2025-05-29 06:38

Oil volatile after earlier gains on US court blocking Trump's tariffs OPEC+ could hike oil output for July, say sources and analyst US crude, gasoline and distillate inventories fall, EIA says NEW YORK, May 29 (Reuters) - Oil prices fell over 1% on Thursday, retreating from earlier gains, as investors weighed the potential effects of a U.S. court ruling that blocked the most sweeping of President Donald Trump's tariffs. The market also watched for potential new U.S. sanctions curbing Russian crude flows and an OPEC+ decision on hiking output in July. Sign up here. Brent crude futures settled down 75 cents, or 1.2%, to $64.15 a barrel. U.S. West Texas Intermediate crude fell 90 cents, or 1.5%, to $60.94 a barrel. Prices had earlier risen after a U.S. court on Wednesday ruled that Trump overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium using a different statute. Futures steadily retreated throughout the session, however, as senior Trump administration officials downplayed the impact of the ruling and insisted there are other legal avenues to employ. "The initial market reaction to the U.S. trade court's Trump reciprocal tariffs dissipated appreciably as the session progressed," Jim Ritterbusch of U.S. energy consultancy Ritterbusch and Associates said in a note. "One interpretation of this response could be that not much has changed and that the uncertainty surrounding the Trump tariffs from day one will continue as the tariffs work their way through the court system and several sectoral tariffs such as autos and auto parts remain intact." Weighing on oil futures on Thursday, IEA Executive Director Fatih Birol said in an interview with Bloomberg that demand for oil was considerably weak in China and developments in Russia and Iran were "question marks" for oil prices. The U.S. and Iran are holding talks meant to rein in Iranian nuclear activities that have rapidly accelerated since Trump pulled Washington out of a 2015 deal between Iran and major powers that strictly limited those activities. "We've seen a lot of back and forth concerns about the Iran situation, whether we’re getting closer to a conflict or a peace deal," said Phil Flynn, senior analyst with Price Futures Group. "We’re moving technically and emotionally right now in a lot of these markets." OPEC+ IN FOCUS On the oil supply front, the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, could agree on Saturday to accelerate oil production hikes in July. "We're assuming the group will agree on another large supply increase of 411,000 barrels per day. We expect similar increases through until the end of the third quarter, as the group increases its focus on defending market share," ING analysts said in a note. However, there are also concerns about potential new sanctions on Russian crude. Adding to supply risks, Chevron (CVX.N) , opens new tab has terminated its oil production and a number of other activities in Venezuela, after its key license was revoked by the Trump administration in March. Venezuela in April cancelled cargoes scheduled to Chevron, citing payment uncertainties related to U.S. sanctions. Chevron was exporting 290,000 bpd of Venezuelan oil, or over a third of the country's total, before that. "From May through August, the data points to a constructive, bullish bias with liquids demand set to outpace supply," Mukesh Sahdev, global head of commodity markets at Rystad Energy, said in a note, expecting demand growth to outpace supply growth by 600,000 to 700,000 bpd. Oil futures on Thursday pared some losses after Energy Information Administration data showed U.S. crude inventories posted a surprise draw in the latest week, falling by 2.8 million barrels to 440.4 million barrels. Analysts had expected a 118,000-barrel rise. In Canada, a wildfire in the province of Alberta has forced residents of a small town to evacuate and prompted a temporary shutdown of some oil and gas production, which could reduce supply. https://www.reuters.com/business/energy/oil-prices-climb-us-court-blocks-trump-tariffs-2025-05-29/

2025-05-29 06:33

US weekly jobless claims rise more than expected Trump tariff push given new twist by court setback US PCE due on Friday May 29 (Reuters) - Gold prices rose in volatile trading on Thursday, aided by softer jobs data, while market participants also digested a court ruling that blocked most of U.S. President Donald Trump's tariffs. Spot gold reversed course to rise 0.9% to $3,318.69 an ounce, as of 02:35 p.m. ET (1835 GMT), after hitting its lowest since May 20 earlier in the session. Sign up here. U.S. gold futures were settled 0.6% higher at $3,343.90. Data showed that the number of Americans filing new applications for unemployment benefits increased more than expected last week. "Gold is rallying on a jump in weekly initial jobless claims which could be a harbinger of a weakening labor market, which would get the Federal Reserve to cut (interest rates) more quickly," said Tai Wong, an independent metals trader. According to released minutes of the Federal Reserve's May 6-7 session, Fed officials acknowledged they could face "difficult tradeoffs" in coming months in the form of rising inflation alongside rising unemployment, an outlook buttressed by Fed staff projections of increased risks of a recession. Bullion is viewed as a hedge against uncertainty and inflation, and it tends to perform well in low-interest-rate environments, as it does not generate interest. Market focus is also on the U.S. Personal Consumption Expenditures data due Friday, which will be closely analysed for signals on future U.S. monetary policy. "Equally impressive is gold's sharp recovery overnight, (with the market) deciding that Trump will ultimately prevail against the trade court's ruling," Wong added. A U.S. trade court ruling that blocked most of Trump's tariffs and found he had overstepped his authority triggered some relief on financial markets, while adding to the uncertainties weighing on the global economy. His administration immediately said it will appeal and analysts said investors will remain cautious as the White House explores its legal avenues. Spot silver rose 0.8% to $33.27 an ounce, platinum was up 0.2% at $1,076.90 and palladium firmed 1.1% to $973.05. https://www.reuters.com/world/india/gold-hits-over-one-week-low-after-us-court-blocks-trumps-tariffs-2025-05-29/

2025-05-29 06:27

Akazawa, Bessent to meet in Washington on Friday Defence gear purchase could boost US trade surplus, Akazawa says US court ruling would not change Japan's strategies, source says Foreign exchange levels have not been discussed so far TOKYO, May 29 (Reuters) - Japan is considering using the purchase of U.S. defence equipment as a bargaining chip in tariff talks, its top tariff negotiator Ryosei Akazawa said on Thursday as he heads for a fourth round of the negotiations in Washington. The defence equipment purchase would be among a package of proposals to gain U.S. concessions, which also include technical cooperation in shipbuilding, revision to inspection standards for imported automobiles and increased imports of U.S. farm products. Sign up here. "Japan's purchase of defence equipment would contribute to the U.S. trade surplus, so in that sense, it could be considered (in the trade talks)," Akazawa told reporters. Akazawa will meet with U.S. Treasury Secretary Scott Bessent on Friday in the fourth round of trade talks in Washington, as Japan faces a 24% tariff rate starting in July unless it can negotiate a deal with the U.S. "We plan to discuss trade expansion, non-tariff barriers and economic security cooperation," he said before heading to an airport. Japan and the U.S. have agreed to deepen the trade discussions with the G7 leaders' summit on June 15-17 in mind, where U.S. President Donald Trump and Japan's Prime Minister Shigeru Ishiba are set to meet in person. A source familiar with the talks said a U.S. trade court's ruling to block Trump's sweeping tariffs would not change Japan's strategies in the trade talks. Japan wants to eliminate not just "reciprocal" tariffs but also industry-specific tariffs on automobiles, said the source, who declined to be identified as the matter is private. Speaking to reporters on the potential defence equipment purchase, Akazawa did not specify which equipment Japan is considering buying. Japanese media reported that Trump pitched the F-47 and other fighter jets in a phone call with Ishiba last week. Meanwhile, a Japanese government spokesperson denied a report by the Asahi Shimbun that the government has started considering increasing its share of costs for U.S. troops stationed in Japan. The budget for the costs of stationing U.S. troops "has been shared appropriately," Chief Cabinet Secretary Yoshimasa Hayashi told a regular press conference. Similarly, Akazawa said national security and tariff deals should be separated as they are different matters. When the two countries started trade talks in April, the issues of currency rates were high on the agenda, as Trump's past remarks accusing Japan of intentionally maintaining a weak yen fuelled market expectations that Tokyo will face pressure to strengthen its currency's value against the dollar. The pair has set the currency issues aside for talks between their finance ministers, and so far both sides said they have not discussed setting currency targets. In what could be interpreted as giving a nod to current rates, the U.S. Treasury Department said last week it agreed with Japan that the dollar-yen rate at present reflects fundamentals. Japanese officials, however, reiterated they have never discussed current foreign exchange levels with the U.S. ($1 = 145.3300 yen) https://www.reuters.com/business/trump-administration-asked-japan-increase-share-costs-us-troops-asahi-shimbun-2025-05-29/

2025-05-29 06:25

MUMBAI, May 29 (Reuters) - The Indian central bank's gains from foreign exchange transactions surged nearly 33% to 1.11 trillion rupees ($13 billion) in the fiscal year ending March, pushing up its income sharply, its annual report showed on Thursday. The Reserve Bank of India's net income rose to 2.69 trillion rupees, up 27.5% on year. Interest income from foreign securities also saw a sharp rise to 970.07 billion rupees from 653.28 billion rupees in the previous year. Sign up here. The size of the RBI's balance sheet grew 8.2% to 76.25 trillion rupees. "In FY25, the surge in dollar selling was due to FY25 balance of payments turning negative," said Gaura Sen Gupta, chief economist at IDFC First Bank. "In FY26, we expect balance of payments to be a small positive. Hence the quantum of dollar selling is expected to be moderate." Last week, RBI's board approved the transfer of a record 2.69 trillion rupees as surplus to the government for last fiscal year as it opted to raise its contingency risk buffer under a revised economic capital framework. In fiscal year 2019, the RBI adopted a new economic capital framework that required it to maintain a contingency risk buffer of 5.5% to 6.5% of its balance sheet. Last week, the board changed the range of the contingency risk buffer to 6% plus or minus 1.5 percentage points to provide adequate flexibility and to ensure smoothening of surplus transfer. IDFC Bank's Sen Gupta expects the RBI's dividend for this fiscal year to remain similar to levels seen in the previous two years, as interest income will remain substantial and provisioning stable. For the last fiscal, the RBI's total expenditure rose 7.76% to 697.14 billion rupees, largely due to higher interest spends, and costs related to employees and printing of notes. GROWTH FOCUS Monetary policy is committed towards achieving durable price stability, which is necessary for high growth on a sustained basis, the RBI reiterated in the annual report. "The benign inflation outlook and moderate growth warrant monetary policy to be growth supportive, while remaining watchful about the rapidly evolving global macroeconomic conditions," it said. The central bank will undertake liquidity management operations in sync with the monetary policy stance and keep system liquidity adequate to meet the needs of the productive sectors of the economy, it said. Banks should manage trading and banking book risks proactively amid heightened global uncertainties, and in light of a moderation in net interest margins, it said. ($1 = 85.5700 Indian rupees) https://www.reuters.com/world/india/india-central-banks-net-income-surges-fy25-fx-gains-rise-2025-05-29/

2025-05-29 06:20

LONDON, May 29 (Reuters) - The price of cobalt has fallen so far over the last couple of years that even Congo's artisanal miners have given up on the battery metal. They have been swept aside by a wave of production from the Democratic Republic of Congo's (DRC) formal sector and a secondary flood of metal from Indonesia. Sign up here. The market was over-supplied for the third consecutive year in 2024 even though global demand exceeded 200,000 metric tons for the first time. Metals investor Cobalt Holdings is betting that the worst is over. The company is aiming to raise $230 million from an initial public offering in London the majority of which it will use to buy 6,000 tons of physical cobalt from Glencore (GLEN.L) , opens new tab. Chief Executive Jake Greenberg believes the purchase from Glencore, the first of several, will be "at or near a low point in the cycle", according to the company's registration filing. Greenberg helped launch Yellow Cake (YCA.L) , opens new tab, which offers investors a physical uranium play, and Cobalt Holdings is a similar vehicle for punters wanting to ride the cobalt cycle. It's likely to be a bumpy ride and the longer-term bull thesis hinges both on whether the Congo, and to a lesser extent Indonesia, can restrain supply and on whether cobalt can maintain its position as a critical new energy input. FINDING THE FLOOR The DRC government's imposition of a four-month export ban in February is a positive sign that the world's largest cobalt producer has woken up to the fact it is producing too much. Cobalt has a history of boom-and-bust pricing as super-strong rallies such as those in 2018 and 2022 generated an artisanal supply response. Not this time. Congo's informal sector saw output drop to a historic low last year, both in absolute and relative terms, according to analysts at Benchmark Mineral Intelligence (BMI). Rather, it was China's CMOC Group (603993.SS) , opens new tab which caused the supply shock, more than doubling production to 114,000 tons, above both guidance and assumed nameplate capacity at its TFM and KFM mines in the DRC. The output surge continues unabated. The company reported first-quarter output of 30,414 tons, up 21% year-on-year. That material is stuck for now as the government decides what it will do when the export ban expires in June. But any decision "will inevitably imply a strict limitation of exports in whole or in part until market balance is reached with regard to the supply and demand of cobalt", according to Patrick Luabeya, head of the government's strategic metals authority. Congo's apparent readiness to address its over-production has dispelled some of the cobalt blues, boosting the price to $16 per pound from a 10-year low of $10. The market is now on tenterhooks as it awaits Kinshasa's next move. But if the world's largest producer is prepared to limit exports or production, the market may have found a price floor, an elusive concept for a metal that is largely produced as a by-product of either copper or nickel. BATTERY WARS Cobalt demand grew by a robust 14% year-on-year in 2024, driven by the metal's usage in electric vehicle (EV) batteries, according to BMI's annual market report commissioned by The Cobalt Institute. The bull case for the metal rests on EV battery demand continuing to expand to the point that cobalt usage starts outstripping production some time around the turn of the decade. BMI expects market surpluses to shrink going forwards, even without any production curbs in the DRC, with a structural supply deficit emerging "from at least the early 2030s". However, cobalt's share of the EV battery market is in flux as Chinese EV producers pivot to battery chemistries that don't use any cobalt at all. This is also true of the fast-growing energy storage sector, which is dominated by lithium-iron-phosphate (LFP) batteries. The good news is that Western automakers are still heavily committed to cobalt-chemistry batteries and may become more so as China tightens export controls on LFP technologies. But cobalt's fortunes remain in significant part dependent on the global battle to produce ever more efficient and powerful batteries. Some of them will contain cobalt, others will not. STRATEGIC STOCKPILE Cobalt Holdings is not the only entity looking to scoop up cobalt at bargain-basement prices. China's state stockpiler has been doing the same. BMI estimates the National Development and Reform Commission received around 16,600 tons of cobalt in 2024, up from 7,200 tons in 2023. That reduced last year's supply surplus from over 50,000 tons to a still substantial 36,000 tons. While China is well stocked, the West isn't, even though just about every country classifies cobalt as a strategically important metal, not just for its use in batteries but also in the form of super-alloys for aircraft manufacturing. Cobalt Holdings' plans to accumulate what amounts to a Western strategic stockpile is an interesting development in the broader competition between the West and China for access to critical minerals. It helps loosen China's mine-to-market grip on the cobalt supply chain and simultaneously offers a hedge against future disruption in a supply chain which is highly concentrated geographically. However, it remains to be seen how long investors will have to wait to see the cobalt cycle once again turn from bust to boom. There is a lot of cobalt around right now and there still will be even after Cobalt Holdings takes another 6,000 tons off the market. The opinions expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/europe/cobalt-holdings-bets-battery-metals-fortunes-have-turned-andy-home-2025-05-29/

2025-05-29 06:09

MUMBAI, May 29 (Reuters) - The Indian rupee weakened on Thursday, weighed down by a broad rebound in the dollar after a U.S. federal court blocked most of President Donald Trump's "reciprocal tariffs" from taking effect. The rupee was at 85.5325 per U.S. dollar as of 11:30 a.m. IST, down 0.2% on the day. Asian currencies were down between 0.1% to 0.6% while the dollar index rose past the 100 handle. Sign up here. However, the benchmark BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab equity indexes were little changed, lagging behind gains in regional peers as markets cheered the court ruling to block Trump tariffs. A U.S. trade court said in its ruling that the country's Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president's emergency powers to safeguard the U.S. economy. The Trump administration has appealed the ruling. Analysts pointed out that the market was showing a knee-jerk reaction to the ruling, which blocked tariff policies that had weighed heavily on the dollar and boosted emerging market currencies, but many added that the initial reaction may lack follow through. "It remains to be seen if this ruling is a game-changer because the Supreme Court has a conservative majority influenced by Trump’s appointments," DBS said in a note, adding that "USD is not out of the woods," as concerns about U.S. fiscal health continue to linger. Traders also pointed to dollar bids from foreign banks and local companies weighing on the rupee. It seems like "two-way price action will persist unless it (USD/INR) moves out of the 84.80-86 range," a trader at a Mumbai-based bank said. Dollar-rupee forward premiums fell after markets pared hopes of Federal Reserve rate cuts, pushing near-tenor Treasury yields higher after the release of the minutes of the Fed's May policy meeting. The 1-year dollar-rupee implied yield fell 4 bps to 1.96%, its lowest since December 2024. https://www.reuters.com/world/india/rupee-dips-tracking-asian-peers-after-court-blocks-most-us-tariffs-2025-05-29/