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ASML's MORNING BID EUROPE - Big Blue's bad Day raises the bar
Tom Westbrook gives us a look at what the future holds for European and global markets. The AI rally is experiencing some speed wobbles as Europe's?valuable? company and top supplier of chip making equipment?reports Wednesday. ASML is the only manufacturer of the lithography machines that cost $300 million and are used to create the circuitry for cutting-edge chips. LSEG estimates show that it is expected to report an 8.8% increase in the second-quarter's net profit of 2.61 billion euro ($2.99 billion), on a revenue growth of 14% at 8.8 billion euro. Analysts also expect the company's revenue forecast for the full year to increase from 36 billion to $40 billion euros. IBM is the latest example of how AI is "upending business models" in software and computing, and how the markets can be fickle when it comes to picking winners and losers during the boom. IBM SHEDS? A QUARTER of its Value "Big Blue" claimed that it failed to keep up with the shift in corporate spending from software towards data-centre infrastructure. The market expected $3.02 for its adjusted earnings per share forecast, but IBM's projection of $2.93 was based on a revenue increase of only 1%. IBM shares fell by 25% as a result. South Korea's volatile KOSPI jumped 8% in Asia. A surprise slowdown in U.S. Inflation cooled bets on rate hikes and gave investors a good reason to smile. Brent crude futures remained above $85 per barrel but fell short of new peaks, as investors wait to see how long oil tankers will be unable to pass through the Strait of Hormuz. Data revealed that?China’s economic growth slowed down to 4.3% in first half of the year, which was below expectations. There was still little reaction because the theme of "export strength and domestic weakening" is well-worn and because investors are hoping the slowdown will lead to a fiscal stimulus. Bank of Canada expected to keep interest rates the same on Wednesday. Markets could be affected by key developments on Wednesday * Earnings: ASML, BNY, Blackrock, Johnson & Johnson, Morgan Stanley, United Airlines * Economics: Eurozone industrial production, U.S. PPI * Bank of Canada holds rates at $1 = 0.8744 Euros (By Tom Westbrook, edited by Christopher Cushing).
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As hostilities in the Middle East worsen, oil prices are rising.
Oil prices rose on Wednesday after?President Donald Trump reimposed his naval blockade against all Iranian ports and Tehran launched attacks on U.S. Infrastructure in the region. Brent futures rose?99 cents or 1.2% to $85.72 per barrel at 0400 GMT. West Texas Intermediate futures rose 64 cents or 0.8% to $79.98 per barrel. Tuesday, oil prices rose 2% to a new one-month high as attacks intensified a supply disruption along the Strait of Hormuz. This is where a fifth of all the world's liquefied gas and oil passed before the U.S./Israeli war on Iran. "While the physical market for oil is adequately supplied, a further escalation in the Strait of Hormuz, or any additional'sanctions' on Iranian exports, could quickly tighten the market sentiment, and add more risk premiums," stated Priyanka?Sachdeva, a senior market?analyst with Phillip Nova. The U.S. military announced that early on Wednesday the U.S. began a new round of strikes to "continue degrading Iranian capability used to attack commercial shipping in the Strait of Hormuz." Tehran has closed the Strait again after hostilities erupted between Iran and the U.S. last week. This has weakened a fragile ceasefire reached in June following several months of fighting. Trump said in a Fox News interview that aired on "Special Report With Bret Baier" Tuesday night, "I'll leave the energy targets until last but we'll ultimately hit energy targets". Iran's Army said that early on Wednesday it had launched drone strikes against U.S. positions at Jordan's Azraq Base. Pentagon has not yet responded to the report. The Iranian Islamic Revolutionary Guard Corps claimed that they had targeted weapons and storage in Bahrain? and Kuwait. Could not verify the reports immediately. The recent flare-up has raised doubts about whether a memorandum signed last month will lead to an end to the war that has enveloped Iran's neighbours. Tim Waterer is the chief market analyst for KCM Trade. He said that Brent prices could remain between $75 and $80 per barrel if diplomatic efforts were made to reopen the Strait. "For now, the risk premium is still there, but it's no one-way bet, given that both sides have incentives to find a diplomatic resolution." Helen Clark reported from Perth, and Jeslyn Lerh from Singapore. Editing was done by Lincoln Feast and Thomas Derpinghaus.
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Malaysia: Higher energy prices will support subsidies
Malaysia announced on Wednesday that higher global energy prices have boosted its petroleum revenue enough to cover part of the rising costs for 'fuel subsidies. This has eased pressure on the government's finances. The government said that it may spend as much as 40 billion ringgits ($9.83 billion), far more than the 15 billion ringgits initially allocated?in the budget for 2026, on fuel subsidies in 2019. This is due to higher energy prices related to the Middle East conflict. * Each $1 change in crude oil prices is estimated to affect federal petroleum revenues by?about 300 million ringgit, not including the dividends paid to Petronas. Liew Chin-Tong, Deputy Minister of Finance, told the parliament. This?increased revenue can offset some of this additional pressure on fuel subsidy spending. "The government monitors'revenue -collection regularly to ensure that it can meet federal operating expenses,"?Liew added. Liew stated that if necessary, a review of the fiscal targets for 2026 will be announced as part of 'the federal budget next year', which is due to be presented to parliament in October.
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Asian stocks benefit from the drop in US inflation rate
Stock markets in Asia rallied Wednesday, after a surprising slowdown in U.S. Inflation lowered expectations for interest rate increases. Meanwhile, oil prices took a break as the U.S. canceled a plan to levy shipping across the Strait of Hormuz. South Korea's volatile KOSPI Index surged by 7% before the next test of the AI rally. Earnings are due from ASML, Europe's largest company and world's leading supplier of equipment to make AI chips. The Nikkei 225 index in Japan rose by 1%, while the MSCI broadest Asia-Pacific share index outside Japan rose by 2.4%. IBM's stock price dropped by 25% overnight after its?revenue estimate missed analyst expectations. This shows how stretched the rally for AI-related stocks is. The S&P 500, Nasdaq, and U.S. Futures all rose on Tuesday, thanks to the stellar profit made by Wall Street banks. The U.S. Dollar was lower in terms of currencies, except against the stubbornly low yen. Short-term bonds also rallied. Two-year Treasury yields fell 11 basis points, to 4.19%, from a 17-month high near 4.3% on Tuesday. In the U.S., the headline consumer price index fell by 0.4% in June. This was its first drop since COVID-19. Core inflation, however, rose to 2.6% annually, versus expectations of 2.8%. In a note to clients, J.P. Morgan analysts stated that "for market bulls, this is even better than Goldilocks would have imagined." "Inflation is lower when earnings are growing positively. This should ease any concerns about a rate hike in July and could also calm fears for September. This allows the market to rise and broaden at the same time. The market price for the likelihood of an interest rate increase in July has been halved, to 16%. CHINA GROWTH MIS Official data released on Wednesday showed that China's economic growth had slowed to just 4.3% for the second quarter. This was below analysts' expectations due to weaker domestic demand, the oil shock caused by the war in the Middle East, and a lack of exports. Investors have a positive outlook on the Chinese retail sales rebounding in June, a relatively strong nominal GDP and the hope that authorities will respond. Woei Chen, economist at UOB, said: "I do not think they will be concerned?enough to?announce any big'stimulus. But it will be targeted. They are aware that the growth is only in the tech areas, whereas the overall economy continues to underperform." The yuan of China traded at an all-time high of 6.7635 per dollar. The euro was stable at $1.14, and the Australian Dollar held on to its 0.8% gain. Brent crude futures remained at $85.80 per barrel after gaining almost 13% on the back of a flare-up in Middle East conflict. U.S. president Donald Trump reimposed on Tuesday a naval blockade against Iranian ports and threatened to attack power plants and bridges if Iran did not resume negotiations with the United States in order to end their conflict. He also scrapped his plan for a 20 percent fee on shipping through Hormuz. BNY, Morgan Stanley and Johnson & Johnson report their earnings in the U.S. before the morning bell, and United Airlines reports after the market close. (Reporting and editing by Christopher Cushing; Tom Westbrook)
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Copper prices rise as US inflation falls, boosting demand
Copper prices rose on Wednesday as lower than expected U.S. inflation supported demand and lifted sentiment, even though the Middle East crisis continued to weigh. The benchmark three-month 'copper contract on the London Metal Exchange? was up 0.05% to $13,650 per metric ton at 0300 GMT. The Shanghai Futures Exchange's most traded copper contract was up 0.64% at 104,770 Yuan ($15480.89) per ton. Data released on Tuesday showed that U.S. consumer prices slowed down more than anticipated in June. This eased fears about higher interest rates and a possible slowdown of economic activity. Daniel Hynes said in a ANZ note that the fading?prospects for a rate increase boosted sentiment throughout the base metals industry. The U.S. Dollar slipped, boosting prices of commodities denominated in the greenback by making them more affordable for buyers who use other currencies. The market digested?economic data coming from China, the world's largest consumer. The GDP growth of the country slowed to a low not seen in 3.5 years, and missed forecasts. Yangshan Copper Premium The, which tracks the buying interest in China remained strong. It was trading at $90 per ton, its highest level since May 2025. Fighting continued between the U.S.A. and Iran. This undermined hopes for peace negotiations and affected the macroeconomic outlook. Aluminum edged up on LME, adding?0.33%. On SHFE it remained unchanged. Prices have been supported by a disruption in supply from the Middle East, which represents around 9% global capacity for aluminium smelting, as well as dwindling inventories. The consumers are also seeking out alternative sources of supply and purchasing larger shipments from China, who exported an unprecedented volume of unwrought aluminum and its products last month. Nickel rose 0.15%, tin 0.24% and zinc 0.35%. Zinc gained 0.53% on SHFE. Lead dropped 1.8%. Nickel slipped 0.29%. Tin rose 1.68%.
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Asian stocks benefit from the drop in US inflation rate
The Asian markets rose on Wednesday, after a surprise drop in U.S. consumer inflation reduced market expectations of interest rate increases. Oil prices also dipped as the U.S. canceled a plan to tax shipping through the Strait of Hormuz. Investors also cheered the stellar earnings of Wall Street banks, though a 25% decline in IBM's stock price after the company missed its revenue forecast showed just how stretched the market has become. In early trading, South Korea's chipmaker heavy KOSPI soared 6% and Japan's Nikkei gained 0.4%. MSCI's broadest Asia-Pacific share index outside Japan rose by 1.7%. The U.S. Dollar fell in?currencies except for the stubbornly low yen. Short-end bonds rose, bringing two-year Treasury yields down to 4.19%, from a 17-month high near 4.3%. Annualised core inflation was 2.6%, compared to expectations of?2.8%. In a note to clients, J.P. Morgan analysts said: "For bulls on the market this is better than Goldilocks ever could have imagined." "Inflation is lower with positive earnings growth. This should ease any concerns about a rate hike in July and could also calm fears for September. This allows the market to rise and broaden at the same time. The market price for a U.S. rate hike in July has been halved from 36% to 16%. The Australian dollar, which was testing $0.70, held on to its 0.8% gain. Brent crude futures remained at $85.50 per barrel after gaining more than 12% in the past week due to a flare up of fighting in the Middle East. U.S. president Donald Trump reimposed on Tuesday a naval blocade of Iranian ports and threatened to strike power plants and bridges unless Iran resumes their negotiations to end the conflict. However, he canceled a plan to impose a 20% surcharge on shipping through Hormuz. Overnight, the Nasdaq rose 0.9% while the S&P 500 gained 0.4%. U.S. Futures were slightly higher Wednesday. ASML's earnings, Europe's most valuable company and data on Chinese industrial production, retail sales, and gross domestic product will be the focus of 'Asian trade' before ASML's earnings, which is the world's largest supplier of AI chips. BNY, Johnson & Johnson, and Blackrock will report their earnings in the U.S. before the morning bell, and United Airlines, after the market close. (Reporting and editing by Christopher Cushing; Tom Westbrook)
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Oil prices rise after US-Iran hostilities flare up again with attacks on energy targets
Oil prices rose Wednesday after President Donald Trump reimposed his?naval ban on all Iranian ports, and Iran launched a retaliatory strike on U.S. facilities in the region. Brent closed at its highest level since 'June 12' and West Texas Intermediate?at its best since june 15 for the second consecutive session. Both prices rose on Wednesday morning trade. Brent climbed $1.46 or 1.72% to $86.19 per barrel at 0029 GMT, while WTI rose $1.11 or 1.4% to $80.40. Oil prices rose 2% on Tuesday to an all-time high, as the supply disruptions in the Strait of Hormuz - where one-fifth of world oil and LNG transited before the start of the war - were intensified. The U.S. began a new round of strikes early on Wednesday to "continue degrading Iranian capability used to attack commercial ships in the Strait of Hormuz", the U.S. Military said. Tehran claims it has 'closed the Strait again after hostilities between Iran & the U.S. re-ignited last week, fraying a fragile?truce already reached in June following several months of fighting. Trump said in an interview with Fox News that aired on "Special Report With Bret Baier" Tuesday night, "I'll leave the energy targets until last but we'll ultimately hit energy targets". Early on Wednesday, the Iranian army announced that drones had been used to attack U.S. positions in Jordan's Azraq base. Pentagon has not yet responded to the report. The Iranian Islamic Revolutionary Guard Corps claimed that they had targeted weapons and storage in Bahrain and Kuwait. ? The reports could not be verified immediately. The recent flare-up has raised doubts about whether a memorandum signed last month will lead to an end to the war that has engulfed Iran’s neighbors. Tim Waterer is the chief market analyst for KCM Trade. He said that Brent prices may remain at $75-$80 per barrel if diplomatic measures are successful in reopening the Strait. "For now, there is still a risk premium, but this is not a one way bet, as both sides are motivated to find a diplomatic resolution." (Reporting and editing by Helen Clark)
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Scientists study the glacier melting risk in Greenland
This week, an international team of 80 scientists and crew will embark on the RSS David Attenborough to sail for Greenland in order to determine whether the melting glaciers on the island could affect the climate and currents in the Atlantic Ocean. The mission, which will last five to six weeks, leaves Britain, after Western Europe and Britain experienced their warmest month of June on record. This caused power outages, closed schools, and increased deaths. Kelly Hogan, marine geophysicist with the British Antarctic Survey, which is leading this mission, said in an interview aboard the vessel that the heatwaves in Europe and the UK in recent months had really made it clear how difficult it was for us to adjust to even small changes in climate. The expedition is a part of a PS20million project called GIANT – Greenland Ice Sheet to AtlaNtic Tipping Points - that aims to better understand the melting and breaking down of glaciers into the ocean, and their impact. Scientists worry that the melting of freshwater may disrupt a rotating ocean current system which regulates Europe's climate. This could lead to extreme weather conditions and higher sea levels. Matt Neill is a ship captain who has made several trips to Antarctica, including his first as a cadet in 2011. He says he's seen first-hand the effects of climate change. "Lots are of glaciers all?receding extremely quickly and more than you think." He said that it is more important now than ever to collect data and improve models during these dynamic times. BOATY MBOATFACE Officially, the ship was named after veteran naturalist Attenborough. But to many Britons, it will forever be "Boaty McBoatface" after this suggestion won a 2016 public poll. Named instead for a high-tech submersible that will be on the vessel, it will dive to 1500 meters below the glacier mixture - a mix of sea ice & snow that forms where the glacier meets the sea. It will map its geometry and how it affects the glacier. Sam Smith, an operations engineer with the National Oceanography Centre said that it would be collecting data never before collected. The data collected will be used to create next-generation climate model and a system of early warning for glacier failure.
F-35s, fixing and fires: Ukraine, Gaza Wars threaten climate
Climate damage: Russia must pay!
Rebuilding Gaza will increase emissions
Massive gaps in military emissions data
Emma Batha
Researchers estimate that the first three years of the conflict generated 237 million tons of greenhouse gasses (GHG). This is equivalent to the annual emissions of Belgium Austria and Ireland combined or 120 million cars running on fossil fuels.
This is pushing us into the wrong direction, at a time we need to drastically cut emissions," said Lennard de Klerk of Climate Research, the lead author of a report that tallied the war's emission, published in this month.
De Klerk stated that the cost of climate damage due to the war, in which hundreds and thousands of people were killed on both sides, already exceeded $43 billion.
When post-conflict rebuilding is taken into account, a separate study on the Israeli-Hamas conflict in Gaza estimated the carbon footprint of the first 15 month's war topped 32 millions tons.
This is equivalent to the annual emissions from Ivory Coast.
Benjamin Neimark led the research of UK and U.S. based experts.
The projected reconstruction emissions were a real shock. This was a shocking revelation and it made us sit up.
The groundbreaking studies will be presented at the sidelines next month's COP30 Climate Summit in Brazil.
Researchers say that conflicts and climate changes create a destructive cycle. Not only do wars cause climate change but climate change also fuels conflict in fragile areas as the competition for water and other resources intensifies.
WILDFIRES
De Klerk was surprised that wildfires accounted for a fifth (of the war's) carbon footprint after Russia's invasion in 2022.
Unrelenting shelling caused thousands of fires that ravaged farmland and forests. Some of these fires were likely made worse by landmines or unexploded ordnance scattered across the landscape.
According to the report of the Initiative on GHG Accounting of War (an international research team headed by de Klerk), nearly 850,000 hectares of land were burned last year.
He said that the amount of rain was more than 20 times higher than the average annual rainfall. The summer of 2024, due to climate changes, was exceptionally dry. This allowed fires to spread.
As the Gaza war expanded, missile attacks across the Lebanon-Israel frontier also caused fires that destroyed forests and farmland.
Firefighters in war zones face many dangers, as in Ukraine.
RECONSTRUCTION
Emissions have also increased due to the destruction of energy infrastructure both in Ukraine and Gaza.
The Russians' attacks on oil depots have caused tons of fuel to burn, and the gas and electricity infrastructure has released powerful GHGs such as methane or sulphur-hexafluoride (SF6) which has a potential global warming 24,000 times higher than CO2.
Solar panels provided a quarter (one of the largest shares) of Gaza's electricity before Israel attacked the enclave in October 2023.
The destruction of solar infrastructure has led to a greater reliance on diesel generators, which are polluting.
Neimark stated that the carbon footprint from post-war reconstruction of Gaza, which has seen the deaths of 68,000 people, will dwarf the emissions caused by the conflict.
According to U.N. estimations, Israel's intensive bombardment destroyed over 90% of Gaza's housing, and has turned it into a wasteland. 60 million tons worth of debris were created.
Concrete and steel are used in huge quantities to rebuild homes and infrastructure. These materials have a high carbon footprint.
Neimark said that the loss of farmland and orchards, as well as shrubland in an area already susceptible to climate change effects, has increased the risk of desertification.
The two wars have also increased global emissions far from the frontlines.
Commercial flights have been forced to reroute due to airspace closures, increasing fuel consumption. De Klerk stated that flights from London to Tokyo take nearly three hours more.
The Middle East unrest has also disrupted the international shipping in the Red Sea. This is due to the longer routes, and the increased speed of sailing.
MILITARY DATA HOLE
This new research about Gaza and Ukraine is a part of an overall push to increase transparency regarding global military emissions.
Even during peacetime, the carbon footprint of armies is large - from maintenance of bases to transporting troops and equipment. Military exercises, weapons production, and military exercises all add up.
According to the Conflict and Environment Observatory (a UK non-profit), about 5,5% of greenhouse gas emissions are attributed to militaries around the world.
However, countries are not required by international climate bodies to report their military emission.
Experts warn that the lack of data could lead us to underestimate the amount of emissions needed to keep the temperature rise to 1.5 degrees Celsius.
Many countries are increasing their defence spending to respond to multiple crises. This is causing concern that this will increase emissions from military equipment and divert funds away from climate change efforts.
Climate scientists say that militaries should be required to report their emissions.
Neimark stated that "we can't begin making meaningful cuts until we have adequate baselines."
(source: Reuters)