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Energy profits drive European earnings to highest level in three years
According to LSEG's forecasts, published Thursday to coincide with the start of reporting season, a surge in energy sector profits will help European blue-chip companies to post their highest earnings growth in more than three years. LSEG IBES data predicts that companies in Europe's benchmark STOXX 600 index will report earnings growth of 16.7% during the second quarter. This is based on?results from 28 companies, and market estimates for those whose results are not yet in. The rate of growth excluding energy companies is a modest 6.4%. The European energy'majors' are reportedly?posting profits that are more than 125% greater year-on-year. This is due to higher oil and natural gas prices after disruptions in shipping through the Strait of Hormuz. Revenue is expected increase by 11.1% annually, compared to the previous estimate of 10.5% a week ago. ASML, the most valuable company in Europe, helped boost sentiment on Wednesday after it reported earnings that exceeded expectations and raised its 2026 sales forecast. The week of July 20 is expected to see 52 companies report their quarterly earnings. This includes Swiss drugmaker Novartis, Italian bank UniCredit and German software giant SAP.
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Nickel reaches 3-week high amid concerns about sulphur supplies
Nickel prices rose Thursday to a three-week high as fears of sulphur shortages resurfaced due to concerns about disruptions in traffic through the Strait of Hormuz. As of 0900 GMT, the benchmark three-month Nickel?on?the London Metal Exchange had risen 1.8% to $17110 per metric tonne. The price of the metal used in making stainless steel and batteries for rechargeable devices jumped by as much as 3.1%, reaching $17,330. This was its highest level since June 23. "Sulphur tightness expectations are again fermenting." This'mostly' means that nickel analysts are expecting a higher cost for the high pressure (HPAL), acid leaching process, according to a recent note from a broker. Indonesia, which is the world's largest nickel producer, depends on the Middle East to provide about 75% the sulphur it uses for sulphuric acids for leaching. The U.S. blockade of the Strait of Hormuz by Iran and the U.S. has disrupted shipments. These?guys from Indonesia were at the bottom of cost curve. "They're right at the top," Macquarie analyst Jim Lennon stated on a Webinar this week. He noted that the spike in the price of sulphur had led to a $10,000 per ton increase in production costs. Lennon added that, in addition, the Indonesian government was seeking to limit nickel ore allocations for HPAL producers. The market was waiting, he said, to hear the results of the midyear requests for additional supply. LME copper climbed 0.1%, to $13,599 per ton. This was aided by a weaker U.S. Inflation data, and the hope of a more dovish Federal Reserve. Around 20% of the global refined copper supply has been leached. Recent withdrawals from LME storages also supported the metal, and exchange data on Friday showed another 18,150 tonnes of copper warrant cancellations. The entire LME complex rose, with aluminium gaining 0.9% at $3,178; zinc gained?0.9% at $3,579; lead recovering 1.1% from a 15-month-low on Wednesday to $1,871.50, and tin gaining 1.3% at $53,305. (Reporting and editing by Subhranshu Sahu, Eileen Soreng, and Solomon Cefai)
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Zambian Finance Minister says Zambia is hoping to sign a new IMF program by the end of this year.
Situmbeko Musokotwane, the Finance Minister of Zambia, said that the country hoped to reach an agreement with the International Monetary Fund on a new programme to encourage investment and boost economic growth by the end the year. Musokotwane said in an online interview that he wished to have reached a settlement with the Fund before the end of the year. The'most recent IMF program for the copper-rich Southern African nation ended in January, with total 'disbursements? of $1.7 billion. This helped it to emerge from a long-running debt restructuring process. "We must do more than simply get out of this debt crisis. We must attract investment?now to create jobs and growth. Investors, or at least some of them, feel more comfortable when an IMF program is in place. This is where we are," Musokotwane said. A team of IMF staff visited Lusaka in April and May. They said that discussions about a 'new programme' had advanced and would continue after Zambian general elections in August.
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Singapore oil products stocks linger near 40 million barrels
Official data released on Thursday showed that oil product stocks in Singapore, Asia's main trading hub, were not significantly changed during the week ending July 15. This was due to a decline in light distillate inventories being offset by a rise in middle distillate stockpiles. Enterprise Singapore's data shows that the combined onshore oil products stocks were 40.25 millions barrels during the week ending July 15. This is a decrease of 0.21% compared to last week. The markets are experiencing uncertainty about supply, after fewer ships passed through the Strait of Hormuz the first day since the U.S. reinstated a naval ban on Iranian ports. Both countries have escalated their strikes in the Gulf. LIGHT DISTILLATES AND RESIDUAL FUELS EXTEND DECLINES Singapore's light distillate stocks, which include naphtha,?gasoline and other products, dropped to a six week low of 11.828 millions barrels during the week ending July 15. This was due to net gasoline exports that?sharply exceeded imports. Strong outbound flows into regional markets like Indonesia and Australia drained the stock, according to the data. Total gasoline exports for the week were about?424,000 (about 3.58 million barrels). This was far more than imports, which were roughly 138,000 tonnes. India was the largest importer of gasoline, with a total of?about 69,000 tonnes. Imports of naphtha increased by 35 percent on a weekly basis as cargoes from Russia, Malaysia, and Oman totaled about 92,000 tons. The residual fuel stockpiles fell for the third week in a row, to 19,12 million barrels (3.01 millions tons), a 0.3% decrease week-on week. The U.S. was the largest supplier of fuel oil. Total imports fell 42.3%, to just over 524,000 tonnes. Total exports from Singapore's onshore tanks increased 6.5%, to approximately 283,000 tons. Most of the volumes were headed for Malaysia, which is a storage hub. Sources in the trade expect that more arbitrage supplies from the West will arrive in the second half of July. The MIDDLE DISTRILLATES are at a two-month high The data revealed that middle distillate inventories increased for the second week in a row, reaching a high of 9.3 million barrels. This was due to a decline in both diesel and jet-fuel exports. The net?exports for diesel, gasoil and jet fuel fell by 12% and 68% respectively. The main countries of origin for diesel and gasoil exports were Australia and Malaysia. Jet fuel imports were dismal. However, the market is expecting more Chinese barrels in the next few weeks due to the increase in July export sales from refiners in China.
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Gold drops as Mideast conflict dampens inflation hopes
Gold prices fell?on Friday as an escalating Middle?East war fueled fears that the U.S. Federal Reserve might raise interest rates in this year. This surpassed recent optimism about easing inflation. By 0729 GMT, spot gold had fallen 0.9% to $4,024.60 an ounce. U.S. Gold Futures for August Delivery fell 0.6% to $4.029.50. Jigar Trivedi is a senior research analyst with IndusInd Securities. He said that June's inflation numbers did not reflect the impact the latest escalation of the?U.S. -Iran conflict has had on the economy. After reimposing its naval blockade, the U.S. launched a series of two-wave attacks on Iran’s coastal defences and missile sites. Iran responded by launching attacks against the U.S. In what it described as an "existential conflict" with the United States, Iran has attacked military sites in neighboring countries. The oil price has risen by?11% this week alone, raising concerns about inflation. Gold is often seen as a hedge against inflation, but it's no longer attractive in an environment of high interest rates. U.S. consumer inflation and producer inflation both slowed down in June amid a drop in energy prices, confirming that inflation had been?subsiding' before the recent escalation of the Middle East conflict. However, the moderated inflation rate was not enough to convince the financial markets that a Fed interest rate increase this year is unlikely. CME FedWatch Tool data shows that traders still price in a 73% chance of a Fed hike in December. Fed Governor Lisa Cook stated on Wednesday that she was "prepared to take action" if inflation does not begin to slow down soon. Fed Chairman Kevin Warsh also declared his determination for inflation to be brought down, without revealing how. Investors will be watching for comments from Fed Vice-Chair Philip Jefferson and Dallas Fed President Lorie Logan, who are due to speak later that day. Silver spot fell by 1.7%, to $56.78 an ounce. Palladium fell 1.4% and platinum 1.3%, respectively, to $1,296.29. (Reporting and editing by Subhranshu Sahu, Rashmi Anich and Swati verma from Bengaluru)
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Nickel prices rise on fears over sulphur supplies via Hormuz
Nickel reached a three-week peak on Thursday as concerns over traffic disruptions?throughout the Strait of Hormuz sparked fears of sulphur shortages and threatened a key raw material for production. The benchmark three-month nickel on the London Metal Exchange rose 2.57%, to $17.235 per metric ton at 0700 GMT. The price had risen by up to 3.14% in the previous session. This was the largest increase since May, and the highest since June 23. The Shanghai Futures Exchange's most traded nickel contract was up 3.01% to 132,940 Yuan ($19641.85) per ton. "Sulphur?tightness?expectations are fermenting once again." This is mainly due to an increase in the?cost expectation for high-pressure acid leaching, which is a process that is used to extract nickel ore. Indonesia, which is the world's largest nickel producer, depends on the Middle East to provide about 75% the sulphur needed in sulphuric acids for leaching metals from ore. The U.S.-Iran blockade of the Strait of Hormuz, as well as military operations, have caused a disruption of shipments along this vital shipping route. The copper price was stable, helped by a weaker U.S. Inflation data and the?hopes for a more dovish Federal Reserve. Supply concerns and recent withdrawals from LME warehouses also helped. The metal rose by 0.27% at the LME, and fell by 0.23%?at the SHFE. Data released on Wednesday revealed that U.S. producer prices had their largest decline in 14-months in June. This is the latest in a series of U.S. reports which have dampened expectations for Fed rate hikes. Reduced borrowing costs tend to boost economic activity, which in turn can help metal demand. Aluminium grew by 0.68% on the LME, while zinc climbed 0.85%, and lead rose 1.19%. Tin also gained 1.35%. Aluminium was unchanged on SHFE. Zinc lost 0.68%. Lead added 0.38%. Tin fell 1%.
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Russian regions report death and injuries after another Ukrainian drone attack
As Kyiv continues its campaign against the 'Russian energy infrastructure, authorities in three Russian regions have reported deaths and injuries caused by Ukrainian drones and rocket strikes. Mikhail Yevrayev, the governor of 'Yaroslavl Region,' 250 km (155 miles) east from Moscow, where an oil refinery has been repeatedly attacked, said one man was killed and four others injured. He claimed that 19 drones had been?downed in the area, but did not specify which targets they were aimed at. Russian media reported that there were casualties in the Volga River region of Saratov after a drone attack on the city of Engels. Engels is home to an airbase which has been repeatedly attacked by Ukraine over the past few years. The governor of Bryansk Region, in Russia's west, near the Ukraine border, confirmed that a 15 year old girl and her grandma were killed by a rocket attack on the village Suzemka. A third person was injured. In recent weeks, Russia has experienced acute fuel shortages in all 11 time zones as long-range Ukrainian drone attacks hit its oil refineries. Ukraine claims it wants to limit the oil revenues that Russia uses to fund its four-year war on its neighbor, despite the fact that thousands of Ukrainians have been killed in Russian strikes across the southeast Ukraine. Both sides deny that they are targeting civilians. Officials in Ukraine said that Russian 'ballistic missiles' struck two districts of the Ukrainian capital Kyiv at dawn on Thursday. The fires started and two people were killed. Reporting by Felix Light, writing by Philippa Fletcher; editing by Philippa Light
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The tourist season has hit the Greek islands and they are experiencing a drought.
Seven Greek Islands in the Aegean have declared drought emergency this year. This is to conserve?water, as climate change causes summers to be hotter and rain more irregular. Authorities are now wondering if there will be enough rain to support the thousands of tourists that strain water supplies just as locals are in dire need. Astypalaia is an island in the shape of a butterfly, located east of mainland Greece. It relies on bottled drinking water and was not affected by the rains that fell in the north and west of Greece, giving the country the wettest winter it has experienced since 2022. According to local authorities' data, Astypalaia, in the southeast Aegean region, experienced the second-driest year since 2020. This created a dilemma for local officials. The island's only water reservoir, built in the 1990s, is surrounded by dry hills with sparse low shrubs. FARMERS RETURN TO WELLS In April, authorities cut off Evdokia Paltianou's access to a manmade lake in order to conserve?water. Her orchard's vegetables withered because she had to rely solely on the brackish water she pumped out of her well. Palatianou said, "Unless it rains I won't be planting anything" as he stood next to an old tree that was once full of mandarins in the village of Livadi on the coast, which is the main fertile area of the island. The lake that supplies water to Livadi, and the main tourist city of Chora (the island's capital), for household use, irrigation, and other purposes, contains now around 150,000 cubic meters, or a sixth its storage capacity. It would last about five and half months if you consume 900 cubic meters per day in summer. Komineas reported that the authorities declared a water crisis in May in order to expedite a temporary desalination facility with a daily production of 600 cubic meters for Chora. They also blocked irrigation to farmers in Livadi in order to protect the lake's reserve until autumn. He said that they would reconnect farmers if the Livadi Reservoir is refilled with rain. CONSUMPTION SOARS IN THE HIGHEST SUMMER MONTHS The Copernicus European Drought Observatory's map of Astypalaia, which was published in June, shows the area in orange as an early indicator of drought. In the village of Analipsi, on the east coast of the island, farmers fill tanks with water or use borehole water that is low quality. Desalination plants that supply tap water in the area were unable to meet the needs of a population that grew from 1,400 people in midsummer to 7,000 by the end of summer. A second temporary facility, located in?Chora, was built in anticipation of a permanent desalination system that will be constructed at the end of this year. On Greek islands, dozens of desalination units are being installed. ?omineas admitted that the temporary plant was expensive, but said it was necessary in case of drought. He said, "I was worried about what would happen if it didn't rain again this year." HOTELS CONSIDER RESOURCE-SAVING MEASURES Some hoteliers in Astypalaia are already taking action to save water. Maria Alkalai (42), who runs a hotel in Chora with views of the castle, the Aegean sea and the hillside, offers guests who choose to skip the daily cleaning a five-euro voucher. She said that "clients have embraced" the idea. She imagined a second island hotel that would have a cistern to collect rainwater in place of a pool or jacuzzi. Stavros papastavrou, the Environment Minister, has approved 15 million-euros ($17million) for desalination and grid upgrades, as well as water tanks, on nine of Greece's 200+ inhabited islands. This includes 1.5 million euros for Astypalaia. He briefed Luxembourg's environment ministers on water resilience in June. He said that water was not a theoretical issue for Greece. It is about the security of the country, its economic growth, and protecting local communities. According to the National Centre for Scientific Research “Demokritos” in Athens, droughts could worsen by 2049 due to global warming and increased water scarcity.
Gold prices fall as inflation worries are revived by tensions in the Middle East
Gold prices fell on Thursday, as tensions in the Middle East increased inflation fears and uncertainty about U.S. interest rate trends.
Gold futures in the U.S. fell 0.4% to $4.037.20 per ounce at 0834 GMT. Spot gold dropped 0.7% to $4.032.19 an ounce.
Gold is still influenced by geopolitics and inflation. The continued U.S. attacks against Iran, and the disruptions of the Strait of Hormuz are supporting oil prices and maintaining inflationary risks," says?Niko tzabouras a senior analyst at Jefferies owned Tradu.com.
After reimposing its naval blockade, the U.S. launched a second wave of attacks against Iran's missile and coastal defense sites. Meanwhile, Iran struck back at U.S. military bases in neighboring countries.
The latest escalation follows a fragile ceasefire that collapsed days ago, fueling?concerns about the Strait of Hormuz. Crude oil is?set to rise by a significant amount each week.
The rising?energy price is fueling inflation fears, increasing expectations for higher interest rates, and reducing gold's appeal.
Data from the CME FedWatch Tool shows that traders are pricing in a 51% probability of a rate increase in September.
Fed Chair Kevin Warsh declared this week his determination to bring down inflation without specifying how.
Data released on Tuesday revealed that U.S. consumer prices fell in June. This prompted spot gold to rise?more than 2 percent immediately following the report. The data released on Wednesday showed that the producer price index had also declined.
The Fed can now relax its policy because the CPI and PPI are no longer as high. This will allow bullion to resume its recovery. This 'cooling of inflation' may be short-lived, as oil prices are expected to rise again. Tzabouras said that a de-escalation of the (peace) negotiations or re-starting them would be best for gold.
Market participants are now awaiting remarks from Dallas Fed president Lorie 'Logan and Fed vice chair Philip Jefferson who will speak later today.
Silver spot fell 1.7%, to $56.82 an ounce. Platinum dropped 1.2%, to $1654.38, while palladium declined 1.5%, to $1294.43. (Reporting by Sukanya Mitra in Bengaluru; Editing by Diti Pujara)
(source: Reuters)