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- GBP has risen by almost a cent against the USD following comments from the Bank of England which bolstered expectations of a rise in interest rates.
- China's ruling Communist Party is proposing to remove a constitutional clause which limits presidential service to just two terms in office. If successful, it would mean that President Xi Jinping could remain in power for an indefinite period of time. The proposition has faces severe backlash with many drawing comparisons to North Korea.
- According to Rabobank's Q4 2017 wine report, France, Italy and Spain, "the engine room of wine production" all suffered poor harvests. From frost in Bordeaux to heat waves in Italy - it is expected that grape production could be down by as much as 10-20%. The impact this has on wine prices will depend on the quality of the grapes which have been able to be harvested.
- Japanese beef exports jumped over 40% last year to 2,706 tonnes thanks to sustained export demand for Japanese-native Wagyu beef. Bullish international demand at a time when a number of producers are on the decline has kept prices for the top-grade Wagyu on the Tokyo central wholesale market at an average Y2,919/kg in December.
- London cocoa prices have dipped today having reached a 3-month high following the firming of the GBP. May London cocoa is currently at $1,541/t.
- China's top steel-producing region has announced an extension of winter production curbs until November sending steel and iron ore futures upwards.
- Tangshan's local government has said it will maintain the production limits which were due to expire next month, cutting steel supplies just as construction demand is expected to pick up amid warmer weather.
- Although steel production cuts tend to be bad news for iron ore prices, the fact that those mills that remain in operation are focusing on the production of higher value-added products (which have more iron), that carry higher profit margins.
- Singapore 62% iron ore for March delivery is currently at $79.15/t
- Shanghai steel reinforcement bar for May delivery is currently at $641/t
Energy - UK
- A new law has been introduced to parliament with the aim of capping energy prices for millions of British homes. The new law forces Ofgem to cap electricity and gas prices until 2020 and enables Ofgem to limit how much companies can charge customers for their standard variable tarriffs (SVTs).
- ScottishPower has reported that it has lost around 200,000 customers over the past year as a result of tougher competition and increased pressure from new market entrants.
- Wholesale gas prices have fallen as unseasonably cold temperatures which triggered a surge in prompt prices ahead of the weekend proved to be milder than expected.
Energy - International
- Oil prices have stabilised at their highest levels in 3-weeks, supported by comments from Saudi Arabia that it would continue to curb output in line with OPEC's efforts. Brent is currently at $67.23 and WTI is at $63.50.
- The UAE's energy minister Suhail al-Mazrouei has emphasised the importance and necessity for Russia to work alongside OPEC in establishing a long-term relationship with a wider group of producer countries outside OPEC.
- S&P Global Platts has launched a blockchain network for reporting oil storage data in the UAE. The system aims to improve the way in which terminal operators communicate their weekly inventory numbers to the regulator, FedCOM, and alleviate's FedCOM's need to manually validate and aggregate each terminal operator's numbers.
- Last week saw European gas prices surge as much as 50% ahead of the cold snap across north-west Europe which left traders scrambling for British, Dutch, German and French gas. The cold snap comes at a time when gas stockpiles stored underground in the UK, Belgium and France are at their lowest since 2015, and LNG deliveries are limited due to increased Asian demand.
- Asian spot LNG prices for April delivery are up this week following increased Japanese buying and a lag in supply from the US. Spot prices for April delivery are currently valued at $8.40/mmBtu, $0.50 above last week's levels.