domestic Product (GDP), can add 1-1.5 percentage point to Hungarian GDP. The bank says that the spread across European equity is "underappreciated". The report cited two catalysts for the positive sentiment in EU equity markets, namely: improved EU policy coordination and the potential release of a 90 billion euro joint loan, which was agreed on in December, but vetoed in Hungary. Morgan Stanley sees this result as supporting the continued narrowing in the valuation gap between European equities and U.S. equities. The euro zone discount compared to U.S. counterparts is the lowest it has been in three years, and about half of its peak before?the U.S. elections of 2024. There is still a lot of uncertainty about what a full repricing would look like. It is the deeper message that may be most important to an EU bloc growing increasingly concerned about internal and external political winds that threaten its founding principles. Laszlo Bruszt, a professor at Central European University whose university was also driven out of Budapest by Orban's government in 2019, finds the outcome particularly resonant. He wrote in Project Syndicate that "Orban's Fall does challenge the feeling of inevitability" surrounding the global shift away from liberal democracy. Save the date! On?April 23, at 1300 GMT/9 a.m. ET, ROI columnists Mike Dolan and Jamie McGeever, will be joining LSEG in a webinar, "Markets unpacked?with open interest: Rethinking safety havens during uncertain times." Sign up here. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. ($1 = 0.8522 euros)
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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
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Oil and dollar drop on hope of US-Iran resolution
Asian stocks rose on Tuesday, while oil prices fell and the safe haven dollar dropped. Investors bet on a solution to the Middle East conflict despite the U.S. blocking Iran's ports after the failure of the peace talks at the weekend. A U.S. official stated that there is progress in reaching an agreement. U.S. president Donald Trump said Iran also wants to make a bargain, but he won't come to an agreement that would allow Tehran to possess a nuclear weapons. Investors seized on the hope of an off-ramp to lift overall market sentiment, sending MSCI’s broadest Asia-Pacific share index outside Japan up by nearly 2%. Japan’s Nikkei also rose by more than 2%. Following an overnight rally in Wall Street, Nasdaq Futures rose 0.2%, S&P futures remained?steady. EUROSTOXX50 futures grew by 0.41%, and DAX futures rose 0.6%. Markets are trading in hope, but not in resolution. "The failed weekend talks didn't produce a deal but they didn't close the door on diplomatic relations, and that was enough to allow equities continue to rise for now," said Charu C. Chanana. She added, "The problem is that markets are pricing the possibility of de-escalation quicker than it's actually happening, so I still expect a choppy and headline-driven tape, rather than a clear risk-on trend." The U.S. began a blockade on Iran's ports. This angered Tehran and added uncertainty to the waterway. However, shipping data revealed that a Chinese tanker sanctioned by the U.S. passed through the Strait of Hormuz Tuesday. Trump said that Washington would block Iranian vessels, and any ships who paid tolls. He also stated that any Iranian "fast attack" ships that came near the blockade will be eliminated. The U.S. played the trump card. It's important to me because it forced Iran to open up the Strait, without needing to put boots on the ground," Tony Sycamore said. The Iranians are now forced to rethink their plans. Brent crude futures fell 1.5% to $97.90 per barrel as the expectations of a further dialogue ending the war overshadowed concerns about supply disruptions. U.S. crude oil futures dropped 2.3% to $96.78 a barrel. In China, data on Tuesday showed the country's export engine slowed in March as buyers chasing an artificial-intelligence-fuelled future ran into the hard reality of the war. CSI300, the blue-chip index of the country, tracked the regional rally and rose 0.7%. Hong Kong's Hang Seng Index grew by 0.4%. DOLLAR AT THE BACKFOOT The dollar dropped to a one-and-a half month low of 98.298 versus a basket?of currencies on Tuesday as a buoyant risk mood dampened demand. The euro was trading at $1.1769, up 0.1%. Sterling rose to $1.3521, a six-week high. Joseph Capurso is a strategist with Commonwealth Bank of Australia. The U.S. Dollar would likely rise against all other currencies if the markets fell again. Treasury yields in the U.S. have remained relatively unchanged. The two-year yield is at 3.7678%, while the benchmark 10-year yield stands at 4.2775%. Investors are preparing for the possibility of a number major central banks raising interest rates. This is a dramatic change from what investors expected before the war, which was for rate cuts or an extended pause. Other than that, spot gold rose 0.7% to $4,770.31 per ounce. (Reporting and editing by Kevin Buckland, Jamie Freed and Rae Wee)
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Gold prices rise as the dollar weakens and oil prices fall, easing inflation fears
On?Tuesday, gold rebounded from a near-one-week 'low? hit the day prior,?on a softer dollar, and as oil prices dropped on hopes of more U.S. Iran peace talks, easing fears about inflation. As of 0509 GMT spot gold rose 0.7% to $4,769.77 an ounce after falling to its lowest level since the previous session on April 7. U.S. Gold Futures for June Delivery rose 0.5% to $ 4,791.70. Oil prices fell below $100 per barrel, as signs of a possible U.S. Iran dialogue to end the war eased concerns about the supply risks resulting from the U.S. Blockade of Strait of Hormuz. By increasing transportation and production costs, higher crude prices contribute to inflation. Gold's appeal is typically boosted by inflation as a hedge. However, high interest rates can reduce its demand. Ilya Spirak, Tastylive's head of global macro, believes that the markets still believe there is time to reach a deal between the United States, and Iran. Reports indicate that Washington and Tehran are still in negotiations, but U.S. Vice-President JD Vance stated in an interview that Washington expects Iran to progress on opening the Strait of Hormuz. President Donald Trump announced that the U.S. began a military blockade on Iran's ports Monday. Meanwhile, Tehran has threatened to retaliate by attacking the ports of its Gulf neighbours after talks on ending the conflict in Islamabad broke down. The U.S. Dollar is also near its lowest point in over a month, which makes gold that's denominated in greenbacks more affordable to holders of other currencies. Near-term, the U.S. and Iran headlines could be driving force due to a thin macro-calendar. This sets up choppy prices for the moment," said Spivak, adding that resistance could be found around $4,850. The traders now expect a 25% chance that the U.S. will cut its interest rate by 25 basis points this year. This is up from 12% last week. There were two expected cuts this year before the war. (Reporting by Noel John in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu) (Reporting from Noel John, Bengaluru. Editing by Rashmi aich and Subhranshu Sahu.
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Nickel producers in Indonesia reduce battery feed production as the sulphur squeeze bites
Three sources said that a sulphur scarcity, caused by the Iran War, forced nickel processors in Indonesia to reduce their output?by 10% or more since last month. The cutbacks?have?hit plants using sulphuric acids to process nickel ore, a feedstock for electric vehicle batteries, into mixed hydroxide precipate (MHP), one of the most clear signs yet that U.S. and Israeli war against Iran is affecting mining supply chains. However, output remains relatively high. Sources said that affected plants include those owned by Chinese companies such as Huayou Cobalt and Lygend Resources, as well Tsingshan Group. Requests for comment were not immediately answered by the companies. Sources said that several plants were operating above their capacity due to high margins and a large demand. The curbs have now lowered the output to the nameplate level. This means that Indonesia's nickel production is still high but MHP supplies are tightening. The Middle East is a major supplier of SULFUR According to Arif Perdana 'Kusuma', the chairman of FINI (Indonesia's nickel smelters' association), about a quarter or more of the world's sulphur is supplied by Middle East. These disruptions have pushed prices up and squeezed margins for Indonesian MHP producers, leading to the production cutbacks. One trader reported that spot sulphur prices delivered to Indonesia had risen to over $800 per metric ton. Some cargoes were sold for as much as $1,000, compared to around $500 prior to the start of the war. Sources declined to name themselves as they weren't authorised to talk to the media. In Search of Alternatives Kusuma stated that no nickel refineries using high-pressure acid lach (HPAL) had been forced by the sulphur shortages to stop MHP production, but stocks at several firms are running low. He said that in some places, the current stocks would only last until May or even earlier. However, he did not say whether plants had reduced production. Some producers are now looking for alternative sources of sulphur, but this is difficult due to the smaller volumes and longer shipping distances. Some producers were importing sulphuric acids instead. This poses logistical challenges and requires import permits. He said that HPAL's operating costs now account for between 30% and 35% sulphur, up from the usual 25%. Reports last month indicated that some Indonesian factories had inventory?lasting just one to two months. Production cuts are likely in April if the supply does not recover. Indonesia's nickel industry is struggling with higher ore costs after Jakarta restricted mining output. Indonesia announced that nickel mining quotas for 2026 would be reduced from 379 millions to 250 million wet metric tons. The nickel ore price is expected to increase after Indonesia changed the formula for calculating tax, royalties, and other charges on nickel ore sales. This new formula will be implemented in April and put further pressure on producers' margins. (Reported by China C&E Team and Fransiska Nangoy from Jakarta; Editing done by Tony Munroe, Thomas Derpinghaus and Thomas Munroe)
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MORNING BID - Fingers crossed for a successful resolution
Rae Wee gives us a look at what the future holds for European and global markets. Markets on Tuesday were 'riding' a hope of a resolution by Washington and Tehran despite the U.S. blockade against Iran's ports. Sources said that despite the failure of the peace talks between Iranian officials and U.S. representatives over the weekend there was still dialogue and a U.S. Official stated that there was forward movement in trying to?get to an agreement. U.S. president Donald Trump said Monday that Iran wanted to reach a deal. However, he wouldn't agree to an agreement allowing Tehran to possess a nuclear device. This was enough to spur a recovery in global stocks. Shares in Asia rose alongside U.S., European and futures while oil prices fell back below $100 per barrel. The global economy has not yet recovered. As long as the Strait of Hormuz remains closed, businesses and consumers will continue to feel the inflationary pressure from rising energy prices. Singapore's central bank tightened monetary policy settings on Tuesday, citing inflation risks arising from the Middle East conflict. China's exports slowed sharply in March and undershot forecasts as buyers who were chasing an AI-fueled future met the harsh reality of war. Earnings?season in the?U.S. The earnings season is underway, and it will be a test to see how companies are dealing with the aftermath of the war. JPMorgan Chase's, Wells Fargo's and Citigroup's results are expected later today, after Goldman Sachs reported a quarterly profit that exceeded expectations on Monday, driven by strength in dealmaking, and equity trading. The following are key developments that may influence the markets on Tuesday. - JPMorgan Chase earnings, Wells Fargo's, Citigroup's, Johnson & Johnson's U.S. PPI March Fed's Barr Collins Barkin Paulson Goolsbee all speak
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Gold prices rise as oil prices fall, easing inflation fears
Gold prices rebounded from a one-week low on 'Tuesday, as oil prices dropped on the hope of more U.S. Iran peace talks and eased inflation fears. As of 0237 GMT spot gold rose 0.6% to $4,768.19 an ounce after falling to its lowest level since the 7th of April in the previous session. U.S. Gold Futures for June Delivery rose 0.5% to $ 4,790.70. As signs of a possible U.S. Iran dialogue to end the war eased fears about the?supply risk stemming from U.S. Blockade of Strait of Hormuz, oil prices dropped below $100 per barrel. By increasing transportation and production costs, higher crude prices contribute to inflation. Gold's appeal is typically boosted by inflation as a hedge. However, high interest rates can reduce its demand. Ilya Spirak, Tastylive's head of global macro, said that the markets appear to believe there is still time for an agreement between?the United States? and Iran. Reports said that negotiations between Washington, Tehran and the U.S. vice president JD Vance were still in progress. In an interview, JD Vance stated that the U.S. expects Iran to make progress towards opening the Strait of Hormuz. The U.S. military has begun a blockade against Iran's ports, according to President Donald Trump. Meanwhile, Tehran has threatened to retaliate by attacking the ports of its Gulf neighbours after talks on ending the conflict in Islamabad failed over the weekend. Additionally, ?the U.S. dollar hovered near its lowest level in more than a month, ?making the greenback-denominated ?gold more affordable for holders of other currencies. Near-term, the U.S.-Iran headlines could be the main driving force due to a thin macro-calendar. This'sets the scene for choppy prices for now,' Spivak said. He added that gold might face resistance at $4,850. The chance that the U.S. will cut its interest rate by 25 basis points this year has risen from 12% to 29%, up from 12% in last week. Prior to the war, it was expected that there would be two rate cuts this year. Other metals saw a 0.9% rise in spot silver to $76.27 an ounce. Platinum rose by 0.1% to 2,071.75, while palladium gained 0.2% to $1,576.23. (Reporting from Noel John, Bengaluru. Editing by Rashmi aich and Subhranshu Sahu.
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Iron ore prices fall on the back of rising shipments and lower new bank lending data
The price of iron ore futures dropped on Tuesday, as the Australian supply recovered from Cyclone Narelle's disruptions. Weak lending data and no signs fiscal easing were also weighing on sentiment. As of 0257 GMT, the?most-traded iron ore contract for September on China's Dalian Commodity Exchange?traded at?0.46% less than its previous price of 755.5 yuan (US$110.80) per metric ton. Singapore Exchange benchmark iron ore for May was $103.2 per ton, 1.39% less. Customs data released on Tuesday showed that China's iron ore imports in March increased 11.5% compared to the previous year. Data from the General Administration of Customs shows that the world's largest iron ore consumer imported 104.74 metric tons of this key ingredient for steelmaking last month. Data from Mysteel shows that global iron ore shipment increased by 844,000 tons between April 6-12, compared with the previous week. The biggest producers, Australia and Brazil, saw shipments increase by 2.335 million tonnes. The Cyclone Narelle-related disruptions in iron ore supply have been largely resolved, as Australian shipments are recovering. This has pushed down the price of iron ore. The central bank of China is not in a hurry to loosen policy as new lending to banks in China was less than expected. A poll shows that China's economy is likely to have regained momentum in the first three months of the year?on the back of solid exports. However, growth will slow over the remainder 2026, as the Iran Crisis threatens to choke off?corporate profits, and sap overseas demand. The 'European Union' reached a preliminary agreement on Monday that will nearly halve the imports of steel and impose a 50% tariff on any excess shipments in order to protect its steel industry. The main steel importers into the EU last year were Turkey, South Korea (Indonesia), China, India, Ukraine and Taiwan. The DCE also showed a mixed picture of other steelmaking ingredients, with coal?up 0.19% and coke?down?0.09%. The benchmark steel prices on the Shanghai Futures Exchange are mixed. Steel benchmarks on the Shanghai Futures Exchange were mixed.
Sika's quarterly sales drop on strong Swiss franc, weak China market
Sika, a Swiss chemical group that manufactures products for construction in China, reported a decline?in sales?for its first quarter on Tuesday. The drop was attributed to a?stronger Swiss Franc and weakness?in the construction industry.
The sales for the quarter fell by 7%, to 2,49 billion Swiss Francs ($3,18 billion).
The company reiterated the forecast it made in February. It projected a 1% to 4% increase in annual sales in local currency and an EBITDA margin between 19.5% and 20% by 2026.
The 'company' said that a?long-term slump in China’s construction sector continued weighing on the results even as Europe showed signs of improvement after?the winter.
Sika reported that construction activity in the Americas was affected by the winter storms as well as the economic uncertainty in the United States.
The Swiss chemicals company reported that construction activity in the Middle East has slowed down after the onset of?the Iran-conflict despite double-digit growth earlier this year.
Thomas Hasler, CEO of Hasler Group, said: "We anticipate that global market conditions will remain muted in 2026. We are taking preemptive action."
In March, Sika said that the conflict in the Middle East could cause economic turmoil and affect its annual results.
(source: Reuters)