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The FOREX Dollar gains after US-Iran discussions, but the pound is choppy due to Starmer's exit.
The dollar rose on Monday, as the first round U.S.-Iran negotiations boosted?optimism about a possible peace deal. Meanwhile, the pound gained in choppy trade after British 'Prime Minister Keir?Starmer announced his resignation. JD Vance, the U.S. vice president, said that talks with Iranian officials held in Switzerland laid "a good foundation" for an eventual peace agreement despite tensions surrounding the Strait of Hormuz. U.S. crude dropped 2.61%, to $74.60 per barrel. Brent was down to $77.98 a barrel, a 3.21% drop on the day. However, the declines were kept in check by threats made by U.S. president Donald Trump to restart war, and the announcement from Tehran that they had closed the Strait of Hormuz. The dollar index (which measures the greenback against a basket currencies) rose by 0.06%, to 100.90. Meanwhile, the euro fell 0.24%, at $1.1444. POUND REVEALS AS POLITICAL UNCERTAINTY LOOMS Sterling recovered from a session-low of $1.318 after Labour leader Starmer announced he would step down, opening the door for Andy Burnham who could become the seventh prime minister in 10 years following the Brexit vote. Marc Chandler, Chief Market Strategist at Bannockburn Capital Markets, New York said: "I think that the bond market 'vigilantes' are a good way to guard against the next UK government moving too far left." The bond market is what will determine the credibility of a new government. The last rise in the sterling was 0.12%, to $1.3248. The Yen is nearing a 40-year low The dollar weakened 0.02% against the Japanese yen to 161.32 from 161.92, which was just a few cents shy of a two-year high reached last week. If the dollar were to break through 161,96, it would be at its lowest level since 1986. The Japanese currency experienced several sharp movements that saw the yen briefly strengthening?against?the greenback. Satsuki Katayama, the Japanese Finance Minister, said that after the Bank of Japan increased rates last week as was widely expected, authorities are prepared to react appropriately at any time to currency movements. The yen lost gains after a series of interventions that began on?April 30. A shift in focus from the Federal Reserve led traders to increase?expectations regarding rate increases this calendar year, favoring the dollar. Chandler said, "People should be alert for BOJ interventions and perhaps even supportive comments from America." On Monday, both Deutsche Bank and BofA global research?updated their Fed forecasts to include rate hikes in the month of September. BofA expects the central bank will raise rates 25 basis points in each of September, October, and December.
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Czech group Sev.en GI sues to reclaim losses of $1 billion at Callide C in Australia
Sev.en Global Investments, a Czech company, said it was suing Callide Energy Pty Ltd (CEPL) as well as CS 'Energy for losses exceeding $1 billion. This is in relation to the operation of the 'Callide C Power Station located in Queensland. The case is based on an explosion that occurred at a power station in 2021. Sev.en GI, owned by Czech billionaire investor Pavel Tykac in the energy sector, has expanded outside of Europe to Australia and the United States. Sev.en stated that the claim was filed by a subsidiary of the Federal Court of Australia and concerned the explosions of the C4 Generator, the collapse of?C3 Cooling Towers, and the explosions of the boiler C3. Sev.en GI reported that "between the two Callide 'C' generation units, more than 1,700 days in generation capacity have been lost just over the last five years." The claim seeks CEPL and CS Energy to be held accountable for CS Energy’s management of Callide C Power Station, and its representations made to the joint venture. CS Energy owns 100% of?CEPL which is 50% owner of Callide C. Sev.en GI acquired the remaining 50% of Callide C by 2025. CS Energy responded that it would defend itself against a legal claim and had known for years about potential claims. It said that "CS Energy is dedicated to the safe, compliant, and reliable operation of Callide C for the best 'interests of Queenslanders, as well as the Crisafulli government's Energy Roadmap," adding that it would not make any further comments. Sev.en GI stated that it was a major supporter of'rebuilding efforts' since the first incident at Callide C, in 2021. It also said that the financial support for the administration process had been provided since early 2024.
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India's central banks sold gold for $8.9 billion, but its holdings remained unchanged.
?The Reserve Bank of India shifted a total of $8.94 billion on the 'foreign exchange markets in 'April, according to data released Monday.?It was doing this to help support the rupee, which had fallen to record lows during the U.S. - Iran war. In its monthly bulletin, the RBI reported that it had purchased $16.23 Billion and sold $25.17 Billion in April. The central bank sold a total of $9.8 billion in March. Data showed that the volume of gold held by the central bank remained unchanged at 880.52 tonnes in May, while its value dropped from $120.23billion late April to $112.6billion last month. Last month, the Indian rupee fell to a new record low of 96.96 per dollar as rising oil prices and global bond yields hammered the South Asian unit. The RBI intervened repeatedly to support the currency. As of the end of April, the RBI's outstanding net forward dollar sales were $95.30 billion, down from $103.06 billion at end-March. The RBI has refuted a report that appeared in the media earlier this month, which suggested the central bank may have sold a portion of its gold reserves. Data showed that the physical stock of gold has not changed since April. The 'backdrop for rupee has improved following a salvo policy measures announced earlier in the month to'shore up dollar inflows in the economy and a sharp decline in oil prices due to signs of progress in U.S.Iran negotiations. The rupee closed Monday at 94.6775 per dollar, down 0.4%. The latest data shows that India's foreign exchange reserves have fallen to $671.6 billion - a record low for more than a year. This is due to the central bank's attempts to defend its embattled currency. (Reporting and editing by Jaspreet K. Kalra, Nishit N. Navin)
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US approves Iranian oil sale amid final peace talks
The U.S. Treasury Department approved the production, sale and delivery of Iranian oil on Monday. This was a promise made by Washington and Tehran in an agreement last week. The general license announced by the two sides as they continue their talks to reach a final agreement on peace allows for the production, sale and delivery of crude oil, petrochemicals and petroleum products with Iranian origin through August 21. In a recent post on X, Treasury Secretary Scott Bessent stated that Iran had 'committed' to allowing free and open passage through the Strait of Hormuz as well as allowing?International Atomic Energy Agency inspectors to enter their country. As part of this framework, Treasury issued a temporary general license for 60 days authorizing production, delivery and sale of Iranian crude oil. The United States has agreed to waive the restrictions on the export of Iranian crude, petroleum products, derivatives and services such as banking, insurance and transportation. The general license issued on Monday allows for the importation of Iranian crude oil, petrochemicals and petroleum products to the United States. The license states that Iranian oil may be imported to the United States as part of the waiver if?necessary? for its sale or delivery. It does not allow?transactions with North Korea or Cuba - countries that are heavily sanctioned in the United States. (Reporting and editing by Doina chiacu, Susan Heavey, Katharine Jackson and Daphne Psaledakis)
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Gazprom shares fall to lowest level since 2009
Gazprom shares fell below 100 roubles ($1.35) for the first time since 2009 on Monday, according to data from the Moscow Exchange. Gazprom shares have been hit by a number of factors, including Europe's decision not to buy Russian energy due to the conflict in Ukraine, the decline in oil prices as a result of progress made between the United States, Iran and the United Nations, as well as the failure to sign a new deal for gas with China. Analysts claim that the 'drone attack' on an oil refinery in Moscow, owned by Gazprom neft (the oil arm of Gazprom), last week also affected the public's opinion towards the company. It hasn’t paid dividends for the past few years. Gazprom shares fell 3.67% on the previous day, to '100.65 Roubles.' They had previously touched 99.9 Roubles. Gazprom’s current market value is 2.382 trillion roubles (about 32.15 billion dollars), which is a far cry from the $1 trillion that was promised by the management in 2008.
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UK Minister says EU steel talks may go to the wire
The UK's Industry Minister said on Monday that talks with the EU over steel could be pushed to the wire as Britain faces a?end-of-month deadline for replacing its import protections. He apologized to businesses for the uncertainty. The?trade?rules of Britain, which date back to before Brexit, will expire on 30 June. London has said that the rules will be replaced by a new measure which will reduce the amount of steel imported without tariff and double the duty on any imports that exceed that quota. Details of the measure have not been finalised yet, but there are discussions?about the market access with the European Union. The EU is renewing its steel trading measures amid concerns over dumping, before they expire on the 31st next month. Chris McDonald, the industry minister, said that EU negotiations tend to "go to the wire." He added that they are "confident" that we will be able to reach an agreement in time. I can only apologize to the businesses that find it difficult to plan ahead... but they will have to finish before July 1. British ministers had previously stated that Britain and EU should be able?to agree mutually beneficial exceptions to each others' measures. McDonald, a junior Minister in the Department of Business and Trade said that there was "no chance" of changing the date of July 1. If?Britain did not take action, "the UK would become the global dump for subsidised Steel, which will wipe out our industry 'in very short time. Britain, the EU, and others are moving to protect domestic producers of steel as they express concern about the "dumping" high subsidised steel from countries such as China. McDonald claimed he was sending a message of "continuity" and "certainty" to businesses, despite the chaos caused by Keir's earlier announcement of a timeline for his resignation. (Reporting and editing by Peter Graff. Additional reporting by Sam Tabahriti.
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Arcosa to be acquired by CRH in an all-cash $8.5 billion deal
CRH, a building materials company based in Ireland, announced on Monday that it will acquire Arcosa of the United States in a cash-only deal worth $8.5 billion. This acquisition will strengthen CRH's position in North America. CRH has offered $150 per share, which is a premium of 10.4% over Arcosa’s previous closing price. In premarket trading, shares of the Dallas-based company rose by 7.5% to $146. Jim Mintern, CEO of CRH, said that the deal enables CRH to take advantage of rising demand in U.S. utility and energy infrastructure. Arcosa is a large manufacturer of energy transmission equipment in the U.S., with its Engineered Structures division. The deal for Arcosa is expected to be closed in the first quarter of 2027. This deal adds to the surge in dealmaking that has been taking place in the U.S. construction-products sector as firms look to scale and localized supply chain to reduce tariffs. Demand is boosted by new housing construction and repairs, and renovations. QXO has struck a $17billion deal with TopBuild, a building products distributor. Commercial Metals Company acquired concrete supplier Foley Products last year for $1.84billion. CRH has been a dealmaker for the last two years, spending $9.1 billion, mainly on smaller acquisitions. The largest deal in the company's history was a EUR6.5 billion ($7.44billion) purchase of cement assets from European rivals Holcim & Lafarge that they had to sell before their merger. This transaction transformed?the Dublin based company into a larger player. CRH stated that it 'expects run rate cost synergies to reach $175 million in year three, and the deal will be accretive for?earnings? within the first twelve months after completion. J.P. Morgan, Morgan Stanley and Evercore are acting as financial advisers for CRH. Goldman Sachs and Evercore are financial advisors for Arcosa. (Reporting from AnshumanTripathy in Bengaluru, and PadriacHalpin in Dublin. Editing by TasimZahid.)
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Gold retorts on encouraging US-Iran Peace Talks
Gold rebounded Monday, ending a three-session loss streak, supported by a fall in Brent crude oil on the back of positive progress in U.S. Iran talks. Investors were also on edge due to the Federal Reserve’s hawkish position. After falling to its lowest levels since June 11, spot gold rose 1.2% by 1205 GMT. U.S. Gold Futures?for August Delivery fell by 0.4% to $4228.30. Ross Norman, an independent analyst, said that gold may benefit from hot money flowing out of oil and into gold. Press TV reported that progress had been made by a spokesperson for the Iranian Foreign Ministry, according to Iran's Press TV. Negotiations follow a memorandum last week extending a fragile "ceasefire" agreed in April by at least 60-days. Brent crude futures fell by nearly 2% on the news. The spike in oil prices due to the war has increased inflation fears and strengthened the case of higher interest rates which usually dent the appeal of gold. Norman said it is too early to predict a gold turnaround, especially with the Fed's hawkish outlook. Kevin Warsh, the U.S. Federal Reserve chair, struck a firm note on inflation last weekend. He offered little clarity as to what conditions could delay an increase in interest rates. His remarks confirmed market expectations of a rate increase 'in the near-term. According to the CME FedWatch Tool, traders now see an 89% probability of a rate hike in December. This is down from 61% prior to the Fed meeting. Morgan Stanley stated in a Friday note that "we retain an upside bias but $5,200 per ounce for the'second half of 2026 looks more dependent on ETF buying. There is also evidence to suggest that lower oil prices are feeding into the rate outlook." The British pound also remained firm after Prime Minister Keir starmer announced his resignation. Silver spot rose by 2.5%, to $66.51/ounce. Platinum gained 1.5%, to $1689.02; and palladium increased 0.9%, to $1269.08. Reporting by Sumit and Ashitha in Bengaluru, Editing by Sharon Singleton & David Goodton
Oil prices fall as US-Iran optimism about peace lowers gold prices
Gold prices rose by nearly 1% on Monday after recovering from a?an over one-week-low hit the previous session. Progress in U.S. Iran peace talks weighed down on oil and tempered inflation concerns.
By 10:00 am, spot gold had risen 0.9% to $4199.07 an ounce. ET (1400 GMT). On Friday, prices reached their lowest level since June 11.
U.S. Gold Futures for August Delivery fell by 0.7%, to $4216.30 an ounce. Ole Hansen, analyst at Saxo Bank, said that energy prices would remain a major short-term factor for the precious metals space.
Hansen said that the "bumpy" talks between the U.S., Iran and Switzerland are still leading towards a deal which would add new barrels of oil to the market and put pressure on the crude prices. This in turn would help gold and increase the price. U.S. officials and Iranian delegates are reported to have made "encouraging" progress in their first round of discussions that ended on Monday morning. However, tensions remain over Lebanon and Strait of Hormuz, according to mediators. Brent crude futures dropped more than 3% following the announcement.
According to the CME FedWatch Tool, traders see an 89% probability of a rate increase in December. This is up from 61% prior to the Federal Reserve meeting last week.
Nine out of 19 Fed policymakers think they will need to increase the policy rate in this year.
Gold tends to lose its appeal as interest rates increase, as it is less attractive than interest-bearing assets. In a Friday note, Bank of 'America stated that the $6,000 per ounce gold price target is unlikely as it would require the market to fully price in rate increases for this level to be reached. The original premise that 'underlies the bank’s bullish call on gold -- an unorthodox 'U.S. macro policy?-- remains intact. It added that the macro-policy remains unchanged. Silver spot rose by 2.4% at $66.46 an ounce. Platinum gained 1.7%, reaching $1,691.54, while palladium was up just 1%, at $1,271.25. Reporting by Sukanya Mittra and Ashitha Shivprasad, Bengaluru. Editing by Leroy Leo
(source: Reuters)