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Asia shares slip, oil prices pile pressure on bonds
Asia share markets fell on Monday, as new drone attacks in Gulf drove up oil prices and bond yields. Meanwhile, the AI boom will be tested this week by the earnings of tech-diva Nvidia. Saudi Arabia intercepted three drones as U.S. president Donald Trump warned that Iran must "act fast" to reach an agreement. The Strait of Hormuz, which used to transport 20% of world oil trade, is still closed to all but the smallest of ships as Tehran attempts to formalise control of this waterway. Capital Economics analysts warned that the closure was draining oil stocks worldwide fast. "Inventories may reach critical levels before the end of June, which could lead to Brent reaching $130-140pb or even higher." If the strait closes by year's end and oil remains around $150pb in 2027, this would drive inflation near 10% in UK and Euro zone, sending rates back to recent peaks, and lead to a global recession. Brent crude was up 1.2% to $110.63 per barrel. U.S. crude rose 1.0% to $106.42 per barrel. G7 Finance Ministers meet in Paris to discuss the Strait?Hormuz, and crucial raw material supplies. Global bond markets were hammered by fears that energy costs will remain high, and therefore continue to drive inflation. The yields on U.S. 10-year notes are up to 4.584% after a surge of 23 basis points in the last week. 30-year bonds have risen 18 basis points. Investors feared that central banks around the world would tighten up to stop an inflationary spiral. A hike by the Federal Reserve this year is seen as a 50% chance. The minutes of the Fed’s last meeting were released on Wednesday. They should show how much pressure was put on the committee to adopt a neutral position and move away from a bias towards easing. Japan's Nikkei index eased by 0.4% after falling 2% in the previous week, though this was still from records highs. South Korean stocks dropped 2.1% as the hot market cools a bit after semiconductor demand drove it to record highs. MSCI's broadest Asia-Pacific share index outside Japan fell 0.6%. China's stock markets reached their highest level in over four years last Thursday, but they will need to deal with data on April retail and industrial output in the later session. AI, RETAIL EARNINGS TO TEST FOR THE BULL RUN S&P futures dropped 0.4%, while Nasdaq Futures lost 0.5%. Analysts at Citi note that while Wall Street was boosted by positive earnings, half of it came from special items like tariff add-backs or asset markups. The gains in both profits and overall indexes are also closely correlated. In a note, Scott Chronert, an analyst at?Chronert & Co. wrote: "We identified 20 stocks that contributed to the majority of index earning upside." "Forward Guidance increases also demonstrate a similar focus." He added that "Broadening" is necessary for indexes to move upwards. This will require a clearer view of the Iran conflict's winding down. Earnings from Nvidia, the world's largest company and most valuable in terms of market value, are due to be released on Wednesday. Expectations for this company are high. Nvidia's shares have risen 36% from the low of March, while the Philadelphia SE?semiconductor Index has soared 60%. This is due to the fervent demand for chips, as tech companies invest massively in AI-related infrastructure. This week, Walmart will release a number of retail results that will give a glimpse into the consumer's reaction to high energy costs. The greenback has been the most liquid currency in the forex market because of risk aversion. The United States? The?U.S. The euro was at $1.1620 after losing?1.4% in the last week. The pound sank to $1.3318 after a 2.3% drop last week, as political instabilities added to the already high pressure on gilt markets. The dollar remained steady against the yen, at 158.64. Only the threat of Japanese interference prevented another speculative attack on the 160.00 chart. Gold was unchanged at $4,540 per ounce on the commodity markets. It has received little support as a safe-haven or a hedge against inflation. (Reporting and editing by Jacqueline Wong; Reporting by Wayne Cole)
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Australia orders China-linked investor to sell Northern Minerals stake
Australian Treasurer Jim Chalmers announced on Monday that he has 'ordered six shareholders to sell their shares in Northern Minerals, after a 'concern about Chinese parties attempting to control the rare earths mining company. Northern Minerals has developed the Browns Range Heavy Rare Earths Project in Western Australia, at a moment when Western governments seek to loosen China’s stranglehold on?the industry. Heavy rare earths play a vital role in industries like semiconductors and defense. Chalmers stated in a press release that the?decision is intended to protect national interests and ensure compliance with its foreign investment framework. He said that "we operate a robust, non-discriminatory framework for foreign investment and will take additional action to protect our national interest in this regard." Northern Minerals spokesperson had no immediate comment. In recent years, the government has intervened on several occasions in relation to the company's shareholder base. The first intervention was in 2024 when five Chinese parties were required to sell their shares of the miner for national interest reasons. Australian authorities found that some of these parties sold shares to a related party at the time, Hong Kong based investor Ying Tak. Treasurer Chalmers issued an interim order to Ying Tak in April, which prohibited it from voting at Northern Minerals annual meeting or selling its shares. The announcement made by the Treasurer on Monday did no name the six investors. Ying Tak's phone number and email address are not listed in Hong Kong's company registry. Reporting by Melanie Burton and Alasdair Pala in Melbourne; Editing by Himani Sarakar and SonaliPaul
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Bloomberg News: NextEra will discuss paying $76 per Dominion share
Bloomberg News reported that the U.S. power firm NextEra Energy was in talks with Dominion Energy about a deal that would value Dominion Energy at $76 per share, or $66 billion. The two companies would form one of the biggest power companies in America, measured by their market value. Calculations show that the offer represents an increase of approximately 21%?over Dominion's May 15 closing price. The?Bloomberg article added that NextEra would exchange about 0.8 shares of its stock per outstanding share?of Dominion in a deal which could be announced by Monday. The report stated that while NextEra intends to pay mostly in stock, the deal will also include a small amount of cash. NextEra shareholders will own approximately 75% the combined company. The report could not be verified immediately. Companies did not respond immediately to requests for comments outside of regular business hours. According to LSEG, Florida-based NextEra is one of the largest energy developers in the world, with a market cap of $194.69 Billion, compared to?about $54.29 Billion for Dominion. Financial Times reported the news of the merger on Friday. Citing sources, the Financial Times said that the deal would result in a company worth?about 400 billion dollars, including debt. The record U.S. electricity consumption of 2025 will continue to rise?overthe next two years as the AI boom?drives the data-center operators?to lock in utility supply agreements, boosting the sector profits amid increasing demand. (Reporting and editing by Chris Reese, Nick Zieminski and Chandni shah in Bengaluru)
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Authorities say that a suspected Ukrainian military drone crashed in Lithuania
The National Crisis Management Centre of the Lithuanian government said that a suspected Ukrainian military drone crashed in Lithuania on Sunday. Reporters were told that the drone had not been detected upon its entry into Lithuania and it was not armed. The centre reported that the drone was found in the village of Samane. This is about 40 kilometers from the Latvian border and 55 kilometers from Belarus. Kyiv is yet to comment on this issue. Separately the 'Latvian Army' said that a drone alert had been issued Sunday morning along the border with Russia. NATO fighters from a Baltic Air Police mission were then'summoned into the area. The army reported that a drone briefly entered Latvia during the alert. Since March, several Ukrainian drones that have strayed into the airspace of NATO member Latvia, Lithuania, and Estonia, which borders Russia and its ally Belarus, have been seen. Kyiv has said that the drones launched by Kyiv were to hit military targets in Russia but was confused? by Russian interference. Two drones, which caused a fire and explosion at an oil storage facility in Latvia on May 7, were among the drones that crashed and exploded. Evika Silina, Latvian Prime Minister, fired her Defence minister after the incident. This led to her losing her government in May 2014. In 'April, the?Baltic States said they had never permitted their?territories or airspace to be utilized for drone attacks on targets in Russia. Reporting by Andrius sytas, Pavel Polityuk and Aide Lewis; editing by Chizu Nomiyama and Aide Lewis
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Five people killed in Gaza by Israeli strikes, say medics
Health officials reported that Israeli strikes killed at least five Palestinians on Sunday in the Gaza Strip, as ceasefire attempts to end the fighting between Israel's militant Hamas group failed. Israel intensified its attacks on Gaza in the weeks following the end of its joint bombing campaign with the U.S. against Iran. Hamas is tightening their grip in Gaza while Israeli troops still control more than half of the territory. Medical personnel reported that an Israeli strike had killed a Palestinian in a tent camp near a police station and another one at a tent encampment?in Khan Younis, south of the Gaza Strip. Israeli forces said they killed a militant that posed a direct threat to the local forces. Gaza medics have also reported that another Israeli airstrike in central Gaza killed at least 3 people in a community kitchen located near Al-Aqsa Hospital. The Israeli military didn't immediately comment on that incident. The Israeli military announced on Saturday that Izz al Din al Haddad, the leader of Hamas’ armed wing, had been killed by what they described as an accurate strike in Gaza City. Hamas acknowledged Haddad's demise but did not threaten revenge. HAMAS COMMANDER KILLED BY CAR Israeli military claimed that it also killed Bahaa Baroud, the Hamas Operations Headquarters Commander, in an airstrike Saturday. They accused him of planning numerous imminent attacks against Israeli troops and civilians over recent weeks. The military claimed that Baroud was a direct threat, and it was targeted with a "precise" strike. They also said that they had taken measures to minimize civilian injury, such as the use of?precision munitions? and?aerial monitoring?. Gaza's health officials confirmed that Baroud and another person were killed in an airstrike which targeted the car they were in in Gaza City. Israel and Hamas are unable to progress in their indirect talks on President Donald Trump's plan for Gaza, which is intended to bring an end to more than two years fighting by ending the war with Hamas as it disarms along with Israeli troops leaving Gaza. According to figures that don't distinguish between civilians and combatants,?870 Palestinians were killed by?Israeli attacks since the October ceasefire. In the same time period, militants killed four Israeli soldiers. Hamas doesn't disclose the number of casualties amongst its fighters. (Reporting and editing by Kirsty Donovan, Alex Richardson, Maayan Libell; Additional reporting by Nidal Al-Mughrabi)
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Israeli strikes kill four Palestinians, doctors say
Health officials reported that Israeli airstrikes on Gaza Strip killed four Palestinians. Medical personnel confirmed that an Israeli strike had killed a Palestinian near a police station in Khan Younis,?in the?southern Gaza Strip. Israeli military claimed it had killed a militant that posed a direct threat to forces in an area located south of the enclave. Gaza medics also reported that another Israeli airstrike in the central Gaza area killed at least 3?people? at a community cooking near Al-Aqsa Hospital. The Israeli military did not immediately comment on this incident. Israel and Hamas are still unable to progress indirect talks in order to implement President Donald Trump's plan for Gaza, which is intended to bring an end to more than two years of conflict. Israel has intensified its attacks on Gaza since it halted its joint bombing campaign with the U.S. against Iran. The military claims that Hamas fighters have tightened their grip in the devastated Palestinian territory. The Israeli military announced on 'Saturday that Izz al Din al-Haddad was killed by a 'precise strike' it called a day earlier in Gaza City. Hamas acknowledged Haddad's demise but did not threaten revenge. Israel has repeatedly carried out strikes against Gaza since the ceasefire began. According to?numbers that don't distinguish between combatants and civilians, 870 Palestinians were killed by Israeli strikes since October's ceasefire. Four Israeli soldiers were also killed by militants in the same time period. Hamas doesn't disclose the number of casualties amongst its fighters. Reporting by Nidal Al-Mughrabi, Editing by Kirsten Doovan
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IAEA says UAE radiation levels normal after drone strike near Barakah plant
The Abu Dhabi Media Office reported on Sunday that authorities in 'Abu Dhabi' responded to an fire caused by a drone strike on a?electrical genset outside the inner perimeter at the Barakah Nuclear Power Plant, in Al Dhafra Region. The Federal Authority for Nuclear Regulation (FANR) confirmed that the essential systems of the plant were working normally. The statement didn't give any indication as to?how the drone attack happened. The International Atomic Energy Agency (IAEA) reported that the UAE informed it that radiation levels at Barakah Plant remained normal after the incident. The U.N. nuclear watchdog said that the IAEA was "following the situation closely" and in constant contact with?UAE officials, ready to offer assistance if necessary. The UAE was repeatedly targeted by?drones and missiles during the Israel, U.S., Iran conflict. The UAE's Foreign Ministry said that it "categorically" rejected Iranian allegations and attempts to justify attacks against the UAE. It added, "that it reserves its sovereign, legal, diplomatic, and military rights to respond to threats or hostile acts." Reporting by Tala RAMADAN Editing by Peter Graff & Barbara Lewis
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Four Russians are killed by Ukraine drones in Russia. This is the biggest attack on Moscow in more than a year
At least 'four' people were killed by a major Ukrainian drone strike on Russian -regions including Moscow. This was the largest attack Moscow has faced in over a year. Authorities announced on Sunday that three people were killed in the Moscow Region and one in Belgorod. The regional governor of Moscow, Andrei?Vorobyov, said that a woman died when a house was hit in Khimki to the north of the capital. He added that rescuers were searching for a second person among the debris. Two men died?in the village Pogorelki, in the Mytishchi District. He said that a number of?residential buildings and infrastructure facilities had been damaged. TASS, citing Sergei Sobyanin as the mayor, reported that air defences had destroyed 81 drones heading for Moscow since midnight. This is the largest attack on the capital of over a calendar year. Sobyanin reported that 12 people were injured, mostly near the entrance of Moscow's oil refining plant, while three houses were damaged. He added that the "technology" of refinery was not affected. The Russian defence ministry said that 556 drones had been shot down over the country during the night and early morning. The largest airport in the country, Moscow's Sheremetyevo, said that drone debris landed on its land without causing damage. Reporting by Vladimir Soldatkin and Anton Kolodyazhnyy, Editing by Raju Gopikrishnan & William Mallard
Oil reaches 2-week high following drone attack on UAE Nuclear Power Plant
Oil prices?extended their gains on Monday, as 'efforts to halt the U.S. and Israeli war against Iran seemed to have stalled. After a nuclear power station in the United Arab Emirates was attacked and U.S. president Donald Trump is expected discuss military options for Iran.
Brent crude futures rose $1.44 or?1.32% to $110.70 per barrel at 2337 GMT, after reaching their highest level since May 5,?earlier that day.
U.S. West Texas Intermediate is now at $107.26 per barrel, an increase of $1.84 or 1.75 percent, after reaching its highest level since the 4th of May.
Last week, both contracts rose more than 7% as the hopes of a peace agreement that would stop ship attacks and seizure around the Strait of Hormuz faded. ?Last weeks talks between Trump's and Xi Jinping's Chinese counterparts ended without any indication that the world's largest oil importer would be able to resolve the conflict.
Concerns about an escalation of the conflict were raised by drone attacks against the UAE and Saudi Arabia, and the rhetoric coming from the U.S.
Emirati officials confirmed that they were investigating the cause of the attack on the Barakah Nuclear Power Plant and that the United Arab Emirates had every right to respond in kind to "terrorist" attacks.
Saudi Arabia warned that it will take all necessary measures to protect its sovereignty and security if anyone attempts to violate its sovereignty.
Tony Sycamore, IG's market analyst, said: "These drone attacks are a stern warning - new U.S. or Israeli attacks on Iran may trigger further proxy attacks by Iran...or its regional proxies on Gulf energy...and critical infrastructure."
Axios reports that Trump will meet with his top national security advisors on Tuesday in order to discuss military options regarding Iran.
(source: Reuters)