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Europe steadies after fresh Middle East hostilities
The global?share, bond and oil markets stabilized on Thursday following the week's resumption of Middle East hostilities. Oil prices fell - for only the second time within six days - after the United States launched new overnight strikes against Iran to, they said, keep the Strait of Hormuz available to shipping. Donald Trump, who had warned that the ceasefire between the United States and Iran was "over", also quelled some of the more extreme fears, saying that, despite its breakdown, he didn't expect to see a return to full-blown war. Brent crude futures fell back below $77 per barrel in early London trade following a 9% increase in the last?days which briefly had them above $80. The pressure on borrowing costs around the world also eased. Benchmark 10-year U.S. Treasury Yields stabilized at 4.56%, after a rise of 10 basis points since Monday. Germany's Bund Yields in Europe fell 2 basis points to 3.16%. In Asia, however, Japan's 10-year bond yields reached a peak of 2.9% for the first time since 1996. Meanwhile, Australia's 10 year government bond yields hit a monthly high of 4.933%. Max Kettner, HSBC's Multi-Asset Strategy Chief, said that the bond markets were highly sensitive to Middle East tensions because of the possible implications for inflation and interest rates globally. He said that the market rates are really following the oil prices. "That was evident over the past few days." VOLATILITY OF TECHNOLOGY European shares moved modestly higher on the back of a rebound in tech and AI stocks following a couple of stumbling weeks for this high-flying industry. The pan-European STOXX 600 Index was up nearly half a percentage with tech stocks rising 1.3%, as Siltronic soared by more than 10%. The global sentiment was also boosted by a report that China may allow limited access to AI leader Nvidia’s H200 chip and indications that SK Hynix’s $28 billion U.S. IPO was more than 7 times oversubscribed. The South Korean chipmaker's offering, which will finance the construction of new factories to meet the surging demand for?AI chips, is expected to be the second largest share sale in the world after SpaceX SPCX.O's record-breaking $85.7 Billion IPO last week. Kettner, from HSBC, said that the "realised volatility" of South Korea's KOSPI was currently 75%. Comparatively, a 7 to 10 year?U.S. Treasury exchange-traded funds have historically had a volatility of about 3%. Imagine yourself as an institutional investor. Who could really purchase a class of assets with a 75% realized volatility? Kettner stated. HSBC has "underweighted" emerging market stocks following this week's surge in important markets such as Korea. MUTTED CURRENCY Markets Wall Street futures rose 0.2% to 0.6% ahead of the later resumption in trading. The currency markets were a bit muted. In the meantime, the dollar barely moved, the yen was stuck near a low of 40 years, and the euro and other European currencies were also not much changed. The first FOMC minutes under the new Federal Reserve chair Kevin Warsh on Wednesday, showed that there were growing concerns over inflation. According to CME FedWatch, the implied probability of a Fed rate hike this year has increased to about 87%. As oil prices fell, gold rose 0.8% to $4109 an ounce. Tim Waterer is the chief market analyst for KCM Trade. He said that traders are watching to see how Middle East tensions will develop. He said that oil prices are currently held back by the possibility of a de-escalatory move.
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Singapore's oil product stocks hover around 40 million barrels
Government data released on Thursday shows that oil product inventories in Singapore, Asia’s main trading hub, have barely changed from week to week. This is because declines in light distillates and residual fuels offset gains in middle distillates. Enterprise Singapore data shows that total onshore oil product stocks were hovering at 40.33 million barrels for the week ending July 8 compared to 40.45 millions barrels last week. Markets are anticipating an increase in inventories if exports to regions like Northeast Asia continue to rise, after a recovery of refining operations these past two months. China's outflows will also increase after Beijing lifted its restrictions on refined fuels exports until the end of July. A certain amount of uncertainty remains, however, regarding Middle East supplies due to the return of conflict in that region. MIDDLE DISTRILLATES BOUNCE BACKWARD Diesel and jet fuel inventories rose from?last weekend to a little more than one-month's high of 8,9 million barrels despite increased net exports. The majority of the imports came from India and the Middle East. Malaysia and Indonesia were the regional contributors. Exports increased by?more that 50%, but outflows into Australia were absent. The east-west spread has reached more than $100 per ton discount, and traders expect lower diesel swing barrels to be shipped to Singapore in July. LIGHT DISTILLATES RESIDUAL FUELS SLIPP FURTHER The residual fuel stockpiles fell to their lowest level in three weeks, falling 2.4% on a weekly basis to 19,18 million barrels (3.02 millions tons). The total fuel oil exports out of Singapore's onshore tanks rose 61.2% in a week to exceed 265,000 tons. Hong Kong, Vietnam, and China were key markets. The total imports of fuel oil also increased, increasing by 41.3%, to more than 907,000 tonnes during the same period. The arbitrage supply was replenished more than the week before, with Brazil & Nigeria as the leading origins of?imports. Singapore has also seen a surge in the import of fuel oil from Saudi Arabia. The total was 130,000 tonnes?in a single week. This is the highest amount since mid-March. The inventories of light distillate, which includes naphtha, gasoline and other products, have fallen to a new low in three weeks, falling to 12.245 millions barrels. This is because net gasoline exports?outpaced the imports. Strong outbound flows into regional markets like Malaysia, Indonesia, and Australia also drained stocks. The total gasoline exports in the past week were approximately 750,000 metric tonnes (6.34 millions barrels), far exceeding imports, which were roughly 179,000 tons. Malaysia took nearly 274,000 tons of it, Indonesia around?262,000, and Australia was at 63,000. The Naphtha inventories increased, as imports totaling about 219,000 tonnes (1.97 millions barrels) exceeded the exports by only a few thousand tons. Saudi Arabian imports were seen for the first since supplies had been dwindled by the war. Russian supplies amounted to 30,000 tonnes.
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HSBC reduces its gold price forecasts for 2026-2027 on the basis of a hawkish Fed.
HSBC reduced its average gold price predictions for 2026 - and 2027, citing a 'hawkish shift' in U.S. monetary expectations as well as a'stronger dollar. The bank has lowered its forecast for 2026 gold prices to $4,560 from $4,864 per ounce and for 2027 to $4,925, from $5,000. The bank said that gold prices could fluctuate between $3,800 to $4,700 in 2026, and then end the year at $4.750. Its 2027 forecast was $5,025. As of 0730 GMT spot gold was trading at $4,100, down more than 20% on the record $5594.82 set on January 29. The?Middle East Conflict stoked inflation concerns and led to a more hawkish shift by the Federal Reserve. HSBC stated that "changing perceptions of U.S. monetary policies?and their impact on the dollar?are among the main reasons for further gold liquidation, and the price declines." HSBC stated that central bank purchases have slowed down after driving gold's price rally in recent years. However, long-term diversification can still support prices. It added that the heavy outflows of exchange-traded funds seen in the first part may partially reverse in the second. HSBC stated that despite the reductions in forecasts, downside?risks may be?limited, as the market has already adjusted to a stronger dollar and higher rate environment. The bank claimed that many of the factors which supported gold prices before the Middle East conflict remained unchanged, such as concerns about fiscal deficits, economic insecurity and sovereign debt burdens. HSBC stated that the conflict "still has the power to?send?gold lower, but we don't believe Iran-related decreases alone would be lasting." (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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Gold recovers from a one-week low due to a softer dollar
Gold prices increased?on Friday, after hovering around a?near?one-week low earlier during the session. A weaker dollar offset pressure from renewed U.S. Iran hostilities, which prompted fears about inflation and longer-term interest rates. Spot gold rose 0.8% to $4,107.69 an ounce at 0737 GMT after falling to its lowest level since July 1, on Wednesday and Thursday. ?U.S. Gold futures for August were up by 0.9% to $4,117.30. On Wednesday, the U.S. Military said it had 'launched new strikes against Iran in order to keep the Strait of Hormuz opened to shipping. This triggered Iranian attacks on Kuwait and Bahrain as the latest escalation of efforts to derail the end of the war. Donald Trump, the U.S. president, said on Thursday that Iranian officials called him to seek a peace agreement with Washington. Dollar fell by 0.1% making greenback-priced gold more affordable to holders of other currencies. Kelvin Wong is a senior analyst at OANDA. He said that the dollar dropped a little because Trump had suggested the Iranians could make a deal with America. After yesterday's skirmishes, the temporary ceasefire between U.S.A. and Iran is still on shaky grounds, so it could change again. The CME FedWatch tool shows that the markets are pricing in a 65% probability of an increase in U.S. interest rates?in September. The Federal Reserve meeting last month was dominated by concerns about inflation. Officials followed the lead of Chair Kevin Warsh and issued a policy statement that was more bare-bones, despite fears that prices were 'expanding' and could require rate increases. Gold is often seen as a hedge against inflation, but high interest rates can weigh down on this non-yielding investment. Bank of America has lowered its average 2026 gold forecast by 14%, to $4,360 per ounce. The reason given was a "hawkish Fed". Palladium rose 2.5%, while platinum gained 2.2%, to $1.611.83. Spot silver also increased 1.5%, to $59.14 an ounce. (Reporting and editing by Subhranshu Sahu and Harikrishnan Nair in Bengaluru.
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Zambia's election will test Hichilema on his economic record
Zambia is preparing for an upcoming?election on August, where President Hakainde Hichilema has a good chance of winning a second term. However, opposition leader Brian Mundubile may be a strong challenger. The vote is shaping up to be a referendum on?Hichilema’s economic record, since he assumed office in 2021 and inherited a country that was reeling from an sovereign debt default. After restructuring its debts, Africa's second largest copper producer enjoyed an economic recovery supported by high copper price, but many people are still squeezed by their cost of living. The opposition will seek to exploit this. Zambia's annual inflation rate slowed in June to 6.5%, the lowest in eight years. This shows that Zambia is recovering from its debt crisis. However, many households are still struggling. Hichilema said to supporters in Lusaka, the capital of Zambia: "Most of our families need more support than we can provide today. But I want you all to know that we do hear you." CRITICS FLAG GROWING RESISTANCE The?64 year old businessman won in 2021 by a huge margin when he deposed the late former President Edgar Lungu. Mundubile is a 55 year old lawyer who was a member of the parliament when the election was announced. He has never been a candidate for president and he emerged as a last contender after an opposition that had fractured rallied around him. Hichilema denies the charges that he has suppressed political dissent and restricted campaigning in Zambia. Zambia's new cyber crime law was introduced in 2025. Civil society groups claim that the wording is vague and could cause people to be afraid of speaking up online. Hichilema signed into law constitutional amendments in December, which will expand the parliament. Critics say this could be a move that favours his party. In an interview Mundubile said that the police had disrupted opposition meetings. HICHILEMA TENDS TO ECONOMIC INDICATORS The Zambia Election Research Network conducted a survey late last year that found 51% of respondents were expecting a fair and free election. 55% also planned to vote Hichilema. "While the opposition began late to organise and mobilise, they shouldn't be dismissed," said Lee Habasonda a lecturer in political science at the University of Zambia. Hichilema has the advantage of being in power, which includes access to state resources, and aircraft. Opponents travel by road across a nation three times as large as the United Kingdom. His campaign is also backed by improved economic indicators. The International Monetary Fund predicts that Zambia's economy will grow by 4.3% from 3.8% last year. Foreign investment has also increased. Mundubile claims that the government's economic successes have not improved the lives of ordinary Zambians. How can you brag that you have $6.5 billion of foreign reserves while your people go hungry? He said this at a rally held last month. (Reporting and writing by Chris Mfula, Additional reporting and editing by Nellie Pettit; Editing and proofreading by Bate Felix & Michael Perry).
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Copper rebound, Middle East conflict escalates no longer a concern
The dollar, which had recently surged, was stabled and copper rebounded on Thursday as the market looked beyond the escalation of Gulf hostilities. Benchmark three-month copper on the London Metal Exchange was up 1.62% to $13,379 per metric ton at 0700 GMT. The Shanghai Futures Exchange's most traded copper contract rose 0.16%, to 103.160 yuan (15,182.65) per ton. This was a slight improvement from the earlier drop of 1.32%. Although the copper market is still watching Middle East conflict developments closely, investors have "tended to price in an expectation that any escalated tensions will be brief and a solution?will be found," according to Craig Lang, CRU's principal analyst. Copperfell fell on Wednesday due to demand concerns, after U.S. president?Donald Trump declared that the Gulf?conflict had been "ended" and both countries exchanged attacks. Everbright Futures, a Chinese broker, said that the resurgence in Middle East conflict led to short-term trades based on interest rates and inflation logic. Industrial?metals are still concerned about inflation and interest rates. Input costs have increased, including energy, which has impacted manufacturers and cast a shadow on industrial metal prospects. Data released on Thursday showed that Chinese producer inflation reached a four-year peak in June. Aluminium?was a firm metal in other places. On the LME, the metal's price was up by 0.62%. Aluminum has been supported by declining inventories and concern about disruptions in the Middle East's supply. Zinc grew 1.85% on the LME, while lead gained 0.61 %, nickel gained 1.21%, and tin climbed 2.57%. Otherwhere,?on SHFE only down 0.04%. Zinc added 0.4%. Lead added 0.47%. Nickel gained 1.22%. Tin gained 0.99%.
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Iron ore is confined to a limited range as fears of a possible supply disruption offset weakened demand
Iron ore prices remained 'range-bound' on Thursday as investors weighed a potential'supply risk stemming from a threat of strike by some workers at BHP’s iron ore operation versus a seasonally weakened demand in China, the top consumer. The day's most traded iron ore contract at China's Dalian Commodity Exchange closed 0.27% higher, closing the daytime trade at 745.5 Yuan ($109.72). As of 0800 GMT, the benchmark August iron ore traded on Singapore Exchange was down?0.13% to $98.9 per ton. BHP's iron ore mines in Western Australia, Port Hedland, could see hundreds of workers walk off their jobs next week. This would be the largest industrial action in the past decade. This has led to concerns from traders and steelmakers about a possible supply disruption at the world's largest bulk port. Analysts also expected that the supply from major manufacturers would decline as the rush to ship to meet quarterly targets ended. Some mills began equipment maintenance due to a seasonal decline in steel demand. This led to a reduction in steel production and reduced feedstock demand. China's daily crude-steel output fell by?3,6% in the 10 days following the previous 10-day period to 2,66 million?tons. The prices of coke and other steelmaking materials, such as coking coal, have not changed much. This is despite the fact that energy prices are rising due to renewed supply concerns after the United States launched its latest strikes against Iran. The benchmarks for steel on the Shanghai Futures Exchange were mixed. Rebar rose 0.1%, while hot-rolled coil edged up by 0.12%. Wire rod fell 0.51%. Stainless steel dropped 1.34%.
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Sources say that Indian BPCL, and Japan's Taiyo Oil purchase US crude through tenders.
According to sources in the trading world, India's Bharat Oil Corp and Japan's Taiyo Oil purchased 'crude' from the United States this week, as refiners sought to diversify their supplies amid the Middle East conflict. Four sources claim that BPCL purchased West Texas Intermediate crude oil from Vitol. The refiner has booked an Aframax Tanker that can?carry up to 600,000.0 barrels of crude oil, according to two of the witnesses. They added that the oil was purchased at a price premium of?around 6 per barrel over dated Brent. A separate trader reported that Taiyo Oil purchased 2 million barrels for delivery early in October at a price premium of about $6 per barrel over ICE Brent. Companies do not normally comment on commercial issues. Asian refiners?reduced their purchases?of U.S. oil following the U.S. Iran ceasefire agreement. Supply risks have increased this week after fresh attacks by both sides, and Donald Trump's announcement on Wednesday that he believes the ceasefire agreement is "over".
Copper prices rise on hopes of a Gulf deescalation and softer dollars
The dollar dropped after its recent surge, and copper rebounded as the market hoped that hostilities would be de-escalated in the Gulf.
As of 0920 GMT, the benchmark three-month copper price?on London Metal Exchange?was?up 2.1% to $13,437 per metric ton. Metal prices fell 1.5% Wednesday after U.S. president Donald Trump announced that the Gulf Conflict was over.
Trump said that Tehran "wants to make a deal" so badly and that he didn't expect a full-blown war even though the two countries were exchanging attacks.
Tom Price, Panmure Liberum's analyst, said that the bounce could only be attributed to Trump making his claim. Who knows if it is true, but the market will always buy any sort of pitch for peace by Trump. If you are into short-term trading then this is a great opportunity.
Copper stocks in LME warehouses
Cash?aluminium contracts were meanwhile commanding an a little premium
Aluminum climbed 1.2% to $3,169 per ton after dropping?below the pre-war level? at the end of last week. LME aluminium stocks
Industrial metals ?prices were higher across the board, spurred by a dip ?in the dollar, making greenback-denominated metals more affordable for holders of other currencies, and concerns over inflation due ?to higher fuel prices.
Zinc rose 2.5% to $3,605.50 - its highest level since June 22, while nickel climbed 1.4% to $15,565, tin increased 2.2% to $53,175, and lead grew 0.4% to $ 1,898.50. (Reporting and additional reporting by Solomon Cefai, Singapore; Editing Ronojojo Mazumdar and Leroy Leo).
(source: Reuters)