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MORNING BID - A breakthrough or a crude awakening in Europe?
Ankur Banerjee gives us a look at what the future holds for European and global markets. The markets are 'holding their collective breath' as optimism about a possible deal to open the Strait of Hormuz combines with growing fears of an impasse which could lead to an escalation of violent conflict, and yet another U.S. deadline is looming. Risk-off hasn't yet turned into a selloff as traders wait for the deadline set by U.S. president Donald Trump on Tuesday at 8 pm Eastern Time (00:00 GMT Wednesday) to reach a deal with Iran. Both sides have exchanged barbs, insults and attacks as Iran rejected a proposed ceasefire. Instead, they are looking for an end to the war that has shut down the Strait of Hormuz - a vital waterway of energy supply that has affected markets and economies. Trump, on the other hand, warned that Iran would be "taken" if they did not reach an agreement by his deadline. He threatened to destroy Iranian bridges and power plants, while he dismissed concerns that such actions could be considered a war crime. The dollar's stability and the stock market's struggle for direction kept investors hesitant on Tuesday. Even the stellar earnings of chipmaker Samsung Electronics could not lift the mood. U.S. Stock Futures dropped 0.44%, while European Futures indicated a subdued opening as the region returns from holidays on Friday and Sunday. Brent crude is currently at $111.43 a barrel, up $39 or 53% from the start of the war. The yen is perilously close the 160 dollar level, which traders are worried will?bring Tokyo to the market to help support the fragile currency. The demand for U.S. dollars is unrelenting and any intervention could be futile. The manufacturing data that will be released later today could give a glimpse into the impact the six-week war has had on the European economy, and whether or not the fears about the price 'pressure caused by the energy shock' are warranted. Investors will be focusing on another binary event, which could have a significant impact on sentiment in the near term. The following are key developments that may influence the markets on Tuesday. PMI data for France, Germany and the Eurozone for March
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Iran's defiance on the eve before Trump's ceasefire deadline
Iran and Israel exchanged attacks on Tuesday, as Tehran defiantly refused to reopen Strait of Hormuz or accept a ceasefire agreement on the eve of the deadline set by U.S. president Donald Trump for Tehran to comply with his demands. According to a source familiar with the plan, Iran rejected the U.S. proposal that was mediated by Pakistan. The plan called for an "immediate" ceasefire, the lifting of the effective blockade in the Strait of Hormuz, and then talks about a wider peace settlement to be held within 15 to 20 working days. IRNA, the official news agency, reported that the Iranian response included 10 clauses. These included an end to conflicts, a protocol ensuring safe passage through Strait of Hormuz and lifting of sanctions. Trump stated on Monday that "the whole country could be destroyed in one night. That night may be tomorrow." He threatened to destroy Iranian infrastructure and?power plants if Tehran did not agree to the deadline. Trump warned that without a deal "every bridge" in Iran would be destroyed by midnight on Wednesday (0400 GMT). "Every power plant?in Iran will go out of business and be burned, exploded, and never used again." Fight Unabashed The Israeli military announced early on Tuesday that it had successfully completed a wave airstrikes against Iranian government infrastructure located in Teheran and other places. It was using air defence systems in order to intercept missiles fired from Iran. The Saudi defence ministry did not specify who fired the projectiles, but said that debris fell near energy facilities. Saudi Arabia has been attacked by hundreds of Iranian drones and missiles since Israel and the U.S. launched their war against Iran on February 28. Authorities have confirmed that the majority of these were intercepted. Saudi Arabia, the United Arab Emirates, and Bahrain all issued public safety alerts at the same time on Tuesday. Trump dismissed questions about whether his pledge to destroy Iranian power plants would be war crimes. He said he was not concerned at all by the possibility. He said, "I hope I won't have it to do." Iran's ambassador to the United Nations stated on Monday that Trump's threats to strike were "direct incitement of terrorism" and provided clear evidence to commit war crimes according to international law. On Tuesday, Iran's deputy sport minister, Alireza Rahimi called for artists and athletes to create human chains in power plants throughout the country. The top military command of Iran said that Trump is "delusional." According to Mehr, a U.S. and Israeli projectile struck a synagogue located in the heart of Iran's capital on Tuesday. ChokeHold The price of oil hovered at $110 per barrel as Trump's deadline approached and there was little prospect of the Strait of Hormuz being reopened, a major global oil transit chokepoint which has fueled inflation fears around the globe. Iran has effectively closed Hormuz. This is a conduit that supplies about a fifth of the oil and gas in the world. It's a powerful bargaining tool for Tehran, which it does not want to give up. Brent crude futures increased 0.4% to $101.9 a barrel, while U.S. West Texas Intermediate oil futures climbed by 0.8%?to $113.31. Trump is on the brink of a political crises as Iran has proven to be a more formidable adversary than what he had predicted when he began the conflict. He said that the conflict was meant to stop Iran from developing nuclear weapons and missiles for them. After 13 U.S. military personnel were killed in the conflict, Trump found himself in a 'perilous situation' when an F-15E U.S. fighter jet crashed on Friday. One of the two airmen remained stranded on Iranian soil. The rescue mission by U.S. commandos, to bring the stranded weapons officer to safety, helped to avert an escalation in a political crisis that could have been disastrous for Trump. The war has killed thousands of people in the Middle East, including 3,546 Iranians, according to the U.S. rights group HRANA, and almost 1,500 Lebanese, where Israel is targeting the Iran-backed Hezbollah.
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China's iron ore trade returns; Trump's Iran deadline looms
After a long weekend of holidays, trading resumed on Tuesday in the 'top buyer China. Investors were awaiting clarity on the prospects for a resolution of the 'Iran War. Demand expectations were also a factor in the price rise, following Beijing's call to accelerate energy-related projects. By 0243 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange rose 0.5% to $805 yuan (US$117.03) per metric ton. The benchmark May ore traded on the Singapore Exchange rose 0.25% to $106.9 per ton. Iran on Monday said it wanted to?a permanent end to the conflict with the U.S., Israel and other countries, and resisted pressure to reopen Strait of Hormuz. Meanwhile, U.S. president Donald Trump warned that the country would be "taken" if they did not meet the deadline of Tuesday night to reach a settlement. As a'response to the global energy shocks' caused by the Iran War, Chinese President Xi Jinping called for accelerated planning of a new system to ensure the energy security of the country. The construction of the largest hydropower project in the world on the eastern edge of the Tibetan Plateau will support the prices of industrials and construction materials, including iron ore. Iron ore prices rose, but gains were restricted by the high inventory levels and anti-dumping policies on Chinese steel. Steelhome data showed that iron?ore stocks at major Chinese port cities increased by 0.65% from week to week. The increase was despite rising output of hot metal, which highlights difficulties in inventory reduction and weakening basic support. Vietnam's trade ministry announced that it has implemented a temporary anti-dumping tax of up to 27,83% on certain Chinese hot-rolled coil steel. Coking coal was down 0.45% and coke was up 0.33% on the DCE. The majority of steel benchmarks on the Shanghai Futures Exchange are negative. Rebar was not much changed. Hot-rolled coil and wire rod both declined 0.27%. Stainless steel rose 0.21%. ($1 = 6.8784 yuan) (Reporting by Ruth Chai; Editing by Subhranshu Sahu)
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South Korea's envoy will visit Kazakhstan, Oman, and Saudi Arabia in order to secure oil supplies
Kang Hoon Sik, the South Korean chief of staff to the president, said that he was traveling to Kazakhstan, Oman and Saudi Arabia on Tuesday to procure crude oil and naphtha due to disruptions in shipping through Strait of Hormuz. Kang will depart on Tuesday evening as the special envoy of President Lee Jae Myung to hold discussions with governments, energy firms, and ship operators in order to ensure that cargoes arrive at 'domestic ports' and to maintain stable supplies of essential goods, such as medical products. He said that South Korea needed to diversify its supply lines urgently, as the country relied heavily on the Hormuz Route for 61% of crude oil imports and 54% of naphtha. Kang said that shipments of crude oil, naphtha and other products secured from the United Arab Emirates last month under a 24-million barrel supply agreement had already started arriving at South Korean ports. He said that the government worked with international?partners? to ensure the safe passage of 26 South Korean flagged vessels, which are currently waiting in the Strait of?Hormuz. Kang called on 'households and business' to actively participate in energy-saving initiatives so that the country can weather tight supply. (Reporting and editing by Ed Davies. Kyu-seok Shim)
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Energy Transition Minerals, Australia's Energy Transition Minerals, faces a likely refusal of a licence renewal for its Greenland project
The Australian'miner' Energy Transition Minerals said that Greenland has informed it of a potential rejection of the exploration licence renewal request for its 'Kvanefjeld Rare Earths Project. Energy Transition Minerals shares fell 5.6%, to A$0.051, by 0152 GMT after trading resumed following a stoppage on Thursday. The benchmark S&P/ASX 200 index rose 1.5%. Kvanefjeld, a large-scale project to produce?rare Earths in the west, has the potential of becoming a major producer of minerals critical for consumer electronics. Energy Transition Minerals said it received a draft of a decision from the Greenland Government indicating the intention of the mineral resources ministry to recommend the denial of the application. Greenland said that its exploration activities "nolonger serve a purpose", and that under the current legal framework, a licence cannot be granted. The company stated that the decision was based on a law passed in December 2021 - "the 2021 Uranium Act" - which would ban uranium exploration, prospecting and exploitation. Energy Transition Minerals filed a claim with an arbitral tribunal in Copenhagen to determine the legal rights of unit Greenland Minerals A/S to receive an exploitation license for 'the project' under this law. Greenland had previously granted license renewals for the Project, including in the course of an active?legal Dispute and after the introduction of the 2021 Uranium Act, the company stated, calling the draft stance "inconsistent with the historical treatment" of the project. Sherin Sunny, Bengaluru. Sumana Nady and Subhranshu Sahu edited the article.
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As Asia and Europe compete for supplies, US crude prices have reached record highs.
Industry sources say that spot premiums for U.S. West Texas Intermediate Crude have reached all-time highs due to the fierce competition for supplies between Asian and European refiners to replace Middle Eastern oil flow disruptions caused by the Iran War. Europe is the biggest importer of U.S. oil, but the competition has increased as Asian buyers are searching for supplies from the Americas and Africa to Europe to replace Middle Eastern crude that cannot move through the Strait of Hormuz. Sources and analysts say that the increase in crude oil prices is driving up costs for refiners and increasing losses on both continents. This puts severe pressure on companies, including state-owned ones, who are required to produce fuel by governments for national security. In a note from April 3, Paola Rodriguez Masiu, Rystad's chief oil analyst, said that Asian refiners are aggressively bidding for every barrel of the Atlantic Basin. 'EVERY ?DAY THERE'S A NEW PRICE' The traders reported that the offers for WTI Midland crude to be delivered to North Asia on July's?very large crude carrier? had a?premium of $30 to $400 per barrel depending on which benchmark was used. One trader put the premium at 34 dollars a barril over Dubai quotes, while another said it was $30 above Brent dated. Two other traders said that offers were closer to $40 a barron above the August ICE Brent base. These levels are higher than the premiums paid by Japanese refiners, including Taiyo Oil, for WTI crude in late March and early April. One of the traders stated that "every day, there is a new price", adding that Asian refiners are facing?severe loss due to the premiums. One trader suggested that refiners should reduce their crude runs and buy products, if they are offered. The spot premiums increased after the WTI monthly spread reached its largest backwardation Thursday. Backwardation is when the current month's prices are higher than future months. The U.S. Gulf Coast has also seen a surge in demand for tankers due to the wider discounts offered on U.S. Crude Oil compared to Brent, which is the global benchmark. This has reduced vessel availability and pushed up freight rates. On Thursday, the bids for WTI?Midland to be delivered to Europe reached a record premium of nearly $15 per barrel compared to Brent dated. According to Rodriguez-Masiu, "At the current physical differentials as well as freight rates, European refiners who buy spot crude cannot make any money by running these barrels through their system."
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Blues aim for two-game sweep against NHL's best Avalanche
Most teams find it difficult to defeat the Colorado Avalanche, but to do so twice in a single season is like climbing Mount Everest. The St. Louis Blues will have to 'climb that mountain' Tuesday night, when they host the Avalanche for the second half of a two-game home-and-home series. Robert Thomas's first career hat-trick was completed with 2:50 left in the third quarter, helping the Blues win 3-2 on the road against Colorado. Thomas, who scored the goal in question, said: "It took a long while so it feels great." It's a little relief but it has been a long time. Thomas received some assistance from his teammates in achieving the hat-trick, as Jimmy Snuggerud (three assists) and Dylan Holloway (three assists) each scored three assists. The Blues (33-31-28, 78 points), who have a record of 6-1-1 over the past eight games, and 13 victories since the Olympic break, are firmly ensconced in the tight race for the last wild-card position in the Western Conference. St. Louis has been led by its top talent during this stretch. Thomas has scored in five consecutive games (5 goals, 5 assists), and Holloway is on a six-game streak (4 goals, 7 assists). Snuggerud stated, "We are having fun together, and we are trying to win games. We're doing everything we can to do that." "Coming into the building is a difficult one. I thought we rose to?the?occasion. And we need to do that at home." The Avalanche, despite their loss on Sunday, are still on the verge of winning the Presidents' Trophy, for the fourth consecutive time in the history of the franchise. They need just one more win or the Dallas Stars to lose in regulation in order to take the top spot in Western Conference. Colorado was the top-scoring team in the league during the 56-game shortened regular season of 2020-21. Brent Burns, who had just played in his 1,000th consecutive match, turned the clock back with a performance of two points (one goal and one assist) at the weekend. Parker Kelly, meanwhile, reached his 20-goal mark for the first time. Things are just coming in. This one is going off my stick and then off the guy. Kelly added, "So, little bit luck." "I am happy with the year that I have had, but we still have (six games) here and we need a few more wins." "That's our priority." The forward Valeri Nichushkin was unavailable for Sunday's match due to an injury in the upper body, but could be available for game two of the set. "He is probably a possible, even for Tuesday." We'll see how he feels in the next few days. Jared Bednar, Avalanche's coach, told the media that it was just "that time of year". "You get a few little bumps and bruises. Everyone has them. But sometimes they're a bit more serious. I don't like to hurt people if there is a chance that it could get worse. You have to be very careful with some of them. "That's what Val and I did today." Nathan MacKinnon will look to score after a blanking Sunday. He leads the league in goals with 51 and is third with 122 points. Field Level Media
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Oil prices continue to rise as Trump's rhetoric against Iran becomes more aggressive
The oil prices continued to rise on Tuesday as U.S. president Donald Trump increased his rhetoric against Iran and threatened stronger action if it failed to reopen the Strait of Hormuz - a major global oil transit chokepoint. Brent crude futures rose 57?cents or 0.5% to $110.34 a barge by 1202 GMT. U.S. West Texas intermediate crude futures gained $1.26 or 1.1% at $113.67. Trump has threatened to "rain hell" on Tehran for failing to meet his deadline to reopening the Strait of Hormuz by 8 pm EDT, Tuesday. Trump said that if no deal was reached, "they could be eliminated." Tehran, in response to an American proposal via Pakistani mediator, rejected the idea of a ceasefire, said that a permanent ending to the war is necessary, and refused to bow to pressures to reopen Strait. After U.S. attacks and Israeli strikes began on 28 February, Iranian forces effectively closed the Strait of Hormuz. This waterway typically transports about 20% of world oil flows. Tim Waterer is the chief market analyst at KCM Trade. The potential for a truce deal could be a counterweight to the rising prices. If it gains traction and becomes a reality, the price will drop. However, the persistent supply concerns from the "Hormuz" chokepoint as well as the damaged energy facilities keep the price at a minimum. Sources say that on Monday, Iran's Revolutionary Guards stopped two Qatari liquefied gas tankers, and told them to stand still without explanation. Shipping data shows that vessel traffic through the strait has been limited since last Thursday. Diplomats say that the U.N. Security Council will vote on a resolution on Tuesday to protect commercial shipping through the Strait of Hormuz. However, it is likely to be in a significantly watered down form, after China, which has veto power, opposed authorizing force. Syrian state TV reported that the attack continued in the region as explosions could be heard in the Syrian capital Damascus and the surrounding countryside, Tuesday, which were caused by Israeli interceptions of Iranian missiles. According to the Saudi defence ministry, on Tuesday, it said that seven ballistic missiles were intercepted and destroyed, with debris falling near energy facilities. As Asian and European refiners rush to secure replacement supplies due to disrupted Middle Eastern flow, the conflict has put pressure on global crude markets. Spot premiums for U.S. WTI have risen to record levels. Saudi Arabian state oil company Aramco has raised the official selling price of its Arab Light crude for Asia, for delivery in May. This is a record-breaking premium of $19.50 per barrel over the average of Oman/Dubai. Russia said Monday that Ukrainian drones had attacked the Caspian Pipeline Consortium terminal on the Black Sea. This terminal handles 1.5% of the global oil supply. Russia reported damage caused to storage tanks and loading infrastructure. OPEC+ decided on Sunday to increase oil production quotas in May by 206,000 bpd, but the agreement will only be a nominal one as some members are unable to boost their production due to strait closings that limit exports. (Reporting and editing by Anmol Chaubey, Bengaluru.
Fuel price surge pushes Philippine inflation above central bank target
The Philippines' annual inflation rate increased more than expected in March. It breached the central bank's target range of 2% to 4.0%. This was primarily due to the sharp rise in 'fuel prices' amid the escalating Middle East tensions.
In March, headline inflation was 4.1% higher than a year ago. This is significantly higher than the 2.4% in February and also above the median polled forecast of 3.7%. This is the highest reading of inflation since July 2024 when it was 4.4%.
Inflation grew at the fastest rate since January 2023 - 1.4% on a monthly basis. This reflects a dramatic increase in prices.
Transport costs were the main driver, as they soared because of rising energy prices globally. Diesel prices jumped 59.5% from a year ago, and gasoline prices jumped 27.3%. These are the highest gains since September 2022 when Russia's invasion in Ukraine disrupted global energy markets. Diesel and gasoline both declined by 1.3% in February.
The transport index has risen by 9.9% year-on-year. This is the highest since January 2023, when it soared 11.1%.
The Philippines is heavily dependent on Middle East crude oil. This makes it susceptible to price fluctuations and supply shocks during times of geopolitical conflict.
Core inflation (excluding food and energy) also increased to 3.2% in March, up from 2.9% the previous month, indicating emerging second-round effects.
The central bank projected earlier that inflation would fall between 3.1% and 3.9% for the month of March.
It kept its key rate at 4.25% in response to the rising risks at an unexpected 'off-cycle' meeting on 26 March. The policy will focus primarily on'second-round effects of global oil price shocks. The next monetary review is set for April 23. Reporting by Mikhail Flores, Nestor Corrales and Kevin Buckland; Editing by John Mair & Kevin Buckland
(source: Reuters)