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Investors weigh down lower demand on US-Iran talks and the oil prices are little changed
After forecasters reduced their projections of global oil demand for 2026, the price of crude oil remained stable in volatile trading on Wednesday. Meanwhile, attacks on Middle East ships continued, and talks to end Iran's war reached an impasse. Brent futures fell 3 cents to $88.88 per barrel at 12:10 pm. ET (1610 GMT). U.S. West Texas Intermediate Crude rose?11 Cents, or 0.12%, to $83.31. In its monthly report on the oil market, the Organisation of the Petroleum Exporting Countries (OPEC) lowered its forecast for world oil demand growth to 580,000 barrels a day by 2026. The International Energy Agency, another rival forecaster, has lowered its demand projections for 2026 and expects to see a 1.6-million bpd decline this year. The Paris-based agency predicts a 4.3m bpd decline in supply for this year and a deficit of around 1.27m bpd by 2026. Anas Alhajji said in a recent note that the demand for energy has dropped significantly. He warned, however, the demand figures included inventory changes, and could therefore differ from actual consumption. The Energy Information Administration reported on Wednesday that U.S. crude oil stocks rose unexpectedly last week, and had their biggest weekly gain since the start of 2023. Analysts say the build in inventories last week is mainly due to unusually low crude exports, and an increase in imports. TWO SHIPS ATTACKED MIDDLE EST? Prices rose after a senior Iranian official said that there had been 'no discussion between the U.S. and Iran to extend the ceasefire agreement because the deal, according to Tehran, did not have a start date. On Tuesday, the U.S. reported that the Houthis of Yemen and Iran-aligned Houthis of Yemen had launched separate attacks against shipping in the Strait of Hormuz as well as the Bab el-Mandeb Strait. These are two vital export routes for Middle Eastern gas and oil in addition to the Suez Canal. The number of vessels that transited Hormuz on Tuesday fell to a low of just eight, a week-low. 125-140 vessels used to pass through this vital waterway every day before the war. (Additional reporting by Shadia Naralla, Robert Harvey Sam Li and Colleen Waye. Jan Harvey, Mark Potter, and Chris Reese edited the article.
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BofA will take 49.9% of Jio Credit in India for $1.9 billion
In a deal worth 182.68 billion rupees (about $1.92 billion), Bank of America will take up to 49.9% stake in Jio Financial Services' non-bank lending division. The U.S. lender is expanding its presence in India’s rapidly growing financial sector. Bank of America and Jio Credit announced on Wednesday a preferred allocation of equity shares, warrants, and other securities. BofA initially holds a stake of 26.5% in the transaction. This could increase to 49.9% if warrants are exercised. As part of this deal, Jio Credit will sell shares and warrants up to 66.13 Billion Rupees. BofA CEO Brian Moynihan stated that by combining Jio Financial Services’ scale, local expertise, and customer base with Bank of America's global presence,?digital experiences, and nearly 250 years of banking leadership, they can expand access to financial products and services, and support India's economic growth. A BofA spokesperson said that the deal is subject to approval by regulators and is not an expansion of retail banking in India. This is the latest large investment by foreign companies in India's Financial Services, following the investment of Japan's MUFG in Shriram Finance as well as the acquisition by Dubai-based bank Emirates NBD of a 60% stake at lender RBL Bank. Jio Credit is one of India's fastest growing NBFCs. Its assets under management reached $3 billion at the end of June, just two years after it began operations. Jio Financial is a listed company in 2023, after a demerger from Mukesh Ambani’s Reliance Industries. It operates businesses like digital lending, payment, insurance brokerage, and asset management services. Through its joint ventures with BlackRock, the company provides asset and wealth management services. The company has also formed a joint venture with Germany's Allianz for general and health insurance.
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Oil stocks rise globally, but US CPI remains stable
Oil prices fell on Wednesday as traders awaited the outcome of talks to end Iran's war. U.S. inflation data showed only a small increase, which dampened some expectations about a Federal Reserve rate hike. The U.S.-Iran talks were at a standstill. Both the United States and Yemen’s Iran-aligned Houthis have reported separate attacks on ships. Oil prices fell as investors took into account lower demand expectations. Data released on Wednesday showed that U.S. consumer price index increased by 0.1% in July. This was in line with the expectations. This small increase may weaken the case for a Federal Reserve interest rate hike next month. Money markets had a 50% chance that a rate hike would occur before the release of data. Robert Pavlik is a senior portfolio manager with Dakota Wealth, Fairfield, Connecticut. The data shattered rate-hike bets, and gold prices increased by more than 1%. Data did not reflect the recent increase in oil prices, which has risen amidst tensions between the U.S. The MSCI index of global stocks rose by 0.37%, to 1,154.92. Wall Street saw the Dow Jones Industrial Average rise 0.10% to 53.848.98. The S&P 500 rose 0.31% to 7.752.35 while the Nasdaq Composite gained 0.65% to 26,617.60. CoreWeave, a cloud-based AI company, released positive results after the markets closed on Tuesday. This gave a boost to the AI trade. The pan-continental STOXX 600 index fell 0.04% in Europe while the broad FTSEurofirst 300 Index lost 0.09%. The broadest MSCI index of Asia-Pacific stocks outside Japan, closed up by 0.92% to 1,636.51. Emerging Market Stocks rose by 1.05% to 1,682.95. Talks to End the War in Iran Continue The markets were still closely following the talks to end war and reopen Strait of Hormuz for shipping traffic. Both the U.S., and Yemen's Iran aligned Houthis, reported separate attacks against shipping on Tuesday. Iran and the U.S. both have increased their rhetoric over recent days. Iran's top security official stated on Tuesday that the Strait of Hormuz would remain "closed" unless the U.S. accepted Iran's demands. Investors have remained calm. Dorian Carrell is the head of Schroders' multi-asset income. We don't think the Strait of Hormuz will be at full capacity. This puts a floor under the oil prices and keeps an energy-driven inflationary force in the markets for?the short-to-medium-term. Brent crude futures fell by 0.26%, to $88.68 a barrel. U.S. crude dropped by 0.49%, to $82.79. The benchmarks for both Brent and U.S. crude oil settled higher by more than $1 on Tuesday. This was their highest closing since July 31. Markets anticipate a BOJ hike The yield on the benchmark 10-year notes of the United States fell 1.81 basis points to 4.666% and that on German benchmark Bunds of 10 years. The yield on benchmark 10-year U.S. notes dropped 1.81 basis points, to 4.666%. And the yield on German 10-year Bunds also fell 3.77 basis?points, to 3.139%. The markets are pricing in a rate hike early in Japan. This puts pressure on Japan's short-dated bonds. Investors have priced in a nearly 60% chance that the Bank of Japan will raise rates by a quarter point at its September meeting. The yen gained 0.11%, to 159.08 per dollar. This is still below the high of last week of 155.20. The dollar index (which measures the greenback versus a basket including the yen, the euro and others) fell by 0.08%, to 99.73. Meanwhile, the euro rose 0.1%, at $1.1552. Spot gold increased by 1.61%, to $4436.99 per ounce. (Reporting from Samuel Indyk and Rocky Swift in London, Chris Prentice and Sinead carew in New York; additional reporting by Sinead carew; editing by Edwina gibbs Stephen Coates and Barbara Lewis.
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India and Southern African Customs bloc renew trade pact discussions
India and the five members of the Southern African Customs Union signed terms-of-reference on Wednesday, to begin talks on a preferred trade agreement. New Delhi is seeking lower tariffs for exports such as cars, pharmaceuticals, and industrial machinery. After five rounds of talks that ended in 2010 without an agreement, the move brings back India's negotiations with SACU. SACU is made up of South Africa, Botswana Namibia, Lesotho, and Eswatini. The agreement could be India's first significant trade agreement with a regional African bloc. It would give Indian companies access to 65 million people in Africa while also helping SACU members increase their exports?to the fastest-growing major economies of the world. The scope, objectives, and procedures of the negotiations are determined by the terms of reference. A preferential trade agreement is different from a comprehensive?free trade agreement because it usually cuts duty on a list of agreed products and less likely to cover services, investments or intellectual property. South Africa is considering raising the duty on autos imported from India and China from 25% to 50%, which would threaten a major Indian export. After signing the agreement, Ndiitah Nghipondoka Roberti, executive director of Namibia's Ministry of International Relations and Trade with Yashvir Singh (an additional secretary in India's Trade Ministry), said that these terms would guide negotiators to a "balanced and mutually beneficial agreement oriented towards development." India's trade minister Piyush Goyal expressed his confidence that SACU and India will "benefit enormously" from an equitable, balanced, and fair agreement which he hopes to finalise within the next few months. Trade officials and industry representatives have said that India is expected to seek duty concessions on automobiles and auto components, pharmaceuticals, machines, electrical equipment, textiles, and chemicals. In the fiscal year ending March 2026, India's exports to SACU were $1.7 billion in value. India's exports totaled $7.5 billion to SACU in 2025/26. Imports were $9.2 billion. South Africa accounted for the majority of trade, with Indian exports totaling $7 billion and imports $9.2 billion. New Delhi also seeks to improve its access to SACU's supply of minerals that are critical for manufacturing, batteries, and clean energy technologies, such as manganese, platinum group metals, and copper. Manoj Kumar is the reporter. (Editing by Alison Williams, Mark Potter and Alison Williams)
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Hungary seeks to cool nuclear plant using Danube engineering
In a video posted on Facebook, Peter Magyar, the Prime Minister of Hungary said that the government would carry out engineering works?on the Danube River to raise water levels and ensure cooling for Paks Nuclear Plant. In recent weeks, the Danube fell to record lows amid a heatwave and a drought that lasted across Europe. The plant is now only operating at around 25% of capacity with only two out of eight turbines still running. The summer droughts have caused havoc on the European power industry, shipping and health care systems. Romania's neighbor, for instance, may shut down its final working?reactor Thursday due to the continued fall in levels of the Danube, despite attempts to divert cooling?water to?the plant. The engineering work that will be done in Hungary includes a "riverbed sill", which is a submerged dam-like structure, built across the bottom of a channel to regulate water flow. RAISING WATER LEVELS The military will help to start the construction of the sill immediately, using nearly 150,000 cubic metres of stone. This will cost approximately 6 billion forints (19 million dollars). Magyar stated that the river sill could raise the water levels by as much as 1 meter and ensure that within a few weeks, the plant will be back to full capacity. Magyar stated that "the prolonged low water level on the Danube is causing immense damage to the Hungarian budget and economy. This is why we need to find a?solution that can be implemented 'immediately. He also said that preparations were made for the possible sinking of two barges of 80 meters 'as a temporary measure, as the water levels will drop further within the next four to five day, leading to the shutdown of the nuclear power plant. Magyar stated that sinking the 'barges' could raise the water level by 20 centimeters within a short time period, allowing the facility to operate during the construction of the riverbed sill. On Friday, the government will decide whether or not to sink barges.
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Gold gains over 1% after US inflation data denies rate hike bets
Gold rose by more than 1% on Wednesday. This was supported by a softer dollar after the U.S. inflation rate matched expectations. It also boosted bets on whether or not the Federal Reserve would keep rates at current levels in September. Gold spot rose by 1.1%, to $4,416.29 an ounce, at 09:25 am EDT (1325 GMT), surpassing the 100-day moving median, which currently stands at $4,387.33. Bullion reached its highest level on Tuesday since June 5. U.S. Gold Futures rose 0.8% to $4 476.10. The Fed's argument to raise interest rates next month could be weakened by the slight increase in consumer inflation that occurred in the U.S. The rate of inflation in the United States increased by 0.1% last month, which was on par with expectations, after a drop of 0.4%. The CPI data is encouraging. "The CPI data has been encouraging." Dollar-priced gold is now more affordable to buyers abroad thanks to a 0.1% drop in the U.S. index. According to CME FedWatch, traders now price in a 38% probability of an interest rate increase at the Fed meeting on September, down from 46% prior to the inflation data. On July 29, the Fed left its benchmark policy rate at 3.50%-3.75 percent, despite three of the 12 voting policymakers dissenting in favor of a rate increase. Gold that does not yield tends to be less attractive in a higher interest rate environment. The Producer Price Index (PPI) is due Thursday. As the prospects of ending the Iran War appeared to be fading, both the U.S. as well as Yemen's Iran aligned Houthis launched separate attacks on shipping on Tuesday. Meir stated that a resumption in hostilities could cause oil to move back towards $100, and you might see rates rise. Gold may also struggle. Silver spot, among other metals, rose 1.9%, to $65.87 an ounce. It had earlier in the day reached its highest level since 22 June. Palladium rose 1.5% to $1380.75, while platinum increased 1.6% to $1772.51. (Reporting by Sukanya Mitra in Bengaluru; Editing by Leroy Leo)
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Global stocks hold gains after in-line US CPI
The?global stock market held onto its gains on Wednesday, after U.S. data on inflation came in as expected. Oil?prices also edged up after a senior Iranian official said that there had been no talks with Washington about extending the ceasefire. According to a survey of economists, the Consumer Price Index rose 0.1% in July after falling 0.4% in June. The annual CPI inflation rate slowed from 3.5% to 3.4% a month ago. Richard Carter, Head of Fixed Interest Research at Quilter-Cheviot, said that "the market should react positively to the latest inflation figures, given Kevin Warsh's unwillingness to provide much or any forward guidance." Following the data, traders stuck to their bets which narrowly favoured an interest rate halt at next month's meeting. Markets give about a 50% chance that the Fed keeps its policy rate within the current range of 3.50%-3.75 %. U.S. Stock Futures,?the S&P500 e-minis were up 0.4% and held onto gains following the data. Nasdaq's futures rose by 0.8% after CoreWeave, a cloud AI company, announced positive results following Tuesday's closing. The STOXX 600, which is the pan-European index, was up 0.2% in Europe. Frankfurt, Paris, and London's major stock indexes were all up between?0.1% and 0.4%. Stocks in Asia rose by?0.9%. The gains were led by the South Korean Kospi's 3.7% rise and a nearly 1% increase in Japanese and Taiwanese shares as chipmakers rose. Talks to End the Iran War Continue Markets are still watching negotiations to end Iran's war and open the Strait of Hormuz for shipping traffic. According to a senior Iranian source, there are no talks between Iran and the U.S. about extending their ceasefire, because from Tehran's point of view, the deal has no start date, and there is nothing to extend. The update came after attacks on ships in the Middle East Tuesday. Both Iran and the U.S. also have increased their rhetoric over the past few days. Investors are calm despite the lack of progress. Stocks around the world are close to records highs. "Our base-case for a very long time was a gradual, but messy deescalation," stated?Dorian Carrell. He is the head of Schroders'?multi-asset-income. We don't think the Strait of Hormuz will be at full capacity. This puts a floor under the oil prices and keeps the markets fueled by energy inflation in the short-to-medium-term. U.S. crude oil rose 0.7% to $83.71 per barrel while Brent rose 0.3% to $89.19 per barrel, both set to extend their five-day streak of positive performance. The benchmarks closed more than $1 higher Tuesday, their highest since July 31, and extended gains after?jumping 5% on Sunday. The?dollar index fell to 99.69. Both the euro and sterling?ticked-up after the U.S. Inflation data. The yen rose 0.3% to 158.81 dollars, but was still below the highs of last week of 155.20 following several suspected rounds. Spot gold increased by 1.4%, to $4,428 per ounce. Spot silver rose 2.9%, to $66.47 per ounce. Reporting by Samuel Indyk from London and Rocky Swift from Tokyo. Barbara Lewis and Mark Potter edited the article.
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Azerbaijani President says that his country can supply electricity to Armenia
Azerbaijan President Ilham Aliyev said that his country could provide 'electricity' to Armenia. He added that Yerevan would not be able to?extend?the?life?of the Metsamor nuclear plant, which is old and inefficient. The Armenian government has not yet commented on Aliyev’s proposal, or whether Yerevan will consider importing power?from Azerbaijan. After decades of conflict, Armenia and Azerbaijan are moving toward a 'normalisation of relations'. This opens the door to new transport and energy links. Armenia, which has been heavily reliant on energy from?Russia and Iran, is now reviewing proposals by U.S. companies, Russian, Chinese and South Korean firms to build a new reactor to replace the Soviet era Metsamor Nuclear Power Plant. Aliyev stated in an interview to 'Azerbaijani State Television' that Azerbaijani experts had conducted preliminary surveys on Armenian territory and identified possible locations for electric transmission pylons as part of a plan connecting Azerbaijan’s power grid with the Nakhchivan Exclave through 'Armenia. Aliyev stated that "Armenia's primary energy source today is a nuclear plant." "If the nuclear power plant is shut down, Armenia could be facing a major energy crisis," Aliyev said, adding that a second source of electricity was in Yerevan’s best interest. (Reporting and editing by Andrew Osborn)
Gold reaches a two-month high as US inflation data dampens bets on rate hikes
Gold rose more than 1% to a two-month high on Wednesday, supported by a weaker dollar following a U.S. reading of inflation that matched expectations. This boosted bets on the Federal Reserve keeping rates at current levels in September.
Gold spot rose by 1.1%, to $4,414.32 an ounce, at 11:50 am EDT (1550 GMT). It also climbed above its 100-day moving median, which currently stands at $4,387.28. Bullion scaled to its highest level since the 5th of June earlier in this session.
U.S. Gold Futures increased 0.7% to $4474.00.
The Fed's argument to raise interest rates next month could be weakened by the fact that U.S. consumer inflation rose slightly in July. The rate of inflation in the U.S. increased by 0.1% in July, which is on par with expectations, after falling 0.4% in June.
The CPI data was?encouraging. The CPI was higher this month than last, but in line with expectations, "along with the weaker dollar, and technicals that have all helped to piggyback gold on it", Marex analyst Edward Meir stated.
Dollar-priced gold is now more affordable to buyers abroad, thanks to a slight decline in the U.S. index.
According to the CME FedWatch Tool, traders now price in about 40% of an interest rate increase at the Fed meeting on September, down from the 46% they had before the inflation data.
On July 29, the Fed left the benchmark rate unchanged, ranging from 3.50% to 3.75 %, but three out of twelve policymakers who voted against it preferred a rate increase.
Gold that does not yield tends to be less attractive in a higher interest rate environment.
The Producer Price Index (PPI) is due Thursday.
As the prospects of ending the Iran War appeared to be fading, both the U.S. as well as Yemen's Iran aligned Houthis launched separate attacks on shipping on Tuesday.
Meir stated that a resumption in hostilities could cause oil to move back towards $100, and you might see rates rise. Gold may also struggle.
Silver spot rose 1.5%, to $65.64 an ounce. It had reached its highest level in June 22 during the previous session.
Palladium rose 1%, to $1373.58, and platinum gained 1.5%, to $1769.80. (Reporting by Sukanya Mitra in Bengaluru; Editing by Leroy Leo and Diti Pujara)
(source: Reuters)