Crypto News: 5 things to start your day

Good morning. Apple is trying out 3D printers, China's PMIs stay weak and Giorgia Meloni is weighing options to raise funds. Here's what people are talking about.

Apple is testing the use of 3D printers to produce the steel chassis used by some of its upcoming smartwatches, according to people with knowledge of the matter. The technique would obviate the need to cut large slabs of metal into the product's shape and would reduce the time it takes to build devices, according to the people, who asked not to be identified because the plan is private. The new approach has the potential to streamline Apple's supply chain and kick off a broader shift.

Europe's biggest hedge fund startup in 2021, founded by former Citadel money managers Niall O'Keeffe and Tio Charbaghi, has suffered heavy losses. Their FIFTHDELTA hedge fund that bets on rising and falling stocks lost about 13% in July, extending declines for 2023 before paring year-to-date losses, people with knowledge of the matter said, asking not to be identified discussing confidential details. The setback marks a change in fortunes for the duo who started their hedge fund with $1.3 billion in July 2021 and closed it to new money on the first day of trading to control the amount of capital the fund ran.

China's manufacturing activity contracted for the fifth consecutive month in August, as calls grow for the government to take concrete steps to boost the world's second-largest economy. The official manufacturing purchasing managers' index rose slightly to 49.7 last month, according to the National Bureau of Statistics, in contraction but still an improvement over the 49.3 reading in July. The nation's manufacturers have been struggling for months because of a slump in global demand and subdued domestic spending. Deflation has put pressure on industrial profits as well, with data on Sunday showing a contraction in July.

Prime Minister Giorgia Meloni's coalition is considering selling minority stakes in selected state owned companies to boost Italy's public finances, according to people familiar with the discussions, who asked not to be named because the talks are confidential and not at an advanced stage. Meloni told colleagues during a cabinet meeting on Monday that they need to pare back spending to pay for the government's plan to cut taxes on wages and to help families in need, according to the text of her speech. Asset sales would be one option to allow her far-right coalition to fund new spending without adding to Italy's mammoth debt load.

European stocks are headed for a steady open as traders continue to examine the outlook for global interest rates. The ECB publishes an account of its July meeting. The central bank's Isabel Schnabel and Luis de Guindos speak at separate events, while BOE chief economist Huw Pill addresses a conference in Cape Town. Expected data include French GDP and Italy's CPI inflation. UBS releases its first set of results since taking over Credit Suisse.

This is what's caught our eye over the past 24 hours.

Australia, EU restart trade talks in bid to break FTA deadlock.
Rising stock prices threaten progress on Powell inflation gauge.
RBC upgrades Heineken less than 12 hours after cutting to sell.
Nvidia partner expects AI server sales to double in 2024.
Polish ruling party moves ahead with probe targeting Tusk.
Ukraine gets 'Vampire' rockets from US to combat Russian drones.
France's Pinault nears $7 billion deal for talent agency CAA.

Diesel prices have been supercharged this summer. But the moves seem out of kilter with the relatively mundane fundamental drivers, creating the risk of a correction.

Benchmark diesel futures in northwest Europe are currently worth about $35 more than ICE Brent, more than double the seasonal norm. This price difference -- known as the diesel crack, or margin -- has been on an almost solid bull run since late May.

Such a dramatic price move, up or down, is extremely rare; not even Covid triggered this kind of swing in Northwest Europe's diesel margins. Excluding last year, when Russia began its invasion of Ukraine, there hasn't been anything like it in at least a decade.

The forces behind this upward surge come more from the supply than the demand side. However, key factors, such as refinery issues and OPEC+ cutting output, essentially fall into the category of ``normal problems'' when it comes to oil markets.

And yet this rally is well beyond normal. More surprising still, it has taken place despite demand having "been weak, with OECD diesel usage falling 240k b/d y/y during Jan-Jun and China's appetite likely unchanged y/y," according to Bank of America.

The bullish narrative is starting to look stretched. Money managers reduced their net-long positions in ICE Gasoil futures, albeit from a high base. And after jumping above $40 a barrel, the ICE Gasoil crack has now come off to about $35.

It's hard to see a world where, sooner or later, today's sky-high diesel margins don't come off. The question doesn't seem to be ``if'', but ``when''. And timing, as good traders know, is everything.

Jack Wittels is an oil reporter in the Oil Trading Europe team for Bloomberg News in London.