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Gold drops as Fed rate hikes and higher Treasury yields weigh
On Wednesday, gold fell for the third session in a row as?U.S. Treasury yields, as well as growing bets on the Federal Reserve raising interest rates, weighed down on gold. As of 0849 GMT spot gold was down by 0.8% to $3,974.75 an ounce, after reaching its lowest level since November last year at $3942.99 in the previous session. U.S. Gold Futures for August Delivery lost 1.3%, to $3.987.70/oz. On Tuesday, the yellow metal recorded its first quarterly loss in 2024. The benchmark 10-year yield rose as high as 9 basis points on Tuesday, before easing off its peak. On Wednesday, yields were up again by 4 basis points at 4.465%. This was higher than the increase in euro zone bonds yields. Bullion is less affordable to overseas buyers due to a stronger dollar. The market is pricing in more rate increases for this year because of comments made by Fed's Hammack. Beth Hammack, the president of the Federal Reserve Bank of Cleveland, said Tuesday that she might advocate for higher interest rates if inflation continues to rise. CME FedWatch shows that traders expect a rate increase of 67% by September. Staunovo said that the expectation of more hikes is not helping investment demand. ETF holdings saw renewed outflows over recent days. The Fed may change its policy direction based on the June ADP employment report, which is due at 1215 GMT. The markets will also be watching the annual conference of the European Central 'Bank in Sintra on Wednesday. Fed Chair Kevin Warsh, and ECB -President Christine Lagarde both have speeches scheduled. Geopolitically, there are concerns about the prospects of U.S. diplomacy with Iran after Teheran announced it would not be meeting senior U.S. officials. Envoys travelled to the region following the recent outbreak of violence. Spot silver dropped 1.4% to $57.75 an ounce. Palladium fell 1.4% to $1,187.01, down from its lowest level since November. Palladium fell 1.4% to $1187.01. (Reporting and editing by Harikrishnan Nair in Bengaluru, Noel John from Bengaluru)
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Zelenskiy: Ukraine strikes Russian oil refinery, missile component factory
Ukraine has hit a Russian refinery in Ufa for the second consecutive time, Volodymyr Zelenskiy, the president of Ukraine, said on Wednesday. Kyiv is intensifying its strikes in Russia. "Our plan to impose Ukrainian long-range sanction is being implemented every day," Zelenskiy said, referring the Ukrainian attacks deep within Russian territory. "This is a completely just response to everything Russia does against us." Zelenskiy reported that a strike was also carried out on a Russian military-industrial complex he described as "strategic", located in the Penza area, which he claimed made components for missile weapons used by Moscow to attack Ukraine. He said that the site was located about 600 kilometers from the frontline. The Ukrainian General Staff identified the plant as belonging to Roscosmos, a Russian state-owned space corporation. The company said that it produces sensors for cruise missiles and ballistic rockets, components for aircraft electronics, and equipment to support reconnaissance satellites. General Staff reported that two?bridges were also struck in Russian-occupied areas of Ukraine's Donetsk, Luhansk and Donetsk regions as well as the logistics crossing in Donetsk. Analysts say that Ukraine's increased?attacks on Russian military supply lines is part of an ongoing campaign to target Moscow’s logistics behind the frontline. This effort has helped slow down its war machine, after more than four years of conflict. Ukraine's Defence Ministry said that Ukraine's troops hit 11 oil refineries as well as fuel logistic facilities, military factories and other targets in the month of June. Ukraine's SBU security service?also said it had struck hangars housing Russian jet fighters on an airfield in Crimea that?Russia annexed in 2014. Zelenskiy announced last week that he approved a campaign of 40 days to "influence" Russia into ending its five-year war with Ukraine. (Reporting and editing by Andrew Heavens, Sharon Singleton, and Anna Pruchnicka)
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Fuel prices in Nepal are reduced as global prices fall
Nepal has lowered fuel prices up to 17 percent, according to an official statement released on Wednesday. The Himalayan nation reacted to the fall in global prices after progress was made?towards a peaceful resolution of the war iin 'Iran. The sole distributor and importer of fuels in Nepal, the state-owned Nepal Oil Corporation, has reduced retail prices for petrol, diesel and cooking gas. It said that jet fuel prices have dropped by 14.8% for domestic flights from Kathmandu and by 14.47% for international flights from Pokhara. Prices have fallen sharply since recent highs, as fears of supply disruptions in the Middle East waned amid hopes that U.S. and Iranian peace talks would help maintain a fragile ceasefire. Brent and U.S. West Texas Intermediate are both close to the levels they reached on February 27, just before the U.S. and Israel war against Iran began. Brent closed that day at $72.48 a bar and WTI at $67.02. NOC stated that the'movement was a result of lower fuel supply prices received by Indian Oil Corp on Tuesday. Indian Oil Corp is?the lone?supplier to Nepal. It said that the improvement in fuel prices on the global market was to blame. New rates are effective as of Wednesday. Nepal raised petrol and diesel prices?in April,?and began rationing cooking gases in?March because of supply disruptions caused by the Iran War. Nepal, wedged between India and China is completely dependent on fuel imports. (Reporting and editing by Aftab Ahmad, Raju Gopalakrishnan and Gopal Sharma)
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Two killed after wildfire ravages house in Northern Greece
The fire brigade reported that two people died after a wildfire destroyed a house in a 'forested settlement' in northern Greece. Local media reported that the fire started in bushland Tuesday afternoon, and was fanned quickly by strong winds. It engulfed a house located near the village of Liti, about 25 kilometers (16 miles) north of Thessaloniki. Fire brigade reported that they found a dead man near the fire as they extinguished it and saw another body inside the home. The same area was also the location of a woman who suffered?burns. Authorities told residents to evacuate their'settlement' and move to a nearby playing area. Scientists consider Greece and other Mediterranean countries to be wildfire hotspots due to the fast-warming climate. Fires are more destructive in the summer months when it is hot and dry. (Reporting and editing by Elefterios papadimas, Angeliki Koutantou)
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Aluminium prices fall to four-month lows as Gulf risk premium declines
Aluminum prices fell to their lowest level in four months on Wednesday as investors unwound risk premiums associated with the Gulf, despite new uncertainty surrounding U.S. diplomacy towards Iran. As of 0715 GMT the benchmark 'aluminium' for three months on the London Metal Exchange was down 0.73% to $3,063 per tonne, after hitting a four-month-low at $3055.50 earlier during the session. On Tuesday, it posted its largest quarterly and monthly drops in years. The Shanghai Futures Exchange's most traded aluminium contract tracked the LME. It closed daytime trade at 22,370 Yuan ($3,292.47) per tonne, down 0.95% from its six-month-low of 22,245 Yuan. The London benchmark fell by almost 16% in the month of June as the risk premiums for metals?light?were reduced amid the Iran War, despite the fact that shipments through the Strait of Hormuz - a region which accounts for 9% of the global aluminium production - remained low. Iran announced on 'Tuesday' that it will not meet with senior U.S. representatives who have travelled to the area, thereby reducing the chances of a lasting peace agreement. Iranian officials said that both sides need to sort out the details of the ceasefire agreement signed two weeks earlier before they can move on to more difficult issues. The most traded SHFE contract fell 0.56%, while the LME three-month copper contract lost 1.10%. U.S. Job Openings reached a 2-year high in May, indicating that labour demand was resilient despite the softer hiring. Investors focused on inflation and the possibility of U.S. rates staying high for longer. This supported the dollar. Copper losses were capped by signs of a?continued growth in China's industrial sector. The RatingDog China General Manufacturing PMI slipped to 51.7 from 51.8 in may, but remained above the 50-mark that separates growth from contraction. The average PMI for the second quarter was the highest since the fourth of 2020. This was due to sustained growth in new orders and improved labor?market conditions. Nickel slid by 0.38%, tin fell by 2.30% and zinc dropped 1.30%. The SHFE saw zinc gain 0.64% while lead fell 1.09%. Nickel also declined 0.63%, and tin was a smidgen higher at 0.07%. ($1 = 6.7943 Chinese Yuan Renminbi)
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Dengue outbreak in Bangladesh as weather-related aids spread
Health experts have warned that dengue cases could increase sharply in Bangladesh over the next two month due to wet weather conditions and poor mosquito control. In recent weeks the spread of the disease has accelerated, raising concern after the country's deadliest outbreak ever in 2023. According to data from the health ministry, dengue deaths increased from one in May to 18 at the end June. Meanwhile, reported infections increased by more than eightfold from 714 to 5,924. Professor Kabirul bashar, an entomologist from Jahangirnagar University, said that he expects dengue cases to double in 'Dhaka in July compared to June and triple or quadruple by August. "But the biggest challenge will likely be outside of the capital where several districts face a?risk?of a much steeper increase in infections." In 2023, over 321,000 people will have been infected. 1,705 of them will die. In 2024, Bangladesh had 101,214 dengue infections and 575 fatalities. Dengue is a threat to the country as it deals with?its biggest measles outbreak in decades. More than 100,000 suspected cases, and more than 10,000 confirmed infections, have been reported since mid-March. The death toll has exceeded 700. This puts additional pressure on an already fragile healthcare system. Bashar stated that heavy rainfall, high temperatures, and humidity created the ideal conditions for dengue transmission. Mosquito control has not kept up with this growing threat. He called on the government to establish a national 'early warning system' to identify mosquito breeding areas and hotspots that are rising, so authorities could respond quicker and warn communities. He said that the window for containing the outbreak was closing. (Reporting and editing by Kevin Buckland; Ruma Paul)
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Mike Dolan's notes for the week: ROI-Youth, Task Forces and AI Debt
The news flow has been relentless in the week that has passed, reflecting on the madness of the first half of 2026 as well as the 250th Anniversary of the U.S. This week's column is a little different. It's a look at a few issues, some related to the main story and others not. 1)?YOUTH BURDEN OR BOON? Many investment houses have been pondering the reasons why America is now the world's largest economy. Morgan Stanley strategist Andrew Sheets, citing Gordon Wood's book "Empire of Liberty" from 2009, which chronicles the early Republic, argued that chaos and volatility were transformed into an economic catalyst thanks to the country's openness, adaptability, and capacity for renewal following repeated crises. In 1810, approximately 70% of Americans were younger than 25 years old. The population was a fraction and life expectancy far less than today, but this figure captures a youthful vigour and youth that is hard to match. Sub-Saharan African nations such as Uganda and Niger are close behind, with 70% of their population under 25 years old. Although emigration is more prevalent than immigration in these countries and life expectancy is below world averages, can sheer youth lead to better economic prospects? Many economists disagree, arguing the world today is different than the labour-intensive economy of the early nineteenth century and that the youth dividend might not be as it was. The Centre for Economic Policy Research, co-authored by Nobel Laureate Daron Acemoglu, found that lower birthrates in the last few decades were associated with higher GDP per working-age adult growth across countries as well as stronger wage growth within U.S. commuter zones. This had no negative effect on aggregate GDP or earnings. They argue that this is a response by the technology and innovation to a shortage of young workers. They add that countries and regions with lower rates of birth show more patents for labour-saving technologies and a growing high-tech industry. It is not the overall population growth, but the decrease in the younger populations. A brave new world indeed - and another hat tip to the current market obsession. What is the advice? The focus of attention on the new Federal Reserve chair Kevin Warsh is on his reaction to the market expectation that the next move for Fed interest rates will be up. Warsh is more likely to be focusing on the "task forces" that he established last month in order to study the workings of the central bank and the conduct of monetary policies. One story in the Wall Street Journal that many may have missed was that Warsh had appointed veteran Fed staffers Daniel Covitz, and Eric Engstrom to be his key advisors. Everyone wants to know their thoughts and what they have been working on. Perhaps a guidance skeptic, like Warsh, was attracted to Engstrom’s work about the pitfalls in the Fed’s quarterly economic and interest rate projections. The pair's latest joint paper was published in February and dissected the elevated Treasury forward rates. They concluded that this outsized jump in rates for long-dated bonds was more rooted in fiscal concerns rather than inflation or fears about Fed credibility. The Fed website says Covitz is currently researching "Asset bubbles" and "Stability of Short Term Credit Markets". These are timely topics for a central banking institution that wants to keep up with the AI craze in some parts of financial world. Engstrom's work on "Stock-Bond Comovement", "Corporate Profits and Entrepreneurship" and other topics, meanwhile, shows how the big themes of this year may influence policy. 3) BROKEN CYCLE? The stock prices of big AI beneficiaries are soaring. This year, the most obvious ones were chip makers and computing equipment manufacturers. But what looks like a buoyant midyear ?for top-line stock market indexes masks the angst over AI's potential losers, mainly the software-as-a-service sector. Matthew Savino of Carlyle wrote in a recent note that one way to look at this is the rising borrowing premia?for these companies in the leveraged loans market. Software spreads are nearly twice as high as the broad index. Early in the year, they jumped by nearly 300 basis points and haven't returned since. Savino cites two points that stand out. Savino says that two points stand out. About 85% of the debt is B-minus, or below, and debt maturing between 2028 and 29 has a weighted average of 79 cents per dollar. More than half of this debt trades at less than 90. It is obvious that companies and creditors must work together to resolve these debts. This leads us to the second point. Most workouts for rolling or extending debts involve higher spreads or pay-in kind coupons, or other sweeteners in order to keep borrowers whole. These assume that the economy will recover in a cyclical fashion over time. For some firms, AI disruption can be existential. This complicates debt relationships that were previously flexible and increases anxiety among those who are most affected. Savino concluded that "in the context of secular distress, and high uncertainty regarding terminal value, time may be an enemy if financial degradation is rapid in the business at hand." It's about time to get interesting. The opinions here are those expressed by Mike Dolan, columnist at. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. 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As boards dream of takeovers, mega-deals are driving record M&A.
LSEG data shows that a surge in mega-deals of $10 billion or more drove global M&A levels to record levels during the first half 2026. Some companies took advantage easier regulatory environments to pursue their dream deals. The value of the announced deals grew by 48% year-on-year to $2.8 trillion, the highest total for the first half of the year since LSEG began recording in 1980. The number of deals announced in 2026 fell by 9%, to 24,000 - a six year low. LSEG data revealed that 47 deals above $10 billion accounted for more than $1.3 trillion, and nearly 50% of the global volume. This was a record. Jay Hofmann is the co-head for mergers and acquisitions at JPMorgan in North America. He said that financing "is available at different sizes" and allows companies to acquire assets they need "to navigate the change and position themselves for the future". Ivan Farman is the co-head of Global M&A for Bank of America. He said that the strong momentum in the upper end of the market and the lesser momentum in the lower end reflects the growing belief that a $1 to $3 billion transaction "takes as much time as larger ones, so when a chance to make a large transaction arises, businesses see this as an opportunity to act." Bankers say investors place a high premium on the size and focus of a company. Farman said that "bigger companies with bigger moats, and a greater competitive advantage, trade at better multiples than small companies." The CEOs and management are actively pursuing long-held dream deals. Some dealmakers are so optimistic, despite the geopolitical turmoil that they believe the activity could surpass the post-pandemic M&A peaks of 2021. They expect companies to take advantage of the fewer regulatory hurdles. Bankers report that the Trump administration is receptive towards large U.S. mergers. European policymakers are proposing a rewrite of rules in order to create local champions. Cash-rich Japanese corporations are expected to make more deals in Asia. This is due to proposed revisions of Japan's Governance Code that emphasize the need to efficiently use cash. Morgan Stanley's Jan Weber, the head of Morgan Stanley's mergers and acquisitions for Europe, Middle East, and Africa said, "Momentum behind the scenes has started to accelerate over the past six weeks, with a growing portfolio of cross-border strategic deals." "It seems like many indicators are green for more M&A, and boards feel they need to take action." Weber said, "I do believe we are moving towards the next peak." Ed Wittig said that companies are focusing on growth. He is the co-head for Asia?Pacific mergers? acquisitions at Goldman Sachs. He added that there was a lot of enthusiasm for synergies and the markets reward those who execute well. Bankers reported a record number of corporate separations driving dealmaking, as companies sought ways to adapt to changing industry dynamics. Examples include Comcast's planned spinoff NBCUniversal and Honeywell's split into three. The market has become more conservative in its approach to businesses with a high degree of diversification. Previously, investors praised diversity as a means of reducing risk. However, today, they are wary of it because of the complexity that comes from this and the lack of focus on management's part. TECHNOLOGY DOMINATES The first half of the year saw a plethora of financing for acquisitions. Global?investment grade corporate debt issues reached $3.4 trillion. This is a 10% year-on year increase and the highest total year-to date since LSEG began keeping records. LSEG data shows that technology remained the most active sector in global dealmaking, with $649 Billion of transactions announced in the first half. The U.S. is a prime example of this. The other side is the HALO, which includes heavy assets, low-obsolescence, large infrastructure, and a big?industry. This will continue regardless of AI's impact, said?Sam Newhouse. In the first half 2026, cross-border M&A amounted to $893 billion. This is up 62% on the previous year and represents the best start of the year since 2018. Cross-border M&A reached $893?billion in the first half of 2026, up 62% from a year ago and the best start since 2018. Kirshlen Moodley is the head of UK M&A at BNP Paribas. (Reporting from Anousha Sakoui, Echo Wang and Kane Wu respectively in London, New York and Hong Kong. Editing by Alexander Smith).
US and China to start new talks on tariff truce, easing the path for Trump-Xi Meeting
The top U.S. economic officials and Chinese representatives will resume their talks on Monday in Stockholm to address long-standing economic disputes that are at the heart of a trade conflict between the two largest economies. They hope to extend the truce for three months while preventing tariff increases. China faces an August 12 deadline for a lasting tariff agreement with the Trump administration. Beijing and Washington had reached preliminary agreements in May and early June to end weeks' worth of escalating tariffs, and to stop the cutoff of rare-earth minerals.
If there is no agreement, the global supply chain could be thrown into turmoil by U.S. tariffs returning to triple-digit rates that would amount to an embargo on bilateral trade. The Stockholm talks follow Trump's largest trade deal to date with the European Union, which was announced on Sunday. It included a 15% tariff for most EU exports into the U.S. including autos. The EU will also invest $600 billion in U.S. energy and buy $750 billion of American energy over the next few years. The U.S. and China talks are not expected to produce a similar breakthrough, but trade analysts believe that a 90-day extension is likely of the tariff and export control ceasefire struck in mid May.
A further extension would help prevent further escalation, and allow for planning a possible meeting between Trump and Chinese president Xi Jinping at the end of October or beginning of November. A U.S. Treasury spokeswoman declined to comment on South China Morning Post's report, which cited unnamed sources who said that the two sides will refrain from introducing any new tariffs for 90 more days.
Trump's administration will soon impose new tariffs on China, including those on semiconductors. Pharmacies, ship to shore cranes and more.
"We are very close to making a deal with China." "We're very close to a deal with China. We'll see what happens," Trump told reporters Sunday, before European Commission President Ursula von der Leyen signed the tariff agreement. Financial Times reported Monday that the U.S. had paused curbs of tech exports to China in order to avoid disrupting talks with Beijing, and to support Trump's attempts to secure a meet-up with Xi. The newspaper reported that the Commerce Department's industry and security bureau, which is responsible for export controls, was told not to take any tough measures against China. This information came from current and former officials. The report could not be verified immediately. Outside of business hours, neither the White House nor the Department responded to requests for comments.
DEEPER ISSUES The previous U.S.-China talks held in Geneva and London, in May and in June, focused on reducing the U.S. and Chinese tariffs from triple-digit rates and restoring the flow for rare earth minerals that China had stopped and Nvidia H20 AI chips as well as other goods that the United States had stopped.
The talks so far have not covered broader economic topics. The U.S. has complained that China's export-driven, state-led model floods the world's markets with cheap products, while Beijing complains that U.S. export controls on technology goods are meant to stunt Chinese economic growth.
"Geneva and London really were just trying to get their relationship back on track, so that at some point they could actually negotiate about the questions which are the source of the initial disagreement between the two countries," said Scott Kennedy. He is an expert in China economics at the Center for Strategic and International Studies, Washington.
Kennedy stated that "I would be surprised if some of these things were harvested early, but an extension of ceasefire for 90 more days seems the most likely result." U.S. Treasury secretary Scott Bessent already announced a deadline extension. He also said that he wanted China to rebalance their economy from exports towards more domestic consumption, a goal of U.S. policymakers for decades. Analysts claim that the U.S. and China negotiations will take more time than other Asian nations because they are more complex. China's hold on the world market for rare earth magnets and minerals, which are used in everything from car windshield wiper motors to military hardware, has proven to be a powerful leverage point against U.S. industry.
TRUMP-XI MEETING?
There is speculation in the background about a meeting between Trump & Xi that could take place at the end of October. Trump has stated that he would decide on a historic trip to China soon, and any new tariffs or export controls could derail the planning.
Sun Chenghao is a fellow with the Center for International Security and Strategy at Tsinghua's Center for International Security and Strategy, Beijing. He said the Trump-Xi Summit would give the U.S. an opportunity to lower its 20% tariffs against Chinese products related to fentanyl. He said that in exchange for the Chinese commitment to purchase more U.S. farm goods and other goods by 2020, they could fulfill their 2020 pledge.
Sun stated that the future summit of heads of state is very helpful to negotiations, as everyone wants to achieve an agreement or pave a way for the negotiations in advance.
Analysts said that China would likely ask for a further easing of U.S. export controls on high-tech products and a reduction in the multi-layered U.S. duties totaling 55 percent. Beijing argues that these purchases will help reduce the U.S.-China trade deficit, which is expected to reach $295.5 billion by 2024. (Reporting and editing by Diane Craft, Stephen Coates, and Shivani Tanna; Additional reporting in Bengaluru by Shivani.
(source: Reuters)