The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
0849 ET - Treasury yields rise ahead of U.S. inflation data due later this week and following July's unexpected negative payroll numbers. Iran makes tough demands to reopen Hormuz, pushing oil futures up 1.5%. Economists surveyed by WSJ expect July's 12-month CPI inflation to cool slightly to 3.4% from 3.5%, with core slowing to 2.5% from 2.6%. Odds of a September hike fall to 46% from 67% a week ago, as the Fed is now expected to hold, according to CME data. The WSJ Dollar Index rises 0.2% as the greenback strengthens 0.6% against the yen. The 10-year yield is at 4.662%, up from Friday's settle of 4.657%. The two-year rises to 4.222% from 4.203%. (paulo.trevisani@wsj.com; @ptrevisani)
0817 ET - Barrick's settlement with Newmont may be a potential drawback for Barrick shareholders, according to Citi analyst Alexander Hacking in a report. The $1.95 billion deal resolves the Nevada Gold Mines joint venture disputes between the two miners, and clears the path for Barrick's North American IPO of its gold assets, Hacking says. However, the payment to fold in Fourmile "may be below what some investors were expecting," he says. "Investor consensus seemed to be that Fourmile was a $10-20bn asset and thus a vend in payment from NEM for their 38.5% could be in the $4-8bn range," according to Hacking.(adriano.marchese@wsj.com)
0745 ET - European natural-gas prices climb more than 5% as uncertainties surrounding the reopening of the Strait of Hormuz raise concerns about supplies ahead of winter. "Europe is well behind in refilling its storage facilities before the heating season, with levels sitting at 58% compared with normal seasonal levels of 70%," ANZ analysts say. "However, even if the strait reopens, shipping companies will require a sustained period of calm before making the journey through the key waterway." In afternoon trading, the benchmark Dutch TTF contract is up 5.7% to 58.80 euros a megawatt-hour. (giulia.petroni@wsj.com)
0614 ET - Palm oil rose during the Asian trading session. Sentiment was likely supported by strength in overnight rival oil prices, amid concerns over Iran rejecting talks with the U.S., making a deal to reopen the Strait of Hormuz elusive, Kenanga Futures writes. There is also improving demand prospects from India ahead of the festive season, it adds. The Bursa Malaysia Derivatives contract for October delivery rose 47 ringgit to 4,724 ringgit a ton. (kimberley.kao@wsj.com)
0518 ET - The Democratic Republic of Congo's ban on copper and cobalt concentrate exports is expected to have limited impact on global copper markets, Goldman Sachs analysts say, calling it an administrative extension of the country's long-standing push to process minerals domestically rather than a new supply shock. "We estimate the remaining affected flow to be modest relative to the global market, or 0.3% of global mine supply, while the Mines Ministry retains discretion to grant waivers," they say. Copper futures trade above $14,000 a metric ton, supported by concerns over potential U.S. import tariffs and tightening inventories outside the country. (giulia.petroni@wsj.com)
0500 ET - Copper prices hold above $14,000 a metric ton on tightening supplies and easing concerns about a September rate hike by the Federal Reserve. In midmorning European trading, three-month copper futures on the LME rise 1% to $14,160 a ton. "On the London Metal Exchange, the premium of spot prices over the three-month future hit a six-month high of $154 a ton, a sign of tightness in the physical market," analysts at ANZ say. "This comes as metal continues to flow into the U.S. ahead of a possible tariff being placed on imports by the Trump administration." Meanwhile, traders have scaled back expectations of an imminent interest-rate hike by the Fed. Lower interest rates typically boost industrial metals by weakening the U.S. dollar and reducing inventory borrowing costs. (giulia.petroni@wsj.com)
0320 ET - Gold prices hold above the $4,400-a-troy-ounce mark after booking their best weekly performance since January, as investors await key U.S. inflation data for more cues on the Federal Reserve's policy path. "The rally was supported by weaker U.S. economic data reducing the risk of near-term rate hikes, mounting U.S. fiscal debt concerns, a softer dollar and continued demand from central banks and Asian investors," analysts at Saxo Bank say. After the latest data showed the U.S. economy unexpectedly shed jobs in July, traders price in only a 44% chance of a rate hike in September, according to the CME Group's FedWatch tool. In early European trading, New York gold futures are up 0.2% to $4,410 an ounce. (giulia.petroni@wsj.com)
0303 ET - Comex gold futures are seeking to rise beyond resistance at $4,400 an ounce, RHB Retail Research's Joseph Chai says in a research report. The futures closed Friday with a long bullish candlestick pattern on the daily chart, the analyst notes. This, together with the upward-rounding relative strength index, indicates that gold bulls remain in control, Chai says. The commodity will likely break past $4,400 an ounce, and extend gains toward subsequent resistance at $4,650 an ounce, the analyst says. Spot gold is 0.4% higher at $4,358.71 an ounce. (ronnie.harui@wsj.com)
2244 ET - Iron ore futures prices across different deliveries are mostly lower in early Asian trade. The most actively traded September iron ore contract on the Dalian Commodity Exchange is flat at 716.00 yuan a ton. While China's iron ore supply remains ample, steel demand has been weak as the country's official manufacturing PMI contracted from the preceding month, Galaxy Futures says in a research note. As overseas steel demand is also expected to drop, iron ore prices could decline further in the next month, the brokerage says. (sherry.qin@wsj.com)
2243 ET - Hillgrove Resources' new copper-hedging program is modest and adds a good level of support in case prices soften, according to analysts at MA Moelis Australia. They say it makes sense for Hillgrove to ensure a minimum price for some of its production. The volumes--Hillgrove hedged 3,600 metric tons over the 12 months--seem appropriate, they add. "While recent times have seen the market grow cautious of hedging in general, it is still incumbent upon companies to ensure appropriate risk mitigation," the analysts say. MA has a buy rating and a 9.5 Australian cents a share target on Hillgrove. The stock is down 0.8% at 6.35 Australian cents. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2243 ET - Palm oil rises in Asian trading, driven by biodiesel demand and weather concerns that could weigh on output, AmInvestment Bank says in a note. Technical analysis suggests crude palm oil futures' broader uptrend should remain intact although near-term consolidation may persist, it adds. AmInvestment Bank expects palm oil prices to face resistance at 4,700 ringgit a ton and find support at 4,650 ringgit a ton. The Bursa Malaysia Derivatives contract for October delivery is higher by 14 ringgit at 4,691 ringgit a ton. (yingxian.wong@wsj.com)
2237 ET - A good U.S. crop season is unlikely to benefit crude palm oil prices, given U.S. soybean oil and CPO prices have decoupled, Maybank IB's Ong Chee Ting says in a note. Soybean oil is now largely used to meet the U.S. renewable-fuel standard, limiting the impact of a good U.S. soybean crop on CPO prices, the analyst notes. However, a major soybean harvest failure could prompt the U.S. to import feedstocks from global markets, supporting CPO prices, he says. Maybank maintains its 12-month neutral view on Southeast Asia's plantations sector but remains positive over the three-month period. SD Guthrie, Sarawak Oil Palms and Genting Plantations are its top picks.
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