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The side effects of the morning bid in Europe-Tariff medicines
Wayne Cole gives us a look at what the future holds for European and global markets. The Asian stock markets are once again in a rout as President Trump refuses to back down from his tariff plans, despite the conflagration of wealth that has engulfed equity markets. Investors thought that the threat of losing trillions of dollar would cause Trump to reconsider or shake his aides. But he appears to believe this harsh medicine is going help him in the end. Bill Ackman, a billionaire fund manager who supported Trump's presidential run, said the tariffs would be an "economic winter" for the entire world. China's blue chips fell almost 7% and the Nikkei index lost another 6%, despite the talk of Beijing stepping in to help with stimulus measures. Trump's high tariffs have caused a drop of almost 10% in Taiwan's stock market after a long break. Trump's levies are threatening the supply chains on which so many businesses rely. Taiwan's policymakers took action to stop short selling, and circuit breakers in many markets were tripped. Dealers became increasingly worried that the market losses would force investors into selling profitable assets to cover margin calls. This could lead to a fire sale. JPMorgan sees 60% probability of U.S. recession, and Fed rate reductions from June until next January. The funds rate will be around 3%. The futures markets also moved in the same direction, with the December Fed Funds contract rising by an astounding 30 basis points this morning before reducing it to 16 ticks. The markets even suggest that the Fed may ease up to May, despite Powell's repeated statement last week that it was not in a hurry to act. It's understandable that he is hesitant, given the fact that tariffs will increase prices for everything from food to cars. The U.S. consumer price report for March this week is unlikely to reflect the full impact of tariffs, but it won't be long. Trump said that many countries are looking for deals to ease tariff pain. The "reciprocal rates" chosen by the U.S. were higher than levies imposed in most other countries, which makes it difficult for them to make deals that are "beautiful". China is ready to fight in part because they see an opportunity to replace the U.S. as the trusted trade partner. When the trade ministers of the region meet on Monday, there could be further hints about EU reprisals. This is all happening as U.S. earnings are due to begin with major banks this Friday. It will take a brave CEO to express anything other than caution regarding the outlook for sales and profits. Market developments on Monday that may have a significant impact Sentix investor's confidence, German industrial production - Appearances of ECB Board member Piero Cilpollone, and Fed Governor Kugler
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Gold falls to a 3-1/2-week-low as the market sells off hits bullion
The gold price fell to its lowest level in more than three weeks on Monday, amid a wider sell-off. Investors dumped the bullion as they sought to recover their losses from other trades due to fears of an impending global recession caused by a escalating trade war. As of 0331 GMT spot gold was down by 0.3%, at $3,027.90 per ounce, after falling over 1% in the previous session, to its lowest level since March 13. U.S. Gold Futures increased 0.4% to $3 047.50. Gold fell more than 3% Friday as the global market spiraled after U.S. president Donald Trump's tariffs were larger than expected. Dealers speculated that the drop in gold prices, which is usually a safe investment during times of uncertainty, was due to investors selling bullion for profits or to cover margin calls, losses, or other assets. "There is a lot confusion and uncertainty in the markets as to whether there will be room for de-escalation, given that tensions at this point are extreme, with many still struggling for a quick resolution right now," IG Market Strategist Yeap JunRong said. While some price weakness could be due profit-taking, resilience seems to be a broader theme. Safe-haven flows offer some cushioning amid the volatility of the market. China responded to the U.S. Tariffs that Trump imposed on Friday with a number of counter-measures, including an extra 34% levied on all U.S. products and export restrictions on certain rare earth metals. Last week, fears of a global recession caused U.S. stock prices to lose nearly $6 trillion and Japan's Nikkei index to fall nearly 9% on Monday morning. Federal Reserve Chairman Jerome Powell stated that tariffs increase the risk of inflation and slower economic growth. This highlights the difficult road ahead for policymakers in the U.S. Central Bank. Spot silver rose 2.3% to $30.22 per ounce after reaching its lowest level for nearly seven months. The spot platinum price rose 1%, to $925.50. Palladium prices increased 1.5%, to $925.00. (Reporting and editing by Anjana Anil and Anushree mukherjee, Bengaluru. Sherry Jacob Phillips and Savio d'Souza).
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Dalian iron ore falls to a two-week low due to trade war fears
Iron ore prices fell on Monday as a result of a trade war that has widened due to the tit-fortat tariffs imposed by the U.S. against China, its largest consumer. The May contract for iron ore on China's Dalian Commodity Exchange ended the morning trading 2.6% lower, at 768.5 Yuan ($105.10) per metric ton. In the early part of the session, prices dropped to 754 Yuan, their lowest level since March 21. The benchmark iron ore for May on the Singapore Exchange fell by 2.21% to $98.4 per ton. In a recent note, Galaxy Futures said that new U.S. Tariffs will cause external shocks on global markets. This will put pressure on iron ore prices. Chinese stocks plunged on Monday as a result of escalating tensions between the two world's largest economies, which could disrupt trade and cause a global slowdown. China responded on Friday by imposing additional tariffs of 34% on all U.S. goods after U.S. president Donald Trump imposed tariffs of 34% on most Chinese products. Steelmakers have ramped up production in the spring construction season, March and April. According to Everbright Futures, the broker that tracks hot metal production (which is typically used to gauge demand for iron ore) has reported a rise of 14,500 tonnes per month to 2,3873 million tones. Coking coal and coke, which are used to make steel, also lost ground. They fell by 2.16% and 1.1 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have stagnated. Rebar fell 2.24%, while hot-rolled coils dropped nearly 2.5%. Wire rod also declined 2.74%. Stainless steel tumbled 3.65%.
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Petrobras Completes Veterinary Center Required for Offshore License
Petrobras has completed work on a veterinary center in the Amazon region that is required for it to obtain an environmental permit for an offshore drilling project, the company said on Saturday.The animal care center in the town of Oiapoque, Amapa state, is designed to assist animals in the event of an oil spill.It was one of Brazilian environmental agency Ibama's main demands in response to Petrobras' proposal to drill offshore in the environmentally sensitive Foz do Amazonas region.Amapa has granted the veterinary center an operating license but it still requires Ibama's clearance. Petrobras said in a statement it informed the agency the center will be available for inspection starting Monday.The center is designed to care for birds, marine mammals, turtles, dolphins and manatees, said Petrobras, which aims to conduct exploratory drilling in a block 540 kilometers (325 miles) off Amapa's coast.Foz do Amazonas in the so-called Equatorial Margin is Brazil's most promising oil frontier. It shares geology with nearby Guyana, where Exxon Mobil is developing huge fields.Ibama blocked Petrobras from drilling there in 2023, but the company filed a new request, which the agency is assessing. There is no deadline for a final answer.(Reuters - Reporting by Marta Nogueira; Writing by Gabriel Araujo; Editing by Cynthia Osterman)
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Australian heavy rare Earths miners protest China export controls
Australian listed miners of heavy-rare earths rallied Monday, despite major selloffs on other markets. They were betting that Western governments would redouble their efforts to create a separate supply after China, the top producer, imposed export controls. Shares in Australia's heavy rare earths developer Northern Minerals, which has a project in Brazil and is based in Australia, surged by 9.5%. China placed export restrictions for rare earth elements as part of its response to U.S. president Donald Trump's tariffs on Friday, which squeezed supply of minerals to the West used to manufacture weapons, electronic devices and a variety of consumer goods. The group of rare earths consists of 17 elements. Heavy rare earths have higher atomic masses, such as dysprosium, yttrium and others. These are less abundant but more valuable. The news from China highlighted Lynas’s strategic capabilities, which are underpriced on the market at present," said Barrenjoey Analyst Dan Morgan. China produces 90% of rare earths in the world, which is a grouping of 17 elements that are used by the electronics, defence, and electric vehicle industries. Analysts said that the export restrictions affect all countries and not just those in the United States. They include magnets, as well as other products, including finished goods, which will be hard to replace. Meteoric Resources announced in a Monday filing that it intended to produce six elements subject to export control at its Caldeira Project, which is expected to be operational during the second half 2027. Lynas didn't immediately respond to an inquiry for comment. Separately Australia's Premier Anthony Albanese who faces an election on May 3, raised the possibility of creating national stockpiles for critical minerals which would likely include rare earths. Albanese stated last week that a Labor Government would establish a Critical Minerals Strategic Reserve. I will be able to elaborate on this. Analysts said that they were waiting for more details, as typically, consumers would stockpile inventory in the event of a supply chain disruption, and not producers. (Reporting and editing by Jamie Freed; Additional reporting in Sydney by Kirsty Wantham; Reporting by Melanie Burton)
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Financial Times - April 7
These are the most popular stories from the Financial Times. These stories have not been verified and we cannot vouch their accuracy. Headlines - UK auto industry gets tariff relief by lowering EV targets - Britain will relax rules for hedge funds and smaller private equity firms UK will scrap or merge even more quangos as part of anti-regulation drive - US closes on crucial minerals deal with DR Congo View the full article After President Donald Trump's 25% tariff on global auto sector exports to the U.S., the British government has lowered its targets for electric cars, and lowered punitive penalties, to support the domestic automotive industry. The British Government plans to introduce a lighter regulatory system for smaller groups in order to encourage more investment. UK Cabinet Office Minister Pat McFadden wrote to Whitehall departments to demand they justify the existence and purpose of each quango that is currently being used to outsource decisions. The aim is to close unnecessary agencies and bring responsibility for making decisions back to Whitehall. The United States is close to a deal that will see American companies gain more control over critical mineral assets, in exchange for greater support for the struggling Kinshasa Government. (Compiled Bengaluru Newsroom)
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China metals fall after trade war retaliation, copper hits over 3-month low
The price of base metals in China plunged sharply on the first day of this week as fears about a possible recession grew due to an escalating trade war. Copper prices fell to a three-month low. As of 0138 GMT on the Shanghai Futures Exchange, the most traded copper contract dropped 7%, to 73640 yuan a metric ton, its lowest level since January 3, over three months ago. The London Metal Exchange's benchmark copper for three months fell 1.9% to $8614.5 per metric tonne. China, the world's largest consumer of metals, retaliated on Friday by imposing additional tariffs of 34% on all U.S. products from April 10 after U.S. President Donald Trump imposed 34% on most Chinese items as part his sweeping tariff program. We expected a steep drop in China commodity prices today, as China's markets were closed on Friday. This coincided with a significant decline in LME base-metals. Base metals traders said that some even reached their lowest limits immediately after trading started. A second trader stated, "The retaliatory trade tariffs make us worried about a trade war that will hinder economic growth worldwide." SHFE aluminium fell 4.5% to 19.515 yuan per ton. Zinc fell 4.2% to 22195 yuan. Lead fell 2.4% at 16,810, nickel fell 6.7% to 120370 yuan. Tin fell 6.5% at 273,680. Other metals include LME aluminium, which fell by 0.3%, to $2.372.5 per ton. Lead also dropped 0.3%, to $1.901, while zinc slid by 0.8%, to $2.639; tin, down 2.2%, at $34,615, and nickel, down 0.1%, at $14.775 per ton.
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Trump compares tariffs with'medicine' after Asian markets erupt
U.S. president Donald Trump said that foreign governments will have to pay a "lot of money" in order to lift the sweeping tariffs he called "medicine." This has caused further turmoil on global financial markets. Asian stocks suffered steep losses on Monday morning. U.S. futures markets opened with sharply lower prices as investors expressed concerns about Trump's tariffs, which they feared could lead to higher costs, a weaker economy, a drop in confidence, and even triggering a global economic recession. Trump told reporters on Air Force One that he wasn't concerned about the losses of trillions of dollars from stock markets all over the world. "I don’t want anything to fall. "But sometimes you need to take medicine to cure something," he said, as he returned after a golf weekend in Florida. Trump claimed he spoke to leaders in Europe and Asia on the weekend. They hope to convince Trump to lower tariffs by up to 50%, which are due to come into effect this week. They are at the table. "They want to talk, but they won't talk until we pay them a lot of cash on an annual basis," Trump said. Trump's announcement of tariffs last week shocked economies around the globe, prompting retaliatory measures from China. Fears were raised about a global recession and trade war. Investors and politicians have been trying to figure out whether Trump's tariffs will be permanent or just a tactic used to get concessions from countries. Trump's economic advisors tried to present the tariffs on Sunday morning talk shows as a clever repositioning by the U.S. within the global trading order. Treasury Secretary Scott Bessent stated that more than fifty nations have begun negotiations with the U.S. following last Wednesday's announcement. Bessent told NBC News' Meet the Press that "he's created maximum lever for himself". Howard Lutnick, Commerce Secretary at CBS News, said that the tariffs will remain in effect "for days and even weeks." Kevin Hassett, White House economist, sought to calm concerns that tariffs were part a strategy designed to pressure the U.S. Federal Reserve into lowering interest rates. He said there would not be any "political coercion". JPMorgan's economists estimate that tariffs will cause the U.S. Gross Domestic Product to decline by 0.3% in the full year, compared to an earlier estimate of growth of 1.3%. They also predict the unemployment rate will rise from its current 4.2%, to 5.3%. Bill Ackman is a billionaire fund manager who has endorsed Trump for president. He said that Trump had lost the confidence of many business leaders, and warned him of a "economic nuclear Winter" if he didn't take pause. Tariff negotiations began on Saturday when U.S. Customs agents started collecting Trump's 10% unilateral tariff on all imports. The "reciprocal tariff" rates will increase to 11% to 50 % on certain countries on Wednesday, at 12:01 am EDT (4:01 am GMT). Several governments have indicated a willingness for engagement with the U.S. in order to avoid duties. Taiwan's president Lai Ching Te on Sunday offered no tariffs as a basis for discussions with the U.S. He pledged to remove trade barriers, and said Taiwanese firms would increase their U.S. investment. Benjamin Netanyahu, the Israeli Prime Minister, said that he will seek to have a reprieve on a 17% tax on Israel's products during his meeting with Trump scheduled for Monday. A government official in India said that the country did not intend to retaliate for a 26% tax and that talks with the U.S. were underway over a potential deal. Giorgia Melons, a Trump ally in Italy, pledged to protect businesses from the planned 20% tariffs on EU goods. Italian wine producers and U.S. Importers said that business has already slowed down and they fear further damage.
Glenfarne seeks 5 more years to build Texas LNG export plant
U.S. energy company Glenfarne Group LLC has actually asked federal energy regulators to offer it until November 2029 to put its proposed Texas LNG export plant into service, according to a filing provided on Tuesday.
Texas LNG is one of more than three lots LNG export plants being established in the U.S., Mexico and Canada, a few of which have been under development for many years.
The U.S. Federal Energy Regulatory Commission approved building of Texas LNG in November 2019. That order provided the business five years, until November 2024, to construct the facility and location it into service.
We expect this to be authorized without affecting the project or its timeline, Brendan Duval, CEO and founder of Glenfarne Energy Transition, told .
Typically, it costs about $800-$ 1,000 per tonne to build an LNG export plant, so the Texas LNG task would likely cost in between $3.2 billion and $4 billion, according to a price quote by .
Glenfarne stated in its FERC filing that the project was delayed due to extenuating scenarios outside of Texas LNG's. control, consisting of lawsuits by the Sierra Club ecological. group tough FERC's orders licensing the job and. other fights over state permits.
Glenfarne wants to develop two liquefaction trains at Texas. LNG that together would be able turn about 0.5 billion cubic. feet each day (bcfd) of natural gas into about 4 million tonnes. per annum (MTPA) of LNG.
One billion cubic feet of natural gas suffices to provide. about 5 million U.S. homes for a day.
The U.S. is the most significant international LNG exporter and currently. has the capacity to produce around 104.6 MTPA of LNG.
In addition to producing LNG for its own power plants,. Glenfarne has said it likewise wishes to sell LNG to other business. to assist fund its projects.
Glenfarne already has nonbinding LNG supply contracts with. systems of Swiss commodities trader Gunvor and U.S. energy business. EQT, the most significant U.S. gas producer, according to its. FERC filing.
Glenfarne is also establishing the 8.8 million tonnes per. year Magnolia LNG export plant, to be located in Lake Charles,. Louisiana.
As soon as DOE finishes its analysis, we are positive they will. see the benefits Magnolia LNG brings to advance the energy. transition Duval added.
(source: Reuters)