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Oklo closes in on nuclear agreement with US Air Force
Oklo, an American company that hopes to build micro-nuclear power plants, announced on Wednesday that the Energy Logistics Agency of the Defense Department had issued a Notice of Intent to Award a Power Purchase Agreement for a Pilot Reactor. Why it's important After President Donald Trump's executive orders on nuclear power last month, companies that produce nuclear power are now seeking U.S. government contracts. Trump's first administration also included a directive to agencies to build small nuclear reactors at military bases, but no plants were built. Oklo’s project for Air Force could produce up to 75 Megawatts of electricity as well as usable heat. The unit is tiny in comparison to the 1,000 MW average of today's reactors. However, developers are hopeful that it can be easily replicated in factories. Is the agreement final? Under the terms of a long-term contract, Oklo will design, build, own and operate a power plant delivering heat and electricity at Eielson air force base in Alaska. The deal's value was not disclosed. The U.S. Nuclear Regulatory Commission refused Oklo a license to operate in 2022. Oklo hopes to receive a license in 2027 and plans to apply again in late 2025. Trump ordered the NRC last month to issue licenses in 18 months. What happened the first time? The U.S. Military made an agreement in 2023 for Oklo, to build a reactor at Eielson before the end of 2027. Later that year, the U.S. military retracted its intention to award Oklo an over $100 million contract. Concerns about Proliferation Non-proliferation specialists are concerned that Oklo's plan would use plutonium to extract energy, which could be used for a nuclear weapon. Oklo claims that the plutonium will be encased in highly radioactive substances, making it almost impossible to use as a fissile substance.
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Stocks muted, dollar steady on latest US-China trade detente
The dollar was steady and stocks were downbeat on Wednesday, despite the lack of details from the U.S. China trade talks. Although they promised a high-level deal, the talks did not resolve the long-standing tensions that have existed between the two world's largest economies. Investors in bonds were also waiting for the 8:30 am reading of U.S. Inflation. The early impact of tariffs could be seen in the price changes. A Treasury auction will also test the demand for the country’s debt. Washington and Beijing negotiators said in London that they had "agreed on a framework for trade", which would be presented to their respective leaders. Howard Lutnick, the U.S. Secretary of Commerce, said that the implementation plan would result in a resolution to restrictions on rare Earths and magnets. He did not provide any specifics. Carol Kong, currency strategist at Commonwealth Bank of Australia, said that even though the details were scanty, markets would be happy as long as both sides talked. She said, "It's going to be very difficult and take a lot of time for both parties to reach an agreement on a comprehensive trading relationship." A federal appeals court on Tuesday allowed the most comprehensive tariffs of President Donald Trump to remain in place while it reviewed a lower court ruling blocking them. Elon Musk, the billionaire who owns Tesla, also admitted that he regretted certain posts he had made about Trump last week. This could be the beginning of a reconciliation of the abrupt rift which has caused Washington to be roiled and damaged the shares of Musk's Tesla. Investors who have suffered from trade tensions before, remain cautious. Both the S&P 500 and Nasdaq Futures are down by 0.2%. The outlook for Asian shares was slightly better, with MSCI’s broadest index of Asia-Pacific stocks outside Japan rising 0.6%. However, the STOXX benchmark, which measures major European shares, fell 0.1%. AUCTION ANGST The dollar strengthened slightly against the Japanese currency to trade at 145.15. The euro fell 0.1% to $1.1433, pushing the dollar index to 99.041. Bond investors also awaited an auction later that day of $39 billion worth of 10-year notes, eager to see whether foreign buyers would show up. The 10-year Treasury yields remained unchanged at 4.497%. Investors are increasingly concerned about the huge U.S. deficits and debt, as well as White House policy changes. This has led to a demand for a higher premium on Treasuries. Analysts expect that the data on U.S. Consumer Prices for May will also show an initial increase in prices due to tariffs. However, it may take several months before this is fully reflected. The median forecasts predict that the consumer price index will rise by 0.2%, and the core index by 0.3%. This would push the annual rates to 2.5% and 2,9% respectively. Any increase would undermine the hopes of further rate cuts by the Federal Reserve, and bonds could be sold off. The markets have little hope that the Fed will relax at its meeting in July or next week, but they've priced in a 60% probability of a move for September. Gold gained 0.24% on the commodity markets to $3,329 per ounce. The oil price rose to a record high of seven weeks as the markets assessed the outcome from the U.S. China trade talks. Brent crude futures were up 82 cents at $67.69 per barrel while U.S. Crude was up 96 to $65.94.
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Copper prices are impacted by China's demand and trade tensions
Prices of copper fell on Wednesday, as China's outlook for its demand dominated the mood. The country's trade negotiations with the United States also did little to alleviate concerns over a possible resolution to the tariff dispute. By 1036 GMT the three-month contract for copper on the London Metal Exchange fell 1.2% to $9,639 per metric tonne, its lowest price since June 5. U.S. officials and Chinese officials announced on Tuesday that they had reached an agreement on a framework, but did not reassure the markets that a lasting resolution to long-standing trade tensions was close. Ewa Mnthey, ING commodities analyst, said that the trade war would continue and China's policy of reduced stimulus was a downside risk to copper prices. Metals markets are likely to continue experiencing high volatility as long as uncertainty remains high. Yangshan Copper Premium shows China's appetite to import copper At $43 per ton, up from $103 in early May. This is the highest price since mid-December of 2023. Data shows that China's copper imports fell 2.5% in May compared to the previous month. Copper stocks on the LME fell, which helped to support prices. . In three months, the 119,450 tonnage has dropped by 50%. The LME is expected to lose another 70,700 tonnes of metal due to be delivered or cancelled warrants. The LME draws are mainly due to metals being shipped to the United States, where COMEX prices are higher. This is because the U.S. Administration is considering imposing tariffs for copper imports. The increase in U.S. aluminum import tariffs from 25% to 50% last Thursday has led to speculation about levies on Copper. Support for copper, on the technical front is around $9.600 at the 21-day average. Other metals include aluminium, which rose by 0.7%, to $2.509 per ton. Zinc, on the other hand, increased by 0.2%, to $2.662, while nickel dropped 0.4%, to $15,250. Tin fell 0.2%, to $32,600, and lead grew 0.2%, to $1.985.5. (Reporting from Ashitha Shivaprasad and Pratima Deai in London, with editing by Barbara Lewis.)
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Budget watchdog: Climate change will cost Italy more than 5% of its GDP by 2050
The budget watchdog of Italy said that extreme weather caused by climate change could cost the country more than 5% GDP in 2050. It added that global actions to reduce carbon emission could reduce the impact. In the past few years, flooding has devastated cities in Italy, killing dozens and causing billions in damages. Severe droughts have also damaged crops and livestock, particularly in less developed southern regions. Sicily, in 2021, also set the European record for heat with 48.8°C. In its annual report, the UPB said that the impact of extreme events on the public finances in Italy would rise from an estimated 0.2% of GDP annually in 2024 to a value of 5.1% of GDP in 2030 if the policy scenario remained unchanged. This would drop to just 0.9%, if the global carbon neutrality targets are met. To achieve carbon neutrality, you must reach a balance of zero between the CO2 emissions from your vehicle and the CO2 that is absorbed by your atmosphere. According to a plan adopted in 2019, the European Union hopes to achieve carbon neutrality by 2050. The UPB stated that "the projections assume the number of extreme weather events in 2050 to be six times higher than in 2024 with a policy scenario unchanged and two times more in the scenario carbon-neutral." According to the independent watchdog, subsidies for the switch to cleaner energy sources are among climate-related costs on state finances. The document was presented by UPB President Lilia Cavallari, who said that the "fragile global environment" makes finding shared solutions to major issues more difficult, including climate changes. "The urgency to coordinate climate change mitigation by involving as much as possible actors remains urgent. Cavallari stated that isolated measures in this field risk being both less effective and more expensive. Since returning to office in January, U.S. president Donald Trump has led an effort to push back against policies largely driven by Democrats to reduce carbon emissions. (Reporting and editing by Alvise Armillini and Alex Richardson.)
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Russian rouble slightly down vs US Dollar, ignoring EU sanction threat
The Russian rouble was slightly weaker against the U.S. Dollar on Wednesday. This is despite the European Commission's proposal for new sanctions, which includes a lower price cap on Russian crude oil. On June 10, the commission proposed an additional 18-point package of sanctions for Russia's invasion of Ukraine. The measures targeted Moscow's banks, energy revenues, and military industry. The Russian government has proposed that the price cap for Russian crude oil in the Group of Seven (G7) nations be lowered to $45 per barrel from $60, to reduce Russia's revenue. According to LSEG, based on quotes over the counter, by 0945 GMT the rouble had fallen 0.2%, at 78.60 US dollars. On June 10, the dollar and the rouble both strengthened by 0.7%. In November of last year, U.S. sanctions were imposed against Gazprombank which processed Russia's energy payments. The rouble dropped by as much as 15%. The Russian currency is up around 40% versus the dollar this year. BCS analysts commented on the EU sanction proposals with "Negative sentiment but still there is little certainty". "The history of the introduction of logistical restrictions from 2022 shows that a temporary increase in price discounts for Russian hydrocarbons is followed by a normalization of prices without affecting production or export volumes. "It is likely to happen again this time," said the experts. The rouble fell by 0.9% on the Moscow Stock Exchange against the Chinese Yuan, which is the most commonly traded foreign currency in Russia. The central bank uses the yuan to make foreign exchange intervention. (Reporting and editing by Rachna uppal; Gleb Bryanski)
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Reds aim to sweep Guardians in the Ohio Cup
The Cincinnati Reds are the winners of their rivalry against the Cleveland Guardians. Spencer Steer's RBI single and Andrew Abbott’s first-career complete game along with his three-hitter allowed Cincinnati to defeat Cleveland 1-0 in a Tuesday matchup. The Reds were 5-0 winners against the Guardians by 2025. They have a chance on Wednesday to finish the season sweep. Cincinnati, who has also won five consecutive games overall, will send Nick Lodolo, a left-handed pitcher (4-4 with a 3.21 ERA), to the mound in the final game of the series to face Cleveland's Logan Allen, whose ERA is 3-4 and 4.42. TJ Friedl, Reds' center fielder, said: "We have played really good baseball in this clubhouse for a short time and we will continue to build on that." We know what we've got in this clubhouse. "We're going to accept that and move on." The intrastate battle of this week was dominated by a literal rolling. The players of Cincinnati didn't realize that Terry Francona was the real winner until the Ohio Cup trophy was brought into the clubhouse following the first game. The Reds had not won the season series in 2014, so it was easy to understand. When they rolled the trophy here on the cart we were like "Oh, it's true." Friedl laughed and said: "It's right there." Steer's batting average is only.230 for the season, but with his single to win the game off Slade Cecconi, he has gone 4-for-7 in the last eight games when he had runners on base. This was his fifth consecutive game in which he had a hit. Abbott's dominance against Cleveland has made him the favorite for the Frank Robinson Most Outstanding Player Award, which will be presented on Wednesday to Ohio Cup's best performer. He has pitched 14 scoreless inning in both of his starts against the Guardians. Stephen Vogt, the manager of the Guardians, said that Reds players "pitched well, hit well, played good defense and took good at-bats." "They are a very strong team." Vogt’s team has lost back-to-back domestic series for the first since August 2023. Abbott's 110 pitch masterpiece was the first time Cleveland had been blanked in its ballpark by a 1-0 score since August 9, 2023 when it lost to the Toronto Blue Jays. Carlos Santana, first baseman for the Guardians, said via an interpreter: "It is a long and difficult season. "Mentally we must keep fighting." We must play our best baseball and think about one day at a tme. Lodolo has a career record of 1-1 and a 6.30 ERA against Cleveland. Allen won his only appearance against Cincinnati two years ago after pitching six scoreless inning. Jose Ramirez is still the driving force behind the Guardians. He batted.388 during a 36 game on-base streak, which began April 30, with seven homers. The streak of the six-time All Star third baseman is the second-longest in the majors for this season. It trails only the 41-game streak by Kyle Schwarber, who plays for the Philadelphia Phillies. And it ties Cleveland’s longest streak in the last 19 years. Jason Kipnis' 36-game streak was in 2013. Francona stated that "Ramirez is so good, you know exactly where he's on your lineup cards." "I felt the same way with Miggy in Detroit (former American League MVP Miguel Cabrera). This guy is similar." Field Level Media
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Curve prices rise on the return of nuclear fears in France
The European electricity prices rose in the late morning of Wednesday due to concerns about possible corrosion at French reactor Civaux 2. A spokesperson for EDF has said that the EDF is not responsible for any damage caused by its employees. Inspection is underway The utility has not yet received the results of the annual maintenance at Civaux 2. Markets were reminded three years ago of the corrosion that occurred in French reactors when production fell and required imports from Germany. Prices then rose. By 0945 GMT the French baseload year-ahead was 7.6% higher at 67.6 Euros ($77.30). All contracts in Germany rose across the board. German base for 2027 was up 5.9% and 80.4 euros, while the German base for year-ahead was up 3.1%. On the spot market, a combination of a rising solar energy generation and softer demand brought down prices. LSEG's analysis revealed that the growth of solar power in Germany's main producing country outweighed the decline in wind power. The increase in coal-to power production in Germany also exceeded a decrease in gas power in the local area. The French baseload day-ahead price was down 7.1% at 26 euros/MWh. The German baseload on Thursday fell 7.6% to 64 euros. LSEG data revealed that the German wind power production will fall by 2.4 GW per day to 12.5 GW this Thursday. The German solar power generation was projected to rise by 3 GW, to 20.8 GW. The French nuclear capacity remained unchanged at 71%. The demand for electricity in Germany will be down by 300 MW per day to 53.5 GW. In France, it is expected to rise by 100MW to 43.7GW. This leaves the total usage of the region at a lower level. The temperature was expected to increase between 1 and 2,7 degrees Celsius until Thursday. Warm temperatures usually boost the European carbon market as they require additional power to cool devices, which is often generated using carbon-intensive fossil energy sources. The benchmark European carbon contract increased 2.6%, to 74.59 Euros per metric ton. European gas also firmed up.
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Russian court delays hearing on $2.9 billion Rosatom/Fortum dispute to March
Court filings show that a Russian court postponed the legal proceedings in a $2.9 Billion lawsuit brought by Rosatom, Russia's nuclear energy company, against Finland's Fortum & Outokumpu by over nine months. In May, documents filed in court and a Rosatom press release revealed that the state-controlled nuclear energy company Rosatom was seeking compensation of 227.8 billion Russian roubles (about $2.9 billion) for the termination of the contract for the Hanhikivi-1 Nuclear Power Plant in Finland. Court documents, which did not provide any further information, showed that the hearing at the Moscow City Arbitration Court scheduled for Wednesday morning has been postponed to March 16, 2026. Rosatom, Fortum, and Outokumpu did not respond immediately. Rosatom and former Finnish partners are locked in a dispute over the cancelled agreement since May 2022. The Finnish side cancelled the project shortly after Moscow started the conflict in Ukraine citing delays and political risk. Rosatom said in May that it sought compensation for the losses it alleged to have suffered as a result of what it termed the illegal termination of the EPC contracts to build the plant and violations of the shareholder agreements. Outokumpu claims that it never signed the EPC contract or any other agreement related to the Hanhikivi-1 Project with any Rosatom companies. Fortum stated in May that it was the final decision of the International Chamber of Commerce that Rosatom subsidiary could not include Fortum as a party. The contract for the 1.2 gigawatt power plant, with estimated investments of 6.5-7 billion euro, was signed with Fennovoima in 2013. This joint consortium included Finnish stakeholders such as Fortum, Outokumpu, and SSAB, who initially controlled two thirds via a joint venture. And the Russian side held a third. Fennovoima has ceased its business operations after the termination of the project. It is now only involved in legal disputes. $1 = 78.6000 Rubels (Reporting and writing by Alexander Marrow, Editing and editing by Alexandra Hudson).
Investors watch US-China trade progress to see if it can bring about a change in the dollar and stock prices
As trade talks between China and the United States continued for a second consecutive day, investors had reason to believe that tensions may be easing between the two world's largest economies.
U.S. commerce secretary Howard Lutnick stated that discussions between the two parties were going well. President Donald Trump put a positive spin after the Monday session.
Lutnick met with Treasury Secretary Scott Bessent, U.S. trade representative Jamie Greer and their Chinese counterparts at the London International Trade Fair.
Markets will likely be relieved if the talks progress, given Trump's frequently changing tariff announcements. These have disrupted supply chain and threatened to stymie global growth.
The MSCI All-Country World Index, which reflects world stocks, reached near-record highs. Meanwhile, the dollar was stable against a variety of currencies.
"While market participants clearly take a half-full outlook on the outlook, both in terms of trade policy and more generally, we do not think this should be interpreted as an opinion that tariffs are going to be completely unwound," Jonas Goltermann said, deputy chief markets analyst at Capital Economics.
Goltermann expects U.S. duty on Chinese goods will settle at around 40 percent, while the majority of analysts say that the 10% universal levy on imported products into the United States will remain.
Investors were worried about the new proposals by the Swiss government to require the bank to have $26 billion extra in capital.
U.S. Stock futures are trading about 0.1% higher.
In Tokyo, Finance Minister Katsunobu Kato announced that policymakers are looking into measures to promote the domestic ownership of Japanese Government Bonds. This comes a day following reports that Japan was considering buying back super-long government bond issued in previous years at low interest rates.
The yield for the 10-year JGB remained flat at 1.47%. Meanwhile, 30-year yields increased by 1 bp to 2.92% after a decline from a record high of 3.18 % in late May.
The dollar was essentially unchanged for the day at 144.5 yen. Meanwhile, the euro rose 0.1% to $1.1428. After weak UK employment figures, the pound fell 0.3% to $1.35.
QUALITY, NOT SIZE
Investors' confidence in U.S. assets has been eroded by Trump's unpredictable trade policies, and concerns over Washington's increasing debt. The dollar is down more than 8% so far this year.
The deficit will remain stable, and the Americans won't be able to blow up their fiscal situation. Samy Chaar is an economist with Lombard Odier.
You'll have macropayoffs if you spend and invest on productive investments. You'll develop an industry, strengthen your economy, create jobs. "If you reduce revenues by cutting taxes on people that don't require the money, then they won't consume more or invest more. So the macropayoff is limited," said he.
U.S. Treasuries yielded around 4.45% on Monday, down by 3.4 basis points.
The impact of tariffs on the price of goods could be revealed by data on U.S. Consumer Inflation for May, due to be released on Wednesday.
The report on the producer price index will be published a day after.
Kevin Ford, Convera’s FX and macrostrategist, said that the May CPI and PPI figures in the United States will be closely examined for any signs of inflationary pressures.
If core CPI continues to be elevated, rate cuts may not occur at the FOMC meeting on June 18.
The traders expect that the Fed will leave rates unchanged during its next policy meeting. By December, only 44 bps of easing had been priced in.
Brent crude rose 0.5% to $67.30 a barrel on commodity markets due to optimism that the U.S. China talks scheduled for Tuesday could reduce trade tensions. Gold spot rose 0.4%, to $3341 per ounce.
(source: Reuters)