Latest News
-
Asia stocks fall as markets prepare for energy shock
Investors cut crowded positions on the Asian markets, citing fears that a larger Mideast conflict could cause an energy shock which would increase inflation and delay rate cuts. As fast-money investors and foreigners fled a market that had surged due to the vast AI profits of memory chip makers, shares in Seoul plunged 4%. The selling pushed the win to its lowest level in 17 years. Nikkei, the Japanese stock market index, fell 2.5% for a third consecutive session. Japan and South Korea import a lot of energy. Benchmark Brent crude futures have risen more than 12% this week, to $81.40 per barrel. However, they are down from their highs following the order by U.S. president Donald Trump for an insurance guarantee of?Gulf Shipping and that the Navy may escort tankers through Strait of Hormuz in the event of a need. U.S. forces and Israelis have been pounding Iran for the past four days. Iranian drones and rockets have also struck Gulf oil refineries as well as U.S. embassies in Saudi Arabia and Kuwait. It does seem that the conflict will last a little longer than people initially thought. There's also been an escalation because the war has now expanded to include U.S. allies, said Damien Boey. "Oil infrastructure appears to be under attack... people have to consider how long this will last." As traders cashed out winning bets in order to cover losses elsewhere during a volatile trading week, gold fell by about 4.5% over night. Gold remained steady at $5,128 per ounce in the early Asia session, as traders tried to cover losses elsewhere. S&P 500 indexes closed 0.8% lower than the previous day on Wall Street due to fears over possible prolonged high oil prices. Chuck Carlson is the CEO of Horizon Investment Services, a Hammond-based investment firm. Are energy?prices likely to stay elevated for a longer time period than people thought yesterday? And then, does this pass through? Investors expect that Europe will be hard hit by rising energy costs. Gas prices in Europe have increased by 65% over the past two days. (Reporting and editing by Jacqueline Wong; Tom Westbrook)
-
ROI-Iran war exposes 60-40 portfolio frailty: McGeever
Investors are uncomfortable with the Middle East conflict and the flaring geopolitical risks around the world. How can they hedge these risks when the traditional equity-bond portfolio no longer works? Investors are under pressure to find a solution, and the answer may not be obvious. However, the recent volatility in the world markets following the U.S./Israeli attack on Iran at the weekend indicates that this pressure will only intensify. On Monday, implied volatility in U.S. Treasuries rose to its highest level since April as bonds fell across the curve. On Tuesday, implied volatility in the U.S. equity markets rose to its highest level since October as global stocks tumbled. Investors have historically used Treasuries to protect themselves against economic, geopolitical and financial risks. They also use gold, which is considered the safest, most liquid asset. It was expected that bonds would appreciate during periods of low risk, thus reducing the volatility of equities. This led to a widespread adoption of traditional portfolio allocations: 60% stocks and 40% bonds. Since the COVID-19 outbreak, America's rising fiscal deficit, public debt and inflation have slowly but steadily eroded the status of Treasuries as a natural hedge against equity risks. The safety mechanisms built into the 60/40 Portfolio have been eroded as a result. The authors of an International Monetary Fund (IMF) blog published a report last month that noted how bonds and stocks often move together, particularly during market declines. Investors from all backgrounds, including conservative institutions such as pension funds and insurance companies, are therefore exposed to greater volatility and larger losses. This, of course also increases the financial stability risk for policymakers. If diversification fails, it can lead to a cascade of financial instability. "Investors and policymakers need to rethink their risk management in a new world where traditional hedges are no longer effective," they stated. DIFFERENTIATION IN CORRELATION What are the best strategies for diversification and hedging? Blog post discussed private assets as potential portfolio buffers against panic, given that they often have lower volatility than publicly traded 'assets. Recent events in the private credit market show that private markets are not without their own risks. Post also suggested commodities be taken into consideration. Gold and precious metals have disappointed those who believe that hard assets are the best way to hedge political risk. Bullion, the traditional "safe-haven asset" and hedge against inflation that is most widely accepted, only rose 1% on Sunday and fell 2% on Tuesday. Platinum and silver prices have fallen by 10% since Monday's opening of trading. The precious metals market is driven by short-term, speculative flows as well as economic fundamentals. Other commodities, with the notable exceptions of oil and natural gas, are also being sold, such as corn, wheat, and copper. These are certainly short-term movements, but if these don't reverse one wonders what the options are for investors to hedge and diversify. Not Dead Yet Before the Iran strike, Treasuries seemed to be regaining a sense of diversification. According to Truist Advisory Services, the daily correlation between stocks & bonds became negative in the first two month of the year and approached the average levels seen during the pre-pandemic decade. Was it a temporary anomaly? Keith Lerner is the chief investment officer at Truist. Lerner says that while the current rise in oil prices might make Treasuries look less attractive due to the possibility of inflation and tighter monetary policies, a prolonged period of high energy costs will become a recession threat. In this case, bonds become attractive once again. Lerner stated that "our view on high-quality bonds?should still generally act as a good portfolio diverifier" has not changed. Risk-management models and diversification strategies are often thrown out the window when political factors drive market sentiment and prices rather than economic fundamentals. Investors who are experts in understanding the economy and markets, do not always have the best ability to predict how long wars last or when they will end. Bob Elliott, Unlimited's CEO and CIO, said: "Let this conflict be a lesson to you, whether it is short or long. It will teach you how to diversify your portfolio for a wider range outcomes." Investors face a difficult challenge. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
-
Canada promotes buyers' alliance in order to combat critical minerals supply concentration
Canada's Energy and Mining Minister Tim Hodgson said on Tuesday that a production partnership or buyers club is the best way to?address the issue of a concentrated supply of critical mineral?rather than just a floor price. "We think that the critical mineral production alliance that we proposed in the G7 in Kananaskis and the group that emerged from that, the buying critical minerals?group is the best multilateral way to deal with this on a global basis for all countries interested," said Hodgson. He spoke while attending the annual Prospectors and Developers Association of Canada Conference in Toronto. Last month, U.S. vice president JD Vance stated that the U.S. would establish a price floor for critical minerals to increase its access. The U.S. has signed a separate deal with Mexico, but left out Canada. A price floor is a system where a country, or government, agrees to purchase certain goods at a minimum cost. Price floors are not limited to metals. They can also be applied to certain crops. Over the past two years, the G7 countries have proposed several steps to combat China's dominance in rare earths – difficult-to-extract metallic materials used in cell phones, EVs, and high-tech weaponry. China controls 90% of this metal and has imposed export controls in response to U.S. tariffs. Canada, the host of the G7 meeting in Kananaskis (Alberta) last year, proposed a'series of 'deals with partners to ensure the supply of essential metals. Canada has signed 30 new agreements with 12 countries for proposed investments of C$12.6 billion (9.22 billion dollars) in mining and mining technology. This brings the total investment to C$18 billion. Hodgson stated that the initiative for a buyers' club was taken up by France as the?host country of the G7 meeting in 2026,?to ensure its continuation. He said that incorporating the American initiatives in the multilateral approach was the best way to achieve the goal.
-
Oil price spike: Investors and US crude producers scramble for a lock-in
Investors have rushed to lock in the spike in oil prices in the past week. This resulted in a record number of energy futures contracts and 'options contracts being traded on Monday. It was the first trading day since Israel and the U.S. bombed Iran and Tehran responded. Hedging allows traders to make money in volatile markets, while also protecting producers from market volatility by locking in an oil price. Investors traded a total of 12.7 million energy contracts and options on the Intercontinental Exchange (ICE) on Monday, as oil futures soared. Crude oil futures reached multi-month highs in the session. ICE Low Sulphur Gasoil is the global benchmark of refined oil products. A record 1.3million futures and option contracts were traded. This was a significant increase over the previous?record, which was set in 2025 when Israel and Iran traded air strikes. U.S. Diesel futures closed nearly 12% higher than U.S. Crude and Gasoline futures on Monday. Both futures ended the day over 6% higher and almost 4% higher respectively. Analysts and traders said that diesel prices were most vulnerable to the conflict in the Middle East, because the region was a major supplier and inventories had dropped dramatically after a harsh winter when demand for heating, power generation, and other fuels was high. Brent futures and option contracts reached a record high of 4.8 million on the ICE on March 1, the highest level since June 2025. U.S. Producers Lock in High Prices U.S. Oil producers scrambled to coordinate with large trading houses and banks at the Monday market opening to lock in soaring prices for crude oil. All eyes were on the Strait of Hormuz - a crucial shipping lane that carries around 20% of world oil supplies. West Texas Intermediate crude futures rose 8% on Monday at the market's opening, and Brent crude futures increased 11%. "We had an oil producer queue and a group of dealers waiting to trade on Sunday at 5 pm, anticipating that the price would increase. "Everyone was ready to go, finger on the button and let's start trading," said Matt Marshall of Aegis Hedging. The company handles hedging of roughly 25-30% of U.S. production, according to internal estimates. According to the most recent government statistics, the U.S. produces 13,73 million barrels of crude oil per day. Marshall stated that "even though it was Sunday, about a quarter of our oil-producing clients were watching the market and had coordinated with both us and our counterparties to be able hedge," Many producers using the Aegis platform for hedging chose swaps. These allow them to convert an unexpected price rise into a?fixed price based upon crude futures?prices. Some analysts predicted that oil would be above $90 per barrel or even near $100. However, Brent opened around $81.60, and WTI was at $75. Marshall stated that "there will be more hedges if news comes out that the Strait may remain impassable longer. This is about the Strait." (Reporting and editing by Liz Hampton, Nia Williams and Georgina McCartney from Houston)
-
Brazil court blocks transfer of Equinox Gold minerals rights to CMOC
According to a court ruling, a Brazilian court ruled on Tuesday that Canadian firm Equinox Gold could not transfer mineral rights it acquired in Latin America to Chinese metals mining and processing group CMOC Group. Equinox Gold 'concluded a sale of gold assets located in?Brazil, to CMOC for $1 billion earlier this year. The judge 'blocked' the transfer of assets in the northeastern state of Bahia. The decision was made after complaints by the local state-run company CBPM which leases the mineral assets. They claimed that the deal violated the?leasing agreement. The press offices of CMOC Group Brazil and Equinox 'Gold' did not respond immediately to a request for comment. Henrique Carballal, the president of CBPM, said that the decision "underscores the irregularity in the negotiation of a mineral resource belonging to the people?of Bahia State." (Reporting and writing by Andre Romani, Sao Paulo; Additional reporting by Ricardo Brito)
-
Gold bulls claim that the broader rally will continue despite investors' rush for cash
Analysts and traders said that gold's appeal will remain unchanged despite the fact that some investors prefer the dollar as a safe haven. The experts said that the sharp drop in?gold price on Tuesday would likely attract buyers. The dollar index rose as traders sought safety. The dollar index rose by 0.5%, reaching a three-month high. DOLLAR STRENGTH PUSHES SILVER LOWER The 'dollar strength' has weighed heavily on gold, which is usually viewed as a hedge against inflation and a safe place to be during uncertain times. The dollar's surge pushed spot-gold to its lowest level since February 20, down 4%, at $5,136. Robert Gottlieb said that if there are profits to be made, it's best to take them off the table wherever possible. "But, have the fundamentals changed?" No. "We still face persistent geopolitical, economic and financial uncertainty." The extreme volatility of the gold market on January 29, when it hit a record high of $5,594.82 and then plummeted over the following two sessions has made traders cautious. Gottlieb said, "People learned to be careful on January 30th - to determine whether it is a knife falling or a dip and not to get caught." INCREASED GOLD PURCHASE FORECAST BNP Paribas has raised its average gold price forecast for 2026 by 27%, to $5,620. A peak of $6,250 is likely by the end of 2026. A precious metals trader stated that the fall of gold to $5,100 will continue to attract Asian demand as safe haven buying continues. He requested anonymity as he wasn't authorized to speak with media. He said that the sale of gold this week was greater due to the large amount of purchases made on Friday, ahead of Saturday's start of the U.S. and Israeli air war against Iran. Profit-taking followed the gold price closing at $5,260 on Monday, its highest level since 30 January. The S&P 500 index, which fell 1.5% last week, has added to the pressure placed on gold. Sharp equity corrections force investors to sell safe-haven holdings such as bullion to free up cash for broker deposits. Adrian Ash, BullionVault's head of research, said that traders who were long gold before the New Year can use their gains to profit from margin calls on equities. Gold prices surged by 64% in 2012, largely due to investors' cash flows into bullion. They were worried about S&P 500 gains in 2025. "Their performance is like a coin flip - day-to-day and month-to-month." "If you think this war will drag on, God forbid," Ash said, gold's appeal as a long-term safe haven is hard to beat. Gold tends to increase over a 12-month period when stocks are down from the previous year. According to Ash's calculations over a five-year period since 1970, gold was always higher than the five years prior when the S&P 500 index fell during that time. (Reporting and editing by Veronica Brown, Barbara Lewis, and Polina Devitt)
-
Fed faces new risks to inflation and growth despite US energy resilience
Federal Reserve officials began assessing the risks of an expanding conflict in the Middle East, despite the relative resilience of the U.S. economy to energy price shocks. New York Fed President John Williams stated on Tuesday that a potentially open-ended conflict between the U.S., Iran and their proxies could have a spillover effect to the U.S. through lower asset prices, trade shocks for U.S. allies and higher inflation. It will take some time to assess the net impact of this conflict on the U.S. Economy and Fed policy. There is no way to compare the current situation with other similar events, such as the Russian invasion of Ukraine in 2022, which affected both the economy and prices in Europe, but didn't have a major effect on the U.S. Williams said that no one knows how long the current situation will last, or what the wider implications are. Past experience shows that the movements in oil prices we've seen thus far do not fundamentally change the economy. But we'll "wait and see" It's a development that could hit both our mandated targets in an opposing manner?in a short-term - increase inflation and possibly slow global growth. The important question, however, is how much of an impact this has on the U.S. and how long-lasting these effects are. Williams told reporters that the "transmission" is mainly through asset prices and financial markets reactions. These have so far been relatively muted. GLOBAL OIL PRICES SHOCK IS UNLIKELY. The initial reaction on the financial markets to President Donald Trump's war against Iran was to place a premium on inflation risk. Investors bet on a slightly tighter U.S. monetary policies and slower rate cuts before President Donald Trump launched massive attacks on Iranian targets in consultation with Israel. Trump promised to continue the attack as long as necessary to remove the Islamist regime whose 1979 overthrow led to an oil price shock around the world. It also stoked the inflation in the United States. Williams cited the impact of the conflict on U.S. trade partners, especially in Europe, as well as investor perceptions of risk and uncertainly, which could have a significant impact on the Fed's response to monetary policy and the economy. The Fed's rate-cutting plans were further slashed by the fierce selling on Tuesday in the Treasury and Rates Futures markets, amid rising oil prices that heightened concerns about inflation. U.S. Oil prices have risen by more than 13% in the past week since the weekend's attacks which killed Iran's Supreme leader Ayatollah Ayatollah Khamenei. This has prompted threats of counter-attacks, including the closure of the Strait o'Hormuz. The Strait is responsible for about 20% of world crude oil flows. According to AAA, U.S. gasoline retail prices have increased by 10 cents per gallon over the past 24 hours. AAA predicts that more increases are likely in the near future. The rate futures sale?lowered to 35% the chances of a Fed rate reduction?in the month of June, when Kevin Warsh (Trump's nominee for Fed Chair Jerome Powell) would be leading a policy-setting session for the first-time. The traders now see only a 55% probability of a Fed rate cut in July. This is down from 70% recently. The perception of a further cut beyond the initial one has also dropped. (Reporting and editing by Chizu Nomiyama, Paul Simao and Ann Saphir)
-
Standard Chartered increases Brent 2026 forecasts in response to Middle East turmoil
Standard Chartered has raised its Brent forecasts for 2026 and sees asymmetric upside risks to their projections if the Middle East 'conflict escalates 'further, and impedes production from Iran and other regional producers. The bank increased its forecast for the first quarter of 2026 Brent to $74 from $62, and raised its forecasts for the second quarter to $67 per barrel from $63; it also increased its forecasts for '2026 on average to $70, from $63.50. Brent futures rose 6% to $82.38 per barrel at 1749 GMT, as the U.S. and Israel 'war against Iran' widened. This caused disruptions in oil and gas fuel deliveries throughout the Middle East and heightened fears of a long-term conflict. Israel has also?attacked Lebanon. Iran responded by striking energy infrastructure in Gulf nations and tankers on the Strait of Hormuz. This is where a fifth of world oil and liquefied gas passes. Standard Chartered stated that the perception of loose market equilibrium had dampened upward price risks. However, it added 'that a tighter focus has been placed on the lack of spare capacity as well as the concentration of transit routes. It expects this theme to continue. The bank said that "the forward curve has notably strengthened, and OPEC has resumed its incremental production?"increases." On Sunday, OPEC+ agreed to a modest increase in oil production of 206,000 barrels a day for the month of April. (Reporting by Anushree Mukherjee in Bengaluru)
Copper climbs amid weak dollar
The copper price rose on Friday due to a lower?dollar and growth in other metals.
The benchmark "three-month" copper on the London Metal Exchange rose 1.2% at 1043 GMT to $12,901.50 per metric ton after finding support on its 21-day average at Thursday's market close. The metal reached a record-high of $13,407 in January.
Investors are uneasy about the sudden policy changes in Greenland and geopolitical tensions. The dollar's weakness makes dollar-priced precious metals more appealing to buyers using other currencies.
Capstone Copper, which is on the supply side of things, said that a strike by workers had "forced" a production stop at its Mantoverde Mine in Chile.
Freeport-McMoRan, a copper miner, said it expects to have 85% of its Grasberg mine back in production by the end of the year.
The Yangshan premium was a result of the high demand for copper and the record December production in China, the world's largest metal consumer.
This week the premium between the Comex and LME copper contracts has slashed sharply, prompting deliveries of LME registered warehouses to?the U.S.
The spread between the LME cash copper contract (the benchmark) and the LME cash copper contract (the LME cash contract) indicates a rising supply of the metal in the near future.
Other LME metals saw a 0.1% rise in aluminium to $3135.50. Zinc rose 0.3% to $4221, while lead increased 0.2% to $2,000, while tin was up 3.3% at $53,400. Nickel was also up 3.1%, at $18,545. (Reporting and editing by Vijay Kishore; Additional reporting by Dylan Duan)
(source: Reuters)