Morning Note: A Round-up of Market News.
Market News
Copper futures are trading at $5.60 per pound after surging more than 15% in the previous session, as US President Donald Trump announced plans to impose a 50% tariff on copper imports. The move is aimed at bolstering domestic production and reducing reliance on foreign supply as the US currently imports nearly half of its copper, with Chile as the primary source. Citi expects prices to fall and said US stockpiles would displace import requirements for the rest of the year.
The new tariff brings copper in line with existing 50% duties on steel and aluminium, further escalating trade tensions and fuelling volatility in the metals market. In a more aggressive move, the President threatened to impose tariffs of up to 200% on pharmaceutical imports, though he noted that these would be delayed by 12 to 18 months to give the industry time to adjust. The EU is said to be nearing a preliminary deal with the US that would protect Airbus and some German carmakers from hefty tariffs.
US equities were little changed last night – S&P 500 (-0.07%); Nasdaq (+0.03%) – while in Asia this morning, markets were mixed: Nikkei 225 (+0.3%); Hang Seng (-1.2%); Shanghai Composite (flat). China’s factory-gate deflation was the worst in two years as the trade war bites. Gold has fallen back to $3,290 an ounce, while Brent Crude has risen to around $70 a barrel.
The FTSE 100 is currently 0.3% higher at 8,884, while Sterling trades at $1.3610 and €1.1590. The UK 10-year gilt yield rose to 4.64%, the highest in a month, as concerns over the country’s fiscal outlook deepened. The Office for Budget Responsibility (OBR) warned that the UK’s public finances are increasingly vulnerable, projecting national debt to exceed 270% of GDP by the early 2070s. This alarming forecast is driven by long-term demographic pressures, including an ageing population and rising healthcare and pension costs.
Shares in EssilorLuxottica are trading 5% higher this morning on news that Facebook owner Meta Platforms has acquired a nearly 3% stake in eyewear maker amid growing consumer interest in AI-powered wearable devices. According to Bloomberg News, Meta is considering further investments that could build its share to around 5% over time.
Seven UK housebuilders have agreed to pay a total of £100m to affordable housing programmes following a CMA investigation. The companies have also agreed to legally binding commitments which will prevent anti-competitive behaviour and promote industry-wide compliance. If accepted, the commitments will become legally binding and mean that it is not necessary for the CMA to decide whether the housebuilders broke competition law.
Source: Bloomberg
