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Dollar climbs following US-Iran talks; pound is choppy after Starmer's exit
?The?dollar rose on Monday, as optimism about a possible peace deal was boosted by the first round of U.S. - Iran talks. Meanwhile,?the pound rose in choppy 'trading' after British Prime Minister Keir?Starmer announced that he would resign. After the first round of talks in a budding deal, the U.S. lifted sanctions against Iran for a period of 60 days. Officials reported calm after fighting had led Iran to declare that the Strait of Hormuz was closed. U.S. crude fell 1.84%, to $75.19 per barrel. Brent dropped to $77.93 a barrel, down by 3.29%, on Monday, after the first talks under a budding peace deal. The dollar index (which measures the greenback versus a basket of currencies) rose by 0.16%, to 101. The euro fell 0.36%, to $1.1427. The European Central Bank's Christine Lagarde stated that the inflation shock in the?eurozone is too big to ignore, but not large enough to cause price increases or dangerous second-round effects. POUND RETURNS AS 'POLITICAL UNTRUTH LOOMS Sterling recovered from a session-low of $1.3175 after Labour leader Starmer announced he would step down, allowing Andy Burnham the opportunity to become the seventh Prime Minister in 10 years. Marc Chandler, Bannockburn Capital Markets' chief market strategist in New York said that he thought the bond market vigilantes would act as a safeguard against the next UK government moving too far to the left. The bond market is what will determine the credibility of a new government. The last increase in the sterling price was 0.08%, to $1.3243. The yen is near a 40-year low. After hitting 161.92, the dollar rose 0.14% to reach 161.50, just a few cents shy of the two-year-low reached last week. If the yen breaks above 161,96, it will be at its lowest level since 1986. The Japanese yen experienced several sharp movements in which it briefly strengthened against greenback. Satsuki Katayama, the Japanese Finance Minister, said that after the Bank of Japan increased rates last week as was widely expected, authorities are prepared to react appropriately to currency movements at any time. The yen lost?gains after a series of interventions on April 30. A shift in focus from the Federal Reserve led traders to expect rate increases this year. This has favored the dollar. Chandler warned that "people should be alert for BOJ interventions and perhaps even positive comments from the U.S." BofA Global Research and Deutsche Bank both revised their Fed forecasts on Monday, including rate hikes for September. BofA expects the central bank to raise rates 25 basis points in each of September, October, and December. According to CME FedWatch, the markets now price in a 38.5% probability of a rate increase at the Fed meeting on July. This is up from 6.4% one week ago.
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As Europe heats up, at least 18 people, including two children, have died in France.
As a heatwave gripped Europe on Monday, breaking temperature records across several cities, at least 18 people died in France. Forecasters in Britain said temperatures in June could be higher than ever before, as schools in France closed their doors or changed their schedules. Bordeaux, France's west wine country, saw its temperature rise to 41.9 degrees Celsius. This is a new record for the region. In central France, it reached 41.2 C. This was higher than the previous record set in 1947. Climate Monitor shows that Europe is the continent farthest away from its historical norm for Monday. A report from the World Meteorological Organization in April found that Europe is warming up at a rate more than twice as fast as the rest of the world. TWO CHILDREN PERISH IN A HOT CAR A prosecutor from Carpentras in southeast France said that first responders in Carpentras were unable resuscitate the two children who were unconscious in their family car outside their home. According to a local government official,?Sophie Brocas, late Sunday night, three elderly people aged 80-95 died in Bordeaux due to heat related illnesses. Jerome Boulanger, a spokesperson for the French Civil Safety service, said that 13 drownings were reported between Sunday and Monday. Last year, drownings in France increased by 172% during heatwaves when swimmers sought to cool down. Clair Barnes is a research associate at Imperial College, London, who specializes in extreme weather, climate and climate change. She said that the heatwave in Europe takes the form of an Omega block, which has a bulge in the middle of the letter and cooler air on either side. It's drawing hot air from North Africa and the Sahara up, which is why we're experiencing this intense heat. "It's slow-moving and there's no breeze, no wind to provide some relief," she said. Climate change is causing heatwaves and storms to intensify, driving temperatures up and causing increased rainfall, said she. UK HEAT WILL BREAKING JUNE RECORD SET INS 1976 Met Office, Britain’s national weather forecaster said Monday that a heatwave lasting four days could easily push temperatures over 39 C in some places, breaking the record set by 35.6 C in June 1957 and 1976. Only a few short weeks ago, Britain's record for the highest temperature in May was broken. Lewis Jennings said, while walking through central London: "Thirty six degrees will be disgusting." Meteo-France's preliminary data indicates that Paris is expected to reach its highest temperature in June with a mercury reading of 38.4 C. Ruben del campo, spokesperson of Spain's AEMET Weather agency, said that temperatures are between 5 - and 10 - degrees above average for this time of the year. In some northern areas, they may even be more than 10 - degrees above average. RED HEATWAVE ALERTS ACROSS ITALY Italy issued heatwave alerts on Monday for 12 cities. Utility?Iren is doubling the number of workers and adding generators in Turin to deal with sporadic power outages as the grid becomes overloaded, according to a spokesperson. Romaine de Jägere, the founder of the Centre for the Rehabilitation of Animals 'Living in the Wild Refuge in Temploux, Belgium, explained that birds such as swifts and swallows who nest in the eaves of rooftops have been affected most by the abnormally high temperatures. "Temperatures on the roofs can reach up to 60 degrees Celsius at times." De Jaegere added that 150 animals had been taken in by the shelter in the past three days. Reporting by Lewis Macdonald in Paris and Makini in Gdansk; Emma Pinedo and Giancarlo Navich in Milan; Sarah Young in London and Zoran Mikletic and Andrew Heavens in Brussels. Writing by Charlie Devereux. Editing by Alexandra Hudson.
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Oil prices fall as US-Iran optimism about peace lowers gold prices
Gold prices rose on Monday, after recovering from a?low? of over a week in the previous session. Progress in U.S. Iran peace talks helped to stabilize oil prices, and eased inflation fears. Gold spot rose 0.5%, to $4.182.39 an ounce at 1:50 pm. ET (1750 GMT). On Friday, prices reached their lowest level since June 11. U.S. Gold Futures for August Delivery? Settled 1% Lower at $4,202.7 per ounce. Ole Hansen, analyst at Saxo Bank, said that energy prices would remain the key driver of precious metals in the short term. We're watching the bumpy discussions in Switzerland between?U.S. Iran and the United States are still on track to reach a deal which would bring new barrels of oil onto the market, Hansen said. This would put pressure on crude prices as well as help gold. JD 'Vance, the U.S. vice president, said that talks in Switzerland with Iranian officials had "laid a good foundation" for an eventual peace deal despite tensions surrounding the Strait of Hormuz. Brent crude futures dropped more than 3% following the announcement. According to the CME FedWatch Tool, traders see an 89% probability of a rate increase in December. This is up from 61% prior to the Federal Reserve meeting last week. Nine out of 19 Fed policymakers think they'll need to increase the?policy interest rate this year. Gold, despite its reputation as an inflation hedge, tends to lose appeal when interest rates increase, as it becomes less appealing relative to other investments that pay interest. Bank of America stated in a note published on Friday that the $6,000 per ounce gold target is 'unlikely', since the market would have to price rate increases into their prices to reach such levels. The original premise that underpinned the bank's bullish gold call -- an unorthodox U.S. Macro Policy -- remains intact, according to the statement. (Reporting by Sukanya Mitra and Ashitha Shivaprasad in Bengaluru Editing by Leroy Leo and Vijay Kishore) (Reporting and editing by Leroy Leo, Vijay Kishore and Ashitha shivaprasad from Bengaluru)
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The US Strategic Petroleum Reserve has seen its lowest oil stocks since 1983
The?stocks of crude oil in the United States have fallen to their lowest level since June 1983. The Strategic Petroleum Reserve dropped to 331.2 million 'barrels' last week. This is the lowest level since June 1983, according data from the Department of Energy. Supplies continued to tighten as a result of the U.S. - Iran war. The government's emergency stock fell by 9.05?barrels. This is the third-largest draw ever recorded. The drawdowns were a part of an agreement between the U.S. and Canada to release 172 millions barrels from the facility in order to lower fuel prices. U.S. crude oil stocks have declined rapidly in recent weeks as a result of strong demand for American oil from exporters and refiners. Since the beginning of the war at the end February, U.S. overall inventories have dropped by 96.2 millions barrels. They are now the lowest they've been since 1985. Cushing is the main oil storage hub in Oklahoma, and also the price point for U.S. West Texas Intermediate crude oil futures have dipped to a low of?around 20 million barrels. This is considered a operational low for the tank storage farm. The latest SPR 'loans' require companies to borrow oil and return it in its original volume, plus a?premium, which is?extra oil. The Department of Energy says the system will stabilize markets without costing U.S. tax payers. Reporting by Arathy S. Somasekhar, Houston; editing by David Gregorio
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Oil prices fall as US-Iran optimism about peace lowers gold prices
Gold prices rose on Monday as the U.S. and Iran peace talks impacted oil prices. This helped to ease inflation fears. Gold spot rose 0.4%, to $4174.90 an ounce at 12:12 pm. ET (1612 GMT). On Friday, prices reached their lowest level since June 11. U.S. Gold Futures for August Delivery fell?1.2%, to $4193.90 an ounce. Ole Hansen, analyst at Saxo Bank, said that energy prices would remain the key driver of precious metals in the short term. Hansen said that the "bumps" in the talks between the U.S. and Iran are still pointing to a deal which would essentially add new barrels of oil into the market, putting pressure on the crude prices. JD 'Vance, the U.S. vice president, said that talks with Iranian officials in Switzerland laid "a good foundation" for an eventual peace deal despite tensions surrounding the Strait of Hormuz. Brent crude futures dropped more than 3% following the announcement. According to the CME FedWatch Tool, traders see a 90% probability of a rate increase in December. This is up from a 61% chance before the Federal Reserve meeting last week. Nine out of 19 Fed policymakers think they'll need to increase the policy rate this year. Gold, despite its reputation as an inflation hedge, tends to lose appeal when interest rates increase, as it becomes less appealing relative to other investments that pay interest. Bank of America stated in a note published on Friday that the $6,000 per ounce gold target is 'unlikely', since the market would have to price rate increases into their prices to reach such levels. The original premise that underpinned the bank's bullish gold call -- an unorthodox U.S. Macro Policy -- remains intact, according to the statement. Silver spot rose by 0.5%, to $65.24 an ounce. Platinum gained 0.1%, to $1,666.45, and palladium fell 0.5%, to $1,251.92. (Reporting and editing by Leroy Leo, Vijay Kishore and Ashitha Shivprasad from Bengaluru)
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Metal prices boosted by hope for US-Iran agreement
Prices of industrial metals rose on Monday due to a?hopefulness that the initial U.S. - Iran talks would pave the way for a?deal to end the conflict. Benchmark copper prices on the London Metal Exchange were?up 0.3% to $13,635 per metric tonne by 1601 GMT. The price of copper, which is used as an indicator of economic health by investors, has increased more than 15 percent since March 23. Mediators said that U.S. officials and Iranian officials had made "encouraging" progress by agreeing on a 60-day timeline to end the war. But tensions remained over the Strait of Hormuz and?Lebanon after Tehran once again closed the waterway, and U.S. president Donald Trump threatened new attacks. Tom Price, Panmure Liberum analyst, said: "The market desperately wants to believe the U.S. - Iran war is over and is busy trying to price it in... But the reality is this ceasefire doesn't look robust." "We have definitely entered a period where the markets are trying to return to something that is similar to pre-war conditions. Investors are once again looking to the themes of pre-war copper." The copper prices have risen over the last few years due to forecasts for strong demand from data centres required for AI, grid investments and electric vehicles. Aluminium prices are expected to continue to be under pressure due to a rise in shipments from the Middle East. The Middle East is home 9% of global capacity for smelting. Aluminum prices have fallen 10% since the beginning of June, when concerns about Middle East supply and global shortages peaked. The LME cash contract premium over the 3-month forwards is narrowing, which indicates that there are fewer concerns about aluminium supplies. After reaching a '19-year peak above $104 per ton on 1 June, it is now around $10. Reduced oil prices will reduce the production costs of aluminium and zinc. Both are?highly energy-intensive. This, traders claim, will eventually weaken the price support and make it a "bearish factor". Aluminium fell 0.9% to $3.365 per ton. Zinc gained 1.2% to $4,600. Lead firmed up 0.5% to $2,964. Tin rose 0.4% to $53,500. Nickel rose 0.7% at $17,715. (Reporting and editing by Sonia Cheema, Jonathan Ananda).
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Oil prices fall as worries about rates offset optimism over Iran talks
Oil prices dropped on Monday as expectations of higher interest rates pushed U.S. Treasury Yields up. JD Vance, the U.S. vice president in Switzerland, said that Iran had agreed to allow inspectors of nuclear technology into the country. The talks could begin as early as this week. Officials from Qatar have said that progress has been made in developing a roadmap for a final agreement to be reached within 60 days. Wall Street's benchmark S&P 500 index and the Nasdaq fell on the day. This was due to the consumer discretionary and communication services stocks. The Dow rose. The Dow Jones Industrial Average rose 0.23%. The S&P 500 dropped 0.37%. And the Nasdaq Composite fell by 1.09%. The STOXX 600 Index in Europe was up by 0.56%. MSCI's global index of stocks rose by 0.02%. The apparent progress of the peace talks has boosted Asian stocks overnight. MSCI's broadest Asia-Pacific share index outside Japan closed up by 0.88%. Gerry Sparrow is the chief investment officer at Sparrow Capital Management. He said that markets are influenced by Fed's hawkish view and reduced expectations of Kevin Warsh, new Fed chair, reducing?rates. Sparrow stated that the market was surprised by the action of the new Fed Chair, as they had expected him to be more lenient on interest rates. Federal Reserve held interest rates at the same level on Wednesday, but policymakers are expecting a rise in borrowing costs this year due to growing concerns over inflation that is above the 2% target set by U.S. Central Bank. The yield on the benchmark U.S. 10 year notes increased by 4.39 basis points, to?4.495%. Brent crude futures fell by 3.8%, to $77.44 per barrel. This is far below the peak price of $126.41 in May. Sparrow stated that "the progress in the peace talks was good, but the only disappointment was the fact that the new Fed wasn't more accommodating during its latest announcement." UK POUND RISE AFTER STARMER?RESIGNS After Keir Starmer's resignation was announced, the pound and UK bonds rose. This paved the way for Britain to elect its seventh leader in ten years. The 10-year gilt yield dropped 3.37 basis points, to 4.808%. Andy Burnham, the former Manchester mayor, is considered to be the "favourite" candidate to succeed Starmer. However investors believe that a crucial question for nervous UK bond markets will be who becomes finance secretary. The euro fell 0.29%, to $1.14375 after reaching a three-month high on Friday of $1.1418. The dollar is 'flat' at 161.38 yen. Only the threat of Japanese interference prevents the currency from rising to its 40-year high 161.96 in 2024. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) rose by 0.08%. Gold spot rose 0.56%, to $4183.19 per ounce.
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The FOREX Dollar gains after US-Iran discussions, but the pound is choppy due to Starmer's exit.
The dollar rose on Monday, as the first round U.S.-Iran negotiations boosted?optimism about a possible peace deal. Meanwhile, the pound gained in choppy trade after British 'Prime Minister Keir?Starmer announced his resignation. JD Vance, the U.S. vice president, said that talks with Iranian officials held in Switzerland laid "a good foundation" for an eventual peace agreement despite tensions surrounding the Strait of Hormuz. U.S. crude dropped 2.61%, to $74.60 per barrel. Brent was down to $77.98 a barrel, a 3.21% drop on the day. However, the declines were kept in check by threats made by U.S. president Donald Trump to restart war, and the announcement from Tehran that they had closed the Strait of Hormuz. The dollar index (which measures the greenback against a basket currencies) rose by 0.06%, to 100.90. Meanwhile, the euro fell 0.24%, at $1.1444. POUND REVEALS AS POLITICAL UNCERTAINTY LOOMS Sterling recovered from a session-low of $1.318 after Labour leader Starmer announced he would step down, opening the door for Andy Burnham who could become the seventh prime minister in 10 years following the Brexit vote. Marc Chandler, Chief Market Strategist at Bannockburn Capital Markets, New York said: "I think that the bond market 'vigilantes' are a good way to guard against the next UK government moving too far left." The bond market is what will determine the credibility of a new government. The last rise in the sterling was 0.12%, to $1.3248. The Yen is nearing a 40-year low The dollar weakened 0.02% against the Japanese yen to 161.32 from 161.92, which was just a few cents shy of a two-year high reached last week. If the dollar were to break through 161,96, it would be at its lowest level since 1986. The Japanese currency experienced several sharp movements that saw the yen briefly strengthening?against?the greenback. Satsuki Katayama, the Japanese Finance Minister, said that after the Bank of Japan increased rates last week as was widely expected, authorities are prepared to react appropriately at any time to currency movements. The yen lost gains after a series of interventions that began on?April 30. A shift in focus from the Federal Reserve led traders to increase?expectations regarding rate increases this calendar year, favoring the dollar. Chandler said, "People should be alert for BOJ interventions and perhaps even supportive comments from America." On Monday, both Deutsche Bank and BofA global research?updated their Fed forecasts to include rate hikes in the month of September. BofA expects the central bank will raise rates 25 basis points in each of September, October, and December.
Ukraine says it struck Russian missile electronics plant, governor says five dead
Ukraine's military said that it hit a factory producing electronics for missiles in Russia’s border Voronezh Region on Monday. The?Russian area's governor reported five 'people' killed and dozens injured in the attack.
The Ukrainian military's missile attack on Voronezh is the latest long-range strike to hit Russia's defence industries.
The Ukrainian General Staff claimed that it used air-launched missiles to strike the facility. It described the facility as a "critical" component in Russia's defense production.
It posted on Telegram that "It produces electronics used in Russian weapons, in particular the Iskander tac missile system."
Alexander Gusev of Voronezh Region, in a Telegram message, described the main target as "an industrial establishment on the left side of the Voronezh River, the provincial capital."
"We suffered extremely heavy losses today. Gusev stated that five people died as a result a missile strike on the city. "Several dozen citizens requested medical assistance, but the majority were sent home once they received treatment."
Gusev reported that 10 apartment buildings as well as six private residences were damaged. The governor had earlier claimed that Russian air defences destroyed several high speed targets above the city.
A video taken from a passing car, and verified by?, shows large plumes of smoke rising out of the factory in at least two places.
Robert Brovdi said that his drone units took part in the operation along with?other forces.
In the last few months, Kyiv has targeted several Russian military production facilities.
Russian air attacks have a much greater reach in Ukraine despite Kyiv’s increased capabilities. A top Ukrainian drone manufacturer, General 'Cherry', revealed on Monday that one of its factories was hit. This is a rare disclosure. Max Hunder, Kyiv bureau and Bahareh Khosabandeh, Additional reporting by Ron Popeski, Cynthia Osterman, Andrew Cawthorne and Daniel Flynn.
(source: Reuters)