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FOREX Dollar gains as investors monitor US-Iran discussions; yen nears a 40-year-low
Dollar remained firm as investors grew optimistic about a possible deal after the first round U.S. Iran talks. The yen remained near a 40-year-low and the pound slipped when UK Prime Minister Keir starmer announced he would resign. Qatar and Pakistan, who act as mediators between the U.S.A. and Iran, said that the two countries had agreed on a roadmap to reach a final agreement to end the conflict in 60 days. Investors were worried about the threats of U.S. president Donald Trump to restart war in the Middle East. They also fretted over the announcement by Tehran that it has closed the Strait of Hormuz. Brent crude futures are now trading at $79.1 per barrel, a drop of nearly 2%. Chris Weston is the head of research for Pepperstone. He said: "The physical markets remain tight, and this should provide some support. But flows in FX, commodities and energy will continue to be heavily affected by developments in that complex." The pound fell 0.1% to $1.322, which is not far from the 'lows' for the day, after Labour leader Starmer announced he would step down. This could allow Andy Burnham, a rival of Starmer's, to become the seventh Prime Minister in 10 years since the Brexit vote. Lee Hardman, senior currency analyst at MUFG, said: "At this moment, Andy Burnham seems to be the frontrunner. He has reassured the gilt market he would adhere to fiscal rules and there have been reports that he is working with respected economists." This will help to limit the risks of the pound or gilts falling in value over the short term. The Yen is nearing a 40-year low The Japanese yen was struggling around 161.73 per dollar last week, barely above the two-year low. If the yen falls below 161,96, it will be at its lowest level since 1986. Satsuki Katayama, the Japanese Finance Minister, said on Monday that his authorities are ready to react appropriately at any moment to currency movements. Matt Simpson, a senior market analyst with StoneX, said that the MOF might be rubbing their necks as they watch USD/JPY soar to a 2024 high. "Yet, they may feel powerless to act against it - as intervening in the face of a hawkish Fed or strong U.S. Fundamentals could prove futile and costly." The yen is losing gains after a round interventions on April 30 when Tokyo spent an unprecedented 11.7 trillion yen (72.44 billion dollars). This was due to a Federal Reserve hawkish tilt that led traders to increase bets for rate increases in this year. CIBC's head of G10 currency strategies?Jeremy Stretch stated that even if the BOJ raised rates more quickly, traders see the Fed likely to increase U.S. interest rates at least one time this year. This means the dollar will likely remain strong. He said: "The rate spreads remain unfavorable, and in a world of U.S.exceptionalism, the path of least-resistance, excluding any intervention risks, would be to see dollar/yen trade higher." Investors have increased their bullish dollar position in the last week. The 'Commodity Futures trading Commission data shows that speculators have made the largest bet in 16 months on the dollar rising, valued at nearly $30 billion. The dollar index (which tracks the U.S. Dollar against six other currencies) was around 101, its highest level in a year. The index has risen nearly 3% in the past year, largely due to expectations that interest rates would remain high for longer. (Alun John, London; Ankur Banerjee, Singapore; Muralikumar Anantharaman; Himani Sarkar and Aidan Lewis; William Maclean and Aidan Lewis)
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Oil prices fall as traders consider fragile Iran peace talks
European stocks and U.S. Futures dropped slightly, while oil prices dipped Monday. This was after Iranian negotiators announced that 'progress' had been made with peace talks between the United States and Iran. This helped calm fears about the fragile process of ending the Iran War. After Prime Minister Sir Keir announced his resignation, UK assets remained steady. This paved the way for a seventh leader in ten years. Iran war talks were overshadowed earlier by Tehran's announcement that it had once again closed the Strait of Hormuz. Shipping had slowed down after U.S. Central Command reported 55 vessels had passed on Saturday. This prompted U.S. president Donald Trump to make threats of new?attacks. Officials from Qatar and Pakistan issued a joint statement stating that the first round of talks was concluded, and progress had been made in developing a roadmap for?reaching a final agreement within 60 days. Brent crude futures, which had been gaining ground in the early stages of discussions, have now fallen 0.7% to $80.07 per barrel. This is a far cry from its peak in May at $126.41. The STOXX 600 index in Europe slid and ended the day down by 0.1%. U.S. S&P futures also traded 0.1% lower. Susannah Streeter is the chief investment strategist for Wealth Club. She said that there appears to be progress being made during talks in Switzerland toward a lasting resolution, and oil prices are down again. It is obvious that there is a long way to go and new obstacles could arise before a lasting deal is signed. The apparent progress of the peace talks boosted Asian stocks overnight. Japan's Nikkei gained 1.6% while South Korea's hot market rose 0.7% after surging 11% last Friday on demand for semiconductors. UK OUTLOOK STARMER RESIGNATION CLOUDS The pound fell 0.1% on Monday to $1.322 after Starmer announced that he was resigning, as had been widely reported over the weekend. Andy Burnham, the former Manchester mayor, is expected to succeed Starmer. Analysts said that a key issue for nervous UK bond markets will be who will become finance minister. Nick Rees of Monex Europe, the head of macro-research, said that a new leader would not change fundamentally the fiscal situation that they will inherit. It's what happened to Starmer and we have yet to see a credible plan on how to?deal with this." The euro fell?0.1%, to $1.146 after reaching a low of $1.1418 on Friday. Treasuries remain under pressure after a hawkish shift by the Federal Reserve, which led to markets pricing in a 75% probability?of an early rate hike. Futures suggest that the Fed will tighten by 38 basis points before year's end, and yields on 2-year bills have risen as much as four basis points since early 2025 to reach a high of 4.230%. Fabio Bassi is the head of JPMorgan's cross-asset strategy. He said: "Our baseline is patience, and we believe that the margin for error is small, and there is a limited tolerance for inflation. There are genuine risks for earlier hikes." The Fed's hawkish view helped push the dollar 0.3% higher to 161.71yen. Only the threat of Japanese interference prevented the currency from reaching its 40-year high 161.96 in 2024. (Reporting from Sydney by Wayne Cole and Harry Robertson; Editing by Shri Navaratnam Kate Mayberry Aidan Lewis).
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Oil prices fall as traders consider fragile Iran peace talks
After Iranian negotiators announced that 'progress was made in peace negotiations with the United States, this helped calm fears about the fragile process of ending the Iran War. Qatari and Pakistani officials also released a joint statement announcing that the first round of talks was over and that progress had been made in a roadmap for a final agreement to be reached within 60 days. The talks were overshadowed earlier by Tehran's announcement that it had once again closed the Strait of Hormuz. Shipping had slowed down after U.S. Central Command?said 55 ships passed on Saturday. This prompted U.S. president Donald Trumpto threat fresh attacks. Brent crude futures retreated from their early gains to drop 0.7%, or $80.07 per barrel. This is far below the peak reached in May of $126.41. The STOXX 600 index in Europe slid and ended the day down 0.1%. U.S. S&P futures also traded 0.1% lower. Susannah Streeter is the chief investment strategist for Wealth Club. She said that there appears to be progress in talks taking place in Switzerland toward a lasting solution. Oil prices are also down again. It is obvious that there is a lot of work to be done, and more obstacles could arise before a lasting deal is signed. The apparent progress of the peace talks boosted Asian stocks overnight. Japan's Nikkei gained 1.6% while South Korea's hot market rose 0.7% after a surge of more than 11% on demand for semiconductors stocks last week. MARKET NARROWS ODDS ON FED HIKE Treasuries remain under pressure after a hawkish shift by the Federal Reserve in recent weeks, which led markets to price a 75% probability of a rate increase as early as September. Futures suggest a 38 basis point tightening by year's end, and yields on 2-year bonds rose to their highest level since early 2025. Fabio 'Bassi, JPMorgan's head of cross-assets strategy, said: "Our baseline is patience and a first rate hike in the second quarter of 2027. However, we believe that the margin of error and tolerance for inflation are limited and there is a genuine risk of earlier hikes." The Fed's hawkish view helped to push the dollar up by 0.3%, reaching 161.77 yen. Only the threat of Japanese interference prevented the currency from rising?to its 40-year high 161.96 in 2024. Sterling fell 0.37% to $1.319 as a result of rising dollar and political uncertainty. According to reports, Keir starmer is evaluating his future as a politician after Andy Burnham's resounding victory in the recent election to parliament led more Labour Party ministers to call for him to step down. Skye Masters is the head of NAB's market research. She said that "Gilts are likely to remain under pressure this week due to the uncertainty surrounding a possible challenge against the UK Prime Minister and what it means for the fiscal outlook." The euro fell 0.3% to $1.144 after hitting a low of $1.1418 on Friday, a three-month high. (Reporting from Sydney by Wayne Cole and Harry Robertson; editing by Shri Navaratnam, Kate Mayberry and Kate Mayberry).
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Cargill plans to sell all metals units by August, according to sources
Four?sources? with knowledge of the situation said that Cargill aims to sell its iron ore and trading business by late July?or early august, as it refocuses its operations on food and agriculture. According to Cargill, the Singapore-based company is a large one, with a trading volume of 60 to 70 millions metric tons of iron ore per year and up to 4 million tons steel. This makes it a target for companies that are looking to expand their physical trading. Sources say that the original deadline for the sale was late May, which is the end of Cargill’s financial year. However, this has been extended because talks with multiple potential buyers continue. One of the four and a fifth source with knowledge of this matter said that Gunvor, a fellow trading house, is also in the conversation. This was confirmed by the Australian investment bank, Macquarie Group, which exclusively reported on the story in early June. It is not possible to determine the price of a potential sale immediately. All sources requested anonymity because they were not authorized to speak with the media. Macquarie and Gunvor refused to comment. Cargill has not responded to a request for comment. Cargill's metals division, based in?Singapore has 130 employees according to its website. Cargill sold their 'petroleum' business in 2017, which included crude oil and oil products to the Australian investment bank. Reporting by Amy Lv and Pratima Deai; Additional reporting by Lewis Jackson, May Angel and Muralikumar Aantharaman.
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US-Iran negotiations make "encouraging advances" but tensions remain
Mediators said that U.S. officials and Iranian officials had made "encouraging progress" during a first round of discussions in Switzerland, which ended early Monday morning, despite the tensions over Lebanon and Strait of Hormuz. Mediators Pakistan and Qatar said the parties agreed on a roadmap to a final deal to end their war within 60 days. This was despite the initial tension as 'Tehran' again closed the Strait of Hormuz and U.S. president Donald Trump threatened to restart attacks against Iran. The two sides said they had agreed on a mechanism that would end the fighting between U.S.-ally Israel and Hezbollah militants who are aligned with Iran in Lebanon. They also opened a communication line to ensure the safe passage of commercial ships through this strait. This strait is a vital route for the global supply of oil and liquefied gas. The joint statement stated that technical talks will continue in Buergenstock (a Swiss mountain resort owned by Qatar) for the remainder of the week. Abbas Araqchi, Iranian Foreign Ministry, posted a message on social media stating that Tehran had obtained waivers for petrochemical and oil exports. He also stated that some assets were released and a plan for reconstruction and development for Iran was launched. After the U.S. signed an interim agreement with Iran last week, oil prices dropped to levels not seen since the 'war' began on February 28, when the U.S., Israel and Iran attacked Iran. After Monday's statement, oil prices continued to fall as concerns about a global supply shortage eased. Brent crude, the global benchmark crude oil, was trading at just under $80 per barrel by 0815 GMT. SEPARATE ACCOUNTS?TALKS JD Vance, the U.S. vice president, began discussions with Iranian officials Sunday in accordance with the memorandum reached last week. The aim was to extend the tenuous ceasefire that started in April for another 60 days. Discussions continued into the early morning hours of Monday. Fox News reported on Sunday that Trump told Iranian officials, "you won't be a country," if they attempted to close the Strait again. Fox News reported that Trump had also reiterated his earlier threat to take over the waterway, and perhaps charge its own toll. Separate accounts were provided by U.S. sources and Iranians of the discussions that took place in Switzerland. According to an informed source cited by Iran's semiofficial Tasnim News Agency, after Trump's threat became public, the Iranian delegaion refused to return to where the talks took place, even though messages were exchanged via the mediators. According to Tasnim, Iranians stated that in order to begin negotiations on nuclear issues, other MOU provisions would have to be fulfilled, such as the release of assets frozen and the U.S. waivers allowing Iran oil exports. A U.S. diplomatic participant in the talks said, "The Iranians have never left. They are still meeting and negotiating late into the night." "We have discussed the Strait of Hormuz, Lebanon, the nuclear issue, and the details of implementing MOU among other topics." The agreement calls on reopening of the Strait of Hormuz, and an end to all hostilities. This includes in Lebanon where Israel continues its strikes while Hezbollah targets Israelis. Iran claims that the U.S. failed to meet its commitment to end the war in Lebanon. The weekend statement said that the maritime traffic had been stopped through the strait, and the talks on Sunday would not include substantive issues like its nuclear program. In the presence of mediators, Vance played down the impact of violence in Lebanon. In the presence of mediators and U.S. He said, "These things always seem a little messy." Vance said to reporters that Trump "asked us turn over a fresh leaf in order to transform our relationship to the people of Iran." The U.S. diplomat said that discussions included "clarifying the Iran's confusing messages on the Strait, and building deconfliction mechanism to ensure the Strait remains?fully open. A second container ship arrived at the Shahid Rajaee Port in Bandar Abbas, Iran on Monday and started loading its cargo. This was announced by the director general of Hormozgan Ports and Maritime Organisation. IRAN CITES LEBANON FOR REASON TO CLOSED STRAIT There has been little sign of an end of the fighting in Lebanon despite Friday's announcement of a ceasefire. Iran announced on Saturday that it had again closed the strait as a consequence. Data from analytics firm Kpler showed that only five vessels had passed through the strait a day before, a dramatic drop from 26 ships seen a day prior. Data may not include vessels that turn off their transponders when travelling through the Gulf. By nightfall, there were no major reports of violence in Lebanon. Isaac Herzog, the Israeli president, said that Israel is not against a diplomatic solution to the Iran War. However any agreement reached must guarantee that Tehran will not be able to use the funds it receives in the deal to fund regional proxies or military purposes. (Reporting and writing by the bureaus, Stephen Coates and Ann Saphir; editing by Sergio Non & Timothy Heritage).
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ADNOC sold at least 18,000,000 barrels of oil in the third tender, traders claim
Sources in the trade said that Abu Dhabi National Oil Company sold "at least 18,000,000 barrels" of crude oil from United Arab Emirates during its third spot tender this month. ADNOC has sold at least 48,000,000 barrels of crude oil in June, according to calculations. ADNOC is also offering more volumes in a 4th?tender due to close this week. Kpler data showed that the UAE exported 101.4 million barrels of oil in January, and 95.2 millions in February before the U.S. - Iran war blocked the Strait of Hormuz. Two trade sources reported that an Indian refiner bought 2 million barrels for STS (ship-to-ship) delivery of 'Das crude' off Sohar in Oman between July 21-31. The cargo was sold with a $1 premium per barrel over Dubai prices. PetroChina bought 4 million barrels, while Zhenhua Oil and Sinochem each purchased 2 million barrels. Sources said that Inpex, a Japanese trading house, bought 2,000,000 barrels Upper Zakum while Mercuria, Shell and Japan's Inpex each purchased 2,000,000 barrels. The cargoes was for June-August loading. ADNOC offers cargoes on various delivery terms including STS transfers outside the strait. This allows buyers to secure supplies while reducing transit risks through the waterway. Companies?typically don't comment on commercial sales. Reporting by Florence Tan in Singapore, Siyi in New Delhi and Nidhh Verma in New Delhi. Editing by Sonia Cheema.
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China Coking coal continues to lose money despite rising supply
The prices of China's coal futures continued to decline on Monday. This was due to the prospect of a rising supply following the resumption of production in coal-rich Shanxi, as well as from increasing imports. The Dalian Commodity Exchange's (DCE) most traded coking coal contract closed the daytime trading 1.39% lower, at $188.20 per metric ton. This is approximately 14% lower than the 1,486.5 Yuan that was reached on June 8th, the highest level since Oct 2024. The most active DCE contract dropped 0.49%, to 2,015.5?yuan per ton. According to a survey conducted by the consultancy Mysteel, as of June 17, 63% of coal mining operations that were suspended after a fatal mine accident occurred in late May had resumed production. Customs data also showed that China's coking coal imports in May grew 51% compared to the previous year, while year-to date imports increased 25%. China's coking coal imports are expected to increase this year, according to traders. Analysts at Galaxy Futures wrote in a report that the recent slump in the price of 'coking coal' was not due to a change in fundamentals but rather a shift in traders' focus from fears of a supply shortage to a resumption of production. They added that "uncertainties continue to cloud the pace of production resumption for other mines and it will be difficult to recover output to pre-accident levels." Iron ore prices fell on Monday, falling to a more than three-month high. This was due to the continued accumulation of?portside stocks. The DCE?ore contract, the most traded contract in China, fell 0.87% to 739.50 yuan per ton. The contract hit its lowest since February 24, at?739 Yuan, earlier in the session. As of 0809 GMT, the benchmark July iron ore on the Singapore Exchange had fallen 0.24% to $98.4 per ton after hitting its lowest price since March 4, at $98.15. The Shanghai Futures Exchange's steel benchmarks were mixed. Rebar fell 0.22% while hot-rolled coils lost 0.39%. Stainless steel gained 0.6%, and wire rod increased 0.74%.
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LME copper prices tick up after tensions in the Middle East end
The London Metal Exchange saw a rise in copper?prices on Monday as the market digested the weekend's tense U.S. Iran?peace talks. Benchmark three-month Copper?on LME gained 0.71% to $13,692?a metric tonne by 0700 GMT. The Shanghai Futures Exchange's most traded copper contract fell by 0.08%, to 104 890 yuan per ton ($15 476.21). After the peace talks between the U.S.A. and Iran, traders closely monitored the macroeconomic climate. David Wilson, BNP Paribas' head of metals strategy, stated that the market was just waiting and watching to see what would happen. Mediators confirmed that the first round of high level peace talks ended on Monday. Donald Trump, the U.S. president, threatened to restart attacks while Tehran announced that it had again closed the Strait of Hormuz over the weekend. The conflict has affected the?base metal market, dampening the risk appetite and increasing energy prices. This has dimmed growth expectations. Wilson stated that "LME copper is moving based on expectations of rate and inflation on the one hand and a Gulf Peace dividend on another." Markets are also awaiting a report and recommendations from U.S. Secretary of Commerce Howard Lutnick? on possible copper tariffs. This is due at the end of June. Metals from Europe and Asia have been shipped to the United States due to tariff concerns. Metals from Europe and Asia are being shipped to the?U.S. Copper stocks at?LME registered warehouses decreased on Friday Exchange data revealed that?fell another 3,575 tons to 352150 tons. The number of cancelled warrants, which indicate metal that is destined for withdrawal, reached 37%. The SHFE reported on Thursday that copper inventories in warehouses monitored by the exchange fell 23.6% during the past week. Aluminium gained 0.62% on the LME, while zinc rose by?0.48%. Lead rose 0.1%, nickel rose 1.65%, and tin increased by?3.08%. The SHFE showed that aluminium rose by 0.92%. Zinc fell by 0.32%. Lead dropped 0.49%. Nickel slipped 0.09%. Tin gained 0.67%. $1 = 6.7775 Chinese Yuan (Reporting and editing by Mrigank Dahniwala, Subhranshu Saghu).
Gold recovers from a one-week low after Iran mentions progress in peace negotiations
Gold recovered from a lower level than a week ago on Monday as oil prices dropped after Iran said that peace talks between the United States and Iran had progressed. However, bets on higher interest rates following hawkish Federal Reserve signals weighed down the precious metal's prospects.
As of 0800 GMT spot gold was up 0.7% to $4,189.69 an ounce after falling to its lowest since June 11, on Friday. U.S. Gold Futures for August Delivery fell by 0.9% to $4207.70.
According to Press TV, the first round of high-level talks between U.S. officials and Iranian officials ended in Switzerland on Monday. A spokesperson for the Iranian Foreign Ministry said that good progress had been made.
In a joint statement, the?mediating countries Qatar and Pakistan stated that the U.S. agreed to a roadmap?towards a final agreement within?60days.
Edward Meir is an analyst with Marex. He said, "The current Swiss situation has changed dramatically from just a few hours earlier when both sides were fighting. But now, it appears they are making progress."
"We will continue to trade on geopolitical principles for a while, but since the situation is fluid it is probably best to stay out of the fray for the time being."
Brent crude futures dropped more than 1% following the announcement.
Oil prices are rising, which is causing inflation concerns and a rise in interest rates. When interest rates are high, gold tends to lose its appeal as it doesn't yield any interest.
Investors have concluded that a rate increase is imminent because Fed Chair Kevin Warsh has focused on inflation without nuance. Nine out of 19 Fed policymakers think they'll need to increase the policy rate in this year.
According to the CME FedWatch Tool, traders now see an 89% probability of a rate increase in December. This is up from 61% prior to?the Fed meeting.
Silver spot rose by 2%, to $66.18 an ounce. Platinum gained 0.4%, to $1670.74, while palladium climbed 1%, to $1270.41. (Reporting and editing by Rashmi, Sonia Cheema, and Harikrishnan Nair in Bengaluru)
(source: Reuters)