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Can markets handle more straight talk?
Ankur Banerjee gives a look at what the day will bring for European and global markets. After five months of observing events in the Strait of Hormuz investors are now focusing on the Arabian Peninsula, where the Iranian-aligned Houthis who control the area near the 'Bab el-Mandeb strait, in the 'Red Sea open a new rift in the Middle East crisis. Brent futures have reached $96 a barrel, their highest level since early June. Investors are worried about stockpiles being depleted after Houthis announced a naval blocade against Saudi Arabia this week. Ship-tracking data revealed that the threat caused tankers to change course in Red Sea. The surge in oil prices has sparked fears of inflation. Short-term Treasury yields have reached their highest level in 17 months, as traders bet that a Federal Reserve rate hike could happen soon. Now, traders are 'fully pricing in' a rate hike for September. The European Central Bank will announce its decision on interest rates later today. It is almost certain that the bank will keep them unchanged. The ECB is expected to keep the door open for a rate increase in September as a new surge in energy prices could put further upward pressure on inflation. The markets are watching the earnings of tech giants Alphabet, Tesla and other hyperscalers to see if their massive capital expenditure is beginning to show results. Google parent reported the best ever quarter for growth in its cloud computing division, but it wasn't enough to satisfy investors as the focus shifted to higher capital expenditure plans for the coming year. Search giant Google now anticipates spending between $195 billion and $205 billion. This is up from $180 to $190 billion. This is good news for Asian semiconductor companies, who may be able to pocket billions of dollars as they build this infrastructure. South Korea's KOSPI grew nearly 4% led by SK Hynix & Samsung Electronics. European futures indicate a muted opening, so the mood could darken as investors fret about valuations and profit growth. This week's earnings will give us a better idea of our position in the tug-of-war between profitability and capital expenditure. Ankur Banerjee, Singapore: Key developments on Thursday that could affect markets: Economic events: ECB Policy Decision, Euro zone Consumer Confidence Data for July
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Copper prices rise as supply pressures increase, but demand is still low
Copper prices rose on Thursday as a result of?a continuing supply and declining inventories. However, higher prices slowed down downstream purchases and limited further gains. Benchmark three-month?copper?on London Metal Exchange?was up 0.28 %?at $13,846.5 per metric ton at 0300 GMT. The Shanghai Futures Exchange's most traded copper contract was unchanged at 106150 yuan (15,682.02 dollars) per ton. Prices on both exchanges reached multi-week highs after Tuesday and Wednesday, when supply fears combined with improved demand drove prices to new record levels. Analysts from Chinese broker Galaxy Futures stated that the combination of "rising copper prices" and high premiums has curbed downstream purchasing. Copper inventories in LME-registered Shanghai-monitored warehouses The physical supply has been under pressure in recent months as the price of goods has fallen. The Yangshan copper price has risen. On Wednesday, the price of a ton of, which measures China's demand for imports, reached a record high. Prices have also been supported by strong shipments of copper into the United States ahead of any potential U.S. tax on refined copper. Traders are still waiting for details. The LME Cash-to-three month copper premium On Wednesday, the price of a ton of coal was slightly lower by $4.7, signaling pressure on supply in the near term. Geopolitical events continue to influence risk sentiment and demand expectations. Oil prices rose?to an all-time high of six weeks after Yemen's Iran aligned Houthis claimed they had attacked?two tankers? as part of a Saudi Arabian blockade. The rise in energy prices has sparked inflation fears and increased the likelihood of interest rate hikes. This typically slows economic growth. Aluminium gained 0.14% on the LME, while zinc, lead, and nickel all gained 0.42 percent. Tin gained 0.6%. On the SHFE, aluminium rose by 0.58%. Zinc gained 1.61%. Lead gained 1.11%. Nickel gained 1.17%. Tin added 0.29%. $1 = 6.7689 Chinese Yuan Renminbi (Reporting and editing by Sonia Cheema).
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Gold drops from two-week high as oil prices advance; Fed meeting is in focus
As oil prices rose due to an escalating Middle East war, gold held steady on Thursday. Traders are now looking ahead to the Federal Reserve meeting next week for any clues about the timing of interest rate increases. As of 0324 GMT spot gold was unchanged at $4,132.01 an ounce, after climbing?to $4.165.87 during the previous session, its highest level since July 7. U.S. Gold Futures for August Delivery?fell by 0.4% to $4134.60. Jigar Trivedi is a senior analyst at IndusInd Securities. He said, "Oil prices continue to rise, which adds to inflation pressures and expectations for Fed interest rate hikes. This also caps a positive undertone to gold, as the dollar is weakening." Oil prices have risen to their highest level in over?six months, as the United States launched a new round?of strikes against Iran and Yemen Houthis targeted oil tankers on the Red Sea. Dollars fell by 0.1% making greenback bullion cheaper for holders of other currencies. The yields on two-year U.S. Treasury bonds that are sensitive to interest rates have risen to their highest level in 17 months as the rising oil price fuelled fears of a resurgence of energy disruptions, which could reignite inflation. This would increase the likelihood of Fed rate hikes. Fed will meet next week. It is expected that the central 'bank will keep interest rates at their current level. However, futures markets are positioned for at least one rate increase by year-end. According to the CME FedWatch Tool, traders are pricing in 77% of an interest-rate hike for September. High interest rates tend to reduce the appeal of non yielding bullion. The European Central Bank will almost certainly keep rates unchanged on Thursday, but it will leave the door open for another rate hike in September. Spot silver rose by 0.3% to $59.90 an ounce. Platinum gained 0.7% at $1,656.24 while palladium increased 0.8% to 1,301.25. (Reporting and editing by Mrigank Aich and Rashmi aich in Bengaluru, and Swati verma from Bengaluru)
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Marco Rubio warns diplomats not to mention the 'kill switch" in American technology
According to a cable reviewed by the. The talking points were distributed worldwide and show how U.S. diplomacy is trying to deal the international backlash caused by the Trump administration's attempts to control who American AI companies can release their models to. The White House directed questions to the State Department which then pointed to an article from U.S. Jacob Helberg, Under Secretary for Economic Affairs at the State Department, condemned "autarkist" measures that aimed to push American AI technology aside and in favor of native AI. He called this trend "backwards and counterproductive." Rubio's letter follows the Trump Administration's move in June '12 to ban foreign nationals from Anthropic’s most advanced models Mythos and fable on national security grounds. This prompted the AI company, to suspend global access to these models. Asian tech executives used the disruption to promote their own alternatives, while European legislators redoubled calls for digital independence. The fallout from the ban lingers even though it was lifted the following month. The U.S. government's new desire to monitor AI products, and possibly yank them from allies' hands at any moment, was reflected in Trump's?executive orders of June 2, which required AI companies to submit their models for 30 days to cybersecurity testing before their release. The episode, according to European legislator Christophe Grudler, showed that the U.S. has a "kill-switch" over vital technologies that it is more than willing to use. Aura Salla of the European People's Party (the largest political group in the European Parliament) said that Europe "cannot continue building its tech stack based on access that could be turned off by a foreign country overnight." The State Department cable dated July 16 did not refer to Anthropic or specifically to Trump's executive orders or last month's banning of the company, but provided American diplomats talking points designed for countering arguments that have arisen in their wake. The cable stated that "Stopping narrow uses or requiring 30-day testing prior to the release a highly powerful new technology is not an 'Kill Switch.'" There is no'magic' button on the government's part. This narrative is exaggerated, and does not capture the nuances of U.S. Technology Policy." AMERICAN AI SALE PITCH Rubio’s cable urged diplomats to oppose "so-called "digital sovereignty" initiatives. It defined these as efforts to restrict American technology firms' access foreign markets, subject them localization requirements, or force them follow local rules such as content moderating. Rubio had already told American diplomats earlier this year to oppose data sovereignty measures. The cable discussed ways to counter "AI sovereignty", instructing American diplomats to promote American AI products as the best available tools and to describe efforts to create rival AI systems by scratch as a waste. The cable stated that "American AI companies are able to build large, independent AI Infrastructure, with secure, robust supply chains, which minimizes backdoor risk." They build it. It's yours." Edward Fishman, Director of the Maurice R. Greenberg Center for Geoeconomics, at the Council on Foreign Relations said he understood the safety concerns that led the U.S. Government to impose first restrictions on Anthropic’s models which could turbocharge complex hacking activities. Fishman, however, said that the Trump administration's tendency to use coercive economic instruments such as tariffs or sanctions against both friends and enemies made the State Department pitch a difficult sell. He said that European partners were worried that the U.S. might use their business as a weapon against them if they became "ultra-reliant" on U.S. frontier AI model like those by Anthropic or OpenAI. Salla, a European legislator, said that Trump's administration had repeatedly threatened countries such as Denmark, creating an atmosphere of distrust that could not be dispelled by rhetoric. She said, "They haven't shown us that they are reliable business partners." Reporting by Raphael Satter; editing by Deepa Babyington and Lincoln Feast.
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As tensions between the US and Iran escalate, oil prices reach a six-week-high.
On Thursday, oil prices jumped more than 1.5% and reached their highest level in over six weeks. This was due to a new round?of strikes by the United States against Iran as well as Yemen's Houthis attacking oil tankers on the Red Sea. Brent crude futures were up $1.93 or 2% at $96 as of 0011 GMT. This is the highest price since June 8th. The previous session had seen it settle over $3 higher, at $94.07. This was just short of the six-week peak. U.S. West Texas Intermediate Crude rose $1.44 or 1.7% to $88.27 after rising almost 3% on Wednesday. The U.S. Military said that it had carried out 12 consecutive nights of attacks against?Iran, hours after U.S. president Donald Trump's pledge to destroy an Iranian power plant or bridge every time Iran fires on a ship in Strait of Hormuz. This raises the stakes of the war with Iran. The Iranian Revolutionary Guards reported that two oil tankers turned back after an explosion occurred while trying to pass what they called a mined path south of the Strait of Hormuz. The Guards warned that the Strait would remain "completely closed" as long as U.S. military actions continue in the area. They also said no tanker will be allowed to enter the region or leave it without coordination with Iran. The Houthis, who are aligned with Iran, have not only re-opened the conflict over the control of this key waterway but also opened a new front by threatening to target vessels transporting Saudi oil through the Bab el-Mandeb Strait. They've also announced a naval blocade against Saudi Arabia. The Houthis claimed they carried out a military action targeting two 'Saudi oil tanks.' Maritime security reports stated that one of the vessels, the Saudi flagged tanker Encelia was hit in the Red Sea. The Houthis claimed that they had forced 10 ships to return and retreat after warning vessels not to?sail to Saudi ports. This account could not be verified immediately. In a recent post on X, the Revolutionary Guards spokesperson warned that the southern 'route' of the Strait of Hormuz is mined. The Energy Information Administration reported that crude oil stocks in the United States increased by 2,000,000 barrels during the week ending March 29, as refinery operations slowed and crude exports fell while imports rose. In a survey, analysts had predicted a draw of 1.1 million barrels. (Reporting and editing by Arathy S. Somasekhar)
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Mexican journalist killed in Oaxaca - fourth murder since June
The Attorney General's Office of the Mexican state of Oaxaca announced that Mexican journalist Francisco Leyva had been found dead on Wednesday. This is at least the fourth killing of a 'journalist' in Mexico since June. In a press release, the state prosecutor's has said that it has started an investigation into the murder. It also added that it had sought the assistance of the Special Prosecutor for Crimes against Freedom of Expression. Leyva (60) primarily covered stories about government corruption and violence linked to criminal groups in Oaxaca. "He was a critical journalist of our government like many other journalists, who exercised their rights every day to ask questions, point out issues, and express their opinions freely," Oaxaca governor?Salomon jara wrote on social media. Mexico is regarded as one of the world's most dangerous countries for journalists, outside of active war zones. According to press freedom groups, the vast majority crimes committed against journalists are not punished. Early in July, Mexican authorities confirmed that remains found at a property located in the eastern state Veracruz were those of journalist Roxana Guzman. She had been abducted a month before by an armed group. According to Article 19, journalists Luis Angel Lopez, Manuel Moreno and others were also killed in June for their reporting. At least five journalists were killed in 2026. According to Article 19, seven journalists were killed last year while reporting. Reporters Without Borders recorded nine murders of journalists in Mexico last year, making it the deadliest year since 2003. Reporting by Lizbeth Diz, Editing and production by Lincoln Feast.
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The largest US electrical grid was ravaged by a massive power outage
Experts and grid operator PJM data indicate that a massive amount of?of _power was abruptly disconnected on Wednesday, causing a disturbance in voltage which could be felt all the way from Washington, D.C., up to Chicago. It is unknown what caused the incident in PJM Interconnection territory. It demonstrates why state and federal regulators are studying ways to better manage sudden drops in demand from data centres and crypto miners, which can destabilize grids. The epicenter of the event on Wednesday occurred around 7:55 am. Bob Marshall, CEO at Ting Labs, said that the epicenter of the event occurred in northern Virginia. This is home to the largest number of data centers anywhere in the world. The network of 1.4 million sensors owned by Ting Labs recorded voltage disturbances along the east coast and as far west as Chicago. Marshall stated that grid disturbances are corrected in milliseconds by operators and utilities. He said that Wednesday's grid disturbance took 10 minutes to stabilize. Marshall stated that "this was a huge event." PJM Interconnection (the grid operator for 67,000,000 people in a region that stretches between Washington and Chicago) reported more than 3 gigawatts or 3% of the total electric demand of the grid at the time. PJM reported that it had registered the sudden fall in power 'demand' and a change to the grid's 'frequency', which measures 'the grid's equilibrium of electricity supply-and-demand. But PJM's reliable was not affected. Marshall said that "our customers in northern Virginia reported flickering and loud noises coming from their air conditioners?and refrigerators." "The power quality was a big hit." Dominion Energy, an electric utility in the Dominion Energy territory, did not respond to a request for comment on this event.
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Treasury's Bessent applauds Pakistan's reforms and pushes to return to the capital markets
Treasury released a statement saying that U.S. Treasury Secretary Scott Bessent had met with Pakistan's Finance Minister on Tuesday. Treasury welcomed the country's efforts to 'implement' economic reforms and to prepare for its return to international capital market. First reported by. Sources say that the request was made by Pakistani Finance minister Muhammad Aurangzeb during the meeting. John Jovanovic, President of the U.S. EXIM Bank, was also present during his Washington visit. Treasury reported that during his meeting with the Pakistani representative, Bessent stressed the importance of Islamabad working to advance its reforms and become more "economically independent", boost growth, and strengthen its resilience. Treasury stated that "Secretary Bessent appreciated the progress Pakistan made in restoring the macroeconomic stability and advancing fiscal consolidation. Recognizing the government's effort to implement significant reforms," Treasury. It said that "Secretary Bessent praised the government for its commitment to creating conditions for a successful re-entry to international capital markets" and expressed his support for Pakistani efforts to achieve greater economic independence. Pakistan has been hard hit by the Iran War, due to its dependency on Gulf energy imports. It also relies heavily on remittances from the Gulf and financial support. It narrowly avoided defaulting in 2023 by signing a standby agreement with the IMF worth $3 billion. Later, it secured a $7-billion Extended Fund Facility and a $1.3-billion loan to improve its resilience against climate change and natural catastrophes. Its reserves are still dependent on China and Saudi Arabia for official financing, rollovers, and deposits. Islamabad requested the bilateral currency stabilization funds after it took the initiative to broker talks about ending the Iran War, which raised its diplomatic profile and earned praise from the Trump Administration. After Aurangzeb met with the EXIM head, the Ministry issued a statement welcoming the U.S. The export credit agency has proposed to strengthen ties with the U.S., create a multi-year pipeline of transactions, and facilitate U.S. funding. The minister stated in a blog post that both sides had agreed to identify transactions near term, designate focal people, and work towards finalizing a strategic framework with a view of having it signed 'on the sidelines the United Nations General Assembly in September 2026. EXIM confirmed that the meeting was held in a post on 'X, but did not provide any details regarding U.S. -financed plans. It wrote: "Chairman JJovanovicUSA held a meeting with Pakistani Minister of Finance and Revenue Muhammad Aurangzeb at @Financegovpk in order to promote stronger economic cooperation and to create new opportunities for American companies to compete and win overseas." Reporting by Andrea Shalal and Gursimran K. in Washington; editing by Alexandra Hudson, Sonali Paul and Sonali Hudson
Middle East shipping risk escalates as oil prices reach a six-week high
Oil prices in Asian trade rose by?more? than 1.5% on Thursday, reaching their highest level?in? more than six weeks. Yemen's Houthis attacked oil tankers in Red Sea while the United States launched another round of airstrikes against Iran.
Brent crude futures rose by $2.2 or 2.3% to $96.27 at 0327 GMT. This is the highest level since June 8. The previous session saw Brent crude futures rise more than $3, to $94.07, which was just short of the six-week peak.
After Wednesday's rise of 3%, U.S. West Texas Intermediate crude rose $1.65 or 1.9% to $88.48.
The Iranian Revolutionary Guards reported that an oil tanker was set ablaze after an explosion when it attempted to follow what they called a?mined route, south of Strait of Hormuz. Two other tanks had also turned back.
The Guards issued a statement in which they said that the Strait was "completely shut" and under their control, while U.S. military actions continued to be conducted in the area. They also warned that no tanker will be allowed into or out of the region without coordination with Iran.
The Houthis, who are aligned with Iran, have not only renewed the conflict over 'control of the key waterway but also opened a new front. They threatened to target vessels that were carrying 'Saudi oil' in the Bab el-Mandeb strait and announced a naval blocade against Saudi Arabia.
Priyanka Sackdeva, Senior Market Analyst at Phillip Nova, says that oil prices face a rare threat from disruptions in both the Bab el-Mandeb Strait and the Strait of Hormuz.
"Geopolitical Premiums have Returned, but for a sustained rally (in price), there must be evidence of long-term shipping disruptions or significant supply outages."
The Houthis claimed to have carried out a military action against two Saudi oil tanks. According to maritime security reports, one of the vessels identified by this group, the Saudi flagged tanker Encelia was hit in the Red Sea.
The Houthis claimed that they forced around 10 ships to retreat after warning them against sailing into Saudi ports.
This account could not be verified immediately.
In a recent post, the Revolutionary Guards spokesperson of Iran warned shipping companies about the mines in the Strait of Hormuz.
Saul Kavonic is the head of MST Marquee's energy research. He said that the new threat to the Red Sea passage could disrupt up to?5million barrels of oil per day, as well as the main route of Gulf oil bypassing the Strait of Hormuz.
The U.S. Military said it completed its 12th night of continuous attacks against?Iran, hours after President Donald Trump pledged to destroy an Iranian power plant or bridge every time Iran fires at a vessel in the Strait of Hormuz. This raises the stakes of the war with Iran. Reporting by Arathy S. Somasekhar, Trixie Yap, and Florence Tan from Singapore. Editing by Kim Coghill & Clarence Fernandez.
(source: Reuters)