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Oil analysts lower their oil forecasts after the reopening of Hormuz eases supply concerns
A poll on Tuesday showed that analysts have cut their oil price forecasts 2026 for the first time since the Iran War began. This follows five consecutive months of increases. The reopening of the Strait of Hormuz has eased concerns about?prolonged disruptions in supply. According to the'monthly' survey of 31 economists, analysts and other experts, Brent crude will average $84.50 a barrel by 2026 compared to $90.44 last month. U.S. crude oil was projected to average $79.49 per barrel, down from the $84.63 estimate in May. These revisions represent a decline of more than 6% from estimates made in May. The forecasts jumped after the Iran conflict broke out at the end February, which disrupted the oil supply and drove the oil price to multi-year heights. Since then, oil benchmarks have fallen from their peaks of $126 per barrel of Brent and $120 per barrel of WTI. This is due to easing geopolitical conflicts and the restoration of shipping through the Strait of Hormuz. Tobias Keller of UniCredit said that the bulk of geopolitical risks premium had already been unwound. He added that weaker demand and recovering Middle East flows would likely cap any further gains. According to the poll, on average, analysts expect Brent to fall from $84 in the third-quarter of 2026 to $79 in the fourth-quarter, then to mid-$70s in mid-2027. Some market participants warned that geopolitical risks may still support prices. How to handle returns of supplies as a risk? If the traffic in the Strait of?Hormuz returns to normal, the oil market will return to surplus supply. Frank Schallenberger, head of LBBW commodity research, said that prices would continue to fall in the second half 2026. During the conflict, the Strait of Hormuz was closed. This cut off nearly a fifth of the global oil supply. This led to a dramatic drop in stocks and pushed the markets into deficit by 2026. Kim Fustier is the head of European Oil & Gas Research at HSBC. She said that "our 2026 balance estimates" show a market with a?deficit of 2 million barrels per day... and a return of a small surplus in the fourth quarter 2026 of 1 million bpd, assuming Gulf Production is restored to near-normal. Several respondents believe that OPEC+ will continue to increase output at a moderate pace as it tries to regain market share while preventing a sharp drop in prices. The International Energy Agency, in its first look ahead to 2027, said that the oil market would enter a significant overhang. Global supply is expected to increase by 8 million barrels per day, while demand will only rise by 2 million. DEMAND SOFTENS SUPPORT EYED Ahead According to the poll?oil consumption growth is expected to decrease by approximately 1.0 to 2.0 million barrels a day in 2026. Analysts say that the demand for oil has slowed due to a weaker Chinese economy, which is the world's largest importer. OPEC's 2026?oil growth forecast remained at 1.4 million barrels a day between February and April. It was then reduced to 1.2 million bpd by May, and finally to less than 1 million bpd by June. Goldman Sachs, a global stockpile of more than 1 million barrels per day (bpd) is cited by some participants as a trend that will improve demand in the future.
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Flood aid in Bangladesh depends on better forecasts and cash upfront
Flash floods strike key rice crops at peak harvest Some people benefited from pre-flood money, but thousands lost out The problems are money, logistics and forecasting By Md. ?Tahmid Zami He managed to save less than half of his crop. He said, "I couldn't?get?enough farmworkers or harvester machines?to cut the whole yield and bring it home." Since a decade, the government has alerted vulnerable farmers and families to impending flooding and provided them with cash in order to minimize their losses. Forecasting and support depth are the main problems. The forecasting behind early support is just as important as the actual support, said Dr. Fazle Rabbi Sadeque Ahmed. He is the deputy managing director at the government-backed Palli Karma-Sahayak Foundation. In April, flash floods caused by excessive rainfall and runoff water from the Indian state Meghalaya upstream in northeast Bangladesh submerged over 46,000 hectares at the height of?the rice harvest. Three days before the April flooding, the U.N. World Food Programme, one of the organizations implementing this scheme known as early actions, distributed 5,000 Taka (41 dollars) to each household. Flash floods can be less dangerous than monsoon floods, which are often deadly. However, they can cause damage to crops and threaten the food supply. Early warnings and cash handouts from the WFP in the Northeast helped farmers harvest 60% of their crops in wetlands areas. However, the assistance could not cover all the flooded areas. Some 50,000 farmers were still facing heavy losses. The weather service of the country provides an advance warning. However, flash floods are not as predictable, despite recent improvements. AID GAP Niger Dilnahar is the head of resilience innovation for WFP Bangladesh. He said that the WFP had intended to assist 85,000 farming families with early action prior to the April flood season. However, the WFP could not activate this programme everywhere because forecasts were not available for the entire "haor" wetlands region. Ahmed said that accurate and timely forecasts were needed to determine where floods would likely strike and the potential damage they could cause. Sardar Uday Raihan is an executive engineer with the government agency. He said that the Flood Forecasting and Warning Centre had been working on increasing warning times and was able to provide a forecast three days prior to the April flood. Imran Shakil is an agricultural officer appointed by the government in Brahmanbaria, in eastern Bangladesh. He said that farmers in remote areas need more than just cash. They also need better roads and harvester machines. Shakil said that farmers need assistance with harvesting logistics to make pre-flood help work. The resource gap is one of the biggest bottlenecks in scaling up the support. Dilnahar stated that the WFP provides support to about?500,000 households -- or around 2.5 million people- against cyclones. Dilnahar said that there is a large resource gap in?prefinancing early actions and donors need to step up to fill the gap. Experts in disaster and climate said that pre-disaster assistance should be supplemented with other types of support. PKSF's Dr. Ahmed said that disasters exacerbate the vulnerability of people on the frontlines. The pre-disaster support cash should be combined with regular social security benefits for those most at risk, as well as climate insurance for farmers. Miya, and other Brahmanbaria farmers are unsure of the future of their farms.
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UK auto lobby group warns that post-Brexit regulations will cost PS1.4 billion
The main British car lobby estimated that British electric vehicle manufacturers will be forced to pay PS1.4billion ($1.85billion) in tariffs, if the European Union and the United Kingdom cannot reach an agreement on the local content requirement. The Society of Motor Manufacturers & Traders (SMMT), said that the post-Brexit regulations on the sourcing parts, which were delayed a second time in 2023, are now set to come into effect as of January. This will result in a 10% tariff imposed?on 70% battery electric and plugin hybrid models sold within the EU. A similar enforcement could make many of these important models less affordable and competitive. The warning comes at a time of political uncertainty following the resignation of Prime Minister Keir starmer. It is unclear whether Andy Burnham, former Greater Manchester Mayor, will continue his approach towards EU relations. The government didn't immediately reply to a question about the SMMT statement. At a London press briefing, SMMT CEO Mike Hawes said: "Global competition is fiercer than ever. We don't need any additional costs in this trade. Both the EU and Britain are aiming to eliminate combustion engine models by 2030. The EU has already backtracked from a 2035 ban of?diesel cars and petrol vehicles as sales haven't risen as quickly as expected. The previous extension was made after several carmakers threatened to shut down their factories in Britain. Hawes stated that the 'Made-in-EU' proposal of the European Commission would "effectively" "shut out", UK-assembled cars from most European markets. He added: "It is not only a UK issue... It will harm the UK, and also Europe itself." Reporting by Muvija and Nick Carey, Editing by Thomas Derpinghaus & Raju Gopalakrishnan
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VEGOILS - Palm down on weaker Soyoil and the prospect of increased production, but logs a monthly gain
Malaysian palm futures declined?on Tuesday as soft soyoil pressured the market and an anticipated increase in production pushed the price up. However, the contract still recorded a'monthly gain. The benchmark palm oil contract for September delivery at Bursa Derivatives Exchange fell 39 ringgit (0.85%) to 4,549 Ringgit ($1,114.40). This month's contract saw a gain of 0.31%, ending two consecutive months of declines. Markets traded lower as a result of a 'weakness in the soybean oil markets during Asian hours. The expectation that output will rise in the next few weeks also weighed on sentiment. Dalian's palm oil contract fell by 0.55%, while the most active soyoil contract dropped by 0.14%. Soyoil prices at the Chicago Board of Trade fell by 0.33%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. Investors are looking forward to possible U.S.-Iran discussions in Doha, amid a strained ceasefire in 'the four-month old war. Palm oil is a less attractive feedstock for biodiesel due to the weaker crude oil futures. According to cargo surveyors, Malaysian palm oil exports rose from 4.7% to?11.9% in June compared with a month ago. The dollar's value against the ringgit has fallen by 0.37%, making palm commodities slightly cheaper to buyers who hold foreign currencies. Indonesian Palm Oil Association statistics show that Indonesian palm oil exports in April included 2.78 million tons of refined products, up from 1.78 million tonnes in the same period last year. ($1 = 4.0820 ringgit)
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AfD leader vows restore German-Russian relations as she seeks chancellery
Alice Weidel of the far right Alternative for Germany said that Germany should stop a boycott against Russian oil and gas to boost its flagging economy. She was describing the party's ambitions to form a national coalition. Weidel claimed that the AfD could win two important federal state elections within the next few months. He described them as a milestone towards securing the position of German chancellor at the next national election due in 2029. The success of Made in Germany was due to the cheap energy that Russia provided. Weidel stated that we need to get it back. "The loss has put us years behind." The loss of hundreds of thousands of jobs has been devastating. "It has made us dependent upon the United States who sells us electricity at much higher prices." SEES ELECTIONS as 'DECISIVE MOLESTONES Before sanctions were imposed in 2022 over Moscow's invasion into Ukraine, Russia accounted for more than one-third of Germany's crude imports as well as more than half its natural gas. Germany is also struggling to recover from shock following the closure of the important undersea Nord Stream Pipeline, which was crippled in September 2022 by explosions. After a sharp rise in energy prices, the country's industrial sector is still in a rut. Volkswagen, the car giant, is also considering cutting up to 100,000 jobs. Weidel's remarks highlight the fragility of the Western coalition that supports Ukraine. Germany's government supports Ukraine but the German population is divided. Weidel made the remarks ahead of September elections in two key eastern German ?states, Saxony-Anhalt and Mecklenburg-Vorpommern, where the AfD is dominating polls. If the AfD wins control, these regional governments will challenge Berlin's migration policy, which they claim is "too generous", rejecting the financial burden placed on local governments. It would?upend the consensus-model of committee-style governance in Germany and give the AfD the opportunity to gain national power. "Saxony-Anhalt and Mecklenburg-Vorpommern are decisive milestones," Weidel said. "If we win in Saxony-Anhalt, then Mecklenburg-Vorpommern will probably follow. "I can see AfD at the chancellery by the next election or after." A victory of the far-right party, Saxony-Anhalt, would be a blow for mainstream parties, such as the Christian Democrats of Chancellor Friedrich Merz, who have refused to cooperate with the AfD. Voters could be influenced by the lower energy costs in Russia and the possibility of a cheaper alternative. In the East, where the Soviet Union ruled until the fall the Berlin Wall over 35 years ago, Germany's relationship with Russia is more important. Many in the east have a positive view of Russia, but a negative one towards Germany's protector, the United States. "WE WILL NOT?TURN EVERYTHING OFF ITS HEAD" Weidel made his comments about Russia after a senior AfD legislator Markus Frohnmaier visited Russia earlier in the month. He met with Alexei 'Miller, head of Russian 'energy giant Gazprom, and demanded a reopening for the Nord Stream pipeline. Frohnmaier rebuffed critics of his trip and said he understood U.S. Investors were examining reopening Nord Stream to Germany. This could mean that Germany would have to pay a fee in order to obtain Russian gas. He said: "We must be very careful that Germany does not miss this window of opportunity in order to get back on the Russian market." Mr Miller stated that it would be three months before the gas supply was resumed. Roderich Käsewetter is a Christian Democrat member of the Merz parliament who said that the AfD’s pro-Russian position?distorts the public discourse in Germany. Kiesewetter stated that the AfD is using the romanticisation of Russia, especially with a view to the upcoming elections in Eastern Germany. Weidel denied that her party is extremist. This was classified by Germany’s spy agency in the past year. She said, "The way that we view ourselves and how our political opponents judge us are very different." "People describe us as far-right. We are in fact a party of the average person. "We will not change everything if we are elected." (Reporting by John O'Donnell, Editing by Andrew Heavens).
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Stocks soar in stellar quarter, dollar sinks gold, yen and other currencies
On Tuesday, global stocks were on track to achieve their best performance in the second quarter of six years. Meanwhile, a resurgent US dollar drove the yen down to its lowest level in four decades and?on course for a fourth consecutive quarterly increase. In the past three months the Strait of Hormuz reopened haphazardly and gradually as the hostilities between Iran and the U.S. waned, resulting in a fragile ceasefire that knocked 20% off of the price of crude oil. A dramatic shift has also occurred in the expectations of U.S. interest rate, against a backdrop that is dominated by a boom in artificial-intelligence stocks. The MSCI All-World Index has increased by almost 14% in the past three months to new highs, its best performance for the second quarter since 2020. The majority of gains are due to a fervent rally in everything AI-related. This is especially true in Asian markets where indexes from Japan, South Korea, and Taiwan have seen double-digit percentage increases. The S&P500 is up 14%, and the Nasdaq has gained 20%. Guy Miller, chief strategist at Zurich Insurance Group, said: "The theme that has disappeared is monetary support." The futures market had been pricing in further rate reductions at the start of the year. Now, that's changed. This is largely due to the current situation in Iran and the increased commodity prices. "We don't expect any further central bank cuts, but we also do not anticipate a new cycle of hikes." Europe's STOXX 600 index, which doesn't have as many AI beneficiaries than many Asian or U.S. indices, is up 0.65% and heading towards a quarterly gain of 10%. It has risen each month since March. U.S. stock futures rose 0.2%, indicating a modest rise at the opening bell. THE WINNING DOLLAR This quarter, the dollar was the biggest winner on the foreign exchange markets. It gained 1.4% against a basket major currencies. Investors are accumulating bullish positions in record numbers thanks to an astonishing re-pricing the U.S. rate outlook. The interest rate outlook has changed from one of cuts to increases, due to the surprising power of the U.S. economic and the persistent inflationary pressures that go beyond energy prices. The rise of the dollar has caused gold to fall to its biggest quarterly drop in over a decade. Meanwhile, the yen is at its weakest level in 40 years and traded around 162.23 per dollar on Monday. The yen's weakness in 40 years has caused traders to be on edge, and Finance Minister Satsukikatayama issued another warning. Kevin Warsh will address the European Central Bank annual meeting in Sintra, Portugal on Wednesday. Warsh's emphasis on inflation during his first meeting as Fed head earlier this month led traders to price in a rate increase by October. However, some economists think the economy is strong enough and the inflation obvious enough to suggest that an increase could be as early as July. Isabelle Mateos y Lago is the chief economist of BNP Paribas. "That's certainly not our case, but there's a good chance that they'll want to do it and get the issue out of their way." Before Warsh appears, on Tuesday, there are a number of European inflation data, the U.S. consumer sentiment data for June, and the JOLTS monthly hirings-and-firings report. The clock is ticking down to the U.S. jobs report due out Thursday. (Additional reporting from Dhara Ranasinghe and Tom Westbrook, both in London; editing by Muralikumar Anantharaman and Stephen Coates)
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Unexpectedly, German unemployment drops in June
Labor?office data showed on?Tuesday that the number of unemployed in Germany dropped unexpectedly?in June. According to a recent poll, analysts and economists predicted a rise of 7,000. The total adjusted number of unemployed people dropped to 2.984 millions, below the '3 million mark. In June, the seasonally adjusted unemployment rate remained at?6.3%. This is unchanged from previous months. In a recent statement, the head of the Labour Office, Andrea Nahles, said that there was little evidence of change on the labour market. The unemployment rate is only marginally decreasing, while the employment that is subject to Social Security contributions continues its downward trend. In June, the total number of?unemployed people was 2.94 million. This is a 15,000 decrease from the previous month. Economists have warned that an increase in unemployment is likely to occur in the next few months, as companies tend to 'delay staffing decisions as they react geopolitically such as with the Iran conflict. The labour office registered 648,000 job openings in total, which is 16,000 more than the previous year. Reporting by Friederike Hiene Editing by Miranda Murray, Linda Pasquini
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EU announces new steel import quotas in order to protect the industry from overcapacity
The European Commission announced quotas as part of a new system that limits duty-free steel imports to the European Union. This was done to protect the?steel sector and to increase capacity utilization to 80%. The EU's annual tariff free import quotas have been slashed from 18.3 million to 18 350,000 tonnes. A duty of 50% for steel products imported outside the quota has also been introduced. The remaining half of the import quotas is available to all trading partners including FTA partners. The commission said that many of these partners would receive country-specific quotas proportionate with their historical volumes. It said that "most of the EU FTA partners' market access will be reduced significantly less than the average 47% reduction foreseen by the Steel Regulation." The Commission stated that a "significant number" (or partners) have agreed to these allocations. The Commission emphasized that the rules were needed to protect the European industry against overcapacity and dumping elsewhere in the world. It said that "persistent global steel overcapacity remains a serious problem on the global stage and continues to distort international markets." The report added that the measure would "restore fairness to a market affected by distortions due to overcapacity." Reporting by Bart Meijer and Phil Blenkinsop; editing by Sudip K. Gupta
Doubled at halftime for MORNING BID AMERICAS
What's important in the U.S. and Global Markets Today By Mike Dolan. Editor-at-Large for Finance and Markets
The first half of 2026 is over as the whistle blows.
The AI industry has had a great year despite the energy-shocking, four-month-long Iran war, and the geopolitical tensions over Venezuela, Greenland, and NATO. Chip stocks have more than doubled.
Below, I will go into more detail. Check out my most recent column about the risks that remain around the AI boom, even as bubble concerns are waning. Watch the new episode of Morning Bid, a special mid-year edition with Markets Columnist Jamie McGeever. Subscribe to the Morning Bid podcast to hear journalists discussing the latest news in finance and markets seven days a weeks. Also, subscribe to Jamie McGeever's Trading Day newsletter.
DOUBLED IN HALF TIME
The so-called hyperscalers have pumped up AI?capex, which has led to a trebling or quadrupling of many chip stocks this year. The U.S. SOX index had its best quarter ever in the second quarter, but the Magnificent 7 - who are responsible for most of the spending - have experienced a dreary year so far. The oil prices are back to pre-Iran War levels. Meanwhile, all eyes will be on the planned peace talks in Doha, scheduled for Tuesday, after weekend military flareups.
Recent macro releases indicate that the U.S. may be running hot. The quarter ended with a positive note for Asia's big chip-stock winners, and Wall Street is now focused on the June jobs report, due Thursday, during this holiday-shortened week.
The U.S. consumer confidence update for June is scheduled for Tuesday. Also, the May U.S. job openings are on the agenda. The narrow U.S. Supreme Court decision that President Trump could not fire Fed Governor Lisa Cook before the case against her was heard and proven on Monday, was another big development. It's another matter if she is found guilty. Japan's yen has continued to fall to its lowest level in 40 years on the FX market, with no intervention by authorities despite repeated warnings. Investors are becoming increasingly concerned about possible official intervention to support the currency. Speculative short positions have reached their highest level in two years. Comcast's stock ended Monday almost 5% higher after it announced that it would be splitting its media and entertainment division from its?communications unit, spinning out NBCUniversal, Sky and into a separate company.
Chart of the Day
In 2026, the halftime whistle has already blown. And?chips? are the clear winners.
Even that is an understatement. Intel, Marvell Technology and Micron Technology shares have more than tripled in value. Sandisk's share price has risen more than 700%.
But the companies that are doing the AI-related spending, which is driving demand for these chips, are also suffering. The Magnificent Seven of U.S. Tech Megacaps, once a 4% loss for the year. Microsoft is down 24% while Meta is down nearly 15%.
Watch today's events
* U.S. May ?JOLTS job openings (10 a.m. EDT), June consumer confidence (10 a.m. ?EDT)
Nike's earnings in the U.S.
Beth Hammack, Cleveland Fed's Beth Hammack, speaks
Want to receive the Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent those of News. News is bound by the Trust Principles to maintain integrity, independence and freedom from bias. (By Mike Dolan).
(source: Reuters)