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Global stock markets continue to fall without any clarity on tariffs and the economy
After a sharp drop on Monday, stocks fell again on Tuesday. However, the pace was slower. This is because U.S. president Donald Trump announced that he would double tariffs for Canadian metal imports. This fueled fears of an economic recession caused by tariffs. The U.S. Treasury yields rose along with the oil price, even though Trump announced on Tuesday that he instructed his Commerce Secretary to impose an additional 25% on all steel and aluminium imported into the United States by Canada. This would bring the total tariff for these products to 50%. The S&P 500 saw its largest one-day percentage decline since September 2022, and the Nasdaq experienced its biggest drop in a single day. The reaction was a response to President Trump’s Fox News interview from the weekend, where he refused to rule out a possible recession due to his trade policies and spoke of a "period transition." In addition to the concerns over tariffs, the data released on Tuesday showed that U.S. small business confidence fell for the third consecutive month in February. This erased much of the gains made in the wake of Trump's election victory in November. Phil Blancato of Osaic Wealth, New York's chief market strategist, said that the guidance given by Delta Airlines and retailer Kohl's would indicate a future softening in consumer spending. Blancato said, "You're not seeing the dead cat bounce that you would want after a bad day like yesterday." You're not seeing many bottom feeders yet. The headlines are still unclear. "There's a lot more uncertainty in many areas, and this is leading to a shortage of buying power among institutions." Blancato said that while investors are hoping to get some clarity about tariffs in early April, they will also be anxiously awaiting the U.S. Consumer Price Index reading for February on Wednesday for information regarding inflation conditions. The data for last month was hotter than expected, with the largest monthly price increase since August 2023. The Dow Jones Industrial Average fell 483.32 points or 1.15% at 41,428.39. The S&P 500 dropped 40.90 or 0.73% to 5,573.66. And the Nasdaq Composite lost 47.75 or 0.27% at 17,420.81. The MSCI index of global stocks fell 6.31 points or 0.76% to 826.42. The pan-European STOXX 600 fell by 1.8%. The yields on U.S. Treasury bonds have steadied after falling to a five-month low earlier in the session. The yield on the benchmark 10-year U.S. notes increased 3.6 basis points from late Monday to 4,249%. The 30-year bond rate rose by 4.1 basis point to 4.5804%. The 2-year note yield, typically moving in line with expectations of interest rates for the Federal Reserve rose by 0.8 basis point to 3.904% from 3.896%. The U.S. Dollar rose to an all-time high of one week against the Canadian Dollar, while the Euro reached a four-month-high against the Greenback amid hopes for a German defense spending agreement. The Canadian dollar fell 0.26%, to C$1.45 for every U.S. Dollar. The dollar gained 0.09% against the Japanese yen to 147.39. The pound rose 0.51% to $1.294. The dollar's weakness helped oil prices rise, but gains were limited as worries about a U.S. economic slowdown and tariffs had an impact on the global economy. U.S. crude climbed 1.17%, to $66.80 per barrel. Brent rose 1.21% to $70.12 a barrel. The gold price rose after a sell-off in the previous session. Spot gold was up 0.92% to $2,916.10 per ounce, and U.S. Gold futures were 0.81% higher, at $2914.50 per ounce. Bitcoin gained 2.36% in cryptocurrencies to $81,151.44. (Reporting from Sinead carew in New York; Alun in London; Ankur Banerjee, in Singapore; Alun in London; additional reporting by Dhara Raasinghe, Kirsten Donovan, Alexandra Hudson)
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Who are the separatist Baloch militants in Pakistan responsible for hijacking trains?
Separatist militants from the Baloch Liberation Army claimed to have taken hostages in an attack on a train that carried hundreds of people including paramilitary forces, on Tuesday, and threatened to kill those who were still alive. Beijing has invested in Gwadar's deep-water port, among other projects. The BLA is one of the most powerful insurgent groups in the region bordering Afghanistan and Iran. The militants, who were previously engaged in a low-level conflict, have intensified their attacks in recent months using new tactics in order to cause a high death toll and injure many others. They also target the Pakistani military. The group has also targeted Chinese interests. What are the BLA's goals? The BLA is seeking independence for Balochistan. This province, located in Pakistan’s southwest, borders Afghanistan to the north as well as Iran to the West. The group is the largest of several ethnic insurgents that have fought the federal government over decades, claiming it unfairly exploits Balochistan’s rich mineral and gas resources. Insurgents are fighting for local resources that they claim belong to their own people. Balochistan’s mountainous border area serves as a haven for insurgents from Balochistan and jihadist militants. How has it become more lethal? In 2022, the BLA stunned the security establishment of the country when it stormed military and naval bases. The country has used suicide bombers in attacks on Chinese nationals in a university in Karachi, and in a bombing attack in southwest Balochistan. Last week, an umbrella group for several Baloch ethnicities announced that they had gathered all factions to try and unite them into a single military structure. In recent weeks, a dormant BLA-splinter group known as BLA (AZAD), which was previously inactive, has become active. What are the BLA's targets? BLA has targeted infrastructure and security forces in Balochistan but also in other areas, most notably in the southern port city Karachi. Insurgents accuse Beijing of aiding Islamabad in exploiting the province, and specifically the strategic port Gwadar, located on the Arabian Sea. The militants have attacked the consulate of Beijing in Karachi and killed Chinese nationals working in that region. Separately, the BLA was at the center of the tit-fortat attacks last year between Iran, Pakistan, and other neighbours over what they called militant base on the territory of each other. This brought the neighbours to the brink war. BALOCHISTAN’S SIGNIFICANCE Balochistan forms an important part in China's $65 Billion investment in the China Pakistan Economic Corridor. This is a wing to President Xi Jinping’s Belt and Road Initiative. The area is home to several key mining projects. One of these, Reko Diq (run by mining giant Barrick Gold, ABX.TO), is believed to be the largest gold and cobalt mine in the world. China operates a copper and gold mine in this province. Pakistan's plan to tap untapped resources has been hampered by the insurgency that has lasted for decades and continues to cause instability. Pakistan's largest by area but its smallest by population. Balochistan has a coastline that stretches along the Arabian Sea, close to the Gulf's Strait of Hormuz shipping lanes. Many of the women activists protested at Islamabad and Balochistan against alleged security force abuses - allegations that the government denies. Islamabad claims that India and Afghanistan are supporting militants in order to harm Pakistan's relationship with China. Both countries deny this accusation. Reporting by Asif Shazad from Islamabad, and Saud Mehsud from Dera Ismail Khan. Editing by Aidan Lewis & Ed Osmond
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Goldman Sachs predicts surge in US net copper imports
Goldman Sachs stated in a Tuesday note that U.S. copper net imports may increase by 50 to 100 percent in the next few months, due to the higher U.S. price before the Trump Administration's planned tariffs. After the U.S. started an initiative, the May 2025 U.S. Copper price currently trades at $756 per ton above the global benchmark London Metal Exchange price (LME). investigation The bank said it would look into possible tariffs for copper imports in order to rebuild U.S. manufacturing. Goldman Sachs predicts that a 25% duty on copper imports will be implemented by the year's end, causing a surge in imports, and an increase of 200,000 to 300,000 tons in U.S. inventories at the end the third quarter. Bank said that the higher U.S. prices is expected to increase U.S. Copper stocks from 95,000 to 300,000 to 400,000 tons by the third quarter. The bank said that this would represent 45-60% global inventories and leave very low inventories in other countries. Goldman Sachs forecasts an 188,000-ton global deficit on the copper market in 2025, due to robust electrification demands, China's stimulus and a slower growth in mine supply, which is expected to be concentrated during the second half due to seasonal factors. Goldman Sachs stated that they "maintain our forecast" of the LME 3-month average price at $10,200/t by 2024 Q3. They see the impact primarily in the timespreads. We forecast a maximum backwardation of $350/t LME from Sep to Dec, based upon the LME backwardation reaching a level which will close the U.S. Import Arbitrage. As of 1505 GMT, the price for three-month copper was $9,623.5 per metric ton on the LME. (Reporting and editing by Margueritachoy in Bengaluru)
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Ontario Premier says he won't back down until Trump's tariffs have been removed
On Tuesday, the Premier of Ontario who imposed a 25 percent surcharge on exports of electricity to the United States said that he wouldn't back down until U.S. president Donald Trump removed his tariffs against Canadian imports. Doug Ford reiterated his threat from Monday and said that he wouldn't hesitate to reduce the supply if necessary. Ontario exports electricity to 1.5 million homes across New York, Minnesota, and Michigan. We will not retreat. We will not back down. Ford apologized to the American public for President Trump's unprovoked attacks on our country. This was shortly after Trump announced he would double the tariffs on steel and aluminum imported from Canada. Generators selling electricity in the U.S. are now required to charge a surcharge of 25%, equivalent to $10 per megawatt hour. Ontario estimates that the surcharge would generate revenues of C$300,000.00 to C$400,000.00 ($432,346 up to $576.462) per day. Ford responded in an interview with CNBC when asked about the possibility to cut off power completely: "Is that a tool we have in our toolkit? 100%. "I won't hesitate as long as he continues hurting Canadian families and Ontario families." Bill Berkrot and David Ljunggren edited the report.
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Petrobras, Brazil's drilling vessel operator, will remove corals from the drilling vessel that will be used in Foz do Amazonas
Documents seen by revealed that Brazil's Petrobras had received approval from the environmental agency of the country to remove corals from undersides of the drilling vessels it intends to use in Foz do Amazonas. Monday, the firm's request for a vessel to drill off of the coast of northern Amapa State was granted if the firm obtains the long-sought exploration license in the environmentally sensitive area. Corals are a potentially invasive specie if they were moved to another biome. This process must be supervised by Ibama - Brazil's environmental agency. Petrobras considers the Equatorial margin as the most promising frontier in oil exploration. Petrobras hopes to start drilling this year if the license is granted. Petrobras' plans to drill were again thwarted last month when Ibama’s technical staff recommended that the body deny a drilling license in the northern part of the Equatorial Margin. This area shares the same geology as nearby Guyana where Exxon Mobil has developed huge fields. Petrobras' exploration head Sylvia dos Anjos told the CERAWeek Conference in Houston on Tuesday that the company is "optimistic". Ibama, in May 2023 denied Petrobras’ request for an offshore oil drilling license off the coast Amapa State, citing concerns about the environment. Ibama has yet to make a final decision on the appeal filed by Petrobras. (Reporting from Fabio Teixeira, Rio de Janeiro. Additional reporting by Marianna Pararaga, Houston. Editing by Bill Berkrot.)
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Trump doubles tariffs on Canada's metals
On Tuesday, President Donald Trump doubled the planned tariffs on steel and aluminum imports from Canada. This was in response to Ontario's decision on Monday to impose a 25% tariff for its electricity exports into the U.S. Trump posted on his Truth Social media page that he had instructed his Commerce Secretary to impose an additional 25% tariff for metals products. The new tariff will be in effect Wednesday morning. "Canada must also immediately remove their anti-American Farmer tariff of 250% to 390 % on various U.S. Dairy Products, which is long considered outrageous. "I will declare a National Emergency on Electricity in the affected area," Trump wrote. He also threatened "substantially increasing" tariffs on vehicles coming into the U.S. starting April 2, "if other egregious and long-standing Tariffs from Canada are not likewise dropped." In a message posted on X after Trump's latest threats, Ontario Premier Doug Ford – whose government is raising the price of electricity it generates in parts of New York State, Michigan, and Minnesota – said he wouldn't back down until Trump's tariffs against Canadian imports into the U.S. are "gone for ever." Investors are worried that the tariffs will harm U.S. economic growth and ignite inflation. The S&P/TSX composite index of the Toronto Stock Exchange was down by about 0.5%, and the Canadian Dollar fell against the dollar. Early on Wednesday, a 25% levy on all steel and aluminium imported into the U.S. will be increased. These tariffs will be applied to millions of tonnes of steel and aluminium imports from Canada and Brazil. They also apply to South Korea, Mexico and other countries which had previously entered the U.S. without paying duty. Trump has promised that tariffs would be applied "without exemptions or exceptions" to help struggling U.S. businesses. Since taking office, Trump has focused his attention on tariffs in a way that has shaken investor, consumer and company confidence. Economists are increasingly concerned about the possibility of a recession. The small business survey released on Tuesday revealed that sentiment has weakened for the third consecutive month, erasing any confidence boost Trump received after his November 5th election win. Last week, economists polled showed that risks for the Mexican economy are increasing amid chaos in the implementation of U.S. Tariffs. This has caused deep uncertainty among businesses and decision makers. In the surveys, 70 out of 74 economists from Canada, the U.S., and Mexico said that they believed the risks of a possible recession have increased. The upside risks of inflation in the U.S. also rose. (Reporting and editing by Dan Burns, Katharine Chiacu, and David Ljunggren; Additional reporting in Ottawa by David Ljunggren; Writing by Katharine Jackson; Editing by Paul Simao).
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CERAWEEK - Petrobras looks for opportunities in Argentina, Colombia and Africa
Sylvia dos Anjos, head of exploration and production at Petrobras, said that the company is looking for opportunities in Argentina and is also advancing projects in Colombia and Africa. Anjos, speaking at the CERAWeek Conference in Houston, said that the gas from the Vaca-Muerta region could be of interest to Petrobras, as a pipeline linking Argentina, Bolivia, and Brazil can be used to transport the gas. She said the company could also search for oil opportunities abroad, since Petrobras is actively seeking to replenish its reserves of oil through overseas projects due to difficulties in obtaining environmental permits to drill in Brazil. The company in Colombia is drafting a development plan for an offshore project, where 6 trillion cubic foot of gas has been discovered. They are waiting on a government licence. Anjos stated that 13 million cubic metres of gas per day from the project will be delivered to Colombia by pipeline. The firm in Africa expects to drill exploratory wells between July and august in a block of oil in which they have a stake, in Sao Tome & Principe. The executive said that another area in South Africa would be drilled during the second half. (Reporting and writing by Marianna Pararaga, editing by Gabriel Araujo).
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Research provider: Index funds could double sales of agricultural futures in the face of recession fears
Last week, index funds, which are the largest participants on the commodities market, sold agricultural futures worth over $7 billion. This could be doubled due to fears of recession and lower inflation expectations. Peak Trading Research, a provider of commodities markets research, said that on Tuesday, funds, which are investment vehicles for endowments, foundations, and sovereign wealth funds could sell between 200,000 and 300,000 agricultural commodity futures contracts. It said that they had already sold 156,000 contracts in the last week. This was a record for this period and equated to $7.3 billion worth of contracts. In a recent note, Dave Whitcomb said that index fund investors were very concerned about the economy's softening and their lower inflation expectations. They could be selling a lot of agriculture futures. He said that this would cause the prices of agricultural futures to fall significantly. Whitcomb stated that index funds typically invest in agricultural futures to hedge against inflation and as a store of value. Their positions are usually closely tied to U.S. expectations for inflation. The derivatives market is the largest trading place for agricultural commodities. Soybeans and corn are the most commonly traded. Sugar, beef, sugar, coffee, and cattle are also popular. Whitcomb stated that the inflation data due to be released Wednesday, and the oil prices which are highly correlated to inflation pressures will be the catalysts for index funds to sell agricultural commodities futures in large quantities. (Reporting and Editing by Marguerita Chôy)
Australia's Brickworks falls as North America operations hit causes investor anxiety
Brickworks shares fell on Tuesday, after the Australian company warned of a reduction in its interim results. The firm cited ongoing revenue pressures for its North American operations as a result of challenging market conditions during the last six months.
The stock dropped as much as 10% to A$22.92 - its lowest level since Sept. 2023.
Brickworks, a company in which Washington H Soul Pattinson owns a stake of nearly 43%, was one of the biggest decliners among the ASX 200, which fell 1.3% for the day.
The company expects to record a noncash impairment charge in the amount of A$55,000,000 ($34.5 Million) for its North America operations when it releases its half-year financial results. Brickworks warned about difficult trading conditions at its annual general meeting held in November 2024.
Brickworks reported in a Tuesday filing that "these challenging conditions continued throughout the remainder of 1H25 and drove a 13% decrease in revenue as compared to the previous corresponding period."
In order to manage excess inventory the company had to close several plants in the period. This led to increased manufacturing costs as well as a decrease in EBITDA (earnings before interest, tax, depreciation, and amortization) for the first six months.
Brickworks' outlook was impacted by the continued uncertainty about when the market would recover. It cited labour shortages, high material costs, rising interest rates and geopolitical instability as factors.
The company has therefore moderated its expectations for short- and medium-term sales.
Jessica Amir is a market strategist for trading platform Moomoo. She said that the demand for the company's products has slowed down due to the fact that interest rates are staying the same in the U.S. and tariffs have increased their price.
"(Brickworks') dividend history is strong and this appears to be a trend that will continue. "But the road ahead could be bumpy," added she.
The company was unable to provide an estimate of its net profit after taxes, as it would include the investment earnings from Washington H Soul Pattinson's 25.65% share. (1 Australian dollar = 1.5924 dollars) (Reporting and editing by Alan Barona in Bengaluru, Nikita Maria Jio from Bengaluru)
(source: Reuters)