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US manufacturing production is boosted by motor vehicles and AI; war-related shortages of supplies are looming
The U.S. manufacturing sector posted its biggest increase in 14-months in April. This was driven by the demand for motor vehicles, and?technology products amid a boom in artificial intelligence spending. A survey released by the New York Federal Reserve showed that delivery performance in New York State deteriorated during May. The U.S. and Israel conflict with Iran has caused disruptions in shipping through the Strait of Hormuz. This has led to higher energy prices and global supply chain strains, as well shortages of many goods including consumer products, fertilizers and aluminum. In April, producer prices rose at the fastest rate in four years. The oil prices rose on Friday, after President Donald Trump's comments and Iran’s Foreign Minister's remarks quashed hopes for a deal that would end attacks and seizures of ships around the Strait. Michael Gapen is the chief economist of Morgan Stanley. He said: "Overall, a firmer demand, and a continued increase in output, point to some strength in the manufacturing sector." "However uncertainty about supply and prices puts the outlook for the near term at risk." The Federal Reserve reported that manufacturing output rose 0.6% in April, which is the highest increase since February 2025. This follows a 0.1% rise in March, which was upwardly revised. The Federal Reserve said that economists surveyed by it had predicted that factory production would rebound 0.2% following a 0.1% drop in March. In April, factory production increased 1.3% on an annual basis. The production of motor vehicles and parts jumped by 3.7%. The production of high-tech industries increased by 1.0%, after increasing 0.5% in March. Computers and peripheral equipment boosted output for the second consecutive month, increasing 1.5%. The production of semiconductors, electronic components and other related products increased by 1.0%. Communications equipment increased by 0.6%. AI is being rapidly adopted by businesses, who are investing billions in the process. This helps to support manufacturing, which represents?9.4% (?) of the economy. AI spending was a major contributor to the economy's annualized growth rate of 2.0% in the first quarter. Manufacturing, excluding high-tech industries and motor vehicle production, rose by 0.3% in April following a similar increase in March. Durable goods production jumped 1.2% in the last month. Chemicals production fell by 0.9%. Plastics and rubber production also fell by 0.9%. The production of petroleum and coal-based products increased by 1.0%, for the second consecutive month. Food, beverages and tobacco products also saw an increase in production. The increase in manufacturing could be due to companies placing orders early to avoid possible shortages or higher prices caused by the Middle East conflict. DETERMINING THE PERFORMANCE OF SUPPLIER DELIVERY New York Fed Empire State Manufacturing Survey revealed that its measure of business conditions rose nine points in May to 19,6. This was the highest level for more than four-years. New orders and shipments also increased significantly, both for the second consecutive month. The survey's measurement of delivery time reached a four-year peak, but its gauge of availability of supplies remained negative. This suggested that "delivery times had become much longer and availability of supplies worsened." Stocks in the United States were trading lower, as inflation fears increased. Treasury yields on longer-dated bonds reached their highest level in over a year. Dollar rose in relation to a basket. The financial markets expect that the U.S. Central Bank will keep its overnight benchmark interest rate at 3.50%-3.75 percent until next year, due to the higher oil prices and inflation. The higher interest rates may offset the manufacturing boost from tax cuts. Trump's import tariffs hurt manufacturing last year, but the AI spending spree helped to offset some of that drag. The Fed's report shows that mining output fell 0.1% in April after falling 1.6% in March. Energy production increased by 1.0%, but drilling for oil and gas wells decreased again in March. In the Fed's Beige Book last month, it was noted that "many producers were cautious about increasing drilling because of uncertainty?about the persistance of higher prices." Stephen Brown, Capital Economics' chief North America economist, said: "This second consecutive decline should serve as a reminder to those who think that an increase in U.S. oil production will offset the supply losses from Middle East." Electricity and natural gas production both increased by 1.9%. Utilities production fell by 1.4% in march. After a downwardly revised 0.3% decline in March, the overall industrial production increased by 0.7%. Previously, industrial output was reported to have decreased by 0.5%. In April, it increased by 1.4% compared to the same month last year. Capacity Utilization for the Industrial Sector, which measures how well firms use their resources, increased to 76.1% in March from 75.7%. This is 3.3 points below the average for 1972-2025. The manufacturing sector's operating rate increased by 0.4 percentage points to 75.8%. This is 2.4 points below the long-term average. Reporting by Lucia Mutikani; Editing by Chizu Niyama and Nick Zieminski
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Gold falls to a one-week low, as yields and the dollar climb. Middle East tensions also fuel inflation.
As U.S. Treasury yields and the dollar rose, gold fell to its 'lowest level in over a week on Friday. Meanwhile, inflation fears due to the Middle East conflict reinforced bets that interest rates would rise. By 9:40 am EDT (1340 GMT), spot gold had fallen 2.6% to $4,527.80 an ounce, its lowest price since May 5. Prices have fallen 4% this week. U.S. Gold Futures for June Delivery fell 3.2% to $4,535 "There were a few reasons for the sell-off in (precious metals). The dollar is strong right now. Edward Meir is an analyst with Marex. Benchmark 10-year U.S. Treasury yields have risen to a nearly one-year-high, increasing the opportunity cost of non-yielding gold. The dollar is set to make its biggest weekly gain in the past two months. This will increase the price of gold priced in greenbacks for foreign buyers. Donald Trump, the U.S. president, said that his patience was running out with Iran and that China had no significant breakthroughs in trade or tangible assistance to end this war. He added, "The Chinese didn't really offer much help to resolve the conflict. And we're now seeing crude oil rise, which reinforces inflation narrative, and has been very negative for metals." Since the U.S. and Israel war against?Iran started, crude?oil has risen by more than 40%. This has led to a global increase in inflation. In times of high inflation, central banks are more likely to raise interest rates. This in turn can reduce the appeal of non-yielding gold. According to CME’s FedWatch Tool, traders have priced in a U.S. rate cut this year but bets on a rise have increased. Spot silver dropped 8.7% to $76.26 an ounce. Platinum fell 4.1% to $1967.35, and palladium was down by 1.9%, at $1,409.75. All three metals are headed for losses this week. Silver had fallen as much as 9% in the previous day and was set to have its worst performance daily since March 3. (Reporting by Ishaan Arora in Bengaluru; Editing by Joe Bavier)
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Venezuela starts giant debt rework, but hurdles remain
Venezuela announced a "comprehensive restructuring of public debt" on Wednesday. However, it still faces significant hurdles in order to complete one of the largest and most complex sovereign reworks ever. Analysts estimate that the total liability could exceed $150 billion once interest accrued, arbitration awards, and other claims are included. Here are some key questions and answers. WHAT DEBTS WILL BE AFFECTED BY THE RESTRUCTURING? The government stated that the aim is to "normalise" its outstanding debt obligations. This includes its international government bonds and PDVSA's bond. The statement is not as clear on other debts. The official debt, which is the multilateral loans that the government has taken out from lenders around the world, will be "addressed by institutional normalisation". However, there are no details on how the debts it has borrowed bilaterally from other countries around the globe will be handled. According to JPMorgan, Venezuela owes around $2 billion to the Inter-American Development Bank as well as the Development Bank of Latin America & the Caribbean. It owes China at least $10 billion bilaterally, with Brazil and Japan being other large creditors. JPMorgan stated that the restructuring of Venezuelan bonds and commercial debt may take a different path - and possibly faster - than its defaulted loans to "official sector" creditors. What are the basic principles of VENEZUELA? Venezuela said the restructuring will be based on four principles: sustainability, comprehensiveness and good faith, transparency and tempo, or speed. Analysts have doubts that Caracas can move quickly enough to ensure the process is thorough and covers all claims, including those from the United States. The 'intent' to restructure the debt has contributed to the sharp rise in bonds this year. Analysts at Citi stated that Venezuela is moving faster than anticipated towards a restructuring. They stressed that, although the process was not imminent, that it was important to have a credible start. What happens next? Venezuela has set an ambitious schedule, promising to deliver a macroeconomic frame and a Debt Sustainability Analysis (DSA) by June. The framework would include economic assumptions and projections, while DSA would evaluate its ability to service the debt and indicate how dramatically?the debt should be restructured. The International Monetary Fund is usually involved in both, and the process can take several months. The IMF's role in the June timeline is not clear. This has caused some concern among investors and analysts who expect the IMF to provide independent, credible assessments. The IMF stated 'on Thursday that it has not been involved in the process to date. Meanwhile, the interim president of Venezuela's Central Bank, Luis Perez said a delegation will travel to Washington to meet with the IMF by the end of the month. When can negotiations begin? Caracas hired Centerview Partners, a financial services company based in the United States. Washington recently granted it a licence allowing it to hire advisers. The licence does not permit Venezuela to negotiate with bondholders or come up with a deal. A group of investors has already established the "Venezuela Creditor Committee" (VCC). AJ Mediratta is a partner at Greylock Capital Management which is a part of the VCC. He said that the committee has been signaling to U.S. officials for over a year that they are ready to engage but Venezuela was not in able to start talks. Analysts believe Washington could act quickly to grant permission for negotiations to begin. (Reporting and editing by Marc Jones, Kirby Donovan, Kirin Strohecker; Johann M Cherian contributed additional reporting).
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Early monsoon rains will hit the southern Indian coast, causing crop planting
The state-run weather service announced on Friday that monsoon rains will hit India's southern coast six days sooner than normal, leading farmers to hope for early plantings of rice, corn and other crops. India Meteorological Department said in a press release that the monsoon will likely arrive over Kerala's southern state on May 26. The margin of error is four days. The'monsoon' usually ends in Kerala by the middle of September. India's $4 trillion economy relies on the monsoon to replenish reservoirs and aquifers, as well as water its farms. India Meteorological Department predicted below-average rains for 2026, the first time since 2013. This raised concerns about farm production and economic growth. India Meteorological Department defines a normal or average rainfall as falling between 96% and 104% of the 50-year average rainfall of 87 cm for a four-month period. (Reporting and editing by Barbara Lewis; Mayank Bhardwaj)
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Watchdogs warn that foreign buyers are fueling the illegal mineral trade in Nigeria.
A joint report by the government and civil society revealed that Nigeria is losing vast amounts of mineral revenue to illegal trading networks, which are dominated by shell companies, foreign buyers, and armed criminals groups. This highlights the extent of illicit activity. The report was produced by Nigeria's extractive industry watchdog NEITI and Africa Network for Environment and Economic Justice with UK government funding. It found that illicit financial flow in the mining sector occurs through commercial manipulation, corrupt officials, and cross-border smuggling. Nigeria's mining industry contributed only 0.72% of GDP in 2023, 0.28% of revenue, and 0.75% % of exports. This is a fraction of the oil and gas sector, which was responsible for 82% of revenues and 29% of exports. The Financial Intelligence Unit of Nigeria has identified illegal mining in Nigeria as a growing threat to national security and the economy. The report alleges that foreign buyers, especially Chinese actors, have a disproportionate impact on pricing, purchasing arrangements, and export channels. They negotiate directly at mine sites. The report alleges that this allows for a'systematic undervaluation, weights and grades manipulation, and informal payments. Shell companies registered under Nigerian laws are often used by foreign companies to conceal ownership. They use local proxy firms to gain access licenses and permits. This practice, according to the report, facilitates money laundering and trade misinvoicing. In areas plagued by banditry or terrorism, an estimated 80% mining in North-West Nigeria will be illegal. This activity is expected to increase between 2022 and 2024. The report highlighted a growing overlap in commercial interests linked to China and local conflicts. It said that the May 2025 conviction of four Chinese nationals in 'Plateau State', each sentenced to 20 years with forfeiture of assets, is an exception. Requests for comments were not immediately responded to by the Ministry of Solid Minerals Development or the Chinese Embassy at Abuja.
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Bond yields rise on inflation fears as global shares fall
Global shares fell on Friday, as investor euphoria about tech stocks was replaced by inflation fears. Bond yields rose and expectations of interest rate hikes in this year were raised. MSCI's main world stocks index fell by 0.35%. Europe's STOXX600 dropped?1.37% after rising the previous two sessions. Nasdaq Futures dropped 1.32%, and S&P500 futures dropped 0.9%. Wall Street had hit new highs after a 4% rise in AI darling Nvidia. The broadest MSCI index of Asia-Pacific stocks outside Japan dropped 2.54%. Japan's Nikkei fell 1.99% following data showing wholesale inflation increased to 4.9% in the month of April, the highest pace in three-years, keeping the Bank of Japan in line to raise interest rates. In the past few days "it has been this relentless rally. "I think that this rally has reached a point of exhaustion," said Tim Graf. He is the managing director at State Street Markets and is responsible for EMEA's macro strategy. He added that the equities market remains supported. He said that if there is anything to cause a reversal, it's the rate market and the possibility that inflation will stay above target. Prices of oil?rose as the uncertainty surrounding a Middle East Peace Deal and the reopening of Strait of Hormuz was in the spotlight. Brent crude futures climbed 2.3% to $108.14 per barrel, on course for a 6.7% gain in a week. Attention has also been focused on Beijing, where U.S. president Donald Trump concluded a state trip. Trump stated that after meeting Chinese President Xi Jinping they both agreed Iran should not have a nuclear weapon. They also agreed to reopening the Strait of Hormuz. "President Trump’s China visit continues and is a welcome respite from the Iran war anxiety. Padhraic G Garvey is the regional head of ING's Americas research. "The front and center issue is delivered inflation which remains troubling for Treasury markets." We continue to maintain a view that yields will be tested on the upside in the coming weeks. YIELDS SPike The global bond market was again under pressure Friday due to the rising inflation risk, fueled by higher oil prices. The yields on German 10-year bonds, the benchmark of the eurozone, increased by more than 7 basis points, to 3,1199%. Meanwhile, Japanese yields reached record highs. The yields on U.S. 2-year notes US2YT=RR increased by 5.8 bps, to 4.0498%. And the yields on 10-year notes US10YT=RR also rose 7.7 bps, to 4.5358%. Both yields are at their highest levels in about a year. A run of weak auctions in this week has highlighted the fragility of the market. Dollar to gain 1.4% a week - most in 2 months - due to 'lack of progress' in Gulf. The strength of the greenback pushed the yen down to 158?per?dollar and traders were on alert for any further interventions from Tokyo. The sterling hit a new low of five weeks and fell 0.3% last session to $1.3360. It had fallen 0.9% the previous day following the resignation by Wes Streeting as health minister, which deepened Britain's political crisis. Reporting by Sophie Kiderlin from London and Stella Qiu from Sydney. (Editing by Sam Holmes Mark Potter and Joe Bavier.
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As rising yields and the dollar sap appeal, gold drops by 2%
Gold fell more than 2% on Friday, as a strong U.S. dollar and surging Treasury yields weakened its appeal. Higher oil prices and continued tensions in Middle East also reinforced expectations for higher interest rates. By 1141 GMT the spot gold price was down by 2.1%, at $4,551.81 an ounce, its lowest level since May 5. Bullion has already lost 3.4% this week. U.S. gold futures for delivery in June fell 2.8% to $4,556.40. Benchmark 10-year U.S. Treasury Yields have risen to a near-year-high, increasing the cost of gold that does not yield. Dollar strength also made greenback-priced gold more expensive for overseas buyers. "Yields are higher and the dollar is stronger on increased inflationary concerns. This is partly due to the Gulf hostilities, but also backed by the PPI and CPI figures released this week," said StoneX analyst Rhona OConnel. Brent crude oil prices rose 7.8% in the past week and hovered above $109 per barrel as the Strait of Hormuz remained largely closed. As manufacturers pass on the costs, higher fuel prices can contribute to inflation. In turn, this forces central banks keep interest rates high, reducing the appeal of non-yielding metals. This week, data on inflation showed that consumers and businesses have begun to feel the effects of war. According to CME's FedWatch Tool, traders have priced in U.S. rate cuts for this year. O'Connell said that "Gold has been wary about the Gulf -war for some time now, and the news from India this week regarding import duties has increased tensions in an already weak market." This week, gold discounts in India reached a new record. The reason was a steep increase in import duties. Ross Norman, an independent analyst, said that the news is awash with uncertainty, which is causing gold prices to rise. Spot silver dropped 6.3%, to $78.26 an ounce. Platinum fell 3.1%, to $1,991.33, while palladium fell 1%, to $1,422.41. All three metals were on track to post weekly losses. (Reporting by Anjana Anil in Bengaluru; Editing by Shreya Biswas)
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Nigeria offers pension funds a waiver on investing in the proposed Dangote refinery IPO
Nigeria's pensions regulator has granted fund managers a "special waiver" to invest in the planned initial public offering of?Dangote Oil?Refinery. This is an unusual policy change aimed at supporting a key asset for the country. A circular dated May 13 stated that the National Pension Commission would suspend eligibility criteria, such as "profitability" and a track record of dividends which typically govern how pension funds allocate their assets. The move is part of an broader effort to channel domestic long-term?capital towards large industrial projects viewed as?vital for growth and energy security. PenCom stated that the decision was made after a review of "strategic significance" and "strong foundations", as well as a review the track record of Dangote Group, the parent company. Fund administrators can invest in an IPO under a waiver but they must adhere to internal guidelines, risk control and fiduciary responsibilities towards?contributors, retirees and fund contributors. The regulator stated that the forbearance is "exceptional and one-off, and strictly case-specific," but it will not apply automatically to future offerings. Aliko Dangote's refinery is Africa's biggest and has helped Nigeria to rely less on fuel imports. PenCom stated that the directive was effective immediately. Reporting by Camillus Eboh; Writing by Elisha Gbogbo; Editing by Andrew Heavens
Rwanda's Trinity Metals aims to raise $200 million US dollars in order to increase tin and tungsten production
Rwanda's Trinity Metals plans to list on an international exchange in order to raise between $100 and $200 million as it expands its tin and tungsten mines, and moves forward with what could be one of the top lithium deposits in the world, according to its CEO.
The soaring demand for metals known as 3T, which are used in electronic, defence, and energy supply chain, is driving a move toward traceable non-Chinese suppliers, bringing Rwanda's 3T mine belt near the Democratic Republic of Congo into sharper focus.
Trinity has consolidated three undercapitalised properties in 2022, the Nyakabingo mine for tungsten, Rutongo's tin operation and Musha's tin-tantalum license. It is also converting many artisanal operations into industrial scale operations.
Peter Geleta, the Chief Executive of the company, said that the output has quadrupled. The company is aiming to list on the New York Stock Exchange within the next 12-18 months in order to tap into the growing Western demand for essential minerals.
We've decided to list .... New York is our preferred choice due to the appetite and liquidity for critical minerals."
Not Affected by the Eastern Congo Conflict
Trinity, however, has not been affected by the fighting in eastern Congo, according to Geleta.
The company plans to invest $150 million in the next three year's time into processing plants at its mines. This includes a $50-million plant that could be operational by the end of 2027.
Trinity's goal is to triple the tin and titanium production in three to five years. This will be achieved by mechanisation?and a new underground development.
Geleta stated that strong prices for tungsten are the basis of their strategy, after China, which is responsible for around 85% global supply, curtailed exports and tightened markets.
He said that all of his production was sent to the U.S.A., Europe, and Thailand. "We don't sell to China", he added, adding that long-term agreements were already signed with Western buyers.
Geleta says that if drilling confirms the lithium deposit, it could be among the top 10 in terms of grade.
He said: "We could easily become a multi-billion dollar company in five years if we make the right investments." Maxwell Akalaare Adombila wrote the article. Mark Potter edited the book.
(source: Reuters)