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Volkswagen CEO targets power switch alongside deep cuts
Volkswagen CEO Oliver Blume’s plan to close German factories and 'cut up to 100,000 jobs' is more than just a cost-saving measure. It could also be an attempt to change a corporate structure that has held back progress for years. Sources say that Europe's largest?automaker? is considering its biggest-ever restructuring. This includes doubling the planned job cuts, and closing four German factories. It does this to combat tariffs, rising costs, and increasing competition from Asia. The company is also considering plans to separate passenger cars and parts into separate divisions. This could be a test of the limits of the Volkswagen Law, which entrenches both the influence of workers and Lower Saxony as the second largest shareholder. The law limits the ability of management to "close" plants. The law only applies to VW AG, which controls six of the core German factories in the VW Group. Creating separate entities would allow a way to circumvent these?constraints. Three legal and financial sources have said that spinning off the passenger vehicle division - which is heavily exposed to tariffs and weak European demand, as well as a price battle in China - could be an important step in this process. This would lead to a confrontation with powerful political and union stakeholders. The IG Metall has already said that the carve out plans are an "attack on VW?law", signaling Blume is in for a fight. Investors say that with the crisis in the industry, Volkswagen's share price near 16-year lows, and rising internal tensions, management is forced to change. Ulrich Hocker of shareholder lobby group DSW said that labour's influence is "excessive", and it has its roots in an old era. Volkswagen has a long history of failed compromises, with Lower Saxony and labour holding a majority in the supervisory board. He said: "At some stage, everyone will realise that major changes are needed to ensure this company's survival." SPINNING THE "BAD BANK" In practice, any spinoff would require shareholder approval over 80%, under the VW?law. This effectively gives Lower Saxony, with 20% voting rights, a blocking stake. One of the sources stated that "Lower Saxony will never support a vote aimed to diminish its own power." UBS anticipates a deal, and warns that any restructuring is likely to come with provisions as well as a downgrade in Volkswagen's outlook for 2026. Olaf Lies is the Lower Saxony premier and a member of the supervisory board. He said that the state would not accept measures which would weaken workers' influence, which he described as "an integral part of Volkswagen’s success story". Instead, he has suggested that production of models aimed at China be moved to Germany in order to support underutilized plants -- an idea Blume also floated. Investors, including Porsche SE, have criticized Volkswagen SE's complex structure that spans 10 brands. The company could take a leaf out of Siemens’ playbook and streamline its empire in order to close the gap that has existed for a long time between its market value and what analysts attribute to its assets. Volkswagen's stakes in the truck unit?Traton, and Porsche sports cars are worth more than 50 billion euros (EUR44 billion) - this is over twice as much as the market value of the entire group. Citi analysts believe that carving out core operations could unlock value. They compare this move to creating a "bad-bank" which would isolate weaker businesses and leave behind a holding company with a smaller footprint, less vulnerable to geopolitics or weak growth.
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Aluminum prices fall as Middle East fears about supply ease
Aluminum prices fell on Monday due to a easing in fears that the weekend tit for tat strikes between Iran and the U.S. would escalate and cause a larger conflict and disrupt Middle East shipments, traders reported. The benchmark aluminium price on the??London Metal Exchange was down 0.2% at $3,164 per metric ton. The Strait of Hormuz is a major shipping channel. On Tuesday, Washington and Tehran will resume their talks. Britannia Global Markets stated in a report that "the situation is fluid, and any new disruption could quickly tighten the?availability of... aluminum". The suspension of the trade through the Strait caused a significant disruption to the aluminium market. Middle East is home to 9% of the global aluminum smelting capacities. This month, due to disruptions in supplies, prices reached $3,787.50, their highest level since March 2022. Prices of metals used in construction, transport and packaging have fallen by 16% since then. The premium for the LME cash aluminium contract has fallen from its 19-year-high over the next three months to a discount. Support for aluminum is at the 200-day moving median, which is currently around $3.160. On the upside, resistance is found at the 100-day Moving Average around $3.410. Metals markets in other countries are influenced by the strength of the U.S. dollar, making metals priced in dollars more expensive for those with currencies other than the U.S. dollar. The dollar is on track to?have its biggest monthly gain in over a year. This is due to the growing likelihood of higher interest rates in the United States in order to curb inflationary pressures. Alastair Munro is a senior base metals analyst at broker Marex. He said that the initial sell-off in the energy and precious metals markets was due to a hawkish U.S. rate backdrop. The industrial metals suite then came under pressure the following week. Lead gained 0.2% and tin 1.4%, while nickel fell 0.4%. This week, the manufacturing PMIs of China's top consumer will provide clues about industrial metals demand. Reporting by Pratima Dasai, Editing by Mark Potter & David Goodman
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Martin Marietta to buy Lhoist North America in $13.5 billion deal
Martin Marietta Materials announced on Monday that it will merge with Lhoist North America, a limestone supplier in North America, through a cash and stock deal valued at $13.5 billion. The building materials firm is looking to tap into the growing demand for lime-based products. The shares of the Raleigh, North Carolina based company fell about 3% during premarket trading. The company stated that Martin Marietta would?use a combination of $7 billion cash and $6.5 billion worth of shares to fund the deal. The company expects to achieve annual cost synergies of about $85,000,000. Martin Marietta CEO Ward Nye stated that the demand for high quality lime products will'remain resilient in decades to come due to investments in infrastructure, advanced manufacture, energy development, and industrial expansion. The building products industry in the United States has seen a boom in recent years, as new housing, repairs, and renovations have all boomed. Last week, Ireland’s CRH announced that it would acquire Arcosa for $8.5 billion in an all cash deal. This was done to take advantage of the rising demand in U.S. 'energy and utility infrastructure. Lhoist’s Berghmans Family – which owns privately held Lhoist Group, a Belgian industrial company – would own approximately 15% of Martin Marietta at the close of the deal. Martin Marietta would gain 2 billion tons worth of limestone reserves, production facilities, distribution terminals, and quarries in the Sun Belt metro corridors. Lhoist North America produces hi-calcium limestone, dolomitic liming, and industrial mineral products that are used for?domestic?steel manufacturing, infrastructure, and heavy non-residential?construction across North America. The deal should be completed by the end of 2026 if regulatory approvals are granted. (Reporting and editing by Shashkuber, Devika Syamnath and AnshumanTripathy in Bengaluru)
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US futures rise as Middle East attacks stop, keeping oil prices muted
U.S. Stock Futures rose on Monday, after the U.S. agreed to halt recent hostilities with Iran and resume talks. This helped oil prices drop after they spiked earlier due to renewed attacks between both sides. After a sell-off last week triggered by fears about AI spending, European stocks were flat. However, tech was outperforming on both sides. The STOXX 600 index in Europe was not changed, but the S&P 500 futures in the U.S. rose 0.8%. Futures on the Nasdaq, which is a tech-heavy index, rose by 1.1%. This puts the U.S. Index back on track to recover after it fell more than 4% in the previous week. The STOXX technology?index rose 1.2%. After several days of strikes, both sides have accused each other of violating an interim ceasefire after an Iranian projectile struck a cargo vessel in the Strait of Hormuz. After the U.S. and Iran exchanged strikes over the weekend the oil price spiked initially on Monday, but then fell to its lowest level since the conflict began. Brent crude oil was up 0.7% last week at $72.50 per barrel. This is down 22% from the previous month. Mohit Kumar said that the market could benefit from the drop in oil prices, and the impact it has on the global economy. Lower oil prices will lead to diversification of trade, and sectors that are growth-sensitive should perform better. Asian markets have pared their earlier losses. South Korea's KOSPI is down by 0.2%, and Japan's Nikkei is up 0.2%. Investors are worried that AI-related companies' valuations have risen too high after dramatic gains. However, markets were set to recover some ground on Monday. The Bank for International Settlements warned against the sustainability of the current AI investment boom, citing supply bottlenecks as well as intense competition that could lead to the same overinvestment seen during previous boom and bust cycles. WAGE WAGERS FOR RATE INCREASE The oil prices have dropped sharply over the past few weeks, but inflation measures have?risen in the U.S. The dollar has risen due to the rising odds of a rate hike. The dollar index (which measures the U.S. currencies against other currencies) was slightly lower last week at 101.25. This is just below its one-year high reached last week. The Japanese yen fell slightly to 161,80 per U.S. Dollar as fears of further intervention by Tokyo prevented the fragile currency breaking its lowest level in 40 years. Investors have priced in at least a Fed rate hike this year. This is a dramatic change from the expectations of two rate cuts before the war began. BofA's strategists expect?three increases, reflecting a more hawkish outlook that is partly influenced by?strong U.S. job growth. Gold was down by 1.3% to $4,034 an ounce, as the dollar rose. The yellow metal will experience a 13% drop in the second quarter. This is its largest quarterly decline since 2013.
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Gold drops as Mideast tensions fuel inflation worries, Fed rate hike bets
Gold prices fell on Monday as recent hostilities in the Middle East increased inflation fears and expectations for rate hikes by the U.S. Federal Reserve. As of 1142 GMT, spot gold was down by 1.3% to $4,035.79 an ounce. U.S. Gold Futures for August Delivery fell by 1.1%, to $4,050.02/oz. Bullion's weekly drop was 1.7% on Friday. It is expected to fall by more than 10% this month, marking its fourth consecutive?month in losses. A U.S. official announced on Sunday that Iran and the United States had agreed to cease recent hostilities and re-start talks over their dispute regarding the Strait of Hormuz. Iran fired missiles and drones early Sunday morning at U.S. military bases in Kuwait and Bahrain, just hours after President Donald Trump had threatened to 'terminate the Islamic Republic' if they did not comply with an agreement to end this war. Investors are still uncertain about the U.S. - Iran peace talks, said ActivTrades Analyst Ricardo Evangelista. He added that new flare-ups would likely increase energy prices and raise inflation fears, as well as reinforce hawkish expectations from central banks. Crude oil prices rose on the day. Gold is often seen to be a hedge against rising inflation. However, in an environment of high interest rates its appeal tends to diminish as it does not offer any yield. CME's FedWatch showed that markets are pricing in three rate hikes by the Fed this year. There is a 61% probability of a hike in September. Investors are awaiting the June ADP employment figures and the U.S. Nonfarm Payrolls data for more clues about the Fed's policy. "A stronger-than-expected U.S. non-farm payrolls reading later this week could ?reinforce expectations of a more hawkish Federal ?Reserve, creating the conditions for ?a sustained break below $4,000," said Evangelista. Silver fell 2.3%, to $57.82 an ounce. Platinum fell 1.6%, to $1.588.01, and palladium increased 0.3%, to $1.212.61. (Reporting by Sumit Saha in Bengaluru; Editing Harikrishnan Nair, Tasim Zahid and Diti Pujara)
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Guinea to establish regional hub for gold refining as West African race intensifies
Guinea's mines minister said that the country aims to be a regional hub for gold refining. This is part of a wider push by West African producers to 'process bullion locally instead of exporting it into the Middle East. Gold prices are high, and the move aims to preserve more value for consumers at home. Bouna Sylla, Mines Minister Bouna Sylla said over the weekend that there was no problem if each country (in West Africa) had a refinery. "If you are not competitive in the market, your refinery will either fail or succeed due to economics and not politics." The President of the World's Top Bauxite Producer, Mamady Doumbouya, banned raw gold exports last week with immediate effect. GUINEA Refinery Among Africa's Largest Sylla, who described it as one of the largest refineries in Africa, said that Guinea built a new facility capable of processing products from all over the region. Bangaly Steve Toure is the?deputy director of Guinea's?Mining Investment Fund. He said that the $30 million facility would process 530 metric ton (about 17 millions ounces) a yearly at first, and then increase it to 733 tonnes when fully operational. Commercial operations should begin in July, following final approvals. Ghana, Africa's largest gold producer, along with Mali, Burkina Faso and others, are also racing to create a domestic refinery?hub in order to extract more value from the bullion. AngloGold Ashanti, and Nordgold dominate the industrial gold production in Guinea. Industry estimates suggest that West Africa will produce 11 million ounces of gold by 2025. Sylla stated that Guinea produced approximately 2.32 million ounces of gold?last, valued at?about $7.9 billion. However, it retained less than 1% domestically. He said, "It's not just about jobs and revenue." "Countries such as the UAE don't produce gold, but they built refinery capacity to stimulate economic growth. We want to create a similar value chain. Guinea is preparing to issue a decree encouraging artisanal refinement and reforms that will formalise the artisanal industry and improve traceability. They added that the refinery is part of an overall push to develop downstream industry, and mirrors similar efforts in Guinea’s bauxite sectors. Maxwell Akalaare Adombila is the reporter. Mark Potter edited the article.
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Gold drops as Gulf tensions fuel inflation concerns and Fed rate hike bets
Gold prices fell on Monday as recent hostilities in Gulf added to inflation fears and expectations of rate hikes by the U.S. Federal Reserve, putting pressure on the non-yielding material. As of 1053 GMT, spot gold was down by 1.3% to $4,036.19 an ounce. U.S. Gold Futures for August Delivery fell by 1.1%, to $4.051/oz. Bullion experienced a weekly decline of 1.7% on Friday, and is on course for a monthly loss in excess of 10%. A U.S. official announced on Sunday that Iran and the United States had agreed to cease recent hostilities and re-start talks regarding their dispute over Strait of Hormuz. Iran fired missiles and drones towards the United States. Early on Sunday morning, military sites were found in Kuwait and Bahrain. This was shortly after President Donald Trump had threatened to cease the existence of the 'Islamic Republic' if they did not honour an agreement to end a war. Investors are still uncertain about the U.S.-Iran Peace Talks, which is putting pressure on gold prices. ActivTrades Analyst Ricardo Evangelista said that investors were under pressure because they were unsure of how things would progress. Crude oil prices rose on the day. Gold is often seen as a hedge to inflation but its appeal dwindles in an environment of high interest rates because it doesn't yield any interest. CME's FedWatch tool showed that the markets are pricing in three Fed rate increases this year. There is a 61% probability of a hike in September. Investors are now awaiting June's ADP Employment Data and the U.S. Nonfarm Payrolls data for more clues about the Fed's policy. "A stronger-than-expected U.S. non-farm payrolls reading later this week ?could reinforce expectations of a ?more hawkish Federal Reserve, creating the conditions ?for a sustained break below $4,000," said Evangelista. Silver fell 2.4% per ounce to $57.73, platinum dropped 1.4% to $1.590.70, and palladium increased 0.6% to $1.216.67. (Reporting by Sumit Saha in Bengaluru; Editing Harikrishnan Nair and Tasim Zahid)
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MORNING BID AMERICAS-Weekend wars
What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets Is the Middle East conflict over? The world markets, which assumed that the Middle East conflict had ended and been resolved, were rudely surprised over the weekend when the United States launched new strikes against Iran in response to the attacks on Gulf shipping. Oil markets were unable to react to the news in early trading this morning, when both sides agreed to cease hostilities and restart peace talks. Below, I'll go into more detail. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. WEEKEND WARS The weekend wars didn't have much of an impact on crude prices, which continued their slide back to pre-war levels as we entered the week. Parts of the oil markets are already experiencing oversupply because of a return of Gulf shipping. Brent crude traded at $73 per barrel on Monday morning after losing more than 10% the previous week. The wobbly technology sector is still on edge, after the selloffs and whipsaws of last week, which were largely caused by?profit taking after a spectacular quarterly for chip stocks. On this front, real concerns still linger. Apple's soaring costs of memory and reports that OpenAI's IPO could be delayed despite Micron Technology's dazzling earnings report. These worries, combined with the uncertainty surrounding the peace agreement, kept Asia markets on edge?on Sunday, with major indices closing lower. Wall Street futures were in the black before the bell, and European shares held their ground early in trading. The dollar is poised to make its largest monthly gain in over a year against major counterparts, fueled by Federal Reserve rate hike bets. Friday is Independence Day in the United States, and Thursday's release of the June payrolls will shorten this week. This should provide a better indication of the Fed's policy outlook. On Wednesday, the new Fed chair Kevin Warsh is scheduled to deliver a keynote speech at the European Central Bank annual symposium, which begins today in Sintra. Andy Burnham, who is the frontrunner to be the next UK Prime Minister, will deliver his first key note speech on a government plan on Monday morning. He is expected to present a "long-term vision" for improving living standards and giving greater power to local authorities. Chart of the Day The U.S. Dollar is headed for its largest monthly gain in almost a year ahead of?key U.S. employment data later in this holiday-shortened weekend, with futures still betting on an interest rate rise by the Fed in October. The yen is at the other end of the dollar stick, as it continues to hover around 40-year lows. CFTC data indicates that speculative yen short positions have reached extremes not seen since 2024. Watch today's events The ECB annual forum is underway in Portugal Want to receive Morning Bid in your email every morning? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent those of News. News is bound by the Trust Principles to maintain integrity, independence and freedom from bias. (By Mike Dolan).
Gold prices steady as traders consider inflation and Israel-Iran ceasefire risks
The gold price remained stable on Tuesday, as traders assessed the fragile ceasefire agreement between Israel and Iran. Inflation and interest rate hikes were also top of mind.
As of 0746 GMT, spot gold was unchanged at $4,328.39 an ounce. The previous session saw bullion at its lowest level in more than two months.
U.S. Gold Futures for August Delivery were down 0.3% to $4,352.30.
Tim Waterer, Chief Market Analyst at KCM Trade said that gold is trading moderately, as traders are sceptical of the durability of an Iran-Israel ceasefire. They also remain cautious in advance of this week's U.S. Inflation data, which could influence the Fed's outlook.
Iran and Israel announced?on Monday that they had halted their attacks after an appeal by U.S. president Donald Trump. However, Tehran warned that it would resume hostilities in the event Israel continued to strike Hezbollah.
Goldman Sachs expects that the U.S. Federal Reserve will keep interest rates at their current levels through 2026, and defer rate cuts until 2027. They cite stronger economic growth and job creation as reasons for this.
The CME FedWatch tool shows that traders are pricing in more than 70% of the possibility of an?U.S. According to CME FedWatch, traders are pricing in a more than 70% chance of a?U.S.
Investors are preparing for the U.S. Consumer Price Index data due on Wednesday to determine the Fed's policy direction.
Waterer stated that a return to $5,500 gold by the end of the year is still possible, if oil prices, bond rates and 'the dollar' all take a downward turn.
Silver spot rose 0.3% per ounce to $68.36, platinum rose 0.4% to $1761.53, while palladium rose by 1.8% to $1226.47. (Reporting and editing by Subhranshu sahu in Bengaluru, Sherry j. Phillips, Eileen Soreng, Andrew Heavens.)
(source: Reuters)