2025-02-24 05:35
A look at the day ahead in European and global markets from Wayne Cole. The market reaction has been relief at the election of the relatively mainstream CDU/CSU conservatives in Germany's election, with DAX futures now up 1.4% after a slow start. The euro has added 0.5% to a one-month high at $1.0528, clearing the previous top of $1.0514. The next target is $1.0534. Conservative leader Friedrich Merz still has to form a coalition government and it is not yet clear whether he will need one or multiple partners, with the latter sure to take more time. Analysts assume a straightforward coalition with the SPD would be the most favoured outcome, but there's a lot of horse trading to come first. The German Ifo survey due later could show a pick-up in anticipation of a Merz win. German leadership is sorely needed given question marks over President Donald Trump's support for NATO and Ukraine. European Union leaders are set to hold an extraordinary summit on March 6 to discuss additional support for Ukraine and how to pay for Europe's newly burgeoning defence requirements. This will almost certainly require more debt issuance and some relaxation of EU budget rules. Maybe they could bring back War, sorry, Defence Bonds to get patriotic retail investors involved. Across the Atlantic, just the threat of tariffs was enough to slam the services PMI sharply lower and it's likely to get worse with reports the White House is actually pressuring Mexico to raise its own tariffs on Chinese imports. A jump in U.S. consumer inflation expectations to the highest since 1995 will not be welcomed by Fed policy makers, who have constantly comforted themselves with the assertion that expectations were "well anchored". There are at least nine Fed speakers this week so there's plenty of scope for verbal warnings ahead of the PCE inflation report on Friday. Wall Street futures have at least bounced in Asian trade, perhaps on hopes Nvidia's (NVDA.O) , opens new tab results on Wednesday will justify its stratospheric valuation. Investors are looking for fourth-quarter sales around $38.5 billion and first-quarter guidance around $42.5 billion, while any caution on future AI capex would be a downside risk. Key developments that could influence markets on Monday: - German Ifo survey of business for Feb, EU final CPI data - BoE research conference where Deputy Governors Dave Ramsden and Clare Lombardelli speak, along with Bank of Canada Deputy Governor Toni Gravelle. BoE committee member Swati Dhingra speaks. Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-02-24/
2025-02-24 05:16
Spot gold hits record high of $2,956.15/oz Investors wait for US PCE data due on Friday SPDR Gold holdings at 904.38 metric tons, highest since August 2023 Feb 24 (Reuters) - Gold prices surged to a record high on Monday, driven by safe-haven demand amid concerns over U.S. President Donald Trump's tariff plans, with additional support coming from inflows into the world's top gold-backed exchange-traded fund. Spot gold rose 0.4% to $2,947.48 an ounce as of 01:55 p.m. ET (1854 GMT). It hit $2,956.15 earlier in the session — its eleventh record high in 2025. U.S. gold futures settled 0.3% higher at $2,963.20. U.S. dollar index (.DXY) , opens new tab touched its lowest level since December 10 earlier in the session, making bullion more affordable for buyers using other currencies. "Investors believe that in the coming weeks and months or longer than that gold prices are going to continue to appreciate," said Jim Wyckoff, a senior market analyst at Kitco Metals. "The path of least resistance for gold remains sideways to higher and as long as uncertainty persists, gold is likely to continue rising." U.S. President Donald Trump warned of imminent new tariffs last week. These plans are broadly viewed as inflationary and capable of sparking trade wars, thereby increasing the demand for safe-haven assets like bullion. SPDR Gold Trust , the world's largest gold-backed ETF, said its holdings rose to 904.38 metric tons on Friday, the highest since August 2023. Prices holding above $2,950 per ounce are drawing investor focus toward the $3,000 mark, with the metal up more than 12% in 2025. Investors will watch Friday's U.S. Personal Consumption Expenditures report, the Fed's preferred inflation gauge. The Fed is likely to wait until next quarter before cutting rates again, according to a majority of economists in a Reuters poll who previously expected a March cut. Also, on the radar are speeches from at least nine U.S. central bank officials this week, who are expected to reinforce a cautious stance on further rate cuts. Spot silver fell 0.7% to $32.32 an ounce, platinum shed 0.7% to $962.70 and palladium lost 2.6% to $944.19. Sign up here. https://www.reuters.com/markets/commodities/gold-prices-retreat-traders-lock-profits-us-data-focus-2025-02-24/
2025-02-24 05:14
KUALA LUMPUR, Feb 24 (Reuters) - Palm oil's share of India's annual edible oil imports is set to drop below soft oils for the first time as its rising premium over soyoil and sunflower oil pushes refiners toward more affordable alternatives, the head of an industry body said. Lower palm oil imports by India, the world's biggest buyer of vegetable oils, could weigh on benchmark Malaysian palm oil prices and support U.S. soyoil futures . "Palm oil is getting pricey due to supply issues, so buyers are naturally shifting to soyoil and sunflower oil instead," said Sanjeev Asthana, president of the Solvent Extractors' Association of India (SEA), in an interview with Reuters. The country's palm oil imports in the 2024/25 marketing year ending in October 2025 could fall to as low as 7.5 million metric tons, the lowest in five years, said Asthana, who is also the CEO of Patanjali Foods Ltd (PAFO.NS) , opens new tab. Palm oil is losing market share to soft oils, which are projected to account for a slightly larger volume of imports, he said. Palm oil accounted for 56% of India's total edible oil imports in the last marketing year, but in the first three months of the current year its share fell to 43%, the SEA data showed. Palm oil has been trading at a premium over rival oils for the past few months as supplies from top producers Indonesia and Malaysia were affected by floods at a time when Jakarta has also moved to increase the tropical oil's use in biodiesel. The current premium for palm oil is not sustainable, and once it begins trading at a discount, likely within two months, Indian buyers will increase their imports, Asthana said. Soyoil imports in the current year could increase by 1 million to 1.5 million tons from last year's 3.4 million tons, while sunflower oil imports may rise slightly from last year's record level of 3.5 million tons, he said. India meets nearly two-thirds of its vegetable oil demand through foreign sourcing. It buys palm oil from Indonesia, Malaysia and Thailand, while soyoil and sunoil come from Argentina, Brazil, Russia and Ukraine. The rising availability of local oils, which will help fulfill incremental demand, is expected to keep the country's total edible oil imports steady at around 16 million tons this year, Asthana said. Sign up here. https://www.reuters.com/markets/commodities/indias-annual-palm-oil-imports-fall-behind-soft-oils-first-time-industry-2025-02-24/
2025-02-24 05:01
US imposes additional sanctions targeting Iranian oil industry Iraq reaffirms commitment to OPEC+ agreement Crude market structure implies near-term supply tightness War in Ukraine remains in focus Trump says US 'on time' with tariffs against Canada, Mexico Feb 24 (Reuters) - Oil prices settled higher on Monday as fresh U.S. sanctions on Iran and a commitment to compensate for overproduction by Iraq added to concerns of near-term supply tightness, helping the market recover some of Friday's steep losses. Brent crude futures settled up 35 cents, or 0.5%, at $74.78 a barrel. U.S. West Texas Intermediate crude futures gained 30 cents, or 0.4%, to $70.70. On Friday Brent notched its lowest close since February 6 while WTI had its lowest settlement so far this year. On Monday, the U.S. Treasury imposed a fresh round of sanctions targeting Iran's oil industry, hitting brokers, tanker operators, and shippers who sell and transport Iranian petroleum. That might have had a modest impact on oil prices, along with the Iraqi oil ministry's reaffirmation of its commitment to the OPEC+ group's supply agreement, UBS analyst Giovanni Staunovo said. He cautioned, however, that Iranian crude oil exports remain elevated. "Time will tell if (the sanctions) impact exports," he said. Iraq said it would present an updated plan to compensate for any overproduction of its OPEC+ quotas in recent months. Iraq on Sunday said it will export 185,000 barrels per day from Kurdistan's oilfields through the Iraq-Turkey pipeline once oil shipments resume. Oil prices were bound to recover from the prior session's steep selloff, when expectations of the resumption in northern Iraqi exports and of an end to the war in Ukraine pulled benchmarks more than $2 lower, Commodity Context analyst Rory Johnston said. The market structure has also flashed signs of near-term supply tightness, he added. The premium of front-month Brent futures over the next month's contract was at its highest on Monday since February 11, having climbed steadily over the past week. Others cautioned oil prices could stay under pressure from talks to end the Ukraine war, which could pave the way for more Russian oil onto the market, and a slew of U.S. tariff measures, which could weigh on economic activity and crude oil demand. U.S. President Donald Trump said on Monday the U.S. is close to a minerals deal with Ukraine as he and French President Emmanuel Macron held talks that covered prospects for ending the Ukraine war despite stark differences on how to proceed. Trump said Washington is 'on time' with tariffs against Canada and Mexico, responding to a question about the deadline ending a previous pause on such action which expires next week. "We're just clearing out room to trade lower and I would be cautious if I was a buyer in the market today," Mizuho analyst Robert Yawger said. "Just sitting here, waiting for the next big event to happen, and obviously there are plenty of big ones out there that could hit any moment." Sign up here. https://www.reuters.com/business/energy/oil-dips-pending-kurdistan-supply-resumption-2025-02-24/
2025-02-24 03:19
SINGAPORE, Feb 24 (Reuters) - Dalian iron ore futures prices snapped a four-day winning streak on Monday as increasing levies on Chinese steel dampened demand prospects for the key steelmaking ingredient, though decreasing portside inventories in China limited the fall. The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) ended daytime trade 0.77% lower at 832.5 yuan ($114.95) a metric ton. The benchmark March iron ore on the Singapore Exchange ticked 0.18% lower at $108.3 a ton as of 0710 GMT. Vietnam will impose a temporary anti-dumping levy of up to 27.83% on some steel products from China, according to a trade ministry document seen by Reuters. The move comes after U.S. President Donald Trump announced 25% tariffs on all steel imports earlier this month, with South Korea following suit and provisionally imposing tariffs on Chinese steel plates last week. Meanwhile, China stocks slipped on Monday, weighed down by concerns over President Donald Trump's new memorandum signed last week that restricts Chinese investments in strategic areas, escalating trade tensions. The capacity utilisation rate of the blast furnace steel mills surveyed decreased for a second straight week, with daily hot metal production decreasing 0.21% on-week to 2.28 million as of February 20, Mysteel data showed. Hot metal output is typically used to gauge iron ore demand. Still, global iron ore shipments have fallen slightly year-on-year, affected by Australian weather, Chinese consultancy Hexun Futures said in a note, adding that port inventories are expected to fall. Portside iron ore inventories in China fell 1.15% to 145.8 million metric tons as of February 21, weekly data tracked by SteelHome showed. Other steelmaking ingredients on the DCE fell, with coking coal and coke down 1.99% and 2.89%, respectively. Steel benchmarks on the Shanghai Futures Exchange posted losses. Rebar edged down nearly 0.8%, hot-rolled coil declined 1.24%, while both stainless steel and wire rod dipped 0.23%. ($1 = 7.2422 Chinese yuan) Sign up here. https://www.reuters.com/markets/commodities/iron-ore-snaps-four-day-rise-due-more-duties-chinese-steel-2025-02-24/
2025-02-24 03:04
MUMBAI, Feb 24 (Reuters) - The Indian rupee is likely to inch up at open on Monday, boosted by the drop in the dollar and U.S. Treasury yields after economic data fuelled worries over the U.S. growth outlook. The 1-month non-deliverable forward indicated that the rupee will open at 86.60-86.64 to the U.S. dollar compared with 86.7125 in the previous session. U.S. business activity nearly stalled in February amid mounting fears over tariffs on imports and cuts in federal spending, data released on Friday showed. Separately, data revealed that U.S. consumer sentiment dropped more than expected to a 15-month low and inflation expectations rocketed. "Expectations for future activity weakened, while longer-run inflation expectations are at risk of becoming de-anchored. That was the clear message from the subset of soft U.S. economic surveys," ANZ Bank said in a note. The 10-year U.S. yield declined about 8 basis points on Friday, while U.S. equities plunged. The dollar index dropped to 106.16 - the lowest since mid-December - in Asia trading on Monday. Meanwhile, the euro rose against the U.S. dollar following the results of Germany's elections. Asian currencies were mostly higher. The rupee "probably will not do much" after the opening up move based on the weaker dollar, a currency trader at a bank said. The rupee last week was in an 86.4750-86.98 range. The trader reckons that the range will "broadly hold up" this week. FX SWAP The Reserve Bank of India will conduct a longer duration dollar/rupee buy/sell swap to infuse durable liquidity into the banking system next week, the central bank said on Friday. The dollar/rupee forward premiums are expected to soften post RBI's swap. This is the second swap auction by the central bank in a month. KEY INDICATORS: ** One-month non-deliverable rupee forward at 86.84; onshore one-month forward premium at 17.5 paise ** Dollar index down at 106.12 ** Brent crude futures at $74.4 per barrel ** Ten-year U.S. note yield dropped to 4.43% on Friday ** As per NSDL data, foreign investors sold a net $404.6mln worth of Indian shares on Feb. 20 ** NSDL data shows foreign investors sold a net $14.7mln worth of Indian bonds on Feb. 20 Sign up here. https://www.reuters.com/markets/currencies/rupee-rise-after-dollar-hits-over-2-month-low-us-yields-fall-2025-02-24/
