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MORNING BID EUROPE - "That is not what we have agreed to!"
Gregor Stuart Hunter gives us a look at what the day will bring for the European and Global markets. The U.S.Iran 'ceasefire' agreed on this week appears to be strained, as Israeli attacks on Lebanon prompted Hezbollah retaliation. Meanwhile the lack of ships resuming a?passage? through the Strait of Hormuz prompted a new tirade by?the ___________. leader. Investors became nervous when Iran claimed that Israel's attacks on Lebanon violated its agreement with the United States. This halted the risk-on mood that followed the deal. S&P 500 futures were unchanged on Friday, while MSCI’s broadest Asia-Pacific share index ex-Japan rose 0.8%. Benjamin Netanyahu, the Israeli prime minister, said on Thursday that he wanted to talk with Beirut. This was a day following the most intense Israeli bombardment in the war which killed more than 300 people. Hezbollah launched a missile against Israel on Friday, which triggered air raid sirens in Tel Aviv and other cities. While on Truth Social, U.S. president Donald Trump criticized Iran for its "very poor" job of allowing ships to pass through the Strait. "That's not the agreement that we have!" He wrote. During the war, about one-fifth of all oil and gas shipments went through Strait of Hormuz. Traffic was below 10% on Thursday as ships navigated mines, bureaucracy and required Iranian approval for each vessel. Oil prices have soared, and energy supplies are tightening as a result of the strait being effectively closed during Israel and the U.S.'s six-week conflict with Iran. Official data revealed that factory gate prices in China increased for the first time since three and a quarter years in March. Brent crude rose by 0.7% to $96.57 per barrel, on fears about supply. The Japanese Prime Minister Sanae Takaichi said on Friday that Japan will release 20 days worth of oil reserves in May to ensure a stable domestic supply. Fast?Retailing shares set a new record in Japan as the owner of Uniqlo reported a higher-than-expected profit on Thursday. Early European?trade saw pan-regional futures up 0.6%. German?DAX Futures also rose 0.6%.?FTSE Futures increased 0.2%. The following are key developments that may influence the markets on Friday. * Germany CPI and HICP for the month of March The current account balance of Germany for February The U.K. government auctions 1-month, 3-month and 6-month debt
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Oil prices rise as attacks on Saudi oil facilities cause anxiety and bring Hormuz to a standstill
The price of oil rose on Friday due to renewed?anxiety about Saudi Arabian supplies and?as tanker travel through the Strait of?Hormuz?remained largely?frozen. Prices continued to fall as the nerves of Americans and Iranians relaxed after a two-week fragile ceasefire. Israel, however, signaled a possible diplomatic opening by saying that it was prepared to start direct talks with Lebanon in the shortest time possible. Brent crude futures rose 58 cents or 0.60% to $96.50 per barrel at 0338 GMT. West Texas Intermediate futures rose 49 cents or 0.50% to $98.36 per barrel as of 0338 GMT. Both contracts have lost 11% this week. This is the largest weekly loss since June 2025. Saudi state-run news agency SPA reported that attacks on Saudi energy plants have 'cut the kingdom’s oil production by approximately 600,000 barrels a day, and throughput of its East-West Pipeline has been reduced by around 700,000 bpd. ANZ analysts stated in a 'Friday note' that the report has increased their concern about further disruptions to oil supplies. Tony Sycamore, IG'market analyst, said in a note that the initial relief after President Trump announced a two-week truce has given way to underlying concerns. Sycamore stated that "all eyes are firmly focused on the tanker tracking flows through Strait of Hormuz, looking for any increased activity in advance of Friday's peace talks in Pakistan." The volume of ships passing through the strait was well below normal levels on Thursday, despite the ceasefire. Tehran maintained its control over the situation by admonishing the vessels to stay within its territorial waters. Iran and the U.S. reached an agreement on Tuesday for a ceasefire lasting two weeks, brokered by Pakistan. However, fighting continued after the announcement. Analysts believe Pakistan will push for a durable peace agreement, but it may not have the leverage to force the reopening the strategic waterway. A Tehran official said on April 7 that Iran wanted to charge ships for passing through the Strait as part of a peace agreement. Western leaders and the U.N. shipping agency have rejected the idea. Conflict began when Israel and the U.S. launched air attacks on Iran on February 28, effectively closing down the crucial oil and gas artery. John Paisie, President of energy consultants Stratas Advisors, stated that Brent prices could reach $190 a barrel if the Strait of Hormuz flows remain at their current levels. If Iran permits increasing?flows, the price of crude oil will be moderated but still far above pre-war levels. JPMorgan reports that drones and missiles have damaged 50 infrastructure assets in the Gulf over the past six weeks. Around 2.4 million barrels per day of oil refining have also been shut down.
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Australia PM in Singapore to secure fuel supply from regional allies
The Australian Prime Minister Anthony Albanese is scheduled to meet with his Singaporean counterpart Lawrence Wong on Friday. Canberra will be looking to secure fuel from regional allies due to disruptions caused by the Middle East conflict. Singapore, Asia's oil-trading hub, is Australia’s largest petrol supplier and major supplier of diesel and jet fuel. Albanese, after arriving in Singapore late Thursday night, told reporters that the relationship was important at a time where fuel security is a global concern due to the conflict in Middle East. The main consumers of diesel fuel in Australia, farming and mining, are being affected by the shortages caused by limited stocks and dispersed distribution networks. A panic buying spree also dried up several petrol stations across Australia. Albanese stated that Australia supplies around one-third Singapore's imports of liquefied gas, while the city-state gets about 26% its refined fuel. "Australia and Singapore have a strategic alignment. We have a mutual respect for each other's values, and we are in a trusting relationship. Albanese stated that it is important to be able to rely on each other in difficult times. Australia is among a number of Asian nations that are concerned about fuel supply after Iran closed down the Strait of Hormuz. This was the route through which a fifth of world oil transited prior to its war with Israel and the U.S. Ship traffic in the Strait is at a standstill, despite an fragile peace agreement between?the U.S.A. and Iran. Australia imports 84% of the petroleum products it needs. Two refineries are now in operation, down from eight in 2005. Singapore is one of Asia's major refinery centres. It has three refineries, with a combined capacity of about 1.2m barrels of crude oil per day. However, refineries cut production after the Iranian closure of Strait of Hormuz disrupted their crude supply. According to statistics released by the road insurer NRMA late in March, Singapore accounted for close to 6 billion litres of Australia's fuel imports. South Korea was second with 22.5%, and India third with 11.5% or 1,25 billion litres. Since early March, Albanese and Foreign minister Penny Wong have been in contact with their Asian counterparts to discuss?fuel supply. The Australian government said that it had held talks with Japan and South Korea. It also claimed to have met with Indonesia, Malaysia, Brunei as well as China. Reporting by Renju José in Sydney and Helen Clark, Perth; Additional reporting from Xinghui Kok in Singapore; Writings by Praveen Mnon; Editing Jamie Freed
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Japan has ruled out the major risks of private credit to domestic consumers for now
Satsuki Katayama, Japanese Finance Minister, said that private credit is not a major problem in Japan at the moment. However, he noted that risks related to this $2 trillion industry may be discussed next week at the G7 finance summit. "Japan’s exposure to private credit is not very large." "It's not like there are no investments, but at this stage we don't view this as an important issue in Japan," she said at a press conference. Her comments coincide with the 'Financial Services Agency of Japan' checking private credit exposure in major financial institutions amid growing concerns about emerging strains within the $2 trillion private?credit market. Katayama stated that she keeps herself updated with the latest developments by receiving briefings from financial watchdogs. She added that the Group of Seven finance ministers meeting in Washington next week could raise questions regarding the risks and whether they are being monitored adequately. She added, "I do not think that the current situation has developed to the same extent as past crises." Retail investors in the United States are fleeing the private credit funds due to concerns about transparency, valuations, and disruptions related to artificial intelligence. In recent years, Japanese banks have increased their financing of global private credit funds to increase returns. (Reporting and editing by Christian Schmollinger; Makiko Yamazaki)
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Stocks are shaky after Israeli attacks on Lebanon test ceasefire with Iran
Asian stocks rose early on Friday, but gains were limited as traders questioned whether the U.S. and Iran?ceasefire this week would last. They also remained cautious about fragile hopes for peace talks between Israel and Lebanon. Investors became nervous when Iran cited the ongoing attacks by Israel on Lebanon as one of its main sticking points in its agreement with America. MSCI's broadest Asia-Pacific share index outside Japan rose 0.5%. The South Korean Kospi led the way with a 1.9% increase. Japan's Nikkei added 1.5% while S&P500 e-minis futures traded flat after reversing earlier losses. The U.S.-Iran truce led to a sharp rise in Asian markets, but yesterday the risk-on attitude was tested," said Rupal garwal Asia quant strategist for Bernstein in Singapore. She said: "We think this could be the start of the end, and it's an opportunity for investors who want to focus on fundamentals and trends from before the war." "We recommend adding some beaten-down stocks back." The S&P 500 gained 0.6% on Thursday. MSCI's global equity benchmark also made modest gains. This was after Israeli Prime Minister Benjamin Netanyahu reportedly said that he wanted direct talks with Beirut a day after the most devastating bombardment in the war, which killed over 300 people in Lebanon, and put the U.S. Iran ceasefire 'in danger. Brent crude jumped 1% to $96.63 a barrel after trading resumed in Asia. Hezbollah fired a missile towards Israel, which triggered air?raid? sirens across the country, including in Tel Aviv. The Strait of Hormuz is largely closed for shipping. Marine traffic was well below 10% of its normal volume on Thursday, as Tehran asserted control of this strategic waterway which typically transports one-fifth of all global oil and gas shipments. Oil prices soared and energy supply was tightened as a result of the closure of the Strait during the six week Iran War. Donald Trump, the U.S. president, issued a stern warning. In a Truth Social post, he stated that Iran is doing a "very bad job" in allowing oil through the Strait. "That's not the agreement that we have!" He wrote to emphasize Washington's frustration at the intensifying market turmoil. The U.S. Dollar Index, which measures greenback strength against a basket of six currencies, rose 0.1% to 98.92 after data released on Thursday showed that weekly jobless claims increased 16,000?to 219,000, and continuing claims?fell 38,000?to 1.794?million, the lowest since May 2024. The Core PCE Price Index also increased 0.4% for the second consecutive month, reflecting an increase year-on-year of 3.0%. The yield on the 10-year Treasury Bond in the United States was up by 0.6 basis points at 4.285%. Fed funds futures indicate traders are bringing forward expectations of the Federal Reserve cutting rates by 25 basis points to April 2027. According to the CME Group's FedWatch, the implied probability that the U.S. Central Bank will remain on hold during its April 2027 meeting has dropped to 49.6% from 64% last Thursday. Investors have requested to withdraw more than 15 percent of their assets from Carlyle’s flagship private-credit interval fund. The group announced this in a letter to shareholders on Thursday. Bitcoin fell 0.7% to $71,903.27 while Ether was 1.0% down at $2,191.81. (Reporting and editing by Gregor Stuart Hunter)
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Russian diplomat: Moscow won't abandon Cuba; help with energy
After talks in Havana, the Russian deputy minister of foreign affairs was quoted saying that Russia would never abandon or betray Cuba. The Russian government also plans to assist Cuba with energy issues related to an embargo by the United States. Sergei Ryabkov was quoted by Russian news agencies as saying that Moscow would not abandon its interests in Western Hemisphere, no matter what the United States said. Ryabkov stated that Moscow's support for Cuba will go beyond the shipload of oil the country sent to the island last week. Ryabkov said, "I'm certain that recent events in our relations will lead us to move forward and find solutions to some of the most difficult problems that have arisen from the illegal and absolutely unacceptable U.S. blockade on the island." "We can't betray Cuba. This is not possible. "We cannot let it go on its own." Ryabkov stated that Cuba's energy requirements were a priority. It is too early to predict what will happen next. Ryabkov stated that we would not limit our supplies to just the cargo on the tanker Anatoly Kolodkin. The agencies quoted him as saying: "Russia has no intention of leaving the Western Hemisphere, regardless of what Washington may say." "They're obsessed with pushing Russia out of the area." He said that the U.S., Israel and other countries' attacks on Iran have "made it clear that using force and sanctions to impose political diktats does not work". The Russian-flagged Anatoly Koodkin arrived in Cuba last week with 700,000 barrels - the largest delivery of Russian crude oil since Washington cut off the island fuel supply. The United States claimed that it allowed the tanker to transport fuel because of humanitarian reasons. The Russian government has been trying to rekindle its close relationship with Cuba during the Soviet period and has urged the United States to not blockade Cuba. In February, Cuban Foreign Ministry Bruno Rodriguez met with President Vladimir Putin and Sergei Lavrov his Russian counterpart during a trip to Moscow. (Reporting and Editing by Stephen Coates).
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Oil prices increase after attacks on Saudi oil installations
The oil prices climbed in the early hours of Friday's trading, following the attacks on the?Saudi energy industry, and the markets assessing the risk premium from the ongoing closure of Strait of Hormuz. This was despite the fragile truce that the U.S. has reached with?Iran. Brent crude futures rose 83 cents or 0.87% to $96.75 per barrel at 0100 GMT. West Texas Intermediate futures rose $1.04 or 1.06% to $98.91 per barrel. In a recent note, IG analyst Tony Sycamore stated that the initial relief after President Trump's announcement of a two-week ceasefire has given way to underlying concerns. Iran and the U.S. announced a ceasefire on Tuesday, but the fighting continued after the announcement. Sycamore stated that "all eyes are firmly focused on tanker tracker flow through the Strait of Hormuz to look for signs of increased activity before Friday's scheduled peace talks in Pakistan." Analysts believe Pakistan will push for a durable peace agreement in the talks, but it may not have the leverage to force the reopening of?Strait of Hormuz. A Tehran official said on April 7 that Iran would like to charge fees for ships crossing the strait as part of a peace agreement. Western leaders, as well as the U.N. shipping agency, have rejected the idea. The conflict that began February 28 with the U.S. and Israel's air attacks on Iran has effectively closed down the crucial artery of oil and gas flow. John?Paisie of energy consultants Stratas Advisors said that Brent prices could reach as high as $190 a barrel if the Strait of Hormuz continues to flow at its current rate. If Iran permits increasing flows, the price of oil will be more moderate but still far above pre-war levels. Saudi Press Agency reported that attacks on Saudi Arabian oil production have reduced the kingdom's production by 600,000 barrels per day and the throughput of its East-West Pipeline has been reduced by 700,000 barrels per day. JPMorgan analysts said in a recent research note that the announcement "changes the narrative from an episodic disruption to one of a measurable shock." JPMorgan says that drone and missile attacks have damaged 50 infrastructure assets in the Gulf over the past six weeks. Around 2.4 million barrels per day of oil refining have also been shut down.
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Fortescue, Australia's Fortescue, will accelerate diesel elimination plans in Pilbara
Fortescue, an Australian mining company, announced on Friday that it was accelerating the rollout of its 'off-grid green energy system' to 'eliminate fossil fuels from Pilbara mines, especially diesel. The world's largest mining companies rely on diesel as their primary energy source, but it is expensive, volatile and carbon-intensive. Therefore, they are increasingly looking to replace this with renewable power. By the end of 2028 it is expected that the world's fourth largest iron ore mining company will have completed its Pilbara Green Grid, including a 1.2 gigawatt solar power, more than 600 megawatts of wind energy and 4-5 GW hours of battery storage. Fortescue expects to have 290MW installed of renewable energy capacity by the beginning of next year to meet its fixed ore processing facility?energy needs, enabling 'green processing" throughout its Pilbara operations. The company plans to use the'system' for all its operations without fossil fuels, 24 hours a day, later next year. This is well ahead of its plans for decarbonisation. This initiative is part of Fortescue's efforts to decarbonise and achieve "Real Zero" by 2030. The company wants to establish itself as a green energy leader in the world. (Reporting and editing by Shreya Biwas in Bengaluru)
Gold gains for the third consecutive week as US dollar strength offsets US rate outlook
Gold prices fell on Friday due to a stronger dollar and uncertainty over the U.S. Iran ceasefire, but they remained on course for a third weekly 'climb' as investors priced in more aggressive and earlier U.S. interest rate cuts. This supported non-yielding gold.
By 0316 GMT, spot gold had fallen 0.1% to $4,759.54 an ounce. Metal has, however, gained 1.8% this week.
U.S. Gold Futures for June Delivery fell by 0.7% to $4.782.70.
Dollar index increased, causing greenback bullion to be more expensive for holders other currencies.
Kyle Rodda is a senior financial analyst at Capital.com. He said, "There's not much clarity on how the Middle East ceasefire will develop and what it means for the energy markets. So we're sort of in a holding pattern with?gold" going into the last session of the week.
Spot gold is down?about 10% in the last few weeks since the U.S. - Israel conflict with Iran began on February 28. High energy prices are fueling inflation fears and higher interest rates.
On Friday, the fragile ceasefire that had existed between the U.S.A. and Iran for two weeks showed signs of strain as Washington accused Tehran of breaking promises made on the Strait of Hormuz.
Brent crude has fallen more than 11% in the past week, despite the optimism that a ceasefire would reopen Strait of Hormuz. This is where about 20% of world oil and natural gas passes.
If things go wrong, gold could quickly drop to the mid-$4,000 range. If the ceasefire is maintained and a peace agreement looks more likely, we may be able to push the price of gold up to $5,000," Rodda said.
The U.S. Personal Consumption Expenditures Index,?the Federal Reserve preferred inflation gauge?, rose 2.8% over the past 12 months, as expected, and is likely to rise further in March.
Investors will be watching for the U.S. Consumer Price Index data for March, which is due later today, to get more clues about Fed's monetary policies.
According to CME's FedWatch Tool the markets are now pricing in a 31% probability of a U.S. interest rate cut at the Fed's meeting in December. This is up from 20% the previous session.
Silver spot rose 0.9% per ounce to $75.74, while platinum fell 2% at $2,061.06 and palladium dropped 1.2% to $1539.43.
(source: Reuters)