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As the Middle East erupts, investors choose oil and safe havens over stocks.
U.S. Investors sought refuge on Friday in safe-haven assets such as the dollar and gold after oil prices soared following Iran's retaliation against Israel's largest-ever military attack against the major producer of crude. Iran launches airstrikes against Israel After unprecedented Israeli strikes, some fear a regional conflagration. On Friday, explosions were heard in Jerusalem and Tel Aviv - the two largest cities of Israel. Israel had earlier destroyed Iran's vast underground nuclear facility at Natanz and killed top military leaders. Investors believe that the markets will likely survive the latest hostilities, unless Iranian oil installations are attacked or if other countries get involved in the conflict. Crude prices soared up to 14% due to fears of possible disruptions in oil shipments. Oil futures closed the day 7% higher. Jim Baird is the chief investment officer of Plante Moran Financial Advisors, Southfield, Michigan. Money manager says he expects "a little more flight to quality trade" if stocks continue to fall. This could be beneficial for gold and Treasuries. How long will it last? How intense will the battle be? Will it attract other parties? "From a large-scale economic perspective, it doesn't seem to make a material difference," he said. Gold prices in safe-havens rose by more than 1 percent, while Wall Street's major equity indices fell more than 1 percent. Oil prices were brought into sharp focus by the outbreak of war. Iran is one of the largest crude exporters in the world. It borders the Strait of Hormuz which is a major choke point for crude tankers and through which a fifth of the global crude consumption passes. Iran has threatened to close the Strait of Hormuz as a retaliation against Western pressure. Oil prices rose and investors looked for safe havens. U.S. government bonds yields increased on the bets higher energy prices would cause inflation. Brent crude oil, the benchmark for global crude oil prices, is still well below $80 per barrel, despite the recent spike. Irene Tunkel is the Chief U.S. Equity Strategy at BCA Research. She said that she doesn't see any long-term implications for U.S. markets unless oil prices rise above $100 per barrel. This would affect consumer spending. She said this was unlikely, unless the oil infrastructure is destroyed. Or "Iran closes the Strait of Hormuz in some way and (the conflict spills) out of Iran. And energy production is shifted to Iraq." The strategist noted that Friday's S&P 500 decline followed a rally from lows in April. Donald Trump, the U.S. president, said that Iran still had time to stop Israel's attacks by negotiating a deal with its nuclear program. Investors were concerned about how central banks might handle interest rates in the event that U.S. consumer costs rise as a result of Trump's tariffs. Jack Janasiewicz is a portfolio manager with Natixis Investment Managers, based in Boston. He said that the possibility of higher inflation due to rising oil prices was "less supportive" of U.S. Government bond prices. He did note that investors usually take geopolitical crisis in stride. "Historically, with these geopolitical issues, the market has a knee-jerk response but the long-term implications tend to fade. Janasiewicz said that history tells us we should look past some of these things. OIL PRICE RALLY Janasiewicz stated that the final gains in oil prices would depend on the length of the war and if U.S. supplies could be increased to cap prices, if there was a disruption in supply. Janasiewicz stated that "from a U.S. standpoint, it's a little more insulated" because domestic producers can certainly increase production. On Friday, the dollar index, the safe-haven asset that has been the focus of risk aversion in recent months, was up 0.5%. Fiona Cincotta, City Index's strategist, said that the dollar was returning to its traditional role as a safe haven. Investors warned that the market may not have been cautious enough despite Wall Street's selling off. James Athey, the manager of Marlborough Fixed Income Fund, said that investors could be tempted to return to riskier assets if tensions don't rise quickly. He said that "in general, the markets tend to pass over these types of events fairly quickly. But of course, therein lies a risk of complacency." He said, "The situation is really tense and fraught. Risk assets are still being priced to perfection."
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US Court extends the pause in Nippon Steel Case, seeking updates by June 20,
The U.S. Appeals Court on Friday extended a pause between Nippon Steel, the Trump Administration and other parties in the litigation over the Japanese steelmaker’s $14.9 billion offer for U.S. Steel. Nippon Steel & U.S. Steel are putting the final touches on an agreement to be signed with the Trump Administration. This is in order to alleviate national security concerns raised by the proposed tie-up announced in December 2023, but blocked by Joe Biden. This agreement would allow for the transaction to proceed. The D.C. Circuit stated that the litigation will be paused pending further orders from the court. The judges of the panel -- Patricia Millett (chair), Cornelia Pillard (co-chair) and J. Michelle Childs (member) -- have also instructed the parties to update the court by June 20, about any further legal proceedings. This filing may ask the court to put the case on hold or to ask the judges to create a new timetable. (Reporting and editing by Diane Craft, Alistair Bell and Alexandra Alper)
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Holiday schedule for US economic and other data
The release of major economic, energy, and commodity reports from Washington will be affected by the Juneteenth federal holiday, which falls on Thursday, 19th June. The schedule is below. The times are in EDT/GMT. Some Treasury announcements may be subject to change. Monday, June 16 The U.S. Department of Agriculture releases weekly U.S. Export Inspections for Grains, Oilseeds and 1100/1500 Treasury Department's Weekly Sale of 3- and 6-Month Bills, 1130/1530 National Oilseed Processors Association releases monthly U.S. Soybean Crush, 1200/1600 Treasury Department offers 20-year Bonds, 1300/1700 USDA releases weekly Crop Progress 1600/2000 Tuesday, June 17 Commerce Department releases Retail Sales for the month of May, 830/1230 Labor Department releases Import and export prices for May, 830/1230 Redbook releases weekly retail sales index 0855/1255 Federal Open Market Committee starts two-day meeting to discuss interest rate policy. Start time TBA Federal Reserve releases Industrial Production for May 0915/1315 Commerce Department releases Business Inventories April 1000/1400 Treasury Department announces weekly sale of 4-, 8, and 17-week Bills, 1100/1500 Treasury Department sells 6-week bills every week, 1130/1530 Treasury Department sells 5-year Treasury Inflation Protected Securities, 1300/1700 American Petroleum Institute releases weekly national petroleum reports, 1630/2030 Wednesday, June 18, Mortgage Bankers Association releases weekly Mortgage Application Survey, 0700/1100 Commerce Department Issues Housing Starts For May, 830/1230 Labor Department releases weekly jobless claims, 0830/1230. Note: Issued one day before due to holiday Energy Information Administration (EIA), Weekly Petroleum Stocks and Output Data, 1030/1430 Treasury Department announces weekly 3-, 6-, and 6-week bills; sales of 2-year floating-rate notes; 2- and 5-year notes; and 2-, 7-, and 10-year notes. Note: Due to the holiday, Treasury Department announces 3- and 6-month bills and 6-week bill sales one day before. Treasury Department will hold weekly sales for 4- and 8 week bills, 17-week bill, 1130/1530. Note: Due to the holiday, 4- and 8 week bills are sold one day before. Freddie Mac issues weekly U.S. mortgage rates, 1200/1600. Note: Rates are published one day before the holiday. EIA releases weekly U.S. Underground Natural Gas Stocks, 1200/1600. Note: Issued one day ahead due to time change. Federal Open Market Committee Issues Statement on Interest Rate Policy, 1400/1800 Treasury Department Issues Treasury International Capital for April 1600/2000 Thursday, June 19 Juneteenth holiday. Closed federal government offices, Federal Reserve and International Monetary Fund. Stock and bond markets. Friday, June 20 USDA releases weekly export sales, 0830/1230. Due to the holiday, this week's export sales are delayed. Conference Board releases Leading Indicators for the month of May, 1000/1400 USDA Cattle on Feed Monthly, 1500/1900 Federal Reserve releases Weekly Balance Sheet, 1630/2030. Note: this is a delayed release from Thursday because of the holiday.
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Diplomats claim that the UN's nuclear watchdog board will meet to discuss Israel's Iran strike.
Diplomats confirmed that the Board of Governors of the U.N. Nuclear Watchdog will hold an extraordinary meeting on Monday in order to discuss Israel's attacks on Iran. At least one country requested it at the regular quarterly session of this body held on Friday. A meeting can be called by any country that is a member of the International Atomic Energy Agency's (IAEA) board. Diplomats reported that Iran, a member of the board but not a member, had requested a meeting. It was backed by Russia, China, and Venezuela. Diplomats differed on which board member made the initial request. Before any announcement was made about the emergency meeting, diplomats held a closed-door discussion on Friday. The IAEA Israel had targeted Iran's Natanz nucleus site earlier in the day, including an underground uranium-enrichment plant as well as a smaller pilot plant above ground. The IAEA's highest policy-making body said that there was no indication of any effort to push for a decision or other action by the 35 nation board on Monday. (Reporting and editing by Joe Bavier, Gareth Jones and Francois Murphy)
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Investors reduce risk following Israel's attack on Iran, causing copper and other metals to fall.
The price of copper, and other industrial metals, fell on Friday. This was due to a stronger dollar. Investors sold their risky assets following the attack by Israel on Iran. The benchmark three-month copper price on the London Metal Exchange fell 0.5% by 1600 GMT to $9,653 per metric ton after hitting $9,532, its lowest since June 3. After Israel launched an extensive military strike against Iran, the dollar index rose and stock markets around the world fell. The dollar is stronger, making commodities priced in U.S. dollars more expensive to buyers of other currencies. Alastair Mudro, senior base-metals strategist at Marex, said that the market has de-risked copper and aluminum. The current events make it unlikely that we will run away from the topside. "Those who are looking for dips will be pleased by the declines." LME copper was up by a fifth since April 7, when the price reached its lowest level since November 2023. This rebound continued until this week. U.S. Comex Copper Futures fell 0.3% to $4.82 a pound. This brings the premium of Comex copper over LME copper up to $976 a tonne. Munro stated that most of the selling came from Commodity Trade Advisor investment funds which are driven largely by computer programs. Chinese participants also emerged to buy at lows. The most traded aluminium contract at the Shanghai Futures Exchange (SHFE), which is the largest metal exchange in China, gained 0.4% to 20,425 yuan/metric ton for the third consecutive day. This outperformed other SHFE Metals. Analysts from a Hangzhou futures company stated that "aluminium has performed rather well compared to other metals recently, as the demand from the local market has been robust. SHFE stocks, however, have been falling." Aluminium stocks In SHFE warehouses, the number of tons dropped to 110,001 in the week ending June 13 - the lowest level since February 2024 - and the largest drop since late March, when it fell by 54%. Other metals include LME aluminium, which fell by 0.5% to 2,505 per ton. Lead also dropped 0.3% to 1,990, and zinc, which fell 0.6% to 2,627, after falling to its lowest level since May 1. Nickel increased 0.3%, to $15.185. Tin rose 0.3%, to $32,755. Click here to see the latest news in metals.
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Newspaper reports that Nippon Steel's exec said the firm needed freedom to manage U.S. Steel.
The shares of U.S. Steel dropped after a Nippon Steel executive said to the Japanese Nikkei that the planned takeover required "a certain degree of management flexibility" in order to proceed, even though sources claimed a deal had been reached with the U.S. Government to approve the tie-up. The executive told the newspaper that without a certain degree of management autonomy, it might not be possible for the U.S. Government to come to an agreement. This sent shares of the iconic U.S. Steelmaker down by 4%. The comments seemed to be a response to remarks made on Thursday by President Donald Trump who claimed that he controlled U.S. Steel through a "golden shares" which gave the American public a 51% share in the company. Two of the three said that the deal could be completed as early as Friday. Nippon Steel U.S. Steel, and the White House have not responded to immediate requests for comments. Nippon Steel's $14.9 billion offer, announced in December 2023 by Nippon Steel, was met with opposition right from the beginning. Former President Joe Biden, along with Donald Trump, both asserted that U.S. Steel must remain American-owned in order to woo Pennsylvania voters before the 2016 presidential election. Biden blocked this deal in January, citing national security concerns. This led to lawsuits from the companies who claimed that the review of their national security was biased. The Biden White House denied the claim. Steel companies saw an opportunity with the Trump administration. The Trump administration began on January 20, and in April, opened a 45-day review of national security for the proposed merger. Trump's public remarks, which ranged from welcoming the Japanese company to "invest" in U.S. Steel, to floating a minority stake of Nippon Steel sparked confusion. Trump said at a rally on May 30 in Pennsylvania that Nippon Steel was a "great" partner for U.S. Steel. He later told reporters that the deal was still subject to his approval and he had not yet decided whether Nippon Steel would be allowed to acquire ownership. Nippon Steel, the Trump Administration and a U.S. court of appeals requested on June 5, an extension of eight days to a pause to litigation. This was to give the parties more time to negotiate a settlement for the Japanese company. The pause ends Friday but can be extended. The current contract between Nippon Steel & U.S. Steel expires on June 18, but the companies could agree to delay that date. Reporting by Alexandra Alper, David Gaffen, in New York and Nathan Gomes, in Bengaluru. Editing by Anil d'Silva.
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Gold prices rise as Israel-Iran tensions escalate, fueling safe-haven bids
The gold price soared Friday, as investors sought safe-haven assets after Israeli airstrikes against Iran. This re-ignited fears of a wider conflict in the Middle East. Gold spot rose by 1.2% to $3,424.99 per ounce at 1143 EDT (1543 GMT) and is now within striking distance of the record high set in April of $3,500.05. Prices have risen by about 3.4% this week. U.S. Gold Futures increased by 1.3% to $3445.50. "Israel's destruction of Iranian targets has caused a bit of geopolitical fear in the market." Prices will remain elevated as traders anticipate the next phase, namely the retaliation from Iran. Israel launched a barrage on Iran Friday, claiming it had destroyed nuclear facilities and missile factories as well as killed military commanders. This could be the beginning of a long-term operation to stop Tehran from developing an atomic bomb. Donald Trump, the president of the United States, suggested that Iran was responsible for its own attack by refusing to comply with an ultimatum issued by Washington in negotiations to limit its nuclear program. Gold prices rose this week as a result of softer U.S. inflation figures. This boosted expectations for interest rate cuts from the Federal Reserve. Bullion is a popular asset that many people consider safe, particularly during economic turmoil or geopolitical instability. Bullion tends to flourish in an environment with low interest rates. Goldman Sachs reaffirmed its forecast that central bank purchases will drive the price of gold to $3,700/toz at end-2025 and $4,000 in mid-2026. BofA believes that gold will reach $4,000/oz in the next year. In terms of the physical market, the demand for goods in the major Asian hubs has weakened as rates have risen. Prices in India have soared past the psychologically significant 100,000 rupee mark. Spot silver fell 0.4% to $36.23 an ounce. It gained 0.8% in the past week. Platinum dropped 5.9% to $1.219.03, and rose over 4% in the past week. Palladium fell 1.3% to $1 041.51 this week and has dropped 0.4%. Ashitha Shivprasad in Bengaluru and Sarah Qureshi, editing by Nick Zieminski & Shrey Biswas.
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Source: Thyssenkrupp CEO Lopez will get contract extension.
A person with knowledge of the matter has said that the contract of Thyssenkrupp's CEO Miguel Lopez who was appointed two years ago will be extended by the supervisory board next week. Lopez, who assumed the role of CEO on June 1, 2023 has overseen two significant steps in the transformation of the company: the listing of Thyssenkrupp’s hydrogen unit and the sale of 20% of its steel business by Czech billionaire Daniel Kretinsky. Thyssenkrupp, under his leadership also accelerated its efforts to spin-off its defence division TKMS. The company unveiled plans for a holding model that would allow all of its divisions to be opened to outside investors. The person stated that at a supervisory committee meeting on June 20, Lopez’s contract which expires May 31, 2026 is expected to be extended. Members of the committee will also likely approve the planned spinoff of TKMS. Lopez's aggressive approach towards Thyssenkrupp’s revamp has attracted the ire powerful labour leaders. These hold half of the seats in Thyssenkrupp’s supervisory board, but they cannot block an extension as Chairman Siegfried Russwurm is able to cast a decision if there's a deadlock. Thyssenkrupp issued a statement in which it said: "We confirm that the Supervisory board will address this issue in due time." The German weekly Welt am Sonntag was the first to report on the contract extension. (Reporting and writing by Friederike Hine, editing by Miranda Murray; Friederike Steitz)
Jindal Stainless, India's stainless-steel body, says it will file an antidumping petition within a few weeks.
India's Jindal Steel said on Thursday that a domestic trade organization will seek anti-dumping duty on stainless steel imported from China and Vietnam. This comes weeks after India imposed a temporary safeguard duty of 12% on certain steel imports in order to support its local mills.
The tariffs were introduced to help Indian producers, who had been forced to reduce their operations and even consider job cuts because of the influx of cheaper shipments coming from China, South Korea and Japan.
The temporary tariff did not include stainless steel.
Abhyuday Jindal, Managing Director of the company, said that data showed that China and Vietnam were dumping goods into India. He added that these shipments came to India at "throwaway" prices.
Jindal said, "The threat to the nation is clear."
The O.P. The O.P. The net revenue increased by 8%, to 101.98 trillion rupees.
Exports dropped to 8%, down from 11%.
The company expects exports to increase by 30% during the financial year 2025-2026. Jindal stated that the U.S. steel tariffs give the company an equal playing field with other countries on the export market.
He added, "We expect growth in our U.S. businesses due to tariffs."
In early 2018, President Donald Trump imposed 25% tariffs for all steel and aluminum products.
In addition, Jindal Stainless increased its sales volume by 9% in the financial year 2025 to 2,37 million tons. The company expects volumes to increase by 9%-10% during fiscal 2026.
(source: Reuters)