Oil falls as Trump urges OPEC to lower prices

NEW YORK – Oil fell 1% on Thursday after US President Donald Trump urged Saudi Arabia and OPEC to bring down its cost during his address at the World Economic Forum.

Uncertainty over how Trump’s proposed tariffs and energy policies would affect global economic growth and energy demand also weighed on prices.

Brent crude futures settled 71 cents, or 0.9%, lower at USD 78.29 a barrel. US West Texas Intermediate crude (WTI) settled down 82 cents, or 1.09%, to USD 74.62.

Prices dipped after Trump announced he would ask Saudi Arabia and OPEC to bring down the cost of oil during his speech at the World Economic Forum in Davos, Switzerland.

“Trump’s call for lower oil prices will naturally be welcomed by consumers and businesses but received warily by the US oil industry and other global suppliers,” said Clay Seigle, senior fellow for energy security at the Center for Strategic and International Studies.

The energy industry has been calling for increased investments in global oil and gas projects, but bringing down oil prices could raise concerns about the economics of new projects, he added.

US crude oil stockpiles slipped to their lowest level since March 2022 last week even as refining activity slowed, the Energy Information Administration (EIA) said on Thursday. But the drawdown was smaller than analysts had expected. Distillate inventories also declined, while gasoline inventories rose, the EIA said.

The broader economic implications of US tariffs could further dampen global oil demand growth, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.

Trump has said he would add new tariffs to his sanctions threat against Russia if the country does not make a deal to end its war in Ukraine.

He also vowed to hit the European Union with tariffs and impose 25% tariffs on Canada and Mexico. On China, Trump said his administration was discussing a 10% punitive duty because fentanyl is being sent from there to the US

On Monday he declared a national energy emergency intended to provide him with the authority to reduce environmental restrictions on energy infrastructure and projects and ease permitting for new transmission and pipeline infrastructure.

There will be “more potential downward choppy movement in the oil market in the near term due to the Trump administration’s lack of clarity on trade tariffs policy and impending higher oil supplies from the US”, OANDA senior market analyst Kelvin Wong said in an email.

(Reporting by Nicole Jao, Paul Carsten, Emily Chow, and Trixie Yap. Editing by Mark Potter and Nick Zieminski)

Trump uncertainties push safe-haven gold to near all-time high

Gold prices soared to near three-month highs on Wednesday, trading just below its record peak, fuelled by a soft dollar and lack of clarity around US President Donald Trump’s policy plans, which investors fear could trigger trade wars and elevate market volatility.

Spot gold added 0.4% to USD 2,755.2 per ounce as of 02:29 p.m. ET (1629 GMT). Prices were at their highest since Oct. 31 when they hit their all-time high of USD 2,790.15.

US gold futures settled 0.4% higher at USD 2,770.90.

The dollar index dipped to a more-than-three-week low earlier in the session, making greenback-priced bullion less expensive for holders of other currencies.

“There are uncertainties with proposed tariffs and other things, and gold typically does well when there’s a large or even a moderate amount of uncertainty in the market, it’s a natural place where people gravitate to,” said Ryan McIntyre, senior portfolio manager at Sprott Asset Management.

Trump said his administration was discussing imposing a 10% tariff on goods imported from China on Feb. 1, the same day that he previously said Mexico and Canada could face levies of around 25%.

Gold is often viewed as a haven during times of economic and geopolitical turmoil, but Trump’s proposed policies are broadly regarded as inflationary, potentially compelling the US Federal Reserve to sustain elevated interest rates for an extended period to rein in rising price pressures.

Trump has not provided many details about his proposed tariffs, making investors question the aggressiveness of the move and the depth of its potential impacts.

“(Trump) has been perhaps just a shade less hawkish on tariffs as feared, which helps — less/lower tariffs is taken to indicate lower inflation hence potential for more rate cuts,” said Tai Wong, an independent metals trader.

Spot silver was steady at USD 30.86, but hovered near a one-month high it hit on Jan. 16.

Platinum rose 0.8% to USD 950.50 and palladium gained 3% to USD 987.41.

(Reporting by Anjana Anil in Bengaluru; Editing by Vijay Kishore, Krishna Chandra Eluri, and Alan Barona)

Top NYSE exec sees robust US IPO activity in 2025

DAVOS, Switzerland – A strong US economy and lower interest rates could foster a surge in the number of initial public offerings in 2025, building on the recent momentum, a top executive at the New York Stock Exchange said on Wednesday.

The change of guard at the Securities and Exchange Commission may also streamline the process to go public, potentially easing the burden for private companies weighing IPOs, the exchange’s vice president of listings and services, Chris Taylor, told the Reuters Global Markets Forum.

“There are certainly a lot of companies that are thinking about accessing public markets. Interest rates for the time being have stabilized. There’s a lot of confidence trickling within the US right now,” Taylor said, on the sidelines of the World Economic Forum in Davos, Switzerland.

The comments illustrate growing optimism in corporate boardrooms, where executives are moving forward with their IPO plans after a prolonged period of uncertainty.

An expected wave of deregulation and corporate tax cuts under the Trump administration has also boosted sentiment.

Genesys, an AI-driven developer of call center software, and Sweden’s payments giant Klarna are among the heavyweights expected to go public in the US in the next few months.

PRIVATE FOR LONGER

While the IPO market is showing signs of recovery, some of the most high-profile startups such as OpenAI and SpaceX have preferred to stay private for longer, raising money from venture capital investors instead.

Critics say the reluctance to list stems from the costly and cumbersome paperwork associated with an IPO.

Taylor said the new SEC regime could be more favorable.

“We think (public markets) are the best place for price discovery, access to capital and universal access to investment. We’re very hopeful that things will become more positive,” he said.

(Reporting by Divya Chowdhury in Davos and Niket Nishant in Bengaluru; edited by Alan Barona)

US yields rise as investors brace for volatility, await more Trump policies

NEW YORK – US Treasury yields were modestly higher in quiet trading on Wednesday, with no clear direction, as investors grew more cautious and awaited more announcements from the new administration about policies on tariffs, immigration, and tax cuts.

US President Donald Trump on Tuesday vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent from China to the US via Mexico and Canada. The proposed 10% tariffs on Chinese goods, however, were far lower than the 60% duty Trump promised during his campaign.

On Monday, Trump said he was thinking of imposing 25% tariffs on imports from Canada and Mexico from Feb. 1.

The tariff threats have left the bond market in limbo and traders increasingly puzzled by the delay in action. Market participants overall were hesitant to make big bets unless Trump made more definitive policies.

Andy Wells, chief investment officer of investment management firm SanJac Alpha LP in Houston, said he thought the trend higher in Treasury yields will continue.

“It makes complete sense considering inflation is persisting. We’re looking at 3% inflation instead of 2% and we don’t think the Fed (Federal Reserve) will cut rates this year.”

“There would be a lot of volatility in the first half,” he added. “There would be a lot of whippiness in the yield curve and that means a trend upward in rates.”

In afternoon trading, the benchmark Treasury 10-year yield was up 2.7 basis points (bps) at 4.601%. Since hitting a more than one-year high of 4.809% in mid-January, the 10-year yield has declined more than 20 bps.

US 30-year yields, meanwhile, were up 1.4 bps at 4.817%.

On the front end, the two-year yield, which is typically tied to the Fed policy outlook, edged higher by 1.2 bps at 4.293%.

Byron Anderson, head of fixed income at Laffer Tengler Investments in Scottsdale, Arizona, echoed the comments by SanJac’s Wells on inflation continuing to trend higher.

He cited Trump’s aggressive stance on immigration as a potential headwind for the Federal Reserve’s goal of bringing inflation down to the 2% average.

Trump on Monday kicked off his sweeping immigration crackdown, tasking the US military with aiding border security, issuing a broad ban on asylum, and taking steps to restrict citizenship for children born on US soil.

“Depending on the deportations, and what that number actually looks like, you could put pressure on the employment market and we could see a spike in wage growth,” Laffer’s Anderson said.

The US Treasury yield curve on Wednesday, meanwhile, was little changed, with the gap between two-year and 10-year Treasury yields at 30 bps US2US10=TWEB. On Tuesday, the curve hit its flattest level since late December of 27.8 bps.

BMO Capital Markets analysts, in a research note, said the flattening could be a “modest retracement of the bear steepening that has represented the ‘go-to’ Trump trade in the US rates market.”

“While we are unquestionably on board with the bounce in Treasuries, there remains the lingering question: how far can the price action reverse in light of the inflationary angst that brought the market to the yield peaks seen last week?”

Also on Wednesday, the US Treasury successfully auctioned USD 13 billion in 20-year bonds, priced at 4.9%, lower than what the market expected at the bid deadline, suggesting solid demand.

The sale’s bid-to-cover ratio, another gauge of investor interest, was 2.75, higher than the 2.64 average.

Post-auction, US 20-year yields were up 1.4 bps at 4.889%.

(Reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Hugh Lawson and Matthew Lewis)

China unveils plan to encourage insurance funds into stock markets

BEIJING – China said on Wednesday it will guide big state insurers and commercial insurance funds to increase investments in the A-share market, in the latest move to boost its lagging stock market.

Under a plan jointly released by six financial regulators including the securities regulator, big state-owned insurance companies will be directed to raise both the size and proportion of their investments in Chinese stocks listed on the mainland and equity funds.

The regulators will implement a long-term performance evaluation for state-owned insurance companies, with the annual return on equity weighted no more than 30% of the evaluation, and at least 60% for a longer three-to-five-year cycle.

The plan comes as Chinese stocks kicked off 2025 with deep losses on worries that US President Donald Trump will impose hefty tariffs on Chinese goods, heaping more pressure on an already sluggish economy.

The plan will increase the investments of China’s National Social Security Fund and pension funds into the stock market.

It will also guide mutual fund managers to steadily increase both the size and proportion of equity funds under their management.

China has unveiled a slew of measures to boost investor confidence and revive its stock market. Among measures to support capital markets over the past few months, authorities have rolled out swap and relending schemes totalling 800 billion yuan for stock purchases.

(Reporting by Ziyi Tang, Yukun Zhang and Ryan Woo; Editing by Jacqueline Wong and Alison Williams)

Oil eases to one-week low amid Trump tariff uncertainty

Oil prices eased to a fresh one-week low on Wednesday as the market considers how US President Donald Trump’s proposed tariffs could affect global economic growth and demand for energy.

Brent futures fell 29 cents, or 0.4%, to settle at USD 79.00 a barrel, while US West Texas Intermediate crude (WTI) traded 39 cents, or 0.5%, lower to settle at USD 75.44.

That puts Brent down for a fifth day in a row for the first time since September and WTI down for a fourth day in a row for the first time since November. Both crude benchmarks closed at their lowest since Jan. 9 for a second day in a row.

“Possible sanctions under the new Trump administration remain unclear, with possible tariffs related to Canada and Mexico now seemingly at the forefront of trader uncertainties,” analysts at energy advisory firm Ritterbusch and Associates said in a note.

Trump said his administration was discussing imposing a 10% tariff on goods imported from China on Feb. 1, the same day that he previously said Mexico and Canada could face levies of around 25%.

He also vowed duties on European imports, without providing further detail and threatened new tariffs against Russia if the country does not make a deal to end its war in Ukraine.

“The oil market’s attention is slowly turning away from US sanctions against Russia towards President Trump’s potential trade policy,” said ING analysts, adding that the energy complex has come under pressure with the growing threat of tariffs.

In Europe, French President Emmanuel Macron and German Chancellor Olaf Scholz sought to project unity at a meeting in Paris, as Europe struggles to respond with one voice to threats of tariffs from the United States.

The US president also said his administration would “probably” stop buying oil from Venezuela, a member of the Organization of the Petroleum Exporting Countries under US sanctions.

The US imported about 200,000 barrels per day (bpd) of oil from Venezuela during the first 10 months of 2024, up from an average of 100,000 bpd in 2023, according to the latest data from the US Energy Information Administration (EIA).

Iran, another OPEC member under US sanctions, delivered a conciliatory message to Western leaders in Davos on Wednesday, with a top official denying it wants nuclear weapons and offering talks about opportunities.

In other OPEC news, Saudi Arabia’s crude oil exports in November jumped to their highest in eight months.

US CRUDE DRAWDOWN SEEN EXTENDING

Analysts projected US crude stockpiles fell about 1.6 million barrels last week, ahead of data due from the American Petroleum Institute (API) trade group later on Wednesday and the US Energy Information Administration on Thursday.

Both weekly reports were delayed by a day due to the US Martin Luther King Jr. Day holiday on Monday.

If correct, that would be the first time energy firms pulled oil out of storage for nine weeks in a row since January 2018 when they withdrew oil for a record 10 consecutive weeks. That compares with a decrease of 9.2 million barrels in the same week last year and an average 800,000-barrel drawdown over the past five years (2020-2024).

Separately, several Texas ports began to resume operations on Wednesday after Winter Storm Enzo disrupted energy and shipping operations earlier this week.

(Reporting by Scott DiSavino in New York, Jeslyn Lerh in Singapore, Arunima Kumar in Bengaluru, and Enes Tunagur in London; Editing by Marguerita Choy, Emelia Sithole-Matarise, and Deepa Babington)

‘Giddy’ Wall Street hits new highs, BOJ looms into view

Whatever doubts investors may have surrounding the longer-term economic damage of US President Donald Trump’s proposed tariff agenda, they are giving his deregulation, tech-friendly and AI-supportive policies a huge thumbs up. Stocks are flying.

With strong earnings from streaming giant Netflix providing an extra tailwind, Wall Street’s sizzling performance on Wednesday should fuel a strong rise in risk appetite across Asia on Thursday. It’s unlikely that a moderate rise in bond yields and the dollar will get in the way of that.

The S&P 500 leaped to a fresh peak of 6,100 points on Wednesday and lifted the Nasdaq above the 20,000-point barrier to within a whisker of December’s record high of 20,204 points.

The tech and artificial intelligence fervor is intensifying again after Trump announced a private sector investment of up to USD 500 billion to fund infrastructure for AI. Trump said that ChatGPT’s creator OpenAI, SoftBank and Oracle are planning a joint venture called Stargate, which will build data centers and create more than 100,000 jobs in the United States.

Billionaire investor Stanley Druckenmiller told CNBC this week that optimism surrounding the US market and business outlook is reaching “giddy” levels in boardrooms. Judging by Wall Street’s boom, that giddiness is being mirrored across trading floors.

Another reflection of investors’ bullishness and hunger for income is the record demand seen at French, Spanish and UK debt sales over the last 24 hours. Remarkably, bids for the roughly USD 37 billion worth of debt on offer totaled around USD 400 billion.

A large part of that is seasonal, as fixed income investors deploy their allocations for the year in January. But still.

These are the global forces on Thursday likely to drive Asian markets, where investors also have the first estimate of fourth-quarter and full-year South Korean GDP data, Japanese trade figures, the latest inflation reading from Singapore and industrial production numbers from Taiwan.

Thursday is also the last full trading day before the Bank of Japan’s policy decision. Financial markets are increasingly confident that the BOJ will raise its short-term policy rate on Friday by a quarter of a percentage point to 0.5%, a level last seen during the Global Financial Crisis.

Given its history, the BOJ could well couch any tightening of policy in cautious terms, making it clear that policy ‘normalization’ will be carried out carefully and gradually. If the Fed delivered a ‘hawkish cut’ last month, the BOJ may be poised to deliver a ‘dovish hike’ on Friday.

Dollar/Yen is trading towards the lower end of the 155.00-159.00 range it has been in for the past month, the two-year Japanese Government Bond yield is buoyant, and the Nikkei 225 index is hovering just below the 40,000-point mark.

Here are key developments that could provide more direction to markets on Thursday:

– South Korea GDP (Q4)

– Japan trade (December)

– World Economic Forum in Davos

(Reporting by Jamie McGeever)

Gold hits over 2-month high on Trump policy risks, weak dollar

Gold prices jumped to an over two-month peak on Tuesday, supported by a weaker dollar and as markets flocked to the safe-haven asset amid uncertainty surrounding US President Donald Trump’s potential tariffs.

Spot gold climbed 1.3% to USD 2,742.48 per ounce by 02:36 p.m. ET (1936 GMT), reaching its highest level since Nov. 6 and nearing the all-time high of USD 2,790.15 set in October.

US gold futures settled 0.4% higher at USD 2,759.20.

The dollar index slipped 1.2%, holding close to a two-week low hit in the previous session and making bullion less expensive for holders of other currencies.

“Today’s move has largely been about the threat of US blanket tariffs following Trump’s inauguration. The information with respect to potential tariffs has only come in at a trickle,” said Daniel Ghali, commodity strategist at TD Securities.

The newly elected president has not provided any specific details about the universal tariffs or extra surcharges on key trade partners, a key plank of his election campaign.

He has, however, hinted at the possibility of imposing duties on Canadian and Mexican goods as soon as Feb. 1.

During the first year of Trump’s first administration in 2017, bullion logged a 13% yearly gain, its best annual performance in seven.

Bullion is considered a safe investment during economic and geopolitical uncertainty, but Trump’s proposed policies are widely seen as inflationary, which could push the US Federal Reserve to maintain higher interest rates for a longer period to curb price pressures.

High rates hurt the non-yielding asset’s appeal.

“The market is probably also looking ahead to next week’s FOMC meeting and Personal Consumption Expenditure (PCE) data, particularly the inflation read,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

“I don’t think anybody is expecting the Fed to do anything next week, but certainly the policy statement will be looked at very closely for hints about the remainder of the year.”

Spot silver rose 0.9% to USD 30.77 per ounce. Palladium gained 1.1% to USD 955.50 and platinum was little changed at USD 942.40.

(Reporting by Anjana Anil in Bengaluru; Editing by Tasim Zahid and Mohammed Safi Shamsi)

Whipsawed dollar and fog of uncertainty? Get used to it

Day two of the second Donald Trump administration, and exchange rates are in the global market crosshairs as investors nervously try to figure out how to trade the immediate fog shrouding the USD president’s trade policy.

That Trump will impose tariffs on imports from many of America’s major trading partners seems almost certain. On what products and countries, and to what degree, are unknown right now, leaving the dollar and other currencies vulnerable to choppy and volatile trading.

The same applies to other asset classes too, although the immediate impact is being felt more acutely in FX. Implied volatility across G10 currencies as measured by Deutsche Bank’s ‘DBCVIX’ index remains relatively high, although it did pull back late on Tuesday.

Investors will be relieved that Trump chose not to hit major trading partners with tariffs on his first day in office. They will be hoping his approach to tariffs follows the path SocGen analysts sketched out last week – “talk tough, aim high, but act gradually.”

But the president’s off-the-cuff remarks to reporters late on Monday that some tariffs could come on Feb. 1 triggered an immediate reversal in the dollar, and served a timely reminder of how difficult the market terrain will be for investors to navigate in the coming weeks and months.

The dollar looks stretched on positioning, sentiment, and valuation metrics – hedge funds last week held the biggest net long dollar position in nine years; ‘long dollar’ is one of investors’ most crowded trades, according to Bank of America’s latest fund manager survey; and Citi analysts reckon the currency is overvalued by 3%.

But that doesn’t mean it can’t go even higher, which is likely if Trump follows through with his more extreme protectionist measures and fiscal policies, Citi analysts warn. Rising Treasury yields and term premiums have tended to be dollar-positive in recent years, they note.

Meanwhile, the outlook for markets in Asia on Wednesday is fairly positive following a day of calm on global FX markets, falling Treasury yields and solid gains on Wall Street. Nikkei futures are pointing to a rise of around 0.75% for Japanese stocks at the open in Tokyo.

China’s markets will be under scrutiny following their decent start to the week on the back of Trump’s initial ‘go slow’ signals on tariffs. The yuan on Tuesday rose the most since early November, as per the central bank’s daily fixing, and on Monday registered its best day in spot market trading since August.

The main economic events in Asia on Wednesday are the release of New Zealand’s latest consumer inflation figures and an interest rate decision and guidance from Malaysia’s central bank.

Here are key developments that could provide more direction to markets on Wednesday:

– New Zealand inflation (December)

– Malaysia interest rate decision

– World Economic Forum in Davos

(Reporting by Jamie McGeever; Editing by Deepa Babington)

South Korea aims to make stock market more attractive with tighter listing rules

SEOUL – South Korea will tighten regulations on stock market listings to improve the quality and competitiveness, the financial regulator said on Tuesday, in the latest move by authorities aimed at making the domestic stock market more attractive to investors.

The Financial Services Commission said in a statement that while the number of listed companies and market capitalization had increased on the market the quality had fallen short.

“When it comes to qualitative aspects of corporate value and growth potential, our stock market growth has been assessed to be comparably weak,” the commission said.

In February 2024, the government announced capital market reforms under the “Corporate Value-up Program“, mirroring Japan’s efforts that brought the Nikkei to an all-time high, to resolve the so-called “Korea Discount“, a tendency for the benchmark KOSPI’s undervaluation due to low dividend payouts and opaque corporate governance structures.

However, the South Korean push, which was one of the signature policy drives of now impeached President Yoon Suk Yeol, has fallen short of market expectations, with the KOSPI dropping nearly 10% in 2024 to rank the worst performer among major Asian markets.

In the statement, the Commission said the initial public offering (IPO) market should be more driven by corporate value-based investment decisions rather than short-term profit considerations.

To achieve that, the Commission said it would introduce preferential treatments for institutional investors that pledge to hold shares for locked-in periods, restrict bidding participation by small firms for reasonable share pricing and strengthen the role and responsibility of the book runner.

The regulator also plans to make de-listing easier, by tightening the criteria for listed companies to stay in the market, such as market capitalization and revenue requirements, and shortening probation periods.

In the last five years, Morgan Stanley Capital International’s Korea index rose 3.8%, while the global index provider’s U.S. index rose 83%, the Japan index rose 65% and Taiwan rose 110%. The number of listed companies rose 18% in Korea to 2,478, compared with increases of 3.5% in the United States, 6.8% in Japan and 8.7% in Taiwan.

The regulatory changes will take effect in stages, from as early as the first quarter, after amendments and preparations are completed for each of them, the Commission said.

(Reporting by Jihoon Lee
Editing by Ed Davies)

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