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German cabinet accepts replacement of green-friendly heating laws
The cabinet of German Chancellor Friedrich Merz agreed Wednesday to scrap a controversial 2023 law that?required building heating systems use at least 65 percent renewable energy. This was criticized by the government as deterring investment. Conservatives and media opposed the so-called "heating laws" passed by former Chancellor Olaf Scholz because they feared it would force families to replace their gas and oil heaters with new, greener systems that cost thousands of Euros. Merz's coalition government has been battling with his Christian Democrats (CDU), who are conservative, and the Social Democrats (SPD), who are centre-left. According to the agreement reached in cabinet on Wednesday,?the existing heating law will be replaced with a new modernisation building law which?will remove the requirement that all buildings must include'mandatory renewables components. The agreement reached in cabinet on Wednesday allows households to keep their existing boilers, if they don't want to switch to other systems such as heat pumps or district heating. Katherina Reiche, Economy Minister, said: "We create investment security, planning security and we enable technological openness, flexibility and choice in heating systems." The new law is expected to pass before the end of summer recess in parliament. It will require that new gas and oil systems gradually blend in "climate-neutral" fuels starting 2029. By 2040, their percentage should increase from 10% to 60%. The law, which reiterates Germany's commitment to achieve climate-neutrality by 2045 will also implement European Union Buildings Directive, mandating that all new buildings be?zero-emission starting 2030. The BDI, Germany's industry federation, welcomed the change and called it "an important step... towards finally getting investments back on track." It said that this would give a boost to renovating Germany's existing building stock and putting money into construction. Katherina Droege of the Greens, who was the leader of Scholz's party when they were in power, called it "a complete abandonment" of Germany’s climate goals. Reporting by Christian Kraemer and Kirsti Knolle; writing by James Mackenzie; editing by Andrew Cawthorne
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Gold drops as US inflation data reduce rate-cut bets
Gold prices fell on Wednesday, following a strong U.S. Inflation data dampened speculation 'of interest rate cuts in the near future. At 0946 GMT the spot gold price was down by 0.4% at $4,694.59 an ounce, reversing a recent three-week high. U.S. Gold Futures for June Delivery gained 0.3%, to $4702.40. Dollar bullion is now more expensive than ever for those who hold other currencies. Data on Tuesday revealed that U.S. consumer inflation increased further in April. The annual rate posted its biggest gain in three-years, as higher oil prices caused by the U.S./Israeli war against Iran drove costs up. The Federal Reserve is expected to remain on hold for longer but with an easing bias, despite yesterday's higher inflation figures. This is likely to?keep (gold) moving sideways over the short-term," said UBS Analyst Giovanni Staunovo. If we see a slowdown in the growth of the U.S. economy, then gold should be supported. Investors await the U.S. producer prices inflation data for April. These are due later today. After Trump stated on Tuesday that he didn't expect to require China's assistance to end the conflict with Iran ahead of his meeting with Xi this week, the Middle East conflict remained a deadlock. Since the Iran War began in late February, gold has dropped more than 10% as high oil prices have fueled concerns about inflation. Gold is often seen as a hedge against rising inflation. However, high interest rates can weigh down on the non-yielding investment. According to CME Group’s FedWatch tool, traders have priced in a rate cut for the United States this year. They now see a?chance? of 29% that rates will rise by?December. Silver spot fell by 0.1%, to $86.61 an ounce. It had reached its highest price since March 11, earlier in the day. Palladium fell 0.1% and platinum 0.1%, to $2123.80. Platinum was also down 0.1%, at $1489.18. (Reporting by Noel John in Bengaluru. Mark Potter edited the article.
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Lebanon's Health Ministry says eight people were killed by Israeli airstrikes on a highway south of Beirut.
Eight people were killed by Israeli airstrikes on a highway south Beirut on Wednesday, Lebanon's?health?ministry? said, as the conflict between Hezbollah, Israel and Lebanon continued, just before a third round U.S.-mediated negotiations between Lebanon and Israel. Hezbollah, backed by Iran, and Israel have been exchanging blows, despite the ceasefire announced last month through U.S. mediation. Hostilities are mostly focused in southern Lebanon, where Israeli troops occupy a self declared security zone. Security sources said that the three separate airstrikes targeted vehicles along the coastal highway, around 20 km (12miles) south of Beirut. According to the Lebanese Health Ministry, two of the victims were children. The Israeli military did not immediately respond to an inquiry for comment. Israel's military has announced that it is targeting Hezbollah in southern Lebanon and told residents to leave six towns where they intend to act against the group. Reporting by Menna Alaaedinn, Nazih Osseiran and Jana Choukeir in Beirut. Writing by Tom Perry. Editing by Toby Chopra, Ros Russell and Toby Chopra.
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European stocks are rising as sentiment improves, but oil and government bond yields remain elevated
European'stocks' rose on early Wednesday trading as markets recovered from previous session losses. The price of 'oil also declined from recent highs, even though hopes for a peace agreement between the United States and Iran dwindled. Wall Street stocks fell after U.S. consumer price data showed that energy costs increased the most since three years on Tuesday. The inflation data showed the economic impact of Israel and the United States' war against Iran. This pushed up government bond yields as traders believed that it would increase the likelihood that central banks might be forced to raise interest rates sooner than they expected. The market sentiment was impacted in Asian trade. However, by 0939 GMT there were signs of a recovery. Europe's STOXX600 rose 0.4% for the day. London's FTSE 100 rose 0.3%. The 10-year U.S. Treasury yield is still at 4.4629 percent, its highest level since late March. Japan's 10-year and 5-year government bond yields reached new records overnight. The oil prices have dipped a bit, but remain high. Brent crude is at $107.3 per barrel, down by 0.4% for the day, and West Texas Intermediate is at $101.45 per barrel, down by 0.7%. International Energy Agency has said that the Middle East war will have a devastating effect on oil production. Both sides have not made any progress in negotiating an agreement to end the?hostilities. Amelie Derambure said that markets were in a "wait-and see" mode, as they waited for the U.S. president Donald Trump to meet with his Chinese counterpart Xi Jinping later this week in Beijing. She said that the preferred scenario would be for China to influence the ceasefire in Iran or peace, but this is considered unlikely. This would be more of a positive surprise than the current market scenario. Trump stated on Tuesday that he does not believe he will need China's assistance to end the war against Iran. Some ships were able to cross the Strait of Hormuz. It was reported on Tuesday by both Iraq and Pakistan that they had made deals with Iran for the shipping of oil and natural gas liquefied from the Gulf. This demonstrated Iran's control over energy flows in the strait. Derambure stated that investors now expect Strait of the Hormuz to open during the summer. Energy prices have risen in Europe and America, which has helped boost corporate profits. However, it is putting pressure on consumers. U.S. earnings were also boosted by the technology companies' investments in artificial intelligence. "There is still this belief that equities - except in a recession but that's on no one's radar for the moment - are better positioned to resist, or to perform decently, in this higher-inflation ?stronger-nominal-growth environment," Derambure added. As Prime Minister Keir starmer's power began to wane, gilt yields in Britain soared. The 10-year yield at 5.08% is down from its previous session's high. The dollar index is at 98.566, which is up 0.2% for the day. The euro is down 0.3% to $1.1699. The Japanese yen is at 157.88 after briefly rising on Tuesday due to "rate-check" speculation. This is often seen as an indication of a possible intervention. Gold prices fell 0.4% in the last 24 hours, to $4,694 per ounce.
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Tinubu calls for global financial overhaul, as debt costs are limiting spending
Bola Tinubu, the President of Nigeria, said that Nigeria will spend $11.6 billion in 2026 servicing its debt, which is nearly half of the projected revenue for government. He called for a reform to a global financial structure he claimed penalized African borrowers. He said that debt-servicing costs were crowding out expenditures on infrastructure, health care and education despite the government's tax reform aimed at increasing revenues in Africa’s most populous nation. Data from the Debt Management Office shows that Nigeria will spend $5.15 billion servicing debt by?2025. Tinubu, speaking at the Africa Forward Summit, held in Nairobi on Tuesday, said that high borrowing costs, limited access to long term finance, and other factors were causing African economies to be structurally disadvantaged. The summit was co-hosted in Nairobi by France and Kenya, and brought together leaders from over?30 different countries. "Each dollar that leaves the treasury for punitive rates of interest is a dollar that didn't go to?our digital industries, steel industry, textile mills or agro-processing facilities," he added. Tinubu, who is now in his third term in office, and is aiming to be re-elected in January 2027 has implemented Nigeria's most significant reforms in decades. He has scrapped costly fuel and electricity subsidies, devalued the currency, and overhauled the tax system, all in an effort to stabilize an economy that was hit by high inflation, shortages of foreign exchange, and external shocks. He said that the "painful and homegrown" reforms stabilised macroeconomic indicator and raised?investor confidence. He added that gains are being undermined by the global financial system that views African sovereigns as high-risk borrowers and drives up interest rates. The Nigerian Economic Summit Group, a group of analysts led by Nigerian economists, said that debt service remains a major vulnerability for the nation. Tinubu called on Africans to be more prosperous and for their growth and development, including through cheaper financing. He called for a reduction in illicit financial flows, and for greater industrialisation support. Africa, he said, accounted for less than 2 percent of global manufacturing. He said, "Nigeria does not ask for charity." "We are demanding a financial structure that allows Africa to industrialize and refine its crude oil, produce its own pharmaceuticals and compete on the global market.
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Nippon Steel to earn $1.4 billion in fiscal year profit, as one-off items fade
Nippon Steel is Japan's largest steelmaker. On?Wednesday, it said that its net profit for the fiscal year ending in March will?increase dramatically to a?220 billion ($1.4 billion). This is because the effects of one-off losses are fading from its results. Nippon Steel also reported a 95% decline in profits for the previous financial year, to 17.2 billion Japanese yen. In February, the company announced that it "expected" to lose 70 billion yen in the fiscal year ending in March. This was due to an explosion at a blast-furnace and to costs related to the U.S. Steel transaction. Nippon Steel said it was able to "turn a profit" due to increased profitability, cost reductions, and gains in inventory and foreign exchange value, because raw material prices rose while the yen remained low. It said that it expects to suffer a loss of around 50 billion yen due to Middle East risks in the first quarter. However, the company added that its impact on full-year earnings 'wasn't yet possible to estimate. JFE Holdings, a Japanese steelmaker, and Kobe Steel warned earlier this month that the U.S. and Israeli 'war on iran' could lead to a rise in commodity prices and fuel shortages. JFE Holdings (Japan's second largest steelmaker) said that it was working to raise the price of steel in response to rising raw materials prices.
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Gold falls as US inflation data weighs down on Fed rate-cutting hopes
Gold prices extended ?losses on Wednesday as uncertainty over ?the Middle East conflict and stronger-than-expected ?U.S. ?Inflation data dampened hopes for Federal Reserve rate reductions, as attention focused on the upcoming summit between U.S. president Donald Trump and Chinese counterpart Xi Jinping. As of 0752 GMT spot gold was down 0.3% at $4,701.98 per ounce. This is a further retreat from the three-week high reached in the previous session. U.S. Gold Futures for?June Delivery gained 0.6%, to $4.712.70. The markets have begun to price in that the Fed could hike rates as early as the end the year. Kyle Rodda is a senior market analyst at Capital.com. Data revealed that U.S. consumer inflation rose further in April. The annual rate posted its biggest gain in three year, further reducing the hopes that the Fed would cut interest rates in this year. According to CME Group’s FedWatch, traders have priced in a rate hike this year. The tool shows that the market now sees a 30% probability of one by December. Investors are awaiting the Producer Price Index to be released later today, as well as the meeting between U.S. president Donald Trump and Chinese 'President Xi Jinping, which is scheduled for Thursday and Friday. Trump said on Tuesday that he doesn't think he needs China's assistance to end the Iran war, even though hopes of a lasting deal are fading and Tehran is tightening its grip on the Strait of Hormuz. Indian 'gold and silver futures' soared after New Delhi increased import tariffs from 6% to 15% as part of its efforts to reduce overseas purchases and ease pressure on the country’s foreign exchange reserves. Silver spot fell by 0.2%, to $86.34 an ounce. It had earlier reached its highest level since the 11th of March. Palladium rose 0.5% to $1,498,47, while platinum fell 0.4% at $2,118.13. (Reporting and editing by Subhranshu sahu, Rashmi aich, and Pablo Sinha from Bengaluru)
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Minutes show that Sweden's Riksbank is vigilant about inflation, but has not raised rates yet.
The central bank of Sweden can wait until it has a better picture to adjust policy. Erik Thedeen, Governor of the Riksbank, said that "the focus is on inflation risks and we will be monitoring closely any signs that 'inflationary trends are spreading more widely in the economy." It is too early to tell if a "change of direction" is required, but we are "ready to change our stance". Oil prices have risen dramatically due to the war in the Middle East. There is a growing consensus on the impact this will have on the global economy. Currently, conditions in Sweden are benign. As expected by the analysts in a poll, Riksbank held its policy rate at 1.75% on May 7. The growth in Sweden's first quarter was weak, and the annual underlying inflation rate, excluding energy prices, was at its lowest level in 30 years, 0.0% in April. This was partly due to the temporary reduction in VAT on food. Sweden is an exception in Europe because of its low inflation.
Extreme Asian heat spurs LNG demand ahead of summer months
Severe temperature levels throughout Asia are driving up melted gas (LNG) demand in the region as importers look for freights ahead of summertime, with imports in South Asia hitting records.
This could tighten readily available supply and additional lift Asian spot << LNG-AS > prices that have currently gotten a third considering that April, with heatwaves across South and Southeast Asia boosting air-conditioner use and other cooling demand. Costs are now at a near six-month peak above $12 per million British thermal systems (mmBtu) and are anticipated to stay raised.
Spot prices are now driven by Asian demand. Temperature levels in South Asia are increasing due to a heatwave, increasing power need, said Siamak Adibi, principal expert at energy consultancy FGE.
While China may still see lower need compared with its record breaking deliveries in 2021, demand from India and the rest of Asia has actually made up for any drop-off, Adibi stated.
Parts of South and Southeast Asia saw severe heat and record temperature levels in April and May, increasing electricity usage for cooling and straining power products. In India on Thursday, at least 15 individuals died of suspected heatstroke in the eastern states of Bihar and Odisha.
South Asian LNG imports rose almost 20% from a year earlier to 3.8 million metric loads in May, according to analytics firm Kpler. India saw its greatest import levels ever for May at 2.4 million loads, while Bangladesh LNG volumes hit an all-time month-to-month record at 0.6 million lots, according to Kpler information.
New importers the Philippines and Vietnam, which started taking LNG deliveries last year, have likewise bumped up their purchases. Vietnam got three freights in April and May for power generation, while buyers in the Philippines delivered 9 freights so far this year versus 11 for all of in 2015.
Rising demand for cooling is set to continue as Northeast Asia enters its summertime. Japan's meteorological agency forecast most likely higher-than-average temperatures from June to August, and China's energy regulator alerted power supply will be tight in some areas the next couple of months amid growing consumption.
Numerous weather forecasts suggest Northeast Asia might experience hotter-than-normal weather from May, said Energy Elements analyst Minutes Na in a note, including that restocking demand for LNG in Asia will be higher year-on-year this summer.
We forecast a total restocking need of 2.4 million heaps this summertime throughout Japan, South Korea and Taiwan, up by 2.3 million loads year-on-year and 0.1 million lots above the five-year average.
Japan federal government data showed LNG stockpiles by energies at 2.06 million tons as of May 26, listed below the five-year average for the duration, as Tokyo is already experiencing hot weather.
South Korean power generation business Korea Midland Power Co (KOMIPO), Thailand state-energy company PTT, Philippines power manufacturer Very first Gen and Bangladesh's. state-owned Rupantarita Prakritik Gas Co Ltd (RPGCL) have all. likewise released tenders looking for LNG for shipment in July.
(source: Reuters)