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Copper, precious metals and oil are down as global tensions decrease;
The prices of commodities such as crude oil, silver, and gold, all fell on Thursday after the leaders of China, the United States, and Iran spoke by phone. Investors reduced their positions due to a stronger dollar in which commodities are priced. Silver fell almost 15%, while gold, crude and copper dropped about 2%. Tony Sycamore is an analyst at broker IG. He said, "We have seen extreme volatility this week in precious metals, other commodities, and we are now experiencing some aftershocks." He added that "talks between Iran and United States seem to be on track again, which has reduced some of the geopolitical premium in commodity markets, especially oil." The tensions in the trade front also eased after the call between Trump & Xi. Investors are tempted to sell gold when it is at these levels. The dollar was stable at the beginning of Asian trading ahead of the interest rate decisions of the European Central Bank and Bank of England. Both are expected to hold rates later in the day. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, traded at a near-two-week high. The dollar's strength makes commodities more expensive for buyers of other currencies. Prices dropped on Monday, after U.S. president Donald Trump announced Kevin Warsh's nomination as the new Fed chair. This triggered a sell-off of risk assets. The dollar is boosted by a hawkish outlook from the U.S. central banks, while gold and silver are at a higher cost of opportunity. VOLATILE COMPONENTS Spot silver also plunged from its earlier session high of?nearly one week. Last week, silver reached a new record of $121.64 and gold reached a record of $5,594.82 per ounce. Christopher Wong is a strategist with OCBC. He said, "Sentiment has become soggy in?most asset categories, as losses feed into each other and create a feedback loop that reinforces itself amid low market liquidity." He added that precious metals and cryptocurrencies, as well as regional equity, reflect such expectations. After the U.S. agreed to hold talks with Iran in Oman, the oil prices dropped about 2%. This eased fears of a possible military conflict disrupting supply from the Middle East's key producing region. Copper was also under pressure due to concerns about demand and the increasing stock in London Metal Exchange warehouses. The metal, which is widely used in the construction industry, had already recovered from a two session slump. This was aided by China's plans to increase its strategic copper reserves. Soybeans have bucked trend and reached a two-month peak, spurred by Trump's comments that China may consider buying cargoes of soybeans from the United States. High inventories also contributed to a 2% decline in iron ore. (Reporting and editing by Clarence Fernandez; Additional reporting in Bengaluru by Ishaan arora; Reporting by Naveen Thural)
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Sources: Nippon Steel is considering a convertible bond issue of $3.2 billion, according to sources
According to two sources familiar with the matter, Japan's Nippon Steel may sell convertible bonds worth up to 500 billion yen (about $3 billion), in the largest transaction of its kind ever in Japan. Sources declined to name themselves as they did not want the information made public. Reports the potential issue for the first. Nippon Steel stated in a press release that "nothing is decided yet". Following the release of the report, shares in the company fell by 6%. According to LSEG data, at 500 billion yen the convertible bond issuance would be the largest in Japan. One source said that the issuance amount could be reduced, or the plan reconsidered. Sources said that Nippon Steel prefers to issue the convertible bonds in order to avoid a capital raise which would result in immediate share dilution. Also, as domestic interest rates are rising, they can be issued as zero-coupon bond. Convertible bonds are able to be converted into shares for a set price. The steelmaker needs capital to expand its overseas business, including in the U.S. and India, as well as for decarbonisation projects. Sources said that the company needs long-term financing to replace its?bridge loan? it took out last year for its acquisition by U.S. Steel, which totaled around 2 trillion yen. Steelmaker's performance has declined due to tariffs imposed by U.S. President Donald Trump on imports of steel and the competition from Chinese exports. Sources also stated that the Japan Bank for International Cooperation (JBIC) is looking at lending funds totaling approximately 1 trillion yen (6.37 billion dollars) to Nippon Steel. JBIC didn't immediately respond to an inquiry for comment.
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Morning bid Europe-Skeptic investors haunted with tech sell-off
Stella Qiu gives us a look at what the future holds for European and Global markets on February 5th: Investors were confident that the major U.S. tech firms would deliver a strong quarter with rosy forecasts. They increased their exposures ahead of this earnings season. This has proven to be a costly error. Google Alphabet Released It delivered solid results, but also surprised analysts when it announced that capital expenditures would be between $175 billion and $185 billion in this year - far above Wall Street's expectations. This only fueled fears about the?explosion of artificial intelligence investment. The valuations of artificial intelligence are already high and there are signs that many jobs in software or data analytics are being automated. There seems to be only one direction to go: down. Alphabet's shares fluctuated wildly in the hours after closing - dropping over 6% once - before settling at 0.4% lower. You would think that the increasing AI spending would benefit a chip manufacturer like?Nvidia. Nvidia's shares rose 2% following the bell. However, equipment suppliers in Asia have been hit hard by the recession, with South Korea down a staggering 3.5%, and Taiwan down 1%. Wall Street futures tried to recover but lost momentum quickly as the selling spread to precious materials, with gold and silver both falling below $5,000 an ounce. European futures indicate a lower opening ahead of the policy decisions of the European Central Bank and the Bank of England. Both are expected keep rates the same. The ECB will likely indicate that no policy moves are imminent, even if recent euro-dollar surges fuel concerns that inflation could undershoot target. BoE is expected to keep its options open as to when it will reduce rates again, waiting to see if a weakened jobs market will help to lower inflation pressures. The following are key developments that may influence the markets on Thursday. ECB-BoE Policy Meeting, January PMI Data for Euro Zone, Germany and France
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China's gold consumption in 2025 drops for the second consecutive year
The 'China Gold Association' reported that China's gold demand dropped for the second year in a row, but the sales of bars and coins, fueled by a growing demand for safehavens, surpassed jewellery purchases for the very first time. The state-backed association reported that China's gold demand in 2025 will fall by 3.57%, or 950.096 tons. This is the second annual decline after the 98.58% drop in 2024. China's gold purchases in 2025 will surpass jewellery sales for the first time, as consumers view gold more and more as an investment. The purchase of gold jewellery has dropped sharply, by 31.61 percent, to 363.836 tonnes in 2025. This represents only 38.29% of the total consumption. The purchase of gold bars and coins, on the other hand, increased for a second consecutive year by 35.14 percent, reaching 504.238 tonnes, which is more than half of all gold consumption. The decrease in gold jewellery sales outweighed the increase in bars and coins purchased by 37 tons. The Shanghai Futures Exchange contract is also expected to rise by?nearly 60 percent in 2025. The price increase has slowed the demand for jewelry, but boosted the demand for bars and coins that investors prefer. The gold price has been extremely volatile since the end of January. On January 30, the spot price fell nearly 10%, its steepest drop since 1983. However, on Tuesday, it made its largest daily gain of 5.86%, since 2008. The association reported that gold production using domestic raw materials increased by 1.09% on an annual basis to 381.339 tonnes. (Reporting and editing by Jacqueline Wong, Clarence Fernandez and Liz Lee in Beijing; Dylan Duan and Shanghai newsroom)
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Maas Group falls on AI pivot after $1.2 billion materials outflow spooks investor
Maas Group, an Australian company, announced on Thursday that it would be selling its building materials division up to A$1.70billion ($1.19billion) in order to pivot to artificial intelligence infrastructure. This caused its shares to drop by more than 26%. Maas Group is selling its Construction Materials (CM), a?unit, to Heidelberg Materials' local subsidiary, HMA. It will also invest A$100m in Nvidia AI infrastructure?firm Firmus Group, for a 1.7% share. The conglomerate was founded by former rugby player Wes Maas over 20 years ago. It is now selling an unit that generated approximately half of the A$219 millions in core operating profits?in fiscal year 2025. The firm's shares plunged by as much as 26,1%, the steepest drop in a single day ever. Meanwhile, the benchmark index dropped 0.4%. Ron Shamgar is the head of Australian equity at TAMIM Asset management. He said that the market was surprised by the fact that the company will be exiting its construction business in Queensland. The population growth and Brisbane Olympics are driving the expansion. The money will be spent on the AI/Datacenter sector, which is a capex-intensive industry. The divestment was part of a broader shift by the Australian construction materials and equipment provider towards data center construction. This sector has been attracting investor interest, as the demand for AI-supporting facilities is growing. Goodman Group, a data center owner in Australia, has already begun a shift towards data center development. Maas Group has invested A$100m in Firmus, following earlier deals with the company. Firmus Technologies signed a A$200m electrical infrastructure contract in mid-December. It said that after the?completion of the transaction?, approximately 1,140 employees would transfer to HMA with the construction material business and ensure the?continuity? of operations. The transaction will be completed by the end of 2026. It is still subject to shareholder and regulatory approvals. ($1 = 1,4292 Australian Dollars) (Reporting from Sherin Sunny, Bengaluru; additional reporting by Roshan Thomsen; editing by Alan Barona, Rashmi aich and Rashmi Aich).
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Sources: Nippon Steel is considering a convertible bond issue of $3.2 billion, according to sources
According to two sources familiar with the matter, Nippon Steel Japan is looking at selling as much as 500 billion dollars ($3.2 billion) in convertible bonds. This would be a major transaction in Japan. Sources said that the steelmaker was considering making a decision this month. They declined to be named because the information isn't public. Is reporting the potential issue for the first time. Nippon Steel didn't immediately respond to our request for a comment. According to LSEG data, at 500?billion yen the convertible bond issuance would be largest of its type in Japan. One of the sources stated that the issuance amount might be reduced, or even reconsidered. Sources said that Nippon Steel prefers to issue the convertible bonds in order to avoid a capital raise which would result in immediate share dilution. Also, as domestic interest rates are rising, they can be issued as zero-coupon bond. At a set price, convertible bonds can be turned into shares. The steelmaker needs capital to expand its overseas operations, including in India and the U.S. Sources said that the?company needs long-term financing to replace a loan taken out last year for its acquisition of U.S. Steel, which was worth around 2 trillion yen. Business performance of the?steelmaker has declined due to tariffs imposed by President Donald Trump on imports of steel and increased competition from China. Sources also claim that the Japan?Bank of International Cooperation (JBIC) is looking at lending Nippon Steel funds totaling approximately 1 trillion yen (6.37 billion dollars). JBIC didn't immediately respond to an inquiry for comment.
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Oil drops 2% after US and Iran agree to talks
The?U.S. The?U.S. Brent crude futures dropped $1.44 or 2.07% to $68.02 per barrel at 0335 GMT. U.S. West Texas Intermediate Crude prices also fell by $1.34 cents or 2.06% to $63.80 per barrel. After a report in the media that suggested planned talks between Iran and the United States on Friday might collapse, oil prices rose by about 3%. Later in the day, officials from both countries said that talks will take place on Friday even though topics of discussion are not yet settled. Mukesh Sahdev is the CEO of XAnalysts, an energy consultancy. He said that the oil price had erased a part of the geopolitical premium following the US-Iran meeting in Oman last Friday. The two sides are still far apart in their views on what should be included in the discussions. Iran is willing to discuss?its nuclear program, including uranium enrichment, with Western nations, while the U.S. wants to also include Iran's missiles, support for armed proxy group in the Middle East, and treatment of its people. Sahdev stated that it is possible for these discussions to reveal new differences, and that the risk premium would rise again in the near future. There are fears that despite the upcoming talks U.S. president Donald Trump will still follow through on his threats to attack Iran, the Organization of the Petroleum Exporting Countries' fourth-largest oil producer, potentially risking an even wider conflict in the oil rich region. Exports from other Gulf producers could also be affected, in addition to the disruption of Iranian production. Around a fifth of all oil consumed in the world passes through the Strait of Hormuz, which is located between Oman and Iran. Saudi Arabia, Kuwait, Iraq, United Arab Emirates and other OPEC countries export the majority of their crude oil via the strait. Analysts said that the strength of the U.S. Dollar and volatility in precious-metals also weighed down on commodities?and risk sentiment in general on Thursday. Data from the Energy Information Administration showed that oil inventories in the U.S. fell last week, after the winter storm gripped large parts of the country.
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Ardea Resources, Australia's nickel producer, is eyeing a $700 million government grant for its nickel project
Australia's Ardea Resource said that on Thursday, its Kalgoorlie Nickel Project received separate letters from Export Finance Australia (A$1 billion) and the U.S. Export-Import Bank to support a possible funding of up A$1 Billion ($699.90 Million). The funding will be used to support Kalgoorlie Nickel’s Goongarrie hub?project in Western Australia. This project is expected to supply nickel and cobalt which are both critical minerals in lithium batteries. Ardea shares jumped 9.6% by 0058 GMT to A$0.745, their highest level for nearly two weeks. They also snapped out of three sessions in losses. The 'Trump administration' has increased efforts to secure U.S. supply of 'critical minerals. They have proposed measures such as a price floor mechanism and announced new funding to miners in order to compete with Chinese dominance on supply chains. Washington convened dozens allied nations this week to form a critical-minerals-trading bloc, and the EU proposed a U.S. EU partnership as part of moves aimed at sourcing and securing mineral outside China. Investor confidence has been boosted by the promise of government support, which has brought fresh capital to the?sector, and pushed several projects towards construction. This is laying the groundwork for a?new?wave? of domestic supply that will be online around 2028. Ardea CEO Andrew Penkethman said that the strong interest from government-backed institutes underscores the strategic importance of the Goongarrie Hub in supplying both nickel for stainless?steel, and the rapidly growing EV and energy-storage battery markets. Export Finance Australia?has indicated an interest in providing a total of A$500m, while U.S. Export-Import Bank has indicated that it could provide up to $350m under its Supply Chain Resiliency initiative.
Analysis-Russian expulsion of Ukrainian troops from Kursk removes obstacle to peace
The ejection by Russia of Ukrainian troops in the Kursk area ends the largest incursion on Russian soil since World War Two. It also removes an obstacle to a peaceful settlement that Moscow had been reluctant to reach with so many hostile troops on its territory. Vladimir Putin, the President of Russia, declared a unilateral ceasefire of three days the day after Moscow announced that the Kursk operation was complete. This was to commemorate the 80th anniversary since the Soviet Union's victory in World War Two.
On condition of anonymity, two Russian sources said that the Kremlin would not accept a settlement to the war as long as Ukrainian troops are in Kursk.
Ukraine launched its most daring attack on August 6, just over two years after Russia invaded the Kursk area in 2022. Supported by drones and heavy Western weapons, the country rammed through the Russian border.
The attack was costly to Kyiv, as the Ukrainian forces claimed almost 1,400 square kilometers of Kursk at its peak.
According to Ukrainian open-source maps, Russia now controls an area of Ukraine that is roughly equal in size to the U.S. State of Pennsylvania.
Analysts say that the diverting of Kyiv forces to Kursk helped Russia accelerate its advance in eastern Ukraine.
"Essentially, Ukraine exchanged territory that it valued the most, its own, for territory it did not value and could not hold forever," said Christopher McCallion. McCallion is a fellow with Defense Priorities in Washington DC, an organization advocating a strong U.S. army with a conservative foreign policy. Ukraine, who has been retreating from Kursk for weeks, but claims to still have some active troops there, believes that the incursion distracted Russia, forcing it to deploy troops elsewhere. Kyiv said that its objectives included securing its border with Sumy and gaining territory for future peace negotiations.
Washington's shuttle diplomacy has now pushed these talks forward, but without Ukraine's bargaining chip. There are still major differences that could undermine the peace efforts of President Donald Trump. One source said that if the talks fail, Russian forces would continue to fight.
Requests for comment from the Kremlin or Ukraine's general staff were not immediately responded to.
Local officials claim that Russia has intensified its attacks on Sumy in recent weeks. This is across the border from Kursk. A Russian missile attack in the capital of Sumy killed 35 people on April 14. Russia claimed it targeted a group of Ukrainian soldiers. Volodymyr Zelenskiy, the president of Ukraine, acknowledged that Kyiv forces are now active in Russia’s Belgorod Region, also near the border. He described it as a move to protect Ukrainian towns. Russia has a few slivers across the border in Kharkiv from Belgorod. According to U.S. proposals for a peace agreement, Ukraine would regain control of all of its territory at Kharkiv while Russia would keep control of just over a fifth.
THE BATTLE FOR KURSK
The Kremlin was embarrassed by the invasion of Kursk in 1943. This was the scene of the biggest tank battle ever fought in history, between Soviet and Nazi forces.
The announcement of victory against Ukrainian troops coincides with the 80th anniversary celebration of the Soviet Union’s victory over Nazism on May 9. This gives Putin a victory to show off in front of dignitaries such as Luiz Inacio Lula Da Silva from Brazil and China's Xi Jinping.
According to Russian sources, despite warnings of an imminent attack, the Russian forces were caught off guard by the Ukrainian assault.
Russian officials spoke at the time of chaos, as Russians fled to the east and the Russian border guards and army attempted to combat small, highly mobile Ukrainian unit speeding along country roads in Kursk with Western weapons and vehicles.
A minimum of 120,000 people had to be evacuated. Putin, visibly incensed, was seen publicly scolding Alexei Smirnov who, at the time, was the governor of Kursk. He was arrested on April charges of embezzling money intended for border defense. He denies these charges. The size of the Russian military operations was impressive when I visited Kursk, Russia, in March: tanks, missiles systems, and thousands of soldiers on the move, while civilians warned of the danger of drones and missile attacks amid the air attack sirens. North Korean troops and shells helped Russia to fight back against the Russians in Kursk. Putin expressed his gratitude personally to Kim Jong Un, the leader of North Korea.
According to the Russian defence ministry, Ukrainian forces lost over 412 tanks and several thousand military vehicles in Kursk. Ukraine says that Russia has suffered over 62,000 deaths and injuries during the operation. Both sides have not released their own numbers of casualties. Both sides dispute these numbers, which are not independent.
OFFENSIVE
In August, as Ukrainian forces raced to expand their territory at Kursk in Russia, the country sent units into the area to slow down the advance and stop Ukrainian forces from reaching Kurchatov Nuclear Power Station which provides a large portion of the electricity for southern Russia.
In less than a month the front was stabilised, and Russia could counterattack.
David J. Betz is a professor at King's College London who specializes in war and the modern world. He said that there were likely some Russian generals who were embarrassed by the Ukrainian incursion.
He said that Russia has a long history of successfully defending its borders. However, unlike other countries who are able defend themselves using geography, Russia is forced to use human bodies and distance to do so.
Russian and Western sources reported that Russian forces gradually began to grind down the Ukrainian defences while Moscow deployed thousands of fibre-optic, or "fibre-optic" drones. These drones are harder to jam than any other drones.
According to Ukrainian maps, within three months Russia had reduced the area controlled by Ukraine by more than half. By February 6, this area had been reduced to just 428 square kilometers. Putin, who had been in military fatigues during the Russian invasion of Ukraine on the third anniversary, made a surprise trip to Kursk to order the top brass to continue their advance. He also suggested that Russia create a buffer along the Ukrainian border.
In March, Ukraine lost over 300 square kilometers of territory that it held in Kursk.
Valery Gerasimov is the top Russian general in charge of the war. He told Putin that Russia cleared Kursk after the last Ukrainian troops were forced out of Gornal, a village near the border.
He claimed that Ukraine had deployed 60,000 troops to Kursk during the height of the operations, which undermined its other forces. He also praised the North Korean troops who fought "shoulder-to-shoulder" with their Russian counterparts.
Gerasimov said that Russian forces "continued" to carve a buffer zone in accordance with Putin's orders, and had taken over 90 square kilometers of Ukraine's Sumy Region.
Ukrainian officials had previously claimed that Russian assault groups were in Sumy. (Reporting and editing by Guy Faulconbridge)
(source: Reuters)