LONDON — A group of some of the world’s most powerful oil producers will likely agree to continue increasing their output at a meeting on Tuesday, analysts say, as oil prices climb amid growing optimism over fuel demand.



International benchmark&nbsp;<a href="https://www.cnbc.com/quotes/@LCO.1">Brent</a>&nbsp;crude futures traded at $71.15 a barrel on Tuesday morning, up around 2.7%, while&nbsp;<a href="https://www.cnbc.com/quotes/@CL.1">West Texas Intermediate</a>&nbsp;crude futures stood at $68.61, for a gain of more than 3% and the contract’s highest level in more than two years. Oil prices have climbed more than 30% this year.



OPEC and its non-OPEC partners met via videoconference to discuss the next phase of production policy.



The Middle East-dominated group, which is responsible for over one-third of global oil production, is seeking to balance an expected upswing in demand with the potential for an increase in Iranian output.



The alliance, OPEC+, announced massive crude production cuts in 2020 in an effort to support prices when the coronavirus pandemic coincided with a historic demand shock.



In April, the group&nbsp;<a href="https://www.cnbc.com/2021/04/01/opec-to-decide-on-oil-production-policy-as-demand-concerns-persist.html">opted</a>&nbsp;to return 2.1 million barrels per day of supply back to the market over the May to July period, reflecting an optimistic outlook for improved mobility despite ongoing concerns about Covid worldwide.



OPEC+ is expected to reiterate this decision to gradually increase output during this week’s meeting.



“I think the event itself is going to be a nonevent. We expect them to basically reconfirm the plan that they laid out on April 1,” Jeffrey Currie, global head of commodities research at Goldman Sachs, told CNBC’s “Street Signs Europe” on Tuesday. “I think the bigger issue underlying this is: How are they going to deal with Iran?”



Iran&nbsp;<a href="https://www.cnbc.com/2021/05/26/iaea-chief-on-iran-nuclear-program-only-countries-making-bombs-are-enriching-at-this-level.html">is in discussions</a>&nbsp;with six world powers to revive its 2015 nuclear deal. The restoration of a deal could lead to more oil on the global market in coming months.



“It’s too early to give specific numbers around Iran,” Currie said. “So I think the best you can hope for in terms of how they are going to deal with Iran is the indication that they are willing to offset any increases in Iran. That could be the positive upside surprise coming out of this meeting.”



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/iran-flag.jpeg" alt="" class="wp-image-405555" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/iran-flag.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/iran-flag-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/iran-flag-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption> The flag of Iran is seen in front of the building of the International Atomic Energy Agency (IAEA) Headquarters ahead of a press conference by Rafael Grossi, Director General of the IAEA, about the agency’s monitoring of Iran’s nuclear energy program on May 24, 2021 in Vienna, Austria. Michael Gruber | Getty Images News | Getty Images</figcaption></figure>



OPEC Secretary General Mohammad Barkindo&nbsp;<a href="https://www.opec.org/opec_web/en/6444.htm" target="_blank" rel="noreferrer noopener">said Monday</a>&nbsp;that he did not believe higher Iranian supply would be a cause for concern.



“We anticipate that the expected return of Iranian production and exports to the global market will occur in an orderly and transparent fashion,” Barkindo said in a statement.



<h2 class="wp-block-heading" id="h-iran-likely-to-act-constructively">Iran likely to act ‘constructively’</h2>



“I think everybody is expecting Iran to add a lot of volume. So beyond the July increase, they aren’t likely to come out with any commitment,” Amrita Sen, chief oil analyst at Energy Aspects, told CNBC’s “Squawk Box Europe” on Tuesday.



“We know that as demand rises, we will need more OPEC barrels, but I think Iran is going to be the big question mark for them,” Sen said.



OPEC+ initially agreed to cut oil production by a record of 9.7 million barrels per day last year as global fuel demand collapsed, before easing cuts to 7.7 million and eventually 7.2 million from January. By July, the group’s production cuts will be on track to stand at 5.8 million.



“The most consequential issue for OPEC+ over the short term relates to the potential rise of Iranian production as a result of the US and Iran returning to JCPOA compliance,” Eurasia Group analysts said in a research note, referring to the acronym for the nuclear deal: the Joint Comprehensive Plan of Action.



Analysts at the risk consultancy said it believed progress in successive rounds of talks made a return to the deal likely in the third quarter of 2021.



“Over the medium term, OPEC+ will most likely adjust its policy to prevent the addition of Iranian barrels from derailing its market balancing strategy,” they continued. “Saudi Arabia will likely lean on Russia to better understand the scope of Iranian policy to work on adjustment plans. Iran would also probably act constructively as higher oil prices serve its own interests.”

iran-flag

Oil jumps to two-year high as OPEC and allies meet to decide production output

LONDON, June 1 (Reuters) &#8211; Global stocks hit a record high again on Tuesday and oil rose, as markets shrugged off concerns about rising inflation and looked ahead to U.S. data later in the week that should offer a major clue to the health of the world&#8217;s biggest economy.



Risk markets have eked out gains in recent weeks as traders balance optimism that some key markets are reopening after pandemic lockdowns with concern that rising inflation could prompt central banks to rein in stimulus programmes.



The recovery from COVID-19 also remains patchy in many parts of the world, with exports reviving but broader economic activity still dampened by measures to contain fresh outbreaks.



Against that backdrop, May euro zone inflation came in higher than expected at 2%, driven by rising energy costs, above the European Central Bank&#8217;s target of below but close to 2% &#8211; and with even higher levels expected later in the year.



Later in the week, Friday&#8217;s U.S. jobs data should also give a firmer steer on near-term Fed policy action.



In advance of that, MSCI&#8217;s broadest gauge of global stock markets rose 0.3% to a record high, led by broad gains across Europe&#8217;s leading indexes, with the STOXX Europe 600 extending gains to trade up 1.1%.



Futures for the S&amp;P 500 and the Nasdaq also pointed to a higher open on Wall Street, up 0.4%



&#8220;Although global stocks are now around 20% above pre-pandemic highs, a combination of strong earnings growth and reasonable valuations relative to still-low bond yields points to further upside for stocks,&#8221; said Mark Haefele, chief investment officer, UBS Global Wealth Management.



OIL GAINS



Overnight, MSCI&#8217;s broadest index of Asia-Pacific shares outside Japan rose 0.6%, hitting the highest in a month and taking total gains so far this year past 7%.



South Korean stocks rose 0.6% after a jump in May exports, and Chinese stocks climbed 0.2% after data showing factory activity expanded at the fastest pace this year in May.



This week&#8217;s main event is Friday&#8217;s U.S. payrolls data, with markets looking for a signal from the Federal Reserve on when it will start tapering its bond-buying programme.



Median forecasts are that 650,000 jobs were added in May, but the outcome is uncertain following April&#8217;s unexpectedly weak 266,000 gain.



Though U.S. inflation data last week was above estimates, another big miss on the jobs front would delay prospects for any wind-down of stimulus, analysts say.



Societe Generale strategist Sebastien Galy said he expected the jobs data to come in below or in line with consensus, but, given low levels of equity volatility, markets were primed for a jump on higher-than-expected numbers.



&#8220;We remain constructive on risk as we expect a disappointment on NFP (non-farm payrolls) but the equity volatility market is likely to reprice higher from its rather extreme lows,&#8221; he said in a note to clients.



As traders awaited clues on Fed direction, the dollar was up 0.1% against a basket of its major peers and the yield on U.S. 10-year government debt was up 2 basis points.



Germany&#8217;s 10-year Bund yield, meanwhile, was steady at around -0.18% with bond markets taking news of the surge in euro zone inflation in their stride.



Concerns about global inflation have driven gold up 8% this month to comfortably above $1,900, although the yellow metal gave up early session gains to last trade down 0.2% on the day



Oil prices, meanwhile, extended gains ahead of an OPEC+ meeting and on optimism that fuel demand will grow in coming months as the U.S. summer driving season gets under way.



Brent crude futures for August added 2% to $70.67 a barrel, while U.S. crude rose 2.6% to $68.06.



(Additional reporting by Dhara Ranasinghe in London; Editing by John Stonestreet, William Maclean and Alison Williams)

Forex trading vs Stock trading

World stocks hit another record, oil up in big data week

June 1 (Reuters) &#8211; Emerging markets made a strong start to June, with stocks rising to more than three-month highs on Tuesday while currencies moved further up in record territory.



May factory activity data from several emerging market countries showed a mixed bag, with manufacturing activity in South Korea and Russia expanding while slowing in India and contracting in Turkey.



In China, factory activity expanded at the fastest pace this year, but inflation pressure crimped production of some companies.



MSCI&#8217;s index of EM stocks rose 0.7% with most Asian heavyweights in the black, while those in Turkey, South Africa and Russia gained between 0.2% and 1.3%, with Moscow&#8217;s index hitting new highs. U.S. stock futures, meanwhile, indicated a higher open after an extended weekend.



&#8220;Although global stocks are now around 20% above pre-pandemic highs, a combination of strong earnings growth and reasonable valuations relative to still-low bond yields points to further upside for stocks,&#8221; said Mark Haefele, chief Investment officer at UBS Global Wealth Management.



China stocks ended higher. Married Chinese couples may have up to three children, China said on Monday, in a major shift which analysts say could support the country&#8217;s long-term economic growth.



The EM currencies index rose up to 0.13%, heading for an eighth consecutive session of gain &#8211; the longest run in seven months.



South Africa&#8217;s rand moved closer to its highest level in more than two years, while Russia&#8217;s rouble rose 0.4% to hit a 2-1/2-month peak.



Turkey&#8217;s lira moved further away from record lows. Turkey is extending its lira bank deposits&#8217; withholding tax support to June and July, Treasury sources said, having announced a cut on the withholding tax on longer-term bank deposits last year.



Turkey further eased measures meant to curb coronavirus infections on Monday including partially lifting a weekend lockdown and opening restaurants to a limited number of guests.



For GRAPHIC on emerging market FX performance in 2021, see <a href="http://tmsnrt.rs/2egbfVh">http://tmsnrt.rs/2egbfVh</a> 



For GRAPHIC on MSCI emerging index performance in 2021, see <a href="https://tmsnrt.rs/2OusNdX">https://tmsnrt.rs/2OusNdX</a>



(Reporting by Susan Mathew in Bengaluru; Editing by Subhranshu Sahu)

World map with charts and graphs as symbols of global finance

Stocks at 3-month highs; EM factory activity a mixed bag

SINGAPORE, June 1 (Reuters) &#8211; Asian equity markets hit a one-month peak on Tuesday, buoyed by the global stock rally, while gold flirted with five-month highs ahead of European and U.S. data this week that will likely offer clues on the health of the world economy.



European stocks were set for a mixed start, with Euro Stoxx 50 futures up 0.3%, while FTSE futures gave up 0.4%.



The world&#8217;s recovery from the COVID-19 pandemic remains patchy with exports reviving but broader economic activity still dampened by new measures to contain fresh outbreaks.



MSCI&#8217;s broadest index of Asia-Pacific shares outside Japan edged up 0.4%, hitting the highest in a month and taking total gains made so far this year to nearly 7%. World equities have risen for a fourth straight month as ample liquidity supported risk taking despite worries about higher inflation.



In Asia, Taiwan&#8217;s and South Korea&#8217;s indexes notched gains, making up for selling it Japanese, Australian and Chinese markets.



South Korea stocks rose as data showed the country&#8217;s exports logged their sharpest expansion in 32 years in May. That contrasted with Japanese data that showed companies cutting spending on plant and equipment for the fourth straight quarter.



China&#8217;s factory activity expanded at the fastest pace this year in May as domestic and export demand picked up, a business survey showed.



While asset markets have rallied last month, policymakers are focused on tackling inflation at a time when the underlying structural economy has been struggling to gain traction. Markets are also awaiting signals from the Federal Reserve on when it will start tapering its bond-buying programme.



&#8220;The fixation of the markets now is on inflation and rightly so because of so much of quantitative easing and supply chain disruptions,&#8221; said Hou Wey Fook, chief investment officer at DBS Bank.



&#8220;It seems to be that tapering should be on the cards. But it will be mild, it&#8217;ll be slow and will be very well communicated.&#8221;



This week&#8217;s main event is the U.S. payrolls on Friday with median forecasts at 650,000, but the outcome is uncertain following April&#8217;s unexpectedly weak 266,000 gain.



Though U.S. inflation data last week was above estimates, another big miss on the jobs front would delay prospects for any wind down of stimulus, analysts say.



The dollar languished near multi-month lows versus major peers as traders looked for clues on Fed direction.



&#8220;The world economy is clearly recovering, and that is going to be bad for the U.S. dollar because it&#8217;s a counter-cyclical currency,&#8221; said Commonwealth Bank of Australia strategist Joseph Capurso. &#8220;The U.S. dollar has been pretty heavy in the last few weeks, and I think it keeps trending lower.&#8221;



The Australian dollar strengthened as much as 0.5% as Australia&#8217;s current account surplus hit a record high and drove upward revisions to economists&#8217; growth forecasts.



But the Aussie later retreated after the central bank left its policy unchanged and stuck with a dovish tone.



The offshore Chinese yuan was steady at 6.3739 per dollar, pulling back from a three-year high of 6.3526 per dollar reached on Monday, after the monetary authority tightened banks&#8217; foreign exchange requirements to stem the currency&#8217;s rise.



Concerns about global inflation have supported gold, with prices for the yellow metal rising 8% this month, vaulting comfortably above $1,900. On Tuesday, gold prices traded near a five-month high scaled last week.



Oil prices rose ahead of an OPEC+ meeting and on optimism that fuel demand will grow in the months ahead with the summer driving season starting in the United States, the world&#8217;s top oil consumer.



Brent crude futures for August added 1.2% to $70.1 a barrel, while U.S. crude rose 1.9% to $67.6.



(Reporting by Anshuman Daga; Additional reporting by Kevin Buckland in Tokyo; Editing by Jacqueline Wong and Sam Holmes)

Stock market report. 3d illustration

Asian stocks hit month high, gold gains ahead of U.S. jobs data

May 31 (Reuters) &#8211; Gold firmed on Monday and was on course for its biggest monthly jump since July 2020 as the U.S. dollar headed for a second month of decline, while growing inflationary pressures also lifted bullion&#8217;s appeal.



Spot gold was up 0.1% at $1,904.34 per ounce by 0848 GMT, while U.S. gold futures rose 0.2% to $1,909.00. Spot prices have climbed nearly 7.7% so far this month.



Most markets will be closed in the United States and Britain on Monday for public holidays.



&#8220;The dollar is staying weaker, that&#8217;s fairly supportive. Gold bulls now have their eyes set on $2,000, and most are thinking it&#8217;s going to go quite a lot higher,&#8221; said Stephen Innes, managing partner at SPI Asset Management.



The dollar index was headed for its second straight monthly decline versus rivals, while the U.S. 10-year Treasury yield fell to 1.593% on Friday, reducing the opportunity cost of holding non-interest bearing gold.



Data on Friday showed U.S. consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve&#8217;s 2% target and posting its largest annual gain since 1992.



Gold is often seen as an inflation hedge, although Fed Chair Jerome Powell has repeatedly stated that higher inflation will be transitory.



&#8220;For as long as the Fed refuses to change its monetary policy in response to rising inflation, real interest rates will continue sliding ever further into negative territory, which is good news for gold,&#8221; Commerzbank analyst Carsten Fritsch said in a note.



Investors&#8217; focus this week will be on U.S. payrolls data on Friday, with median forecasts suggesting they will show an increase of 650,000.



Palladium rose 0.3% to $2,834.40 per ounce, but was set for its first monthly decline in four. Platinum climbed 0.6% to $1,184.00.



Silver gained 0.3% to $27.96 and was heading for its largest monthly gain since December.



(Reporting by Brijesh Patel and Arundhati Sarkar in Bengaluru; Editing by Rashmi Aich, Ramakrishnan M. and Jan Harvey)

Gold ingots and coins

Gold set for biggest monthly rise in 10 on soft dollar, inflation risk

May 31 (Reuters) &#8211; Gold prices held firm above the key $1,900-level on Monday after U.S. consumer prices rose more than expected in April and supported the metal as an inflation hedge. 



FUNDAMENTALS 



* Spot gold was steady at $1,903.25 per ounce by 0036 GMT. 



* U.S. gold futures edged 0.1% higher to $1,907 per ounce. 



* U.S. consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve&#8217;s 2% target and posting its largest annual gain since 1992. 



* The U.S. 10-year Treasury yield fell to 1.593% , reducing the opportunity cost of holding non-interest bearing gold. 



* The White House on Friday sent Congress a $6 trillion budget plan that would ramp up spending on infrastructure, education and combating climate change. 



* Asian shares edged higher on Monday, looking to extend their recent rally to a third week should U.S. jobs figures show the expected revival in hiring in May and keep the global recovery on track. 



* SPDR Gold Trust , the world&#8217;s largest gold-backed exchange-traded fund, said its holdings fell 0.1% to 1,043.21 tonnes on Friday from 1,044.08 tonnes on Thursday. 



* Physical gold demand in second-biggest bullion consumer India was negligible last week with most jewellery stores still shut by COVID-19 lockdowns, forcing dealers to offer steep discounts. 



* Japan&#8217;s industrial output rose in April, helped by the production of general purpose and electrical machinery, in a sign manufacturers continued to benefit from a recovery in appetite for goods in the United States and China. 



* Palladium fell 0.2% to $2,819.14 per ounce, silver gained 0.2% to $27.94 and platinum rose 0.5% to $1,182.74. 



(Reporting by Brijesh Patel in Bengaluru; Editing by Ramakrishnan M.)

gold-is-money-2430051_1920

Gold stays above $1,900/oz after U.S. inflation data lifts appeal

SYDNEY, May 31 (Reuters) &#8211; Asian shares were trying to extend their recent rally to a third week on Monday in the hope critical U.S. jobs figures show the expected revival in hiring in May and keep the global economic recovery on track.



MSCI&#8217;s broadest index of Asia-Pacific shares outside Japan added 0.4%, having rallied 2.2% last week. Japan&#8217;s Nikkei fell 1.1%, while Australia touched a fresh all-time peak.



Chinese blue chips slipped 0.4%, as surveys showed a slight slowdown in factory activity but a pick-up in the giant service sector.



&#8220;It feels like a market looking for direction in the face of uncertainty around the interplay between much-feared inflation and much hoped-for growth recovery,&#8221; says Patrik Schowitz, global multi-asset strategist at J.P. Morgan Asset Management.



&#8220;In this environment, while we continue to reduce risk exposure, we stay long given just how strong growth is likely to stay, as well as the remaining upside to economic and earnings growth expectations.&#8221;



Markets in the United States and Britain are closed for a holiday, but futures were still trading in Asia with the Nasdaq and S&amp;P 500 both ahead by 0.1%. EUROSTOXX 50 futures eased 0.2%.



The main event of the week will be U.S. payrolls on Friday with median forecasts at 650,000 but the outcome is uncertain following April&#8217;s shockingly weak 266,000 gain.



That April figure was close to 750,000 lower than forecasts, the largest &#8220;miss&#8221; in the history of the series.



NatWest Market economist Kevin Cummins noted that even with a rise of around 550,000 total payrolls would still be 7.7 million below the February 2020 level.



&#8220;The labour market would still be considered a long way from being recovered,&#8221; he added. &#8220;In our opinion, the data are unlikely to convince Fed Chair Powell that progress has been substantial enough just yet to start signalling tapering.&#8221;



The Federal Reserve next meets on June 16 and this week will be the last chance for members to talk on policy before the blackout period starts on June 5.



So far, investors have taken the Fed at its word that the labour market needs to improve a lot more before it talks of tapering. That helped yields on U.S. 10-year notes ease to 1.58% even as data on core inflation topped forecasts.



TWIN DEFICITS



The economic outperformance of the United States has a downside in that it has sharply widened the country&#8217;s trade deficit and added to its need for foreign funding for an already huge budget shortfall. &#8220;The U.S. economy will face a period of high fiscal deficits and rising debt levels for the foreseeable future, ensuring that &#8216;twin deficit&#8217; risk for the USD will remain a feature of the market landscape for years to come,&#8221; said Ray Attrill, head of FX strategy at NAB.



The dollar index stood at 89.983, near a five-month low. The euro was steady at $1.2197, just off a four-month high of $1.2266 hit last week.



The dollar has fared better on the Japanese yen as investors borrow the currency at super-low rates to buy higher-yielding assets. The dollar was last at 109.70 yen after touching a two-month top of 110.19 last week.



China&#8217;s yuan hit a fresh three-year high after recently breaching the psychologically important 6.4 per dollar level.



Concerns about global inflation and extreme volatility in cryptocurrencies has been a boon for gold which was holding at $1,906, after hitting a four-month high at $1,1912 last week.



Oil prices were firm after gaining more than 5% last week to reach two-year closing highs as expectations of a rebound in global demand outweighed concerns about more supply from Iran once sanctions are lifted.



All eyes will be on OPEC this week as it reviews its supply agreement, and any hint of an increase in output could pressure prices.



Brent added 38 cents to $69.10 a barrel, while U.S. crude rose 39 cents to $66.71.



(Editing by Stephen Coates)

Asia shares look to extend rally before U.S. jobs test

LONDON, May 28 (Reuters) &#8211; Charging stocks markets were on track for a seventh day- and fourth straight month of gains on Friday, as investors bet the United States will lead the world economy out of its COVID-19 slump with a $6 trillion spending boom.



Sell in May and stay away? Not this year folks.



European stocks hit a new record high as they opened in London, Frankfurt and Paris. Tokyo had leapt more than 2% overnight and the 50-country MSCI world index was now nearly 90% up from last March&#8217;s lows.



U.S. stocks were poised for further gains after reports President Joe Biden will seek $6 trillion in federal spending for the 2022 fiscal year in budget proposals later.



The results of a Reuters poll of around 300 analysts this week showed most see world stocks continuing to rise this year on robust economic and earnings recoveries, although any serious quickening of inflation would temper enthusiasm.



&#8220;We will get what we call &#8216;overheat&#8217;,&#8221; said Royal London Asset Management&#8217;s head of multi asset Trevor Greetham, predicting a &#8220;short and fiery&#8221; boom in some of the world&#8217;s major economies that may well cause a spike in inflation.



There were also significant moves in the currency and commodity markets.



The dollar hit a seven-week peak against the yen as traders braced for what are expected to be some steamy U.S. inflation figures later, while the Chinese yuan extended its hottest monthly streak since November.



Britain&#8217;s sterling suffered a minor wobble on talk it might delay a full relaxation of COVID restrictions next month. But it was still on course for its best month against the dollar this year and, at $1.4192, was close to a three month top.



Oil prices, which play a large role in inflation via energy costs, were nudging towards $70.



Brent and WTI are both on track to post weekly gains of 5% to 6% as analysts expect global oil demand to rebound closer to 100 million barrels per day in the third quarter on summer travel in Europe and the United States following widespread COVID-19 vaccination programmes.



The recent strong U.S. economic data, the world&#8217;s largest economy and oil consumer, has buoyed risk appetite. The number of Americans filing new claims for unemployment benefits fell to the lowest since mid-March 2020 figures showed on Thursday, beating estimates.



A separate report confirmed a 6.4% acceleration in the annualised rate of economic growth last quarter, bolstered by massive fiscal stimulus.



Positive signals on the economy helped lift benchmark Treasury yields back above 1.6% overnight and those on Germany&#8217;s Bunds, seen as the benchmark in Europe, ticked up to a still negative -0.17% in morning trading.



Bond markets have watched this week as multiple Federal Reserve officials have come out again to calm jitters over the growing evidence of price pressures, though they also signalled a possible start to talks about tapering stimulus.



The Fed&#8217;s vice chair for supervision, Randal Quarles, said on Thursday that he was &#8220;fully committed&#8221; to keeping monetary policy running full-throttle while jobs recover, while laying out the case that &#8220;upside&#8221; risks to inflation may be mounting.



In an interview with Reuters published on Friday one of the ECB&#8217;s top policymakers, Isabel Schnabel, said that while the euro zone economy was hopefully past the worst it still needed support.



&#8220;Rising yields are a natural development at a turning point in the recovery &#8211; investors become more optimistic, inflation expectations rise and, as a result, nominal yields go up,&#8221; Schnabel said. &#8220;This is precisely what we would expect and what we want to see.&#8221;



(Reporting by Marc Jones. Editing by Jane Merriman)

Stocks push for record high on $6 trillion U.S. spending hopes

Zambia&#8217;s central bank will increase the daily limit for foreign currency exchange transactions, it announced on Thursday, as part of an effort to draw transactions into official channels and reduce complication for businesses.



Commercial bank customers will be allowed to exchange $10,000 per day, increased from $5,000. Customers at retail foreign exchange bureaus will be permitted to exchange up to $5,000, raised from $1,000, Central Bank Governor Christopher Mvunga said.



&#8220;This will allow for a regulated, systematic market where people can transact within the formal channels,&#8221; Mvunga said of the measures, which will take effect on June 1.



The central bank said in a separate statement foreign exchange bureaus which currently source up to $100,000 per day from commercial banks would be limited to $20,000 per day starting next month.



The rationale for the revision is that foreign exchange bureaus should now be able to source foreign exchange from their customers who would be permitted to exchange $5,000 per day, the central bank said.



The limits were introduced 20 years ago, and the central bank had recognised that they were inconveniencing businesses and forcing people to buy hard currency on the black market.



The central bank said in a circular dated May 24 that it would observe the new over-the-counter foreign currency limits for a period of two months, subject to further review.



 (Reporting by Chris Mfula Editing by Promit Mukherjee and Peter Graff/Mark Heinrich)

currency

Zambia’s central bank to raise cap on foreign exchange transactions

<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/mr-prce-1-820x431.jpg" alt="" class="wp-image-405125" width="568" height="299" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/mr-prce-1-820x431.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/mr-prce-1-300x158.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/mr-prce-1-768x403.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/mr-prce-1.jpg 1200w" sizes="auto, (max-width: 568px) 100vw, 568px" /><figcaption><a rel="noreferrer noopener" target="_blank" href="https://www.google.com/url?sa=i&amp;url=https%3A%2F%2Fkillarneymall.co.za%2Fstore%2Fmr-price&amp;psig=AOvVaw09mMcLNlQI3Fu0fDyd2Lxj&amp;ust=1622202095638000&amp;source=images&amp;cd=vfe&amp;ved=2ahUKEwiS78ru4-nwAhWS_IUKHbaFBmkQr4kDegUIARCEAQ">Mr Price | Killarney Mall</a> Photo via <a rel="noreferrer noopener" target="_blank" href="https://www.google.com/url?sa=i&amp;url=https%3A%2F%2Fkillarneymall.co.za%2Fstore%2Fmr-price&amp;psig=AOvVaw09mMcLNlQI3Fu0fDyd2Lxj&amp;ust=1622202095638000&amp;source=images&amp;cd=vfe&amp;ved=2ahUKEwiS78ru4-nwAhWS_IUKHbaFBmkQr4kDegUIARCEAQ">killarneymall.co.za</a></figcaption></figure>



&nbsp;South Africa&#8217;s Mr Price said on Thursday it would pay a final dividend after full-year profit rose 1.9% on a strong second half and as it captured a bigger share of the market, pushing its shares to a two-year high.



South African clothing retailers were hit hard by COVID-19 lockdowns in April and May last year and the subsequent second wave of COVID-19 infections. Millions of job losses as a result of the pandemic also constrained discretionary spending.



However the pandemic also sparked a home improvement and DIY trend, giving a fresh lease of life to retailers.



The budget clothing and homeware retailer, benefitting from value-seeking shoppers, declared a final dividend of 462.7 cents per share, having skipped a payout a year ago.



It gained 1.2 billion rand in market share, with its clothing business gaining ground every month, Chief Executive Mark Blair said.



The company&#8217;s shares rose as much as 13% to their highest since May 2019.



&#8220;Mr Price released solid results that beat consensus expectations across most metrics in a very tough operating environment,&#8221; Anchor Capital&#8217;s equity analyst Zinhle Mayekiso said.



Trade in the first six weeks of its new financial year, to May 15, has also been strong, with group retail sales rising 27.5% compared to the same period in 2019, the retailer said.



For the 2020 year, diluted headline earnings per share (HEPS), the main profit measure in South Africa, ticked up to 1,049 cents in the 53 weeks ended April 3, from 1,029.4 cents a year earlier. Diluted HEPS in the second half grew 21.4%.



Total revenue from continuing operations fell 2.9% to 22.3 billion rand ($1.62 billion), with retail sales falling 2.4%. Online sales grew 64.1%, more than doubling in Mr Price apparel and Mr Price sport.



In clothing, retail sales and other income fell 5.8% overall, but notably improved in the second half as lockdowns eased, growing 5.9%. Homeware continued to capitalise on limited mobility and the work-from-home trend, increasing sales and other income by 4%. 



($1 = 13.7624 rand)



 (Reporting by Nqobile Dludla; Editing by Uttaresh.V and Kirsten Donovan)

mr prce

South Africa’s Mr Price resumes final dividend after strong H2

Copper prices gained on Wednesday as a planned labour strike at the world’s biggest copper mine in Chile threatened already low global supplies of the metal.



Benchmark copper on the London Metal Exchange (LME) were up 0.6% at $9,978.50 a tonne in official trading.



A union representing workers at BHP’s Escondida and Spence copper mines rejected the company’s contract offer and called on members to walk off the job from Thursday.



“If this strike at the Spence and Escondida mines happens, then it will be an issue for the market,” Roskill copper analyst Jonathan Barnes said.



He said other risks to supply in South America included uncertainty over the new constitution in Chile and mining royalties there and a lead in the Peru polls by a candidate who wants to implement new mining taxes and royalties.



“All of this adds up to the fact that mining companies will not invest because of the uncertainty and there won’t be any primary supply response at a time when the world is desperate for copper,” Barnes said.



DOLLAR: The dollar neared its weakest in five months, making dollar-denominated metals cheaper for holders of other currencies, which could boost demand.



CHINA PLAN: China’s banking regulator has asked lenders to stop selling investment products linked to commodities futures to mom-and-pop buyers to curb investment losses amid volatile commodity prices.



This comes after the Chinese government said it would crack down on the surging prices of industrial metals.



CONGO SUPPLY: The Kamoa-Kakula mine in Democratic Republic of Congo started producing copper concentrate on Tuesday, several months ahead of schedule, joint venture partners Ivanhoe Mines and Zijin Mining said.



OTHER METALS: Aluminium gained 0.9% to $2,393.50 a tonne, zinc rose 0.5% to $2,998.50, lead added 1% to $2,180, tin advanced 1% to $29,775 and nickel climbed 0.9% to $17,198.



(Reporting by Zandi Shabalala; editing by Emelia Sithole-Matarise and Barbara Lewis)

copper-1711056_1920

Copper boosted by planned labour strikes at Chile mines

LONDON/SYDNEY, May 27 (Reuters) &#8211; World stocks were pinned down on Thursday as investors awaited U.S. data expected to offer clues on inflation, with further pressures widely seen as sparking a scaling back of central banks&#8217; giant stimulus packages.



The Euro STOXX 600 lost 0.2%, with German shares down 0.5% and London&#8217;s main index making slim losses. France gained 0.1%.



Losses of around 0.2% in energy stocks were offset by 1.2% gains in the mining sector, while British bank HSBC gained 0.1% after a move to exit U.S. retail banking to focus on Asia.



Wall Street futures gauges pointed to losses of around 0.2% .



In focus was U.S. gross domestic product and jobless claims numbers expected later in the day. Investors also held back major bets before the monthly U.S. personal consumption report, due on Friday.



&#8220;We still believe inflation will not be transient, but will persist &#8211; this is where I think we differ with central banks,&#8221; said Jeremy Gatto, a portfolio manager at Unigestion.



For many investors, rising inflation means the U.S. Federal Reserve will slowly but surely edge towards a discussion about tightening monetary policy.



The prospect lent support to the dollar, which has been heavily shorted of late.



The MSCI world equity index, which tracks shares in 49 countries, was flat.



Earlier, MSCI&#8217;s broadest index of Asia-Pacific shares outside Japan clawed back losses to trade flat at 695.37, not too far from Wednesday&#8217;s high of 696.76, a level last seen on May 10.



TAPER TALK?



Global equities markets have been supported by a concerted effort from major central banks, which have pumped trillions of dollars into financial markets since last year while reiterating their lower-for-longer interest rate stance.



U.S. Federal Reserve Vice Chair Richard Clarida said this week recent inflation pressures would &#8220;prove to be largely transitory&#8221;, though he did add that policymakers will be at a point to begin discussing tapering in upcoming meetings.



The Fed Vice Chair for supervision, Randal Quarles, suggested that at some stage it will become important for the U.S. central bank to discuss plans to tighten its asset purchase programme.



With tapering on the agenda, the U.S. dollar index held on to Wednesday&#8217;s gains and was steady at 89.992.



&#8220;Whether (central banks) are going to do something early in the very small way &#8211; just to indicate they are starting and do it very gradually &#8211; or do something bigger next year, they&#8217;re the two really big scenarios for most investors,&#8221; said Shaniel Ramjee, senior investment manager at Pictet Asset Management.



The Chinese yuan hit a three-year high as China&#8217;s central bank kept to the sidelines.



The euro edged up to $1.22030, after losing ground a day earlier after the European Central Bank&#8217;s Executive Board Director Fabio Panetta said it was too early to taper its emergency bond buying programme.



The New Zealand dollar was among the best performing currencies overnight after hints of a 2022 rate hike by the Reserve Bank of New Zealand. On Thursday, it retreated from a three-month top of $0.7317 and was last as $0.7294.



In commodities, gold prices hovered near $1,900 per ounce, after hitting its highest since Jan. 8 at $1,912.50.



(Reporting by Tom Wilson in London and Swati Pandey in Sydney; Editing by Lincoln Feast, Shri Navaratnam &amp; Giles Elgood)

Inflation questions keep stocks in check

ABIDJAN, May 26 (Reuters) &#8211; A fifth of cocoa purchases by multinational companies in Côte d&#8217;Ivoire must be fulfilled by local firms in an effort to improve competition in the world&#8217;s largest cocoa-exporting economy, according to a government decree on Wednesday.



Until now, major international players have used their greater financial muscle to buy and export all the available cocoa, while local firms lacked access to financing and to European and U.S. chocolate makers to compete on an even playing field.



As a result, around half of local exporters have gone out of business in the past five years, government spokesman Amadou Coulibaly said.



&#8220;In order to promote the emergence of national winners in the sector and to create sustainable conditions for their activities, the council (of ministers) has decided to allocate 20% of bean exports to bean exporters and processors,&#8221; he said.



The decree, whose announcement had been expected in recent weeks, applies also to exports of coffee beans, he said.



The international cocoa companies that currently hold Ivorian export contracts are Cargill, SucDen, Oam , Barry Callebaut, Touton and Ecom.



(Reporting by Ange Aboa Writing by Alessandra Prentice; Editing by Alison Williams and Nick Macfie)

Cocoa_farmer_David_Kebu_Jnr_holding_the_finished_product,_dried_cocoa_beans_ready_for_export._(10687070725)

Côte d’Ivoire boosts local firms’ share in cocoa exports by decree

<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/copper-1711056_1920-820x547.jpg" alt="" class="wp-image-403458" width="690" height="460" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/copper-1711056_1920-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/copper-1711056_1920-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/copper-1711056_1920-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/copper-1711056_1920-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/copper-1711056_1920.jpg 1920w" sizes="auto, (max-width: 690px) 100vw, 690px" /><figcaption>Photo: via Pixabay</figcaption></figure>



Copper prices gained on Wednesday as a planned labour strike at the world&#8217;s biggest copper mine in Chile threatened already low global supplies of the metal.



Benchmark copper on the London Metal Exchange (LME) were up 0.6% at $9,978.50 a tonne in official trading.



A union representing workers at BHP&#8217;s Escondida and Spence copper mines rejected the company&#8217;s contract offer and called on members to walk off the job from Thursday.



&#8220;If this strike at the Spence and Escondida mines happens, then it will be an issue for the market,&#8221; Roskill copper analyst Jonathan Barnes said.



He said other risks to supply in South America included uncertainty over the new constitution in Chile and mining royalties there and a lead in the Peru polls by a candidate who wants to implement new mining taxes and royalties.



&#8220;All of this adds up to the fact that mining companies will not invest because of the uncertainty and there won&#8217;t be any primary supply response at a time when the world is desperate for copper,&#8221; Barnes said.



DOLLAR: The dollar neared its weakest in five months, making dollar-denominated metals cheaper for holders of other currencies, which could boost demand.



CHINA PLAN: China&#8217;s banking regulator has asked lenders to stop selling investment products linked to commodities futures to mom-and-pop buyers to curb investment losses amid volatile commodity prices.



This comes after the Chinese government said it would crack down on the surging prices of industrial metals.



CONGO SUPPLY: The Kamoa-Kakula mine in Democratic Republic of Congo started producing copper concentrate on Tuesday, several months ahead of schedule, joint venture partners Ivanhoe Mines and Zijin Mining said.



OTHER METALS: Aluminium gained 0.9% to $2,393.50 a tonne, zinc rose 0.5% to $2,998.50, lead added 1% to $2,180, tin advanced 1% to $29,775 and nickel climbed 0.9% to $17,198. 



(Reporting by Zandi Shabalala; editing by Emelia Sithole-Matarise and Barbara Lewis)

SHANGHAI, May 26 (Reuters) &#8211; Asian shares rose on Wednesday and the U.S. dollar languished near multi-month lows after U.S. Federal Reserve officials reaffirmed a dovish monetary policy stance, reassuring investors worried about the prospect of rising inflation.



European share markets were set to follow suit, with pan-region Euro Stoxx 50 futures up 0.37% in early deals. German DAX futures gained 0.41% and FTSE futures were fractionally in postive territory.



U.S. stock futures pointed to a higher open on Wednesday with S&amp;P 500 e-minis up 0.32% at 4,198.75.



Richard Clarida, the Fed&#8217;s vice chair, said on Tuesday that the U.S central bank would be able to curb an outbreak of inflation and engineer a &#8220;soft landing&#8221; without throwing the country&#8217;s economic recovery off track.



All the same, Clarida&#8217;s comments reflect a shifting tone at the Fed. A month ago, Fed Chair Jerome Powell said it was &#8220;not yet&#8221; time to even contemplate discussion of policy tapering, but more recently policymakers have acknowledged they are closer to debating when to pull back some of their crisis support for the U.S. economy.



A similar shift was evident in New Zealand, where the central bank held interest rates at a record low on Wednesday, but hinted at a hike as early as September next year. The prospect of higher rates sent the New Zealand dollar soaring more than 1%.



That uncertainty weighed on U.S. stocks overnight, with the Dow Jones Industrial Average down 0.24%, the S&amp;P 500 off 0.21% and the Nasdaq Composite 0.03% lower.



But in Asia, the soothing Fed comments helped to boost sentiment.



&#8220;The messages were not necessarily new but they reinforced the prevailing consensus still that the bulk of the surprise in April (CPI) can be traced to transitory elements,&#8221; said Stefan Hofer, chief investment strategist at LGT in Hong Kong.



&#8220;The proof is in the pudding so to speak over the coming months, how much of the CPI increase is structural and how much of it is transitory. And the jury is I would say still out on that, but the Fed is sticking to its guns and markets seem to be by and large still comfortable with that.&#8221;



U.S. consumer prices increased more than expected in April as booming demand amid a reopening economy pushed against supply constraints.



MSCI&#8217;s broadest index of Asia-Pacific shares outside Japan rose more than 0.5% to over two-week highs, while Tokyo&#8217;s Nikkei advanced 0.42%.



Taiwan shares added 0.12% and Hong Kong&#8217;s Hang Seng index rose 0.85%. Chinese blue-chips were up 0.24% after posting their biggest daily gain in nearly 11 months on Tuesday on easing inflation fears and a strong yuan.



On Wednesday, China&#8217;s onshore and offshore yuan strengthened to near three-year highs against the dollar, with the onshore currency breaking through a key level that had prompted state banks to step in a day earlier.



The dollar index dipped 0.11% to 89.608 after touching its lowest level since Jan. 7 on Tuesday. The greenback was barely changed against the yen at 108.78 and the euro ticked up 0.07% to $1.2258.



Analysts at Jefferies said regional equity markets could benefit, especially given a weak dollar could help boost global trade and emerging markets by lowering global prices of goods and services.



&#8220;A weak dollar should underwrite emerging market performance despite very mixed vaccine roll-outs to date,&#8221; they said in a note.



&#8220;Until the U.S. government declares the pandemic is over and job growth is running at one million plus per month, tapering is unlikely to happen…In the meantime, real rates will be heavily negative. Moreover, based on the dollar&#8217;s Real Effective Exchange Rate, the greenback cannot be described as being &#8216;cheap&#8217;.&#8221;



The benchmark U.S. Treasury yield edged higher after falling to multi-week lows on Thursday on easing inflation concerns and a strong auction of 2-year notes.



The 10-year yield rose to 1.5774%, from a close of 1.564% on Tuesday, but the two-year yield dipped to 0.1485%, from a close of 0.152%.



Oil was little changed as traders weighed expectations of improving demand in the U.S. against the possibility of new supply from Iran. Global benchmark Brent crude was up 5 cents at $68.70 and U.S. crude fell 3 cents to $66.04 per barrel.



Bitcoin gained 2.39% to $39,314.81 despite China&#8217;s northern region of Inner Mongolia escalating a campaign against cryptocurrency mining on Tuesday, days after Beijing vowed to crack down on bitcoin mining and trading.



Spot gold added 0.2% to $1,903.13 an ounce.



(Reporting by Andrew Galbraith Editing by Shri Navaratnam)

Asian shares gain, dollar soft as Fed calms inflation fears

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/4GJHXVSYLNN3JHWJ6ASXG7MLLI-820x547.jpg" alt="" class="wp-image-404814" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/4GJHXVSYLNN3JHWJ6ASXG7MLLI-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/4GJHXVSYLNN3JHWJ6ASXG7MLLI-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/4GJHXVSYLNN3JHWJ6ASXG7MLLI-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/4GJHXVSYLNN3JHWJ6ASXG7MLLI.jpg 960w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>A coal-fired heating complex is seen behind the ground covered by snow in Harbin, Heilongjiang province, China November 15, 2019. Picture taken November 15, 2019. REUTERS/Muyu Xu</figcaption></figure>



May 25 (Reuters) &#8211; A stark appeal by the world&#8217;s top energy body to stop investment in new fossil fuel projects by next year has met a mixed reception from the world&#8217;s top producers &#8211; from guarded praise and pledges to cut back on coal to outright defiance.



The International Energy Agency said in its &#8220;Net Zero by 2050&#8221; report last week that investors should not fund new oil, gas and coal supply projects beyond this year if the world wants to reach net zero emissions by mid-century and meet the goals of the 2015 Paris Agreement on climate change.



Its findings aim to encourage ambitious climate targets from countries attending the United Nations&#8217; Climate Change Conference (COP26) in November in Glasgow, Scotland but has yet to garner a full commitment from any country.



G7



The world’s seven largest advanced economies agreed on Friday to stop international financing of coal projects that emit carbon by the end of this year and phase out such support for all fossil fuels.



The United States, Britain, Canada, France, Germany, Italy and Japan &#8211; plus the European Union said in a joint statement: &#8220;international investments in unabated coal must stop now&#8221;.



UNITED KINGDOM



Alok Sharma, the UK minister presiding over the global climate talks in Scotland who requested the IEA publish its Net Zero report, stopped short of committing to the fossil fuel ban.



&#8220;I welcome this @IEA report, which sets a roadmap to #NetZero and shares many of the priorities of the UK,&#8221; Sharma tweeted, adding that the UK wanted to &#8220;consign coal power to history&#8221;.



The UK government reached a deal with North Sea industry players in March to allow new offshore oil licensing rounds in exchange for pledges to cut emissions.



Following the G7&#8217;s communique on climate, Sharma said: &#8220;We are acting abroad as we’re doing at home by agreeing to phase out international fossil fuel finance, starting with coal.&#8221;



NORWAY



Norwegian Prime Minister Erna Solberg described the IEA&#8217;s roadmap as simply one of &#8220;many reports&#8221;, telling the NTB news agency it would not change the petroleum policy of Western Europe&#8217;s biggest oil producing country.



Norway has offered tax breaks as an incentive for new higher-cost oil projects and is preparing new licenses for offshore exploration.



&#8220;If this roadmap becomes a reality…it may in the long run affect the companies&#8217; interest in looking for new discoveries,&#8221; Norway&#8217;s Oil and Energy Minister Tina Bru told Reuters.



UNITED STATES



White House National Climate Advisor Gina McCarthy said the IEA advice deserved close scrutiny but that change would be gradual and fossil fuel projects remained in the pipeline.



&#8220;I think that&#8217;s one of the things that we have to think about and struggle with… I&#8217;m not suggesting this transformation is going to quick&#8221;, she said, noting that hundreds of new U.S. natural gas units were planned.



U.S. climate envoy John Kerry also praised the report but also stopped short of any new commitments.



&#8220;New @IEA report is an important guide for how the energy sector​ can reach net-zero by 2050,&#8221; he tweeted. &#8220;It shows that we must ramp up existing technologies to rapidly decrease emissions by 2030.&#8221;



EUROPEAN UNION



The European Union&#8217;s head of climate change policy Frans Timmermans said the bloc seeks to work harder to curb emissions through changes to its tax regime.



&#8220;It’s not by chance that we will propose amending the energy taxation regulation,&#8221; he said an interview with the Euractiv information website. &#8220;We need to get out of oil, gas, and coal. We need to have a fair taxation system that incentivises this.&#8221;



&#8220;That&#8217;s more or less the direction we will take. And I feel very supported in this by the IEA’s recent net zero report.



JAPAN



Asia&#8217;s third-largest carbon emitter in 2019, after China and India, Japan said the report did not align with its policy.



Akihisa Matsuda, the deputy director of international affairs at Japan&#8217;s Ministry of Economy, Trade and Industry (METI), said the government has no plans to immediately stop oil, gas and coal investments.



&#8220;The report provides one suggestion as to how the world can reduce greenhouse gas emissions to net zero by 2050, but it is not necessarily in line with the Japanese government&#8217;s policy,&#8221; he said.



OPEC



Oil producer club OPEC said the IEA&#8217;s recommendations on curbing fossil fuel emissions could lead to oil-price volatility if it is acted on.



&#8220;The claim that no new oil and gas investments are needed post-2021 stands in stark contrast with conclusions often expressed in other IEA reports and could be the source of potential instability in oil markets if followed by some investors,&#8221; OPEC&#8217;s report said.



(Reporting By Noah Browning)

4GJHXVSYLNN3JHWJ6ASXG7MLLI

IEA’s urgent fossil fuel warning earns mixed reception from producers

HANOI/BEIJING, May 25 (Reuters) &#8211; Commodities markets are unlikely to experience a &#8220;super-cycle&#8221; in the next few years, experts and audience polled at an online metals seminar on Tuesday said.



&#8220;We&#8217;re not a huge believer in a super-cycle now. You&#8217;ve started to see some central bank starting to taper bond buying and if they are not tapering, they&#8217;ve started to talk about it,&#8221; said Geordie Wilkes, head of research at Sucden Financial.



&#8220;We are also seeing emerging markets starting to increase some of their interest rates and really started to look at inflation and see how we can keep a cap on that after the rising asset prices we have seen,&#8221; Wilkes added.



A global demand recovery as some economies bounce back from the COVID-19 pandemic, strong liquidity injection from trillions of dollars worth of stimulus, and supply disruptions have fuelled some metals prices including copper and iron ore to record highs.



Some global banks are predicting a multi-year super-cycle for commodities, driven by shortages and strong demand from the renewable energy and electric vehicle sectors.



A poll at the LME Asia Metals seminar on Tuesday showed only 6.49% of the audience see &#8220;super-cycle&#8221; as an accurate word to describe the main force for commodities market trends in the next 12 months, while 33.77% voted for liquidity and inflation and 22.08% went for Chinese demand and a rebound for developed economies.



&#8220;We view COVID-19 and the subsequent recovery from COVID-19, even if that&#8217;s somewhat extended, to be somewhat transitory. There&#8217;s a possibility I believe in around 2023 we could see some (Federal Reserve) tightening,&#8221; said Thomas Horn, head of Macquarie Group&#8217;s commodities and global markets in China.



All experts agreed that the energy transition trend, which serves major economies&#8217; carbon neutralisation targets, will benefit some metals, notably copper, nickel and lithium. [



Another poll at the seminar showed a dominating preference for copper as the most benefited metal in the next 6-12 months at 52.69% of all voted, followed by lithium at 16.13%, aluminium at 13.98%, silver at 8.6%, nickel at 5.38% and cobalt at only 3.23%.



Copper will be a dark horse, supported by infrastructure demand and the fast growing new energy vehicle market, said Liu Shoujian, deputy chief executive officer of CCB International.



Sucden Financial&#8217;s Wilkes said &#8220;copper demand from … the green economy is looking strong.&#8221;



A new energy vehicle needs 80 kg (176 lb) of copper compared with 23 kg in an internal combustion engine vehicle, while charging, wiring and grid investment of renewable energy will also generate demand for copper, he added.



Lithium, nickel and low-carbon aluminium will also be sought after amid the energy transition trend, Wilkes said.



Macquarie&#8217;s Horn said although copper might see a small surplus during 2022-2023 due to a supply recovery and slightly slower demand growth in traditional sectors, the energy transition will take over in the longer term.



&#8220;Continued growth of commodities leveraged to energy transition will win out and we see a key inflection point right around the end of 2024-2025 where that supply will plateau and we have high probability of a (copper) deficit,&#8221; Horn said.



(Reporting by Shivani Singh and Mai Nguyen; Editing by Stephen Coates)

Economy

Oil jumps to two-year high as OPEC and allies meet to decide production output

World stocks hit another record, oil up in big data week

Stocks at 3-month highs; EM factory activity a mixed bag

Asian stocks hit month high, gold gains ahead of U.S. jobs data

Gold set for biggest monthly rise in 10 on soft dollar, inflation risk

Gold stays above $1,900/oz after U.S. inflation data lifts appeal

Asia shares look to extend rally before U.S. jobs test

Stocks push for record high on $6 trillion U.S. spending hopes

Zambia’s central bank to raise cap on foreign exchange transactions

South Africa’s Mr Price resumes final dividend after strong H2

Copper boosted by planned labour strikes at Chile mines

Inflation questions keep stocks in check

Côte d’Ivoire boosts local firms’ share in cocoa exports by decree

Copper boosted by planned labour strikes at Chile mines

Asian shares gain, dollar soft as Fed calms inflation fears

IEA’s urgent fossil fuel warning earns mixed reception from producers

No commodities ‘super-cycle’ but copper demand from green economy bright

News Tips

Advertise With Us

Economy

Oil jumps to two-year high as OPEC and allies meet to decide production output

World stocks hit another record, oil up in big data week

Stocks at 3-month highs; EM factory activity a mixed bag

Asian stocks hit month high, gold gains ahead of U.S. jobs data

Gold set for biggest monthly rise in 10 on soft dollar, inflation risk

Gold stays above $1,900/oz after U.S. inflation data lifts appeal

Asia shares look to extend rally before U.S. jobs test

Stocks push for record high on $6 trillion U.S. spending hopes

Zambia’s central bank to raise cap on foreign exchange transactions

South Africa’s Mr Price resumes final dividend after strong H2

Copper boosted by planned labour strikes at Chile mines

Inflation questions keep stocks in check

Côte d’Ivoire boosts local firms’ share in cocoa exports by decree

Copper boosted by planned labour strikes at Chile mines

Asian shares gain, dollar soft as Fed calms inflation fears

IEA’s urgent fossil fuel warning earns mixed reception from producers

No commodities ‘super-cycle’ but copper demand from green economy bright

News Tips

Advertise With Us

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