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China signs first Argentine soybean deal despite US trade war threats
Chinese firms have ordered the first cargo of soymeal from Argentina since Beijing authorized Argentine imports for 2019. The Chinese animal feed industry is looking to diversify its supply options in order to minimize potential disruptions caused by the U.S. - China trade war. Four trade sources confirmed on Thursday that several Chinese feed manufacturers have signed a joint agreement to buy 30,000 metric tonnes of Argentine soybean meal for shipment in July. One Singapore-based trader from an international trading firm that sells soybeans in China said, "This is a test case." If it passes China's quarantine and inspection, we expect to do more business. Sources said that the cargo, which was purchased for $360 per ton based on CNF (cost plus freight), is expected to reach southern Guangdong Province in September. China is the largest consumer of animal feed, but it produces the majority of this raw material by crushing soybeans imported mainly from Brazil and the United States. Argentina is the top exporter of soybean oil and meal in the world. Due to the high tariffs that have been imposed in the ongoing trade dispute between Beijing and Washington, Chinese buyers are grabbing Brazilian soybeans while avoiding U.S. imports. The Singapore-based trader said that the Chinese feed manufacturers' purchase of Argentina was part of a move to secure supplies in case the trade war had a lasting effect on the imports of U.S. soya beans. Traders said that lower prices for Argentine meals compared to locally produced products also encouraged the move. China opened its soymeal market in 2019 following years of opposition that was motivated by a wish to protect the domestic crushing industry. At the time, market participants said that the U.S. - China trade war under President Donald Trump was the reason for the decision. According to Chinese customs, despite the approval, there had not been any purchases of bulk Argentine soybean meal until now. Customs data revealed that China imported around 30,000 tons (mainly from Denmark) of soymeal in 2024. (Reporting from Ella Cao, Beijing; Naveen Thkral, Singapore; Editing Joe Bavier).
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INDIA RUPEE Rupee hits two week high as Fed's credibility worries compound dollar’s problems
The Indian rupee reached a new fortnightly high on Thursday. This was boosted by broader weakness in the US dollar, due to concerns about the future independence of U.S. Federal Reserve. The rupee gained 0.4%, closing at 85.7050 U.S. dollars. This is in line with gains seen by its regional counterparts. The dollar index dropped to its lowest level in March 2022, and last traded at 97.1. This is a 0.3% decline on the day. The dollar's value had risen on the back of the demand for safe havens during the Iran-Israel conflict. However, the ceasefire in the region has decreased the geopolitical premium. The prospect that President Donald Trump would appoint the next Federal Reserve chair early sparked concerns about the independence of the U.S. Central Bank. In a recent note, MUFG Bank stated that a candidate perceived to be more willing to lower rates in accordance with President Trump's requests would strengthen the current trend of the U.S. Dollar's weakening. The dollar index has fallen over 10% this year. The Taiwan dollar, which is the major Asian currency, led Thursday's gains with a 0.6% increase, while India’s benchmark equity indexes, the BSE Sensex, and the Nifty 50, topped regional stock gains. A trader in a private bank reported that dollar sales by at least two major foreign banks likely made on behalf of clients who held the money, helped to boost the rupee. The 1-year implied yield reached a peak of 2.02% in a month before reversing. The Reserve Bank of India announced a plan to remove excess cash from banks, along with an increase in bets on the Fed's rate cut for July. This led traders to pay interest on premiums paid forward. (Reporting and editing by Vijay Kishore; Jaspreet Klra)
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JetBlue's second largest investor is considering selling its stake without any changes
Vladimir Galkin is JetBlue Airways second-largest shareholder. He has threatened to sell his nearly 10% stake in the struggling airline if its cost-cutting plans and other efforts to improve performance fail. Galkin, a Miami resident, won big in the Gamestop "meme stock rally" in 2021. He invested more than $200 million between February 2024 and August 2024 in JetBlue. New York's air carrier is struggling to meet travel demand. In April, the company retracted its full-year forecast, stating that it would be unlikely to break even by 2025. Shares have fallen 43% in the past year, while Delta Air Lines, United Airlines, and other peers are down by 17% and 18% respectively. Galkin is now sitting on a losing investment. "I'm a little under water and I just have to hold onto it." Galkin said that he didn't know how long it would take, but he thought maybe another year. According to a U.S. regulatory document filed in September, Galkin has approximately 35,000,000 shares or $212,000,000 invested in the company. This is a position that he confirmed. JetBlue reiterated in June its plans to reduce costs and focus on routes that are more profitable. Galkin stated that while the memo was positive for the company, its "trajectory" will become apparent in the coming quarters. He suggested that JetBlue reduce the size of their 13-member board in order to cut costs. However, he did not specify what other changes he would implement. The company stated that the cost-saving measures in the memo were part of JetForward, and continued our commitment to reduce costs. This is especially true as the consumer demand in the industry has taken a step back due to macroeconomics. JetForward, the company's multiyear plan for boosting profits and delivering $800 to $900 millions in earnings before taxes and interest through 2027. Galkin said later that selling JetBlue in one year is not a deadline, as he hopes JetBlue will begin making money "sooner than later." He also said that Wall Street undervalues the potential of JetBlue and United's collaboration, which will enable travelers to book flights through both carriers' websites starting in 2027. JetBlue reported profits in only two of the nine previous quarters. According to LSEG, as of May 23, 10 equity analysts had a "hold" recommendation for the stock. Five analysts gave a "sell" rating and two others rated it "strongly sell". There are no ratings. JetBlue's other large investors, such as BlackRock, Fidelity, and T. Rowe Price declined to comment. The company announced Tuesday that it would be offering business class seats on its Orlando to Las Vegas route, as they compete with other airlines like Spirit in a bid to increase revenue. Michael Matousek is the head trader for U.S. Global Investors owns 1,4% of the shares in the JETS ETF. He believes that the company's plan to focus on more profitable routes while shedding less profitable ones is a positive move for the future. Reporting by Doyinsola Oladipo, New York; Editing by David Gaffen and Shri Navaratnam
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India is working to reconstruct the events of the Air India crash
The Indian civil aviation ministry announced on Thursday that efforts are being made to reconstruct the events leading up to the Air India crash, which killed 260 people this month, and to identify contributing factors. The Boeing 787 Dreamliner bound for London crashed just moments after takeoff on June 12 from India's Ahmedabad, killing 241 people aboard and the remainder on the ground. This was the worst aviation accident in the last decade. In the days following the crash, the black boxes of this plane were recovered. One was found on the roof of a nearby building on June 13 and the other on the wreckage on June 16. The ministry released a statement saying that the data was extracted by a team of investigators led by India's Aircraft Accident Investigation Bureau. The Crash Protection Module from the black box in front was safely recovered, and...the data of the memory module were successfully downloaded...the CVR and FDR are currently being analyzed," it stated. The CPM is a core component of a blackbox that protects and houses data recorded during an accident. Last week, India stated that it had not yet decided where to analyze the black boxes. They could reveal crucial information about the performance of the aircraft and the conversations that took place between the pilots before the crash. The air disaster also brought to light violations of airline norms in the country. The Indian aviation regulator announced on Tuesday that there have been multiple incidents of aircraft defects reappearing Mumbai and Delhi, two of India's busiest airports, were the sites where they were discovered. The Indian aviation regulator warned Air India about the dangers of flying certain aircraft despite warnings. emergency equipment checks being overdue. The airline was also warned about Schedules and supervision of pilot duty. Air India said that it has implemented the directions of the authority and is committed to ensuring compliance with safety protocols. It said that it would also accelerate the verification of maintenance records, and complete the process within the next few days.
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India is working to reconstruct the events of the Air India crash
The Indian civil aviation ministry announced on Thursday that efforts are being made to reconstruct the events leading up to the Air India crash, which killed 260 people this month, and to identify contributing factors. The Boeing 787 Dreamliner bound for London crashed just moments after takeoff on June 12 from India's Ahmedabad, killing 241 people aboard and the remainder on the ground. This was the worst aviation accident in a decade. In the days following the crash, the black boxes of this plane were recovered. One was found on the roof of a nearby building on June 13 and the other on the wreckage on June 16. The ministry released a statement saying that the data was extracted by a team of investigators led by India's Aircraft Accident Investigation Bureau. The Crash Protection Module from the black box in front was retrieved safely, and...the data of the memory module were successfully downloaded...the CVR and FDR are currently being analyzed," it stated. The CPM is a core component of a blackbox that protects and houses data recorded during an accident. Last week, India stated that it had not yet decided where to analyze the black boxes. They could reveal crucial information about the performance of the aircraft and the conversations that took place between the pilots before the crash. The air disaster also brought to light violations of airline norms in the country. The Indian aviation regulator announced on Tuesday that there have been multiple incidents of aircraft defects reappearing Mumbai and Delhi, two of India's busiest airports, were the sites where they were discovered. The Indian aviation regulator warned Air India about the dangers of flying certain aircraft despite warnings. emergency equipment checks being overdue. The airline was also warned about Schedules and supervision of pilot duty. Air India said that it has implemented the directions of the authority and is committed to ensuring compliance with safety protocols. It said that it would also accelerate the verification of maintenance records, and complete the process within the next few days.
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Gulf shares increase as Iran-Israel ceasefire is maintained
The Gulf stock markets rose early on Thursday. They extended gains from previous sessions, amid rising oil costs and a perceived ceasefire between Israel & Iran. Donald Trump, the U.S. president, praised the rapid end of the air war between Iran & Israel. He said Washington will likely ask Tehran to commit to ending its nuclear ambitions during next week's talks with Iranian officials. Saudi Arabia's benchmark index rose 0.2% in a fourth consecutive session. Most sectors were also up. Saudi Aramco, the oil major, added 0.3%. Red Sea International rose 3%. Red Sea, a modular house manufacturer in Saudi Arabia, announced on Wednesday that it plans to flot its mechanical and electrical subsidiary on the Saudi Market. Oil prices, which are a major factor in the Gulf financial markets, rose 0.2%, as an unexpectedly large drawdown of U.S. crude inventories signaled a strong demand. Brent crude traded at $67.83 per barrel by 805 GMT. The benchmark Abu Dhabi index rose by 0.4%. This was a result of a 5.3% increase in RAK Properties, and a 0.6% rise in Borouge. Borouge, a petrochemical company, announced on Wednesday that it will collaborate with Honeywell to develop the first AI-driven control rooms for the petrochemical sector. Dubai's benchmark index rose for the fifth consecutive session, with a 0.6% gain, driven by the material, industry, and finance sectors. Salik, a tolls operator, gained 1.8%, and Emirates NBD, the largest lender in the emirate, gained 0.6%. The benchmark Qatari index rose marginally, boosted by gains in materials, utilities, and communications sectors. Vodafone Qatar gained 1.2%, while Qatar National Bank, which is the largest lender in the region, lost 0.3%. Qatar Investment Authority (QIA) and Canadian asset manager Fiera Capital launched a $200-million fund on Wednesday to encourage foreign and local investments into the Gulf State's stock exchange. (Reporting and editing by Md. Manzer Hussain)
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Chinese feed manufacturers sign first bulk contract for Argentine soybean meal since 2019, sources claim
Four sources confirmed on Thursday that Chinese feed manufacturers have purchased 30,000 metric tonnes of Argentine soybean meal for shipment in July. This is the first purchase made by the country since China approved the importation of the product last year. Sources said that the cargo was purchased jointly by several Chinese feed manufacturers and will arrive in Guangdong Province in southern China in September. China is the largest consumer of animal feed, but it produces the majority of this raw material by crushing soybeans imported mainly from Brazil and the United States. Argentina is the top exporter of soybean oil and meal in the world. The trader stated that Chinese feed manufacturers are trying to secure supplies in the event of a reduction in soybean purchases due to Beijing's ongoing trade war with the U.S. They added that the soymeal was sold for $360 per tonne on a cost and freight basis. "This is a test case. Several companies have booked 30,000 tonnes. We expect more deals if it passes China's inspections and quarantines," said a Singapore-based trader from an international trading firm that sells soybeans in China.
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Middle East flights suspended by airlines
Israel's attacks against Iran have caused international airlines to stop flights to certain Middle East destinations because of airspace closures and safety issues. The conflict has entered a new phase after the U.S. invasion on Iranian nuclear sites Some airlines have cancelled flights to hubs such as Dubai is Qatar's Doha. Here are a few airlines that have cancelled flights from and to the region. AEGEAN AIRLINES The Greek airline has cancelled flights to Tel Aviv and Beirut as well as to Amman and Erbil until the early flight on September 8th. AIRBALTIC AirBaltic, a Latvian airline, announced that it had cancelled all flights from and to Tel Aviv up until September 30. AIR CANADA The Canadian carrier suspends its flights between Toronto and Dubai until the 4th of August. The Canadian carrier had already delayed the resumption to service between Canada and Israel until September 8. AIR EUROPA Spanish airline cancels flights from and to Tel Aviv through July 31. AIR FRANCE-KLM The French flag carrier has suspended flights to Tel Aviv up until July 14. The airline plans to resume flights between Paris-Charles de Gaulle airport and Beirut on June 26. It will also resume flights from and to Dubai and Riyadh starting June 25. KLM has cancelled all flights from and to Tel Aviv, until at least the 31st of July. AIR INDIA It said that the Indian airline would "gradually" resume flights from and to the Middle East beginning June 24, and it will also resume flights between the East Coast of the U.S.A. and Canada at the "earliest possible opportunity." The Indian airline will resume flights to and from Europe from June 24. Israeli Airlines has announced that all flights from and to Israel have been cancelled up until 30 June, except for those to Eliat which will be cancelled until 28 June. DELTA AIR LINES Travel to, from or through Tel Aviv could be affected between June 12 and July 31. EL AL ISRAEL AIRLINES The Israeli airline increased flight frequencies and added more flights from major destinations as of June 24. It added that flights will continue to operate according to schedule, with the exception of a few cancelled ones, starting next week. ETIHAD AERWAYS Etihad has announced that it will no longer be operating flights between Abu Dhabi, Tel Aviv and Tel Aviv after July 15. EMIRATES Emirates has temporarily suspended its flights to and out of Iran and Iraq, until June 30. FINNAIR Finnair has cancelled all flights from and to Doha until June 30th, as well as flight AY1982 for July 1. Finnair added that it would not be flying over the airspaces of Iraq, Iran or Syria. FLYDUBAI The UAE airline announced that it plans to resume a full schedule on its entire network as of July 1. On June 26, it will resume flights to Tel Aviv and Damascus. British Airways, a subsidiary of IAG, has announced that flights to Tel Aviv will be suspended until July 31, and flights to Amman or Bahrain until June 30, inclusive. British Airways also suspended flights from and to Doha until June 25. Iberia Express, IAG's low cost airline, announced previously that it would cancel its flights to Tel Aviv up until June 30. Iberia has announced that it will not resume its flights to Doha as planned on the 25th of June after Qatar temporarily closed down its airspace. ITA AIRWAYS Italian Airlines announced that it will extend the suspension of Tel Aviv flight until July 31. This includes two flights scheduled for August 1. JAPAN AIRLINES The Japanese airline has cancelled all flights to Doha from July 2 until July 2. LUFTHANSA GROUP Lufthansa has suspended flights from and to Tel Aviv, Tehran and Beirut until July 31. Amman and Erbil flights are cancelled through July 11. German Airlines added that they would not use the airspace of these countries until further notice. PEGASUS Turkish Airlines has announced that they have cancelled all flights to Iran and Iraq until July 30, and flights to Lebanon, Jordan and Lebanon until June 30. QATAR AIRWAYS Qatar Airways has temporarily cancelled all flights from and to Iraq, Iran, and Syria. Ryanair Ryanair has cancelled all flights from and to Tel Aviv, and Amman up until October 25. Romania's national carrier has announced that flights to Tel Aviv are set to resume on June 26. TUS AIRWAYS The Cypriot Airlines said that it will gradually resume flights to and out of Israel. UNITED AIRLINES According to the U.S. airline, travel from and to Tel Aviv could be affected between June 13, and August 1, 2013. There may be problems with flights to and from Dubai between June 18th and July 3rd. WIZZ AIR Wizz Air announced that it would suspend its flights from and to Tel Aviv, Amman and the United Arab Emirates from June 30 to September 15, and cancel all flights from and to those cities. Hungarian Airlines will not overfly Israeli, Iraqi or Iranian airspaces until further notice. (Reporting and compilation by bureaus, compiled by Agnieszka Olesnka, Elviira Loma, and Tiago Brancao; Editing by Matt Scuffham, Alison Williams and Matt Scuffham)
The rupee is rising with Asian currencies, and forward premiums are still on the uptrend
The Indian rupee and its regional peers strengthened on Thursday, as the dollar fell due to concerns about the independence of the U.S. Federal Reserve.
The rupee increased by nearly 0.4% at 85.74 by 11:40 am IST. This is in line with gains among Asian counterparts.
The offshore Chinese currency was near its highest level since Donald Trump won the U.S. election, and the dollar index hovered around a three-year high.
Investors were worried about the independence of the U.S. Central Bank following Trump's remarks regarding Chair Fed Powell.
Trump called Powell terrible on Wednesday for not lowering rates dramatically.
According to CME's FedWatch, while Powell has called for a cautious approach in regards to policy rates, the markets now price a nearly 25% chance of a cut in July. This is up from just 12% one week ago.
The increased odds of a rate cut have also helped to lift dollar-rupee premiums. Before paring gains, the implied yield for one year rose to a peak near one month at 2.02%.
The day's traders attributed the rise in the rupee to the broad interbank dollar sales.
The FX strategists of DBS believe that "the USD/INR could consolidate within an 84-86 band with a downward bias, in line with its historic tendency to return to equilibrium after large currency movements", the firm stated in a report.
The rupee fell to a low last week of 86.8925 as the conflict between Iran & Israel intensified, but it has since pared its losses after a ceasefire helped lower oil prices.
Brent crude oil futures last traded at $67.8 a barrel, down almost 12% from the previous week. (Reporting and editing by Jaspreet K. Kalra)
(source: Reuters)