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Markets await US inflation data as gold bounces back from a two-week low
Gold rose?on Tuesday, after a 'two-week low. The focus was on the U.S. Consumer Price Index and Federal Reserve Chairman Kevin Warsh’s testimony to get a sense of monetary policy. Gold spot rose 0.5%, to $4,019.50 an ounce, by 0821 GMT after dropping to its lowest levels since July 1, earlier in the session. U.S. Gold Futures for August delivery. Gained 0.5% to $4.026.20. The recent rally of the U.S. dollar has paused, which is supporting gold prices today. Ricardo Evangelista, ActivTrades' analyst, said that the recent dollar rally has slowed. Dollar-priced gold is now cheaper for holders of currencies other than the U.S. Investors are awaiting the U.S. CPI June data and Fed Chairman Kevin Warsh's semi-annual congressional testimony. Both of these events will be delivered later that day. "A 'CPI reading over the'region of 3.8% can reinforce expectations of a hawkish Federal Reserve, and create a downward pressure on gold prices," Evangelista stated. The Fed's decision to raise rates is a result of the rising oil prices. Gold, which does not yield any interest, has become less attractive. The price of spot gold dropped by nearly 3% during the previous session, the biggest percentage decline in over a month. This was due to renewed hostilities in the Middle East between Iran and the United States, which drove up energy prices. Oil prices rose to the highest level in four weeks as the U.S. reimposed its "naval blockade" of Iran and the attacks on the Strait of Hormuz fueled uncertainty about energy flow. Fed Governor Christopher Waller stated on Monday that the U.S. central bank may have to increase interest rates "in a short time" if the coming data shows inflation continues well above the 2% goal. CME FedWatch Tool data revealed that traders are now pricing in a '75%' chance of a September rate hike. Silver spot rose 0.6%, to $58.00 an ounce. Palladium rose 1.5%, to $1,265.79. Platinum fell 0.2% to $1 601.51. (Reporting by Sukanya Mitra in Bengaluru; Editing by Louise Heavens)
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Oil prices rise after Trump's Hormuz levies threat
After yo-yoing between gains and losses, stocks moved back to negative territory as oil reached a?one-month-high on Tuesday following President Donald Trump's announcement that?the?U.S. The United States is re-imposing its blockade of Iranian ships and will collect a 20% charge on Strait of Hormuz freight traffic. Brent crude futures rose over $3.00, to $86.36 per barrel. This is its highest level since the middle of June. Investors were frightened by the escalating tensions between the U.S. and Iran. They analyzed quarterly earnings of companies like oil giant BP or telecom equipment maker Ericsson in order to assess how this conflict will affect corporate health. Travel and leisure, which had been down 2.4% at the time of writing, was responsible for the 0.7% drop in STOXX 600. MSCI's world share index edged in the negative after a volatile Asian trading session. Europe opened lower. The markets were also shaken by the hawkish remarks made on Monday by Federal Reserve Governor Christopher Waller. He said that the U.S. Central Bank may have to raise interest rates in the near future if inflation continues well above its 2% target. The markets enter Tuesday at a critical inflection point, as investors weigh three competing forces: the beginning of the second quarter earnings season and the June U.S. Inflation data," said Bruno Schneller, managing director at Erlen Capital Management in Zurich. He added that "these events will likely determine whether or not the recent rally becomes more selective." The CPI data for the United States will be released later Tuesday. This will be followed by remarks from Fed chair Kevin Warsh who will present to Congress the semi-annual report of monetary policy. This data will influence expectations for the Fed’s next meeting, which takes place on July 28-29. The markets currently expect a rate hike of 25 basis points to be around 40%. The yield on the rate-sensitive U.S. 2 year?Treasury was at 4.29% last, its highest level since February and an increase of 2 basis points for the day. The yield for the U.S. 10 year Treasury increased by 2 basis points to 4.63%. BOOMER TRADE Chinese stocks surged earlier in trading after export and import data released on Tuesday exceeded economists' expectations. They closed 2.15 percent higher. South Korean stocks?rose by 0.7%. Taiwanese stocks fell by 1.42%. In a research note, ING analysts stated that "China's imports and exports have surged to their highest levels since 2021 when the pandemic-affected growth was skewed," as the tech boom supported growth on both sides. Overnight, Wall Street stocks fell. The S&P closed 0.8% lower, and the Nasdaq Composite dropped 1.6%. S&P futures were 0.1% lower during early European trading, while Nasdaq's futures remained 0.3% higher. The U.S. Dollar Index, which measures a basket against six currencies to determine the strength of the "greenback", slipped 0.1% to 101.16. It was trading at its highest levels for the month. Gold rose 0.5% to $4,020.34. The Nikkei closed 0.7% higher in Tokyo after Finance Minister Satsukikatayama stated that Japan could consider changing the strategy of its Government Pension Investment Fund, if the investment climate changed dramatically. Katayama did not provide any further details. Bitcoin rose 0.6%, to $62,504.79. (Reporting and editing by Kevin Buckland, Stephen Coates and Gregor Stuart Hunter)
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Copper prices rise amid fears of disruptions in supply from Hormuz
The latest escalation of the Middle East conflict prompted a rise in copper?prices on Tuesday. The benchmark three-month copper price?on London Metal Exchange? climbed 0.2% by 0700 GMT to $13,568.5 per?metric?ton. The Shanghai Futures Exchange's most traded copper contract rose by 1.06%, to 104 390 yuan a ton. Donald Trump, the President of the United States and Iran, have both announced blockades of Strait of Hormuz. The U.S. renewed its attacks on Iran and?tankers were attacked in this vital waterway. Everbright Futures, a Chinese broker, said that the escalation was a "double edged sword" as fears about supply support prices, but growth risks harm demand. Brokers said that sulphur shortages could squeeze supply chains, in particular. Sulphuric acid is a major?risk to copper and nickel supply chains. Copper leaching is a process used to extract metal from ore. A tighter supply of sulphuric acids could increase costs, even though the demand for copper has been weakened. The oil prices rose to their highest levels in four weeks, but they remained below the peak reached at the heights of the conflict. Analysts at Sucden Financial say that higher energy prices support metals like aluminium and Nickel, which are energy-intensive. Aluminium?increased by 0.62% on the LME while it increased by 1.35% on the SHFE. Nickel, which also is?vulnerable? to sulphuric acids prices, rose 0.17% at the LME, and 0.66% at the SHFE. The renewed hostilities between Iran and the United States have reignited fears that rising energy costs and input costs will force policymakers to increase interest rates in order to control inflation. This would dampen demand for copper, an industrial metal which is dependent on economic growth. Zinc, among other LME metals rose by 0.36%. Lead also climbed by 0.37%. Tin jumped by 2.23%. Zinc was down 0.04% on the SHFE. Lead lost 0.63%, and tin rose 1.17%. (Reporting and editing by Rashmi aich, Subhranshu Sahu and Solomon Cefai)
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Joachim Klement: Why NATO should ask Ukraine for assistance
Western governments are re-arming, but may be spending billions on the wrong arsenals. Drones and algorithms are just as important as tanks and missiles. Ukraine could be in a good position to show what the West needs today. Last week, at the NATO summit held in Ankara (Turkey),?U.S. The President Donald Trump, Secretary of State Marco Rubio, and others noted that Ukraine was able to use drone technology to strike Russian energy infrastructure. They called this an "escalation," which they believed could lead to the resolution of the conflict. The European Union is looking to rearm itself, due to the amount of traditional weapons it has sent to Ukraine, and because Trump wants NATO members to invest more in their own defense. They could turn to Ukrainian companies and experts who have designed drones that have helped Kyiv to survive the years-long onslaught. According to the Ukraine Tracker of the Kiel Institute for the World Economy's Ukraine Support Tracker, European nations sent military aid to Ukraine totaling EUR213 billion (USD242.6 billion). The U.S. military assistance to Kyiv has totaled EUR115 billion by the end of 2026. The majority of these sums do not represent cash expenditures but rather the value of inventory of "old paradigm" weapons systems such as artillery, tank and missiles that were shipped to Ukraine. The European governments are now faced with a strategic decision: either they replenish these stocks, or rethink their next purchases. What to buy? The U.S. and Israeli war with Iran and the war in Ukraine have shown that drones, electronic war, and AI are likely to be the future of warfare. Traditional weaponry will be needed in the short term. Ukraine requested a license for the manufacture of U.S. Patriot interceptor missiles because they are still the best defense against Russia's missiles. Western powers must adapt if war becomes cheaper, smaller and more agile. Use of a Patriot interceptor is a sensible way to stop a ballistic rocket. It makes no sense to use either a Patriot missile (costing about $4 million) or a THAAD, with a price of between $12 and $15 million, to take out an Iranian or Russian Shahed, which costs anywhere from $20,000 to $50,000. However, many European militaries are still stuck in an old mindset. Kiel Institute warned recently that the total amount spent on procurement in 2024-2025 for new-paradigm weaponry like drones would be?only 12%. Poland, which is one of the European Union countries most vulnerable to future Russian aggressions, has increased its focus on cutting-edge technology. Germany and Britain, however, have seen their share fall over time. 'DRONE DEAL' Ukraine is a better option than ordering expensive fighter jets and missile systems. It has experience in 21st century battlefield conditions. Ukraine, which has the largest drone industry and most advanced drones, is the world's leading manufacturer of military drones. Its technology has been proven on the battlefield. Ukraine did not have any significant manufacturing facilities for drones, or first-person-view (FPV), which are tiny, inexpensive cameras-equipped drones that can be controlled through a screen or headset. By the 2025 NATO Summit, Volodymyr Zelenskiy claimed that Ukraine was capable of producing 8 million drones a year. Ukraine offers more and more "drone deals", or drones, to its allies. Kyiv offers support and expertise for the development of drones and radar systems, as well as other electronic devices in exchange with conventional arms or investments into Ukrainian defence manufacturing. The country recently stated that it hopes to reach such agreements with seven NATO countries by the year's end. European countries are advancing, especially smaller ones that do not have a military-industrial complex. Denmark was one of the first countries to sign a drone deal with Ukraine, and Copenhagen-headquartered MITS Industries will be offering "drones-as-a-service" to Western countries, meaning providing engineering assistance and data. As part of the drone deal, Ukraine and Latvia announced that they would invest in a drone factory located on Latvian soil. Saab, the French drone manufacturer Parrot and Ukrainian companies are working together to develop know-how they can use to compete with established players such as Thales and Leonardo. Established?defence companies are developing more and more new-paradigm weapon systems. However, they could lag behind the upstarts who have specialist knowledge, and be hindered by their size, bureaucracy, and longer lead times. These large, legacy defence contractors risk being overtaken by more agile competitors in certain specialized areas if they don't adapt quickly. NEW PRIORITIES After a multi-month conflict, the U.S. must also rearm. The Center for Strategic & International Studies estimates that the United States has spent between 25 to 51 months replenishing its stock of advanced weapons, such as the Patriot and THAAD systems of air defence. The U.S. is not only restocking these systems but also re-examining their military strategy, taking a cue from Ukraine. The Department of Defense announced on July 1 that it would consolidate all Unmanned and Autonomous Systems. This is because the U.S. wants to "rapidly" accelerate the development, acquisition, and deployment of autonomous capabilities. It would be wise for large defence contractors around the world to take note and ensure that they are in contact with Kyiv. One of the greatest risks that they face is complacency in a battlefield that is rapidly changing. 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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Asian stocks fall as oil prices rise after Trump's Hormuz levies threat
Oil hit a new one-month high on Tuesday in Asian trading after President Donald Trump announced that the U.S. would reintroduce its blockade of Iranian ships and collect a?20%?fee for cargo crossing the Strait of Hormuz. After a volatile session MSCI's broadest Asia-Pacific share index outside Japan gained 0.2% as gains in Taiwan were offset by gains for South Korean stocks. S&P 500 futures e-mini edged up 0.1%. The CSI 300, which tracks Chinese stocks, rose 2% as export and import figures for June were released on Tuesday. These data exceeded economists' predictions. ING analysts reported in a research note that "China's imports and exports have surged to their highest levels since 2021 when the pandemic-skewed data was collected." The tech boom is supporting growth on both sides. Exports have been a major growth engine for China in recent years. This year's acceleration has continued to exceed expectations. Brent crude futures rose 2.6% to $85.49 per barrel after hitting their highest level since mid-June, $85.64. The markets were also shaken by the hawkish remarks made on Monday by Federal Reserve Governor Christopher Waller. He said that the U.S. Central Bank may have to increase interest rates "in the short term" if inflation continues well above its 2% target. The U.S. CPI is expected to be released later Tuesday. This will be followed by remarks from Fed chair Kevin Warsh who will present the semi-annual report on monetary policy of the central bank. Chris 'Weston, Pepperstone Melbourne head of research, stated that "while the risk was building in the system, the markets reacted fiercely" to?latest headlines about the Iran conflict. The prospect of tighter monetary policies into a possible energy shock rarely supports risk assets. Overnight, Wall Street stocks fell and oil futures soared by more than 9%, as the conflict between Iran and the U.S. re-emerged, halting the flow of goods across the Strait of Hormuz. The S&P 500 ended 0.8% lower, and the Nasdaq Composite dropped 1.6%. Fed funds futures price in a 43.3% implied probability that the U.S. Central Bank will hike rates by 25 basis points at its next two-day gathering on July 28 and 29, compared with a 34.2% implied chance on Friday. The yield of the 10-year Treasury Bond in the United States was 0.4 basis points higher at 4.6156%. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, dipped 0.1% to?101.18. It was trading at its highest levels for the month. Gold rose 0.8% to $4,031.60. Vis Nayar, chief investment officer at Eastspring Investments, said in a recent note that the risk of a resurgence in tensions between the U.S. and Iran is primarily due to the impact higher energy prices have on currencies and interest rates. "A persistently higher oil price would increase the likelihood that the U.S. Federal Reserve will raise the Fed funds rate this year." The Nikkei 225 index rose by 0.8% in Tokyo after Finance Minister Satsukikatayama stated that Japan might consider adjusting its strategy for the Government Pension Investment Fund if investment conditions change dramatically. She did not provide any further information. Taiwan's benchmark index fell to its lowest level in a month, while other markets recovered. TSMC, a market leader, is expected to release?earnings Thursday. A fifth consecutive quarter with record profits is anticipated. Stocks in Seoul fluctuated between positive and negative territory, as SK Hynix shares fluctuated between gains and losses. They rose as much as 4,9% following an earlier sale. The memory chipmaker's volatility comes after its dramatic drop a day before following its Nasdaq launch last week. Bitcoin was up 0.8% at $62,633.95, while Ether was up 1.1% to $1,784.53. (Reporting and editing by Kevin Buckland, Stephen Coates and Gregor Stuart Hunter)
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BP's second-quarter oil results are slightly higher
BP said on Tuesday that it expects to see a slight increase in its oil trading results compared to the first quarter. This is because the oil price surge caused by the Iran War will allow the company to profit again. BP said that it expects its upstream production will fall?into the second quarter between 2.17 and?2.22 million barrels equivalents per day. This is compared to around 2.34 mln boed during the first quarter. It reported that its gas trading results were essentially flat when compared to the first quarter. Net debt is expected to fall between $22 and $23 billion at the end of this quarter, compared to the quarter before which was $25.31 billion. BP expects that the total of the net debt, hybrids and Gulf of Mexico settlement liabilities will decrease by $6.3 billion to $7.3 billion compared to the first quarter. BP aims to reduce its net debt from $14 billion to 18 billion dollars by the end of 2027.
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China removes third Politburo Member in a deepening anti-corruption drive
Ma Xingrui was expelled from the Communist Party by China on charges of corruption. He is the third member to have been expelled since 2025, as President Xi Jinping continues his anti-corruption campaign. Ma, who was also the deputy leader of the central rural working group, came under investigation for "serious violations of law and order" (the party's code word for corruption) in April. Xinhua said that Ma's investigators discovered that he had improperly arranged a?job for another and sought to benefit others through the selection and appointment officials. The report stated that he "connived, failed to detect, and failed to rein-in serious violations of law and discipline, as well as?suspected crimino conduct' by staff around him." In March, it was announced that a probe would be conducted into Guo Yonghang's conduct as Ma's chief-of-staff during his time in Shenzhen, the southern tech hub. Guo was promoted in the southern province?Guangdong when Ma became the governor of this economic powerhouse. In recent months, a number of officials from Xinjiang have been investigated for receiving promotions after Ma became party chief in the northwestern border region late in 2021. According to the report, he also accepted illegal gifts, assisted relatives in purchasing property at prices below market value, and engaged in power and money exchanges for sex. Ma's family members used his influence to get huge benefits. Authorities described this as "family corruption" on a large scale. Ma also illegally accepted huge amounts of money and property. Xinhua didn't specify the amount. Ma?couldn't be reached to comment. The expulsion is the latest step in Xi’s long-running fight against corruption that has ensnared high-ranking party, government, and military officials. China launched a 'corruption investigation' in January against Zhang Youxia, a senior military general. He Weidong was expelled from the Communist Party last October. He Weidong is a former vice-chair of the Central Military Commission. SCIENTIST-TURNED-ADMINISTRATOR Ma, a scientist-turned-administrator, enjoyed a meteoric rise in Chinese officialdom after becoming an executive at China's main spacecraft and missile ?manufacturer, China Aerospace Science and Technology Corporation, in the 2000s. He was the director of some of China's most significant space programmes for over a decade. Ma's fall comes as China's aerospace and defence sectors are under increasing scrutiny. In February, prosecutors charged Zhang Jianhua with bribery, abuse of power and corruption. Zhang was a former deputy director at the State Administration for Science, Technology, Industry, and National Defense. Zhang was Ma's deputy director when he headed the defence industry regulator. In the same month, three Chinese legislators with links to the aerospace, defence and nuclear sectors lost their posts. (Reporting and editing by Thomas Derpinghaus; Beijing Newsroom)
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SoftBank's son dismisses bubble talks, saying AI will require $5 trillion annually by 2040.
SoftBank Group CEO Masayoshi son said that the development of AI will require $5 trillion in investment each year by 2040. Any talk of a "bubble" forming around this technology is absurd, Son added. The technology investment group, SoftBank, has been investing heavily in OpenAI over the last two years. They have also invested in data centres, robotics companies, and financing. Son told SoftBank's annual conference in Tokyo that the cost of AI will be $5 trillion or 800 trillion yen per year. You might think this is a lie but I'm confident it's true. Son stated that the business model "will be viable" because, by 2040, AI revenue will make up 20% of the global GDP. Spending 800 trillion yen per year would only be a rounding error. Son did not explain how he arrived at the $5 trillion figure or what percentage of the global GDP AI is expected to?make up. Son is well-known for his 'enthusiastic speeches' praising the promise of transformational technologies. The value of AI firms has risen dramatically, while the capital expenditures to secure infrastructure have ballooned. This has led to concerns about whether these firms can generate a sufficient return on investment. "Asking whether AI is a bubble or not is absurd." He reiterated his position, saying that he didn't believe people who asked the question knew what AI was. Son has scored big wins, such as an early investment into Chinese ecommerce company Alibaba, and bringing Apple Inc's iPhones to the Japanese market. However, other companies, such as the bankrupt shared office provider WeWork, have not lived up to expectations. SoftBank is currently placing its highest bet on ChatGPT maker OpenAI. Its cumulative investment is expected to reach $60 billion by 2026. Son said that to power AI, AI data centres would need power of 3 terawatts or 1.8 times the current global consumption by 2040. Son stated that this will be initially powered by gas, before nuclear fusion is the main energy source. Elon Musk: "Will solar power be used in space?" He said that we may use both but that fusion energy on Earth would be the cleaner, cheaper source of energy. Son described his vision of a society in 2040 with 100 trillion AI agents that make their own decisions and take action, as well as communicate with each other. "We'll move from a world centered on humans to one centered around agents. The age of humans as the most advanced lifeform on Earth will come to an end. Son said, "It will happen for better or worse and it cannot be stopped." (Reporting and editing by Muralikumar Anantharaman; reporting by Anton Bridge)
China's aluminium exports in June hit a record high
China's exports of unwrought aluminum and products?reached a new record in June, according to data from the official customs released on Tuesday, as?war?disruption?to supplies and shipments from the Gulf region?continued.
The data revealed that export volume rose above 700,000 metric tons for the very first time in June.
Shipments increased 12.5% from the 632,000 tons in May, and 45.4% over 489,000 tons from a year earlier.
Exports of unwrought aluminum and products rose by 16.3% in the first half of 2026 compared to a year ago, reaching 3.4 millions tons.
The June shipments are a continuation of the previous acceleration that occurred after the Iran War?disrupted the aluminium production in the Gulf and the shipments through the Strait of Hormuz, which represented about 9% of the global supply. Aluminium prices on the London Metal Exchange reached a four-year peak of $3,724 per ton early in June due to concerns over the supply coming from the Gulf region. However, the price fell almost 16% by the end of the month as tensions eased and hopes for a peace deal between Washington and Iran were realized. China's exports, which are used for power transmission and distribution, of aluminium stranded cable also increased due to the price rise caused by the Iran war and tax benefits over exports. The traders expect that the export volumes of aluminium stranded wire will have peaked by June, and then slow down as the tax arbitrage window closes. (Reporting and editing by Thomas Derpinghaus, Lincoln Feast and Lewis Jackson.
(source: Reuters)