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Gold increases by over 2% amid hopes for Middle East peace as oil and dollar fall
Gold prices rose more than 2% on Wednesday after U.S. president Donald Trump suggested a possible deal could be made with Iran. The dollar and crude fell as inflation fears waned. As of 0632 GMT spot gold rose 2.4% to $4667.39 an ounce. This is the highest it has been since April 28. U.S. Gold Futures for June delivery increased 2.4% to $4678.20. U.S. president Donald Trump announced on Tuesday that he will temporarily pause a?operation to assist in escorting ships through the Strait of Hormuz. He cited progress towards a comprehensive deal with Iran. U.S. Secretary of State Marco Rubio said to reporters that "operation Epic Fury" is over. He added that "we are not cheering on an additional situation." The price of gold rose as oil prices fell on the back of a reduction in the geopolitical risks premium. This was after the U.S. confirmed that the fragile ceasefire that has been ongoing between Iran and the United States is still intact despite the skirmishes that were seen at the beginning this week. Wong stated that "any signs of escalation in tension between them will lead to gold prices experiencing some form of profit taking, or for short-term speculators unwinding their near-term long net position in gold." Holders of other currencies can get metals at a lower price when the dollar is weaker. ]USD/] Increased crude oil prices may increase the probability of a rise in?interest rates. Gold is considered a hedge against inflation, but high interest rates can make other assets that yield more attractive. This reduces its appeal. Investors are awaiting the U.S. non-farm payrolls this week. This will determine whether the economy is resilient enough to allow the Federal Reserve to maintain its monetary policy. ANZ stated in a report that "Factors like economic growth risks and worsening geopolitical relationships, currency volatility, and downside risks on equity markets will continue to support the role of gold as a portfolio divider." Silver spot rose by 4.2%, to $75.84 an ounce. Platinum gained 2.6%, to $2,002.75, while palladium was 2.5% higher at $1,522.93. (Reporting and editing by Rashmi aich and Mrigank dhaniwala in Bengaluru)
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Profits of wind energy producer EDPR rise by 9% and beat expectations
EDP Renewables announced on Wednesday that it had surpassed analysts' expectations by achieving a 9% increase in its recurring net profit for the first quarter. This was due to higher production and cost-cutting. EDP's renewables division reported a recurring net loss of 71 millions euros ($83million). The average estimate of the analysts polled at LSEG was 52,5 million euros. The company said that despite the lower European electricity price, overall revenues remained flat at 591 millions euros. This was due to a 3% rise in production of 11,300 gigawatt-hours. North America accounted for 59% and Europe for 29%. In a press release, the company said that recurring core operating costs fell 11% in comparison to a year earlier. This showed "continued improvements in efficiency". The recurring consolidated earnings, before interest, tax, depreciation, and amortisation, rose by 2% on an annual basis to 489 millions euros, exceeding the analysts' consensus estimate of 486million?euros. EDPR operates in 28 countries in Europe, Asia, and the Americas. The installed capacity has increased by?2 gigawatts in the last 12 months. More than half of this increase was in North America. This brings the total capacity up to 20.5 GW. It said that as of March, the capacity under construction for new wind and solar farm and battery energy storage system stood at 1.9?GW. This "supports deployments scheduled for 2026 and beyond". The net debt was increased by 319 millions euros, or 4%, to 8,43 billion euros.
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Buy or avoid ROI-US bonds with a yield over 5%? Mike Dolan
The U.S. bond yields have crossed 5% eight times or more in the last three years, but never stayed there. The question of whether 'dragons' or 'buyers" are above this level is critical for an investor base who has become sour about?super-long term government debt. The appetite for long-term bonds is still important, as 17% of Treasury debt maturing in the next 10 years will be held by the U.S. Treasury. This appetite is being affected by a 'cocktail' of factors, including inflation, corporate debt, dollar value and foreign ownership. A 5% coupon per year from the U.S. Treasury is a nice source of income, especially in an uncertain economy. This is well above the average 4.2% of the last 30 years. If you don't touch your money until the end, the compound interest will more than quadruple it over the next three decades. The real potential return on investment is another matter. If the Federal Reserve is successful in keeping inflation at its 2% goal, a long-term 5% bond will net you a real gain of 150% in inflation adjusted terms. Even if inflation exceeds the average 2.3% rate implied by the 30-year inflation linked debt market, a 5% coupon would only double your money. Add to that, the fact that the administration is encouraging the possibility of the dollar's near-50 percent rise in the last 15 years being substantially undone and foreign investors who hold U.S. Bonds taking a hit. It is more important than it was before. Over the last decade, foreign investors' share in U.S. Treasury Bonds with maturities greater than 10 years has increased by more than two-fold to 14%. The obvious alternative for everyone else over the last half-century has been clear. With dividends reinvested in the S&P500, your money would have grown 15-fold during the last three decades, and roughly the same amount over the next 30 years. The inflation also takes a toll on that, but relative returns remain high. The artificial intelligence boom continues, despite persistent worries about the compressed equity risk premiums with stocks at all-time highs. It continues to confuse both stock market bears and economic bears. Goldman Sachs expects to spend $7.6 trillion on AI infrastructure by 2031. The "hyperscalers" who are leading the AI push finance their spending through long-term debt. This creates a new competition among corporate borrowers for Treasuries in the search for debt financing. Morgan Stanley anticipates record corporate bonds this year. Tech borrowing will be a large part of it. This year, the supply of investment-grade bonds is expected to increase by more than 20% annually with maturities longer than average. FIVE LIVE This is just one of many headwinds that are hitting sovereign debt and in particular long-duration maturity. First, the debt is increasing everywhere. The repeated shocks have prevented any real retrenchment. Populist political movements in Japan, Europe, and the U.S. promise ever more tax cuts or spending, but none are willing to reign in the rising deficits. The midterm elections in the U.S. this year are likely to be a gridlock. Barclays strategists pointed out this week that "historical experience with divided government tilts financial risks towards looser outcomes." Barclays warned that lower tariff revenues, due to legal resistance and other factors, could make the cumulative 10-year deficit in the United States $700 billion higher than the already gloomy estimates of the Congressional Budget Office. This could then lead to higher schedules for debt sales and eventually higher "term premiums" in borrowing rates. In many cases, the demographic shifts in ageing populations that used to see pension funds accumulating ultra-long government bonds to match their liabilities are now reversed. The 'pension funds' are being drawn and the?funds have moved down in maturity. Inflation is high and expectations of inflation are also high. This is exacerbated by the fact that oil prices have risen again this year and trade tariffs are rising. Geopolitics has been volatile and threatens supply chains and energy market for many years. This constrains central bankers from cutting interest rates further, but also keeps the risk of the next move high. If rates don't rise soon, the risk of inflation expectations that are already high in the short term extending further into future decades is growing. There is also the Fed. Kevin Warsh, the new Fed chairman, is expected to take office later this month. He has stated that he wants to reduce the Fed's debt and the maturity of the $6.7 trillion. As of now, 36%?of the debt held by the Fed has a maturity period of 10 years or longer. The 5% Treasury bond yield is a welcome relief to?banks that hold bonds due to regulatory requirements or for foreign central banks who need dollar reserves. What about as an investment? Dragons are real. The opinions expressed are those of Mike Dolan a columnist at. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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LME WEEK - Shanghai nickel contract gains ground in the challenge to LME
Brokers have already praised the Shanghai Futures Exchange (ShFE) for opening its nickel contract to foreign firms. They said it would threaten London Metal Exchange as a benchmark in pricing. China is the world's biggest consumer of nickel, and sources in the industry have long questioned whether pricing should be anchored in London after LME's nickel trading crisis 2022. According to them, benchmarks should be based on where the supply, demand and hedging requirements are concentrated. ShFE is exploring an internationally accessible nickel contract as part of its broader plans to expand its global presence since at least 2023. Last month, it opened trading on the benchmark to certain overseas firms. According to data from ShFE, trading volume increased 179% between the evening session of April 21 and the end of month compared to last year's same period. This week, the annual gathering of the metals sector in Hong Kong for LME Asia Week will focus on whether there will be an enduring interest from abroad and what that means for the internationalisation Chinese commodity markets. The demand for the SHFE Nickel contract has been strong so far. Marc Bailey, CEO of?brokerage Sucden Financial, said that the contract is appealing to international physical traders because they appreciate the access to real Chinese onshore contracts and the low level of fees. The launch went well and the Chinese authorities will likely take comfort in that. This could encourage the opening of Chinese futures on other mature markets, such as copper and aluminium. The volume of nickel in SHFE exceeds that of LME The ShFE has seen a higher volume of nickel trading than the LME in this year. According to metal industry sources, the Shanghai exchange could have been prompted to announce its plans for a nickel contract back in March. In the first quarter this year, ShFE nickel volumes accounted for nearly 55% of global totals. The LME's volume was 45%. ShFE's share was 31% last year, compared to the LME's 69%. Since the beginning of the contract, trading shares have reversed to 52.4% and 47.6%, respectively. DEEPLY EMBEDDED Sources at Asian metal brokers said that the majority of overseas trading has been done by subsidiaries of Chinese companies. This is not surprising, given China's dominance on the nickel market. Source at metal broker: The rationale behind the opening of the contract was less to attract foreign firms and more so to enable Chinese companies abroad to hedge with the same "China Price" in Renminbi that their domestic teams were using. The LME is still 'deeply embedded' in the global physical contracts that are made between producers, consumers and traders. According to traders, the real test of LME influence will be whether or not overseas traders and domestic players, such as companies dominating Indonesian nickel industry, like Tsingshan Group and Huayou Cobalt, use SHFE nickel contracts for hedge and pricing their products. Reporting by Dylan Duan and Pratima Dasai in Hong Kong, with additional reporting by Amy Lv from Hong Kong. Editing by Lincoln Feast.
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Asia markets reach new records due to AI euphoria; yen rises again
The dollar fell, stocks soared, and oil prices dropped after U.S. president Donald Trump announced "great progress" in reaching a "final deal" with Tehran. Meanwhile, momentum accelerated for AI-driven trading. Trump announced that he would temporarily halt an operation escorting vessels through the?Strait?of Hormuz. This area, which carries a fifth or more of the world's oil, has been blocked by Iran since late Febuary, triggering a worldwide energy crisis. Brent crude fell 1.6%, to $108.07 a barrel. S&P 500 futures rose 0.3%. MSCI's All-Country World Index climbed 0.4%, a new record. It was followed by similar milestones in its Emerging Markets index and its broadest Asia-Pacific share index outside Japan which rose 2.8%. South Korea's Kospi led the share rally with a 6.6% surge, as it cleared the 7,000-mark for the first. The yen gained as much as 1.8% in the afternoon on foreign exchange markets. Traders were alert for any new intervention from Tokyo to support the currency. Thomas Mathews is the head of markets at Capital Economics, Wellington. "There is a lot of optimism about a U.S. - Iran 'deal' right now; it could be that the authorities thought this was the perfect time to give the yen a little extra nudge." It could be that the holiday season has affected trade. Best to wait and see what happens towards the end of this week. Wall Street stocks?recorded new highs on Tuesday, as the S&P 500 gained 0.8% and Nasdaq Composite grew 1%. Chris Weston is the head of research for Pepperstone Group Ltd. in Melbourne. He said that investors continue to buy and add to their positions in 2026 winners. There has been some purchasing in S&P500 materials stocks. However, it is tech that continues attracting the majority of flows. Especially in Apple and memory plays. Samsung Electronics' stock price soared 14.8% as the Seoul market opened after a long holiday. The company now has a market cap of $1 trillion, surpassing Berkshire Hathaway, and is closing in on Walmart. The earnings growth trajectory in Asia for sectors like semiconductors, tech, hardware, industrials, and materials is the highest I've seen in years, according to?Rushil Khanna. He is the head of equity investments in Asia for Ostrum, a Natixis Investment Managers affiliate. He said that "this capex will lead to material value creation in Asia as the provider of picks and shovels for the AI ecosystem." The shares of Advanced Micro Devices rose 16.5% during extended trading on Tuesday as the company predicted second-quarter revenue that was above Wall Street's expectations. This was aided by the strong demand for their dead-centre chip as cloud computing companies increase spending on AI infrastructure. The U.S. Dollar Index, which measures greenback strength against a basket six currencies, fell 0.3% to 98.02 on the foreign exchange markets. Sterling is at $1.3588 and the euro at $1.1736, both of which are up around 0.4% on this day. The Australian dollar rose to $0.7246 and reached its highest level since June 2022. This was boosted by an improved risk appetite, as well as a third consecutive interest rate hike the day before. New Zealand's dollar rose 1% to $0.5947. The yield on 10-year Treasury bonds in the United States was unchanged at 4,424%. Gold rose 2.1% to $4,651.84. Bitcoin fell 0.5% to $81,264.67, while ether dropped 0.8% to $2,364.40. (Reporting and editing by Shri Navaratnam, Sam Holmes, and Gregor Stuart Hunter)
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Dsm-firmenich achieves core profit forecasts thanks to scent and beauty demand
On Wednesday, European chemical manufacturer dsm - firmenich reported an adjusted core 'profit' that was broadly in line with market expectations. This was largely due to the strong demand for their perfumery and beauty product. The adjusted EBITDA of the group was 434 million euro ($509m), which is slightly higher than analysts' expectations, who had forecast 431 million euro in a "company-provided" consensus. The adjusted EBITDA grew 4% in the first quarter on a comparable basis, but fell on a reported base. The margin fell to?19.1%, down from 19.7%, due to negative currency effects, higher freight and energy costs, and dsm firmenich. Due to currency effects and portfolio changes after the sale of Agro Ingredients, reported sales decreased 3% over the past year. Some customers also brought their orders forward to the end of the third quarter due to the uncertainty surrounding global supply chains, which is linked to the Middle East. In a press release, CEO Dimitri de Vreeze stated that "we made a strong start to the new year with good (like for like) sales growth across all business while navigating an extremely?dynamic macroeconomic and geopolitical environment." Analyzing the actions taken by 175 companies in the first quarter of the financial year, it is clear that the chemical industry has been hit the hardest. Just over half of the '27 actions tracked by the sector involved financial pressure, guidance reductions or price increases in response to rising fuel costs and other petrochemicals.
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Equinor's first-quarter profits rise more than expected
The company reported on Wednesday a higher-than-expected increase in profits for the first quarter, boosted by a record production and the fact that oil and gas prices rose in March because of the Middle East war. Equinor's poll of 23 analysts predicted $9.0 billion for the Norwegian energy group. This quarter, we?deliver exceptional performance in the field and record-high output... "We present strong financial results, combined with higher prices," said?CEO Anders Opedal in a press release. Equinor has maintained its decision to reduce share buybacks this year by 70%, despite the possibility of windfall profits resulting from Middle East supply disruptions. It also kept its regular quarterly cash dividends at $0.39. Equinor, a majority-owned state company, has seen its shares rise 62% in the past year, outperforming an increase of 37% among European energy stocks. This is due to Equinor's position as Europe's largest supplier of oil, gas and natural gases, with no direct exposure to Middle East. The downstream division, which includes trading in energy, posted a profit exceeding analysts' expectations of $693 million and surpassing the $400 million quarterly guidance. Brent crude futures are now trading well above $100 a barrel, after trading in the $60-$70 range for most of the last 12 months. The spot price for physical delivery is even higher. The European benchmark gas price has also increased sharply. It is now around 50% higher as Qatar cannot deliver liquefied gas (LNG). Equinor has produced a record 2,31 million barrels of oil equivalent per day in the first quarter. This is up from the previous year's 2.12 million and beat the analysts' forecast of 2.22 million.
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Gold prices jump on dollar weakness and Middle East peace hopes
The gold price rose by 2% Wednesday due to a weaker dollar. Meanwhile, lower oil prices eased concerns about inflation and interest rates that would be higher for longer, in anticipation of an agreement between the U.S. and Iran. As of 0415 GMT, spot gold was up by 2% to $4,647.09 an ounce. U.S. Gold Futures for June Delivery rose 2% to $4 658. U.S. president Donald Trump said Tuesday that he will temporarily halt an operation to help escort vessels through the Strait of Hormuz. He cited progress towards a comprehensive deal with Iran. The gold price rose as oil prices fell on the back of a reduction in the geopolitical risks premium after the U.S. confirmed the fragile ceasefire that has been ongoing between Iran and the United States is still intact despite the "skirmish" that occurred at the beginning of this week, said Kelvin Wong, senior analyst?at OANDA. After Trump suggested that a peace agreement could be reached with Iran to end the conflict, crude oil and U.S. dollars prices fell. Marco Rubio, the U.S. Secretary for State, told reporters Tuesday that "operation Epic Fury has concluded." He added that "we don't cheer on an additional situation." Wong said that if there are signs of tensions between the two countries, gold prices will be affected by profit-taking or a move to reduce short-term speculators' net long positions in gold. The dollar is weaker, and metals priced in dollars are cheaper for holders of other currencies. The dollar price of metals is cheaper for holders other currencies. ]USD/] Increased crude oil prices can cause inflation and increase interest rates. Gold is seen as an inflation hedge, but high interest rates can make other assets that yield more attractive. This reduces its appeal. Investors are waiting for the U.S. Non-farm Payrolls to be released later this week. This will determine if the economy is resilient enough to keep the Federal Reserve's policy on hold. Silver spot rose by 3.4%, to $75.62 an ounce. Platinum gained 2.4%, to $1,999.95. Palladium was 2.6% higher, at $1,524.59. (Reporting and editing by Rashmi Dhaniwala and Mrigank Aich in Bengaluru)
Ukraine accuses Russia of violating ceasefire initiated by Kyiv
Ukraine has accused Russia of violating the ceasefire that was initiated by President Volodymyr Zelenskiy on Wednesday at midnight. Officials reported one death and three injuries in frontline areas of the north and east.
Andrii Sybiha, Ukrainian Foreign Minister, said that Russia violated the ceasefire initiated between midnight on May 5th and 6, when it was announced by Ukraine.
Sybiha reported that Russian attacks continued through the night and included morning strikes in Kharkiv, Zaporizhzhia.
He said that "this shows that Russia rejects the peace and their fake calls for ceasefire on May 9th has nothing to do diplomacy."
Sybiha said that Russian President Vladimir Putin is "only concerned about military parades and not human life".
Russia has announced a ceasefire from May 8-9?to coincide the commemorations of Soviet Union's triumph over Nazi Germany during World War Two, and a parade on Moscow's "Red Square".
Ukraine has announced its own proposal of an open-ended truce starting at midnight on Wednesday (21:00 GMT) and urged Russia to "replicate". Zelenskiy stated that Ukraine will act "symmetrically" after that point.
Ukraine's airforce had issued multiple warnings about drones and guided aerial attacks after midnight. The statement said that Russia launched two cruise missiles and 108 drones against Ukraine since 6 pm local time (1500 GMT) on Wednesday.
The regional governor reported that a Russian drone attack on Wednesday morning, which targeted a civilian vehicle in the northern Sumy Region, killed one passenger and injured the driver.
The?city of Kharkiv's mayor announced early on Wednesday that a Russian drone had damaged seven private structures. The regional governor reported that one woman had an acute stress response and another person sought medical treatment. The regional governor announced early Wednesday that Russian forces had attacked an industrial infrastructure in Zaporizhzhia where an attack Tuesday left?12 dead.
Kryvyi Rih was the target of a drone attack in the morning, which damaged infrastructure. The local military administration chief confirmed that no one was injured.
At least 27 Ukrainian officials were killed in several Russian attacks on Ukraine Tuesday, just hours before the deadline set by Kyiv for a ceasefire offer. (Reporting and editing by Andrew Heavens, Lincoln Feast, and Anna Pruchnicka)
(source: Reuters)