HL commentary as it happens

Brent crude firm at $66.20, US dollar claws back some lost ground

Oil markets are firmer today, with Brent Crude futures showing a rise of 39 cents to $66.22, while the dollar has clawed back a little of its recent losses to stand at $1.323 against sterling, with the greenback making gains across the board against other major currencies.

Powell highlights inflation risk

Federal Reserve Chairman, Jerome Powell, unnerved markets last night, warning of the potential impacts of current policy actions upon inflation and growth in the USA. He indicated that the Fed would probably put its anti-inflation mandate ahead of the target to see full employment in the USA if price pressures ticked higher. That led to selling on Wall Street, with the tech sector bearing the brunt.

Trump claims “Big progress” in trade talks with Japan

Tariffs continue to make the headlines, with Donald Trump claiming that “big progress” had been made in talks with Japanese negotiators, aimed at lowering the hefty tariffs that the US will otherwise impose in under three months’ time. No details were given. Japan has strong links with the major US defence contractors and some US commentators are suggesting that tariff concessions may be granted if Japan ups its spending on US arms. Asian markets took the news as a reason to recover some of the previous session’s losses, with Japan’s Nikkei index posting gains of over 1%.

Investors will have to become accustomed to information deficits under this most transactional of Presidents. Trump’s tactics so far have been to claim that injustices have been inflicted upon America and that punishments will be delivered, unless the offending nations bring something shiny to the table. With negotiations happening behind closed doors, investors are left guessing. But with most of the Reciprocal Tariffs stayed for three months, the window of uncertainty is not that long.

Minerals could be next for tariffs

The US also announced a probe into the trading of critical minerals and rare earths to see if levies needed to be introduced. In the current environment, few would bet that the probe will conclude that no, they do not.

Asian markets slide after US toughens its stance on sale of AI chips into China

Asian markets were pressured overnight after the US placed additional curbs on the ability to ship advanced silicon chips into China. Technology companies in Asia led the declines, with Chinese tech companies listed in Hong Kong tumbling by over 4%. Japan’s Topix Index dropped over 1% before paring losses, whilst the Hang Seng index in HK fell by 2.2%. Shares in Korea and Taiwan also declined.