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US stocks rise on hope of progress in US China trade talks
Wall Street shook and crude prices jumped Thursday, as investors juggled the new trade talks between U.S. president Donald Trump and Chinese president Xi Jinping with a series of disappointing economic data in advance of Friday's important jobs report. In early trading, the three major U.S. indexes were unable to find a direction and ended up modestly higher. Meanwhile, U.S. Treasury rates fluctuated and the dollar was weaker. Holding talks According to the summaries provided by the U.S. government and the Chinese government, they spoke with Xi on Thursday to try to resolve the trade dispute between the two world's largest economies. They agreed to continue discussions. Matthew Keator is the managing partner of the Keator Group in Lenox Massachusetts, a wealth-management firm. "I think the market will respond. It's going up and down, as we go through these negotiations. The market gets a clearer picture of how it will look at the end." The latest economic data shows that initial jobless claims have reached their highest level since October. A 16.3% decline in imports, a result of Trump's unpredictable tariff policy, has also led to the narrowest U.S. Trade Gap since November 2023. The Labor Department's May employment report is expected to be released on Friday. However, weaker-than-expected data from the labor market, such as a 47% increase in Challenger layoffs year-over-year and a major surprise in ADP private payrolls have dampened expectations. Keator, however, believes that the Federal Reserve could implement more than one cut in interest rates before the end the year. Keator said that the Fed might be more inclined to cut interest rates more than once in this year, given the recent inflation data and the potential increase in jobless claims. This could be a positive sign for certain sectors. The Dow Jones Industrial Average rose by 9.64 points or 0.02% to 42,437.38, while the S&P 500 gained 6.32 points or 0.11% to 5,977.13; and the Nasdaq Composite increased by 55.96 points or 0.29% to 19,516.24. ECB CUTS RATES As expected, the European Central Bank lowered three of its key interest rates, each by 25 basis points. This decision was based on the updated economic outlook, now that the inflation rate is around the 2% central bank target. European shares have retreated from their earlier gains, even though ECB president Christine Lagarde suggested that the easing cycle could be paused for a few months during the summer. The MSCI index of global stocks rose by 1.83 points or 0.21% to 890.76. The pan-European STOXX 600 Index rose by 0.1% while Europe's FTSEurofirst 300 Index rose by 2.28 points or 0.10%. Emerging market stocks gained 10.96 points or 0.93% to 1,183.41. MSCI's broadest Asia-Pacific share index outside Japan closed up by 0.92% to 623.59 while Japan's Nikkei dropped 192.96 or 0.51% to 37,554.49. Dollar reverses earlier gains after soft U.S. economy indicators. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, and the euro) fell by 0.24%, while the euro rose by 0.43%, reaching $1.1466. The dollar gained 0.42% against the Japanese yen to reach 143.36. The U.S. Treasury yields sawsawed and fluctuated in the choppy market following an unexpected rise in unemployment claims. The yield on the benchmark U.S. 10 year notes increased 0.6 basis points from 4.365% at late Wednesday. The 30-year bond rate fell by 1.6 basis points, from 4.888% to 4.8725% late on Wednesday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve (Federal Reserve), rose by 1.2 basis points, to 3.891% from 3.877% at late Wednesday. The price of crude oil soared after the Trump/Xi phone call. This helped investors ignore the U.S. buildup in stockpiles and Saudi Arabia’s July price reductions for Asia. U.S. crude climbed 1.48%, to $63.78 per barrel. Brent increased to $65.74 a barrel on the same day. Investors reacted to Friday's employment data by boosting gold prices against the dollar. Spot gold remained flat at $3,375.58 per ounce. U.S. Gold Futures increased 0.1% to $3.376.90 per ounce.
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Minister: Australia is an alternative to critical minerals that is "safe and reliable"
Don Farrell, Australia's trade minister, said that Australia is a reliable alternative for the supply of critical minerals essential to industry. This was in response to growing concerns over Beijing's dominance in this sector. China's decision to suspend the exports of rare earths, magnets and other products crucial for sectors such as aerospace and defence and automakers in April was widely viewed as Beijing using its dominance to leverage its trade war against the Trump administration. Australia is home to some of the world's largest deposits of critical minerals. Farrell said in an interview that he believes he can be a reliable and safe supplier to the global supply chain of critical minerals. He said that Australia did not just want to "dig and send" minerals, but also wanted to process them. This would require outside capital, such as from the European Union (EU), the United States, Japan South Korea, Singapore, and India. Last year, the EU and Australia signed an agreement to work together to develop materials that are critical along the entire supply chain. This includes extraction and refinement as well as processing of leftover waste. Farrell said that critical minerals may end up in the free trade agreement between Australia and the EU, which Australia and the EU are currently trying to revive following the collapse of talks in 2023. The main issue is agriculture. The Australian government sent its top trade officials to Brussels to discuss the next steps as both sides look to access alternative markets, as the Trump administration builds aggressive tariff barriers against its trading partners. Farrell, who met EU Trade Commissioner Maros Sfcovic in Paris on the fringes of an OECCD meeting, said: "I believe there is now an impetus from both sides to consider another crack in the agreement." Farrell met with U.S. trade representative Jamieson Greer, at the OECD. He told him that Australia wants the Trump administration's 10% tariffs to be removed and the 50% tariffs for aluminium and steel. According to Greer’s office, the United States, who has had a 20-year free trade agreement, generated a trade surplus of $17,9 billion with Australia last year. (Reporting and editing by David Evans, Leigh Thomas)
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Mali hearings on Barrick's Loulo-Gounkoto Complex suspended have been adjourned until June 12
A Malian judge announced on Thursday that a court had adjourned to June 12 the hearing to determine whether or not to place the Loulo-Gounkoto Gold Mining Complex, which has been suspended since January because of a dispute involving its owner Barrick Mining, and Mali's Government, under temporary administration. The government has requested an administrator to resolve the current standoff. It also signals its desire for the complex to be reopened. The grant of the request would be a significant escalation in a long-running dispute between the West African nation and the Canadian mining company, who suspended operations last January after the authorities seized their gold stock and blocked its exports. Barrick Mining (formerly Barrick Gold) has stated that operations will only resume once the Malian government lifts the November restrictions on gold exports. The Malian government, as a shareholder of the complex, asked the Bamako Commercial Court last month to appoint an interim administrator to run the mines. Barrick and the military government have been at odds over the implementation a new code of mining that increases taxes and gives government a larger share in gold mines since 2023. According to two sources close to the negotiations, the parties continue to negotiate outside of court. Barrick has also filed an international arbitration against Mali in the dispute. On April 22, gold prices reached a new record of $3,500.05 an ounce. (Reporting and writing by Portia CROWE; editing by Alexandra Hudson, Jan Harvey, and Jan Harvey.
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Trump and Xi have agreed to continue talks to resolve trade disputes
According to summaries from the U.S. government and China, the two leaders agreed to continue talks to resolve differences over tariffs which have roiled global economies. Trump posted on Twitter that there should be no more questions about the complexity of Rare Earth Products. Our respective teams will meet shortly at a place to be determined. Trump's summary of the meeting and that of the Chinese government said the leaders invited each other back to their countries at a later date. The Chinese government stated in a press release published by the official Xinhua agency that the U.S. should be realistic about the progress China has made and remove the negative measures imposed upon it. "Xi Jinping welcomed Trump’s return to China, and Trump expressed gratitude." The call was highly anticipated, coming amid recent accusations made by Washington and Beijing over "rare-earth minerals" in a dispute which has threatened to tear apart a fragile truce between the two largest economies. On May 12, the two countries reached a 90-day agreement to reverse some of their triple-digit, tit for tat tariffs that they had imposed on each other after Trump's inauguration in January. Although stocks rose, the temporary agreement did not address the broader concerns that strain bilateral relations, from the illicit trade in fentanyl to the status for Taiwan, a democratically-governed island, and U.S. complaints against China's export-driven, state-dominated economic model. Trump, since returning to the White House, has threatened a variety of punitive actions against trading partners. However, he has retracted some of these measures at the last moment. This on-again-off-again strategy has confused world leaders, and scared business executives who claim that the uncertainty makes it hard to predict market conditions. China's decision to suspend the export of magnets and minerals in April continues to cause supply disruptions for automakers, computer chip makers and military contractors worldwide. Beijing views mineral exports in the United States as a way to exert political pressure. If economic growth slows down because companies are unable to produce products powered by minerals, this could lead to domestic political pressure being placed on President Donald Trump. The 90-day agreement to reduce tariffs and trade barriers is fragile. Trump accused China of breaking the agreement, and ordered curbs on chip-design software and other shipments going to China. He also doubled steel and aluminum tariffs up to 50%. Beijing has denied the claim and threatened countermeasures. The United States has been identifying China as their top geopolitical competitor and the only nation in the world capable of challenging the U.S. militarily and economically. Despite repeated trade threats and announcements of tariffs, Trump has expressed admiration for Xi. He has praised his toughness, and the ability of the Chinese president to remain in power, without the term limitations imposed on U.S. Presidents. Trump has been pushing for a phone call or a face-to-face meeting with Xi but China has rejected this as it is not in line with their traditional approach to working out details of an agreement before leaders speak. Leader-to-leader discussions are vital for the U.S. President and his advisers to break through the logjams in negotiations that have frustrated lower-level officials. China reported that Trump requested the call. The last time the two men spoke is not known. Both sides claimed they spoke on January 17, just days before Trump took office. Trump has said repeatedly that he has spoken to Xi ever since assuming office on January 20. He refused to reveal the date or details of any conversation. China claimed that the two leaders have not spoken recently. Investors are closely watching the talks, as they fear that a chaotic war of trade could disrupt supply chains and cut into earnings for corporations in the months leading up to the holiday shopping season. Trump's tariffs have also been the subject of litigation in U.S. courtrooms. Trump and Xi have met on several occasions including during exchange visits in 2017. However, they haven't met in person since the 2019 Osaka, Japan talks. Xi's last trip to the U.S. was in November 2023 for a summit, which resulted in an agreement to resume military to military communications and to curb fentanyl. Reporting by Xiuhao Zhang, Yukun Zhu and Ryan Woo from Beijing; Trevor Hunnicutt, David Brunnstrom and Franklin Paul in Washington; and editing by Philippa, Chizu, and Franklin Paul.
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Silver hits 13-year-high as gold pares gains after Xi and Trump call signals thaw of tensions
Gold, the safe-haven asset, trimmed its gains after a reported telephone call between Chinese President Xi Jinping ad U.S. president Donald Trump indicated a possible easing of trade frictions. Silver also broke through $35 to reach a new 13-year-high. As of 10:22 am, spot gold was up 0.1% to $3,377.29 per ounce. ET (1422 GMT), after earlier trading at 0.6% higher. U.S. Gold futures rose 0.1% to $3401.10. Chinese state media reported Xi had spoken with Trump on the phone Thursday. The call was made amid increasing tensions over vital minerals that threaten an already fragile trading truce. Daniel Ghali is a commodity strategist with TD Securities. He said that Trump will put a positive spin to the conversation with President Xi. This will reduce the risks of upcoming decoupling between China and the U.S. This year, gold, which is a good investment in times of economic and political uncertainty, gained 29%. Metals Focus reported that central banks around the world are planning to purchase 1,000 metric tonnes of gold by 2025. This will be their fourth consecutive year of large purchases, as they move away from dollar-denominated assets. Data showed that weekly unemployment claims had increased for the second week in a row, signaling an eroding labor market. Now, all eyes are on Friday's nonfarm payrolls data. Trump renewed his call for Federal Reserve Chairman Jerome Powell on Wednesday to reduce rates. Ricardo Evangelista is a senior analyst with brokerage firm ActivTrades. He said: "I believe that a weakening of the U.S. labour market will increase bets for a dovish Fed (which) would have a positive effect on gold." In an environment with low interest rates, zero-yield gold bullion is more likely to flourish. Silver spot jumped by 2.5%, to $35.84 an ounce. This is the highest price since February 2012. Gold-silver is currently at 94. This is down from 105. Tai Wong said that silver could really gallop in both directions. Palladium rose 0.1% to $1,009.40, while platinum rose 5%, reaching its highest level since the March 2022.
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Siemens Energy replaces the 11 billion euro government-backed financing facility
Siemens Energy announced on Thursday that it has replaced the 11 billion euro (12,6 billion dollars) government-backed financing facility put in place to stabilize the power equipment manufacturer in 2023. This is a crucial step in restoring its ability to pay out dividends. After major quality problems at Siemens Energy's wind turbine business, the government was forced to guarantee billions of Euros worth of projects in late 2023. Maria Ferraro, Chief Financial Officer at Siemens Energy, said that the federal government's "counter-guarantee" was crucial in 2023 to ensure our expected growth. The suspension of dividends at Siemens Energy was one of the conditions for the facility. Ferraro stated that "due to our performance over the last two years, and the positive environment in which we operate, we were able improve our margins and cash flow as well as strengthen our balance sheet." This allowed us to replace the building before the end our fiscal year, and fulfill our commitment. Last month, Siemens Energy's Chief Executive Christian Bruch said that the company would resume dividend payments in 2026 if the government facility was replaced. Reporting by Christoph Steitz Editing Madeleine Chambers
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UK intensifies drought response following the driest Spring in more than a century
After the driest, warmest spring England has experienced in more than 130 years, Britain announced on Thursday that it will increase efforts to protect water resources in the lead up to the summer. The Environment Agency (EA), said that reservoirs in England were only 77% filled, compared to the average of 93% at this time of the year. However, it noted the recent rains, which began at the beginning of June, had a positive impact. The National Drought Group, which met for the first time in a series to assess the current situation, heard that some canals had navigation problems, and the quality of the spring crops was deteriorating due to the dry soil. Helen Wakeham said that the spring of this year was the driest since 1893. We need to prepare for future summer droughts, as the climate changes. She added that "we must make sure we have enough to last us through the summer" and urged the public to take care of their water consumption. Wakeham said that recent rains were helping, but they weren't enough to stop a drought from being declared in northwest England. The EA also reported that the EA was experiencing dry weather in Northeast England, Yorkshire and East and West Midlands. The agency now conducts more compliance checks for water-intensive business, increases monitoring of river and underground water levels, and helps farmers plan water needs. Scientists claim climate change makes droughts and summers drier more common. Water companies presented their drought plans at the drought group meeting, including fixing leaks faster and communicating with customers more often. The EA stated that some companies might need to do more to conserve water in the absence further significant rain. (Reporting and editing by Catarina demony)
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Vermilion Energy leaves the US with an asset sale worth $88 Million
Vermilion Energy, a Canadian gas producer, said it will sell its United States assets at a price of C$120,000,000 ($87.88,000,000). The proceeds from the sale will be used to pay off debts and complete its exit from the U.S. Vermilion Energy will be able to concentrate on its core assets, which are gas-weighted, in Canada and Europe, after the transaction closes in the third quarter. It sold its East Finn assets to the U.S. in 2023. Calgary-based company, Alberta Oil and Gas Corporation (Alberta), has raised its forecasted production for this year from 84,000 to 88.000 barrels of equivalent oil per day to between 117,000 to 122,000 boepd. The company has also reduced its capital budget for 2025 by approximately C$100,000,000 to between C$630,000,000 and C$660,000,000, as a result of the elimination of expenses related with the assets that were divested in Saskatchewan or the U.S. It is expected to have a net of C$1.3billion by the end of 2025. Vermilion Energy purchased privately-held oil and gas company Westbrick Energy earlier this year for C$1.075 Billion, strengthening its position within the Deep Basin in Alberta. The average natural gas price has risen in the last few quarters, and reached a 2-year high on 10 March. This was due to a strong demand for LNG export facilities as well as supply concerns.
Sinopec China launches HK$7.75 Billion exchangeable bond, shows term sheet
Sinopec, a Chinese oil company, is seeking to raise HK$7.75billion ($994.42m) via an exchangeable bond. This was revealed in a termsheet seen by us on Tuesday.
The term sheet stated that the bond will have a zero to 0.99% coupon and be issued by an affiliate of Sinopec Group.
The term sheet stated that the bonds would be exchangeable for shares of Sinopec's Hong Kong-listed subsidiary. The bond's exchange price is HK$6, which is 47.1% higher than Sinopec Hong Kong's closing price of HK$4.08 for Tuesday.
Sinopec failed to respond to a request for comments sent by fax outside normal business hours.
According to the terms sheet, the company, the world's largest refinery group by capacity plans to use the proceeds of the transaction to reduce debt.
Goldman Sachs is the only bookrunner.
Sinopec reported in April that its first-quarter profits fell by 27.6% from a year ago, as a result of lower oil prices. Its refining operations also struggled with falling fuel sales and thin profit margins. Reporting by Scott Murdoch, with additional reporting from Ella Cao. Editing by Louise Heavens (with Andrew Heavens & David Evans).
(source: Reuters)