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Talen Energy and Amazon Sign Nuclear Power Deal to Fuel Data Centers
Talen Energy, a U.S. utility company, announced Wednesday that it has expanded its nuclear energy partnership agreement with Amazon.com. The two companies will supply electricity up to 1,920 Megawatts from the Susquehanna power plant in Pennsylvania to Amazon Web Services data centers. Why it's important Talen will receive a long-term, steady revenue stream until 2042. This deal also supports Amazon's increasing demand for carbon-free power to run its AI and cloud operations. Both companies will explore the possibility of building Small Modular Reactors in Talen's Pennsylvania footprint, and expand the energy output from this nuclear plant. CONTEXT The U.S. demand for electricity has increased for the first two decades. This is due to the rapid growth in data centers and artificial Intelligence, which has caused Big Tech companies scramble to find reliable energy sources. Constellation Energy and Meta Platforms reached an agreement earlier in the month to keep one reactor in Illinois operational for 20 years. MARKET REACTION Talen Energy's shares grew by nearly 8% during premarket trading. KEY QUOTES Kevin Miller, AWS Vice President of Global Data Centers, stated that the company was making the biggest private investment in the history of the state - $20 billion - to create 1,250 jobs with high skill levels and to boost the economy. They are also working with Talen Energy, to power our infrastructure using carbon-free energy. (Reporting from Bengaluru by Sumit S. Saha; Editing by Vijay Kishore.)
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Andy Home: Demand destruction could help China break its rare earths shackles
Beijing's export restrictions have exposed the West's dependence on Chinese supplies of esoteric materials and permanent magnets. It's not like we've never been in this situation before. China did the exact same thing in 2010. Western automakers chose to ignore historical precedents and double down on a techniqe that is almost completely beholden Beijing's export whims. Many of them have now entered a panic mode and several have already been forced to stop production lines. This shows the huge economic impact that niche metals like dysprosium (used in neodymium iron boron (NdFeB), magnets) can make. China's willingness weaponise its dominant position in the metals which power our modern world, will accelerate the West’s drive to develop its own supply chain. The solution lies in using less rare earths. The West cannot control the supply but can change demand. The past is not for those who forget it. Beijing said that its 2010 imposition of rare Earth export quotas was only to clamp down on illegal domestic mining. The incident happened after a collision in disputed waters between a Chinese coast guard vessel and a Chinese trawler. The entire West was affected by the skyrocketing prices of rare Earths if Japan were the target. According to Adamas Intelligence, the price of dysprosium oxide increased 26-fold between 2009 and 2012. China only reversed its position after a panel of the World Trade Organization ruled against them in 2014. Several automakers have learned the lesson. Nissan Motor Co. of Japan launched in 2012 a new LEAF electric car with a motor that contained 40% less dysprosium. Renault developed an alternative motor for its ZOE in the same model year, without permanent magnets or rare earths. Adamas estimates that the number of EVs with rare-earth free motors grew from less than 1% in global sales in 2010, to 12% by 2017. This was the pinnacle. BUCKLE UP Prices of rare earths fell in late 2010s and remained steady. Western automakers have largely switched back to permanent magnetics. According to Adamas, around 97% of the EVs sold each year since 2017 have rare-earth motors. The rapid growth of the EV market, especially in China (which for obvious reasons does not have a rare earths phobia), is reflected in the number of magnets that are used in new vehicles, whether they be pure battery or hybrid. Magnets are also used to control heating, entertainment, braking, and remind the driver of their seat belt. This has increased the dependence on a single country, which not only produces 95% of all NdFeB magnetic products in the world but also controls supply chains for the metals needed to produce them. PEACE TALKS China's rare earth exports may have been pushed too far this time, possibly because of an overzealous bureaucracy in the Ministry of Commerce that is responsible for segregating military from civilian applications. The talks between Chinese and U.S. officials entered their second session on Tuesday, in an effort to find a compromise between China's restriction on rare earths and U.S. limitations on advanced semiconductors. Background: Tariffs are a major factor. The automotive industry will remain dependent on rare earths even if Beijing eases up its restrictions. It may take a while for Western supplies to catch up. Even though Western governments pour money into new projects to build a mine-to magnet supply chain, it will take years. Civil sectors will also be second. The U.S. Department of Defense is the largest investor in rare earths, with a stated goal of supporting "all U.S. Defense requirements by 2027". The speakers in your car radio are not as powerful as the magnets required for an F-35 fighter. This aircraft requires over 900 pounds worth of rare earths. DEMAND DESTRUCTION Does the technology used in non-critical applications really need to be deployed on new vehicles? A bigger question is if they need a rare earth magnet in the engine. Renault and BMW, which have learned from their past mistakes, have developed alternatives for their EV motors to reduce the impact of this current supply crisis. Many other automakers have also been interested in the technology, but it is not yet ready for commercial production. China's recent restrictions on rare earths should serve as a powerful motivation to speed up the redesign process. When it comes to breaking free of China's chokehold over rare earth magnets, automakers may find that engineered demand destruction is faster than creating a new supply network. It's not like they've never done it before. These are the opinions of a columnist who writes for. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X and X. Editing by Jan Harvey
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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
World Bank cuts global growth forecast due to trade tensions
The World Bank lowered its forecast of global growth for 2025 on Tuesday by 0.4 percentage points to 2.3%. It said that increased tariffs and uncertainty were a "significant" headwind for almost all economies.
The bank's twice-yearly Global Economic Prospects Report shows that it has lowered its predictions for almost 70% of the world's economies, including the United States and China, Europe, and six emerging markets regions. This is a significant drop from its projections six months earlier, before Donald Trump became president.
Trump has upended the global trade system with a series on-again-off-again tariff increases that have raised the effective U.S. Tariff rate from under 3% to its highest level in nearly a century. This has triggered retaliation from China and other countries.
The World Bank has cut its forecast for growth as a result Trump's unpredictable trade policies. However, U.S. officials claim that the negative effects will be offset by an increase in investment and yet-to-be-approved tax cuts.
The bank did not predict a recession but stated that global economic growth in this year will be the weakest since 2008, outside of a major recession. The bank did not predict a recession, but said that global economic growth this year would be its weakest outside of a recession since 2008.
The report predicted that global trade growth would be 1.8% by 2025. This is down from 3.4% last year and a third less than the 5.9% in the 2000s. Forecast is based upon tariffs that were in place as of late may, including the 10% U.S. duty on imports. The forecast excludes the increases announced by Trump on April 9 and then delayed until that date to allow for negotiation.
Tariff increases and tight labor markets are expected to keep global inflation at 2.9% by 2025. This is still above the pre-COVID level.
The bank stated that "risks to the outlook for the global economy remain firmly to the downside." The bank said that its models indicated that an additional 10-percentage-point increase in U.S. average tariffs on top of the already implemented 10% rate, as well as proportional retaliation from other countries, would reduce the outlook by 0.5 percentage points for 2025.
The report stated that such an increase in trade barriers could lead to "global trade stifling in the second half this year...accompanied by a widespread decline in confidence, rising uncertainty and turmoil on financial markets."
It said that the risk of global recession was lower than 10%.
"FOG ON RUNWAY"
This week, top officials from China and the United States will meet in London to try and defuse an ongoing trade dispute. The dispute has expanded from tariffs and restrictions on rare earth minerals to include a global supply-chain shock and slower economic growth.
"Uncertainty is a drag on the economy, just like fog on an airport runway." In an interview, Ayhan Kose, World Bank's Deputy Chief Economic Officer said that uncertainty slows down investment and clouds future prospects.
He said that there are signs of increased trade dialogue, which could help to dispel any uncertainty. And supply chains were adapting, rather than collapsing, to the new global trade map. He said that global trade could grow by 2.4% in 2026, with artificial intelligence developments also boosting growth.
He said, "We believe that the uncertainty will eventually decline." Once the fog lifts, trade may resume, but at a more moderate pace.
Kose stated that while the situation could worsen, trade continued and China, India, and other countries were still providing robust growth. He said that many countries were discussing new trade agreements which could be profitable in the future.
US GROWTH FORECAST CUT SHARPENLY
The World Bank stated that the global outlook has "substantially deteriorated" since January. This is mainly because advanced economies are now expected to grow by only 1.2%, down a half-point, after growing 1.7% in 2024.
The U.S. outlook has been lowered from 1.4% to 1.4% by a 0.9-percentage point drop, while the outlook for 2026 was reduced by 0.4-percentage points to 1.6%. The report said that rising trade barriers, "record high uncertainty" and an increase in financial market volatility would weigh on private consumption and trade.
The growth estimates for the euro zone and Japan were both reduced by 0.3 percent points to 0.7%.
The forecast for 2025 predicted that emerging markets and developing countries would grow by 3.8%, compared to the 4.1% growth in January.
The report stated that poor countries would be the worst affected. The report said that by 2027, the per capita GDP of developing economies would be 6% lower than pre-pandemic levels. It could take two decades for these countries to recover the economic losses from the 2020s.
Mexico's growth forecast was cut by 1.3 points, to 0.2%, in 2025. The country is heavily dependent on U.S. trade.
The World Bank has left its China forecast unchanged, at 4.5%. It said Beijing had the monetary and fiscal room to support and stimulate its economy. (Reporting and editing by Andrea Shalal)
(source: Reuters)