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EU legislators set to accelerate softer CO2 emissions targets for cars
The European Parliament has cleared the way for a rapid approval of EU CO2 emission targets for cars and vans, which will give automakers more time and reduce potential fines. European automakers warned that failing to meet existing targets this year could lead to fines up to 15 billion euro ($17.0 billion), as the goals depend on selling more electric cars, a segment in which they are behind their Chinese and U.S. competitors. After heavy lobbying by automakers, the European Commission has proposed that they meet their targets using the average emissions for the period of 2025-2027 rather than this year. Instead of debating for months, EU legislators voted to approve a motion that would have allowed the change to be approved quickly. On Thursday, they will vote on the proposal from the Commission itself. The EU still has to approve the proposal. Ursula von der Leyen, President of the European Commission, said that this change will give European automakers a "breathing room". Volkswagen stated last week that the longer compliance period will still be a burden by 2025. E-Mobility Europe, a group representing the electric transport industry in Europe, has warned that changing the CO2 target period to 2025 will further put Europe behind China on EVs as well as deter investment in charging infrastructure. Reporting by Philip Blenkinsop, Benoit van Overstraeten and Kirby Donovan.
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After a last-minute appeal, the Czech court has halted the signing of a nuclear agreement with KHNP.
The court ruled on Tuesday that a Czech court had blocked a subsidiary CEZ, the main electricity company in the Czech Republic, from signing a contract worth at least 18 billion dollars with South Korea's KHNP for the construction of a new nuclear plant. This was until the court resolved a complaint brought by EDF France as the loser bidder. EDF has filed a complaint with the Czech Competition regulator UOHS after it denied its appeals regarding a tender for two nuclear reactors. The Czech government which owns a majority of CEZ had planned a contract signing between KHNP and CEZ for Wednesday. The Brno Regional Court stated that "if the contract was concluded, the French bidding would accidentally lose the opportunity to win the contract public, even if it wins the litigation", It said that the decision could be appealed to the Supreme Administrative Court. CEZ chose KHNP last year to build two 1,000 megawatt units for its Dukovany nuclear plant expansion. Last week, in order to ease the financial burden of CEZ, the government agreed that it would take an 80% shareholding in CEZ subsidiary EDU II, which was created to build the new units. UOHS stood by the decisions it made which dismissed EDF's complaint about the tender. This is a procedure decision. A spokesperson for UOHS said that the decision does not reveal how the court will decide on the merits of the case. "We are confident that our decisions were right." CEZ had said on Tuesday that the tender was conducted under fair conditions. KHNP's bid was better than EDF, and CEZ would seek damages in court if it were to be selected. (Reporting and editing by Emelia Sithole Matarise; Jan Lopatka, Jason Hovet)
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Spot prices increase on forecast of cooler weather and less wind
The cool weather on Tuesday pushed up the price of European prompt electricity, with little temperature increase expected for the remainder of the week. Wind power supply is also falling. LSEG research showed that Germany would be a net electricity importer on the day ahead when wind capacity was down in the region in the morning, shifting the balance in favor of bullishness. Overall, the capacity of conventional generation is expected to remain constant. At 1000 GMT, the price of French baseload electricity for Wednesday was up 80.6% at 32.5 Euros ($36.76). The German contract equivalent rose 12.2%, reaching 96.5 euros. This is a significant premium to France. LSEG data indicated that the German wind power production was expected to drop to 7.9 GW on Wednesday, from 13.7 GW and in France, to 5.9 GW. The French nuclear capacity has increased by two percentage points, to 65%. The power consumption in Germany is expected to rise slightly, from 54.2 to 54.4 GW. In France it will fall by 1.5 GW to 43.3 GW. The German baseload for the year ahead increased by 2.4% to 85.5 euros/MWh. This was mainly due to oil and carbon prices that were higher. The French equivalent rose 2.1% to 63.05 Euros. The benchmark contract on the European carbon markets was up by 2.6% to 69.22 Euros per metric ton. EPEX SPOT said that it traded a volume of 73.0 tWh on its European intraday and day-ahead markets in April 2025. This is 8% higher than the previous year. In its earnings report, Uniper updated the market about the ongoing legal dispute between the two groups. Uniper's trading and storage division was the main cause of its 83% drop in net profit for the quarter. ($1 = 0.8842 Euros) (Reporting and Editing by Louise Heavens, Vera Eckert)
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Canadian companies shift their focus from the US to other markets as Trump tariffs take effect
A pharmaceutical manufacturer is searching for new partners in Asia. Steel component makers with long-standing clients in the United States are warning their customers that they can expect higher prices. A company that makes mascots for school or sporting events is lowering their prices to avoid losing American customers. The tariff war and repeated threats by President Donald Trump to annex Canada are upending decades-old trade relations between North American neighbors and forcing many small-scale Canadian manufacturers to review their long-term strategies. Mark Carney will meet with President Trump at the White House next Tuesday. Carney led the Liberal Party to victory in the last month's election by campaigning against Trump. He has said repeatedly that the old relationship between the United States and Canada is over. According to interviews conducted with over a dozen businesses, advisors and trade lawyers, the U.S.'s unpredictable policy and the uncertainty in doing business with it will continue even if a new agreement is reached with Canada. Mike Chisholm runs a Canadian export consultancy. He said, "Banks, owners, and private equity funds all want stability." "They will just be very, extremely careful." Canada, which historically relied on U.S. export markets for 75%, was among the first countries to be hit by Trump's new tariffs. Trump justified the tariffs by claiming that Canada was responsible for the fentanyl coming into the U.S., even though data showed less than 1% all seizures came from Canada. Trump imposed 25% tariffs on all imports of steel and aluminum into the U.S. in March. He then added another 25% to cars and parts which did not comply with North American free-trade agreements. However, he stopped short on imposing a wide reciprocal tariff against some countries. Experts said that adding reciprocal duties on Canada would have sparked bankruptcy in the manufacturing industry. According to government statistics, the manufacturing sector exports 42% of its production into the U.S. and 41% rely on U.S. imported goods. Carney's Office declined to comment on the impact tariffs. Kush Desai, a White House spokesperson, said when asked for comment: "Canadian businesses won't need to worry about tariffs at all once Canada becomes our beloved 51st State." Alan Urmeneta said that PNP Pharmaceuticals is a contract manufacturer in British Columbia. In response to Trump's tariffs, the company has been trying to find new customers in Asia. Urmeneta stated, "We now venture into other markets as it is clear that we must pivot." He refused to name specific countries. LabelPak Printing Inc. in British Columbia, which distributes packaging products from Asia and is not currently subject to tariffs, may focus exclusively on the Canadian marketplace, gradually reducing its 15% sales from the U.S. Ken Gallie, founder of the company, stated that "if he (Trump), gets angry... and decides... to throw a 50 percent tariff on Canadian products... it will really put us out from the market." "We will put more focus on the Canadian business." Companies and industry associations say that while some Canadian firms have lost confidence, those who are dependent on the U.S. marketplace cannot replace it entirely, particularly smaller companies. Canada's economy has a size less than one tenth of that of its neighbor, and shipping overseas can be expensive. Chisholm says that some of the businesses he advises have set up offices in Europe and Asia and hired sales agents to try and reduce their U.S. operations. Many people are asking themselves, "Where can I do business?" DIFFICULT CONVERSATIONS Executives from other companies have reported that they are having difficult discussions with U.S. clients. James White, CEO at Wellmaster, a company that makes steel components for the energy and water sectors, said: "We're talking to these companies and telling them their government chose to make them pay more." Joyce Banda is the CEO of Concept Factory Inc. in Ontario, which makes mascot costumes and mascots for school or sporting events. She said that she lowered her prices to avoid tariffs, to retain U.S. clients. She said that she will have to take the loss, even though Trump has not imposed reciprocal tariffs. Natalie Gaudreault is the owner of Fusion TG in Montreal, a distributor of tool steel. Trump's tariffs have been a double whammy for her business. Her company imports from China almost 70% of its steel requirements, and then molds the steel to customer specifications before supplying it to roll formers and tool and die makers. Her sales to the U.S. are a fifth of what she does. Trump then imposed a 25% tariff. She estimates that with other taxes her products entering the U.S. would more than double their cost. "I will not absorb the costs." "I have to charge them," she said. She added that her sales had dropped by a third during the first quarter. Some firms have taken the unusual step of trying reopening contracts with clients. This includes clauses about sharing tariff costs. This complicates business relationships, according to Clifford Sosnow. He is a partner at the law firm Fasken and the chair of its international trade and investments group. He said that such negotiations were like a hot knife cutting through butter. It doesn't work unless it causes damage. (Reporting and editing by Caroline Stauffer, Suzanne Goldenberg, and Promit Mukherjee)
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UK new car sales fall in April due to low consumer confidence
Data from the industry showed that British new car registrations dropped more than 10% in April compared to last year, with Tesla suffering a 62% drop. The data was attributed to a lack of consumer confidence as well as tax increases. The Society of Motor Manufacturers and Traders reported that 120,331 cars were registered in April, a traditionally quieter month. Sales of new Teslas fell to 512, down from 1,352 a year earlier. Elon Musk’s closeness to U.S. president Donald Trump, as well as his far-right political views in Europe, have led to a public backlash against him and Tesla. This has been exacerbated by competition and aging product lines. Trump's auto-tariffs have added uncertainty to the sector. The U.S. is the second largest importer of British cars, after the European Union. Jamie Hamilton, Deloitte's automotive partner and head for electric vehicles, said: "As tariffs are implemented on cars sold to the U.S., it is likely to have material impacts on UK car manufacturing, as the U.S. is a key market to UK automotive companies." The SMMT reported that UK registrations for battery-electric vehicles increased by 8.1% in April. This represents a market share of 20.4%, which is still below the target of 28% set by the Government. The SMMT lowered its forecast of BEVs' market share in 2025 to 23,5%, down from the 23.7% estimate it made in January. BYD from China was the biggest winner in April. Its UK registrations increased 654% compared to last year, bringing new sales up to 2,511 cars in April, compared with 333 vehicles last year. The overall volume of purchases last month was also affected by the increase in vehicle excise duties, which went into effect on April 1. This pushed purchases to March. (Reporting by Yamini Kalia and Yadarisa Shabong in Bengaluru. (Editing by Mrigank dhaniwala, Mark Potter and Mrigank Dhaniwala)
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Bahrain's economy grows by 3.4% in the fourth quarter, driven by non-oil growth
The finance ministry reported on Tuesday that the economy of Bahrain grew by 3.4% compared to the same period a year ago. Data from the Information and eGovernment Authority of the Gulf nation showed that growth was primarily driven by a 4,6% increase in non oil activities. Oil activities fell by 3,5% during the same time period. According to the statement, Bahrain's total real gross domestic product will grow by 2.6% in 2024. According to the Ministry's projections, Bahrain's GDP real is expected to increase by 2.7% between 2025 and 2026, mainly due to an expansion of 3.4% in non-oil related activities that coincides with the implementation of the Bapco Modernization Programme. The Bapco Modernization Program is one of Bahrain’s largest energy investments. It will increase refinery production, which in turn, should boost fiscal revenues, as part of efforts to diversify Bahrain's economy. The growth is expected to reach 3,3% by 2026. This will be supported by an increase of 3.9% in non-oil activity. The ministry stated that "However the forecasts will continue to be closely monitored and updated in order to take into account the global uncertainty, escalating instability and ongoing turmoil which may impact the economic projections." S&P Global, a global rating agency, downgraded Bahrain’s outlook from “stable” to “negative” last month. The agency cited ongoing market volatility as well as weaker financing conditions which could increase Bahrain’s interest burden. The escalating trade tensions are adding to the global economic uncertainty. They have clouded macroeconomic forecasts, and they are affecting investor and policymaker trust around the globe. The International Monetary Fund lowered its growth forecasts for 2025 in the Middle East and North Africa to 2.6% earlier this month. It cited uncertainties arising from a trade war on a global scale and lower oil prices. Gulf Cooperation Council economies, which include Bahrain, Kuwait Oman, Qatar Saudi Arabia, and United Arab Emirates, are expected to grow, but at a slower rate than predicted in October. The GCC is accelerating their diversification. Saudi Arabia's Vision 2030 and the UAE's push towards tourism and manufacturing and Bahrain's investments in energy and finance infrastructure are all designed to wean their economies off of oil. (Reporting by Manya Saini in Dubai; Editing by Joe Bavier)
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Gold reaches 2-week high as demand for safe-haven assets increases, Fed meeting in focus
Tuesday's gold prices reached a new two-week-high, as Trump's tariff threats boosted demand for the metal. The Federal Reserve also made a policy announcement this week, which was in the spotlight. Gold spot rose by 1.2%, to $3,372.01 per ounce at 0810 GMT after reaching its highest level since April 22, earlier in the session. U.S. Gold Futures rose 1.7% to $3.379.10. "The structural elements that supported gold during the past few weeks still exist - trade tensions have not been resolved, and concern over the dollar's role as a reserve is still present," said UBS Analyst Giovanni Staunovo. "We're still waiting for gold to test the $3,500 level this year." Trump announced on Sunday a tariff of 100% on films produced abroad, but provided few details as to how it would be implemented. The U.S. president announced on Monday that he plans to announce pharmaceutical tariffs in the next two week. Last month, gold, which is often used as a store of value in times of political or financial uncertainty, reached a record high of $3.500.05 per ounce, thanks to central bank purchases, fears of tariff wars, and strong demand for investment. The Fed's Chair Jerome Powell will be closely watching for clues about the central bank's future rate trajectory. "With a rate holding largely expected, the focus will be on how policymakers evaluate the rising tariff risks and the implications they have for the rate outlook of the second half year," said IG Market Strategist Yeap JunRong. LSEG data revealed that traders are pricing 75 basis points in rate easing for this year, with the first possible move in July. The opportunity cost of non-yielding gold is reduced by lower interest rates. Other metals rose in price as well. Spot silver rose by 1.3%, to $32.92 per ounce. Platinum climbed by 1.7%, to $975.75, and palladium grew 0.8%, to $948.
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Dollar slips as stocks fall on lack of progress in trade
The dollar fell against other major currencies on Tuesday as worries about tariffs and the impact they have on the economy continued to linger. Meanwhile, the focus was on the Federal Reserve policy announcement scheduled for Wednesday. Investors have been focused on the possibility that trade tensions could be eased between the U.S. Donald Trump, the U.S. president, said on Sunday Washington was meeting with many nations, including China. His main priority in dealing with China is securing a fair agreement. Lars Skovgaard is senior investment strategist for Danske Bank. He said, "We have seen a backpedaling and the trade risks are lower." Investors are left to try and make sense of headlines from the White House, but with little information about trade talks. Skovgaard said, "Now we have to see some deals announced or else the stock market will fall again." The STOXX 600 Europe index is down by 0.4% Tuesday, but it remains near its closing level of April 2, when Trump announced his tariff proposal. The FTSE 100 in Britain was up by 0.1%, and is on course to reach a 16th consecutive positive closing record. Germany's DAX fell 1%. Investors also processed a surprise in Germany, where conservative leader Friedrich Merz was unable to gain the majority required to become chancellor. This unexpected setback came for his new coalition of the Social Democrats. With Japan closed on a holiday, MSCI’s broadest Asia-Pacific share index outside Japan was flat. The blue-chip index in Hong Kong and the Hang Seng index in China both rose by about 1% after returning from a long holiday. The Federal Reserve policy decision is expected to be announced on Wednesday. While the central bank will likely keep interest rates unchanged, the focus will be on the policymakers' ability to navigate a path that includes tariffs. Christian Scherrmann is the chief U.S. economics at DWS. "We believe they will adopt a slightly more hawkish tonality, but in a direction more towards an extended pause rather than a possible hike." LSEG data revealed that traders are pricing 75 basis points in easing for this year, with the first possible move in July. DOLLAR RISES, DOLLAR SLIDES VS ASIAN FX Since April, Trump's unpredictable trade policies have fueled significant waves of dollar sales as investors moved away from U.S.-based assets, driving the euro, Swiss franc and yen higher. The euro was up by 0.3% on Tuesday against the dollar, at $1.1347. And the yen rose 0.5% to 142.95 dollars. The record-breaking surge of the Taiwan dollar in recent sessions has shown that dollar selling has spread across other Asian currencies. This has led to speculations about a possible revaluation to gain U.S. concessions on trade. The rally was a sign that a major unwinding is underway. It also shed light on a single economy amongst many where large dollar long positions have been built up by exporters and insurance companies over the years due to big trade surpluses. These positions are now being questioned and put on edge. On Tuesday, the Taiwan dollar traded at 30.28 dollars for every dollar in the U.S., a relatively low rate compared to Monday's near-three-year high 29.59 dollars. On Tuesday, the focus shifted to Hong Kong where the de-facto central bank purchased $7.8 billion in order to prevent the local currency strengthening and breaking the peg with the greenback. Charu Chanana is the chief investment strategist of Saxo Singapore. She said that Asian FX was where it's at today. If these currencies continue to strengthen sharply, this could cause fears of a "reverse Asian currency crises", with possible ripple effects on the bond market, amid fears that Asian Institutions reassess unhedged Treasury holdings. The Hong Kong Monetary Authority announced on Tuesday that it was diversifying its currency exposure to reduce risk in its portfolio of investments. China's Yuan has strengthened on the mainland to its highest rate since November, at 7.2105 per dollar. Oil prices rose in commodities after hitting four-year highs the previous session, mainly due to OPEC+'s decision to increase output. Brent crude futures rose 2.2% to $61.55 a barrel. On safe-haven demand, gold prices increased 1.2% in a week to $3.375/oz. (Editing by Sam Holmes and Kate Mayberry)
India's April Diesel Exports are likely to have reached the lowest level for over a decade.
Analysts and trade sources said that India's diesel imports in April likely reached their lowest level for over a decade as Reliance, a major exporter, cut refinery output to maintain equipment at a time of robust domestic demand.
India, Asia's third largest diesel exporter, exported approximately 1.15 million metric tonnes (9.69 millions barrels) of this industrial and transportation fuel during April, according to a combination of data from LSEG Kpler Vortexa, and two other trade sources.
According to official data, this would be the lowest level since February 2012. It is also a substantial drop from the nearly 1-1/2-year high of 2,83 million tonnes registered in March.
The official export figures for April will be released in the last weeks of May.
Charles Ong, senior analyst at LSEG Oil Research, wrote that the unexpectedly low Indian oil exports for April led to limited supplies being sent to Asia and Europe.
India's drop in exports has partially supported Asia's 10-ppm spot gasoil premium
Reliance Industries in Jamnagar, western India, which operates the largest refinery complex in the world, closed some of its units in April for maintenance.
According to two sources and LSEG, the company's exports of diesel fell to 800,000 tonnes in April.
Reliance didn't immediately respond to an inquiry for comment.
Data shows that Mangalore Refinery and Petrochemicals sold just one cargo in April. Normally, the company exports three cargoes of 65,000 to 70,000 tons per month. One refinery source said that the rest was likely sold on domestic markets.
He added that the higher jet fuel margins in India encouraged refiners to produce more aviation than diesel.
The discount between jet-fuel and 10ppm gasoil in April was around 80 cents per barrel, down from over $1 per barrel in March.
Two sources say that exports for May are expected to increase to 2 million tonnes, due to Reliance's return to production.
One of them stated that MRPL would begin maintenance on one of its crude units which will limit diesel exports.
(source: Reuters)