Latest News
-
The yen is satisfied with the morning bid for Europe.
Wayne Cole gives us a look at what the future holds for European and global markets. Investors have sold on rumours and bought (a little bit) on facts in Japan's upper-house election. The Japanese markets were closed on Marine Day, so there was no liquidity. However, the yen has gained a little against the dollar and the euro. Nikkei Futures in Chicago have been trading in line with the Friday cash close. Wall Street futures have risen a little bit, while European futures are down a little. Shigeru Shiba, the Prime Minister, seems to be in a safe position for the time being, even though the ruling coalition has lost control of upper house by just three seats. He will still need to get support from minor parties if he wants to pass any legislation. The government may also choose to continue the difficult tariff negotiations with U.S. officials. Talks seem to be stuck, partly due to agricultural imports, which are culturally and politically sensitive for Japan. President Donald Trump’s August 1 deadline is fast approaching. The European Union finds itself in a similar situation. The U.S. Commerce secretary Howard Lutnick is confident that a deal will be reached, but the EU is preparing a list for retaliation duties on U.S. goods. On Thursday, the EU also tried to leverage China by having Ursula von der Leyen, President of the Commission and Antonio Costa as Council president meet with President Xi Jinping. Reports suggest that Trump could meet Xi in October or in November. The U.S. has already allowed the export to China of chips in exchange for a resumption in rare earth shipments. Analysts suspect that the U.S. effective tariff rate may be slightly higher than the 1930s levies which contributed to the Great Depression. This optimism is largely based on the earnings of Alphabet, Tesla and other megacaps. Lockheed Martin's and General Dynamics' results should confirm that the increase in global defence expenditure is bringing in a windfall. There's nothing in the diary for Monday, but you can always watch Trump. Market developments on Monday that may have a significant impact No speakers from the central bank or major data sources
-
Steel exports and China's stimulus plans are driving iron ore prices higher.
The iron ore futures price rose on Monday as a result of the hopes that China will continue to stimulate growth after a mixed bag second-quarter data and increased steel export demand. As of 0250 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was 2.15 % higher. It stood at 809.5 Yuan ($112.78) per metric ton. The benchmark iron ore for August on the Singapore Exchange rose by 2.81% to $103.6 per ton. China's benchmark lending rate remained unchanged in line with expectations following slightly better than expected second quarter economic data. Analysts and traders said that the market is now focused on the Politburo Meeting this month, which will likely shape economic policy in the remainder of the year. Mysteel Global reported that the prices of steel products rose due to increased expectations about macroeconomic policy stimuli. Mysteel, in a separate report, said that improved margins on sales of steel also encouraged steel mills increase their blast-furnace operations. The average rate of blast-furnace capacity utilization increased by 0.99 percentage point week-on-week between July 11-17. Analysts say that hot metal production, an indicator for iron ore consumption, is still high. Everbright Futures, a broker, said in a recent note that steel exports were still high. Hexun Futures, a broker, reported that iron ore exports from Australia and Brazil, two of the top producers, have slightly increased. Coking coal and coke, which are used to make steel, also grew by 4.18% and 2.95 percent, respectively. The benchmark steel prices on the Shanghai Futures Exchange have gained ground. Hot-rolled coil and stainless steel gained 1.45% and 1.45% respectively. Rebar and wire were up around 2%. ($1 = 7.1774 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
-
Gold prices steady as investors wait for US trade updates and central bank meetings
Gold prices were not much changed on Monday, as investors watched developments in U.S. Trade Talks and awaited possible market-moving factors, such as the U.S. Federal Reserve policy meeting scheduled next week. As of 0250 GMT, spot gold remained steady at $3,352.19 an ounce. U.S. Gold Futures remained unchanged at $3,358.70. Tim Waterer, KCM Trade's Chief Market Analyst, said that the dollar has had a quiet start to the week. This has opened the door for gold to make gains in the early going. Tariff deadlines are looming. The closer we get to the August 1 deadline, without any new trade agreements emerging, the more likely it is that gold will start to fancy another run towards the $3.400 level, and perhaps even beyond. Investors are watching developments in the trade negotiations as U.S. president Donald Trump approaches his August 1 deadline. U.S. commerce secretary Howard Lutnick is optimistic that a deal can be reached with the European Union. Reports said that Trump could visit China between October 30th and November 1st before attending the Asia-Pacific Economic Cooperation Summit. He might also meet Chinese leader Xi Jinping at the APEC summit in South Korea. The European Central Bank will likely hold its interest rates at 2.0% after a series of rate cuts. Last week, Federal Reserve governor Christopher Waller reiterated his belief that the U.S. Central Bank should reduce rates during its next policy meeting. In an environment of low interest rates, gold, which is often considered to be a safe haven during times of economic uncertainty, does well. The ruling coalition in Japan lost control of Japan's upper house during an election held on Sunday. This further weakened Prime Minister Shigeru Shiba's hold on power, as the U.S. deadline for tariffs looms. Other metals, such as spot silver, rose 0.1% to $38.22 an ounce. Platinum gained 0.3%, to $1.425.11, and palladium increased 0.2%, to $1.243.47.
-
BHP exits $2.5 billion Tanzania nickel project, partner Lifezone says
BHP Group chose to sell to Lifezone Metals its stake in the $2.5 billion Kabanga Nickel Project in Tanzania for up to $83 million. Lifezone, a company listed on the NYSE, said that it would acquire BHP’s 17% equity stake in Kabanga Nickel Limited. KNL is the majority owner in the Kabanga Nickel Project located in the northwestern part of Tanzania. In a report released by the company on Friday, development costs were estimated at $2.49billion. The project is expected to produce around 50 000 metric tons per year once it has been fully ramped-up, which will take about six years. The project will be finalized by the end of next year. BHP agreed to invest up to $100 million by 2022 in the nickel mines and processing facilities, if certain conditions are met. BHP still views Kabanga as one of the best undeveloped nickel-sulphide projects in the world, according to a source familiar with the matter. However, the uncertain outlook for the nickel market and the miner’s capital allocation structure have made investing in greenfield nickel project challenging. BHP's spokesperson declined to make any comment. BHP's view of nickel has changed due to the boom in production from Indonesia over the past few years. BHP put its Australian Nickel West operation on care and maintain last year because of a poor outlook on nickel prices. A decision about the future is due in early 2027. Lifezone owns now 100% of KNL. KNL holds 84% of Tembo Nickel Corporation Limited, the Tanzanian operating firm for the Kabanga Nickel Project. Tanzanian government owns the remaining 16%. Lifezone said that all existing agreements with BHP had been terminated, and it also took full control of 100% offtake of the Kabanga Nickel Project. (Reporting by Melanie Burton; Editing by Jamie Freed)
-
New Zealand dollar drops as rate-cut bets are boosted by benign inflation
The New Zealand dollar fell on Monday, while local bonds rallied. Inflation data showed that it was not as bad at first thought. Still tepid price pressures in New Zealand support a rate cut next month. The kiwi fell by 0.3%, to $0.5941. It had fallen 0.8% the previous week. This is now the third week in a row that it has declined. The kiwi dollar is down almost 3% since a peak of $0.6120 nine months ago. Near-term support has now been found at the low of last week of $0.5906. New Zealand's second-quarter inflation rate rose to 2.7%, its highest in a full year, due to rising prices for food, electricity, and streaming services. This was below the 2.8% forecast. The non-tradable price inflation, mainly domestically generated, has continued to decline to 3.7%, from 4%. Citi analysts said in a client note that "CPI inflation is not expected to increase significantly this year, giving the Reserve Bank of New Zealand Monetary Policy Committee reason to be skeptical about a return of annual CPI to the top of target range (of 1-3%)." This would allow the MPC re-starting the easing cycle during the August 20th meeting. The two-year swap rate fell by 6 basis points, to 3.115%. This is the lowest it has been since mid-May. The yields on ten-year government bonds fell 4 basis points to 4.595%. The markets now price in a probability of 75% that the RBNZ is going to cut by 25 basis point in August. This was up from 61% before the data. The Aussie was flat at $0.5510, after losing 1% the previous week, to as low as $0.455. The 65-cent level is a good support. The yen fell 0.3% against the dollar to 96.61, as the Japanese currency jumped a bit after the ruling coalition lost the upper house of parliament in Sunday's election, a result which was predicted by polls. The Reserve Bank of Australia is expected to release its minutes of the July policy meeting, which may provide some insight into the rare split between policymakers prior to deciding whether or not rates will remain at 3.85%. The markets have priced in a 90% probability that the RBA is going to cut rates this August, after a surprisingly weak jobs report was released last week. On Thursday, Governor Michele Bullock will deliver a speech during the annual fundraising luncheon at the Anika Foundation. Paul Conway, Chief Economist of RBNZ, will speak about the economic impact of tariffs on New Zealand at 11:15am local time Thursday. (Reporting and editing by Lincoln Feast; Stella Qiu).
-
Shanghai metals are rising after China pledges to boost industrial growth
After China's Industry Ministry last week promised to stabilize the machinery, automobiles and electrical equipment sector, the most traded metals contracts at the Shanghai Futures Exchange increased on Monday. Tao Qing said that China would launch action plans to stabilize growth in these industries. Tao said that the move was designed to "improve supply capacity for premium products" in order to prepare the industry to achieve an upgrade of quality and a reasonable growth, measured by quantity. It also promotes an "orderly withdrawal of outdated production capacities". SHFE zinc was the biggest gainer, up 2.69% at 22,900 yuan a ton ($3,190.48), as of 0102 GMT. The contract had hit 22,915 Yuan earlier, its highest level since May 14. SHFE Nickel rose by 1.25%, to 121.750 yuan. Aluminium gained 1.17%, to 20.745 yuan. Lead grew 1.04%, to 16.990 yuan. Copper climbed 0.87%, to 78.990 yuan. Tin advanced 0.56%, to 265,390. Metals analysts at a Beijing futures company commented that "China's Industrial Ministry said was encouraging for metals generally." They added, "Industrials sectors are all relevant to metals." The ministry stated that the plan would cover 10 industries in addition to downstream industries. These include steel, nonferrous materials, petrochemicals, and construction materials. Metals have generally responded positively to news. Those with the most room for price increases will be stronger, said a Shanghai-based futures analyst. After Friday's spike, LME metals fluctuated only slightly on Monday. Zinc rose 0.5% to $2.832.5 per tonne. It reached $2,837 earlier in the session. This was the highest level since April 1. LME aluminium increased 0.15% to 2,633.5. Lead gained 0.13% at $33,490. Nickel added 0.11% at $15,235. While lead decreased 0.1% to $2,000 Copper was unchanged at $9,776.5, after reaching $9,777 last Friday, its highest level since July 8. Click or to see the latest news in metals, and other topics. (Reporting by Hongmei Li. Editing by Sumana Niandy.
-
Investors continue to monitor the impact of new sanctions against Russia on oil prices.
The oil price barely moved on Monday, as traders watched the impact of European sanctions on Russian supply and rising production from Middle East producers. They also worried about fuel prices as tariffs weigh on global economic growth. Brent crude futures were up 5 cents at $69.33 per barrel by 0040 GMT, after closing 0.35% higher Friday. U.S. West Texas Intermediate Crude was up 2 cents to $67.36 per barrel after a 0.30% increase in the previous session. The European Union approved Friday the 18th set of sanctions against Russia for the conflict in Ukraine. These included India's Nayara Energy as an exporter who refines oil from Russian crude. Dmitry Peskov, the Kremlin's spokesperson, said that Russia has developed a certain immunity against Western sanctions. Rosneft - Russia's largest oil producer and owner of Nayara - criticised Sunday the sanctions, calling them unjustified, illegal, and a direct threat to India's energy independence. A spokesperson for the Iranian Foreign Ministry said that Iran, another oil producer sanctioned, will hold nuclear talks with Britain, France, and Germany in Istanbul on Friday. The three European countries had warned that international sanctions would be reimposed if the negotiations were not resumed. Baker Hughes reported on Friday that the number of oil rigs operating in the U.S. fell by two last week to 422 - the lowest level since September 2021. Separately U.S. Tariffs on Imports from the European Union will kick in on 1 August, although U.S. Secretary of Commerce Howard Lutnick stated on Sunday that he is confident the United States can secure a deal with the bloc. (Reporting and editing by Jamie Freed; Florence Tan, Reporting)
-
BHP exits $2.5 billion Tanzania nickel project, partner Lifezone says
BHP Group chose to sell to Lifezone Metals its stake in the $2.5 billion Kabanga Nickel Project in Tanzania for up to $83 million. Lifezone, a company listed on the NYSE, said that it would acquire BHP’s 17% equity stake in Kabanga Nickel Limited. KNL is the majority owner in the Kabanga Nickel Project located in the northwestern part of Tanzania. In a report released by the company on Friday, development costs were estimated at $2.49billion. The project is expected to produce around 50 000 metric tons per year once it has been fully ramped-up, which will take about six years. The project will be finalized by the end of next year. BHP agreed to invest up to $100 million by 2022 in the nickel mines and processing facilities, if certain conditions are met. BHP didn't respond to an immediate request for comment about why it sold its stake in this project. BHP's view of nickel has changed since the divestment, largely due to a surge in production from Indonesia over the past few years. The company put its Australian Nickel West operation on care and maintain last year because of a low outlook for nickel prices. A decision about the future of these operations is due in early 2027. Lifezone owns now 100% of KNL. KNL in turn holds 84% interest in Tembo Nickel Corporation Limited, the Tanzanian operating firm for the Kabanga Nickel Project. Tanzanian government owns the remaining 16%. Lifezone said that all existing agreements with BHP had been terminated, and it also took full control of 100% offtake of the Kabanga Nickel Project. (Reporting by Melanie Burton; Editing by Jamie Freed)
US Judge orders Argentina to transfer YPF Shares to satisfy $16.1 Billion judgment
A U.S. court judge ordered Argentina on Monday to give up 51% of its stake in the oil and gas company YPF to satisfy a $16.1-billion judgment against it.
U.S. District Court Judge Loretta Preska, in Manhattan, said Argentina had to transfer its YPF share within 14 days into a BNY Mellon account and instruct this bank to transfer those shares to the plaintiffs within one business day.
Argentina appealed Preska's decision of September 2023 to award $16.1 billion to Petersen Energia Inversora, Eton Park Capital Management and litigation funder Burford Capital.
Preska's ruling came the same day Argentina requested that the High Court of London block the enforcement of the judgment.
The case arose after Argentina seizes the 51% stake in YPF held by Spain’s Repsol without tendering shares held by minor investors.
Burford said that it expects to receive between 35% and 73% respectively of Petersen and Eton Park damages. Reporting by Jonathan Stempel, New York Editing Mark Potter
(source: Reuters)