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The morning bid rally for EUROPE-AI continues, while the Trump-Xi Summit takes centre stage
Ankur Banerjee gives us a look at what the future holds for European and global markets The record-setting rally fueled by 'AI' appears to be going well as investors shrug off the prospect that interest rates will remain higher in order to combat inflation, oil prices over $100 per barrel and the impasse of negotiations to end the Iran War. The markets are on edge as a high-stakes meeting between U.S. president Donald Trump and China’s Xi Jinping, which has yet to yield any details. Even if expectations are low, a continuation to the status quo may be enough to elicit positive reactions. Trump called Xi a 'great leader and a good friend' as they began two days of discussions on Thursday. The talks will cover the fragile trade truce between China and the United States, Iran and U.S. weapons sales to Taiwan. Xi and Trump greeted each other on the red carpet of Beijing's Great Hall of the People. They shook hands, smiled, and shook hands. Trump brought a group CEOs with him, including Nvidia CEO Jensen Huang and?Elon Musk. For now, the AI theme is still in charge. Asia remains the leader. South Korea's KOSPI, Taiwan's stocks and Japan's Nikkei are all just a few points away from their records peaks reached earlier this week. AI-driven bets have boosted all three indexes. There is little sign that the momentum will fade as Asian chipmakers continue to record record profits with their hyperscaler clients. SK Hynix is 'on the verge of joining the trillion-dollar club. The stock has risen by?more that?1,000% from the beginning of 2025. Investors will be focusing on UK economic data to determine the extent of damage caused by the Iran War that erupted in February. As the political drama intensifies, sterling and government bonds will continue to face pressure. Keir Starmer, British Prime Minister, has so far refused to resign following one of the Labour Party's biggest defeats at last week's regional and local elections. The following are key developments that may influence the markets on Thursday. Economic Events Estimates of UK GDP for March and Q1 Data for UK construction and industrial output in March
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Climate risks are increasing, and a study warns that the World Cup in 2026 will be dangerously hot.
The 'global players union' of football expressed concern on Thursday over the heat during the 2026 World Cup, after scientists warned that the risk of dangerous temperatures for both players and fans had'significantly increased'. A climate research group, World Weather Attribution, has found that a quarter (24 out of 104) matches in the expanded tournament in the United States, Mexico, and Canada will likely be played under conditions that exceed the safety limits recommended by FIFPRO. This is almost twice as high as the risk at the 1994 World Cup held in the United States. Researchers said that around five matches may be played in unsafe conditions, and it would be wise to postpone them. Scientists evaluated the risk by using kickoff time and the Wet Bulb Globe Temperature index (WBGT), which measures how well the body can cool itself. Vincent Gouttebarge, FIFPRO’s medical director said: "The calculations used to estimate the likelihood that 2026 FIFA World Cup matches will be played under high WBGT are in line with FIFPRO’s calculations published in 2020." These estimates justify the need to implement a number of mitigation strategies to protect players' health and performance in hot conditions. FIFPRO recommends that cooling measures be taken when the WBGT exceeds 26 degrees Celsius. Matches should also be postponed at 28C. This is roughly equivalent to 38C for dry heat or 30C with high humidity. FIFA has said that it has undertaken heat-risk planning. This includes measures such as three-minute breaks for hydration in each half-game, cooling infrastructures for fans and players and adapted work-rest cycle. In a press release, FIFA said that it was committed to the protection of the health and well-being of all players, officials, fans, staff and volunteers. "MORE CONSERVATIVE FOOTBALL" Chris Mullington is a consultant anaesthetist and clinical senior lecturer for Imperial College London NHS Trust. He said that extreme heat can have a greater impact on how people play games than it does on medical emergencies. He said that it would be more a matter of performance than health. These players are elite athletes who have acclimatised. You'll notice players self-pacing. This behavioural thermoregulation can be very hard to overcome. You may find yourself playing a more conservative version of football. According to an analysis, cooling systems will reduce the risk in three of 16 venues. More than a third (35%) of the games scheduled in stadiums with a chance of exceeding WBGT of 26C are played at venues without air conditioning, such as Miami, Kansas City and Philadelphia. The analysis showed that the final at the MetLife Stadium, East Rutherford in New Jersey faces a 1 in 8 chance of exceeding 26 C and a 3% chance of reaching the?more dangerous level. This is about twice the risk in 1994. Friederike Otto is a professor of climate science at Imperial College London. She said that the findings showed FIFA the importance of reconsidering the dates for future World Cups, especially in areas susceptible to extreme heat during the summer. Otto said that from a health perspective, it is better to hold the World Cups earlier or later in the calendar year so that you can have a football celebration rather than something which poses a huge health risk for a city. FIFPRO warned that, while air-conditioned stadiums may protect players in cities like Dallas and Houston, fans at outdoor festivals and matches could be exposed to dangerously high temperatures for long periods. Iain Axon reported from London, Lori Ewing wrote in Manchester and Toby Davis edited.
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Kyodo reports that Japan may consider an extra budget to cover rising fuel costs
Kyodo News Agency reported that the Japanese government was considering a supplementary budget in order to ease the pressure on households due to rising fuel costs. This would place additional strain on the country's already stretched finances. Kyodo reported, citing unnamed sources, that a supplementary budget would help households who are likely to face higher gasoline prices and utility costs during the summer peak temperatures. Investors were preparing for an increase in debt issuance as the budget was increased. The Kyodo Report did not specify how large the additional budget might be. The Ministry of Finance did not respond to a request for comment. Saisuke Sakai, senior economist with Mizuho Research Institute, said that the market expected that the government would be able to compile an additional budget. The size of the budget is important. If spending is focused, it could be as little as a few 'trillions' of yen. He said that if it became a 10-trillion yen level the markets might get a completely different impression, which could cause a spike in yields on long-term investments. The Prime Minister Sanae Takaichi repeatedly dismissed the possibility of a budget increase, stating that the government already has enough funds to cover current fuel subsidies. She has been urged by both ruling and opposition legislators to?come up with a new package of plans that will cushion the blow caused by rising oil prices and disruptions in supply due to the U.S. and Israeli war against Iran. Japan has already lowered gasoline prices with?subsidies. A source has told us that the government is looking to tap existing funds in order to revive electricity and 'natural gas' subsidies. Investors are worried about the Bank of Japan's ability to deal with the rising inflationary pressures resulting from the Iran War. A?extra budget will be added to the record budget of 122 trillion yen (776 billion dollars) for the fiscal period that began in April. This is a core part of Takaichi’s "proactive fiscal policy". The Organisation for Economic Cooperation and Development (OECD) urged Japan on Wednesday to stop regularly accumulating extra budgets, and instead use them to combat large shocks.
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Oil prices rise as investors pay attention to Trump-Xi summit in Beijing
Oil prices rose 'on Thursday. Markets were focusing on a 'high-stakes' meeting between U.S. president Donald Trump and Xi Jinping, the Chinese President, to see if there would be any positive results on the Iran War, which has disrupted the global oil supply. Analysts doubt that Xi, China's long-time partner, will push too hard to get Tehran to agree to a deal. Brent crude futures were up by 26 cents or 0.25% to $105.89 a barrel at 0250 GMT. U.S. West Texas intermediate futures were also up by?32 cents or 0.32% to $101.34. Investors worried about a possible U.S. rate hike as higher fuel prices lead to inflationary pressures. Brent crude futures dropped more than $2 per barrel while WTI futures declined more than $1. Trump was given a warm welcome in Beijing's 'Great Hall of the People' on Thursday, ahead of his talks with China's Xi Jinping. The two will discuss their 'fragile' trade truce and the Iran War. They will also talk about U.S. weapons sales to Taiwan. In a note published on Thursday, ING analysts said that oil prices were in a "wait-and-see" mode. They added that the market may be placing too much faith in the U.S. and China talks to produce positive results regarding Iran. Since the beginning of the conflict at the end of Feburary, the Strait of Hormuz has been closed to most traffic. Trump may have said he didn't think he would need China to end the conflict, but he is expected to ask Xi to help resolve the expensive and unpopular conflict. In a 'note, Tony?Sycamore, an IG analyst, said that if the US fails to make progress in reopening the strait it may have few other options than to re-engage in military action. Iran appears to be tightening its grip on the Strait of Hormuz, having cut deals with Iraq and Pakistan for the shipping of oil and liquefied gas from the region. The Chinese supertanker, carrying 2 million barrels worth of Iraqi crude oil, sailed into the Strait of Hormuz Wednesday after spending more than two month in the Gulf due to the U.S. - Iran war. This was the only third oil tanker to leave the Strait of Hormuz since the war began. The International Energy Agency announced on Wednesday that global oil supply would fall short of the?total need this year, as the Middle East war has ravaged oil production in the region and drained inventories at a record pace. This is a reversal from its previous outlook, which predicted a surplus.
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LSEG data shows that a second crude oil tanker linked to Japan has passed through the Strait of Hormuz.
Ship-tracking data provided by LSEG on Thursday showed that a crude 'oil tanker under the flag of Panama, managed by the Japanese refinery?group Eneos, had passed through the Strait of Hormuz. This is the second time a ship with Japan-related links has made it through. Japan used to rely on the Gulf for 95% of its imports of oil before the U.S. and Israeli war on Iran largely interrupted oil supplies via Strait of Hormuz. Kpler data shows that the Eneos managed tanker was loaded with 700,000 barrels Emirati Das Blend oil and 1.2 million barrels Kuwait crude in late February. Kpler data shows that the vessel is expected to reach Japan on June 3. The tanker's passage through the Strait was not immediately known. Eneos Japan, the largest refining company in Japan, declined to comment. Tokyo has intensified its diplomatic efforts and has switched to alternative fuels to replace some of the barrels lost, while lowering domestic fuel prices through massive government subsidies. The Idemitsu Maru made a similar passage in late April, carrying Saudi crude oil and managed by an Idemitsu?Kosan unit. Idemitsu, Japan’s second largest oil refining company, announced this week that it expects Hormuz will reopen between July and Septembre, with Dubai benchmark?oil prices falling to pre-war levels before the end of March 2027. Refinery runs have begun to normalize this month as Japanese refineries replenish strategic stocks and increase alternative supplies, such as from the United States or the Caspian region. They are now above 70% for the first time since March. On Wednesday, a Chinese supertanker containing Iraqi crude left the Gulf before the two-day summit in Beijing of U.S. leaders and Chinese. Abbas Araqchi, the Iranian foreign minister, visited Beijing in the last week.
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Gold prices remain steady as Trump-Xi meetings and the Iran war are in focus
The gold?price remained steady on Thursday as investors centered their attention on the?conversations?between a?U.S. The Iranian war was the focus of attention between President Donald Trump and Chinese president Xi Jinping. As of 0212 GMT, spot gold remained unchanged at $4,688.43 an ounce. U.S. Gold Futures for June Delivery fell 0.2% to $4,695. GoldSilver Central's Managing Director Brian Lan said, "Gold is consolidating right now as everyone is watching what happens in the high level talks between the U.S.A. and China." Lan said: "I think (gold) is also a window for those investors who want to get into metal." Trump will be in Beijing for a series?of meetings with Xi, aiming to achieve economic gains, maintain a 'fragile trade truce, and negotiate thorny issues like the Middle East conflict. Analysts say that Trump will likely seek China's assistance to end the unpopular and costly conflict he started with Israel late in February. However, analysts believe he won't get the support he needs. Wednesday's data showed that U.S. producers prices had their largest increase in four years, due to a surge in the cost of goods and services. This is just one more sign of inflation accelerating. The U.S. Senate has approved Kevin 'Warsh to be the chair of the Federal Reserve. This is because the U.S. Central Bank is grappling with a?intensifying inflation? that may make it difficult for Trump to achieve the interest rate cuts he demanded. Gold is often considered to be a hedge against inflation. However, rising interest rates can have a negative impact on this metal. Gold discounts in India reached a record high of over $200 per ounce on Tuesday, after a spike in prices following an import duty hike caused investor selling amid a weakening demand climate, according to bullion dealers. Spot silver dropped 0.9% to $87.18 an ounce. Platinum fell 0.4% to 2,129.15 and palladium declined 0.3% to $1,495.75.
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Australian stock prices steady as BHP and banks recover, BHP lifts the miners
Australian stocks were flat on Thursday. Financials recovered from a four-day decline on budget-driven worries about mortgages, and gains in heavyweight miners, such as a record high by BHP Group, provided a little support. As of 0103 GMT the S&P/ASX 200 Index?held its position at?8,621.8, but was on course for its fifth consecutive day of losses if current momentum continues. Financial stocks recovered from early losses and snapped a four session losing streak. They gained 0.2%. The financial sub-index fell by nearly 1% earlier in the day and reached its lowest level since 15 May 2025. The drop was primarily due to concerns that changes to property taxes in the budget announced this week would negatively affect mortgage demand. The centre-left Labor Government of Australia proposed Tuesday that negative gearing be restricted to newly constructed homes, and the 50% capital gains tax reduction would be replaced with inflation indexation to increase affordability. Shares of Australian banks fell on Wednesday in'response' to these proposals, which could reduce demand for mortgages - a major source of profit for the banks. Commonwealth Bank of Australia gained 0.8%, bouncing back from a drop in the previous session. ANZ rose by 0.3%. BHP's record-breaking 2% increase and a 0.5% rise in the mining sub-index boosted its performance. Peer Rio Tinto rose 1.4%. The sub-index reflected the higher copper and aluminium prices. Australian gold stocks fell 1%. Sector giants Evolution Mining, and Northern Star Resources, respectively, were down by 1% and 1.2 percent. As the Australian bourse operator ASX grappled with regulatory issues and named Euronext CEO Anthony Attia its new chief executive, it also appointed Anthony Attia to be its next chief executive. Stocks were?flat after a slight dip at the opening. New Zealand's benchmark S&P/NZX50 index traded flat. Air New Zealand, New Zealand's flag carrier, fell as much as 3.5% following a forecast of?its largest annual pre-tax losses in four years. High fuel prices following the Middle East conflict, which exacerbated weak demand and fleet restrictions, were the main drivers of the outlook.
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Miner Sherritt anticipates delays in filings after the external auditor and finance director leave
Sherritt International announced on Wednesday that 'its external auditor resigned and its finance chief left. These developments would delay the first-quarter filings and could trigger a halt to trading in Canada. A U.S. executive directive that expanded sanctions against Cuba also targeted Moa Nickel - a joint venture between Sherritt Nickel and Cuba's nickel state company. Sherritt has suspended its direct participation in the joint-venture in Cuba following the U.S. Order of?May 1. Deloitte, the Canadian mining and energy firm, announced on Wednesday that it had resigned from its role as 'auditor' with effect from May 12, and has started a 'process to find a replacement. Sherritt stated that the resignation did not result from any disagreements over accounting principles, financial reporting or audit procedures. Deloitte reports on previously published financial statements of the company "didn't contain any negative opinion or?a disclaimer," the company stated. Sherritt has also announced that Yasmin Gabriel resigned from her position as chief financial officer with effect on Thursday. The miner didn't give a reason for her departure, nor did she name a replacement. Due to these resignations, it is expected that the company will not be able to submit its first quarter financial statements before May 15. Sherritt said that the U.S. executive orders?could affect the willingness of some audit firms?to?work with Sherritt. Reporting by Chandni in Bengaluru, and Mrinmay in Mexico City. Editing by Subhranshu Sahu, Sherry Jacob Phillips.
Chinese firms warn that nickel quotas and tax increases in Indonesia will threaten investment
Chinese companies in Indonesia are calling for more business-friendly policies. They are warning that tighter nickel ore quotas and higher taxes, as well as a new price formula, are increasing costs and threatening investments in the world's largest nickel producer. China Chamber of Commerce in Indonesia wrote to President Prabowo, copying the Chinese embassy, and was seen by them. They said that Chinese companies faced "excessively strict regulation, over-enforcement" and alleged corruption by authorities.
Five sources familiar with the issue confirmed "the letter", requesting anonymity as they were not authorized to speak in public. The complaint highlights tensions that exist between Jakarta's efforts to extract more value from its natural resource and the Chinese capital which has driven Indonesia's rapid growth in global nickel supply. The letter mentioned higher taxes, royalties, proposed foreign exchange retention rules, stricter forest enforcement, work visa restrictions, and suspensions of major project. The letter's "strongest warning" focused on nickel where Chinese firms dominate downstream processes after years of investments in smelters and stainless steel plants, as well as battery-material project.
The chamber reported that nickel ore mining quotas were drastically reduced in this year. For large mines, reductions exceeded 70%, and the total was 30 million metric tonnes.
The report also criticised Indonesia’s revised nickel ore benchmark price formula, known by the acronym HPM. It said that these changes could have increased costs and undermined existing projects and future investments. The government has deferred planned increases in mineral royalties, export duties and other fees while it develops what officials describe as a "fairer formula" for both the state and miner. Prabowo, speaking earlier on Wednesday said that many foreign investors complained Indonesia required a?great deal of permits and approvals were taking too long. He called for deregulation to support investment without naming a country. The chamber didn't respond to an email request for comments. Prabowo's spokesperson?didn't respond to a text message asking for comment. Tsingshan, Zhejiang?Cobalt, and Brunp all have chamber boards that are members of nickel-producing facilities in Indonesia. (Reported in Shanghai by Dylan Duan, Gayatri soroyo and Gibran Peshimam. Tom Daly and Christina Bernadette contributed additional reporting from Jakarta, London. Mark Potter (Editing)
(source: Reuters)