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AI rally pauses while Middle East ceasefire is on 'life-support'
The dollar and oil rose on Tuesday, as traders waited for U.S. inflation data and a 'chip rally' that had been raging in the chip stock market cooled. Donald Trump, the U.S. president, said that the ceasefire agreement with Iran was "on life support", after Tehran's reaction to a proposal from the U.S. The proposal to end the conflict made it clear that the two sides are still far apart. Brent crude futures rose 0.7% to $105. S&P futures fell 0.2%, and the KOSPI index in Seoul, which is considered to be unstoppable by many investors, dropped 3%. Tokyo's Nikkei index was flat, but MSCI's broadest Asian share index excluding Japan dropped 1%. European futures fell ?1%. The markets are watching Trump's visit to China on Wednesday, but they don't expect any progress in the area of trade or Iran. They just want the status quo to continue. Investors shouldn't expect to see sweeping deals. "A 'win' means no new tariffs or export controls and maybe small symbolic deals such as agricultural purchase, aircraft orders, signals on rare Earths, said Daniel Casali chief investment strategist of Evelyn Partners. These may seem minor, yet stability on the margins is important. Wall Street has been resilient despite the rising oil price. The S&P 500, and Nasdaq have all reached new highs. The U.S. consumer price index is expected to rise by a scorching 3.7% on a year-over-year basis. Markets could be rattled by any suggestion that the Federal Reserve might need to raise interest rates this year, rather than reduce them as investors expected before World War II. Global bond yields increased overnight, led by a selloff of gilts, after Prime Minister Keir starmer's speech did not dispel investor doubts regarding his political survival following Labour's heavy loss in the local elections last week. Japan's 10-year bond yield jumped to a new 29-year high, 2.54%, ahead of a later auction. Summary of the opinions expressed at the Bank of Japan meeting in April reinforced the growing hawkish tilt on the board. This leaves the door open to a rate hike in June. The benchmark 10-year Treasury yields remained at 4.42%. The dollar rose to 157.53 Japanese yen in currency trading. U.S. Treasury Sec. Scott Bessent, who is visiting Tokyo to meet with Japanese officials, did not mention his support for Japan's currency interventions in a press conference on Tuesday. Satsuki Katayama, Japanese Finance Minister, said: "We agree that we are extremely well coordinated on recent market movements including exchange rates." The euro fell 0.2% to 1.1762, and the Australian dollar dropped 0.25% to $0.7232. The Australian government will announce a smaller budget deficit than it had previously announced on Tuesday.
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Petrobras Q1 profits slip as oil price rise yet to be felt
In a filing on Monday, Brazil's state-run Petrobras said that it had missed market expectations in its?first quarter net profit. The?impact? of higher oil prices due to the Middle East conflict has yet to be reflected in the results. Petrobras reported a net loss of approximately 32.7 billion reals ($6.68 billion) - down 7.2% compared to a year earlier. In a separate filing, the company approved a dividend payout of 9 billion reals to its shareholders. The company stated that the increase in oil prices following the U.S. - Israel conflict with Iran, which began in late February, would only be felt by the second 'quarter. The firm stated that most Petrobras exports go to Asian markets. Pricing is usually based on "quotations" from the month before the cargo arrives. According to the results of the firm, the average Brent crude price in the first quarter of 2018 was $80.60. This is only 6.5% higher than the prices of a year ago. Brent prices rose past $100 following the closure of the Strait of Hormuz. Brazilian oil giant Petrobras has been increasingly dependent on exports for revenue generation. While the company's?revenues from?exports increased 28.3% during the first quarter, the?revenues from?sales within Brazil decreased 9.4%. The market expected 136.08 billion?reais. However, the net revenue was only a slight increase of?0.4% to 123.69 reais. The core earnings as measured by adjusted earnings prior to interest, taxes and depreciation (EBITDA), fell 2.4%. Analysts ?expected 64.48 billion reais.
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Prices of oil rise amid supply concerns as fragile US-Iran negotiations continue
The oil prices increased in the early Asian trading on Tuesday as negotiations to end the "war" between the United States of America and Iran appeared 'fragile.' Tehran’s response to the U.S. proposal highlighted stark differences which kept supply concerns alive. Brent crude futures rose 30 cents or 0.29% to $104.51 a barrel. U.S. West Texas Intermediate was up 31 cents or 0.32% to $98.38 at 00:02 GMT. Both benchmarks rose by nearly 2.8% Monday. U.S. president Donald Trump stated on Monday that the Iranian ceasefire was "on life support." He cited disagreements on several demands such as the cessation on all fronts of hostilities, the removal?of a U.S. Naval Blockade, resumption Iranian oil sales and compensation for damage caused by war. Tehran also emphasized its sovereignty over the Strait of Hormuz,?which is responsible for about a fifth of all global oil and liquefied gas flows. Tim Waterer is the chief market analyst at KCM Trade. He said in an email that as long as US-Iran talks remain unresolved and physical flow through the Strait of Hormuz remains restricted, prices should hold above $100. He said that a genuine breakthrough towards a peace agreement could trigger an $8-12 correction. Any escalation of blockade threats or escalation in price would push Brent prices back to $115+. A survey released on Monday showed that OPEC's oil production in April was at its lowest level for over 20 years. Amin Nasser, CEO of Saudi Aramco, warned on Monday that disruptions in oil exports across the Strait could delay the return of market stability until as late as 2027. This would result in a loss of around 100 million barrels per week. The Trump administration announced Monday plans to lend 53.3 million barrels from the U.S. Strategic Petroleum Reserve to help temper the oil markets. The first shipment to Turkey was crude oil from the U.S. SPR, according to ship-tracking data. Washington imposed sanctions against three individuals and nine firms, including those based in Hong Kong, United Arab Emirates and Oman. They were sanctioned for facilitating Iranian oil shipments into China. Separately, on Monday, the Wall Street Journal reported that the UAE had conducted military strikes against Iran, including an early April attack on a refinery located on Iran's Lavan Island. Reports said that the UAE had not acknowledged the strikes publicly. Reporting by Anmol Chaubey, Bengaluru. Editing by SonaliPaul
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New Zealand changes law to prevent private climate litigation
New Zealand's Government announced on Tuesday that it would amend climate legislation to prevent courts from holding companies responsible for climate change-related harm caused by greenhouse gas emissions. Justice Minister Paul Goldsmith announced that the government will amend the Climate Change Response Act of 2002 so it applies to current and future court cases, including a High Court case filed against six major emitters. The case, brought by climate activist Michael Smith against six major greenhouse gas producers including Fonterra Co-Operative Group, is currently making its way through the court system with a trial date set for 2027. The case claims that the emissions of these companies have caused climate change, and have harmed Michael Smith's land, interests, and cultural rights. Goldsmith stated that the litigation created uncertainty for New Zealand business confidence and investment. He also said that the country's response to climate changes should be managed at the national level through its parliament, Emissions Trading System, and existing 'climate legislation. Goldsmith stated that the courts were not the best place to settle claims of climate change harm, adding that tort law is not suitable for the complex environmental, economic and social issues. The?government stated that the change would not affect its responsibilities under climate law or the obligations of businesses under the ETS. (Reporting and editing by Lucy Craymer.
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Vice PM: Russia lowers its 2026 economic growth projection to 0.4%, down from 1.3%
* The GDP growth forecast for 2020 has been reduced to 0.4%. Growth will reach 2.4% by 2029 * Oil price for budget calculations kept ?at $59 per barrel despite global price spikes * Deputy PM Novak stresses that cyclical correction is necessary, and says the slowdown follows robust growth. By Darya Korsunskaya In an interview with Vedomosti on May 12, Alexander Novak, deputy prime minister of Russia, said that despite the rise in oil prices worldwide due to the Middle East war, Russia's economic growth projections for 2026 and the next three years have been cut. Novak stated that New Economy Ministry projections had lowered the gross domestic product growth from 1.3% to 0.4% by 2026 and from 2.8% to 1.4% by 2027. Growth is expected to reach 2,4% in 2029. Novak said that the economy was likely to slow down after the robust growth of 2023-24. This, according to many analysts, was fueled by military expenditures in order meet the demands of the Ukraine war. "Economic dynamics is cyclical. There is always a correction after a period of high-growth, which can be accompanied by structural changes. Novak stated that this is a "normal stage" for the economy, and stressed that it is evolving in a climate of "unprecedented sanctions pressure." After tax increases at the beginning of the year, as well as deep discounts on Russian crude oil due to Western sanctions, Russia's $3 trillion dollar economy contracted by 0.3% during the first quarter. This was its first quarterly decrease since early 2023. Novak, in a surprising move, said that the ministry had projected the oil price to be $59 per barrel by 2026. The projected oil price is equal to the "cut-off price",?which determines how much of the budget oil revenue will go to the National Wealth Fund fiscal reserve. Oil prices are expected to remain at $50 per barrel over the next three-year period, despite many analysts predicting that Russia would be one of the biggest beneficiaries from a rise in oil prices following the 'U.S. Israeli and U.S. attacks on Iran, and a blocking of the Strait of Hormuz. "It's important to maintain a conservative and pragmatic policy." The crisis creates the conditions for higher export revenues, both from oil and natural gas as well as other goods. Novak said Vedomosti that this effect was not long-lasting. Vladimir Putin, the President of Russia, asked his government last year to make sure that growth would resume in 2026. He rebuked senior officials for slowing the?growth last?month and told them they needed to find new ways to support the economy. Novak stated that the government was working hard to restore economic growth to a long-term sustainable trajectory. The goal is to achieve national development goals and to match or exceed global average rates. (Reporting and writing by Darya Kosunskaya, Editing by Nia William and Stephen Coates; Reporting by Gleb Brynski)
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Oil rallies after US-Iran deadlock; stocks rise ahead of US China meeting
The dollar grew on Monday as investors awaited a possible meeting between U.S. president Donald Trump and Chinese president Xi Jinping. Oil prices rose after Trump described the U.S.-Iran ceasefire as "on life support" and dismissed Tehran's response following a U.S.-sponsored peace proposal. His comments stoked fears that the 10-week conflict would continue, paralyzing shipping in the Strait of Hormuz. Iran's response focused on ending war on all fronts. Tehran demanded compensation, stressed its sovereignty over Strait of Hormuz and called on U.S. officials to end their naval blockade and?guarantee that no more attacks will occur, lift sanctions, and remove the ban on Iranian oil exports. Scott Wren is a senior global market analyst at the Wells Fargo Investment Institut. He said investors are cautiously optimistic about some progress towards peace. Wren said that the issue is all about opening up the strait. There's optimism that China can have an influence on the strait problem. Wall Street saw the S&P500 rise 13.91 points or 0.19% to 7,412.84, and the Nasdaq Composite gain 27.05 points or 0.10% to?26.274.13, both closing at record highs. The Dow Jones Industrial Average rose by 95.31 points or 0.19% to 49,704.47. This is still short of the record-breaking close on February 10. MSCI's global index of stocks rose by 2.38 points or 0.22% to 1,108.01. The pan-European STOXX 600 closed earlier up by 0.11%. Dollars fell from their session highs, after Trump's rejection of Iran's reaction kept fears about a prolonged war alive. The dollar index (which measures the greenback versus a basket including the yen and the euro) fell by 0.05%, to 97.96. Meanwhile, the euro was down 0.06%, at $1.1777. The dollar gained 0.37% against the Japanese yen to reach 157.23. The British Pound fell 0.16%, to $1.361. Keir starmer, the British Prime Minister tried to quell a revolt within his ruling Labour Party after a mauling at last week's elections. Oil prices in energy markets rose nearly 3% after Trump made comments that fueled supply fears. The Strait of Hormuz was largely closed and there is no end to the war. U.S. crude oil settled at $98.07 per barrel, up $2.65 or 2.78%. Brent crude rose to $104,21 per barrel, up by 2.88% or $2.92 on the day. The yields on U.S. Treasury bonds increased as oil prices rose, causing inflation fears. The yield on the benchmark U.S. 10 year notes increased 4.6 basis points from late Friday to 4.41%. The 30-year bond rate rose 3.6 basis to 4.9835%. The Federal Reserve's 2-year note yield rose by 5.9 basis points, to 3.952%. Prices of gold reversed their course and rose in volatile trading Monday as investors awaited key U.S. data on inflation due later this week, while also assessing developments in U.S. diplomacy with Iran. Spot gold increased by 0.44%, to $4735.39 per ounce. U.S. Gold Futures increased 0.15% to an ounce of $4,727.70. (Reporting and editing by Sinead carew, Amanda Cooper; Gareth Jones, Mark Potter, Nia William, David Gregorio, Stephen Coates)
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TSX closes at a three-week high as commodity stocks gain.
Canada's main index of stocks closed in the black on Monday and reached its highest level in nearly three weeks, supported by gains in oil and metal stocks. Investors weighed the effects of the Middle East conflict. The S&P/TSX Composite Index of the Toronto Stock Exchange closed up 0.18% to 34,138.88. This was its highest closing since April 21. Energy stocks rose?1.7% and materials rose over 3% as oil and precious metal prices rose. The rapid rejection by President Donald Trump of Iran's response to the U.S. Peace proposal has fueled fears that the 10-week conflict will continue and keep shipping through the Strait of Hormuz halted, driving up oil prices. Angelo Kourkafas is a senior global investment strategy at Edward Jones. He said that the headlines are about a stalemate between Iran and its allies, which is driving up crude oil prices. For now, AI is the story driving gains in the U.S. He said that in Canada, oil prices and the material sector are likely to continue. The Bank of Canada left its key interest rates unchanged last month, but Governor 'Tiff Macklem stated that if oil prices continued to rise and inflation began to increase, the Bank of Canada might be forced to respond by raising rates in a series. "It's because we are seeing a?accelerating growth in earnings,?which allows investors to focus on the corporate fundamentals of the TSX," he said. Barrick Mining jumped 9%, making it one of the 'top gainers' on the TSX after the miner exceeded expectations for its first-quarter profits. This was helped by a record?gold price. Cronos rose 8% following the cannabis producer's first quarter net revenue which soared by?40%. Sales in Israel and countries without excise tax helped to boost this. (Reporting from Tharuniyaa in Bengaluru, and Nivedita in Toronto; editing by Joyjeet Das & Deepa Babington).
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Trump signs orders to increase beef imports and grow herds in order to reduce record prices
Donald Trump, the president of the United States, is expected to sign an executive order on Monday to increase beef imports to the U.S. White House officials said that they would support the renewal of U.S. cattle herds in an effort to reduce beef prices. The official didn't provide any details about the two executive orders. They come at a moment when the U.S. herd is at its lowest point in 75 years, and beef prices are continuing to rise. The Wall Street Journal had reported earlier that Trump would suspend tariff-rate limits on beef. This would allow for more meat to be imported into the U.S. with lower tariffs. The 'newspaper' reported that Trump would instruct the Small Business Administration (SBA) to increase lending to ranchers, and reduce protections for gray and Mexican wolves - which prey on livestock. After Trump's meeting with Brazilian President Lula da Silva, U.S. cattle prices were impacted by expectations of increased beef imports. The Chicago Mercantile Exchange's June live cattle futures recovered from early losses and ended slightly higher on Monday. August feeder cattle fell 0.5%. While prices of eggs, milk and other grocery staples are down since Trump took office in January 2025 the price of beef continues to rise, a sign that inflation is still a problem for American consumers, as summer grilling season begins. Trump ordered in October last year a 'quadrupling' of beef imports to Argentina and removed his 40% punitive duty on Brazilian coffee and beef a month after. According to the Consumer Price Index of the Labor Department, beef prices were up 12.1% in April. Beef prices are more than 16 percent higher than they were when Trump took office in January 2025. HAMBURGER HELPER U.S. cattle numbers have dropped to their lowest level in 75 years after ranchers reduced their herds due to a drought that destroyed grazing land and increased feeding costs. High cattle prices have encouraged ranchers not to keep their livestock for breeding, but to sell them to be slaughtered. The U.S. Department of Agriculture projects that the country will be importing a record 5,8 billion pounds of meat this year. This is up about 6% compared to 2025, and 25% compared to 2024. David Anderson, an agricultural economist at Texas A&M University, explained that most imports are lean trimmings of beef which are then mixed with U.S. beef supplies to make ground beef. He said that more imports would help hamburger restaurants cut their costs. However, he didn't expect consumer prices to drop significantly. "We already imported a record-breaking amount. What is the additional amount to what we already import? Anderson said. "I find it hard to believe that this will have a major impact on prices." It's hard to imagine this being a massive influx of supplies. Bill Bullard of the cattle producers' group R-CALF USA said that increased imports could also?discourage American ranchers from increasing their herds. He said that smaller cattle feeders may 'even leave the industry' if prices fall far enough. Bullard stated that consumers may not benefit as ranchers are under pressure. "We have had record beef imports in the last three years, and yet consumers are still paying record prices," he said. David Lawder, Tom Polansek and David Lawder edited the article. Mark Porter and David Gregorio reported.
The US Supreme Court has cleared the way for Alabama Republicans and their new voting map
The Supreme Court of the United States cleared the way for Alabama Republicans on Monday to pursue a congressional vote map that is more favorable to their political party ahead of the November midterm elections. This is the latest result from the court’s landmark voting rights ruling. The Supreme Court overturned a lower court decision that blocked the state Republicans' preferred map for being racially biased and illegally diluting voting power among Black Alabamians. Politically conservative Southern states are expected to revert back to the previous map. This would reduce the number of districts in which Black voters make up a majority or near-majority from two to just one of the seven U.S. House district of the state. The Republicans could benefit from using the old map. The conservative majority of the nine-member court was responsible for this order. Three liberal justices dissented, suggesting that the lower court should reapply the judicial block on the Alabama Republicans' preferred maps. The Republican Party of President Donald Trump is fighting to keep control of both the House and the Senate in the midterms. Alabama is one of a number of Republican-led states which have sought to eliminate congressional districts with a majority of Black voters and increase their party's odds ahead of the midterm elections after the Supreme Court ruled that a key provision in the Voting Right Act was invalidated. Black voters are more likely to support Democratic candidates. In a landmark ruling on April 29, the court struck down a map of Louisiana's second U.S. Congress district with a majority of Black voters. The majority ruled that the new map relied too heavily upon race, violating the equal protection principle of the constitution. Alabama filed an emergency motion after the Supreme Court decision asking for permission to return to an old map that only had one district with a majority of Black voters. Alabama, where Black voters account for a quarter, was ordered by a lower-court to use a district map with two districts that are majority Black. Both are held by Black Democrats. The lower court ruled that a previous map intentionally discriminated against Blacks and unlawfully dilute their voting power. Alabama officials argued that the court-ordered Alabama map had constitutional flaws similar to Louisiana's.
Steve Marshall, Alabama's Republican Attorney-General, called the order of Monday a "major win at the U.S. Supreme Court" in a post on social media.
Marshall wrote: "For far too long, federal judges who are not elected have had more influence over Alabama's election than Alabama's electors." "That's over now."
Deuel ROSS, an attorney at the NAACP Legal Defense and Educational Fund, who represents a plaintiff group in the case, stated that his clients are "deeply dissatisfied" with the Supreme Court's decision to temporarily allow Alabama to use a map which is intentionally discriminatory.
Ross stated that "the court's ruling interferes with the ongoing election, and casts doubt on the validity of thousands of early votes." "We will explore all options to restore the court-ordered maps and protect the voting rights of the voters," Ross said.
DISSENT SUGGESTS LOWER COURT CAN AGAIN BLOCK NEW MAP
Sonia Sotomayor, a liberal Justice from the United States, argued in a dissent that the ruling of the lower court concerning Alabama's electoral map was more extensive than the Louisiana case and that it included findings of unconstitutional racism by deliberately diluting Black voters' votes in Alabama. Sotomayor, joined by two other liberal justices in a dissenting opinion, wrote that the?majority decision to overturn the lower court ruling was "inappropriate" and would cause confusion when Alabamians vote in elections scheduled to take place next week. She stated that the lower court was "free on remand" to determine whether Callais had any impact on its Fourteenth Amendment analyses or if their prior reasoning is unaffected. This was referring to Louisiana v. Callais, a decision of the court dated April 29, 2019. The court upheld a lower court decision in 2023 that the state's Republican drawn electoral map dilutes Black voters' powers, and violates the Voting Right Act. This 5-4 'ruling' was written by Chief Justice John Roberts and joined by Justice Brett Kavanaugh, a conservative Justice from the court and three liberal justices. Redistricting is a process that redraws the boundaries of the legislative districts in the United States to reflect the population changes measured by the 10 year national census. State legislatures typically redistrict once every decade. Republicans and Democrats are engaged in a multi-state redistricting battle that was ignited by Trump's unprecedented mid-decade initiative to redraw the maps of Republican-led state, starting with Texas.
(source: Reuters)