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Dollar up, stocks down as Middle East War sparks safe-haven trade
The dollar rose and global stocks fell on Thursday as investors sought perceived safe havens amid growing concerns about possible U.S. participation in the Israel-Iran war air battle, which has fueled a rise in oil prices this week. Donald Trump, on the geopolitical side, kept the world guessing as to whether the United States will join Israel in its bombardment of Iranian nukes sites. He told reporters outside the White House, "I may do this." I may or may not do it." Central bankers have been forced to make a flurry decisions as a result of Trump's unpredictable approach on trade and tariffs. This has made it difficult for them to set monetary policy. The STOXX 600 index fell a third time in Europe on Friday, bringing its weekly decline to nearly 2.5%, the biggest since the tariff-induced turmoil that erupted in April. U.S. S&P futures dropped 0.5%, despite the fact that most U.S. market will be closed for a holiday on Thursday. Kyle Rodda is a senior financial market analyst at Capital.com. He said, "Market participants are still tense and uncertain." He added that speculation was rampant "that the U.S. would intervene. This would be a material escalation, and could invite direct retaliation by Iran against the U.S." This scenario could lead to a larger regional conflict with consequences for the global energy supply, and possibly economic growth. The Middle East crude supply shocks have been the main cause of recent market anxiety. They've driven crude oil prices up 11% in one week. Brent crude prices rose as much as 1%, to $77.40 per barrel. This is close to their highest level since January. Gold, which usually struggles when the dollar increases, has pared its earlier losses and is now trading at $3372 per ounce, an increase of 0.1% for the day. The dollar rose, but the euro fell by 0.1% to $1.1466. Australian and New Zealand Dollars, both risk-linked currency, were down by 0.7% and 1.0%, respectively. CENTRAL BANK POLICY The Federal Reserve sent mixed signals to the markets overnight. Trump was not pleased that policymakers kept rates as they were and maintained projections of two quarter-point cuts this year. Jerome Powell, Fed chair, was cautious about future easing, saying in his press conference that Trump's aggressive tariffs will lead to "meaningful" increases in inflation. MUFG strategists said that the Fed is "underestimating the weaknesses in the economy which were present before the shock of the tariffs, and specifically, ignoring the cracks in the labor markets that have been evident for years". As expected, the Bank of England kept UK rates the same. Policymakers also said that trade policy uncertainty will continue to harm the economy and cause a fall in the pound. Norges Bank The surprise quarter-point cut on the crown currency weighed heavily on the markets, while The Swiss National Bank reduced interest rates to zero as expected. However, the fact that it did not drop below zero gave the Swiss Franc a boost, and the dollar fell by 0.1%, at 0.8184 Swiss francs. Commodity markets are a great place to find out about the latest trends. Price of Platinum Nearly $1,300 per ounce was the highest price in nearly 11 years. Analysts said that consumers were looking for a cheaper gold alternative.
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Israel claims it has struck Bushehr and other nuclear sites on the Gulf Coast
A spokesperson for the Israeli military said that on Thursday, they had hit nuclear sites in Bushehr and Isfahan and Natanz and continued to target additional facilities. It was not immediately apparent the extent of Israel's assault on Bushehr. Bushehr, Iran's sole nuclear power plant, is located on the Gulf Coast and uses Russian fuel, which Russia takes back after it has been used to reduce the proliferation risk. Gulf States have been concerned about the potential effects of an attack, which could include contamination of air and water. Sources familiar with the issue said that Gulf countries are preparing themselves for the worst possible scenario. Sources said that Gulf countries had, in collaboration with the U.N. Nuclear Watchdog, prepared a contingency for any attack against any nuclear plant in this region. In a statement released earlier Thursday, the Russian Embassy in Iran stated that Bushehr is operating normally and it does not perceive any security threats. Qatar's Prime Minister warned in March that an attack against Iran's nuclear facility would "entirely pollute" the Gulf waters and endanger life in Qatar and the UAE. Sheikh Mohammed bin Abdulrahman Al Thani said that an attack on Iran’s nuclear sites will leave the Gulf without "water, fish, anything... no living". Qatar, the UAE, and Kuwait are facing Iran across the Gulf. They have very little natural water resources and rely on desalinated Gulf water to provide potable drinking water for their 18 million residents. Reporting by Jana Choukeir in Dubai, Pesha Magd in Riyadh, and Steven Scheer at Jerusalem. Writing by Andrew Mills. Editing by Alison Williams and Aidan Lewis.
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Mining and warming waters are threatening Chile's underwater forests
Underwater forests teem with life in the icy waters off Chile's northern coast. Red and green towers of seaweed rise from the ocean floor. They provide food for wildlife and income for the locals, as well as oxygen and carbon for the planet. Scientists believe that these forests have even greater potential for sustainable food, protein and other materials, despite the fact that they are threatened due to human pollution and warming oceans. "They form a band along the coastal edge, which is essentially an armour of protection and biodiversity," said Alejandra González, a marine scientist from the University of Chile, who specializes on marine ecosystem conservation. She explained that seaweed captures CO2 and produces oxygen, creating important carbon storage under the waves. She said that seaweed is the future of our planet. These forests are being under increasing pressure around the world. A British Natural History Museum report in May stated that kelp forest declines at a rate four times greater than rainforests and twice as fast as coral reefs. Maria Jose Espinoza is the leader of the local Changa community. She said, "Before this, these areas were rich in seaweeds, seafood and fish. Things that most people live off of in this town, from seaweed collection." Changas have been harvesting seaweeds from the forest for many generations. However, they are concerned about the shrinking forests. Espinoza attributed the harm to coastal environments caused by tailings from mining in the nearby copper- and lithium rich Atacama Desert, as well desalination facilities being developed by miner. Chile is the second largest producer of lithium and the top copper producer in the world. The majority of mining activities are located in the north. Roberto Carlos Chango and his son, a diver who went out to collect shellfish with him, both agreed on the importance seaweed forests. Seaweeds are important to all animals because they provide food. He said that without seaweeds there would be no shellfish or fish. Sergio Gutierrez is a Changa harvester of seaweed who gathers the algae and bundles it for sale. He said that the marine forests are a vital part of the local community. He said, "They provide the basis for our livelihood and so much more." Marine biologist Gonzalez believes that more policies are needed to protect underwater forests, given the many benefits they provide for the community and the environment. Gonzalez stated that "all marine organisms related to (the forests), as well as humans, depend on their survival." These forests keep temperatures stable, they create a breakwater effect and maintain the ecosystem. Reporting by Rodrigo Gutierrez, Paposo. Writing by Alexander Villegas. Editing by Adam Jourdan & Sandra Maler.
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Mike Dolan: A weak dollar can soften the impact of any oil shock on Europe.
Oil-importing nations will not be able to avoid a blow in the event of a second energy price shock due to Middle East tensions. However, a rare period of dollar weakness can help soften the blow for other countries. The majority of crude oil prices are in U.S. Dollars, so the impact on regions such as Europe is magnified when the price increases during times of dollar strength. The dollar's decline has actually had the opposite impact, reducing the price of oil as a result of the ongoing Israel-Iran conflict. We're not in a'shock zone' yet, but we are still a long way from it. The dollar-based price of global crude oil has risen by about 14% in the last week. However, they are still well below their January peak and about 7% less than a year ago. The impact on Europe has been more benign, thanks to the euro's 12% increase against the dollar this year. The euro price for Brent crude has fallen by 20% in the last year and is down 12% this year. The greenback's fall is a welcome respite for oil-importing countries, as it helps to soften the blow of soaring oil costs and limit the economic impact. If the dollar continues to fall, this could reduce the relative impact of any new energy price hikes on Europe. This could, in turn support Europe's performance against the United States in this year, and further undermine the American exceptionalism narrative that has fuelled extraordinary portfolio flows into the U.S. over the past few years. The continued dollar weakness, coupled with a new drop in energy prices, would only increase pressure on the European Central Bank (ECB) to lower interest rates. This is to avoid a significant undershoot to its 2% inflation goal. INCREASINGLY INSTABLE According to UniCredit's Keller the dollar/oil relationship is another example of an economic relationship that has become, "increasingly instabile" this year. The dollar's correlation to stocks, bonds, and commodities has changed as foreign investors who have trillions invested in U.S. bonds and stocks began re-evaluating their dollar exposure due to America's trade conflicts, reworked alliances, and upended institutions. The dollar's loss of its'safe-haven' status in times of stress and uncertainty is most obvious. It fell along with stocks and bonds, during an April that was turbulent. The link between the dollar and oil has become especially unstable. A stronger dollar, all else being equal should lower oil prices because it will reduce demand from non-Americans around the globe due to the additional local currency costs of a barrel. The opposite, theoretically, should also be true. In recent years the opposite was true. A spike in oil price after Russia's invasion of Ukraine in 2022 triggered inflation, and steep Federal Reserve rate increases. This was followed by a subsequent drop in oil and inflation, and the start of a Fed easing program. The dollar's movement was closely correlated with the energy price during that period. The dollar index soared by 20% when the oil prices doubled between the mid-2021 and immediate aftermath of the Ukraine Invasion. This amplify the rising costs of energy for Europe. This relationship was broken again after the U.S. elections last year, when the dollar rose initially even though oil prices were falling. The dollar hasn't strengthened as much this month, despite the fact that the correlation was positive after January. This is because the rise in crude oil prices after the Israel/Iran conflict broke out did not coincide with the strengthening of the dollar. The greenback is still hovering near new lows. Relationships are influenced by the background, of course. The primary concern at the moment is that after a decade-long dollar strength, a multiyear unwind will be required as trade, investment and economic imbalances must be corrected. If this is the case, any new oil spike will be less severe for the global economy than it was last time. These are the opinions of the columnist, an author for.
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Copper nears a one-week low due to stronger dollar and growth concerns
Copper prices fell to a new low Thursday, and other base metals followed suit. The strong dollar and growing global growth concerns - amidst escalating tensions with Iran and Israel - contributed to the decline. As of 0852 GMT the LME's 3-month copper fell 0.5% to $9,608 per kilogram, its lowest since June 13. A stronger U.S. Dollar on the rise due to geopolitical worries tends weaken U.S.-dollar-based prices. John Meyer, an analyst at SP Angel, said that long-only funds were sitting on the sidelines because of elevated risk concerns. He added that the pullback is also due to reduced activity because U.S. traders will be away on Juneteenth Thursday. Oil prices and rising Middle East tensions boosted the dollar, which was also bolstered by Federal Reserve Chair Jerome Powell’s cautionary tone regarding inflation. Israel attacked a nuclear site in Iran and Iranian missiles struck an Israeli hospital as U.S. president Donald Trump kept the rest of the world guessing whether the U.S. will join Israel to attack Tehran's nuclear sites. Inflation, high oil prices, and war tend to cause supply chain disruptions, raise costs, and reduce investment, slowing down global growth. LME copper inventories Data for Wednesday revealed that the number of tons dropped by 4,025 to 103 325. This was the lowest level in over a year. Copper has been flooding into the United States in recent months. It is now fetching a premium because of the expectation that Trump will impose tariffs. LME Aluminium fell by 1.2% to $2.515.5 Metal industry sources reported that premiums for customers buying aluminum on the physical market of the United States dropped by more than 7% Wednesday, as traders speculated on possible reductions in U.S. tariffs on Canadian shipments. LME tin fell 0.4% at $32,240. Zinc dropped 0.4% at $2,625.5. Lead dipped 0.2% to $1,988.5. Nickel gained 0.6% to $15,140. The International Lead and Zinc Study Group said on Wednesday that the global surplus of zinc decreased in April, while the surplus of lead increased. Ashitha Shivaprasad, Bengaluru. Edited by David Evans.
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French spot prices jump on anticipated heatwave
The French spot electricity price increased sharply on Friday as the demand for power is expected to rise in France because of an anticipated heatwave and in Germany, as the half the country returns to work after the Corpus Christi holidays. At 8:32 GMT, the French baseload contract for Friday had increased by 27.8% to 65.50 Euros per Megawatt Hour (MWH). The German equivalent contract was not traded. Riccardo Paraviero, LSEG analyst, says that the price signal for Friday in Germany is bullish, as residual load will increase significantly with demand expected to rebound and wind supply to plummet. Data compiled by LSEG shows that the German wind energy output will drop to 4.8 GW this Friday. In France, it is estimated to be down 630 Megawatts, to 3.1 GW. The data revealed that German solar power production has increased by 1.2 GW to 21 GW. The French nuclear availability dropped by two percentage points, to 67%. This was due to planned and unplanned shutdowns that took out two reactors. Operator EDF stated in an online message that the Paluel 2 nuclear reactor was shut down early on Thursday morning for a fix to a problem with a fusebox outside of the nuclear area. Data compiled by LSEG shows that power usage in Germany will increase 3 GW following the partial holiday in western Germany, and demand in France will rise 1.3 GW to 47.6 GW. Meteo France, the state forecaster, has issued heatwave alerts. Usually, higher temperatures mean more cooling demand. The German power contract for the year ahead was up by 0.5% to 93.25 Euros/MWh. However, the French baseload contract for 2026 was not traded after it closed at 66.65 Euros/MWh. Benchmark European carbon permits fell 0.1%, to 74.52 Euros per metric ton. A report released by the energy think tank Ember on Thursday showed that Europe's top data centres are facing a major change as developers will move to wherever the connection times are fastest, unless more proactive planning is done for electricity grids. Forrest Crellin reported. Mark Potter (Editing)
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As the Middle East crisis flares, stocks tumble and safe havens benefit
Investors, worried about the United States' potential for a recession, pushed global stocks down and the dollar up on Thursday. During the Israel-Iran war, they sought out safe assets and abandoned riskier ones. Donald Trump, who spoke to reporters in front of the White House Thursday, said, "I might do it." I may or may not do it." The Wall Street Journal reported Trump told his senior aides that he had approved plans for an attack on Iran, but he was waiting to give the final order until Tehran abandoned its nuclear program. The STOXX 600 index fell for the third consecutive day in Europe. It is now down by nearly 2.5% for the week. This will be the biggest weekly decline since April's tariff-induced turmoil. U.S. S&P futures dropped 0.6% despite the fact that most U.S. market, including Wall Street and Treasury Markets, will be closed for a holiday on Thursday. Kyle Rodda is a senior financial market analyst at Capital.com. He said, "Market participants are still edgy. He said that speculation was rampant "that the U.S. would intervene. This would be a material escalation, and could invite Iran to retaliate directly against the U.S. This scenario could lead to a regional conflict that would have implications for the global energy supply, and possibly economic growth. The Middle East crude supply shocks have been the main cause of recent market anxiety. They've driven crude oil prices up 11% in one week. Brent crude rose by nearly 1%, to $77.40 per barrel. This is close to the highest price since January. Gold, which usually struggles when the dollar increases, has pared its earlier losses and is now trading at $3,366 per ounce. The dollar rose, but the euro fell by 0.1% to $1.1466. Australian and New Zealand Dollars, both risk-linked currency, were down 0.7% and 1.0%, respectively. CENTRAL BANK POLICY The Federal Reserve sent mixed signals to the markets overnight. To Trump's dismay, policymakers kept rates as expected and maintained projections for two quarter point rate cuts this year. Jerome Powell, the Fed chair, was cautious about future easing, and said at a press conference that he expected "meaningful" inflation as a result Trump's aggressive tariffs. MUFG strategists said that the Fed is "underestimating the weaknesses in the economy which were present before the shock of the tariffs, and specifically, ignoring the cracks in the labor markets that have been evident for years." We maintain that the longer people wait before easing up, the more they might need to do. The markets will be looking for possible catalysts in a series of central bank decisions coming out of Europe. As expected, the Swiss National Bank reduced interest rates to zero. The franc was left to drift, since markets had already priced in an approximate 20% chance of a half point cut. Karsten Junius is the chief economist of J Safran Sarasin. He said that the SNB was not concerned about avoiding the appearance of being a currency manipulation. However, it would be politically prudent to avoid appearing too eager to move the policy rate to the negative. The franc was stable against the dollar at 0.819 and the euro, 0.9395, last. Next up is the Bank of England, which is expected to maintain UK rates at their current levels. Data released on Wednesday revealed that inflation was lower than expected in November, but food prices rose. Policymakers will also be looking at the impact of higher energy costs due to the Israel-Iran conflict. The dollar fell by 0.1% to $1.341.
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S&P says that India's new gold lending rules will reshape the business models of lenders.
S&P Global Ratings warned in a Wednesday note that new rules by India's central banks will force lenders to rethink their underwriting procedures and prepare for higher costs in the near term. The Reserve Bank of India released its final guidelines for gold-backed loans earlier this month. They mandated a move to cash-flow-based credit assessment and tighter monitoring of the loan-to value (LTV). S&P stated that these changes would have the most impact on nonbank lenders who are heavily dependent on gold loan portfolios. The first is that the finance companies will incur upfront costs when they switch to a cash-flow-based assessment of borrowers' creditworthiness, said Shinoy Varghese. Credit analyst at S&P Global Ratings. Lenders must comply with the new standards by April 1, 2026. The new rules give lenders more flexibility when it comes to offering short-term loans for consumption borrowing. However, including interest rates into LTV calculations could reduce actual payments made to borrowers. S&P stated that the biggest changes will be for gold-loan specialist companies like Muthoot Finance, Manappuram Finance, and Manappuram Finance. The report also warns that the gold sector could be more susceptible to sharp price corrections as lenders expand their risk appetite and explore different loan structures. Nishit Navin, Bengaluru. Edited by Nivedita Battacharjee.
Iraq's Oil Ministry says that procedures for oil exports via Turkish pipeline are complete
In a statement issued on Saturday, the Iraqi oil ministry stated that all procedures were completed for the resumed exports via the Iraq-Turkey pipe.
Iraq's Oil Minister said Monday that oil exports will resume from the semi-autonomous Kurdistan Region next week. This resolves a dispute of nearly two years that has disrupted oil flows, as relations between Baghdad Erbil have improved.
Sources have confirmed that the Trump administration has put pressure on Iraqi officials to allow Kurdish exports of oil to resume or else face sanctions along with Iran. Later, an Iraqi official denied the pressure and threat of sanctions.
Following the statements made by the oil minister earlier in the week, the federal government of Iraq (FGI) and the Kurdistan Regional Government(KRG) held technical discussions to work out the details needed for the resumed exports. This included a payment system that was acceptable to the oil companies.
The Iraqi Oil Minister's announcement follows the Iraqi Parliament's approval of a budget amendment on February 2, which set a rate for oil transportation and production costs to be $16 per barrel in Kurdistan.
The KRG is also required to transfer its oil production to the State Oil Marketing Organization, which is run by the government.
In a statement issued on Saturday, the oil ministry asked that KRG begin delivering crude oil to SOMO to allow exports to resume. (Reporting and writing by Ahmed Rasheed, Ahmed Tolba, and Maha El Dahan. Editing by Sharon Singleton.)
(source: Reuters)