Money & Commodities Archives - The Financial Daily

Dollar steady as traders weigh escalating Iran war, ceasefire hopes

Webmaster — Tue, 07 Apr 2026 04:31:58 +0000

SINGAPORE: The dollar was steady on Monday, while the yen flirted with the crucial 160 per dollar level, as nervous investors took stock of the escalating Iran war, with all eyes on the latest deadline from U.S. President Donald Trump to reopen the Strait of Hormuz.
In an expletive-laden Easter Sunday social media post, Trump threatened to target Iran’s power plants and bridges on Tuesday if the strategic waterway is not reopened, setting a precise deadline of 8 p.m. Tuesday Eastern Time (0000 GMT).
With most of Asia and Europe closed for holiday on Monday, liquidity is likely to be thin, with investor focus on the possibility of a ceasefire after a media report suggested a last-ditch push from negotiators was underway.
“Trump’s latest deadline itself is bearish not because investors think war is guaranteed tomorrow if Iran does not open the strait, but because every new ultimatum makes the disruption look longer, stickier and more macro-negative,” said Charu Chanana, chief investment strategist at Saxo in Singapore.
The euro was at $1.1523, while sterling last fetched $1.3211. The dollar index , which measures the U.S. currency against six rivals, was slightly lower at 100.12.
The Australian dollar was 0.3% higher at $0.69045, wobbling near the two-month low that it hit last week.
In the kind of mixed messaging that has baffled supporters, foes and financial markets alike, Trump told Fox News on Sunday that Iran was negotiating, with a deal possible by Monday.
Axios reported the U.S., Iran and regional mediators are discussing terms of a potential 45-day ceasefire that could lead to a permanent end to the war.
Global markets have been rattled since the U.S.-Israel war on Iran broke out at the end of February, with Tehran effectively closing the Strait of Hormuz, a key waterway that is a thoroughfare through which about a fifth of the world’s total oil and liquefied natural gas passes.
“If the strait is reopened fully around that time (Trump’s Tuesday deadline), oil will fall sharply and risk will rally hard,” said Prashant Newnaha, senior rates strategist at TD Securities.
“However, if the U.S. escalates, expect global markets to reprice sharply. It’s wait-and-watch in what’s turning out to be a binary event.”

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Copper breaks above $10,000 for the first time in two years

Webmaster — Fri, 26 Apr 2024 21:11:17 +0000

LONDON: Copper prices in London hit a two-year high and surpassed a strong resistance level of $10,000 a metric ton on Friday after Shanghai prices hit a record high on fund buying.
Three-month copper on the London Metal Exchange was up 1.4% at $10,006 a ton by 0958 GMT after peaking at $10,033.50 for its highest since April 2022. The most traded June copper contract on the Shanghai Futures Exchange hit a record high of 81,180 yuan and closed 2.2% up at 81,100 yuan ($11,192.07).
Copper, used in power and construction, attracted additional attention from investors after BHP Group’s takeover proposal to Anglo American, which the London-listed miner rejected on Friday, saying the $39 billion bid undervalued its future prospects.
“Speculation over supply shortfalls in copper are pushing prices to new highs. At the same time, investors are turning optimistic about demand from the green energy sector. BHP’s bid for Anglo American highlights the looming supply squeeze,” said ING commodities analyst Ewa Manthey.
Copper rises on funds inflow, potential supply shortage
In the short-term, however, there are still concerns about demand from top consumer China.
“Premiums for imported cargoes are at record lows, inventories are high and the expected pick-up in demand has not materialised yet,” Manthey added.
In another sign of relatively weak near-term demand, the discount for LME cash copper over the benchmark three-month contract closed on Thursday at $122.85 a ton, up from $78.76 a week ago. It hit a record $134.50 on April 9.
On a weekly basis, copper is up 1.3% and on track for its fourth consecutive week of growth.
LME aluminium rose 1.4% to $2,599.50 a ton, but was on track for a 2.6% weekly decline for its worst week since January. It previously registered six straight weekly gains.
Zinc gained 1.5% to $2,890 after hitting a one-year high, lead advanced 1.2% to $2,233.50 after touching its highest in five months and nickel was up 1.1% at $19,375.
Tin lost 6% week on week and was set for its biggest weekly decline since September. It was last up 1.7% at $33,230 a ton.

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Global LNG: Asia spot LNG at fresh 3-month high on supply concerns

Webmaster — Sat, 20 Apr 2024 20:57:33 +0000

LONDON: Asian spot liquefied natural gas (LNG) prices rose this week to a new three-month high due to supply concerns amid tensions in the Middle East and a drop in feedgas deliveries to two LNG terminals in the United States.
The average LNG price for June delivery into north-east Asia rose to $10.50 per million British thermal units (mmBtu), its highest since Jan. 12, industry sources estimated.
Prices hit a 15-week high earlier this week, slightly exceeding $11.00/mmBtu, tracking gains in European gas markets, but have softened since then.
“Spot gas prices have been strong over the last week due to the ongoing conflict in the Middle East and its impact on oil prices; a series of feedgas dips at U.S. LNG plants; Norwegian outages and Egypt’s switch back to import mode,” said Alex Froley, senior LNG analyst at data intelligence firm ICIS.
“Higher oil prices would push up the price of oil-linked LNG import contracts still common in Asia. The U.S. feedgas falls could indicate lower production and exports, though they may only be short-lived,” he added.
Explosions echoed over an Iranian city on Friday in what sources described as an Israeli attack, but Tehran played down the incident and indicated it had no plans for retaliation – a response that appeared gauged towards averting region-wide war.
The rise of LNG prices above the $10.00/mmBtu threshold again has curbed Asian buyers’ demand for spot cargoes, said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
“In turn, this closed the inter-basin arbitrage again even with low spot charter rates – which also fell slightly over the week – already heavily limiting the premium needed for Asian markets to draw Atlantic spot supply away from Europe,” he said.
In Europe, gas prices saw strong gains earlier in the week, mainly driven by concerns over Freeport LNG and cooler weather forecast for the rest of April, suggesting ample scope for a brief mid/late April resurgence in heating demand, Good added.
On March 20, Freeport said its Train 2 liquefaction unit had been shut down, while Train 1 will be taken down imminently as it expects inspections and any subsequent repairs at both the units to be completed by May.
Traders said there was lower feedgas at Sabine Pass LNG export unit in Cameron Parish, Louisiana, but said it was likely a short-term outage.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in June on an ex-ship (DES) basis at $9.996/mmBtu on April 18, a $0.12/mmBtu discount to the gas price at the Dutch TTF hub.

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Palm oil tracks rival oils higher; output expectations,exports cap gains

Webmaster — Tue, 19 Mar 2024 20:24:35 +0000

JAKARTA: Malaysian palm oil futures climbed higher on Monday as stronger rival oils helped boost prices, but smaller-than-expected export volumes and higher output estimates in certain regions capped gains.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 0.47% to 4,240 ringgit ($899.07) by the afternoon closing.
It rose as much as 1.89% earlier in the session before paring some of its gains.
The contract rose to track Chicago soybean oil and Dalian’s palm oil contract’s earlier gains, but a high production figure from the Southern Peninsular Palm Oil Millers Association (SPPOMA) weighed on sentiment, a Kuala Lumpur-based trader said.
The SPPOMA estimated production in March 1-15 jumped 38.8% from the same period last month, traders said.
The export of Malaysian palm oil products for March 1-15 rose 8.4% from shipments in February 1-15, independent inspection company AmSpec Agri Malaysia said on Friday, while cargo surveyor Intertek Testing Services reported a 3.3% increase in the same period.
Palm oil steady after highest close in more than a year
“As shown from earlier export figures, exports were slower than traders’ expectations,” the trader said.
Dalian’s palm oil contract lost 0.22%, reversing some of its 2.28% gains earlier in the session.
Its most-active soyoil contract rose 0.49%, while soyoil prices on the Chicago Board of Trade dropped 0.24% after hitting its highest level in nearly three months.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may break resistance at 4,326 ringgit and rise into a range of 4,378 ringgit to 4,410 ringgit per metric ton, Reuters technical analyst Wang Tao said.
JAKARTA: Malaysian palm oil futures climbed higher on Monday as stronger rival oils helped boost prices, but smaller-than-expected export volumes and higher output estimates in certain regions capped gains.JAKARTA: Malaysian palm oil futures climbed higher on Monday as stronger rival oils helped boost prices, but smaller-than-expected export volumes and higher output estimates in certain regions capped gains.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 0.47% to 4,240 ringgit ($899.07) by the afternoon closing.
It rose as much as 1.89% earlier in the session before paring some of its gains.
The contract rose to track Chicago soybean oil and Dalian’s palm oil contract’s earlier gains, but a high production figure from the Southern Peninsular Palm Oil Millers Association (SPPOMA) weighed on sentiment, a Kuala Lumpur-based trader said.
The SPPOMA estimated production in March 1-15 jumped 38.8% from the same period last month, traders said.
The export of Malaysian palm oil products for March 1-15 rose 8.4% from shipments in February 1-15, independent inspection company AmSpec Agri Malaysia said on Friday, while cargo surveyor Intertek Testing Services reported a 3.3% increase in the same period.
Palm oil steady after highest close in more than a year
“As shown from earlier export figures, exports were slower than traders’ expectations,” the trader said.
Dalian’s palm oil contract lost 0.22%, reversing some of its 2.28% gains earlier in the session.
Its most-active soyoil contract rose 0.49%, while soyoil prices on the Chicago Board of Trade dropped 0.24% after hitting its highest level in nearly three months.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may break resistance at 4,326 ringgit and rise into a range of 4,378 ringgit to 4,410 ringgit per metric ton, Reuters technical analyst Wang Tao said.
JAKARTA: Malaysian palm oil futures climbed higher on Monday as stronger rival oils helped boost prices, but smaller-than-expected export volumes and higher output estimates in certain regions capped gains.

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Swiss National Bank sold forex worth nearly $150 billion in 2023

Webmaster — Tue, 19 Mar 2024 20:22:12 +0000

ZURICH:The Swiss National Bank sold foreign currency worth 132.9 billion Swiss francs ($149.51 billion) in 2023, the central bank said on Tuesday, showing its increased emphasis on supporting the Swiss franc as a shield against imported inflation.
The figure was a massive increase from 22.3 billion francs in foreign currencies sold by the SNB in 2022, when the bank started selling off some of its huge foreign currency holdings.
The SNB’s strategy has paid off, with Swiss inflation within its 0-2% target range for last nine months.
“The SNB’s foreign currency sales contributed to the Swiss franc initially appreciating roughly in line with inflation differentials against other countries,” the SNB said on Tuesday.
“In doing so, they prevented a weakening of the Swiss franc in real terms and thus helped in tightening monetary conditions,” it added. “Towards the end of the year, the inflation rate fell significantly.”
The SNB said it would no longer focus on foreign currency sales after achieving its goal. The central bank is due to announce its next monetary policy decisions on Thursday.

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Bitwise bitcoin ETF draws most inflows on first trading day

Webmaster — Tue, 16 Jan 2024 04:56:39 +0000

NEW YORK: Crypto asset manager Bitwise said on Friday that $240 million flowed into its spot bitcoin exchange-traded fund (ETF), the most of the 10 such products that began trading on Thursday.
The U.S. Securities and Exchange Commission approved 11 spot bitcoin ETFs this week, including BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF, among others, after a decade-long tussle with the digital asset industry.
On the first day of trading, $4.6 billion worth of shares changed hands across all the products, according to LSEG data from Thursday which tracks total trading activity, including inflows and outflows. Reuters could not immediately verify Bitwise’s data.
Grayscale, BlackRock and Fidelity dominated total trading on Thursday, the LSEG data showed.
The products mark a watershed moment for the cryptocurrency industry that is set to test whether digital assets – still viewed by many professionals as risky – can gain broader acceptance as an investment. The market is closely watching inflows during their first few days of trading.
“We think that this will become a market measured in the tens of billions of dollars,” said Matt Hougan, chief investment officer at Bitwise.
The ProShares Bitcoin Strategy ETF, the first bitcoin futures ETF approved by the SEC in 2021, accumulated $1 billion in assets within its first days of trading.

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Dollar slides after slowing US jobs growth in July

Webmaster — Sat, 05 Aug 2023 20:45:18 +0000

NEW YORK: The dollar fell on Friday, paring almost all the week’s gains, after slowing U.S. jobs growth in July encouraged hopes of a soft economic landing but higher wages suggested the Federal Reserve may need to keep interest rates higher for longer.
The U.S. economy added fewer jobs than expected last month. However, solid wage gains and a drop in unemployment to 3.5% signaled continued tightness in the labor market.
Nonfarm payrolls increased by 187,000 jobs last month, the Labor Department’s survey of households showed, less than a Reuters’ survey of economists who forecast growth of 200,000.
Downward revisions in May and June job growth suggested demand for labor was slowing after the Fed’s hefty rate hikes. But with 1.6 job openings for every unemployed person, the moderation in hiring might indicate companies are failing to find workers.
The softer-than-expected jobs number halted this week’s surge in Treasury yields and stopped the dollar’s recent climb, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
“There’s a short squeeze in the foreign currencies, a bit of a long-dollar liquidation encouraged by a sharp drop in interest rates,” he said. “The dollar’s upside correction is almost over.”
Chandler said next week’s Consumer Price Index (CPI) report could show the first year-over-year rise in inflation since June 2022.
The market was positioned for a blowout number after a private payrolls report and still-low jobless claims data earlier this week, said Kathy Lien, managing editor of 60 Second Investor in New York.
“The case is still for a soft landing at worst,” Lien said. “But all of today’s data leaves the door open for another rate hike from the Federal Reserve.”
The dollar index , a measure of the U.S. currency against six peers, fell 0.4% after climbing on Thursday to 102.84, the highest since July 7. The decline was the dollar’s biggest single-day loss in three weeks.
The U.S. labor market is trending in the right direction, said Marvin Loh, senior global macro strategist at State Street in Boston.

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OPEC+ set for brief respite before tough decision on the new deal

Webmaster — Tue, 28 Jun 2022 21:52:29 +0000

DUBAI: The OPEC+ alliance is set for an easy meeting this week as it cruises to the conclusion of a two-year pact on oil supplies. The respite won’t last long.
When it gathers on Wednesday and Thursday, the 23-nation group led by Saudi Arabia is expected to rubber-stamp another production increase scheduled for August, completing the reversal of vast output cuts made at the outset of the pandemic in 2020.
But in the weeks ahead, the deliberations of the Organization of Petroleum Exporting Countries and its partners will grow more complicated. They must weigh pressure to cool $110-a-barrel prices by filling in the supply gap created by sanctions on fellow member Russia against the need to marshal their dwindling reserves of spare production capacity.
The eventual decision may hinge on next month’s visit to the kingdom by US President Joe Biden, who is reversing an initially tough diplomatic stance against Riyadh in the hope of enlisting its help in taming inflation and isolating Moscow. In the mean time, the Saudis are enjoying a spectacular revenue windfall of $1 billion a day.
“This week’s OPEC+ virtual meeting will stick to the script and proceed as planned,” said Helima Croft, chief commodities strategist at RBC Capital Markets. “The key question is what will the group do with its remaining spare capacity given the very limited number of barrels available.”
Oil prices have soared more than 60% this year as crude production and refining facilities around the world fail to keep pace with the post-pandemic recovery in fuel demand. On top of that, the backlash against Russia over its invasion of Ukraine poses the biggest supply disruption in decades.
The rally is threatening to tip a fragile global economy into recession, while battering consumers with unprecedented gasoline prices, which in the US have risen above $5 a gallon during the peak holiday driving season causing political peril for Biden.
The Saudis have shown some willingness willing to help soften the pain.

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US dollar rides to two-decade highs as yields rise

Webmaster — Mon, 09 May 2022 22:48:43 +0000

LONDON: The U.S. dollar climbed to a two-decade high on Monday as rising U.S. Treasury yields prompted hedge funds to add to their bullish bets while the Chinese yuan weakened below 6.77 levels after weak trade data.
The latest leg of the dollar’s rise, which began after the Federal Reserve raised interest rates by 50 bps last week, has hit currencies that had previously been immune to broad dollar rallies, including the Australian dollar, the yuan and even cryptocurrencies.
Against a basket of major currencies, the dollar topped 104.19 on Monday for the first time since July 2002, extending its almost 9% rise this year.
While it trimmed gains to 103.87 in mid-London trading on reports of some emerging market central banks intervening to support their currencies, the dollar’s uptrend looked intact, said traders.
“It has been a one-way street all morning with Treasury yields nearing the 3.2% levels and the dollar benefiting from that,” a trader at a European bank in London said.
Treasury yields extended their rise for a third consecutive session with yields on benchmark 10-year debt pushing further above 3% to fresh 3-1/2 years. They have doubled in the past two months.
“It is hard to go against the current momentum for higher yields and U.S. dollar strength in the near term,” Mizuho strategists said in a daily note.
Even though the peak in U.S. interest rates in the current hiking cycle is seen at around 3.5% in mid-2023, the speed of the Federal Reserve’s rate hiking cycle is far greater than its peers at the Bank of England and the European Central Bank.
In the euro zone, recent hawkish comments by policymakers have prompted investors to start repricing rate expectations even though projected rate hikes in Europe will lag the United States by a big margin.
Money markets expect the United States to raise interest rates by another 200 bps during the remainder of the year, taking benchmark rates to nearly 3%, while a projected 92 bps of hikes by the ECB will just take its benchmark deposit rate into positive territory.
The Fed hiked its benchmark funds rate by 50 basis points last week and strong jobs data has reinforced bets on further big hikes, with inflation figures due on Wednesday in focus as the next opportunity for an upside surprise.
Latest weekly positioning data suggests yet more upside for the dollar with net long bets still nearly half below their peak in late 2014.
The growth-sensitive Australian dollar fell 1% to $0.6999, its lowest since February. Sterling and the New Zealand dollar hit 22-month lows, while the euro and yen were barely above recent major troughs.

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OPEC+ weighs output policy amid oil price slide, omicron fears

Webmaster — Thu, 02 Dec 2021 20:56:47 +0000

LONDON/MOSCOW: OPEC and its allies will decide on Thursday whether to release more oil into the market or restrain supply amid big gyrations in crude prices, a U.S. release from oil reserves and fears about the new Omicron coronavirus variant.
Oil prices tumbled to near $70 a barrel on Tuesday, down from three-year highs above $86 in October. Prices posted their biggest monthly decline in November since the start of the pandemic, as the new variant raised fears of a glut.
Benchmark Brent was trading around $72 on Wednesday.
OPEC and its allies have been at odds with the United States, which has asked the group to raise output to help the global economy. Producers said they didn’t want to hamper a fragile energy industry recovery with a new glut.
“In these uncertain times, it is imperative that we – together with the non-OPEC countries … – remain prudent in our approach and prepared to be proactive as market conditions warrant,” Diamantino Pedro Azevedo, Angola’s energy minister and rotating OPEC president, said in an opening address to OPEC.
Wednesday’s meeting of ministers from the Organization of the Petroleum Exporting Countries ended without any recommendation on output policy, three OPEC sources said.
On Thursday, the OPEC+ alliance, which includes Russia and other producers, will likely take a policy decision.
Russia and Saudi Arabia, the biggest OPEC+ producers, said ahead of this week’s meetings that there was no need for a knee-jerk reaction to amend policy. Iraq said OPEC+ was expected to extend existing output policy in the short term.
MUTED IMPACT
Since August, the group has been adding an additional 400,000 barrels per day (bpd) of output to global supply, as it gradually winds down record cuts agreed in 2020, when demand cratered because of the pandemic.
“Generally, the impact of Omicron seems to be jet-fuel related for now, particularly in Africa and Europe,” OPEC+ said in a report before the meeting.
Many countries have barred travellers from southern Africa and some European states have imposed new coronavirus restrictions.

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