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Foreign Minister says China is ready to work with Russia to reduce tensions in the Middle East
In a Sunday phone call, Foreign Minister Wang Yi informed his Russian counterpart Sergei Lavrov that China was 'willing to continue cooperating with Russia at the U.N. Security Council' and to make efforts to "cool down" the Middle East situation. Wang stated that the best way to resolve navigational issues in the Strait of Hormuz was to achieve a cessation of fire as soon as possible. He added that China has always favored a political resolution of hot-spot?issues by dialogue and negotiation. The call was made ahead of next week's U.N. Security Council voting on a Bahraini Resolution to protect commercial shipping around and in the Strait of Hormuz. According to a ministry statement, Wang said that as permanent UNSC members, China and Russia should "adopt a balanced and objective approach" and work to gain greater support and understanding from the international community. In a statement from the Russian Foreign Ministry, it was stated that the ministers had discussed how to "achieve a rapid cessation of hostilities" and "launch a diplomatic-political dialogue." It said that "satisfaction" was expressed by the coincidence of Russia and China's 'approaches' on many global issues, including the'situation' around Iran, relating to the unprovoked attack by the U.S. China has repeatedly called on a ceasefire in the Gulf and Middle East region, calling for an end to fighting that has lasted for more than a month, and has largely closed the Strait of Hormuz - a vital shipping artery for gas and oil. Reporting by Shi Bu, Ryan Woo and Mark Porter; Editing Hugh Lawson.
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Phillies Taijuan Walk shoots for Rockies road sweep
The Philadelphia Phillies began their first road trip this season with two impressive victories over the Colorado Rockies. The Phillies will try to complete the sweep on Sunday when they finish the three-game series. Philadelphia, who won 2-1 on Saturday night, will match up Taijuan Walker (0-0, 11.57 ERA), against Colorado's Tomoyuki Sugano (00-0, 1.93 ERA), in a matchup of right-handers. Walker had a tough start for the Phillies in his first game of the year, giving up seven hits on ten in four and a half innings on Monday against Washington. He can improve against the Rockies. Walker is 5-1 in 10 career starts against Colorado with a 2.36 ERA. In 2025, he went 2-0 and had a 2.45 ERA over two appearances against the Rockies. Walker can build on the Phillies' first two starts this weekend. Aaron Nola, Jesus Luzardo and their combined teams struck out 20 batters in each of their respective appearances. Nola was able to benefit from a strong run support during a 10-1 victory on Friday, but Philadelphia only scored two runs Saturday night. The Phillies offense has struggled, except for the 10 runs they scored on Friday. Bryce Harper stated that seasons can sometimes be like this. Some guys have great first months, but then have a horrible rest of the season. They can have a bad month, but then win MVP. You play the entire season because you want to. You shouldn't place too much emphasis on the first few games. You play your own game. It's important to remember that the season is long and it's worth playing all of it. Philadelphia will face a pitcher that it has not faced before. Sugano made a good debut for Colorado on Monday, when the Rockies thrashed Toronto 14-5. Sugano allowed only one run on just two hits, but a high pitch count kept him from going beyond 4 2/3 innings. Colorado signed Sugano (?36) to shore up its rotation, which struggled in 2025. The Rockies' pitching has improved this year, but, like the Phillies, their offense has been a struggle. Colorado has scored 5 runs in its last 4 games. The Rockies scored 15 goals in their Friday home opener and another 13 on Saturday night. This has played a role in the Rockies' 1-4 start in games with one run. After the 2-1 defeat, Warren Schaeffer stated that the "big thing" with Saturday's strikeout was we missed too many pitch in the zone and early in the count. "You can't chase late and miss pitches early, it's a bad combination." Despite the strikeout problems, there have been some positives. Ezequiel Torvar, a rookie, has a.294 average after he went 1-for-4 on Saturday. Troy Johnston is batting.333 and has one of Colorado's first eight home runs. Field Level Media
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Kuwait Petroleum Corp. reports damage to units following Iran drone attacks
On?Sunday?, Iranian drone attacks hit multiple targets in Kuwait. State?energy company Kuwait Petroleum Corporation reported fires and "severe damage" to some units. KPC stated in a press release that teams are working to contain fires at National Petroleum Company and Petrochemical Industries Company affiliates. KPC said earlier that a drone had attacked the complex housing the KPC headquarters and oil ministry in Shuwaikh. Kuwaiti state media, citing Kuwait's finance ministry, reported that an Iranian drone had allegedly 'hit an office complex of government ministries, inflicting significant material damage, but no injuries. Kuwait's Ministry of Electricity and Water said that two power-generating units were taken out after Iranian drones attacked two desalination and power plants. The damage was significant. In all incidents, no injuries have been reported. The U.S. and Israeli 'war on Iran' is now in its sixth weeks, with Tehran attacking Israel and Gulf Arab states that host U.S. military bases. Iran's Revolutionary Guards have claimed responsibility for the attacks on Kuwaiti petrochemical facilities, as well as those in Bahrain and the United Arab Emirates.
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PMI data shows that Saudi Arabia's non oil business activity shrank in March amid conflict.
A 'business survey' revealed that Saudi Arabian non-oil sector activity fell in March for the first time since August 20. The war in the Middle East had slowed down supply chains. S&P Global's?seasonally-adjusted Riyad Bank Saudi Arabia Purchasing managers' Index (PMI) fell to 48.8 from 56.1 in Feb. The readings below 50 indicate contraction. Naif Al Ghaith is the chief economist at Riyad Bank. He said that the drop into contraction was largely due to short-term uncertainties linked with the geopolitical tensions of the region. "The soft reading was mainly?driven by a pause in the new orders, as clients adopted more caution." Export orders experienced a notable drop, and some firms reported a temporary slowdown of cross-border activities. This led to a moderated output, Al-Ghaith explained. For the first time, both output and new orders have declined since August 2020, when the COVID-19 epidemic brought economies to a grinding halt. New orders dropped to 45.2 in March, down from 61.8 in February. Export demand was weakening sharply. New export orders posted their steepest drop?in nearly six years. Exports were 'completely stopped' by some firms, while others experienced greater logistical problems. The conflict has slowed the flow of water through the Strait of Hormuz, but the supply strains have increased. This situation may continue as long as the Strait of Hormuz remains effectively blocked. Business expectations for the coming 12 months remain 'positive' despite a 'weakening of their lowest level since June 2020. Some firms are still confident about government spending, the development of infrastructure and the improvement in demand on the long term. (Reporting and Editing by Hugh Lawson).
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South Korea asks Gulf Nations for a steady supply of energy and safety of Korean vessels
The South Korean Ministry of Finance announced that Koo 'Yun-cheol, Minister of Finance, met with envoys of Gulf countries on Sunday to discuss energy security and the safety of 'Korean vessels near the Strait of Hormuz. This is due to the escalating Iran conflict disrupting shipping. The ministry said that during the Friday meeting, Koo requested the ambassadors of the Gulf Cooperation Council to ensure a constant supply of oil, liquefied gas, naphtha and urea as well as other critical resources. He also asked them to ensure the safety and security for Korean vessels and crews near this vital strait. The statement stated that the envoys referred to South Korea as a nation of "top priority". They also pledged to work closely with Seoul in order to maintain a stable supply. Like many Asian economies, South Korea relies heavily upon energy imports. This includes through the Strait of Hormuz. The Strait of Hormuz was the conduit for 20% of 'world oil' before Israel and the U.S. launched their war on the 28th of February. Since then, Iran has effectively closed the waterway. This has pushed up energy prices and raised fears of a global recession. Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait and Oman are the six GCC member states. Reporting by Cynthia Kim, Editing by William Mallard
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Egypt increases electricity prices for households and businesses that use more energy amid energy crisis
The electricity ministry announced on Saturday that Egypt will raise electricity prices for residential and commercial consumers who use more electricity. This increase is due to a global energy crisis caused by the Gulf War. The government has taken a number of measures to reduce energy consumption and curb fiscal pressures as rising import costs put pressure on the finances of the most populous Arab country. The ministry stated that the increase would only affect households with higher consumption and commercial users. This was done to ensure the supply of electricity across residential, industrial and commercial sectors. The report said that electricity rates for residential bands up to 2,000 kilowatt hours per month would remain the same, but tariffs for higher residential brackets will increase by an average 16%. It added that commercial electricity prices in all brackets will increase on average by about 20%. In March, Prime Minister Mostafa. Madbouly stated that Egypt's energy import bills had more than doubled in the last few years since the start of the conflict involving the United States and Israel. This forced the government to increase fuel prices, raise fares for public transportation, and slow down some state projects, to relieve pressure on the public finances. Egypt implemented measures to rationalise its energy consumption in March, including a move towards earlier closing times for commercial venues. This was due to the rise of global oil prices during the conflict. Inflation has been in double digits since September 2023, when it peaked at 38%. The country is already struggling with heavy debts. Reporting by Momen Atallah and Enas Alashray
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Slovak PM: EU should lift sanctions on Russian oil, gas and other energy sources to improve energy security
Robert Fico, the Slovakian Prime Minister, said that the European Union must end sanctions on Russian oil and gas imports and take steps to restore Druzhba pipeline flows, as well as end the conflict in Ukraine, in order to tackle the energy crisis stemming from the war with Iran. Fico stated in a press release after a phone call with Hungarian Premier Viktor Orban, that the EU should re-establish dialogue with Russia to ensure member states get gas and oil from all sources including Russia. Hungary and Slovakia are the only two EU countries that maintain relations with Moscow. Oil prices have risen?since U.S.-Israeli strikes against Iran began on February 28, causing a disruption to oil supplies in the Gulf and causing what the International Energy Agency calls the largest oil supply interruption in history. Central European nations have taken steps to reduce the impact of high fuel prices on consumers and businesses. By the end of 2025, only a fraction of EU oil imports came from Russia. This was after a steep decline in imports following Moscow's invasion of Ukraine. By January 27, Kyiv reported that a Russian drone attack had hit Ukrainian pipeline equipment, disrupting Russian oil?shipments. Budapest and Bratislava accuse Ukraine of intentionally delaying repairs in order to resume oil flow through the Druzhba pipe. This has triggered a political dispute which?has seen Hungary blocking an EU loan for Kyiv. Ukraine claims it is repairing it as fast as possible. Fico stated that it is not enough to address the energy crisis at the national or only local level. Five other European Union countries are also calling for a windfall profit tax on energy companies in response to rising fuel prices. This was revealed by a letter sent to the EU Commission on Saturday. The energy chief of the bloc said on Tuesday that it was considering reinstating energy crisis measures from 2022. This included proposals to reduce grid tariffs and electricity taxes.
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Taiwan has received assurances from a'major country' about LNG supplies
Taiwan's economy minister announced on Saturday that the energy minister of a "major country" producing liquefied gas had given Taiwan assurances about supply. He was speaking in relation to the?impact of the Iran War on Middle East energy imports. Taiwan, which is a major producer of semiconductors, relied on Qatar to supply around a third its LNG prior to the conflict. It has now said that it has secured alternative supplies from countries such as Australia and the United States for the months ahead. Kung Ming Hsin, Taiwan's Economy Minister, told reporters in Taipei that Taiwan enjoys good relations with its?crude gas and natural oil suppliers. Therefore, adjusting the origin of shipments or purchasing additional spot -cargoes will not be a problem. Kung stated that the energy minister from a "major energy producing country" had contacted him about two weeks prior. The person "explained that they would fully support our natural gas needs. He added that if we had any requests, we could let them know. Kung added: "Another nation even stated that certain countries had released strategic petroleum reserves and could help coordinate the matter if Taiwan needed assistance." He said, "This shows Taiwan has earned considerable international goodwill through the long-term confidence it has built." He refused to identify the countries involved. Angela Lin, spokesperson of state-owned refiner CPC said that at the same?newsconference, crude oil inventories are being maintained at levels prior to conflict and that overall petrochemical supply has remained stable. CPC Chairman Fang Jeng Zen said that a new agreement with the U.S. would see 1.2 millions metric tons of LNG delivered?annually. He added that Taiwan does not intend to import crude oil or LNG from Russia. (Reporting and editing by Ben Blanchard, Roger Tung and Joe Bavier).
Dollars slide on trade and tax concerns
As June began, the U.S. Dollar plunged to its lowest level since six weeks. Concerns about U.S. Tariffs were back in the spotlight after the legal confusion of last week and rising military tensions around the world.
The euro was the leader, unfazed by the prospect that the European Central Bank would cut interest rates again on Thursday. The new German chancellor Friedrich Merz will visit Washington on Thursday to meet U.S. president Donald Trump as trade negotiations between Europe and America continue to be closely watched.
The dollar is susceptible to fears of foreign capital flight as markets are still concerned about the U.S. Fiscal Bill that is currently being debated in the Senate. This bill gives the administration the ability to tax companies and investors who come from countries with 'unfair' foreign taxes.
On Monday, the focus was back on tariffs. It seemed that President Donald Trump would push for levies in some way despite last week's legal opposition.
After the weekend, Trump's plan of doubling duties on import steel and aluminum from Wednesday to 50% hit the greenback as Beijing retaliated against allegations that it had violated an agreement regarding critical minerals shipments.
The weekend was marked by geopolitical tensions of great importance and bellicose threats. Gold rose.
Pete Hegseth, the U.S. Secretary of Defense, warned his Indo-Pacific allies on Saturday to increase their spending on defence. Ukraine-Russian war continues to rage. Ukrainian drones continue to strike dozens of Russian aircraft deep within Russian territory. Gaza's conflict is not ending.
The major countries are building weapons at a rapid pace. Britain is expanding its fleet of nuclear-powered attack subs as part a review of defence, aimed at preparing the country for modern warfare and countering the Russian threat.
The oil price rose by about 3% Monday, after the producer group OPEC+ maintained its output increase in July at the level of the previous two month.
There was some good news on the interest rates front in a week that saw a lot of data from the U.S. Labor Market.
Federal Reserve Governor Christopher Waller stated on Monday that further rate cuts are possible in the second part of the year. Waller said that since the rise in inflation pressures linked to Trump's increased import taxes is unlikely to persist, he supports looking past any tariff effects to near-term-inflation in setting policy rates.
As expected, China's manufacturing sector shrank in May for the second consecutive month.
After Karol Nawrocki, the nationalist candidate of the opposition won the second round in the presidential elections, stocks in Poland fell by 1.4%.
Before Monday's bell rang, U.S. stocks futures were down by about half a percentage, and so too were stocks in Europe, Japan, and other parts of the world. The yields on U.S. Treasury bonds have risen again.
The column today looks at this week's major monetary decision made in Europe. It is widely expected that the European Central Bank will lower rates for an eighth time during the cycle, but the euro has risen regardless.
EURO CONUNDRUM: ECB FACES SURGING EURO DISCONNORDRUM
The euro continues to rise while the European Central Bank is cutting rates. This is because a capital reversal in the US has thrown off the relative rate shifts, and could force the ECB to further ease.
It is expected that the ECB will lower its main lending rate to 2% on Thursday, which would be half of what it was a year ago at its highest point and less than half of the Federal Reserve's equivalent. The central bank has also returned to a level it considers to be 'neutral,' meaning that the rate does not either stimulate or rein in the economy.
For the first time since almost two years, real, or inflation adjusted, ECB interest rates will return to zero.
It's amazing that the euro, after eight consecutive ECB rate cuts and the prospect of zero real rates or even negative ones in the future, has risen more than 10% against a dollar basket and 5% against a currency basket based on the major trading partners of the Euro Zone.
The nominal effective euro index has reached record levels, while the "real" version is at its highest level in over 10 years.
The euro/dollar rate has risen despite no change in the difference between the yields of two-year government bonds on either side. This is usually a reliable indicator for changes in the exchange rate. This trend is largely due to Donald Trump's trade wars, the fear of capital flight out of dollar assets because of a variety of concerns regarding U.S. institutions and policies, and Germany's historical fiscal boost.
The ECB is in a quandary if, as many believe, even a fraction (or fractions) of the trillions dollars of European capital invested in the United States are indeed returning home. How can it manage both the deflationary and domestic demand effects of a currency increase that is so rapid? The euro is not affected by the possibility of future rate cuts. The majority of ECB observers expect one or even two more rate cuts after Thursday, while money markets are predicting a 'terminal' rate of around 1.75%. This is the low end in the ECB range estimated as 'neutral. If the majority of capital repatriation is from equity investments in the U.S., lower ECB interest rates could even increase the outflows by boosting growth prospects for cheaper European stocks. Higher borrowing in Germany and across Europe should also sustain fixed income returns over the long term, increasing the pool of "safe" investments.
'GLOBAL EUROMOMENT'
The ECB may protest about 'excessive gains' in the euro, but the impact could be limited unless they are prepared to back up their words with actions. There is also a chance that it could backfire because of the reasons mentioned above.
The ECB is encouraging investment and the euro as a currency of reserve, in part, to meet the massive capital requirements for retooling the military, digital, and energy sectors.
Christine Lagarde, ECB head, said in a speech last week in Berlin that there is an opportunity for a global euro moment, where the single currency can be a viable alternative to dollars, bringing immense benefits to the region if the governments are able strengthen the financial and security infrastructure of the bloc.
A soaring currency rate during a trade conflict may seem like a good thing, but it will cause some concern among the major exporting countries in the region.
ECB hawks, doves, and others will have to decide whether the continued easing of monetary policy to counter disinflationary risks is only stoking domestic inflation in the long run. Not to mention the fiscal boost that's coming next year.
It is clear that the ECB will take into account in its new economic projections, due to be released on Thursday, the 7% increase in the euro/dollar rate and the near 10% decline in the global oil price since the last set of forecasts made in early March.
Morgan Stanley economists believe that even if central bank raises core inflation forecasts, headline inflation could still fall short of the 2% target between mid-2025 and early 2027. This is even though the GDP growth outlook for 2025 has been revised upwards.
At this point, it is impossible to make any predictions. Few central banks or major traders have any idea where the U.S. trade war or tariffs will lead.
The ECB is unlikely to be able to cap the Euro, as global trade and investments are a source of anxiety. The ECB is faced with a big dilemma: whether to maintain the status quo or ease up even further.
The chart of the day shows how tariff-related import distortions have distorted U.S. Gross Domestic Product readings this year. Last week, models that track GDP inputs were again jarred when a sharp contraction of the goods trade deficit in April occurred as the front-running imports to beat the tariffs in the 1st quarter faded. According to the Census Bureau of the Commerce Department, with many tariffs in effect, imports plummeted, helping to reduce the goods trade surplus by 46%, to $88 billion. Imports dropped $68 billion, to $276 billion. Exports rose $6.3 to $188.5. If the goods deficit shrinks, the net trade component in GDP calculations could spur significant growth in this quarter. It is similar to how it reduced Q1 GDP by a record-breaking 4.9 percentage points. The Atlanta Federal Reserve’s ‘GDPNow’ tracker is now boosted by the trade figures. It sees an impressive 3.8% real GDP increase in Q2. There is still caution. There is caution. Businesses don't appear to be restocking. Wholesale inventories were unchanged last month, and retail stocks fell by 0.1%. Stockpiles are expected to drop dramatically over the rest of the quarter.
Watch today's events
* US manufacturing surveys for May from S&P Global and ISM (0930EDT), as well as April construction spending (1000EDT).
* Federal Reserve chair Jerome Powell opens Fed event in Washington. Fed Board Governor Christopher Waller and Dallas Fed President Lorie Log speak. Chicago Fed President Austan Gollisbee also speaks. Bank of England policymaker Catherine Mann also speaks.
* US corporate earnings: Campbell's
The opinions expressed are solely those of the authors. These opinions do not represent the views of News. News is committed to the Trust Principles and therefore, integrity, independence and freedom from bias.
(source: Reuters)