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Asian shares are up, the dollar is holding gains ahead of US earnings and Nasdaq Futures are up
The dollar gained on Tuesday, as the trade talks were still in the spotlight. This week will also see important readings for U.S. bank earnings and inflation. Oil prices fell after U.S. president Donald Trump set a deadline of 50 days for Russia to stop the war in Ukraine or face energy sanctions. Nasdaq Futures rose after Nvidia NVDA.O announced it would resume sales of H20 chips in China. Trump indicated he would be open to discussing tariffs following his threat at the weekend to impose 30% duty on Europe and Mexico starting August 1. Japan is trying to set up high-level discussions with the U.S. on Friday. Rodrigo Catril, a strategist at National Australia Bank, says that the market has reacted rather benignly to the uncertainty surrounding tariffs. This makes earnings this week in the United States all the more significant for clues. Catril, who spoke in a NAB Podcast, said that it would be interesting to hear what the companies have to say, especially in regards to the future-looking outlook. He added, "I believe that the idea of complacency comes from the fact that we don't know how this entire thing will play out." The Nikkei index in Japan added 0.2%, while the MSCI broadest Asia-Pacific share index outside Japan increased by 0.4%. The EU warned that if a deal is not reached, it will take countermeasures. Trump said that he would be open to discussions with the EU and trading partners. The Yomiuri reported that Japan's Shigeru Shiba will meet U.S. Treasury Sec. Scott Bessent on Friday in Tokyo, before the August 1 deadline for 25% tariffs to go into effect. Ishiba will also have to deal with an election on Sunday. Polls show that his ruling coalition could lose its majority in the upper chamber to political opponents advocating expansive spending. The yield on the benchmark 10-year bond, which is the highest since October 2008, jumped to 1,595%. Data revealed that China's economy shrank less than expected during the second quarter, a sign of its resilience in the face of U.S. Tariffs. Nvidia's CEO Jensen Huang will visit China on Wednesday. His company plans to resume the sale of its H20 artificial-intelligence chips. The U.S. earnings period will begin Tuesday with the release of major bank's second-quarter results. According to LSEG, S&P profits will rise 5.8% over the past year. The outlook for the S&P 500 has changed dramatically since Trump's trade war began in early April, when he predicted a 10.2% increase. Investors will also be watching for the U.S. consumer prices data for June due Tuesday and any price increases that may result from tariffs. After reaching a three-week peak, the dollar was barely changed at 147.62yen. After four days of declines, the euro gained 0.1% at $1.1680. U.S. crude fell 0.5% to $66.63 per barrel. Trump announced on Monday new weapons shipments to Ukraine and threatened sanctions against buyers of Russian exports until Moscow agreed to a 50-day peace agreement. Spot silver rose 0.3% to 38.25 cents per ounce after reaching its highest level since September 2011. Euro Stoxx futures in the pan-region were up by 0.3%. German DAX Futures were also up by 0.2%. FTSE Futures were also up 0.2%. U.S. Nasdaq Futures rose 0.5%.
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The G20 in Durban will be shadowed by BRICS tensions and the absence of BRICS
The G20 Finance Chiefs' meeting in Durban this week is likely to be overshadowed by Donald Trump's tariffs, Scott Bessent's no-show, and the rising tensions between Washington, South Africa, and BRICS. Bessent was among the key officials who skipped Cape Town's February gathering of finance and central bank ministers in the grouping. This raised questions about their ability to address pressing global challenges. Josh Lipsky is the chair of International Economics at the Atlantic Council. He said, "It's problematic that the world's biggest economy is not represented, at least on a high political level." Lipsky said that Bessent’s absence presaged U.S. plans to slim down the G20 and go "back-to-basics" when the U.S. assumes the rotating presidency of the grouping next year. Trump has implemented a 10% baseline tariff on all U.S. Imports. Punitive rates are targeted at specific countries and products, including steel and aluminium at 50%, automobiles at 25% and levies up to 200% for pharmaceuticals. On August 1, additional tariffs will be imposed on 25 countries. The threat of imposing additional tariffs on BRICS nations is complicated by the fact that eight G20 countries, including South Africa as host country, are part of the expanded BRICS grouping. This overlap suggests the rise of rival forums, as Western-led organizations face credibility issues. Fundi Tshazibana, Deputy governor of the South African Reserve Bank, said that "policy uncertainty" is the current biggest issue. The G20 was born out of past firefighting crises and took off when countries all over the world realized that they needed to coordinate their policies in order to recover from the global financial crash at the end of the 2000s. Brad Setser, of the Council on Foreign Relations, said that the G20 was built on the assumption that all major economies in the world shared a similar interest in a relatively stable and open global economy. "But Trump isn't interested in stability, and wants to close the global economy." 'DIFFICULT SPACE' The Durban meeting of finance chiefs that will take place on Thursday and Friday is also taking place against the backdrop of increasing economic pressures, especially for African economies. Goldman Sachs estimates that Sub-Saharan Africa’s external debt is now $800 billion or 45% GDP. Traditional funding sources have also dried up. After years of rapid expansion, Chinese lending has slowed down to a trickle. This leaves an $80 billion funding gap. Trevor Manuel, former Finance Minister of South Africa and leader of the Africa Expert Panel at the G20, said: "Their views are that if they negotiate before they take the loan, then they will accept it." "But after the loan has been made, they expect to receive a return. This is embedded in their laws." "This is a very important issue," he said. China's Belt and Road Initiative brought significant resources to Africa, but there are also offsets. I think part of the drive going forward will be greater transparency. This means that certain barter arrangements, etc. need to treated quite differently. As Washington cuts foreign aid, and European capitals redirect money to defence, U.S. grants and European grants that account for 25% of external funding in the region will be cut. Lumkile Montdi, a political commentator from the University of Witwatersrand, said that "Africa is in an extremely difficult situation." The continent's investment will decline due to high levels of debt and low GDP growth. This makes it less relevant for the current geoeconomics. Pretoria assumed the G20 Presidency in December, under the slogan "Solidarity. Equality. Sustainability". It had hoped that it would use this platform to put pressure on rich countries to finance climate change and to address the mistrust between the North and South of the world. In reality, Pretoria is now dealing with the fallout of aid cuts and tariffs wars which directly undermine these goals. South Africa, as the continent's largest economy, is under pressure to promote African interests and navigate great power rivalries. National Treasury stated that it is "premature" to comment on the specific goals of the meeting. Duncan Pieterse, Director General of Treasury, said in a Monday statement that the South African G20 Presidency hoped to release the first Communique at the conclusion of the meetings. The G20 financial stability watchdog released a new climate risk plan on Monday, but put policy work on hold amid a U.S. retreat which has slowed down efforts to develop a united financial strategy on climate-related threats. The U.S. withdrew from several groups that were exploring the impact of climate policy changes and flooding, wildfires, and other factors on financial stability.
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Leaders' meeting between Australia and China calls for greater dialogue and cooperation
During a meeting on Tuesday with Australian Prime Minister Anthony Albanese in Beijing, President Xi Jinping stated that China was ready to work with Australia for the purpose of deepening bilateral ties. China is trying to regain its footing in the region as a result of this meeting. Capitalise The U.S. President Donald Trump has announced sweeping tariffs on trade. China is attempting to counter this by portraying itself as a reliable and stable partner. Chinese officials expressed an interest in expanding the decade-old free-trade agreement and collaborating in artificial intelligence. Xi stated at the beginning of the meeting that China would "promote the further development of the China-Australian relationship". Albanese responded by saying that Australia valued its relationship with China, as its largest trading partner. He welcomed the "progress made on cooperation" through the free trade agreement. Canberra would approach the relationship based on Australia's interests. The prime minister stated that dialogue is at the heart of our relationship. "I welcome this opportunity to present Australia's interests and views, and how we think about maintaining peace, security, and stability in our region." Albanese will meet Premier Li Qiang of China later on Tuesday. He had previously stated that the main topics of discussion in Beijing would be resources trade, energy transformation and security tensions. Under Albanese, Australia, which considers the United States as its main security ally has adopted a China-based policy that says "cooperate when we can and disagree where we have to". China repeatedly signaled its willingness to expand cooperation in the lead-up to this visit. The state-owned China Daily published an opinion piece on Tuesday that was overwhelmingly positive about the visit. It said the visit showed how countries with different political systems can still work together. The long-standing Australian concern about China's military expansion and the imprisonment of Australian author Yang Hengjun will likely limit any possible cooperation. Beijing has separately criticized Canberra's increased scrutiny of foreign investments in critical minerals, and Albanese’s promise to return an Australian-leased port back to Australian ownership. Australia's largest trading partner is China. Its exports include agriculture, energy, but iron ore dominates. Albanese travelled to China with executives of mining giants Rio Tinto BHP and Fortescue. They met Chinese steel industry representatives on Monday at the beginning of a six-day trip. Bran Black, CEO of Business Council of Australia said that Australia's Bluescope Steel will also be present at the business roundtable on Tuesday, along with China’s electric vehicle giant BYD and Chinese banking executives. Baosteel, as well as state-run food company COFCO, would also attend. Black said on Tuesday that "first and foremost, we use fixtures like this to send out a message that business-tobusiness engagement should encouraged and welcomed."
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Oil drops as Trump's deadline of 50 days for Russia eases supply concerns
Oil prices dropped on Tuesday as U.S. president Donald Trump's 50-day deadline to Russia for ending the Ukraine war in order to avoid sanctions reduced immediate supply concerns. Brent crude futures dropped 29 cents or 0.4% to $68.92 per barrel at 0342 GMT. U.S. West Texas Intermediate Crude futures declined 35 cents or 0.5% to $66.63. Both contracts closed more than $1 lower the previous session. "Trump’s more lenient stance on Russian oil sanctions eased fears of a shortage while his tariff plan continues mounting economic pressures," said Priyanka Sackdeva, Senior Market Analyst at Phillip Nova. The news of possible sanctions caused oil prices to rise, but they later lost these gains, as the deadline of 50 days raised the hope that sanctions could be avoided. Traders also speculated whether the U.S. actually would impose high tariffs on countries who continue to trade with Russia. Analysts at ING wrote in a Tuesday note that if Trump follows through with the sanctions and they are implemented, it "would drastically change the outlook of the oil market". China, India and Turkey are among the top three buyers of Russian crude. The ING note stated that they would have to compare the costs of exporting to the US against the benefits of purchasing discounted Russian crude oil. Trump announced on Monday new weapons for Ukraine, and said on Saturday that he would impose 30% tariffs on most imports coming from the European Union or Mexico starting August 1. He had also issued similar warnings to other countries. Tariffs could slow down the global economy, which would reduce fuel demand and lower oil prices. According to Russian media, the secretary general of the Organization of Petroleum Exporting Countries said that oil demand will remain "very strong" throughout the third quarter. This will keep the market in a tight balance for the near future. Goldman Sachs raised its oil prices outlook for the second-half of 2025. The company cited potential supply disruptions and shrinking oil stocks in Organisation for Economic Co-operation and Development (OECD) countries as well as production constraints in Russia. (Reporting from Anjana Anil and Sudarshan Varadhan in Singapore, with editing by Jamie Freed.)
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Baker Hughes, Petronas Team Up for Asia-Pacific Energy Resilience
Energy technology company Baker Hughes and Malaysia’s state-run energy giant Petronas have signed a memorandum of understanding (MoU) on a strategic partnership to explore business initiatives that have the potential to support the delivery of Asia’s energy expansion and transition.The MoU serves as a foundation for collaboration initiatives between the two companies to enhance local supply chain capabilities and explore the feasibility of implementing a variety of technology solutions.The include enhanced LNG services footprint and cross-border talent training and development programs to strengthen local field operations capabilities, exploration and production, chemicals and mature assets solutions, digital solutions, including AI, as well as sustainable energy solutions including carbon capture, utilization and storage (CCUS), as well as lubricants and biofuels for turbomachinery supply chain.In support of these initiatives, Baker Hughes announced plans to expand on its existing services footprint in Malaysia to develop a full aeroderivative gas turbine module repair services facility, inclusive of disassembly, assembling, grinding and testing capabilities.With an installed base of over 600 gas turbines and continued expected growth given the energy expansion, these augmented services capabilities will provide enhanced service to customers across the region with the aim to accelerate service turnaround time and enable continued best-in-class reliability and availability.“It is critically important to grow alongside our customers in Asia-Pacific, including Petronas, as we work toward our shared goal of sustainable energy development to provide for a world that needs more reliable, secure and lower-carbon energy. We look forward to working alongside Petronas, as well as other local partners, to realize this additional localization effort to help ensure energy is available today and in the future,” said Lorenzo Simonelli, Baker Hughes Chairman and CEO.
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US Delays Rule on Gulf of Mexico Whale Protection
U.S. President Donald Trump's administration will delay by two years a final rule designating protections for the endangered Rice's whale in the oil and gas drilling region of the Gulf of Mexico, according to an agreement with environmental groups filed in a federal court.The U.S. Commerce Department's National Marine Fisheries Service agreed with green group Natural Resources Defense Council to finalize by July 15, 2027 the geographic area deemed critical for the Rice's whale survival. The previous deadline had been Tuesday, July 15, of this year.The agreement filed in the U.S. District Court for the District of Columbia on July 3 was seen by Reuters on Monday."NMFS continues to make diligent progress on this complex Final Rule," the agreement said. "NMFS, however, requires additional time to analyze the impact of the Rule and evaluate the science underlying it. As part of that process, NMFS plans to coordinate its efforts with the scientific and academic communities."The delay is the latest turn in a legal battle among conservationists, the oil and gas industry and the federal government over protecting a whale that was only recognized as a unique species in 2021. The Rice's whale was previously considered a Gulf of Mexico subspecies of the Bryde's whale.Probably fewer than 100 Rice's whales remain in the Gulf of Mexico, according to NMFS. The mammals, which measure up to 41 feet and weigh up to 60,000 lbs, have primarily been seen in the Eastern Gulf, off the coast of Florida, but have also been spotted in western areas off the Louisiana and Texas coasts. The central and western Gulf is where most U.S. offshore oil and gas production occurs.NMFS officials were not immediately available for additional comment. NRDC, representing the environmental group Healthy Gulf in a 2020 lawsuit over designation of the so-called critical habitat, was also not immediately available for comment.Oil and gas companies in the region welcomed the delay. Drillers had faced restrictions on how they could operate in key parts of the northern Gulf under a proposal published by former U.S. President Joe Biden's administration in 2023.That proposal had expanded the whale's critical habitat to the central and western Gulf, potentially putting productive areas off-limits to oil and gas exploration and development. Green groups and government scientists have said that oil and gas operations threaten the Rice's whale's continued existence."We strongly support the decision to extend the timeline for finalizing the Rice's whale critical habitat. Given how much work is needed to get this rule right, extending the deadline is both responsible and necessary," Erik Milito, president of the National Ocean Industries Association, an oil and gas trade group, said in a statement.(Reuters - Reporting by Nichola Groom; Editing by Mark Porter, David Gregorio and Richard Chang)
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Iron ore prices fall as China's property data is sluggish
The price of iron ore futures fell on Tuesday, as the persistent weakness of China's real estate sector dampened investor confidence. Meanwhile, a decline in crude steel production and weather-related disruptions further affected steel consumption. As of 0250 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.07% lower. It was 765.5 Yuan ($106.75). The benchmark iron ore for August on the Singapore Exchange fell 0.59% to $99 per ton. China's new-home prices fell the most in June since eight months. This reflects a continued slowdown in the real estate sector. China's crude output of steel in June was down 3.9% on the previous month and 9.2% year-onyear, as steelmakers performed more equipment maintenance. As a result of the high temperatures in northern Canada and the heavy rains in eastern and southern United States, outdoor construction was limited, which in turn reduced the demand for steel. In a recent note, analysts at ANZ stated that "strong steel production, healthy margins and low inventories of steel appear to have encouraged mills to restock their raw materials." ANZ said that the gains are limited, however, by the concern that authorities will continue reducing steel capacity. China's Q2 Gross Domestic Product (GDP) grew by 5.2% from the previous year. Meanwhile, June industrial production grew 6.8%, exceeding analyst expectations despite the U.S. Tariffs. Hexun Futures, a broker, reported that iron ore shipments from Australia and Brazil, two of the world's top producers, were mixed. Australia's shipments declined due to maintenance in some ports while Brazil's shipments recovered significantly. Coking coal and coke, which are used to make steel, also fell on the DCE. They were down by 0.16% each and 0.59 % respectively. All steel benchmarks at the Shanghai Futures Exchange fell. The price of rebar fell by 0.35%. Hot-rolled coil dropped by 0.21%. Wire rod was down 1.37%. Stainless steel dropped 0.04%. ($1 = 7.1712 Chinese yuan). (Reporting and editing by Rashmi Liew)
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Copper prices fluctuate when China GDP exceeds forecasts and markets focus on US data
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw only small fluctuations in copper prices on Tuesday as China's GDP growth was forecast. Meanwhile, traders were awaiting U.S. inflation figures and possible monetary policy changes. As of 0203 GMT the LME's three-month copper contract was up by 0.27% to $9,644.5 a metric ton. The most traded copper contract on SHFE, however, fell 0.33% to $78,030 ($10,883.30). China's National Bureau of Statistics reported that the GDP of the country grew by 5.2% in April-June. This is slightly less than the 5.4% growth of the first quarter. The GDP growth of the country for the first half of the year 2025 will be at 5.3%. Fixed asset investment has increased 2.8% on an annual basis. The metals market won't react much as long as China's first-half GDP growth is over 5%. For the remainder of 2025, and the longer-term, it will be more about how Beijing deals with the overcapacity and fierce competition in many industrial sectors. A poll predicted that China's GDP would grow by 5.1% in April-June compared to 5.4% in the previous quarter. The dollar was near its three-week peak against other major currencies as traders awaited U.S. Inflation data to get clues about monetary policy, and the possible departure of Federal Reserve Chairman Jerome Powell in light of continued criticism by U.S. president Donald Trump. LME aluminium climbed 0.17% to $2,596.5 a ton. Nickel fell 0.13% at $15,045 and tin traded flat at $33,515. SHFE nickel dropped 1.1%, to 119.440 yuan for a ton. Tin fell 0.47% to 264.960 yuan. Zinc was down 0.36% at 22,125 yuan. Lead was down 0.18% to 17,030. Aluminium edged lower by 0.07% to 20,420. Click or to see the latest news in metals, and other related stories. DATA/EVENTS 0900 Germany ZEW Economic Conditions, ZEW Current Sentiment July 1000 EU Reserve Assets June 1230 US core CPI MM and SA June1230 US core CPI YY and NSA. June 1230 US MM and SA. June 1230 US YY.
Oil prices drop as the market considers possible sanctions and tariffs
Oil prices fell on Tuesday, as investors digested U.S. president Donald Trump's deadline of 50 days for Russia to end its war in Ukraine and avoid sanctions against buyers of their oil. Meanwhile, concerns over Trump's tariffs on trade continued to linger.
Brent crude futures dropped 5 cents, to $69.16 per barrel, by 0000 GMT. U.S. West Texas intermediate crude futures were down to $66.69, a 9-cent drop.
The two contracts were settled at a lower price than the previous session.
Trump announced on Monday new weapons for Ukraine and threatened sanctions against buyers of Russian exports, unless Moscow agreed to a peaceful deal within 50 days.
The news of possible sanctions caused oil prices to rise, but they later lost these gains, as the deadline of 50 days raised the hope that sanctions would be avoided. Traders also speculated whether the U.S. actually imposed steep tariffs on those countries who continued to trade with Russia.
The pause has eased fears that sanctions against Russia may disrupt crude oil flow. The rising tensions in trade also weighed on sentiment, wrote ANZ senior commodity analyst Daniel Hynes in a client note.
Trump announced on Saturday that he will impose a 30 percent tariff on imports from Europe and Mexico starting August 1. He also issued similar warnings to other countries, giving them less than 3 weeks to negotiate framework agreements to lower the tariff rates.
Tariffs could slow down the global economic growth and lower oil prices.
According to Russian media, the secretary general of the Organization of Petroleum Exporting Countries said that oil demand will remain "very strong" throughout the third quarter. This will keep the market in a tight balance over the short term.
Goldman Sachs raised its oil prices outlook for the second-half of 2025. The company cited potential supply disruptions and shrinking oil stocks in Organisation for Economic Co-operation and Development (OECD) countries as well as production constraints in Russia. (Reporting by Anjana Anil in Bengaluru; Editing by Jamie Freed)
(source: Reuters)