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Gold falls as dollar strength weighs on gold; attention turns to Fed meeting
The dollar strengthened on Tuesday and gold prices fell. Markets were looking for clues about the future of interest rates in the Federal Reserve's policy announcement. Gold spot fell by 0.7% at $4,044.81 an ounce as of 0250 GMT. It had risen as high as 1% Monday. U.S. Gold Futures for August Delivery fell 0.8% to $4.045.40. Dollars are nearing a month-high, which makes greenback bullion prices more expensive for those who hold other currencies. Ilya Spivak is the head of global macro for finance content network Tastylive. The U.S. Federal Reserve is expected to conclude its two-day policy meeting on Wednesday. According to CME FedWatch, 62% of market participants believe that the Fed will keep interest rates at their current level. However, 38% expect a rate increase at least 25 basis points. The markets are pricing in a 81% chance of a hike during the September meeting of the central bank. On Monday, President Donald Trump called on the Fed lowering interest rates. He said that the U.S. would have the lowest rate of interest in the world. Trump said that on Monday, the United States was having "good discussions" with Iran. He also stated that there is a possibility of a 'deal' to resolve their conflict. However, he warned that strikes will resume if the negotiations fail. Saudi Arabia, Jordan, and Iraq reported drone attacks on Sunday, indicating that Tehran had quickly tested the pause of the U.S. campaign. Spivak said that gold will likely rise above $4,200 an ounce if the Fed meeting does not produce language that is "setting the foundation for a rate hike in September". Silver spot fell by 1.9%, to $57.30 an ounce. Platinum lost 1%, to $1605.14, and palladium dropped 1.6%, to $1271.09. (Reporting and editing by Varun H. K. and Ronojoya Mazumdar in Bengaluru)
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Australia builds first oil refinery at home in 60 years, to improve fuel security
Prime Minister Anthony Albanese announced on Tuesday that Australia will be considering building its first?oil? refinery in over 60 years. The war in the Middle East has squeezed supplies from abroad and highlighted the urgency of improving energy security. Albanese stated that the project would help to build Australia's sovereignty and resilience in the fuel sector, which could shield the country against future supply shocks. Albanese stated that if the project is deemed?feasible', Perdaman, a chemical industrial producer in Western Australia will build a new large-scale refinery. Albanese, a reporter in Western Australia's Pilbara Region, told reporters that "the war?in?the Middle East... has an impact here just like it does all over the world." Building national resilience makes Australia less susceptible to events happening around the globe. Albanese announced that his government, along with the Western Australia State Government, will spend A$4,000,000 ($2.8 million) jointly on a feasibility study for the refinery. Albanese continued, "We want the project to be a success and that's why we are looking for the best location. Australia imports about 80% its fuel and is racing to secure supplies in the face of the Iran War. A report by the Australian Treasury warned that global oil markets have become more vulnerable, with "weaker buffers against supply-shocks". The treasury told Treasurer Jim Chalmers that global oil inventories?have decreased since the conflict in the Middle East has intensified. Meanwhile, refined fuel markets now face a?risk of further tightening?, it said. The majority of Australia's oil refineries were constructed in the 1950s and 1960s. However, high operating costs as well as the rise of large refineries across Asia have forced many of them to close over the last three decades. Ampol's Queensland Refinery and Viva Energy's facility in Victoria, both in the east of the country, are now the only two active refineries. In 2000 there were eight. Western Australia's lone refinery will be shut down by 2021, after BP converted its 146,000 barrels a day Kwinana facility into a fuel terminal. ($1 = 1.4306 Australian dollars)
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Asia markets sell off in a broad scale due to AI fears
Asian markets dropped on Tuesday, led by chipmakers, on concerns?about massive funding requirements of the AI boom. A slide in oil prices didn't do much to lift bonds, and traders were worried about U.S. interest rate hikes coming this week. South Korea's KOSPI plunged more than 8 percent to a low of three months, setting off a circuit breaker. Japan's Nikkei fell 4% after a drop of 2.2% for the Philadelphia Semiconductor Index. Nvidia's shares fell 5% overnight, after the Wall Street Journal reported that the company was in discussions to provide approximately $250 billion in financial guarantees for OpenAI in connection with a massive data center project. CXMT shares in Shanghai surged 466% on their debut day, highlighting the growing interest of investors and the competitive threat from Chinese competitors. Chris Weston is the head of Pepperstone's research. He said that there was a growing sense of optimism in mainland markets regarding China's ability build a global competitive AI ecosystem. The Information reported that China had?also started manufacturing locally developed immersion deep UV lithography machines. This chipmaking tool was long dominated exclusively by Dutch supplier ASML. ASML's shares fell 8.5% on Monday. South 'Korea SK Hynix shares fell by nearly 11%, while Samsung Electronics shares dropped more than 9%. In Tokyo, Kioxia was down 18% and?Tokyo Electron was down 9.8%. CXMT, the chip-making indexes and CXMT were also lower in early trading. OIL SLIDES US YIELDS DIPLEAD Brent crude futures continued their nearly 9% drop on Monday, dropping to $87.55 per barrel as hostilities between Iran and the U.S. cooled following Washington's sudden suspension of airstrikes on Saturday. Donald Trump stated on Monday that the United States and Iran were having "good discussions" and that there was a possibility of a deal. The break in fighting has pushed benchmark U.S. Treasury 10-year yields down by four basis points, to 4.64%. Shorter-term rates have not moved much. The Federal Reserve is expected to hike by 25 basis points this Wednesday, according to traders. "The U.S. - Iran War, which is driving up the price of crude, remains the main determinant for what will 'happen in the global economy over the next few months and, as a result, what informs the central bank policy forecasts at the margin," said Thierry?Wizman, currency & rates strategist?at Macquarie Group. We expect the Fed to tighten its bias this week. The expectation of a hike?sooner rather than later' kept the dollar at $1.1370, the euro at $1.14 and the Australian Dollar just below 70 cents. The yen was trading at 163.78 per dollar, barely above a four decade low. Markets are on edge about Japan interfering in the currency pairing, especially if the Bank of Japan holds rates this week, and causes another yen drop. Wizman said that if BoJ communication was not hawkish, and USD/JPY continues to rise, traders can expect an official response. This could include verbal interventions, rate checks or direct FX market interventions, possibly on Friday. (Reporting and Editing by Shri Navaratnam).
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Whitehaven Coal's output in 2026 is at the top of its guidance range, but costs are at the low end.
Whitehaven Coal, Australia's largest coal producer, said Tuesday that its annual sales and output were near the top end of their guidance range due to the recovery of its Queensland mines. However, the company expects its costs for the full year to be near the lower end of the forecast. As the Sydney-based coal mining company tries to absorb higher diesel costs linked to Middle?East conflict, it is important to consider cost forecast. Whitehaven has said that unit costs are expected to be around A$132 ($92.29), towards the low end of their forecast range. This is after they achieved savings in line with its annualised target between A$60 and A$80 million. The company made A$222 for every ton of thermal coal it sold in the 'fourth quarter,' up from A$189 per ton a year ago, thanks to a stronger Asian demand after the supply of liquefied gas was interrupted. The managed run-of mine production for the year ending June 30 was 40.3 Mt, up 3% on the previous year and close to the upper end of the 37-41 Mt range. The managed coal sales increased 8%, to 32.7 Mt. This was within the estimates of 29.5 to 33 Mt. The Visible Alpha consensus estimate was that fourth-quarter production would rise by 1.3%, to 10.7 mt. Queensland operations including the Blackwater and Daunia Mines, which were purchased from BHP Group for $4.1 billion in early 2024, have recovered from weather disruptions in previous quarters, with production increasing 41% sequentially. New South Wales' mines including Maules Creek Narrabri, and Gunnedah posted a 1.6% increase in quarterly production year-on-year, but output fell by 8% from the previous quarter due to tougher mining conditions. Whitehaven shares were down 1.1% at 0058 GMT, following the declines of the energy subindex and the wider market. $1 = 1.4302 Australian Dollars (reporting and editing by Shilpi Major and Subhranshu S Ahu in Bengaluru).
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Origin Energy in Australia flags the possible exposure of data for about 900,000.
Origin Energy, a company in Australia, said that on Tuesday, data relating to 900,000 customers, both current and former, may have been accessed. The company is contacting the affected individuals. Last week, the country's largest electricity and gas retailer announced that it was investigating an alleged security breach which involved unauthorised access to some customer information. Origin stated on July 23 that the affected data could include financial information, such as last few digits of a customer’s credit card number or bank account number. As of 0121 GMT, shares of the company were down 1.7% at A$10.47. The broader ASX200 index was 0.3% lower. On its website, the company announced that it had finished its initial review phase and was notifying customers affected. It also offered identity protection and cybersecurity support services. Sydney-based company reviewed a possible security threat in early July but stated that, 'based on the information available at the?time, it was not considered credible. The company said that new information it received on the 22nd of July indicated that a possible security incident could?have taken place, prompting them to inform customers and investors. Origin has engaged cybersecurity and forensic experts, taken steps to secure its systems and is continuing its investigation into the incident. Customers are urged to be vigilant and watch out for scams.
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South Korea's KOSPI falls 7% as the global chipmaker sale deepens
South Korean shares fell 'on Tuesday, as a global sale of chipmakers weighed down on technology heavyweights. Pressured 'by concerns about a 'intensifying competitive environment - from China - and a steep drop in SK Hynix shares listed in the U.S. The benchmark KOSPI fell 500.47 points or 7.41% to 6,253.81, prompting "sidecar" trading restrictions on both the KOSPI index and junior Kosdaq, temporarily suspending programme trading. Memory-chip manufacturer SK Hynix fell 10% after 'its American Depositary Receipts (ADRs), which were issued in the United States, dropped to a new record low and below their original U.S. offering prices. Samsung Electronics fell 9.15%, another major index component. The KOSPI weighting is dominated by the two largest chipmakers, who together make up more than half the market. This amplifies the effect of the sell-off across the entire sector. The market sentiment was further dampened due to developments in China. These included a blockbuster debut of ChangXin Memory Technologies, (CXMT), and reports that a Chinese state-backed company began manufacturing immersion DUV equipment. Kim Seokhwan, a Seoul based analyst at Mirae Asset Securities said that the market is more concerned about CXMT's potential to expand its capacity?to Korean rival companies and?technology following?its IPO. Reporting by Cynthia Kim, Editing by Sherry Phillips
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Australia is considering building its first oil refinery domestically in 60 years
Australia announced on Tuesday that it will 'consider building its first new oil refinery for more than 60 Years, as the war in the Middle East squeezes overseas supplies and highlights the urgency of improving energy security. A government statement said that the federal government and Western Australia's state government would jointly spend A$4m ($2.8m) on a feasibility study of the refinery. Australia imports 80% of the fuel it uses and is racing to get supplies in light of the Iran 'war. The majority of Australia's oil refineries were built in the 1950s and 1960s. However, high operating costs as well as the rise of large refineries in Asia have forced many of them to close over the last three decades. "This is a matter of fuel security - for the entire nation. But, of course, Western Australia will be left with no fuel refining capability after the closure of the BP facility in Kwinana by 2021. It's an important initiative," Federal Resources Minister Madeleine King said to ABC Radio. Ampol's Queensland refining facility and Viva Energy's facility in Victoria – both?on Australia's east coast – are the only two operative now, compared with eight in 2000.
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Officials say seven people were killed in Russian attacks on eastern Ukraine
Officials said that on Monday, a Russian strike on frontline localities in eastern Ukraine killed seven people and injured more than twenty. Three people were killed in two locations near Kostiantynivka, a contested city, according to prosecutors in Donetsk Region. The Russian military claimed this month that its forces had captured Kostiantynivka. However, Ukrainian officials denied the city's change of hands. Four people were killed in the area of Kramatorsk. This heavily fortified "fortress city" is considered crucial to Ukraine's defenses. The prosecutors said that 18 people had been injured in the Donetsk Region. Oleksandr Hansha, the Governor of Dnipropetrovsk Region said that more than 50 artillery and drone attacks were conducted on five districts. Two people were killed near the town of 'Nikopol', which is a Russian target that is often used on the north bank if the Dnipro River. One person was killed near the town of Syneklykove in the east. A Ukrainian drone hit a building in Russia's Belgorod Region and killed one person. Two others were injured. (Reporting and editing by Nick Zieminski, Cynthia Osterman, and Ron Popeski)
Australia's nuclear power proponents have concerns to respond to: Russell
(The. viewpoints expressed here are those of the author, a columnist for. .)
Australia's main opposition celebration wants a sensible dispute. about nuclear power as it devotes to develop seven plants to. replace coal generation if it wins the next federal election.
The conservative Liberal Celebration and its junior regional. partner National Celebration announced intend on Wednesday for five. large-scale nuclear plants in the eastern Australian states of. Queensland, New South Wales and Victoria, in addition to small. modular reactors for South Australia and Western Australia.
If there is to be a real argument on what type of. generation is best to change Australia's aging and. significantly undependable fleet of coal generators, there are 2. main questions that need to be responded to.
The first is the expense of the replacement generation and the. second is whether it can be delivered quickly enough to not just. replace coal plants, but also to satisfy Australia's dedication to. net-zero emissions by 2050.
The Liberal and National parties, together known as the. Coalition, decreased to offer any costings for the their plans,. but Liberal leader Petter Dutton did acknowledge it would be. expensive, while still declaring it would deliver less expensive power. for Australians.
No credible expert supports Dutton's assertion, with. price quotes differing as to the expense of building nuclear generation,. however all of them coming in well above the cost of solar and wind. firmed by battery storage and pumped hydropower.
The federal government's science company, the CSIRO, estimated that. new nuclear power would be two times as pricey as renewables. backed by storage, and this was a best case scenario predicated. on attaining economies of scale from a long-term and continuous. constructing programme.
The Union stated it would be able to have nuclear plants. up and running between 2035 and 2037, assuming it started. executing its policy if it beats the ruling Labor Celebration in. a federal election due in the first half of 2025.
In theory it would be possible to develop the seven gigawatts. ( GW) of nuclear plants on that time scale, however doing so would be. an amazing achievement at odds with the recent experiences of. other Western countries.
Nuclear plants are well-known for burning out both on spending plan. and time, with Britain's under-construction Hinkley Point C one. such example, where the expense has more than doubled and the start. date pressed back at least seven years.
BARRIERS ABOUND
The Union likewise did not elaborate on how it would. get rid of several political and social barriers to nuclear. power.
Currently nuclear generation is prohibited by federal law,. suggesting the Coalition would need to pass enabling legislation. through both the lower chamber and the upper home Senate.
While it may win the election and manage the lower house,. it would take an enormous triumph for it to take control of the. Senate.
This suggests Dutton as prime minister would have to negotiate. with cross-bench senators, and provided the majority of those are. either from the Australian Greens or are progressive. independents, it's likely his nuclear strategy would stop working at the. initially obstacle.
There are also restrictions on nuclear power in a number of. states, therefore far the leaders of New South Wales, Victoria and. Queensland have turned down any nuclear plants.
Developing a nuclear industry from scratch would likewise need. importing a competent workforce of nuclear engineers and other. professionals, something that appears at chances with the Union's plans. to lower migration and its increasing anti-immigrant rhetoric.
Winning a social licence from the communities where the. nuclear plants are prepared to be situated might also provide. obstacles, even if the centers bring tasks to change those. lost when the coal-fired generators close.
There is likewise the concern of scale, with the Union. intending on 7 GW of nuclear plants, which is only a 3rd of. Australia's current coal-fired capacity of about 22 GW.
This indicates that nuclear will not come close to changing coal,. which in turn means that renewables and storage will be needed. too, or there will be more reliance on costly natural gas.
The concern of funding nuclear is likewise unsettled,. especially given that no Australian energy has actually revealed any interest in. going nuclear.
The Coalition has actually indicated that a government-owned. corporation will be established and probably funded by taxpayers, a. position that seems to contradict the underlying philosophy of. a minimum of the Liberal part of the Union that governments. should play a minimal function in the economy.
Initial reaction to the Coalition's nuclear plans has been. overwhelmingly negative, with one of the couple of encouraging voices. originating from the Minerals Council of Australia, a lobby group. that includes coal miners.
While the council doesn't say it in their media release,. part of their support for nuclear is since they identify that. going down that path most likely means coal stays in the. generation mix for a lot longer duration than currently anticipated.
In general, it's tempting to dismiss the Coalition's nuclear. plans as a pricey fantasy, specifically in a country so. preferably fit to establish solar and wind.
However, the real damage from the nuclear proposal is most likely. that the energy argument in Australia will come down into a partisan. political slanging match, with nuclear and fossil fuels being. promoted by the conservative and renewables and storage by their. left opponents.
The opinions revealed here are those of the author, a columnist. .
(source: Reuters)