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Oil prices fall and global stocks rise after Iran peace deal report
Stocks rose and oil prices fell?on Wednesday? after a report stated that?the White House believed it was close to a memorandum ending the war with Iran. Meanwhile, momentum in AI driven trades increased. Axios reported that the U.S. was expecting Iranian responses to several key issues in the next 48-hours. On Wednesday, a Pakistani source who is involved in peace efforts confirmed that the report was true. Brent crude, a global benchmark, fell 7.5% to $101.70 a barrel. A peace agreement could ease some of the pain for the oil and gas market. The Iran war has closed the Strait of Hormuz which is normally the conduit through which 20 percent of the world's energy flows. The STOXX 600 index in Europe extended its gains, and ended the day up 2.1%. It had risen 0.7% the previous day. MSCI's All-Country World Index rose 0.9%, setting a new record. Futures for S&P 500 in the U.S. rose by?0.7% a day after it climbed 0.8% and reached its latest record high. This was driven by strong earnings of companies and excitement over artificial intelligence. Chris Turner, ING's head of global markets, said: "It appears equity investors still want to invest and are focusing on the positive news coming out of the Gulf." This was in response to a previous rise in stocks after U.S. president Donald Trump praised progress in peace -talks. The U.S. Dollar, which was a safe-haven currency during the Iran War, fell 0.5% versus its major counterparts, reflecting investor hope about a potential deal. As traders lowered their expectations of a central bank rate increase, the yields on government bonds also fell. The yield on the?10-year U.S. Treasury fell by 7 basis points, to 4.35%. The broadest Asia-Pacific index outside Japan rose 3.2%. The South Korean KOSPI index, which had reopened following a holiday, led the surge with a 6.5% increase. Samsung Electronics surged?14% to surpass Berkshire Hathaway and reach a market cap of $1 trillion. Rushil Khanna is the head of equity investments in Asia for Ostrum, a Natixis Investment Managers affiliate.
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Schneider Electric launches Southeast Asia Training Hub in Malaysia
A senior executive at French energy technology company Schneider Electric said that the firm plans to open a Southeast Asian Training Centre?in Malaysia?this year. This is due to a boom in artificial intelligence infrastructure, which will drive a soaring demand for power. Analysts predict that Southeast Asia's capacity for data centres will triple by 2030. Malaysia has emerged as a hotspot in recent years, attracting investment from tech giants like Microsoft,?Amazon, and Alphabet’s Google. It is also one of the world's leading hubs for testing and packaging semiconductors, with 13% of all global testing. Henri Berthe, president of Schneider Electric’s semiconductors and battery segment, told? that AI demand is expected to drive both sectors to growth, placing pressure on firms for improved?energy efficiency. He said, "This growth pushes us to invest in Southeast Asia," on the sidelines a regional business forum. Berthe stated that the training center would provide technical skill to the company's end users and partners throughout the region. This includes?semiconductor companies, using operational equipment such as medium-voltage power management systems or data centre solutions. Schneider, a manufacturer of server racks,?power?equipment and?cooling systems for energy-intensive buildings, has seen its earnings increase as a result of the AI boom. Berthe said Schneider also uses AI to help customers manage their energy consumption. This includes through predictive systems, which allow firms to adjust the use of chillers according to weather conditions. He said that such technologies could help reduce energy consumption by 2% to 3% for companies with power-hungry equipment like data centres and chip fabs. (Reporting and editing by David Stanway; Rozanna Latiff)
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RPT-Rivian develops variants of R2 EVs that are more affordable
Rivian's CEO said that the company is developing a?undisclosed version of its R2 electric vehicle, just days after it began mass production of smaller, more affordable SUVs. Rivian is a company that's known for its R1 SUVs and pickups. It plans to start delivering R2 SUVs in June. Analysts have stated that a successful launch will be critical to the expansion of the company's reach among the general public. When asked about the pickup version of R2, CEO RJ scaringe replied in an interview, "There are other variations of R2, that we haven't showed." "What we are building in Georgia?allows different variations," said he, referring a new factory where Rivian plans to expand its production of R2?vehicles. Scaringe didn't disclose any details about the other variants. The demand for EVs in the United States has been impacted by the elimination of tax credits, despite the fact that high gasoline prices are causing some people to be interested in battery-powered cars. 'Affordable EVs' are seen as a bright light in the electric vehicle sector, since borrowing costs...remain high. Rivian announced in March?various trims for the R2 SUV. The launch will start with a R2 priced at $58,000, and then other versions that are cheaper will be released later this year or in 2027. By late 2027, Rivian will release a $45,000 trim that has 275-mile range. This is expected to broaden the customer base of Rivian. Rivian launched first its R1T pickups in 2021, followed by the R1S SUVs. Rivian announced R2 SUVs with the mid-size platform. They also released a smaller R3 crossover and the R3X performance variant. Scaringe stated that "clearly there could be a R2X." He said, "There will be combinations." "I don't want to reveal the program," he added. Rivian’s forecast for a 53% increase in deliveries this is due to the rollout of R2 vehicles. This implies approximately 22,000-23,000 R2 deliveries assuming steady demand and smooth production ramp. Cantor Fitzgerald analyst Andres Sheppard wrote in a note to clients that the R2 will "materially boost" sales and "capture more EV market shares," thanks to its lower 'price point' and autonomy features. This was following Rivian’s quarterly earnings last week. Uber will also deploy 10,000 R2 fully autonomous vehicles in 2028 as part of a $1.25 billion robotaxi agreement with Rivian. (Reporting and editing by Christopher Cushing in San Francisco, Abhirup Roy from San Francisco)
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Trade talks between G7 countries focus on critical minerals, as US-EU tariff dispute strains unity
The Group of Seven Trade Ministers met in Paris on Wednesday to find common ground for securing vital?mineral? supplies that are dominated primarily by China. However, the United States' recent tariff threats against European Union made cars could strain unity. As ministers prepare to hold a summit of leaders in mid-June, Nicolas Forissier, the French Foreign Trade Minister said that France wanted critical minerals supplies among its most tangible deliverables. He said: "I think we'll make concrete progress in rare earths, critical minerals and supply chain security. We won't be held hostage to certain countries." There was a broad consensus among officials that China should be less dependent on us, but there were significant differences about how we could do this. The unity of the G7 is also put to test by Donald Trump's comments. He said that Washington would increase tariffs on EU made cars from 15% to 25%, claiming that Brussels did not adhere with a deal reached in Turnberry, Scotland last year. Katherina Reiche, German Economy minister, said she had been in intensive discussions with U.S. officials about the tariffs. Germany's export dependent automotive sector has already been stressed by weakening Chinese demand, slower global growth, and higher input and labor costs. Maros Sefcovic, EU Trade Commissioner, said that he and U.S. trade representative Jamieson Greer discussed the Turnberry Agreement at a meeting held in Paris on Tuesday. He will be going to the European Parliament on Wednesday to negotiate EU legislation related to the deal. Sefcovic stated that "we both clearly concluded that it is important to respect Turnberry's deal from both sides. So, we must deliver on what was promised in Scotland." Forissier stated that the?trade ministers will also?discuss overcapacity in the industrial sector - China is the primary source - as well as reforms to the World Trade Organization. Reporting by Elizabeth Howcroft in Paris, Makini and Leigh Thomas, and Kirsti Knolle, in Berlin. Editing by David Goodman and Alexandra Hudson.
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BHP denied permission to appeal UK judgement over 2015 Brazil dam failure
The London Court of Appeal has ruled that BHP can't appeal against the UK ruling that found it liable for the 2015 collapse of a dam in southeastern Brazil. In November, London's High Court ruled BHP was legally responsible for the collapse of the Fundao dam in Mariana, southeastern Brazil, ?which was owned and operated by Samarco, a joint venture ?between Australia-headquartered BHP and Brazilian company Vale. Brazil's worst ecological disaster unleashed a toxic sludge wave that left 19 dead, thousands homeless, inundated?forests, and polluted?the length of the Doce River. The High Court refused BHP permission to appeal the ruling in January of last year. BHP filed a direct appeal to the Court of Appeal arguing that the trial judge did not engage with BHP's arguments. The Appeals Court refused to grant permission, stating in a written decision that "ample evidence" was available to support the High Court's findings. In April 2027, the trial will begin to decide whether BHP is liable for the damages. (Reporting and editing by MuvijaM; Sam Tobin)
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Environmental concerns have led Jesuits to consider divesting from Rio Tinto in Britain
The Jesuits of Britain, an order of Catholic priests, may sell their stake in Rio Tinto after a failed engagement with the mining giant over environmental concerns in Madagascar and Guinea, said its head for ethical investments on Wednesday. Stephen Power SJ, the order's head of ethical investments, said at Rio Tinto’s annual general meeting: "We have been engaged with Rio for three or four years now, coming to AGMs." Power said that Rio Tinto's management of water contamination at its Madagascar operations was particularly troubling. Key water reports were either late or lacking in detail. Since?years, environmental groups have warned that the water flowing downstream of Rio Tinto's southern Madagascar mining operation contains high levels of lead and uranium. This could pose a danger to local residents who rely on nearby water sources for their drinking water. Lead exposure can affect children's mental development and their ability to learn, while uranium is a kidney-damaging substance. Dominic Barton, Rio Tinto's chairperson, said that the company has "focussed a lot of attention" on water quality. He noted that external assessments showed "regulated metals consistently under laboratory limits of detection." The Jesuits are concerned about the?Simandou Project in Guinea, and Scope 3 emissions of Rio Tinto - indirect greenhouse gas emissions from their?value chain. The possible divestment is a reflection of?growing pressure from faith-based investor groups demanding greater environmental accountability, and community protection. (Reporting and editing by Louise Heavens, Clara Denina & Melanie Burton)
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Axios: US and Iran close in on a one-page note to end the war
Axios, citing two U.S. government officials and other sources, reported that the 'White House' believes it is close to reaching an agreement with?Iran over a one-page memo of understanding. This would end the war, and provide a framework for further nuclear negotiations. According to a report, the U.S. is expecting Iranian responses to several key points within the next 48 hours. The report cautioned that there hasn't been any agreement yet, but stated this was the closest parties have been to an accord since the beginning of the war. Axios reported that the deal included, among other things, Iran agreeing to a moratorium in nuclear enrichment and the U.S. agreeing lift sanctions and release "billions" of frozen Iranian funds. Both sides would also be lifting transit restrictions through the 'Strait of Hormuz. Reports said that the?one-page memorandum with 14 points is being negotiated by U.S. ambassadors Steve Witkoff, Jared Kushner, and several Iranian officials both directly and via mediators. Axios said that in its current form the memorandum would announce the end of the war and begin a period of 30-day negotiations to reach a?detailed agreement to open up the strait and limit Iran's nucleonic programme, as well as lift U.S. sanction, Axios continued. The U.S. Navy blockade and Iran's restrictions to shipping through the Strait would be lifted gradually during this 30-day period. According to a U.S. official, in the event that the negotiations fail, U.S. Forces would have the option of restoring the blockade, or resuming military action. Iran had said on Wednesday that it would only accept a "fair"?peace agreement after U.S. president Donald Trump paused the three-day old naval mission to reopen?the Strait of Hormuz, which had shaken the?month-old ceasefire in?the War. Could not immediately verify the report. The U.S. State Department or White House didn't immediately respond to an inquiry for comment. U.S. index futures continued to gain following the Axios Report. Reporting by Gursimran in Bengaluru, editing by Andrew Heavens
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Axios report that US Iran is closing in on a deal has boosted stocks and bonds
After a report by Axios that the U.S. is close to completing a one-page "memo" with 'Iran, the U.S. dollar dropped and stocks and bonds rose. The broad STOXX 600 index in Europe jumped dramatically and ended the day up 2.2%. Energy- and economy-exposed stocks such as?banks, miners, and oil and gas companies fell. According to a report from the U.S., the U.S. is expecting Iranian responses to several key issues?within 48 hours. The report cautioned however that no agreement has yet been reached but stated this was the closest the parties have ever come to an accord since the beginning of the war. Could not verify immediately the report. Bonds rallied as well, driving yields on the benchmark U.S. 10-year Treasury notes down by 6 basis points to 4.5%. European bonds, which have been hit harder in recent weeks, are outperforming. German 10-year yields are down 7.5 bps to 2.99%, and rate-sensitive 2-year yields have fallen 10 bps to 2.658%. Markets have scaled back their bets about the number of rate increases they expect from the European Central Bank this year. British and Italian yields dropped more dramatically, respectively, by 10 bps and 12.5% bps. The dollar fell, too. Both the euro and the pound rose by 0.6% to $1.1762 and $1.3618.
Guinea pays EGA to resume bauxite trading, according to statements
Guinea and Emirates Global Aluminium have reached an agreement to settle a long-running disagreement over the seizure its local operations, allowing the resumption bauxite shipment. The two companies released separate statements on the matter.
The deal is subject to certain conditions. Guinea will pay an upfront sum to Abu?Dhabi based miner, in exchange for the transfer of Guinea Alumina Corporation assets to state-owned Nimba Mining Company. Financial details were not revealed.
Guinea, the top producer of aluminium feedstock in the world, took over GAC's Bauxite Operations last year after a disagreement about plans to build an Alumina Refinery. The assets were then transferred to the state-backed company Nimba Mining Company, who have since resumed the mining and exports.
EGA searched for alternative sources of supplies after the export ban, including possible sourcing from Ghana.
Conakry's and EGA's standoff was resolved and bauxite shipment could resume.
The statement said that the agreement included Guinea's payment of GAC for the asset transfer related to the Sangaredi Bauxite Project, as well as the renewal of the?bauxite?supply agreements between Compagnie des Bauxites de Guinee, and EGA, under mutually beneficial terms.
EGA is the largest aluminium manufacturer in the Gulf and relies on stable bauxite supply.
Guinea has tightened its mining regulations to maximize the value of its mineral wealth. It has revoked?licences, and pushed companies to develop a local refining capability.
According to the statement, the agreement is in line with the?objectives of the Simandou Strategic Committee aimed at stabilising commercial partnerships within the mining sector.
(source: Reuters)