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MORNING BID EUROPE - Indefinite ceasefire and markets unbothered
Ankur Banerjee gives us a look at what the day will bring for the European and global market. An indefinite ceasefire in the Middle East, which may or may not be agreed upon by all parties, but is expected by the markets?will likely keep April's risk momentum intact. This will allow investors to concentrate primarily on corporate earnings and economic statistics. Donald Trump, the U.S. president, appeared to announce unilaterally a ceasefire agreement extension hours before it was set to expire. However, it is unclear whether Iran or the U.S. ally Israel have or would accept the new arrangement. Trump said that he would blockade Iran's shores and ports, which means traffic in the Strait of Hormuz has?effectively come to a halt. Brent crude is now hovering around $100 per barrel. Oil prices have dropped from their March highs on the back of growing optimism about a peace agreement, but as long the waterway is closed there will be a risk of higher energy prices and inflationary shock. This brings us to the most important?economic data for the European day. The British inflation report will provide the details on the impact of the Middle East war locally. A poll of economists showed that it is likely to show an increase in inflation from 3% to 3.3%. The earnings of Elon Musk and Texas Instrument, a U.S.-based chipmaker, will be important to understand how companies are dealing with the changes in energy and supply chain. Musk's SpaceX, which has been grappling with?that?, has seen a number of developments in the past week as it barrels towards what could be the largest IPO ever. Share prices will likely continue to rise, as they have already recovered all losses from March. U.S. Stock Futures?were up by 0.5%, while European Futures indicated a subdued opening. The AI theme has returned to Asia and is driving South?Korean stocks, as well as Taiwanese shares, to new highs. South Korean chipmaker SK Hynix, for example, now ranks among the 20 most valuable companies worldwide. The following are key developments that may influence the markets on Wednesday. * UK CPI and PPI March The Eurozone consumer confidence index for April
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BHP completes its supply agreements with China and is now able to deliver iron ore.
The iron ore price ranged on Wednesday as the steelmakers restocked in a frenzy of activity before the holidays. BHP, 'the?world’s?third-largest supplier of iron ore, announced that it had completed iron ore contract negotiations with China Mineral Resources Group (CMRG), a state buyer. Last week, it was reported that CMRG lifted its ban on the procurement of the key ingredient for steelmaking from BHP following a visit by BHP's top executives. As of 0214 GMT, the most traded iron ore contract at China's Dalian Commodity Exchange was up 0.38% to 787 yuan (US$115.37) per metric ton. As of 0204 GMT, the benchmark May 'iron ore' on the Singapore Exchange had fallen 0.14% to $106.75 per ton. Analysts at Yongan Futures wrote in a report that "the term contract negotiations (between BHP & CMRG) have been finalised and bearish factors are largely priced in." Prices will stabilize in the near term as demand for the holidays is strong. Chinese steelmakers usually restock their feedstock before the May Day holiday, which is May 1-5. BHP expects seaborne iron ore demand to plateau over the next few decades, with a slight decrease in China being offset by growth in emerging markets and a recovery in Europe. Coke and other steelmaking materials, such as coking coal, have gained respectively 1.23% & 1%. The Shanghai Futures Exchange steel benchmarks moved sideways. Rebar gained 0.16%. Hot-rolled coils advanced by 0.3%. Wire rod grew by 0.03%. Stainless steel fell 0.33%. ($1 = 6.8218 Chinese Yuan) (Reporting and editing by Amy Lv, Tony Munroe)
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Term sheet shows that a Sinopec unit sold CATL shares worth $770 million.
A term sheet showed that a unit of Sinopec had sold 8.5 millions Hong -Kong listed shares of CATL on Wednesday for $770 million. The company was able to cash in on the soaring stock performance of the Chinese electric vehicle -battery manufacturer. The term sheet examined by revealed that Sinopec (Hong Kong), in an accelerated stockbuild, sold shares at HK$708 (US$90.41), a discount of approximately 3.8% from the closing price on Tuesday for Contemporary Amperex Technology Co Ltd (CATL). According to the term sheet, Sinopec also agreed to a 90 day lock-up period on its remaining CATL stake. According to the term sheet, Goldman Sachs is the only placing agent. Sinopec and CATL did no immediately respond to comments. The 8.5 millions shares sold represent approximately 5.5% of the Hong Kong shares issued by CATL. LSEG data revealed that Sinopec (Hong Kong), held a 9.45% share in CATL’s?Hong Kong shares. CATL shares listed in Hong Kong nearly tripled their price from HK$263 to HK$736 since May 2025. Its market capitalisation is now $304 billion after a 46.9% increase year-to date, according to LSEG data. CATL is the largest battery manufacturer in the world and supplies many automakers, including Tesla, BMW and Volkswagen. The?company raised $4.6 billion during its Hong Kong listing in that year. It was the largest listing in the world. Most of the proceeds were used to finance a battery factory in?Hungary, as part of their overseas expansion. In March, CATL announced a fourth-quarter profit and a full-year net profit for 2025 that exceeded market expectations. The timing, size, and structure of the deal are still being reviewed. ($1 = $7.8308 Hong Kong Dollars) (Reporting and editing by Christian Schmollinger, Muralikumar Aantharaman).
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Trump's Iran ceasefire extends to stocks, but the dollar is still in a shaky state
The dollar weakened on Wednesday after President Donald Trump announced that he would "indefinitely" extend the Iran ceasefire. This kept the mood upbeat, even though the Strait of Hormuz was still closed. Oil held onto its recent gains. Trump's unilateral announcement was confusing, as it wasn't immediately clear if Iran or the U.S. ally Israel would agree to extend a ceasefire that began two weeks earlier. The markets, however, remained steadfast in their risk-adjusted momentum. S&P Futures rose by 0.5%, while Nasdaq Futures gained 0.6% in early Asian hours. MSCI's broadest Asia-Pacific share index outside Japan slipped 0.14%, after hitting a seven-week-high in the previous session. Japan's Nikkei fell 0.2%, as traders tried to consolidate their recent gains. The markets have quickly recovered this month after a steep selloff due to the?war? in the Middle East. They are now back at their pre-war levels, as the prospect for a ceasefire and a peace agreement has helped boost risk sentiment. Matt Simpson, senior analyst at StoneX, said: "It seems markets were right in assuming that peak war uncertainty was behind us." The risk seems to be buoyant, and equity bulls are favourable towards dips. "The closure of the Strait of Hormuz has already been priced in." Trump stated that he would continue to blockade Iran's ports, shore and coast with the U.S. Navy. Tehran has closed the Strait of Hormuz, through which a fifth of the world's energy supply normally flows. This has caused a global shock. U.S. West Texas Intermediate Crude Futures rose 0.44% to $90.12 per barrel. The benchmark contract rose 2.8% Tuesday. The euro was last trading at $1.1748 during early trading. The dollar was slightly stronger at 159.26 yen, while sterling rose to $1.35195. (Reporting from Ankur Banerjee, Singapore; Editing and proofreading by Christopher Cushing).
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Exports from Japan grew 11.7% in March, thanks to a brisk market and higher prices
Data showed that Japan's exports increased for the seventh consecutive?month. This was boosted by a solid global demand, rising prices, and the fact that the Middle East conflict had no major impact on the country. Data showed that total exports by value increased 11.7% on an annual basis in March. This was higher than the median market expectation of 11%. The data revealed that exports to the United States increased by 3.4% from the previous year, and those to China rose 17.7%. Imports increased 10.9% from a year earlier in March, while the market expected a 7.1% rise. In March, Japan had a trade surplus of 667 bn yen, which is $4.18 billion, as opposed to the expected surplus of 1.1 trillion?yen. The closure of the Strait of Hormuz slowed down Gulf energy shipments and disrupted global supply chains. However, the higher export prices in Japan have helped the country's trade. Manufacturers are increasingly concerned about the rising energy prices, disruptions in oil supplies and other materials that could eventually drag down Japanese exports. In recent weeks, shortages of naphtha - a vital feedstock for petrochemicals - and other materials forced dozens companies to halt orders, despite assurances from the government that there were sufficient stocks. The Japanese economy continues to show signs that it is undergoing a modest recovery. This is supported by a firm business investment climate and robust exports. However, the growth momentum remains uneven due to external headwinds. Analysts warn of the impact that Middle East tensions and rising oil prices could have on the economy. They say they will increase import costs, and reduce household purchasing power. Bank of Japan will likely maintain its current interest rate stance at the next policy meeting, scheduled for next week, as a weaker yen, higher energy prices and a weaker yen adds to inflationary pressures, making it difficult for the central bank to strike a balance between price stability and economic growth. ($1 = 159.54110 yen)
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BHP says iron ore production in the third quarter rose, but maintains full-year forecast
BHP Group said on Wednesday that its iron ore production in the third quarter rose by 3%. The miner's outlook for the year was unchanged. In February and March, two tropical cyclones disrupted Port Hedland's operations, which is the largest iron ore hub in the world. This affected shipments of this key steel-making material. The largest listed mining company in the world said that iron ore production from its Western Australia mine operations was 69.8 metric tons on a 100 percent basis for the?quarter ending March 31. This is higher than Visible Alpha's estimate of 68.9 metric tons. Last year, 67.8 millions tons of?tonnes were produced. The price of the wet metric tonnage steelmaking ingredient has fallen by 2%, from $85.35 per metric ton for the last three months. The company stated that the 100% iron ore production guidance for fiscal 2026 from Western Australia operations remains at 284 to 296 millions tons. The quarterly copper production fell 7%, to 476.800 tons. This was due to a weaker performance by the Escondida? and Pampa Norte?operations. BHP has announced that it has completed iron ore contract negotiations with China Mineral Resources Group. Earlier this month, it was reported that CMRG (the state iron ore purchaser) had lifted the bans on the procurement of the?key ingredient for steelmaking from BHP. This ended a long-running dispute following a visit by BHP's top executives. Mike Henry, the outgoing Chief Executive Officer of GE Energy, said: "Our centralised purchasing capability and our low-cost operation have placed us in an advantageous position in the face of industry-wide pressures on the cost energy and consumables due to the conflict in the Middle East." BHP appointed senior executive Brandon Craig as its new CEO in March, ending Henry’s six-year tenure. Craig will take over the role on July 1. (Reporting by Sneha Kumar in Bengaluru; Editing by Maju Samuel)
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South32 reduces Australia's manganese forecast after wet season and cyclone impacts
South32 cut its full-year predictions for Australia's manganese after heavy rains during the wet season and Tropical Cyclone Narelle disrupted operations. Narelle forced the company in March to temporarily stop operations at its Gemco'manganese mining site in the Northern Territory, and evacuate all non-essential personnel from the mine. The diversified mining company now expects the fiscal '2026 production guidance to be 3 million metric tons of 'wet weight (wmt), a drop of over 6% from its previously announced guidance. Australia Manganese produced 589,00 wmt in the March quarter. This compares to no production a year ago, when the primary concentrater was paused because of?stockpiles built before the wet seasons. South Africa's production of manganese was 500,000 wmt in the third quarter, up from the 476,000 wmt that had been recorded the previous year, despite the fact that the operation underwent scheduled maintenance during the period. The combined'manganese production from its Australian and South African operations in the March quarter was 1.09 million Wmt, up from 476,000 Wmt?a year ago?but still missing Visible Alpha's consensus estimate of 1.25 Million wmt. (Reporting by Kumar Tanishk in Bengaluru; Editing by Maju Samuel)
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London military planners discuss the reopening of Hormuz
The British government announced that military planners from over 30 countries will meet in London for two days starting on Wednesday. They will discuss a mission to reopen the Strait of Hormuz, and develop detailed plans. Last week, more than a dozen nations said they would join an international mission led by Britain and France to protect shipping along the Strait of Hormuz, if conditions permitted. This commitment was made after 50 countries from Europe and Asia, as well as the Middle East, joined a videoconference to send a message to Washington following Donald Trump's statement that he didn't need any help. The British Ministry of Defence stated in a press release that the meeting scheduled for Wednesday would build upon progress made during last week's discussions. John Healey, UK's?defence Minister, said: "Today and tomorrow we must?translate diplomatic consensus into a plan that will safeguard freedom of movement in the?Strait, and promote a ceasefire lasting." I am confident that real progress will be made in the next two working days." The British government said that the talks would advance military plans for reopening the Strait of Hormuz when conditions allow, after a sustained ceasefire. Participants are expected to discuss military capabilities, control and command arrangements, and the deployment of forces in the region. (Reporting and editing by Andrew Cawthorne; Catarina demony)
After US extended ceasefire with Iran, gold rises and oil falls
Gold prices rose?on?Wednesday as lower oil prices, following a U.S. extension of a?ceasefire with Iran?, eased concerns about inflation and high interest rates.
As of 0225 GMT spot gold increased 0.9% to $4.755.11 an ounce after Tuesday's fall to its lowest level since the 13th April.
U.S. Gold Futures for June Delivery gained 1.1% to $ 4,772.90.
Hours before the ceasefire was due to expire, U.S. president Donald Trump said he would extend it indefinitely to allow for future peace talks.
Trump's unilateral announcement was confusing, as it wasn't immediately clear whether Iran or Israel, the U.S. ally, would agree to extend a ceasefire that began two weeks earlier.
According to Marex analyst Edward Meir, "the markets perceive that the crisis has de-escalated with this extension of the ceasefire." If the ceasefire is broken and hostilities are resumed, the dollar will strengthen and oil and interest rates will rise, which should put pressure on gold prices.
After the ceasefire extension, stocks rose, the dollar weakened and oil prices fell.
Inflation can be fueled by higher crude oil prices, which increase transportation and production costs. Gold is considered a hedge against inflation, but high interest rates make yielding assets more appealing, which reduces the appeal of bullion.
Standard Chartered stated in a report that "price action is still at the mercy Middle East ceasefire headlines, and liquidity requirements."
We continue to expect that (precious-metals) prices will recover, and in particular gold to retest records highs.
Kevin Warsh, the Federal Reserve nominee to lead the central banking system, said that he made no promises about interest rate cuts to Trump. He was trying to reassure U.S. Senators who were weighing his nomination to the position of head of the central bank, that he would act independently from the White House and pursue broad reforms.
Silver spot rose by 1.5%, to $77.84 an ounce. Platinum gained 1.5%, to $2,067.25, while palladium increased 1.8%, to $1,560.31. (Reporting and editing by Eileen Soreng in Bengaluru, Noel John)
(source: Reuters)