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Oil wobbles as shares drift ahead of Nvidia earnings
After the U.S.'s "economic D-Day", sanctions against Iran, turned out to not be as severe as they had feared. U.S. Treasury rates are down from their recent highs after a report stating that the Treasury Department may tap into its cash account to fund increased debt buybacks. This could reduce the requirement for additional short-term bill sales. Investors are well aware of the high expectations that Nvidia will have to meet. Analysts expect quarterly revenues to nearly double, to $92 billion. Full-year earnings are expected to range between $103 billion and $105 billion. "Those are high expectations that must be met," said Fabien Yp, a IG market analyst. "Judging by Nvidia's past performance, it won't be shocking if they achieve the headline figures, but the bigger piece is that people are trying understand if there are any concerns about the circular deals driving its 'growth' and a sustainable growth percentage in the coming quarters." MSCI's broadest Asia-Pacific share index outside Japan fell 0.1%. Japan's Nikkei recovered from early losses and traded 0.3% higher, while South Korea's Kospi dropped 0.2%. China's CSI300 blue chip index fell 0.2% while Hong Kong Hang Seng Index was down by 0.3%. Alibaba's $10.2 billion share offering at a steeply discounted price to fund its AI ambitions, as well as Samsung Electronics' disappointing shareholder-return program, were two factors that weighed on the tech sentiment. Nasdaq Futures rose 0.36%, while S&P500 Futures gained 0.1%. EUROSTOXX Futures declined by 0.2%, FTSE Futures remained flat, and DAX Futures gained 0.13%. SANCTIONS AND THE FED The Trump administration issued a warning on Monday to countries that they must cut off their business with Iran, or else face secondary sanctions. This was part of an "economic D-Day" which the Trump administration referred to. However, the Treasury Department did not impose any sanctions. Brent crude futures were down 0.04% at $92.13 per barrel on Tuesday. U.S. crude climbed 0.1% to $85.08 per barrel, both measures falling more than 2% the previous session. Iran has promised to retaliate for the increased U.S. sanction and expressed confidence in major trading partners' ability to resist Washington’s pressure campaign. Joseph Capurso is a strategist with Commonwealth Bank of Australia. He said: "We don't expect China, Iran's biggest trade partner, to bow to U.S. demands to stop commerce with Iran." The U.S. campaign against Iran threatens the trade truce that the U.S. has with China before the next leaders' meeting. The threat of being cut off from the dollar-based system has stoked rumours about some countries and their banks needing to buy dollars as a precaution, lending support?to the greenback. The U.S. Dollar extended gains against its Canadian counterpart, and stood last at C$1.3860 following a gain of more than 0.5% the previous session. Donald Trump, the U.S. president, threatened on Monday to increase U.S. tariffs to 50% on all Canadian cars, trucks, and auto?parts starting January 1. This escalated a trade war after negotiations broke down last week. The euro fell 0.08% to $1.1656, and sterling slipped 0.04% at $1.3624. Investors will be watching the Federal Reserve Chair Kevin Warsh’s speech on Friday in Jackson Hole Wyoming. They are hoping to get some clarity about U.S. Interest Rates. Standard Chartered analysts stated that "Fiscal Uncertainty?is not likely to fade anytime soon... but there is still scope for the Warsh-led Fed?to ease some monetary uncertainty by clarifying their?reaction functions - namely, how long they are willing to hold rates to see inflation reach its 2% goal." All eyes will be on the Jackson Hole address by Chair Warsh for a sign, if no other guidance. Spot gold fell 0.3% to $4,635.89 per ounce. Bitcoin crossed the $80,000 mark for the first since mid-May. It last traded at $81,506.75, 2% higher.
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Fortescue suspends senior executive under sexual harassment probe
Fortescue is Australia's third largest miner. On Tuesday, it announced that a senior executive was suspended while he was under investigation for allegations of sexual harassment. Fortescue took the allegations "extremely serious" and hired MinterEllison as an investigator, it said in a last-week statement. Australian Financial Review first reported the allegations against the senior executive, who has not been named, earlier this month. The miner stated on Tuesday that Fortescue had continued to seek external legal and governance guidance as the investigation progressed. The employee who is the subject of the allegations has decided to not work for Fortescue until the investigation is completed. Fortescue Energy Chief Gus Pichot said in a earnings call last Thursday that legal advice indicated the employee did not require suspension. He said that they had taken extensive legal and governance advice from external sources. "We are confident we're following the right process," he added. The issue of sexual harassment at mine sites has been persistent in Western Australia, and led to a state investigation in 2021. Fortescue received a class-action lawsuit in July, alleging workplace misconduct including sexual harassment and gender discrimination. The lawsuit was filed by the law firm JGA Saddler. They also launched similar "class-action suits" against Rio Tinto in 2024. These cases are still pending in the courts. Fortescue reported last week a 20% decrease in "psychosocial breaches", which includes?sexual harassment and ethics issues, with 98 incidents reported in the most recent financial year. The company with 16,154 employees said that it dismissed 11 people for violating its code of conduct in relation to sexual harassment and discrimination. The report found that there were 13 instances of inappropriate sexual contact and 10 cases of sexual harassment. It also discovered one case of sexual assault. (Reporting by Melanie Burton; Editing by Kate Mayberry)
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EARLY MORNING BID EUROPE - Waiting for Nvidia to complete the next leg of AI rally
Rae Wee gives us a look at what the future holds for European and global markets. The?session began in Asia with a muted tone, as stocks drifted ahead of Nvidia’s upcoming?earnings, where high expectations are being placed on the artificial intelligence darling. Alibaba's $10.2 billion sale of shares at a steeply discounted price to fund its AI plans and Samsung Electronics disappointing shareholder-return program in the previous session weighed on technology shares. A roughly 45% drop in?the share price of Unitree after a five-fold increase on its Shanghai debut triggered concerns over bubble risk, retail investors losses, and flaws within the IPO system. The shares of China's most-known humanoid robotics manufacturer were mostly flat on Tuesday after days of declines following its listing. It is up to Nvidia now to drive the next leg in the AI rally. This is because of its role as a bellwether of the broader AI ecosystem, which includes chipmakers and companies that finance the rapid expansion of datacenter capacity. Oil prices are also falling after the U.S.'s threat of an "economic D-Day," or a wave of sanctions against Iran, turned out to not be as serious as they had hoped. The U.S. announced on Monday a new round of sanctions to 'cut off Iran’s economic lifeline.' However, it stopped short of the harshest measures and instead warned the world not to do business with the Islamic Republic. Tehran has promised to retaliate and expressed confidence that major trading partners will resist Washington's pressure. Investors are watching for a series of data releases this week from Europe, including German GDP data and the German Ifo Survey on Tuesday. These could provide insight into the cost to the economy of higher energy prices over a longer period. Key developments on Tuesday that may?influence the markets: - Germany's GDP, Ifo survey – Reopening 2-year German Government Debt Auction - Reopening 7-year UK Government Debt Auction Confidence of U.S. consumers according to the Conference Board Thomas Barkin, President of the Federal Reserve Bank of Richmond (Editing: Saad Sayeed).
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Oil prices rise as investors assess the impact of US sanctions on Iran
The oil prices rose on Tuesday, after falling more than 2% the previous session. Investors were evaluating the impact of a new 'U.S. Sanctions?against Iran. Brent crude futures were up 27 cents or 0.3% to $92.44 per barrel at 0330 GMT. U.S. West Texas Intermediate crude rose 37 cents or 0.4% to $85.38. Both contracts settled lower Monday. U.S. crude fell to a new one-week low as profit taking took place after the prices had risen over the past two weeks. The market is not fazed at all by Washington's efforts to tighten economic pressure against?Iran. Traders see the U.S. push to nudge trading partners away from Iranian products as marginal and not market-moving. U.S. Treasury secretary Scott Bessent announced on Monday an expansion of sanctions in order to cut off Iran’s economic lifeline and force a?end to the war between the two countries. He told the countries that they must cut their business ties, or risk being cut from the dollar-based system. He refused to reveal the names of the countries targeted, or the date that the penalties would go into effect. Instead, he said he would give them some time to comply with the new directive. Although U.S. Secretary of Defense Pete Hegseth stated on Monday that the U.S. will not rule out the use of military force against Iran the country has turned to more economic coercion which analysts say removed concerns about Middle Eastern oil supplies being threatened by the war. Tim Waterer is the chief market analyst for KCM. He said that markets appear to be pricing in economic pressure as being a less-risky path for physical supplies than kinetic actions. This was why initially, oil moved lower rather than spiked higher. He warned that "Iran retains the capability to respond by disrupting the shipping, which continues a residual premium on the oil price." The United Kingdom Maritime Trade Operations highlighted 'those threats when an oil tanker, struck by an unknown projectile on Tuesday, was disabled and was located about 9 nautical kilometres (16,7 km) northeast from?Oman?s Ash Shishah. Iran still maintains that it should control the Strait of Hormuz. Before the start of the war in February, the Strait of Hormuz carried about 20% of the world's oil. It named 45 tankers who had violated its rules for crossing the Strait of Hormuz on Monday and threatened to take action, including seizing their cargo. Supply disruptions caused by the U.S. and Israeli war against Iran, which began on February 28, have led to countries reducing their 'commercial and strategic reserves. The Department of Energy announced on Monday that crude oil stocks in the U.S. Strategic Petroleum Reserve dropped by 3.7 million barrels, to 289.7 millions barrels, last week. This is the lowest level since November 1982. Ishaan Lerh and Jeslyn Arora reported from Bengaluru, and Christian Schmollinger edited the story in Singapore.
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Copper prices fall as dollar rises and new supply problems are outweighed
The copper price fell on Tuesday due to a stronger?dollar, and the macroeconomic climate, which overshadowed new fears about supply shortages triggered by withdrawal requests at the London Metal Exchange (LME). By 0301 GMT, the benchmark three-month copper contract on 'the 'LME had fallen 0.41% to $14,214 per metric tonne. The Shanghai Futures Exchange's most traded copper contract edged up 0.17% to 107 930 yuan (16,051.93) per ton. Red metal was also weighed down by the'stronger dollar', concerns about interest rates, and a cautious economic outlook. This is a reversal from Monday's gains, which were a result of a large increase in LME Copper warrant cancellations - meaning that metal was marked?for storage withdrawal - and "stoked new concerns about supply shortages," Daniel Hynes said, senior commodity analyst at ANZ. The dollar index was up by 0.08%. A stronger dollar can weigh on greenback-denominated commodities ?by making them more expensive ?for buyers using other currencies. Concerns about rising interest rates in the United States have been raised by concerns over tariffs and an apparent deadlock in negotiations to end the Middle East conflict. According to CME's FedWatch, traders were pricing in 42% of a rate increase at the U.S. Federal Reserve meeting on September, up from 36% one week prior. Interest rates that are too high can dampen economic activity, which in turn affects growth-dependent materials such as copper, which is used for power and construction. The gloomy conditions also helped Aluminium shrug off the news that a Russian aluminium manufacturer?Rusal had suspended exports of 600,000 tons per year alumina from its refinery in Guinea due to a derailment. The LME fell by 0.67% and the SHFE dropped by 0.21%. Zinc fell?0.37% among other?LME Metals. Lead dipped by 0.08%. Nickel dropped by?0.48%. Tin lost 0.44%. The SHFE showed that zinc gained 0.17%. Lead dropped 0.34%. Nickel lost 0.75%. Tin lost 0.47%.
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Investors await US inflation data as gold retreats from its three-month high
The gold price fell?on Tuesday, after reaching its highest?levels? in more than three month earlier that day. Investors' attention shifted towards upcoming U.S. data on inflation and Kevin Warsh's speech this week. As of 0334 GMT, spot gold was down by 0.2%, at $4,640.39 an ounce. U.S. Gold Futures remained steady at $4,696.00. Tony Sycamore, IG's market analyst, said: "We expect gold dips to be supported by buyers who are looking for gold. We also expect gold to move up towards the next resistance level at $4,900/$5,000." The U.S. Treasury Department announced that it would double its liquidity support buyback operation for longer-dated bonds and notes. Prices rose sharply in the last week. The announcement sparked currency debasement concerns. "These U.S. -dollar devaluation fears should see 'gold' well supported in the coming week, as the Fed is not sending a clear message it is prepared to fight higher inflation," TD Securities stated in a report. The risk rates may eventually rise, as crude oil grinds higher. Gold is often viewed as an inflation hedge. However, high rates can reduce its appeal because it is not a yielding asset. The Fed Chairman Warsh’s inaugural speech at this year's annual?Jackson Hole Conference has gained added importance as traders and analysts seek guidance on the recent rise in bond yields, and to reassure their independence from the Trump Administration. The U.S. The Personal Consumption Expenditures Report, the Fed’s preferred inflation indicator, is due Wednesday. Iran has vowed to respond in kind to the U.S. economic sanctions Washington claims will cut off Tehran's lifeline. Silver spot fell by 1.3%, to $68.01 an ounce. Platinum lost 1.2%, to $1853.85; and palladium dropped nearly 1%, to $1345.26.
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Japan does not plan to release crude oil from its national reserve during September and October
Ryosei Akazawa, Minister of Economy, Trade, and Industry, said that Japan will not release any more crude oil in September or October. He said that the amount of crude oil purchased in September will be about 80% less than the average monthly volume last year. This is because tankers which would normally travel through the Bab el-Mandeb Strait, are now being rerouted to the 'longer Suez route. Akazawa, a Japanese?press officer, said that Japan expects the August purchase to be the same as last year, but the September?volumes are expected to decline. This is because shipments via Suez take 55 days to arrive in Japan compared to 21-23 days via the Bab el-Mandeb Strait. * "Of those national reserves that have already been released, a portion has not been used due to the progress made in securing alternate supplies. Akazawa stated that using?that part would provide crude oil supply equivalent to a typical month in the past year. He added that Japan expects crude oil purchases to return to the average monthly levels of last year in October. (Reporting and editing by Kate Mayberry; Yuka Obayashi)
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Gold reaches its highest level since mid-May, as purchasing momentum builds
Tuesday's gold price hit a?higher than three-month high, continuing a rally that was?driven by?the recent announcement of the U.S. Treasury buyback. Investors are now focusing on key inflation data, and an upcoming speech from Federal Reserve Chair Kevin Warsh. As of 0146 GMT spot gold was up 0.4% to $4,668.19 an ounce after reaching its highest level since May 14, earlier in the session. U.S. Gold Futures increased 0.6% to $4724.50. Tony Sycamore, IG's market analyst, said that gold has continued to rise, and the return of?debasement trading last week has fuelled the latest leg of gains. He said: "We expect gold dips to be supported by buyers who are looking to see gold move towards the next resistance level at $4,900/$5,000." The U.S. Treasury Department announced that it would?double the size of liquidity support buyback operations for longer-dated notes and bonds. Treasury Department announced that it would "double the size" of its liquidity support buyback operations on longer-dated bonds and notes. The announcement sparked currency debasement concerns. TD Securities stated in a report that "these U.S. Dollar debasement concerns should see gold well supported in the coming week, as the Fed is not sending a clear message it is prepared to fight higher inflation." Gold is often regarded as a hedge against inflation, but high interest rates can reduce demand for bullion by increasing the cost of holding this non-yielding investment. Fed Chairman Warsh’s inaugural speech at this year’s annual Jackson Hole conference has gained in importance as traders and analysts seek guidance on the recent rise in bond yields, and to reassure themselves of his independence from Trump’s administration. The U.S. The Fed's preferred inflation indicator, the Personal Consumption?Expenditures Report, is due Wednesday. Iran has promised to respond geopolitically against the 'expanded U.S. sanctions, which Washington said would cut off Iran’s economic lifeline. Tehran expressed confidence in the ability of major trading partners to resist pressure. Silver spot gained 0.3% per ounce to $69.16, platinum gained 0.4% to 1,883.93, and palladium rose 0.2% to $1359.00.
Port Hedland's unions present a counter-proposal for a wage agreement to BHP before the September 8th talks
The Combined BHP Ports unions have placed a counterproposal on a wage deal for its Port Hedland operation in Western Australia, ahead of their meeting on September 8. This comes after workers rejected a BHP proposal.
BHP's spokesperson stated in an email that they continue to "make progress" towards an agreement which will address the key concerns raised by their employees.
The union said that the proposal that BHP made that workers rejected before the meeting would have "maintained significant inequalities among workers." A meeting with the Fair Work Commission is scheduled for September 15th.
BHP spent'months' at the bargaining tables with unions representing around 450 operators and maintenance workers to negotiate a new wage?deal. BHP employs over 800 people in the port.
The unions claim that workers want enforceable protections for 'wage and conditions.' They argue that extreme heat and long hours away from their families mean they shouldn’t be paying lower rates than city workers.
(source: Reuters)