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Holders of Venezuelan bonds ask New York Court to protect their rights
Holders of an important bond defaulted on by Venezuela's PDVSA state oil company asked a New York Judge to ensure that they can claim compensation in an expected auction of shares of the parent of Venezuelan-owned U.S. refining company Citgo Petroleum. Holders' claim in New York against Venezuela is still not resolved. However, if they obtain an injunction, they can block the transfer of Citgo Holding's parent company PDV Holding's shares to the winner of the auction. Last week, a Delaware court officer who was overseeing the bidding process recommended that a $7.4 billion bid submitted by group led by unit of Gold Reserve for PDV Holding be declared the winner. The auction, which is being conducted by a court, aims to repay Venezuela's creditors for the debt defaults and expropriations that occurred in South America. The Gold Reserve Group's bid is not a payment agreement for bondholders, unlike some other competing offers. Holders are preparing to file an injunction in Delaware if Gold Reserve Group's offer under the proposed terms is approved. Christopher Clark, the lawyer for the holders, said to Judge Katherine Polk Failla of the Southern District of New York that "we don't wish to interfere with sale" in a court proceeding. "We are only trying to protect our rights." Delaware is not a proper forum to do that. Leonard Stark, a federal judge, must decide in the coming weeks whether or not to approve this recommended bid. Stark anticipated that bondholders' objection to Gold Reserve's proposed transaction to purchase Citgo's parent company could lead to an increase in litigation. The 8-year-old case saw a first failed bidding round. Late in June, the lawyers for the holders informed Polk Failla that they would be seeking relief, such as an injunction to maintain their status quo, while the New York Court decides their case. The purpose of the hearing on Thursday was for lawyers to explain their planned injunction. Reporting by Marianna Pararaga Editing and proofreading by Marguerita Chy
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IMF: New US tariffs increase trade uncertainty
The IMF stated on Thursday that it closely monitored the latest U.S. Tariffs announcements. It said uncertainty about the global economy outlook was high, and encouraged countries to work together to create a stable trading environment. The IMF announced that it would provide more information when it updates its April World Economic Outlook late in July, before the new deadline of August 1, for trade negotiations. Donald Trump, the U.S. president, expanded on Wednesday a global economic war by imposing a new tariff of 50% on U.S. imports of copper and a duty 50% on Brazilian goods. Both duties will be effective on August 1. He also announced that he would be increasing tariffs on 21 other countries. In response to an IMF representative's question, "Trade-related development is evolving and uncertainty continues to be high", the IMF spokesperson stated. ? "Countries must continue to work together to create a stable trading environment and to address common challenges." Surveys released on Tuesday showed that worries over future U.S. Tariffs clouded the outlook for many factories in the United States, Asia, and Europe. However, some factories were able shrug off this uncertainty and continue to grow. Analysts say the softness of the surveys underscores the challenges that businesses and policymakers face as they attempt to navigate Trump's efforts to shake up global trade. Officials from the Trump administration claim that tariffs have not caused inflation and that a law reducing taxes approved last week more than offsets any temporary negative effects of additional trade duties. In April, the IMF lowered its growth predictions for the United States and China, and warned that trade tensions could further slow the growth. It cited the impact of U.S. Tariffs, which are now at a 100-year high. Since then, the economy has grown due to stockpiling in anticipation of tariffs. The U.S., as well as China, have also backed down on steep reciprocal tariffs. This could indicate a slight, if temporary, upward revision. Economists believe that uncertainty is high, and that higher tariffs are likely to hit harder in the second part of the year. (Reporting and editing by Diane Craft; Andrea Shalal)
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Thousands of first-responders are searching for Texas survivors despite the odds
On Thursday, thousands of first responders continued to comb through piles covered in mud and debris, searching for survivors, despite the odds, six days after flash flooding swept across the region, killing 120. Twelve states have sent search teams to Kerr County where most of the victims died when torrential rainfalls sent a wall raging water down the Guadalupe River at dawn on July 4. Officials said that at least 96 people including 36 children died in Kerr County. They made the announcement during a press conference on Thursday morning. A further 161 people are still missing. According to authorities, the last person alive found was Friday. Camp Mystic is a Christian all-girls summer retreat located on the banks the river. Officials said that five girls and one camp counselor remain missing. Kerr County is located in the middle of "flash-flood alley" - a region of central Texas that has experienced some of the deadliest flooding. In less than an hour, more than a foot fell early on the 4th of July. The river rose in height from a few inches to over 34 feet (10.40 meters) within a few hours. It washed away trees and other structures as it swept its way. On Wednesday, hundreds of Kerrville residents gathered for a prayer service at Tivy high school to remember the victims. The memorial held at the football stadium of the school saw students and adults praying and singing, some holding back tears and hugging each other. Reece Zunker and Paula Zunker were both former teachers at the school. According to the school district, their two children are still missing. Marti Garcia, an art teacher who was present at the event on Wednesday, said: "Zunker is a tough guy." "I had complete faith in his ability to overcome the challenge." Kerr County authorities have been questioned about what more they could have done to warn residents of the rising floodwaters in the early morning hours of July 4, and to get some to higher ground. After failing to obtain state funding to cover the costs, the county refused to install an early warning system. Officials have promised to examine the events in order to determine where they went wrong. However, their focus at this time is on rescue and recovery. In a special session, the state legislature will meet later this month in order to investigate and provide funding for disaster relief. New Mexico Governor Michelle Lujan Grisham informed reporters Thursday that, after discussions with Homeland Security Secretary Kristi Nuem, federal officials had committed $15 million to disaster relief in the mountain village Ruidoso where, on Tuesday, flash flooding killed three people including two children and damaged hundreds homes. Lujan Grisham stated that 12 million dollars of the federal disaster funds were money that was previously promised, but never paid to build levees in order to protect the community against flash floods following wildfires. Reporting by Jane Ross, Additional reporting by Jonathan Allen and Rich McKay; Writing by Joseph Ax. Editing by Chizu nomiyama.
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Analysts warn about the impact of Trump tariffs on shares of Brazil's Embraer
The shares of Brazilian planemaker Embraer plunged sharply Thursday after U.S. president Donald Trump announced he would impose 50% tariffs on all imports coming from South America. Analysts have warned that the third largest aircraft manufacturer in the world, with a large market for its executive jets and regional planes in the U.S., will be among the most affected firms by the tariffs. Embraer shares traded in Sao Paulo fell as much as 8 percent on the news before reversing their losses and trading down only 5%. Embraer led the decline in Brazil's Bovespa index which fell 0.7%. SkyWest recently ordered 60 E175 Embraer jets. The demand for business jets has been high in Brazil, where Embraer has assembly lines. Analysts at Itau BBA said that 60% of Embraer’s revenues are derived from North America. Of this, three quarters of them could be affected by tariffs. The analysts estimated that Embraer could lose $150 million in earnings before interest and tax (EBIT) between August and December. Brazil's top imports to the United States are aircraft, oil, steel, coffee, and orange juice. Analysts at XP said that "although we see Trump's statement primarily as a negotiation tool, we expect investors to remain concerned given the potential impact a 50% tariff on Brazilian products would have for Embraer." They noted that although Embraer's jets are assembled in Florida, some of their content comes from Brazil. XP said that the tariffs may also affect demand for E1 aircraft in an inflationary climate. Embraer shares have risen more than 30% year-to date, after a 150% increase last year. The shares reached a new record earlier this month due to robust demand for Embraer's aircraft. (Reporting and editing by Paul Simao; Gabriel Araujo)
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Mali military helicopter transports gold from Barrick's Loulo Gounkoto
Three sources confirmed that on Thursday a Malian military helicopter transported gold from Barrick's Loulo-Gounkoto mining complex. This comes days after reports claimed that a court-appointed administrator intended to sell the bullion at the site to fund operations. Last month, a Bamako Court appointed a temporary administrator to resume operations at the largest gold mine in the West African nation. This comes nearly six months after Barrick Mining had suspended the site's operations amid tensions over the implementation of the new mining code. Barrick has said that it had to suspend its operations at the beginning of January after Mali’s military-led Government blocked its exports and detained its executives for two months. They also seized three tonnes of bullion. The World Bank was also contacted to help resolve the dispute. A brown and green helicopter landed on the tree-lined runway of the mine site Thursday morning. The mine's security team escorted its passengers to the plant where the gold is stored, according to the first source. Five hours later, the helicopter took off with the bullion aboard. The first source reported that one ton of gold, worth approximately $107 million, had been in the storeroom of the site since January. Three tons of gold were taken out and stored in a vault by a Malian Judge. Second source: The entire tonnage was taken Thursday. First and third sources, as well as a fourth source, said that the provisional administrator and former health minister Soumana Maadji plans to fund the mine operations by selling the gold. Three sources have said that the gold airlifted will be sold to this end. While drilling and other extraction activities have yet to begin, operations at the plant, which processes ore into gold, resumed on Monday, according to the third, fourth and another source. According to estimates, it takes between 11 and thirteen days to produce the first gold bars after the plant restarts. Barrick's and Mali's Mines Ministry spokespeople did not respond immediately to requests for comments. Makadji was not available for comment. Barrick and Mali’s government are in talks since 2023 about the implementation of a mining code which increases taxes and gives the Mali government a larger share of the gold mines. Reporting by Portia Crowe in Dakar, and Divya Raagagopal in Toronto. Mark Potter edited the story.
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As investors digest Trump's latest trade tariffs, stocks edge higher and the Brazilian real rises.
Investors weighed the latest trade announcements by U.S. president Donald Trump on Thursday. The Brazilian real recovered from its losses after Trump announced a 50% tariff for goods coming from Brazil. Trump confirmed late Wednesday that a 50% copper tariff will be implemented, with effect from August 1. The last time U.S. Copper prices rose on the day was late Wednesday. On Wednesday, the Brazilian real's volatility gauges reached their highest level since late April and the real fell as much as 2,3%. The dollar fell by 0.4% last Thursday against the real while Brazilian stocks dropped about 0.7%. Brazilian President Luiz inacio Lula da silva vowed to retaliate against unilateral tariff increases and called for a ministerial meeting on Thursday. The market's reaction to Trump's recent moves has been milder than it was in April. This could be because investors are hoping that the ongoing trade negotiations between Washington, D.C. and its trading partners will result in an agreement before the deadline. Investors are also preparing for the second-quarter earnings and looking for any signs of impact from Trump's Trade War launched on April 2. Bruce Zaro of Granite Wealth Management, Plymouth, Massachusetts said that the market appeared to be in a hold pattern before the S&P 500 company reports. JPMorgan Chase will release its results on Tuesday, which is essentially the start of the reporting period. He said that there was a lot of skepticism among the analysts who follow the S&P 500. They've all been reducing their estimations based on tariffs and the uncertainty surrounding that. "But, we believe, after all, that those tech companies and growth companies will come up with fantastic earnings." I believe the market is still in a period of waiting. The Dow Jones Industrial Average rose by 203.80 or 0.46% to 44,664.09; the S&P 500 gained 6.51 or 0.11% to 6,270.16; and the Nasdaq Composite dropped 50.94 or 0.25% to 20,560.39. The MSCI index of global stocks rose by 0.64 points or 0.07% to 924.94. The pan-European STOXX 600 Index rose 0.5%. Investors digested the upbeat quarterly results of TSMC, which showed strong interest in artificial-intelligence applications, fuelled by the demand for products from the world's largest chipmaker. TSMC released its report a day after Nvidia, the AI chip giant, became the first publicly traded company in history to reach $4 trillion market value. However, it closed at that level. The dollar index (which measures the U.S. Dollar against a basket currencies including the yen, euro and others) rose by 0.4% to reach 97.77. Bitcoin gained 0.46%, reaching $111,289.21. The yields on 30-year U.S. Treasury bonds increased after U.S. figures showed that unemployment claims in the United States unexpectedly dropped last week. This was before the U.S. Treasury Department planned to sell $22 Billion of 30-year Treasury bonds. The yield on U.S. benchmark 10-year notes last rose 1.4 basis points for the day to 4.356%. U.S. crude dropped 1.86%, to $67.11 per barrel. Brent was down to $69.09 a barrel, a 1.55% drop on the day.
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US again stops cattle imports from Mexico due to flesh-eating screwsworms
The U.S. Department of Agriculture reported that the New World Screwworm, a livestock pest that eats flesh, has moved closer to the U.S.-Mexico border. Washington blocked imports of Mexican calves just days after allowing them to resume at an Arizona port of entry. Screwworms are parasitic fly larvae that lay their eggs in the wounds of warm-blooded mammals, such as livestock and wild animals. The larvae of the screwworm burrow into living flesh with their sharp teeth once they hatch. If left untreated, these larvae can kill their hosts. The USDA announced late Wednesday that Mexico reported a case of screwworm on Tuesday in Ixhuatlan de Madero in Veracruz. This is about 370 miles from the U.S. Border. The USDA ordered that all livestock trade be stopped through southern ports of entrance, effective immediately. Bill Bullard is the CEO of R-CALF USA, a group of cattle producers in the United States. He said that closing down border was not only justified but essential. Mexican President Claudia Sheinbaum criticized the decision as "exaggerated" and said it was motivated by one new case. Sheinbaum told her morning press conference Thursday that "it is an overreaction to a situation which is already under control." Mexico recorded 480 cases at its peak, in late June. According to the most recent data from the Agriculture Ministry this number has fallen below 400, as Mexico continues its campaign against the pest. Sheinbaum said, "We hope they will be reopening very soon." United States Concerns expressed by the Mexican government about the threat of the disease nearing its northern border. A US infestation could cause further shortages of cattle in the United States, already at their lowest level in decades. It would also threaten other livestock, including household pets. In May, the USDA suspended Mexican beef imports after screwworm was found on farms in Oaxaca or Veracruz in Mexico. The agency announced last week that imports would resume on Monday in Douglas, Arizona as part of a gradual reopening the border, because screwworms were not moving north from Mexico. Secretary Brooke Rollins stated that the USDA must see progress in fighting the pest in Veracruz, and other nearby Mexican states, before it will reopen the livestock ports along the southern border. In the 1960s, researchers introduced sterile male screwworm flies to mate with female screwworms in order to produce infertile egg. Last month, the USDA announced that it was building a sterile flies dispersal facility and considering a sterile flies production facility in Hidalgo county, Texas. Colin Woodall, CEO for the National Cattlemen's Beef Association, said that work should begin immediately on a U.S. facility to produce sterile flies. He said that the New World Screwworm's movement northwards jeopardizes American agriculture. "We can't wait any longer." In a press release, the Mexican Beef Producers Association expressed regret for the suspension of the program. Meanwhile, the Mexican government indicated that they were working to release sterile fly. Reporting by Tom Polansek, Aida Pelaez Fernandez and Mark Porter; editing by Chizu Nomiyama & Mark Porter
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Brazil's stocks fall, but real rebound after Trump's tariffs of 50%
Brazil's stock exchange fell on Thursday. However, the real recovered the next day, after U.S. president Donald Trump shocked the world by imposing 50% tariffs instead of the 10% originally indicated. Trump cited political disagreements as the reason for his shock decision. The currency volatility gauges reached their highest level since April's tariff announcements. After the real fell as much as 2,8% on Wednesday, in response to what Deutsche Bank called an escalation in tensions. The currency fell 2.3% on Wednesday, but rebounded on Thursday to be up 0.5% against the dollar. U.S. listed shares of Brazilian companies dropped, with an ETF that is widely followed in Brazil falling by nearly 2%. Itau Unibanco dropped 3.8%, Banco Santander fell 3.5%, and Petrobras, the state oil company lost 0.4%. The local benchmark fell by 0.6%. Citibank's analysis indicates that the impact of the tariffs is uncertain, but this announcement is a blow to Brazil's external accounts. Citibank said that further escalation of the tariff could lead to financial account outflows and potentially damage asset prices. Brazil's bonds are among the best performers in emerging markets, with bonds denominated in dollars returning almost 8% while local bonds returned a staggering 20%. Local stock markets have reached record highs this month, and are among the most affordable in terms of dollar value for expected earnings. The dollar-denominated Brazil Stock Index is also up by nearly 25%. This is due to the 13% real surge this year. Graham Stock, RBC BlueBay Asset Management, said Trump's reasons for the tariffs were based on his dissatisfaction with a court case involving former Brazilian right-wing president Jair Bolsonaro as well as legal actions against U.S. Social Media firms. Stock stated that "the economic implications of this are still fairly modest" as only a little over 10% of Brazil’s exports were going to the U.S. and represented just 1% of Brazil's GDP. He said that the risk was that Lula would use his defiance against U.S. intervention as a badge in the lead-up to October 2026's elections. In this case, de-escalation is less likely. Experts and traders said that the U.S. consumer will face steep price increases on staples such as coffee and orange juice, if the tariffs of 50% are implemented. Brazil is the source of a third the coffee that the U.S. consumes, making it the largest consumer of this beverage in the world. More than half the orange juice consumed in the U.S. comes from Brazil, too. Trump's decision on Wednesday followed his threat to impose a 10% additional tariff on the BRICS developing nation group - Brazil being the 'B.' - that he called "anti American."
LSEG data show that the price gap between east and west for diesel in July is at its widest level in two-and-a half years.
LSEG data on Thursday showed that the immediate July price differential between diesel prices in Asia & Europe widened to a discount near $120 per metric tonne, its largest in slightly over 2-1/2 years.
According to data, the last time the exchange of futures swaps (EFS), the price difference between ICE Gasoil Futures and Singapore Swaps, reached this level was at the end October 2022.
The ICE Gasoil Futures Contract for July expires later this Thursday. As of 0830 GMT, the August EFS had a discount per metric tonne of $35.
A larger EFS spread is likely to encourage swing suppliers from India and the Middle East, to send their cargoes over to Europe in order to take advantage of higher prices.
LSEG's shiptracking data shows that most of the cargoes from the Middle East, India and other countries bound for West of Suez markets are loaded in the first half of July.
James Noel Beswick, analyst at Sparta Commodities, said that the unprecedented rise in European diesel prices created arbitrage opportunities for sending supplies from Asia and the U.S. Gulf Coast to Europe.
A Singapore-based trader stated that the large backwardation of ICE gasoil contracts could pose a risk, as it could reduce the prices of their cargoes when they reach Europe during the second half of July or August.
Backwardation is a market structure in which prices for immediate months are higher than future months.
The July/August ICE Gasoil Spread
August/September
(source: Reuters)