Why markets are discounting the risk of an oil supply disruption
Shane Oliver, AMP's chief economist and head of investment strategy, says financial markets are betting the risk of an energy supply shock has now receded with the price of oil now below what it was when Israel first attacked Iran.
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Perth Now
2 days ago
- Perth Now
Mining sector surges on overall quiet day for ASX
Strong gains by the mining sector are keeping the local bourse modestly in the green in what's shaping up to be the third straight day of quiet trading. Shortly after noon AEDT on Friday, the benchmark S&P/ASX200 index was up 17 points, or 0.2 per cent, to 8,568.3, while the broader All Ordinaries was up 23.5 points, or 0.27 per cent, to 8,795.3. The local currency, meanwhile, was at its highest level against its US counterpart since mid-November, buying 65.54 US cents, from 65.24 US cents at midday on Thursday. The greenback has weakened in recent days on concerns that Donald Trump might lessen the independence of the Federal Reserve by appointing a more dovish "shadow" chairman before Jerome Powell's term officially expires. With a few hours of trading left, the ASX200 was on track to finish the week up 0.7 per cent following Tuesday's rally prompted by the Iran-Israel ceasefire. It'll be the ASX's sixth winning week out of the last seven. The materials sector was up 2.7 per cent, on pace for its best day since a 6.3 per cent gain on April 10. BHP had gained 3.7 per cent, Rio Tinto had advanced 4.4 per cent and Fortescue had added 3.8 per cent. Goldminer Northern Star had dipped 0.9 per cent, but peer Evolution had climbed 2.3 per cent and Newmont had gained 1.1 per cent. In industrials, Reece was down 14.2 per cent to a more than two-month low of $14.90 after the plumbing supplier said that it expected to earn around $546 million this financial year, down from $681 million in 2023/24. Chairman and CEO Peter Wilson said that the expected results reflected the backdrop of continuing macroeconomic headwinds, with recent interest rate cuts in Australia and New Zealand not yet translating into improved housing activity. All of the big four banks were lower, with CBA down 1.1 per cent, Westpac dropping 0.5 per cent, ANZ declining 0.7 per cent and NAB dipping 0.6 per cent.
News.com.au
2 days ago
- News.com.au
Syria's wheat war: drought fuels food crisis for 16 million
Rival Syrian and Kurdish producers are scrambling for shrinking wheat harvests as the worst drought in decades follows a devastating war, pushing more than 16 million people toward food insecurity. "The country has not seen such bad climate conditions in 60 years," said Haya Abu Assaf, assistant to the United Nations Food and Agriculture Organization (FAO) representative in Syria. Syria's water levels have seen "a very significant drop compared to previous years, which is very worrying", Abu Assaf told AFP, as a relatively short winter rainy season and decreased rainfall take their toll. "A gap of between 2.5 to 2.7 million tonnes in the wheat crop is expected, meaning that the wheat quantity will not be sufficient to meet local needs," Abu Assaf said, putting "around 16.3 million people at risk of food insecurity in Syria this year". Before the civil war erupted in 2011, Syria was self-sufficient in wheat, producing an average of 4.1 million tonnes annually. Nearly 14 years of conflict have since crippled production and devastated the economy. The FAO estimates that harsh weather has impacted nearly 2.5 million hectares of wheat-growing land. "Around 75 percent of the cultivated areas" have been affected, as well as "natural pastures for livestock production", said Abu Assaf. - Imports, competition - To bridge the wheat gap, imports would be essential in a country where around 90 percent of the population lives in poverty. Before his ouster in an Islamist-led offensive in December, Syria's longtime ruler Bashar al-Assad used to rely on ally Russia for wheat. In April, new authorities reported the first wheat shipment since his removal arrived in Latakia port, with more Russian shipments following. Iraq also donated more than 220,000 tonnes of wheat to Syria. During the war, Damascus competed with the semi-autonomous Kurdish administration in the northeast to buy wheat from farmers across fertile lands. Last year, Assad's government priced wheat at $350 per tonne, and the Kurds at $310. After Assad's ouster, Damascus and the Kurds agreed in March to integrate Kurdish-led institutions into the new Syrian state, with negotiations ongoing on implementation. Damascus set wheat prices this month at between $290 and $320 per tonne, depending on the quality, plus a $130 bonus. The Kurdish-led administration offered $420 per tonne including a $70 bonus. - 'Poverty and hunger' - Damascus' agriculture ministry expects a harvest of 300,000 to 350,000 tonnes in government-controlled areas this year. Hassan Othman, director of the Syrian Grain Establishment, acknowledged Syria was not self-sufficient, in comments on state television. But he said authorities were working "to ensure food security by importing wheat from abroad and milling it in our mills". In northeast Syria's Amuda, farmer Jamshid Hassu, 65, inspected the tiny wheat grains from his fields, which cover around 200 hectares (around 500 acres). Despite heavy irrigation efforts to offset scarce rainfall, he said, production has halved. The FAO's Abu Assaf said indicators showed that "about 95 percent of rain-fed wheat has been damaged and affected", while irrigated wheat yields were down 30 to 40 percent. Hassu, who has been farming for four decades, said he had to pump water from depths of more than 160 metres (525 feet) to sustain his crops as groundwater levels plunge. Agriculture remains a vital income source in rural Syria, but without urgent support, farmers face ruin. "Without support, we will not be able to continue," Hassu warned. "People will suffer from poverty and hunger."
The Advertiser
3 days ago
- The Advertiser
Dollar sinks and global stocks extend record run
The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts. Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026. It left the greenback down more than 10 per cent for 2025. If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies. European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9. The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025. The euro jumped 0.6 per cent to $US1.173, its strongest since 2021. "The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said. "It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic. Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures. Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too. In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar. There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too. He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him. The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025. The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks. In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran. Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21. The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts. Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026. It left the greenback down more than 10 per cent for 2025. If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies. European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9. The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025. The euro jumped 0.6 per cent to $US1.173, its strongest since 2021. "The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said. "It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic. Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures. Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too. In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar. There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too. He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him. The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025. The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks. In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran. Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21. The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts. Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026. It left the greenback down more than 10 per cent for 2025. If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies. European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9. The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025. The euro jumped 0.6 per cent to $US1.173, its strongest since 2021. "The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said. "It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic. Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures. Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too. In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar. There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too. He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him. The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025. The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks. In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran. Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21. The dollar has sunk to a three-year low while world stocks notched their second record high in three days as a report that Donald Trump was planning to choose the next Federal Reserve chief early fuelled fresh bets on US rate cuts. Dollar selling continued after the Wall Street Journal said the US president - who has been urging the Fed to cut rates faster - was toying with the idea of selecting Chair Jerome Powell's replacement in the next few months before his formal departure in May 2026. It left the greenback down more than 10 per cent for 2025. If it stays that way in the coming days it will be its biggest first half of a year fall since the early 1970s - effectively the era of free-floating currencies. European shares edged higher again, buoyed by signs that the Israel-Iran ceasefire appeared to be holding and that European Union leaders were preparing to set their stance for US trade tariff talks ahead of a Trump-imposed deadline of July 9. The region's flagship STOXX 600 index was up 0.2 per cent on Thursday while MSCI's record-high world stocks benchmark was up 0.4 per cent, leaving it almost eight per cent ahead for 2025. The euro jumped 0.6 per cent to $US1.173, its strongest since 2021. "The striking thing on the dollar trend of the last six weeks is that in almost any market regime the dollar is struggling to appreciate," State Street's Michael Metcalfe said. "It seems to be in something of structural decline," he said, highlighting State Street data that investors were now the most negative they have been on the dollar - or "underweight" in banking speak - since the COVID pandemic. Euro traders also took heart from the outcome of Wednesday's NATO summit that saw the bloc's members of the alliance agree to spend five per cent of output on defence - broken down into 3.5 per cent on troops and weapons and 1.5 per cent on looser, defence-related measures. Overnight in Asia, Tokyo's Nikkei jumped 1.65 per cent to its highest level since January, while MSCI's broadest index of Asia-Pacific shares outside Japan finished slightly higher too. In currency markets, the Swiss franc firmed to a decade-high while the Japanese yen also strengthened again to below 144 per dollar. There are growing expectations that the Fed will soon be cutting US rates again following recent patchy data, but Trump's criticism of it for not moving quick enough has been escalating too. He has repeatedly targeted Fed chief Powell, and his idea of naming a successor well before Powell leaves office would effectively create a shadow over the head of the US central bank that could undermine him. The dollar index, which measures the US currency against six rivals, now sits at its lowest level since March 2022 following its slide in 2025. The two-year US Treasury yield, which typically moves in step with interest rate expectations, was down 1.5 basis points at 3.764 per cent, its lowest level in seven weeks. In commodities, oil prices rose on Thursday after their sharp slump following the Trump-brokered ceasefire early this week between longtime Middle East foes Israel and Iran. Brent crude futures rose 0.37 per cent to $US67.93 a barrel, while US West Texas Intermediate crude gained 0.45 per cent to $US65.21.
