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Mike Dolan: ROI-Warsh’s impossible mission is to tame inflation and please Trump.
Kevin Warsh believes that the Federal Reserve will be successful if no one talks about inflation. The Fed nominee is unlikely to be able to please President Obama anytime soon in order for him achieve this goal. Trump reiterated his position on interest rates just over an hour before Warsh's confirmation hearing began in the?Congress. He told CNBC that he would not be happy if the Fed Chair?didn't lower borrowing costs as soon as she took office. Warsh was grilled by the Senate Banking Committee for more than two hours. He defended Fed independence and insisted that Trump never asked him to make a rate commitment. Warsh faces a difficult task to meet his own definition of "price stability" before the end of the year, even with all his "regime-change" rhetoric, data analyses and balance sheet rethinks. Warsh, channeling the former Fed chief Alan Greenspan’s view of inflation targeting, defined price stability - one of the two congressional mandates of the central banks - as a "rate of price change no one is talking" Greenspan's target of 2% is the level at which changes in prices no longer influence the decisions made by households and businesses. Warsh stated that the economy is close to being at full employment. It may take months to calm down the concerns of businesses and households about rising prices, especially after an oil shock has already sent headline inflation surging higher than it's been in two years and by more than one percentage point. The Fed's core inflation gauges were already one point over target even before the Iran War began. Few Americans will stop talking or acting about inflation in the months ahead. According to the latest University of Michigan poll, consumer expectations of inflation in the coming year have risen by a full percentage point this month. This is the highest level they've seen in seven months. ISM surveys also show that businesses recorded their highest input costs last month since the inflation surge of 2022. According to the Ipsos rolling poll, Trump's approval rating for his handling of cost of living is 26% - his lowest reading ever. The U.S. does not, by any standard,?experience price stability. If "nobody talking about it" was the goal, then we're a long ways from that. STOP THE TALKING Warsh's statement was a bit throwaway. However, his wider testimony provided a more detailed look at how he viewed the economy and the reform of the Fed, allowing for more flexibility than the blunt definition suggested. The new Fed chair who will take over from Jerome Powell if confirmed next month spoke about examining issues in the collection of inflation data, a possible artificial intelligence productivity wave and pre-emptive policies. He also talked about a gradual reduction of Fed's huge balance sheet, which could give more room to cut rates. It would be almost absurd to start his tenure by reducing rates, even if the workers and businesses were clamoring about price increases. The markets have understood this - at the very least, since the recent oil price shock. Futures pricing gives a less than 50% chance of a Fed cut in this year. A further reduction is not fully priced-in for at least a 12 month period. Investors who bet that a Trump appointed Fed chief would deliver on the White House's demands have seen their clouds darken. Warsh's focus on the balance sheet during his hearing only tightens things up at the margins. Trump will be very disappointed by all of this, not to mention in the middle of an election year. Warsh said that, "inflation, even if it is not explicitly stated, is a choice, and the Fed has to take responsibility." He added that the government is entitled to express its opinions. "Fed Independence is largely in the hands of the Fed." Some people disagree, especially given the legal case brought against Powell. The current Fed Chair himself claims that the case is a "pretext", to force him to cut rates even further. Claudia Sahm, a former economist at the Fed, was even more blunt in her writings on Tuesday. She wrote that "Warsh’s platitudes ignore current reality." Trump's pressure is beyond words. She wrote that "central bankers who oppose Trump's views about interest rates don't need to "be strong enough to listen", but they do need to have enough money to pay the legal fees for cases brought against them as retaliation." Warsh's honeymoon could be short-lived if he cannot convince Fed colleagues to accept?his new vision of the central bank or stop Americans from talking about inflation. Save the date: On April 23, at 1300 GMT/9 a.m. ET, ROI columnists Mike Dolan, and Jamie McGeever, will join LSEG in a webinar, "Markets unpacked with open interest: Rethinking safety havens during uncertain times." Sign up by clicking here. You like this column? 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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After US extended ceasefire with Iran, gold rises and oil falls
Gold prices rose?on Wednesday, as lower oil prices, after a U.S. extension of a ceasefire agreement with Iran, eased concerns about inflation and high interest rates. Gold spot rose 0.9%, to $4,754.89 an ounce at 0435 GMT after Tuesday's fall to its lowest level since the 13th of April. U.S. Gold Futures for June Delivery gained 1.1% to $ 4,772.60. Hours before the ceasefire was due to expire, U.S. president Donald Trump said he would extend it indefinitely to allow for future peace talks. Trump's unilateral announcement was confusing, as it wasn't immediately clear whether Iran or Israel, the U.S. ally, would agree to extend a ceasefire that began two weeks earlier. Edward?Meir, Marex analyst, said: "With this ceasefire extension, the markets perceive that the crisis has de-escalated." If the ceasefire is broken and hostilities are resumed, the dollar will strengthen, and oil and interest rates will rise, which should put pressure on gold prices. Following the extension of the ceasefire, stocks rose, the dollar weakened and oil prices fell. Inflation can be stoked by higher crude oil prices, which increase transportation and production costs. Gold is seen as an inflation hedge but high interest rates make yield-bearing investments more appealing, which reduces the appeal of bullion. Standard Chartered stated in a recent note that "price changes are still at the mercy Middle East ceasefire headlines, and liquidity requirements." We continue to expect that (precious-metals) prices will recover, and in particular gold will retest records highs. Kevin Warsh, the nominee for Federal Reserve chairman, said on Tuesday that he made no promises about interest rate cuts to Trump, in an attempt to reassure?U.S. Senators considering his nomination to lead the central bank will want to know that he will act independently from the White House and pursue broad reforms. Silver spot rose by 1.7%, to $77.97 an ounce. Platinum gained 1.7%, to $2,070.37. Palladium was 1.9% higher at $1,561.72. (Reporting and editing by Eileen Soreng, Mrigank Dhaniwala and Noel John from Bengaluru)
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USTR Greer asks US allies for more money to buy critical minerals
The Financial Times reported that U.S. trade representative?Jamieson G. Greer told American allies to 'pay more' for critical minerals sourced outside of China. Greer, in an FT interview, said that U.S. allies would have to be willing to pay a premium for minerals that are sourced within a group of?trading partner countries, including Europe. Greer said in an interview that "there is a security premium we all pay. I call it the national security fee. We will pay this premium to have a safe supply chain." Greer, who has been drafting a draft of detailed information to share with partners said that he blamed the fixation on costs on Western countries' reliance on China as a source for key minerals. Greer explained that when trading partners express concern about the economic costs of price floors or mechanisms they should say: "What you're talking about is cost 'efficiency. This?is the reason we're where we are." Greer said earlier that there should be a price mechanism for rare earth minerals. The U.S. is attempting to gain?access? to vital mineral reserves. (Reporting and editing by Christian Schmollinger, Muralikumar Anantharaman, and Chandni Shah in Bengaluru)
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MORNING BID EUROPE - Indefinite ceasefire and markets unbothered
Ankur Banerjee gives us a look at what the day will bring for the European and global market. An indefinite ceasefire in the Middle East, which may or may not be agreed upon by all parties, but is expected by the markets?will likely keep April's risk momentum intact. This will allow investors to concentrate primarily on corporate earnings and economic statistics. Donald Trump, the U.S. president, appeared to announce unilaterally a ceasefire agreement extension hours before it was set to expire. However, it is unclear whether Iran or the U.S. ally Israel have or would accept the new arrangement. Trump said that he would blockade Iran's shores and ports, which means traffic in the Strait of Hormuz has?effectively come to a halt. Brent crude is now hovering around $100 per barrel. Oil prices have dropped from their March highs on the back of growing optimism about a peace agreement, but as long the waterway is closed there will be a risk of higher energy prices and inflationary shock. This brings us to the most important?economic data for the European day. The British inflation report will provide the details on the impact of the Middle East war locally. A poll of economists showed that it is likely to show an increase in inflation from 3% to 3.3%. The earnings of Elon Musk and Texas Instrument, a U.S.-based chipmaker, will be important to understand how companies are dealing with the changes in energy and supply chain. Musk's SpaceX, which has been grappling with?that?, has seen a number of developments in the past week as it barrels towards what could be the largest IPO ever. Share prices will likely continue to rise, as they have already recovered all losses from March. U.S. Stock Futures?were up by 0.5%, while European Futures indicated a subdued opening. The AI theme has returned to Asia and is driving South?Korean stocks, as well as Taiwanese shares, to new highs. South Korean chipmaker SK Hynix, for example, now ranks among the 20 most valuable companies worldwide. The following are key developments that may influence the markets on Wednesday. * UK CPI and PPI March The Eurozone consumer confidence index for April
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After US extended ceasefire with Iran, gold rises and oil falls
Gold prices rose?on?Wednesday as lower oil prices, following a U.S. extension of a?ceasefire with Iran?, eased concerns about inflation and high interest rates. As of 0225 GMT spot gold increased 0.9% to $4.755.11 an ounce after Tuesday's fall to its lowest level since the 13th April. U.S. Gold Futures for June Delivery gained 1.1% to $ 4,772.90. Hours before the ceasefire was due to expire, U.S. president Donald Trump said he would extend it indefinitely to allow for future peace talks. Trump's unilateral announcement was confusing, as it wasn't immediately clear whether Iran or Israel, the U.S. ally, would agree to extend a ceasefire that began two weeks earlier. According to Marex analyst Edward Meir, "the markets perceive that the crisis has de-escalated with this extension of the ceasefire." If the ceasefire is broken and hostilities are resumed, the dollar will strengthen and oil and interest rates will rise, which should put pressure on gold prices. After the ceasefire extension, stocks rose, the dollar weakened and oil prices fell. Inflation can be fueled by higher crude oil prices, which increase transportation and production costs. Gold is considered a hedge against inflation, but high interest rates make yielding assets more appealing, which reduces the appeal of bullion. Standard Chartered stated in a report that "price action is still at the mercy Middle East ceasefire headlines, and liquidity requirements." We continue to expect that (precious-metals) prices will recover, and in particular gold to retest records highs. Kevin Warsh, the Federal Reserve nominee to lead the central banking system, said that he made no promises about interest rate cuts to Trump. He was trying to reassure U.S. Senators who were weighing his nomination to the position of head of the central bank, that he would act independently from the White House and pursue broad reforms. Silver spot rose by 1.5%, to $77.84 an ounce. Platinum gained 1.5%, to $2,067.25, while palladium increased 1.8%, to $1,560.31. (Reporting and editing by Eileen Soreng in Bengaluru, Noel John)
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BHP completes its supply agreements with China and is now able to deliver iron ore.
The iron ore price ranged on Wednesday as the steelmakers restocked in a frenzy of activity before the holidays. BHP, 'the?world’s?third-largest supplier of iron ore, announced that it had completed iron ore contract negotiations with China Mineral Resources Group (CMRG), a state buyer. Last week, it was reported that CMRG lifted its ban on the procurement of the key ingredient for steelmaking from BHP following a visit by BHP's top executives. As of 0214 GMT, the most traded iron ore contract at China's Dalian Commodity Exchange was up 0.38% to 787 yuan (US$115.37) per metric ton. As of 0204 GMT, the benchmark May 'iron ore' on the Singapore Exchange had fallen 0.14% to $106.75 per ton. Analysts at Yongan Futures wrote in a report that "the term contract negotiations (between BHP & CMRG) have been finalised and bearish factors are largely priced in." Prices will stabilize in the near term as demand for the holidays is strong. Chinese steelmakers usually restock their feedstock before the May Day holiday, which is May 1-5. BHP expects seaborne iron ore demand to plateau over the next few decades, with a slight decrease in China being offset by growth in emerging markets and a recovery in Europe. Coke and other steelmaking materials, such as coking coal, have gained respectively 1.23% & 1%. The Shanghai Futures Exchange steel benchmarks moved sideways. Rebar gained 0.16%. Hot-rolled coils advanced by 0.3%. Wire rod grew by 0.03%. Stainless steel fell 0.33%. ($1 = 6.8218 Chinese Yuan) (Reporting and editing by Amy Lv, Tony Munroe)
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Term sheet shows that a Sinopec unit sold CATL shares worth $770 million.
A term sheet showed that a unit of Sinopec had sold 8.5 millions Hong -Kong listed shares of CATL on Wednesday for $770 million. The company was able to cash in on the soaring stock performance of the Chinese electric vehicle -battery manufacturer. The term sheet examined by revealed that Sinopec (Hong Kong), in an accelerated stockbuild, sold shares at HK$708 (US$90.41), a discount of approximately 3.8% from the closing price on Tuesday for Contemporary Amperex Technology Co Ltd (CATL). According to the term sheet, Sinopec also agreed to a 90 day lock-up period on its remaining CATL stake. According to the term sheet, Goldman Sachs is the only placing agent. Sinopec and CATL did no immediately respond to comments. The 8.5 millions shares sold represent approximately 5.5% of the Hong Kong shares issued by CATL. LSEG data revealed that Sinopec (Hong Kong), held a 9.45% share in CATL’s?Hong Kong shares. CATL shares listed in Hong Kong nearly tripled their price from HK$263 to HK$736 since May 2025. Its market capitalisation is now $304 billion after a 46.9% increase year-to date, according to LSEG data. CATL is the largest battery manufacturer in the world and supplies many automakers, including Tesla, BMW and Volkswagen. The?company raised $4.6 billion during its Hong Kong listing in that year. It was the largest listing in the world. Most of the proceeds were used to finance a battery factory in?Hungary, as part of their overseas expansion. In March, CATL announced a fourth-quarter profit and a full-year net profit for 2025 that exceeded market expectations. The timing, size, and structure of the deal are still being reviewed. ($1 = $7.8308 Hong Kong Dollars) (Reporting and editing by Christian Schmollinger, Muralikumar Aantharaman).
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Trump's Iran ceasefire extends to stocks, but the dollar is still in a shaky state
The dollar weakened on Wednesday after President Donald Trump announced that he would "indefinitely" extend the Iran ceasefire. This kept the mood upbeat, even though the Strait of Hormuz was still closed. Oil held onto its recent gains. Trump's unilateral announcement was confusing, as it wasn't immediately clear if Iran or the U.S. ally Israel would agree to extend a ceasefire that began two weeks earlier. The markets, however, remained steadfast in their risk-adjusted momentum. S&P Futures rose by 0.5%, while Nasdaq Futures gained 0.6% in early Asian hours. MSCI's broadest Asia-Pacific share index outside Japan slipped 0.14%, after hitting a seven-week-high in the previous session. Japan's Nikkei fell 0.2%, as traders tried to consolidate their recent gains. The markets have quickly recovered this month after a steep selloff due to the?war? in the Middle East. They are now back at their pre-war levels, as the prospect for a ceasefire and a peace agreement has helped boost risk sentiment. Matt Simpson, senior analyst at StoneX, said: "It seems markets were right in assuming that peak war uncertainty was behind us." The risk seems to be buoyant, and equity bulls are favourable towards dips. "The closure of the Strait of Hormuz has already been priced in." Trump stated that he would continue to blockade Iran's ports, shore and coast with the U.S. Navy. Tehran has closed the Strait of Hormuz, through which a fifth of the world's energy supply normally flows. This has caused a global shock. U.S. West Texas Intermediate Crude Futures rose 0.44% to $90.12 per barrel. The benchmark contract rose 2.8% Tuesday. The euro was last trading at $1.1748 during early trading. The dollar was slightly stronger at 159.26 yen, while sterling rose to $1.35195. (Reporting from Ankur Banerjee, Singapore; Editing and proofreading by Christopher Cushing).
Leaders of South Korea and Vietnam to meet in Hanoi as Hanoi seeks investment in high-tech
To Lam, the leader of Vietnam, will meet with South Korean President Lee Jae Myung, on Wednesday. This is their second meeting in less than one year. Hanoi wants to get more support from South Korea for its high tech ambitions.
Vietnam, which is a major exporter for phones and electronic goods, wants to shift to more advanced technologies, such as semiconductors.
South Korea, with its accumulated capital, is the largest foreign investor in Southeast Asia’s fastest-growing economy. The Samsung Group, which includes the chip giant Samsung Electronics, is the most significant corporate investor, with more than $20 billion, mostly in electronic goods factories.
Local media reported that Seoul would pitch Korean firms for roles in state-led projects such as nuclear energy, the Dong Nam New City Development and the Gia Binh Airport. Local media reported that Seoul also views the 'visit' as an opportunity to increase access for Korean agricultural and cultural products.
The leaders will also discuss the development of relations in key areas, such as global supply chains and critical minerals.
Lee, who met Lam last in August, will be travelling to Hanoi after visiting India with a large?delegation of business people. He is expected to have two days worth of meetings.
A dozen or more government agreements of cooperation are being planned, and the goal to increase bilateral trade to $150 billion dollars by 2030 will likely be reiterated.
According to the Vietnamese government, trade grew 9.6% to $89.5 billion last year.
CHIPS AND Ai
Local media reported that Vu Ho (Vietnam's ambassador to South Korea) said, ahead of the visit, that bilateral cooperation should be focused on high-tech sectors, like semiconductors and artificial intelligence.
Multiple sources familiar with these discussions claim that Samsung has been talking to Vietnamese authorities about the possibility of a back-end semiconductor plant for many years.
Intel, Amkor, and other multinationals operate large?chip factories in Vietnam that are primarily focused on the labour-intensive assembly, testing, and packaging of semiconductors.
Hanoi's attempts to attract foreign investment into?more sophisticated plants for chip production (known as fabs) have not yet yielded any results.
Kwak Sungil is the executive director of the Korea Institute for International Economic Policy. He said that South Korean companies active in Vietnam's electronic sector could expand their joint training programmes to help build "the talent base" needed for Hanoi’s industrial ambitions.
He added that this would also help to ease the labour shortages faced by South Korean manufacturers.
Kwak stated that a deeper cooperation with South Korea will also help to?localise part production, train skilled employees and reduce 'vulnerability to external pressure.
Hanoi is under pressure from Washington to reduce its reliance on Chinese electronic components. Washington has increased scrutiny in recent months to see if Chinese goods are being shipped through Vietnam to avoid U.S. Tariffs.
(source: Reuters)