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US construction spending falls unexpectedly in June
U.S. Construction Spending unexpectedly dropped in June, as higher mortgage rates continued to stifle?homebuilding. Census Bureau of the Commerce Department reported on Monday that construction spending had decreased by 0.1%. The?Construction Spending in?May has been?revised. It was not reported that it had increased by 0.1% but was actually unchanged. Economists surveyed by predicted construction spending to rise 0.2%. In June, construction spending fell 3.2% compared to the same month last year. Spending on private construction projects fell 0.2% last month, but only by 0.1% this month. ?Investment in residential construction dropped 0.3%. The spending on single-family housing fell by 0.6%. In June, it decreased by 3.3% year-over-year. Since the U.S. and Israel attacked Iran in February, the average rate for the popular 30-year fixed-rate mortgage increased by 70 basis points. The average rate reached a record high of 6.66% in the last week according to data provided by mortgage finance agency Freddie Mac. In June, spending on multi-family units, which make up a tiny part of the housing market?declined by 0.7%. The?government announced last week that residential investment had rebounded after declining for five consecutive quarters. Renovations are on the rise as higher borrowing costs have depressed housing demand. In June, investment in non-residential structures like power plants and factories increased by?0.1%. Spending on manufacturing projects fell?1.2%. The second quarter saw a contraction in investment in non-residential buildings, marking the 10th consecutive quarterly?decline. After increasing by 0.6% in May, the investment in public construction projects was unchanged. In June, state and local government construction expenditures remained unchanged. The federal government also spent the same amount on construction projects. Lucia Mutikani, Lucia Simao and Paul Simao (Reporting)
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Nigeria's NNPC announces another tender for Cawthorne crude
According to documents obtained by, Nigeria's NNPC, the state-owned oil company, issued a further tender?to.sell a cargo.of its newest.crude oil grade Cawthorne.in September. Cawthorne was exported in March along with other grades recently introduced, such as Nembe, and Utapate. Nigeria is looking to diversify and boost its exports after years of underinvestment and disruptions due to oil theft and operational disruptions. The document states that the Cawthorne shipment will be loaded?on September 22-23 and will consist of 950,000 barrels. NNPC also offers a 950,000 barrel 'cargo of Bonny Light' loading between September 30 and October 1. NNPC has not 'immediately responded to a request for comment. Both cargoes will be sold free-on-board. Bids must be submitted by August 4 at 8 pm, West Africa Time. A preliminary loading program seen by shows that the Bonny 'Light' production stream will load 364,000 barrels of oil per day across 12 cargoes. In recent sessions, sellers of 'West African' grades have begun to increase their offer levels amid increasing supply disruptions in the Middle East. However, trading activity is generally muted while market participants wait for further clarity on the volatile situation at the Strait of Hormuz and Red Sea.
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Greek crews continue to fight wildfires northwest of Athens
On Monday, hundreds of Greek firefighters fought a wildfire north of Athens on a fourth-day basis after strong and erratic wind conditions caused it to ravage homes, pine forest and thousands of acres of farmland. This forced emergency evacuations both by land and water. After a midair collision with another helicopter whose crew was still alive, two firefighters on a firefighting chopper crashed and died near the seaside village of Psatha on Sunday. On Monday, more than 400 firefighters were deployed with 21 aircraft near the communities Kandili & Agia Skepi as thick plumes of black smoke &?red fires enveloped lush pine forests. A Greek official from the?fire brigade said that heavy machinery was used to create fire breaks in order to stop wildfires reaching homes. Wildfires have ravaged Europe this summer, following a time of record heatwaves. Scientists say that the conditions were exacerbated due to a rapidly changing climate. France and Spain were particularly hard-hit, though huge fires in those countries abated at the weekend. Greece's fire season was mild by local standards. Three firefighters died in separate incidents in Crete and the Peloponnese last week. The authorities are trying to determine the cause of a mid-air helicopter accident that occurred at low elevation. Aviation accident investigator Faidon Karaiosifidis said that at this point, the only thing they can say is that the formation between the two helicopters wasn't appropriate. Their vertical and horizontal separation as well as their descent rate were inadequate. Wildfires have been reported in the area around Psatha. Locals complain that while vegetation around houses has been cleared, more needs to be done in order to maintain and build fire breaks within the forest. Kostas Kastafados, Deputy Minister for Climate Crisis, told ERT public broadcaster that the strong and erratic wind conditions over the last few days prevented 'water bombers from drawing up seawater. This left ground forces to fight the fires alone. Nikos Lavranos of the Federation of Unions of Fire Service Employees said that the days of operation have "overstretched" a thinly staffed and aged fire service. This is the result of a hiring ban during Greece's debt crisis from 2009-2018. "A firefighter who is useful to his fellow citizens and the society is not an exhaustion firefighter,"? he said. The fire brigade reported that preliminary investigation indicates that sparks from vibrating conductors of a private powerline?transmitting energy from wind turbines caused a fire to break out and travel 25 km (15miles) in Boeotia, a nearby area. A?electrical engineering and a contractor were arrested, and they are being investigated for arson. In recent years, the main cause of wildfires in Greece has been faulty power lines. This was followed by arson and negligence.
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Copper prices rise on the back of falling inventories
On 'Monday, copper prices rose to their highest level in over a week as lower oil prices eased concerns about the economy and demand. The market was also focused on shrinking inventories. Benchmark copper on the London Metal Exchange increased 0.6% to $13,875 per metric ton, after reaching $13,900. This was its highest price since July 22. The drop in oil after U.S. president Donald Trump cancelled a new attack on Iran to?seek a deal?to curb Tehran's nucleonic ambitions also eased concerns about price pressures, according to traders. Britannia Global Markets stated in a report that "the markets are still headline-driven at the start of the week with energy markets as the primary focus." The fundamental picture for copper appears to be supportive. Both the London Metal Exchange and China Metal Exchange have depleted inventories. The copper stocks registered by the?LME have dropped nearly 40% since May, to 244,025 tonnes. This is their lowest level since February. Since February of last year, producers and traders have shipped copper to the United States, after President Donald Trump threatened import duties, creating a premium over LME copper prices. Zinc was up 0.9% to $3,676 per ton, after reaching a record high of $3703.50, a level not seen in four years, on concerns over supply on the LME. Three?large holdings in cash contracts and warrants (#LMEWHC) created large premiums for nearby zinc 'contracts against forwards with longer dates. A large short on zinc futures #LMEFBR> matured this month, which reinforced the trend. The premium or "backwardation" for zinc cash over the three-month ahead The level of smog is at or near the levels last seen in December. LME zinc stock has dropped to 99.285 tons (0#MZNSTXLOC>), down by 25% since mid-June. Other metals saw aluminium gain 0.8%, to $3,210 per ton. Lead fell 0.3%, to $1,871. Tin increased by 0.4%, to $55,500, and nickel dropped 1.3%, to $17 020.
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Oil prices fall after Trump cancels his attack on Iran and seeks deal
Oil prices dropped more than $5 per barrel on Monday as U.S. president Donald Trump held back a new attack against Iran in order to reach a quick agreement with Iran. Iran said no talks were scheduled. Brent crude futures dropped $5.04 or 5.73% to $82.89 at 1218 GMT. They had retraced a portion of their losses after hitting a session low earlier. ?U.S. West Texas Intermediate crude oil was trading at $78.90 per barrel, down by $5.77 or 6.8%. Both benchmarks saw their largest daily drops in absolute terms and percentages since last Monday. Two contracts increased by more than 20 percent last month, after the U.S. resumed fighting with Iran and several attacks on tankers in the vicinity of Oman raised security concerns and discouraged shippers from entering Gulf to load oil. Iran stated on Monday that there are no ongoing talks with the United States, and no plans for any meetings. This contradicts U.S. president Donald Trump, who had used talks to justify announcing an end to attacks. Can a deal happen? We would expect higher prices in August, given the depletion of global inventories. However, we will also be keeping an eye out for signs of a weakening of demand. According to PVM analyst Tamas Varga, under the current VVV (volatile violent and violent) trading conditions, the chances of making a mistake are high. Shipping data revealed that two tankers laden primarily with Saudi oil, crossed the 'Bab el-Mandeb Strait from the 'Red Sea at the weekend. However, traffic slowed down in the Strait of Hormuz as well as Bab el-Mandeb. Since Saturday, the United Kingdom Maritime Trade Operation has reported three attacks on tankers. On 'Sunday', the Organization of the Petroleum Exporting Countries (OPEC+) and its allies approved an increase in oil production quota of 188,000?barrels a day starting September. The Iran and Ukraine wars have caused export?disruptions in the Gulf, Russia, and Kazakhstan. This has meant that successive monthly OPEC+ increases over the majority of this year did not translate into more oil on the markets. (additional reporting and editing by Florence Tan, Sam Li and David Holmes).
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Greek crews continue to fight wildfires northwest of Athens
On 'Monday, hundreds of Greek firefighters fought a wildfire north of Athens, for the fourth day, after strong winds and erratic weather conditions caused it to ravage homes, pine trees and thousands of acres of farmland. This forced emergency evacuations on land and by sea. After a midair collision with another helicopter whose crew was still alive, two firefighters on a firefighting chopper crashed and died near the seaside village of Psatha on Sunday. On 'Monday, more than 400 firefighters were deployed with 21 aircraft near the communities Kandili & Agia Skepi as thick plumes of black smoke and red fires enveloped lush pine forests. A Greek fire brigade official revealed that heavy machinery was used to create fire breaks in order to prevent wildfires from reaching homes. Wildfires have ravaged Europe this summer, following a record-breaking period of heatwaves and little rain. Scientists say that the conditions were exacerbated due to a rapidly changing climate. France and Spain were particularly hard-hit, though huge fires in those countries have abated since the weekend. Faulty power lines Greece's fire seasons had been relatively mild compared to local standards. Three?firefighters died in two separate incidents last week on the Peloponnese and Crete. The authorities are working to determine the cause of a mid-air helicopter accident that occurred at a low altitude. Aviation accident investigator Faidon Karaiosifidis said that at this point, the only thing they can say is that the formation between the two helicopters wasn't appropriate. Their vertical and horizontal separation as well as their descent rate were inadequate. Wildfires have been experienced in the area around Psatha. Locals complain that while vegetation around houses has been cleared, more work needs to be done in order to maintain and build fire breaks within the forest. Kostas Kastafados, Deputy Minister for Climate Crisis told ERT that the strong winds and erratic weather conditions over the last few days prevented water bombers from bringing up seawater. This left ground forces to fight the fires alone. Nikos Lavranos of the Federation of Unions of Fire Service Employees said that days of operations had overstretched an ageing and thinly-staffed fire service. This was the result of a hiring ban during Greece's debt crisis from 2009-2018. He said that a firefighter who was useful to his fellow citizens and the society would be a "rested firefighter" rather than an "exhausted firefighter". The fire brigade said that preliminary investigation indicates that the cause of a fire in Boeotia that spread 25 km (15miles) last week was a spark from vibrating conductors that were on a private power line transmitting electricity from the wind turbines. A contractor and an electrical engineer have been arrested, and they are being investigated for arson. In recent years, the main cause of wildfires in Greece has been faulty power lines. This was followed by arson and negligence.
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Russell: The increase in oil production by OPEC+ is not relevant for the time being, but for the future.
The decision of the core members to increase crude?oil quotas in September is easy to dismiss as a meaningless act, given the disruptions caused by?Iran's conflict. As long as the Strait of Hormuz is largely closed, and as long as there are no solutions to the threats to the Bab el-Mandeb, the oil-exporting groups will have little chance of being able to deliver what they agreed to produce. Saudi Arabia, Russia and Kuwait are among the seven OPEC+ members who have agreed to voluntary cuts in output. Algeria, Kazakhstan, Kazakhstan, Algeria, Kuwait, Kuwait, Saudi Arabia and Oman also agreed. The United Arab Emirates left the Organization of Petroleum Exporting Countries (OPEC) in May. This is the final phase of the rollback of the 1.65 million bpd cut in supply originally agreed upon in 2023. The production quotas don't matter for the time being. According to the latest survey, the eight OPEC members with quotas produced 20.276 millions bpd in June, which is 6.246million bpd less than the target. According to OPEC, Russia, the largest non-OPEC group member, produced 8.928 millions bpd during June. This was almost one million bpd less than its agreed quota. OPEC+’s decision to reverse voluntary production cuts has little weight on the current market. However, it highlights the challenges that oil exporters and buyers face. Three options The crude oil market is currently facing three scenarios, but it is unclear which one is most likely. First, Iran and the United States must reach a deal that allows unhindered and sustained passage through the Strait of Hormuz. Second, the conflict is sporadic, with periods when it 'elevates,' followed by hope of a pact and a truce, before these hopes are dashed, and drone and missile strikes resume. Third, the ladder of escalation continues. U.S. president Donald Trump orders strikes on civilian and energy infrastructure, and Iran responds by doing the exact same thing against Gulf states, including Saudi Arabia, Kuwait, and Iraq, that host U.S. base. Crude oil futures markets appear to be priced largely for the first option. Brent benchmark contracts fell 6.8% to $83.98 per barrel in early Asian trading on Monday. The price is 34% lower than the peak reached in the Iran conflict on April 30 of $126.41 per barrel. It is also only 16% above the $72.48 closing price on February 27, the day before Israel and the U.S. launched their strikes against Iran. Crude oil will likely drop quickly from its current level if the first option is chosen. OPEC+ will likely be able to increase production fairly quickly, and put more barrels 'on the market? at a time other producers are trying to maximize exports. A comprehensive peace agreement would also allow Iran to sell its crude oil openly, meaning that only Russian petroleum may be subjected to Western sanctions. If the second option prevails over the next few months, then the OPEC+'s decision to increase output is rendered largely insignificant. The question then becomes how well the Saudi exports through the Red Sea, the United Arab Emirates and the Gulf of Oman can compensate for the lost volume of oil from the Strait of Hormuz. This scenario will likely cause crude oil to be volatile, driven by headlines about Trump's tweets on social media. Markets hope that the third scenario will never happen, as it would mean long-term damage to the Middle East's energy infrastructure. This could lead to global economic pain as the world adjusts as up to 20% of its crude oil and liquefied gas supplies are lost. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Stocks rise on hopes of peace with Iran, but crude prices fall; yen firms after the intervention
?Signs of U.S.-Iran relations easing once again have set Wall Street on a positive course for August. Crude prices are up and stock futures are rising, as investors prepare for another week stuffed with economic and earnings data. S&P Futures were up 0.6% and Nasdaq Futures 0.4% in pre-market trading. The oil prices dropped sharply, while European stock exchanges continued to climb. The yen strengthened to its highest level in three months after the U.S. confirmed a joint intervention by Japan and the U.S. Brent crude futures fell $4.40 or more than 5% to $83.52 per barrel after U.S. president Donald Trump announced that talks with Iran will take place on Monday. He had previously called off an assault on Iran in order to pursue a plan to reopen Strait of Hormuz. European stocks rose by 0.4% in the first week of August. The German DAX set an intraday record, and last closed 1.4% higher. Bruno Schneller is the managing partner of multi-family office Erlen Capital Management. He said that "for equity markets, fundamentally, the picture remains positive". "Earnings are generally holding up well and companies with strong price power and resilient business models continue outperforming." Florian Ielpo's research from Monday, the head of macro for?Lombard Odier Investment Managers noted that over half of S&P 500 companies had reported earnings, and 86% of them exceeded earnings expectations. Investors have also considered possible consolidation in the healthcare industry, following a report that Bristol Myers Squibb, AstraZeneca and others had begun preliminary merger discussions about creating the largest drugmaker in the world, valued at nearly $400 billion. AstraZeneca's shares dropped almost 7% at one point on the reports of a possible tie-up. Asian stocks have struggled to start the month after a turbulent and wild July, when investors worried about massive capital expenditure on AI. Japan's Nikkei closed down 1%, while South Korea KOSPI fell more than 5%. The MSCI world stock index was flat as a result. YEN BEAR COWER FOLLOWING JOINT INTERVENTION The Japanese yen gained over 0.5%, reaching 156.77 against the U.S. Dollar after earlier that day it had reached its highest level since early May (155.2), putting traders on high alert for another round of intervention. Japan's Finance Ministry confirmed on Monday that the U.S. and Japan have conducted coordinated yen buying and will not hesitate to continue. This rare bilateral measure was taken to stop the yen from falling to its lowest level in 40 years. U.S. Treasury Secretary Scott Bessent said that the United States will consider in the coming months increasing the size of Federal Reserve's temporary dollar liquidity repurchase facility, describing the tool as an "important backup". Matt Simpson, a senior market analyst with StoneX, said that Besent's comments carry more weight than his intervention. It?feels safe to bet that the Japanese currency has reached its trough for the year. In these?markets, the words 'joint interventions' are a very important term. Trump said that the United States helped Japan support the yen on Sunday as a gesture of friendship and in order to benefit the global economy. Tokyo's unilateral intervention between late April to early May only caused a?brief yen recovery, while the Bank of Japan rate hike in the month of June provided little support. This highlights the challenges policymakers are facing due to rising oil prices, and the widening interest rate differential with other major economies. Before the recent interventions, the yen was anchored near 40-year lows at around 164 dollars per yen in recent weeks. Data from a US regulator showed that net short yen position had reached?roughly $12,5 billion, which is the highest level in two years. The regulator revealed. Bessent has repeatedly called for the Bank of Japan to increase interest rates. As oil prices dropped, yields on U.S. Treasury bonds fell elsewhere. The 30-year bond yield fell by over 5 basis points, to about 5.22%. This is a slight decline from the 19-year peak it reached last week. Investors were confused by the Iran War and the Federal Reserve's policy outlook in July. Reporting by Nell Mackenzie and Ankur Banerjee from London; Editing by Barbara Lewis, Kevin Liffey
Takeaways from Trump’s speech on Iran
In a Wednesday evening prime time address, President Donald Trump defended his handling the U.S. and Israeli war against Iran that has been ongoing for a month. He said the U.S. Military was close to completing its mission. Trump also reiterated his threats to bomb 'the Islamic Republic to the Stone Age.
He gave his 19-minute address against the backdrop of rising global oil prices, and his low approval rating.
What are some key points to remember?
Looking for an exit, but not quite yet
Trump, faced with a war-weary American public, and slipping poll numbers, claimed that the U.S. destroyed Iran's air force and navy, crippled their ballistic missile program, and would continue hitting them "extremely" in the next two to three weeks.
He did not provide a timeline for the end of hostilities, despite saying that the U.S. Military was "on track" to achieve its objectives.
He also suggested that the war might escalate if Iranian officials did not agree to U.S. conditions during negotiations. Strikes on Iran's oil and energy infrastructure could be possible.
Trump's speech, in which he reiterated threats and sent mixed messages, may not do much to calm the financial markets or ease the fears of the American public who have shown little support for America's largest military operation since 2003's invasion of Iraq.
The conflicting signals Trump has sent throughout the conflict only add to the confusion. One moment he calls for a diplomatic solution and the next, he threatens to rain more destruction on Iran as the U.S. military continues to build up in the region.
The Strait of Hormuz
Trump's remarks on Wednesday weren't clear on whether U.S. Military operations could end before Iran reopened Strait of Hormuz. This vital waterway is where it has a chokehold, causing the worst energy shock ever experienced in the world.
He called on countries that depend on Gulf oil, and not the U.S. to "take the initiative" and shoulder the burden of reopening this waterway.
Western allies have, however, resisted his call to join a war he and Israeli Premier Benjamin Netanyahu began without consulting them.
Trump did not mention in his speech that he was considering withdrawing from NATO because of what he believes is its failure to provide support for the U.S. during the Iran conflict.
Analysts say that Iran could gain significant influence over the Strait, which is the route for a quarter of all oil and gas exports in the world.
Washington's Gulf Allies could also be resentful of a quick U.S. withdrawal, as they would have to deal with a hostile, wounded neighbor.
MISSION COMPLETE?
Trump praised the U.S. Military's success in the conflict, but there are still questions about whether or not he achieved his main goal at the beginning of the war - closing off Iran's pathway to a nuclear weapon.
Iran has a'stockpile' of highly enriched uranium which could be converted to bomb-grade, but this is thought to have been buried by U.S. and Israeli bombings in June.
Trump reversed his position on Wednesday, saying he didn't care about the material anymore because it was "so deep underground" and U.S. Satellites could monitor the area. Iran has never claimed to be seeking a nuclear weapon.
He threatened new airstrikes if Iran tried to move the stockpile but did not mention sending special forces to seize the stockpile. U.S. officials said that this was an option under consideration. Any deployment of ground forces would anger the majority of Americans.
Trump claims to have destroyed Iran's conventional weapons, but the country has shown that it can still use its missiles and drones against Israel and U.S. Gulf Allies as well as American military bases on their soil.
Trump's calls for the removal of Iran's theocratic leaders have not been fulfilled. U.S. and Israeli air strikes have killed many top leaders including Supreme Leader Ayatollah Ayatollah Khamenei. However, they were replaced by more hard-line successors including Khamenei’s son. U.S. Intelligence has determined that the Iranian government is largely intact.
DOMESTIC POLITICS
Trump's first prime-time speech since the start of the war on February 28 was initially seen as an attempt to ease Americans' concerns over the interventionist tendencies of a President who ran for his second term based on a pledge to keep the U.S. away from "stupid", military interventions.
Trump's advisers pressed him to demonstrate to the public that kitchen-table matters are a priority. But he only gave a nod and appeared to dismiss Americans' economic worries as temporary, and certain to disappear once the war was over.
He said that many Americans were concerned about the recent increase in gasoline prices at home. This short-term rise is the direct result of deranged terrorist attacks by the Iranian regime against commercial oil tanks of neighboring countries, which have nothing to do with the conflict.
Trump's MAGA has mostly stayed with him. However, his grip on the political base may weaken as long as economic impacts, such high gas prices and his Republican Party, scramble to maintain control of Congress in November's Midterm Elections.
A /Ipsos survey completed on Monday revealed that Trump's approval rating overall has dropped to 36%. This is the lowest level since his return to White House.
Trump did not provide a definitive timeline for the end of the war in his television appearance. The dollar strengthened, and oil prices rose.
Market reaction is a reflection of Trump's dissonant message: he wants to reassure Americans the war will be over soon, but at the same time threatens Iran with new strikes and suggests he might leave without opening the Strait of Hormuz.
FLAT PERFORMANCE?
The Wednesday address gave Trump a rare opportunity to reconnect with his voters and gain primetime viewers. He entered the White House through double doors.
He spoke for 19 minutes in a subdued voice in a dimly-lit room, and stuck to the same old talking points, rather than clarifying the reasons why he wanted to take the U.S. into war.
The former reality star was not in his usual public role. He was probably in front of the largest audience since the State of the Union Address, which was held on February. (Reporting by Matt Spetalnick, Humeyra Pauk and Trevor Hunnicutt. Additional reporting by Trevor Hunnicutt. Editing by Don Durfee & Thomas Derpinghaus).
(source: Reuters)