Shares slip, oil rises as investors weigh Iran outcomes
Early moves were contained, with the dollar getting only a minor safe-haven bid and no sign of panic selling across markets. Oil prices were up about 2.8 per cent, but off their initial peaks.
Optimists are hoping Iran might back down now its nuclear ambitions had been curtailed, or even that regime change might bring a less hostile government to power there.
Analysts at JPMorgan, however, cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Key will be access through the Strait of Hormuz, which is only about 33 kilometres wide at its narrowest point and carries about a quarter of global oil trade and 20 per cent of liquefied natural gas supplies.
"Selective disruptions that scare off oil tankers make more sense than closing the Strait of Hormuz given Iran's oil exports would be shut down too," said Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia.
"In a scenario where Iran selectively disrupts shipping through the Strait of Hormuz, we see Brent oil reaching at least $100/bbl."
For now, Brent was up a relatively restrained 2.7 per cent at $79.12 a barrel, while US crude rose 2.8 per cent to $75.98.
Elsewhere in commodity markets, gold edged down 0.1 per cent to $3,363 an ounce.
Share markets were proving resilient so far, with S&P 500 futures off a moderate 0.5 per cent and Nasdaq futures down 0.6 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5, and Japan's Nikkei eased 0.9 per cent.
EUROSTOXX 50 futures lost 0.7 per cent, while FTSE futures fell 0.5 per cent and DAX futures slipped 0.7 per cent. Europe and Japan are heavily reliant on imported oil and LNG, whereas the United States is a net exporter.
The dollar edged up 0.3 per cent on the Japanese yen to 146.48 yen , while the euro dipped 0.3 per cent to $1.1481. The dollar index firmed 0.17 per cent to 99.078.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising two basis points to 4.397 per cent.
Futures for Federal Reserve interest rates were a tick lower, likely reflecting concerns a sustained rise in oil prices would add to inflationary pressures at a time when tariffs were just being felt in US prices.
Markets are still pricing only a slim chance the Fed will cut at its next meeting on July 30, even after Fed governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including chair Jerome Powell, have been more cautious on policy leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from lawmakers, which is certain to cover the potential impact of President Donald Trump's tariffs and the attack on Iran.
The Middle East will be high on the agenda at a NATO leaders' meeting at the Hague this week, where most members have agreed to commit to a sharp rise in defence spending.
Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
Shares have slipped in Asia and oil prices briefly hit five-month highs as investors anxiously wait to see if Iran will retaliate against US attacks on its nuclear sites, with resulting risks to global activity and inflation.
Early moves were contained, with the dollar getting only a minor safe-haven bid and no sign of panic selling across markets. Oil prices were up about 2.8 per cent, but off their initial peaks.
Optimists are hoping Iran might back down now its nuclear ambitions had been curtailed, or even that regime change might bring a less hostile government to power there.
Analysts at JPMorgan, however, cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Key will be access through the Strait of Hormuz, which is only about 33 kilometres wide at its narrowest point and carries about a quarter of global oil trade and 20 per cent of liquefied natural gas supplies.
"Selective disruptions that scare off oil tankers make more sense than closing the Strait of Hormuz given Iran's oil exports would be shut down too," said Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia.
"In a scenario where Iran selectively disrupts shipping through the Strait of Hormuz, we see Brent oil reaching at least $100/bbl."
For now, Brent was up a relatively restrained 2.7 per cent at $79.12 a barrel, while US crude rose 2.8 per cent to $75.98.
Elsewhere in commodity markets, gold edged down 0.1 per cent to $3,363 an ounce.
Share markets were proving resilient so far, with S&P 500 futures off a moderate 0.5 per cent and Nasdaq futures down 0.6 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5, and Japan's Nikkei eased 0.9 per cent.
EUROSTOXX 50 futures lost 0.7 per cent, while FTSE futures fell 0.5 per cent and DAX futures slipped 0.7 per cent. Europe and Japan are heavily reliant on imported oil and LNG, whereas the United States is a net exporter.
The dollar edged up 0.3 per cent on the Japanese yen to 146.48 yen , while the euro dipped 0.3 per cent to $1.1481. The dollar index firmed 0.17 per cent to 99.078.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising two basis points to 4.397 per cent.
Futures for Federal Reserve interest rates were a tick lower, likely reflecting concerns a sustained rise in oil prices would add to inflationary pressures at a time when tariffs were just being felt in US prices.
Markets are still pricing only a slim chance the Fed will cut at its next meeting on July 30, even after Fed governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including chair Jerome Powell, have been more cautious on policy leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from lawmakers, which is certain to cover the potential impact of President Donald Trump's tariffs and the attack on Iran.
The Middle East will be high on the agenda at a NATO leaders' meeting at the Hague this week, where most members have agreed to commit to a sharp rise in defence spending.
Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
Shares have slipped in Asia and oil prices briefly hit five-month highs as investors anxiously wait to see if Iran will retaliate against US attacks on its nuclear sites, with resulting risks to global activity and inflation.
Early moves were contained, with the dollar getting only a minor safe-haven bid and no sign of panic selling across markets. Oil prices were up about 2.8 per cent, but off their initial peaks.
Optimists are hoping Iran might back down now its nuclear ambitions had been curtailed, or even that regime change might bring a less hostile government to power there.
Analysts at JPMorgan, however, cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Key will be access through the Strait of Hormuz, which is only about 33 kilometres wide at its narrowest point and carries about a quarter of global oil trade and 20 per cent of liquefied natural gas supplies.
"Selective disruptions that scare off oil tankers make more sense than closing the Strait of Hormuz given Iran's oil exports would be shut down too," said Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia.
"In a scenario where Iran selectively disrupts shipping through the Strait of Hormuz, we see Brent oil reaching at least $100/bbl."
For now, Brent was up a relatively restrained 2.7 per cent at $79.12 a barrel, while US crude rose 2.8 per cent to $75.98.
Elsewhere in commodity markets, gold edged down 0.1 per cent to $3,363 an ounce.
Share markets were proving resilient so far, with S&P 500 futures off a moderate 0.5 per cent and Nasdaq futures down 0.6 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5, and Japan's Nikkei eased 0.9 per cent.
EUROSTOXX 50 futures lost 0.7 per cent, while FTSE futures fell 0.5 per cent and DAX futures slipped 0.7 per cent. Europe and Japan are heavily reliant on imported oil and LNG, whereas the United States is a net exporter.
The dollar edged up 0.3 per cent on the Japanese yen to 146.48 yen , while the euro dipped 0.3 per cent to $1.1481. The dollar index firmed 0.17 per cent to 99.078.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising two basis points to 4.397 per cent.
Futures for Federal Reserve interest rates were a tick lower, likely reflecting concerns a sustained rise in oil prices would add to inflationary pressures at a time when tariffs were just being felt in US prices.
Markets are still pricing only a slim chance the Fed will cut at its next meeting on July 30, even after Fed governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including chair Jerome Powell, have been more cautious on policy leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from lawmakers, which is certain to cover the potential impact of President Donald Trump's tariffs and the attack on Iran.
The Middle East will be high on the agenda at a NATO leaders' meeting at the Hague this week, where most members have agreed to commit to a sharp rise in defence spending.
Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
Shares have slipped in Asia and oil prices briefly hit five-month highs as investors anxiously wait to see if Iran will retaliate against US attacks on its nuclear sites, with resulting risks to global activity and inflation.
Early moves were contained, with the dollar getting only a minor safe-haven bid and no sign of panic selling across markets. Oil prices were up about 2.8 per cent, but off their initial peaks.
Optimists are hoping Iran might back down now its nuclear ambitions had been curtailed, or even that regime change might bring a less hostile government to power there.
Analysts at JPMorgan, however, cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Key will be access through the Strait of Hormuz, which is only about 33 kilometres wide at its narrowest point and carries about a quarter of global oil trade and 20 per cent of liquefied natural gas supplies.
"Selective disruptions that scare off oil tankers make more sense than closing the Strait of Hormuz given Iran's oil exports would be shut down too," said Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia.
"In a scenario where Iran selectively disrupts shipping through the Strait of Hormuz, we see Brent oil reaching at least $100/bbl."
For now, Brent was up a relatively restrained 2.7 per cent at $79.12 a barrel, while US crude rose 2.8 per cent to $75.98.
Elsewhere in commodity markets, gold edged down 0.1 per cent to $3,363 an ounce.
Share markets were proving resilient so far, with S&P 500 futures off a moderate 0.5 per cent and Nasdaq futures down 0.6 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5, and Japan's Nikkei eased 0.9 per cent.
EUROSTOXX 50 futures lost 0.7 per cent, while FTSE futures fell 0.5 per cent and DAX futures slipped 0.7 per cent. Europe and Japan are heavily reliant on imported oil and LNG, whereas the United States is a net exporter.
The dollar edged up 0.3 per cent on the Japanese yen to 146.48 yen , while the euro dipped 0.3 per cent to $1.1481. The dollar index firmed 0.17 per cent to 99.078.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising two basis points to 4.397 per cent.
Futures for Federal Reserve interest rates were a tick lower, likely reflecting concerns a sustained rise in oil prices would add to inflationary pressures at a time when tariffs were just being felt in US prices.
Markets are still pricing only a slim chance the Fed will cut at its next meeting on July 30, even after Fed governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including chair Jerome Powell, have been more cautious on policy leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from lawmakers, which is certain to cover the potential impact of President Donald Trump's tariffs and the attack on Iran.
The Middle East will be high on the agenda at a NATO leaders' meeting at the Hague this week, where most members have agreed to commit to a sharp rise in defence spending.
Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
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The Advertiser
an hour ago
- The Advertiser
Asian stocks waver, dollar frail on rates and tariffs
Asian stocks have slipped and the dollar languished near three-and-a-half-year lows as investors weigh the prospect of US interest rate cuts and the scramble for trade deals ahead of President Donald Trump's July 9 deadline for tariffs. Trump said he was not considering extending the July 9 deadline for countries to negotiate trade deals with the United States, and cast doubts again that an agreement could be reached with Japan, although he expects a deal with India. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.23 per cent in early trading on Wednesday, inching away from the November 2021 top it touched last week. Japan's Nikkei fell 0.78 per cent, dragged by tech stocks. Tech-heavy Taiwan stocks and South Korea's Kospi Index also fell after US tech firms were hit hard following a strong rally in June. Data on Tuesday showed the US labour market remained resilient with a rise in job openings for May, sharpening the focus on the payrolls report due on Thursday as investors try to gauge when the Federal Reserve is likely to cut rates next. Fed Chair Jerome Powell, under fire from Trump to cut rates immediately, reiterated that the US central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. Traders are pricing in 64 basis points of cuts this year from the Fed with the odds of a move in July at 21 per cent. That maintained a bearish bias on the dollar. The euro last bought $US1.1793, just below the three-and-half-year high it touched on Tuesday. The yen was steady at 143.52 per dollar. "Any disappointing economic data can prompt further dovish repricing of FOMC rate cuts and another round of USD selling," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "The 'One Big Beautiful Bill' Act (OBBBA) and trade developments also have the potential to further weaken the USD if they undermine investor confidence about the U.S. economy." Investor focus over the last few days has pivoted to the progress of Trump's massive tax-and-spending bill, which is expected to add $US3.3 trillion to the national debt. The legislation heads to the House of Representatives for possible final approval after US Senate Republicans passed it by the narrowest of margins. The bill has stoked fiscal worries but the reaction was relatively muted after it passed the Senate. The benchmark US 10-year yields were steady at 4.245 per cent having touched a two-month low in the previous session. Aninda Mitra, head of Asia macro strategy at BNY Investment Institute, said the legislation "hard wires" a steady deterioration of the fiscal position and the debt trajectory of the US government. "The near-term impact is mostly in the price, but the uncertainty factor could keep term premia elevated. We don't think long-term yields will fall back materially in the 6-12 month horizon." The fiscal worries, trade uncertainties and the US rate path trajectory have all led investors to flee US assets and look for alternatives. Investors worry that Trump's chaotic trade policies could hit US economic growth. That has left the dollar unloved, with the greenback down over 10 per cent for the year in its worst first half performance since the 1970s. The dollar index, which measures the US currency against six rivals, was at 96.649, near its lowest since March 2022. In commodities, spot gold eased to $US3,332.19 per ounce, after surging one per cent in the previous session. The yellow metal is up 27 per cent this year on safe-haven flows. Asian stocks have slipped and the dollar languished near three-and-a-half-year lows as investors weigh the prospect of US interest rate cuts and the scramble for trade deals ahead of President Donald Trump's July 9 deadline for tariffs. Trump said he was not considering extending the July 9 deadline for countries to negotiate trade deals with the United States, and cast doubts again that an agreement could be reached with Japan, although he expects a deal with India. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.23 per cent in early trading on Wednesday, inching away from the November 2021 top it touched last week. Japan's Nikkei fell 0.78 per cent, dragged by tech stocks. Tech-heavy Taiwan stocks and South Korea's Kospi Index also fell after US tech firms were hit hard following a strong rally in June. Data on Tuesday showed the US labour market remained resilient with a rise in job openings for May, sharpening the focus on the payrolls report due on Thursday as investors try to gauge when the Federal Reserve is likely to cut rates next. Fed Chair Jerome Powell, under fire from Trump to cut rates immediately, reiterated that the US central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. Traders are pricing in 64 basis points of cuts this year from the Fed with the odds of a move in July at 21 per cent. That maintained a bearish bias on the dollar. The euro last bought $US1.1793, just below the three-and-half-year high it touched on Tuesday. The yen was steady at 143.52 per dollar. "Any disappointing economic data can prompt further dovish repricing of FOMC rate cuts and another round of USD selling," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "The 'One Big Beautiful Bill' Act (OBBBA) and trade developments also have the potential to further weaken the USD if they undermine investor confidence about the U.S. economy." Investor focus over the last few days has pivoted to the progress of Trump's massive tax-and-spending bill, which is expected to add $US3.3 trillion to the national debt. The legislation heads to the House of Representatives for possible final approval after US Senate Republicans passed it by the narrowest of margins. The bill has stoked fiscal worries but the reaction was relatively muted after it passed the Senate. The benchmark US 10-year yields were steady at 4.245 per cent having touched a two-month low in the previous session. Aninda Mitra, head of Asia macro strategy at BNY Investment Institute, said the legislation "hard wires" a steady deterioration of the fiscal position and the debt trajectory of the US government. "The near-term impact is mostly in the price, but the uncertainty factor could keep term premia elevated. We don't think long-term yields will fall back materially in the 6-12 month horizon." The fiscal worries, trade uncertainties and the US rate path trajectory have all led investors to flee US assets and look for alternatives. Investors worry that Trump's chaotic trade policies could hit US economic growth. That has left the dollar unloved, with the greenback down over 10 per cent for the year in its worst first half performance since the 1970s. The dollar index, which measures the US currency against six rivals, was at 96.649, near its lowest since March 2022. In commodities, spot gold eased to $US3,332.19 per ounce, after surging one per cent in the previous session. The yellow metal is up 27 per cent this year on safe-haven flows. Asian stocks have slipped and the dollar languished near three-and-a-half-year lows as investors weigh the prospect of US interest rate cuts and the scramble for trade deals ahead of President Donald Trump's July 9 deadline for tariffs. Trump said he was not considering extending the July 9 deadline for countries to negotiate trade deals with the United States, and cast doubts again that an agreement could be reached with Japan, although he expects a deal with India. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.23 per cent in early trading on Wednesday, inching away from the November 2021 top it touched last week. Japan's Nikkei fell 0.78 per cent, dragged by tech stocks. Tech-heavy Taiwan stocks and South Korea's Kospi Index also fell after US tech firms were hit hard following a strong rally in June. Data on Tuesday showed the US labour market remained resilient with a rise in job openings for May, sharpening the focus on the payrolls report due on Thursday as investors try to gauge when the Federal Reserve is likely to cut rates next. Fed Chair Jerome Powell, under fire from Trump to cut rates immediately, reiterated that the US central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. Traders are pricing in 64 basis points of cuts this year from the Fed with the odds of a move in July at 21 per cent. That maintained a bearish bias on the dollar. The euro last bought $US1.1793, just below the three-and-half-year high it touched on Tuesday. The yen was steady at 143.52 per dollar. "Any disappointing economic data can prompt further dovish repricing of FOMC rate cuts and another round of USD selling," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "The 'One Big Beautiful Bill' Act (OBBBA) and trade developments also have the potential to further weaken the USD if they undermine investor confidence about the U.S. economy." Investor focus over the last few days has pivoted to the progress of Trump's massive tax-and-spending bill, which is expected to add $US3.3 trillion to the national debt. The legislation heads to the House of Representatives for possible final approval after US Senate Republicans passed it by the narrowest of margins. The bill has stoked fiscal worries but the reaction was relatively muted after it passed the Senate. The benchmark US 10-year yields were steady at 4.245 per cent having touched a two-month low in the previous session. Aninda Mitra, head of Asia macro strategy at BNY Investment Institute, said the legislation "hard wires" a steady deterioration of the fiscal position and the debt trajectory of the US government. "The near-term impact is mostly in the price, but the uncertainty factor could keep term premia elevated. We don't think long-term yields will fall back materially in the 6-12 month horizon." The fiscal worries, trade uncertainties and the US rate path trajectory have all led investors to flee US assets and look for alternatives. Investors worry that Trump's chaotic trade policies could hit US economic growth. That has left the dollar unloved, with the greenback down over 10 per cent for the year in its worst first half performance since the 1970s. The dollar index, which measures the US currency against six rivals, was at 96.649, near its lowest since March 2022. In commodities, spot gold eased to $US3,332.19 per ounce, after surging one per cent in the previous session. The yellow metal is up 27 per cent this year on safe-haven flows. Asian stocks have slipped and the dollar languished near three-and-a-half-year lows as investors weigh the prospect of US interest rate cuts and the scramble for trade deals ahead of President Donald Trump's July 9 deadline for tariffs. Trump said he was not considering extending the July 9 deadline for countries to negotiate trade deals with the United States, and cast doubts again that an agreement could be reached with Japan, although he expects a deal with India. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.23 per cent in early trading on Wednesday, inching away from the November 2021 top it touched last week. Japan's Nikkei fell 0.78 per cent, dragged by tech stocks. Tech-heavy Taiwan stocks and South Korea's Kospi Index also fell after US tech firms were hit hard following a strong rally in June. Data on Tuesday showed the US labour market remained resilient with a rise in job openings for May, sharpening the focus on the payrolls report due on Thursday as investors try to gauge when the Federal Reserve is likely to cut rates next. Fed Chair Jerome Powell, under fire from Trump to cut rates immediately, reiterated that the US central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. Traders are pricing in 64 basis points of cuts this year from the Fed with the odds of a move in July at 21 per cent. That maintained a bearish bias on the dollar. The euro last bought $US1.1793, just below the three-and-half-year high it touched on Tuesday. The yen was steady at 143.52 per dollar. "Any disappointing economic data can prompt further dovish repricing of FOMC rate cuts and another round of USD selling," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "The 'One Big Beautiful Bill' Act (OBBBA) and trade developments also have the potential to further weaken the USD if they undermine investor confidence about the U.S. economy." Investor focus over the last few days has pivoted to the progress of Trump's massive tax-and-spending bill, which is expected to add $US3.3 trillion to the national debt. The legislation heads to the House of Representatives for possible final approval after US Senate Republicans passed it by the narrowest of margins. The bill has stoked fiscal worries but the reaction was relatively muted after it passed the Senate. The benchmark US 10-year yields were steady at 4.245 per cent having touched a two-month low in the previous session. Aninda Mitra, head of Asia macro strategy at BNY Investment Institute, said the legislation "hard wires" a steady deterioration of the fiscal position and the debt trajectory of the US government. "The near-term impact is mostly in the price, but the uncertainty factor could keep term premia elevated. We don't think long-term yields will fall back materially in the 6-12 month horizon." The fiscal worries, trade uncertainties and the US rate path trajectory have all led investors to flee US assets and look for alternatives. Investors worry that Trump's chaotic trade policies could hit US economic growth. That has left the dollar unloved, with the greenback down over 10 per cent for the year in its worst first half performance since the 1970s. The dollar index, which measures the US currency against six rivals, was at 96.649, near its lowest since March 2022. In commodities, spot gold eased to $US3,332.19 per ounce, after surging one per cent in the previous session. The yellow metal is up 27 per cent this year on safe-haven flows.
Perth Now
2 hours ago
- Perth Now
Asian stocks waver, dollar frail on rates and tariffs
Asian stocks have slipped and the dollar languished near three-and-a-half-year lows as investors weigh the prospect of US interest rate cuts and the scramble for trade deals ahead of President Donald Trump's July 9 deadline for tariffs. Trump said he was not considering extending the July 9 deadline for countries to negotiate trade deals with the United States, and cast doubts again that an agreement could be reached with Japan, although he expects a deal with India. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.23 per cent in early trading on Wednesday, inching away from the November 2021 top it touched last week. Japan's Nikkei fell 0.78 per cent, dragged by tech stocks. Tech-heavy Taiwan stocks and South Korea's Kospi Index also fell after US tech firms were hit hard following a strong rally in June. Data on Tuesday showed the US labour market remained resilient with a rise in job openings for May, sharpening the focus on the payrolls report due on Thursday as investors try to gauge when the Federal Reserve is likely to cut rates next. Fed Chair Jerome Powell, under fire from Trump to cut rates immediately, reiterated that the US central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. Traders are pricing in 64 basis points of cuts this year from the Fed with the odds of a move in July at 21 per cent. That maintained a bearish bias on the dollar. The euro last bought $US1.1793, just below the three-and-half-year high it touched on Tuesday. The yen was steady at 143.52 per dollar. "Any disappointing economic data can prompt further dovish repricing of FOMC rate cuts and another round of USD selling," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "The 'One Big Beautiful Bill' Act (OBBBA) and trade developments also have the potential to further weaken the USD if they undermine investor confidence about the U.S. economy." Investor focus over the last few days has pivoted to the progress of Trump's massive tax-and-spending bill, which is expected to add $US3.3 trillion to the national debt. The legislation heads to the House of Representatives for possible final approval after US Senate Republicans passed it by the narrowest of margins. The bill has stoked fiscal worries but the reaction was relatively muted after it passed the Senate. The benchmark US 10-year yields were steady at 4.245 per cent having touched a two-month low in the previous session. Aninda Mitra, head of Asia macro strategy at BNY Investment Institute, said the legislation "hard wires" a steady deterioration of the fiscal position and the debt trajectory of the US government. "The near-term impact is mostly in the price, but the uncertainty factor could keep term premia elevated. We don't think long-term yields will fall back materially in the 6-12 month horizon." The fiscal worries, trade uncertainties and the US rate path trajectory have all led investors to flee US assets and look for alternatives. Investors worry that Trump's chaotic trade policies could hit US economic growth. That has left the dollar unloved, with the greenback down over 10 per cent for the year in its worst first half performance since the 1970s. The dollar index, which measures the US currency against six rivals, was at 96.649, near its lowest since March 2022. In commodities, spot gold eased to $US3,332.19 per ounce, after surging one per cent in the previous session. The yellow metal is up 27 per cent this year on safe-haven flows.
News.com.au
2 hours ago
- News.com.au
Philippines biodiversity hotspot pushes back on mining
A nickel stockpile towers over farmer Moharen Tambiling's rice paddy in the Philippines' Palawan, evidence of a mining boom that locals hope a new moratorium will tame. "They told us before the start of their operations that it wouldn't affect us, but the effects are undeniable now," Tambiling told AFP. "Pangolins, warthogs, birds are disappearing. Flowers as well." A biodiversity hotspot, Palawan also holds vast deposits of nickel, needed for everything from stainless steel to electric vehicles. Once the world's largest exporter of the commodity, the Philippines is now racing to catch up with Indonesia. In 2021, Manila lifted a nine-year ban on mining licences. Despite promised jobs and tax revenue, there is growing pushback against the sector in Palawan. In March, the island's governing council unanimously passed a 50-year moratorium on any new mining permits. "Flash floods, the siltation of the sea, fisheries, mangrove areas... We are witnesses to the effects of long-term mining," Nieves Rosento, a former local councillor who led the push, told AFP. Environmental rights lawyer Grizelda Mayo-Anda said the moratorium could stop nearly 70 proposed projects spanning 240,000 hectares. "You have to protect the old-growth forest, and it's not being done," she said. From 2001 to 2024, Palawan--dubbed the country's "last ecological frontier" -- lost 219,000 hectares of tree cover, more than any other province, in part due to mining, according to Global Forest Watch. - 'Fearsome' flooding - In southern Palawan's Brooke's Point, a Chinese ship at a purpose-built pier waits for ore from the stockpile overlooking Tambiling's farm. Mining company Ipilan says increased production will result in greater royalties for Indigenous people and higher tax revenues, but that means little to Tambiling's sister Alayma. The single mother-of-six once made 1,000-5,000 pesos ($18-90) a day selling lobster caught where the pier now sits. "We were surprised when we saw backhoes digging up the shore," she told AFP, calling a one-time compensation offer of 120,000 pesos ($2,150) insulting. "The livelihood of all the Indigenous peoples depended on that area." On the farm, Tambiling stirred rice paddy mud to reveal reddish laterite he says is leaking from the ore heap and poisoning his crops. Above him, swathes of the Mantalingahan mountains have been deforested, producing floods he describes as "fearsome, deep and fast-moving." Ipilan has faced protests and legal challenges over its logging, but its operations continue. Calls to parent company Global Ferronickel Holdings were not returned. For some in Palawan, the demand for nickel to power EVs has a certain irony. "You may be able to... eliminate pollution using electric vehicles," said Jeminda Bartolome, an anti-mining advocate. "But you should also study what happens to the area you are mining." - 'First-class municipality' - In Bataraza, the country's oldest nickel mine is expanding, having secured permission before the moratorium. Rio Tuba employees armed with brooms, goggles, hats and scarves are barely visible through reddish dust as they sweep an access road that carries 6,000 tonnes of ore destined for China each day. Company senior vice president Jose Bayani Baylon said mining turned a barely accessible malarial swamp into a "first-class municipality". "You have an airport, you have a port, you have a community here. You have a hospital, you have infrastructure which many other communities don't have," he told AFP. He dismisses environmental concerns as overblown. With part of its concession tapped out, the company is extending into an area once off-limits to logging but since rezoned. Thousands of trees have been cleared since January, according to locals, but Baylon said "under the law, for every tree you cut, you have to plant 100". The company showed AFP a nine-hectare plot it spent 15 years restoring with native plants. But it is unclear to what degree that will be replicated. Baylon concedes some areas could become solar farms instead. - 'Four kilos of rice' - Nearby, Indigenous resident Kennedy Coria says mining has upset Mount Bulanjao's ecosystem. "Honeybees disappeared where we used to find them. Fruit trees in the forest stopped bearing fruit," the father-of-seven said. A fifth of the Philippines' Indigenous land is covered by mining and exploration permits, according to rights group Global Witness. Legally, they have the right to refuse projects and share profits, but critics say the process is rarely clear. "There are Indigenous peoples who have not received any royalties for the past 10 years," said Rosento. Coria, who can neither read nor write, said he must sign a document each year when accepting what he is told is his share of Rio Tuba profits. "We get about four kilos of rice from the community leader, who tells us it came from the company," he said. Rio Tuba said funds are distributed in coordination with the National Commission on Indigenous People (NCIP), which is meant to represent the communities. But some say it acts in the interests of miners, attempting to persuade locals to accept concessions and the terms offered by companies. The NCIP referred questions to multiple regional offices, none of which replied. The government's industry regulator declined interview requests. While Palawan's moratorium will not stop Rio Tuba's expansion or Ipilan's operations, supporters believe it will slow further mining. Ryan Maminta, a councillor who backed the moratorium,said it already halted one expansion. There are looming legal challenges, however. A recent Supreme Court decision struck down a mining ban in Occidental Mindoro province. Backers remain confident though, and Rosento said the council would stand firm. "Responsible mining is just a catchphrase," she said. cwl-cgm-fb/sah/lb/dhw
