The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1011 GMT - Sterling is the best-performing major currency so far in August, supported by evidence the U.K. economy is more resilient than expected to the energy-price shock triggered by the Iran war, MUFG Bank's Lee Hardman says in a note. Data Thursday showed the economy expanded 0.4% in the second quarter following 0.6% growth in the first quarter. While a soft labor market and recent lower-than-expected inflation have eased pressure on the Bank of England to raise interest rates, this has failed to weaken sterling. This suggests sterling is being lifted by stronger growth and still attractive yields, he says. Sterling rises 0.3% to $1.3525. The euro falls 0.1% to 0.8540 pounds. (renae.dyer@wsj.com)
0839 GMT - Markets increase their expectations of the Bank of England raising interest rates in 2026 due to inflation concerns as oil prices advance. The price of Brent crude rises 1.7% to $88.5 a barrel after the U.S. on Thursday threatened that it could maintain its blockade of Iranian ports indefinitely. As the U.K. is a net importer of oil its economy is sensitive to oil-price movements. Investors currently price in a total of 27 basis points of BOE rate hikes by year end, up 2 basis points from Thurday's pricing, LSEG data show. (miriam.mukuru@wsj.com)
0805 GMT - Risks to Zambia's copper mining industry are easing after Thursday's peaceful presidential vote in Africa's second-largest producer of the industrial metal, says Zaynab Hoosen, head of Africa Risk Forecasting at Pangea-Risk. Investors have committed as much as $10 billion to Zambia's copper mining industry since President Hakainde Hichilema came to office five years ago, although pressure is mounting on the government to ensure that the mining boom delivers economic benefits amid surging global copper demand. "Zambia's election comes at a critical point as global powers compete for a foothold in Africa's critical mineral supply chains," Hoosen says in a note. "President Hakainde Hichilema entered the vote as the favorite for a second term."(Nicholas.Bariyo@wsj.com;@Nicholasbariyo)
0753 GMT - Oil prices rise more than 1.5% as talks over the Strait of Hormuz stall and the U.S. prepares to send a fresh aircraft carrier to the Middle East. In early European trading, Brent crude gains 1.6% to $88.45 a barrel, while WTI futures are up 1.9% to $82.78 a barrel. Both benchmarks are headed for a weekly gain of nearly 6% after falling in the previous session on a weaker demand outlook and a large build in U.S. stocks. "The lack of a durable Hormuz agreement and continued threats across both Hormuz and the Red Sea should keep a sizeable geopolitical premium embedded in oil prices," says Soojin Kim, analyst at MUFG. Meanwhile, the U.S. military is preparing to replace the USS Abraham Lincoln with the USS George Washington as part of a scheduled Middle East deployment, The Wall Street Journal reported, citing U.S. officials. (giulia.petroni@wsj.com)
0738 GMT - Yields on U.K. and eurozone government bonds climb, tracking moves in U.S. Treasury yields as higher oil prices increase concerns about the risk of prolonged inflation. The price of Brent crude rises 1.5% to $88.38 a barrel after U.S. Defense Secretary Pete Hegseth told reporters Thursday the U.S. could maintain its blockade of Iranian ports indefinitely. Additionally, an auction Thursday saw U.S. 30-year Treasury bonds sell at a yield of 5.216%, the highest in 25 years. This highlights the high compensation investors are demanding for buying long-dated sovereign bonds due to fiscal and inflation concerns. Ten-year gilt yields climb 3.3 basis points to 4.985%, Tradeweb data show. Ten-year Bund yields rise 2.6 basis points to 3.160%. (miriam.mukuru@wsj.com)
0713 GMT - Frencken Group appears to be entering a stronger growth phase, with a potentially stronger 2H performance likely to extend into 2027, says DBS Group Research's Lee Keng Ling in a note. The Singapore semiconductor-tool maker's 2Q profit gained 12% on year due to stronger demand for semiconductors, medical equipment and industrial automation, she says. The company's outlook is growing brighter as customer demand strengthens amid the rising semiconductor cycle, the analyst adds. Capacity expansion, organic growth and selective merger-and-acquisition deals should push Frencken to reach its 1.0 billion Singapore dollar revenue target by 2028 or earlier, she adds. DBS maintains its buy rating and S$3.76 target price. Shares are down 5.7% at S$2.63. (megan.cheah@wsj.com)
0702 GMT - Bitcoin falls as an ongoing stalemate in the U.S.-Iran conflict lifts oil prices and reduces demand for risky assets. U.S. Defense Secretary Pete Hegseth told reporters Thursday the U.S. could maintain its blockade of Iranian ports indefinitely because the U.S. can rotate ships in and out. "Our concern still remains that there is no easy way out of the current crisis," Jefferies economist Mohit Kumar says in a note. Iran won't give up control over the Strait of Hormuz and the U.S. won't accept Iran charging tolls through the shipping route, he says. Iran has time on its side and has a higher tolerance of economic pain, he says. Bitcoin falls 0.4% to $63,140, LSEG data show. (renae.dyer@wsj.com)
0654 GMT - The dollar falls as recent U.S. data dampen the prospect of the Federal Reserve raising interest rates while Treasury yields rise as oil prices gain. Last week's weak labor market data combined with this week's subdued consumer and wholesale inflation data have prompted markets to trim U.S. rate-hike bets. Oil prices rise after the U.S. threatened to maintain a naval blockade of Iran indefinitely. Meanwhile, an auction of 30-year Treasurys on Thursday resulted in the highest yield since 2001, highlighting U.S. fiscal concerns. The DXY dollar index falls 0.1% to 99.854. The 30-year Treasury yield rises 1.7 basis points to 5.228% while the 10-year equivalent rises 1.8 basis points to 4.659%, Tradeweb data show.
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