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Stellantis and Renault fear China's rivals in the small car market, and lobby EU for less rules
Stellantis, a French company, and Renault, a Chinese automaker, are pushing for fewer safety features in small cars, which would make them more affordable. In the past two months, Stellantis chairman John Elkann has engaged in a public campaign that is rare to try and get the European Union's attention on the issue. It is a goal to revive the small car segment that was abandoned by Europe's automobile manufacturers because they were unprofitable. They blame this on regulations which make vehicles heavier, larger and more expensive. Elkann said last week that Europe needed its own version, which could be called "e-car", of Japan's small urban cars with engine and size restrictions and lower insurance and tax costs. He said that there was no reason for Europe to not have an electric car if Japan, with its kei cars, has 40% of the global market. This is similar to comments made in a recent joint editorial by Renault's de Meo. Although de Meo will be leaving Renault in July, it is expected that the company will continue to support the proposal. Renault's Director of Procurement, Partnerships, and Public Affairs, Francois Provost said, "Small vehicles are an area of growth that we cannot and must not ignore at this time." Chinese rivals have focused their efforts on hybrids and larger EVs to gain market share in Europe. However, smaller EVs will be on the way. The Dolphin Surf, a vehicle from BYD, China, was launched on the market a month ago. It is priced at under 20,000 Euros ($23,124), and has features like a large rotating touch screen, anti-steam mirrors, and rotatable rear screens. Comparatively, the Renault 5 is almost 5,000 Euros more expensive when equipped similarly. It's similar, but can accommodate one additional passenger. Flavien Neuvy is the head of Cetelem's research and auto analyst firm. He said, "The market has declined by 20% from last year. There isn't enough volume to satisfy everyone and the Chinese will be here soon." S&P Global estimates that sales of small cars could reach 600,000. This would be an increase of about 20% over last year. "A LOT of EXCUSES" The lobbying effort focuses on the EU's General Safety Regulations 2(GSR2) which mandates safety measures such as side-airbags, sensors that detect if a driver falls asleep, lane crossing warnings, and more comprehensive crash tests. According to a source with knowledge of the lobbying, such requirements and European pollution rules add between 850 euros and 1,400 euro ($983 and $1607) to the price of a vehicle. Some lobbyists claim that small cars are not subject to the same safety standards as vehicles designed for high-speed collisions. The European Automobile Manufacturers Association, also known as ACEA, has backed the demand for a new category of vehicle called M0 or e-car. Lea Zuber, spokesperson for the European Commission, confirmed that it is investigating this matter. People familiar with the discussion said that it would be difficult to change safety requirements without compromising smaller cars. It remains to be determined whether models with less regulations can compete with Chinese EVs. Matthew Avery, Director of Strategic Development at Euro NCAP which tests cars for safety, says the idea that small cars in cities would not be involved with highway accidents is nonsense. Avery said that the Chinese bring cars to Europe which consistently receive five-star ratings by Euro NCAP. Despite the fact that Euro NCAP's ratings are not legally binding, many consumers still take them into consideration and corporate fleets won't buy vehicles with less than five-star ratings. Avery stated that a change in safety regulations could result in smaller European cars being rated at two or three stars. Avery stated that "if they wish, they can despec a vehicle for safety", but added that Euro NCAP tests and ratings of safety will remain the same. "Our job is to simply say that this car is safer than another car," Avery said. Emmanuel Bret is the deputy head of BYD in France. He says that the company will keep offering small cars which meet all the current EU regulations. Blaming the EU for making the vehicles unaffordable, he claims, is "just a bunch of excuses". Bret stated, "Let the customer choose."
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Brent falls as Trump considers military action against Iran
Asian shares rose on Friday, as investors were relieved that the threat of an imminent U.S. strike on Iran had been averted for the time being. This weighed on Brent oil and dollar prices. Israel has bombed Iranian nuclear targets overnight, while Iran has fired missiles and drones towards Israel. The war, which began a week ago, is intensifying, with neither side showing any signs of an end. The White House announced that President Donald Trump would decide within the next two week whether or not the U.S. is going to get involved in Israel-Iran conflict. Some of the MAGA base is expressing concern about a possible attack on Iran, which could lead to another long-term war. Brent fell by 2.1% to $77.23 a barrel on Friday, but it is still heading for a gain of 4% per week, after a surge of almost 12% the previous weekend. The lower oil prices have caused European stocks to rise, with the EUROSTOXX futures rising by 0.8% and the FTSE Futures up by 0.3%. Yesterday, Trump said he would consider a strike on Iran in the next few days. White House comments overnight... now indicate that the decision will be made within weeks," Rodrigo Catril said, senior FX Strategist at National Australia Bank. The price action suggests that investors are still very nervous. In Asia, Nasdaq and S&P futures both fell by 0.2%. U.S. market were closed on Juneteenth, so there was little direction in Asia. Hang Seng in Hong Kong led the way with a jump of 1.2%. The index is down 0.4% this week. South Korea's benchmark share price also performed better than the market with an increase of 1.1%. It surpassed the 3,000 mark for the first since early 2022 after the newly elected president Lee Jae Myung unveiled a stimulus plan. Nikkei 225 in Japan was flat. China's central banks held their benchmark lending rates at the same level as expected on Friday, while Japan reported that core inflation reached a two-year peak in May. This data keeps pressure on Bank of Japan for them to increase interest rates. Investors are not expecting a rate increase from the BOJ before December of this year. This is about 50% priced in. The dollar is expected to gain 0.5% per week on the currency market. The euro rose by 0.3% to $1.1527 while the pound increased by 0.2% to £1.3494. In Asian hours, the U.S. Bond market, which had also been closed on Thursday morning, began trading on a subdued tone. The yield on the 10-year Treasury bond was unchanged at 4.3909%. Two-year yields dropped 1 basis point to 3.9289%. The Swiss National Bank has cut its rates overnight to zero, and is not ruling out going negative. Meanwhile, the Bank of England kept policy unchanged but felt the need for more easing. And Norway's central banks surprised everyone by cutting rates for the very first time since 2020. Gold prices fell 0.5%, to $3354 per ounce. However, they were still set for a loss of 2.3% on a weekly basis.
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Palm oil prices fall on low demand, but set to rise for the sixth consecutive weekly gain
The price of Malaysian palm oils futures dropped on Friday, due to weak demand from key markets. However, the contract was still set to gain for a 6th consecutive week despite needing an additional catalyst to maintain momentum. At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery fell 10 ringgit or 0.24% to 4,094 Ringgit ($962.61) per metric ton. This week, the contract has gained 5,5%. Paramalingam Supramaniam said that trading volumes were relatively low and prices had been largely accounted for by most internal and external factors. "For the trend to continue, it will be necessary for more bullish news." Demand will be crucial in July, as the current market rally is based solely on external forces and has yet to demonstrate a robust increase of demand. The palm oil contract in Dalian, the most active contract, fell 0.05%. Chicago Board of Trade soyoil prices were up by 0.38%. As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils. Later in the afternoon, cargo surveyors will release estimates of Malaysian palm oil imports for the period June 1-20. Brent crude prices retreated from their gains of the previous session on Friday, dropping nearly $2 after the White House deferred a decision about U.S. participation in the Israel-Iran Conflict. However, they are still on track for a record third consecutive week in the green. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures. The palm ringgit's trade currency strengthened by 0.09% against dollars, increasing the price of the commodity for foreign buyers. ($1 = 4.2560 ringgit) Reporting by Ashley Tang, Editing by Sonia Cheema
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French and Benelux stocks: Factors to watch
Here are some company news and stories that could impact the markets in France and Benelux or even individual stocks. ArcelorMittal ArcelorMittal, a German steelmaker, has dropped plans to convert its two plants to carbon-neutral production due to the high energy targets set by Germany. Eutelsat After a capital increase of 1.35 billion euros, the French state will be Eutelsat's largest shareholder. The aim is to make it more competitive with Elon Musk and Starlink. LightOn LightOn has been selected by Ariane Group’s Sodern on Thursday to industrialise AI generative within a safe framework. PostNL Dutch parcel delivery company PostNL issued a Schuldschein on Thursday for 100 million Euros, with maturities of 3, 5, and 10 years and both fixed and variable interest rates. Sanofi Pan-European market data: European Equities speed guide................... FTSE Eurotop 300 index.............................. DJ STOXX index................................................ Top 10 STOXX sectors................................... Top 10 EUROSTOXX sectors......................Top 10 Eurotop 300 sector..................... Pan-European market data: European Equities speed guide................... FTSE Eurotop 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurotop 300 sectors..................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt items......... CAC-40................. Paris items............ World Indices..................................... survey of world bourse outlook......... European Asset Allocation........................ News at a glance: Top News............. Equities.............. Main oil report........... Main currency report.....
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Morning bid Europe-markets can breathe easier after Trump's hedging on Iran
Stella Qiu gives us a look at what the future holds for European and global markets. Donald Trump has said that we might need to wait another two weeks before he decides if he will launch an attack against Iran. Markets are largely breathing a sigh if relief, but they remain cautious about conflict in the Middle East. Brent crude oil fell 2.5% Friday, wiping out some of its recent gains, but it is still on course for a weekly increase of 3.7%, for the third consecutive week. The falling oil price has given European stocks a good reason to celebrate. EUROSTOXX futures rose 0.7%, and FTSE Futures gained 0.3%. Nasdaq and S&P futures both fell by 0.2%. Analysts have cited Trump's deadlines of two weeks for other important decisions, such as in his letters to U.S. trading partners about tariff negotiations. They hope that Tehran will be pushed to negotiate in the meantime. On Friday, Asian stocks were mixed. Japan and Australia fell while China rose. South Korea's benchmark share price rose by 1.1% and surpassed the 3,000 mark for the first since early 2022. This was after the newly elected president Lee Jae Myung unveiled a stimulus plan. The U.S. Dollar was also in the red, despite a projected weekly gain of 0.5% due to the safe-haven flows sparked by the Middle East conflict. Even though one week's gains wouldn't reverse the recent trend, many analysts believe that the dollar will continue to lose ground. China's benchmark lending rates remained unchanged as expected on Friday, while Japan's data showed core inflation reaching a two-year peak. This puts pressure on the Bank of Japan for another rate hike. Investors doubt, however, that a rate hike will occur before December. Overnight, several central banks in Europe have sent out dovish messages, including Norway's Central Bank, which announced its first rate reduction since 2020. The Swiss National Bank lowered rates to zero, but did not rule out a negative rate. Meanwhile, the Bank of England kept policy unchanged and saw the need for more easing. The following are key developments that may influence the markets on Friday. Germany PPI data May -- UK retail sales data for May The ECB releases an economic bulletin
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Oil, tariffs and war tear apart the central bank's roadmap
Investors are becoming more uneasy about the uncertain economic environment. The shock rate reduction in Norway on Thursday highlighted how U.S. Tariffs, Middle East conflict, and a shaky Dollar make global monetary policies and inflation harder to predict. Norway's crown fell by about 1% in relation to the dollar and euro, indicating how unexpected this move was. Switzerland's central bank, which warned of a cloudy outlook for the global economy, cut its borrowing costs on Thursday to 0%, surprising some traders who expected a return to negative interest rates. A day earlier, the U.S. Federal Reserve had kept interest rates at current levels and Jerome Powell, the chair of the Federal Reserve Board said that "nobody" was confident about the future rate path. Markets must contend with a new headwind: the uncertainty of monetary policy. This is in addition to geopolitical risks and trade concerns. A gauge of volatility expected in European equities reached a two-month peak as stocks fell across the region and government bonds - usually safe havens for geopolitical risks - were sold off. "We are in a period of significant policy and macro-uncertainty," said BlueBay Chief Investment Officer at RBC Global Asset Management, Mark Dowding. He added that he would not be making active market wagers on the investment portfolios of his group because he could not see a clear interest rate trend. Investors said that volatility was on the rise because geopolitical factors such as a volatile dollar and fluctuating oil prices made it difficult for central banks to give investors and markets a clear roadmap. T.S. Davide Oneglia, director of European and Global Macro at Lombard. BROKEN MODELS The Fed is not the only central bank that has cut rates. It also faces inflationary threats from President Donald Trump’s tariffs. The dollar, which is the backbone of global trade, commodity values and asset valuations has become weaker and volatile due to trade war stress, and anxiety about government debt. Nick Rees, Monex Europe's head of Macro Research and a specialist in macroeconomics, said: "This is a fundamental change that has occurred on the global markets. Everyone is trying to evaluate it." All of the standard economic rules that we use to forecast are totally broken right now. The dollar has fallen almost 9% this year against other major currencies, but it has also risen since the war between Israel and Iran broke out. Francois Villeroy de Galhau, a policymaker at the European Central Bank, said that if oil prices continue to fluctuate for a long time, then it may be necessary to adjust its rate-cutting plans. Analysts said that the new status quo of markets could be a period of central bank surprises, which would create rapid shifts to market narratives, asset pricing, and volatility trends. Oneglia stated that "we're entering a new cycle where variables are more volatile because events and human factors play a major role, and not just monetary policy, which is easily predictable." Kit Juckes, Societe Generale’s head of FX Strategy, said that Norway's surprise cut was due to the fact that the Norwegian crown had been a “runaway top currency” during the trade war era. The Swiss franc is soaring, as investors search for alternative wealth stores that do not use U.S. dollar. This has led to a drop in import costs and pushed the economy towards deflation. The franc rose on Thursday against the dollar, as traders viewed the SNB's cuts as being too small to prevent deflation. Ninety One's multi-assets head John Stopford stated that the risk of global stock prices increasing was a concern and that options that offer protection against incoming volatility appeared to be fairly inexpensive. He bought bonds in countries where rates and inflation could drop materially. For example, New Zealand. But he was against longer-dated U.S. Treasuries, and German Bunds, where the economic uncertainty is higher, and borrowing by government will likely increase. After investors relaxed over tariffs, global stocks are still almost 20% higher than their April lows. Stopford stated that there is more to be concerned about in the near term. Stopford continued, "The stock exchange feels like a thatched home in a hot land with a high fire risk. People aren't charging a lot to insure this house."
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ConocoPhillips Confirms Oil Discovery off Norway
ConocoPhillips Skandinavia, a subsidiary of U.S. energy major ConocoPhillips, has completed the drilling of an appraisal well in the Norwegian Sea, confirming the previously made oil discovery.ConocoPhillips Skandinavia, the operator of production license 891, has concluded drilling of the second appraisal well, 6507/5-12 S, on the 6507/5-10 S (Slagugle) oil discoveryThe well was drilled about 22 kilometers northeast of the Heidrun field and about 270 kilometers north of Kristiansund.This is the third exploration well in production license 891, which was awarded in the Awards in Predefined Areas (APA) in 2016. ConocoPhillips owns the operating share of 80% in the license, with partner Pandion Energy holding the remaining 20%.The Slagugle oil discovery was proven in 2020. Preliminary calculations indicate a resource estimate in the range of 4.9 – 9.8 million standard cubic metres (Sm3) of oil equivalent, which corresponds to around 30.8 – 61.6 million barrels of oil equivalent in Triassic reservoir rocks (Middle Grey Beds).Additional volumes in the lower Åre Formation and Upper Grey Beds, which are not included in the production test, represent a possible upside potential.The licensees will now analyze the collected data and evaluate a possible development.The objective of well 6507/5-12 S was to delineate the discovery proven in well 6507/5-10 S (Slagugle), and to conduct a formation test to obtain better understanding of reservoir properties and connectivity in the hydrocarbon-bearing layers.The well encountered several oil columns in a 188-metre interval in the Åre Formation and Grey Beds, 75 metres of which consist of sandstone with very good reservoir properties.Extensive data collection and sampling have been carried out and a successful formation test has been completed. The maximum production rate was 650 Sm3 of oil per flow day through a 36/64-inch nozzle opening.The well, which has been permanently plugged and abandoned, was drilled using Odfjell Drilling's Deepsea Yantai semi-submersible drilling rig. Water depth at the site is 341 meters.The next stop for Deepsea Yantai is production license 586 in the Norwegian Sea, where it will drill well 6406/11-2 S for Vår Energi and its partners.
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Gold prices fall by a weekly average as Fed rate cuts are less likely
Gold prices dropped on Friday, and are on course for a weekly drop as a stronger dollar and the prospect that the U.S. will not be cutting interest rates in the near future offset the support provided by the rising geopolitical risk in the Middle East. As of 0245 GMT on Friday, spot gold was down 0.5% at $3,355.49 per ounce and 2.2% over the past week. U.S. Gold Futures fell 1% to $3371.80. Kelvin Wong is a senior analyst at OANDA. He said that the Middle East has a fluid situation, which causes traders to avoid taking aggressive positions on both the long and short sides of the trades. Israel's bombing of Iran's nuclear facilities and Iran's missile and drone attacks on Israel intensified the conflict in the Middle East on Thursday. This included an overnight attack against an Israeli hospital. Both sides have not signaled an exit strategy. The White House announced on Thursday that President Donald Trump would decide within the next two week whether or not the U.S. would get involved in Israel-Iran's air war. This will increase pressure on Tehran to negotiate. Trump has also reiterated his call for the Federal Reserve's interest rate to be cut by 2.5 percentage points. The Fed kept rates unchanged on Wednesday and policymakers maintained projections of two quarter-point cuts in this year. Analysts at ANZ stated in a report that "Macroeconomic development, especially steady yields and renewed USD power, have not supported (gold's) price." The Fed's cautious approach and rising inflation expectations have affected market expectations about the number of interest rate cuts expected this year. On Friday, the dollar was expected to record its largest weekly gain in more than a month. Gold becomes more expensive when the dollar is stronger. Palladium dropped 0.7% to $1 042,92. Platinum dropped 1.5% to $1.287.47 but is heading for a third consecutive weekly increase.
The UK consumer sentiment is on the rise, but Middle East conflict clouds the outlook
A survey on Friday showed that British consumer confidence reached its highest level since 2025 this month as the mood towards the economy improved. However, the threat of higher energy bills due to the war in the Middle East looms over the outlook.
GfK's consumer confidence index rose from -20 to -18 from -20 from May. This is the highest reading since last December. An economist's poll had predicted a similar reading.
The index is still below its long-term average of -11 and lower than it was a year earlier.
Brent crude oil futures are up around 20% since May's end. This could be a problem for Britain, which already has the highest headline inflation rate in the world and some of Europe's most expensive energy costs.
The Bank of England stated on Thursday that it will remain vigilant in its monitoring of inflation risks arising from the conflict between Israel & Iran.
The escalation in conflict in the Middle East is likely to increase petrol prices in the next few weeks. There are also still many uncertainties about the full impact of tariffs. This could have a negative impact on consumers, said Neil Bellamy.
The survey's gauges for past and future economics ticked up in June. However, the indexes measuring personal financial confidence (a better indicator of consumer spending) were flat.
The official retail sales figures for May are due at 0600 GMT and will likely show a decline in sales volume following an unexpected surge in sales in April, which statisticians attributed to the good weather. (Reporting and editing by William Schomberg.)
(source: Reuters)