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MORNING BID EUROPE-Small miss, big hit
Tom Westbrook gives us a look at what the future holds for European and global markets. On Friday, the 'drawdown in tech stocks that followed a narrow miss on earnings at U.S. chipmaker Broadcom' deepened in Asia. This pushed South Korean stocks to their seventh weekly decline since 2026. Broadcom's revenue for the second quarter of $22,19 billion was below expectations, which were $22,27 billion. However, it still stuck to its guidance for revenue of $100 billion next year. This sent shares down by 12.6%. The results were shocking, as markets are accustomed to expecting constant upgrades. In Asia, the fallout highlighted the skepticism surrounding chips and the AI boom which fueled them. Bob Savage, BNY's Head of Markets Macro Strategy and head of BNY's macro strategy, said that the?AI led equity rally was showing signs of exhaustion. South Korea's KOSPI is headed for a?drop of 3% per week, with heavy drops?for Samsung shares and SK Hynix. Under pressure from foreign sellers, the won also traded at its lowest level since 2009. Oil prices were stable on Friday, as traders awaited clarity in the U.S./Iran talks. However, this week's price is still higher than last week after previous flare-ups raised fears of an ongoing supply shock. Brent crude was hovering around $95 per barrel and is expected to gain more than 3% in a week. The session will be dominated by the U.S. jobs data on Friday. The expected rise in May payrolls is 85,000, but a surprise to the upside could boost the dollar. The dollar index will likely gain a little each week. In Asia, the currency briefly touched 160 yen, which drew some verbal pushback from Japanese officials who intervened last month around that level. The following are key developments that may influence the markets on Friday. - U.S.-Iran developments - U.S. employment data
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Demand offsets macro-headwinds to drive copper prices higher at the end of this week
The price of copper was expected to rise despite the?drop on Friday. Tighter supplies and a?bullish mood helped to offset macroeconomic worries related to?the Iran War and inflation. Benchmark three-month Copper on the?London Metal Exchange fell 1.23% at $13,761 per metric ton as of 0300 GMT. This still represents a 0.8% rise for the week. The Shanghai Futures Exchange's most active copper contract fell 0.39%, to 105230 yuan (15,529.81 dollars) per ton. Daniel Hynes is a senior commodity strategist at ANZ. He wrote a note Friday that copper has shown?resilience to macroeconomic headwinds. "Structurally driven demand offsets cyclical weaknesses," he said. ANZ said on Thursday that it expects copper prices to rise to $14,000 per ton by the end of the year, as demand from energy infrastructure and AI will accelerate in the medium-term. On Thursday, there were large orders to remove copper from LME warehouses. This trend has continued in recent months. LME copper inventories The COMEX Copper stocks in the U.S. fell to their lowest level since April 2 at 379,975 tonnes. The number of short tons (642,709 tons) rose to 642,709 tons. Hynes wrote that "Non US (that is, LME and SHFE) Copper Exchange inventories have actually?been decreasing over the last few months." Investors are also awaiting a report from the U.S. Department of Commerce on possible tariffs for imported refined copper. This is due at the end of the month. Hezbollah, a militia backed by Iran, rejected a ceasefire on Thursday in Lebanon, sapping the optimism generated by Israel's and Lebanon's reported agreement earlier that day. The price of oil increased by 0.86% last Friday. Aluminium fell by 0.37%. Zinc dropped by 0.78%. Lead dropped by 0.42%. Nickel dropped by 0.42%. Tin dropped 1.6%. Other SHFE metals include aluminium, which fell 0.21%; zinc, which dropped 0.82%; lead, which lost 0.52%; nickel, a whopping 1.46%, and tin, a whopping 4.25%.
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Gold to fall by a week's worth on fears of rate hikes and tensions in the Middle East
Gold prices dropped on Friday and were set to suffer a weekly loss as tensions in the Middle East dampened expectations for a U.S. Iran peace deal, amid fears of rising inflation rates and interest rate hikes. As of 0402 GMT, spot gold was down by 0.7%, at $4,442.94 an ounce. It is down about 2% this week. U.S. Gold Futures for August Delivery?fell by 0.8% to $4469.10. Hezbollah, a militia backed by Iran, rejected a ceasefire in Lebanon. Israel also said it would not withdraw its troops from Lebanon. This undermined the efforts of U.S. president Donald Trump to stop the fighting and forge peace with Tehran. Nicholas Frappell is the global head of institutional market at ABC Refinery. He said that some pessimism about the outcome of the Iran conflict was negative for gold. "I think the trend is towards tighter interest rates, which also weighs on gold." Kansas City Federal Reserve president Jeffrey Schmid stated on Thursday that the U.S. Central Bank's decision is to be patient and hold interest rates at their current level or raise rates in order to bring down inflation, which has been higher than target for years. Mary Daly, the San Francisco Fed president, said that the U.S. interest rate path would depend on the direction the economy takes. She added that the Fed's monetary policy is "in good shape" and it is ready to respond in "either way." Gold is often viewed as a hedge to inflation. However, rising interest rates can have a negative impact on this non-yielding material. According to CME Group’s FedWatch tool, the markets are pricing in a Fed rate increase before year end, with a 51 percent chance of an action by December. Investors will now be awaiting the U.S. nonfarm payrolls for May, which are due later that day, in order to gauge the direction of the Fed's monetary policies. Silver spot fell by 1.6%, to $72.66 an ounce. Platinum dropped 1.1%, to $1.879.42. Palladium fell 1.6%, to $1.299.23. All metals are headed to a weekly loss. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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Gold to fall by a week's worth on fears of rate hikes and tensions in the Middle East
Gold prices dropped on Friday and were set to suffer a weekly loss as tensions in the Middle East tempered hopes of a U.S. Iran peace deal, amid fears about rising inflation rates and interest rate hikes. As of 0225 GMT, spot gold was down by 0.5%, at $4,452.20 an ounce. It is down about 1.8% this week. U.S. Gold Futures for August Delivery fell?0.6% at $4,478.50. Hezbollah, a militia backed by Iran, rejected a ceasefire in Lebanon. Israel also said it would not withdraw its troops from Lebanon. This undermined the efforts of U.S. president Donald Trump to stop fighting there to achieve peace with Tehran. Nicholas Frappell is the global head of institutional market at ABC Refinery. He said that some pessimism about the outcome of the Iran conflict was negative for gold. "I think the trend is towards a tighter interest rate market, which also weighs on gold." Kansas City Federal Reserve president Jeffrey Schmid stated on Thursday that a choice must be made by the U.S. Central Bank between patience and maintaining interest rates or raising rates to curb inflation, which has been higher than target for years. Mary Daly, the San Francisco Fed president, said that the U.S. interest rate path would depend on the direction the economy takes. She added that the Fed's monetary policy is "in a great place" and it was prepared to react "either way." Gold is often viewed as a hedge to inflation. However, rising interest rates can have a negative impact on this non-yielding material. According to CME Group’s FedWatch tool, the markets are pricing in a Fed rate increase before year end, with a 51 percent chance of an action by December. Investors will now be assessing the direction of monetary policy by evaluating the U.S. nonfarm payrolls for May, which are due later that day. Silver spot fell by 1.4%, to $72.89 an ounce. Platinum dropped by 1.1%, to $1.878.68. Palladium fell 1.7%, to $1.298.45. All metals are headed to a loss for the week. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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US House supports Russia sanctions and Ukraine aid in latest blow against Trump
The U.S. House of Representatives approved legislation Thursday that would provide aid to Ukraine and impose sanctions on Russia. This is the latest indication that Republicans are willing to 'defy their party leaders' and retaliate against President Donald Trump. The House passed the Ukraine Support Act?226?to 195?, after months of waiting. The House voted?226?to 195 for the Ukraine Support Act, which had been pending on the floor of Congress for months. Thursday, Democrats and 18 Republicans joined forces with an independent who usually votes along side them to pass the legislation. This was the latest indication of a break in what was a virtually unanimity of support for Trump's policies among members of his party. The passage came one day after a smaller number of House Republicans joined Democrats in?passing a resolution which would force the removal of troops from hostilities against Iran unless Congress declares a war or orders military force. Olha Stefanishyna - Ukraine's Ambassador to the United States - in a blog post on X, called the decision a'significant step forward' and said that it reflected the continued bipartisan support of Ukraine. Uncertain Future of Support Act The future of the Ukraine Support Act remains uncertain. It must be approved by the Senate. The Republican leaders of that chamber have refused to allow votes on Russia sanctions bills with broad bipartisan support because they want to wait for Trump's direction. Trump would likely veto the bill if it passed the Senate. After the Russian invasion of February 2022 many members of Congress, including the House and Senate leadership, have become 'cooler' towards Kyiv. This has been the case since Trump returned to office in January 2025. Since the beginning of his second term, the president has made all decisions about sanctions in the White House and not with Congress. The U.S. aid to the Kyiv Government has dropped sharply, even though Russia and Ukraine are pounding each other with artillery and missiles. The peace talks have stalled after Ukraine rejected the Russian President Vladimir Putin’s demand to surrender territory that it has successfully defended from 2022. The Ukraine Support Act authorizes up to $8 billion of direct loans and more than $1 billion in assistance to Kyiv. The EU also imposes strict sanctions and export controls against Russia, including financial institutions, oil and mining, and Russian officials. This passage was written 'as another Ukraine ally, the European Union agreed this week to begin talks with Kyiv about the first group of issues in their talks for accession. This was after an agreement to distribute 90 billion euros in loan funds for Ukraine's economy and defense. (Reporting and additional reporting by Jekaterina Glubkova; Editing by Nia, Ross Colvin, Kim Coghill and Nia Williams)
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Iron ore prices fall as steel margins decline, causing a fourth-week loss
The price of iron ore continued to fall on Friday, and was'set for a fourth consecutive weekly loss' as falling margins at steelmakers in China, the top steel-making consumer, curbed demand for this?key ingredient. By 0245 GMT, the most traded iron ore contract at China's Dalian Commodity Exchange(DCE) had fallen 0.95%, to 766 Yuan ($113.05), a metric tonne, and has lost 2.1% for the week. Earlier in the session, the contract reached its lowest level since 15 April? at 760.5 Yuan. As of 0235 GMT the benchmark July iron ore traded on?the Singapore Exchange remained unchanged at $101.5 per ton. It has fallen?3.6% this week. It reached its lowest level since March 6, at $100.85, earlier. Analysts claim that the rising cost of coal and decreasing domestic demand have squeezed steel margins. Mysteel, a consultancy, reported that 59% of Chinese steelmakers made a profit in June. This was down from a high of 64% nine months earlier on May 14. Data showed that the average daily hot metal production, which is a measure of iron ore consumption, fell 0.1% from the previous week to a new low for three weeks at 2,41 million tons. "Softer-than-expected seasonal steel demand in ?China, affected by persistent rainfall and unusually high temperatures, has ?weighed on iron ?ore consumption at a time when global supply is rising," analysts at shipping tracker Kpler ?said in a note. Coking coal and coke, the other steelmaking ingredients, were up by 0.32% each and 0.17% respectively. The benchmarks for steel on the Shanghai Futures Exchange have been moving sideways. The rebar price fell 0.19%. Hot-rolled coils dropped 0.35%. Wire rods grew 0.09%. Stainless steel fell 0.98%. $1 = 6.7757 Chinese Yuan (Reporting and editing by Subhranshu sahu in Beijing, Amy Lv reporting from Shanghai)
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US House supports Russia sanctions and Ukraine aid in latest blow against Trump
The U.S. House of Representatives approved legislation Thursday that would provide 'aid to Ukraine' and impose new Russian sanctions. This is the latest indication that Republicans are willing defy their party leaders and push back against President Donald Trump. The House passed the Ukraine Support Act 226-195. It had been pending for months. A few Republicans signed a petition with Democrats to force a vote. On Thursday, Democrats and 18 Republicans joined forces with one independent who usually votes along side them to pass the bill. This was the latest indication of a rift in the nearly unanimous support that Trump's supporters had for his policies. The passage came one day after a smaller number of House Republicans voted with Democrats to pass a Resolution that would force the withdrawal from hostilities against Iran, unless Congress declared war or ordered the use of force. The future of the Ukraine Support Act remains uncertain. It must be passed by the Senate. The Republican leaders of the Senate have refused to allow votes on Russia sanctions bills that enjoy broad bipartisan support. They said they would wait until Trump's direction. Trump would probably veto the bill if it passed the Senate. Many members of Congress, from both parties, supported Ukraine during the first few years following the full-scale Russian invasion of?February 2022. However, since Trump returned to office in January 2025 some of his closest Republican allies have become more ambivalent towards Kyiv. Since the beginning of his second term, the president also keeps decisions about sanctions at White House and not in Congress. The U.S. has dramatically slowed down its aid to Kyiv, even though Russia and Ukraine are pounding each other with artillery and missiles. The peace talks have stalled after Ukraine rejected the Russian President Vladimir Putin’s demands that it give up territory it has successfully protected since 2022. The Ukraine Support Act authorizes up to $8 billion of direct loans and more than $1 billion for Kyiv. The EU also imposes strict sanctions and export controls against Russia, including financial institutions, oil, mining, and Russian officials. (Reporting and editing by Nia William and Ross Colvin; Reporting by Patricia Zengerle)
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Oil prices remain unchanged despite uncertainty surrounding US-Iran peace agreement
The oil prices were little changed Friday, after a sharp drop in the previous session. Brent crude futures dropped 21 cents or 0.22% to $95.24 per barrel at 0003 GMT, after falling 2.84% the previous session. U.S. West Texas Intermediate crude oil was $92.94 per barrel, down by 10 cents or 0.11% after a loss of 3.1% on Thursday. The two contracts are expected to record their first weekly gains in three weeks. WTI is up a whopping 6% after fighting flared in the Middle East, as U.S. - Iran war peace negotiations dragged on, while traffic in 'the Strait of Hormuz', where a quarter of the world’s oil passes through, remained limited. Analysts are concerned about a?falling global oil inventory that could lead to a price spike during the third quarter. Hezbollah's leader Naim Qassem, rejected on Thursday an agreement brokered by the United States between Israel and Lebanon to stop the fighting. Iran has demanded a ceasefire to be implemented in Lebanon as a precondition for any deal between Washington and Tehran. Donald Trump, the U.S. president, said on Thursday that he thought progress was being made in Israel-Lebanon and that Lebanon deserved peace. In a recent note, IG analyst Tony Sycamore stated that "any optimism is heavily clouded by a tangled net of headlines and anti-headlines." Technically, as long (WTI crude oil) remains above the trendline support of the low $80s the risks are skewed?towards the upside." Secretary General Haitham al Ghais stated on Thursday that OPEC will stick to its forecast of 1.2 million barrels of oil per day growth for this year despite the conflict in the Middle East and the closure of the 'Strait of Hormuz. According to shipping data the U.S. blockade has largely been responsible for this decline, but the weak demand from China also contributed to lower prices. (Reporting and editing by SonaliPaul; Florence Tan)
Japan's Nikkei falls further from its record high as AI euphoria wanes
The Nikkei stock average in Japan retreated for the second time this week after reaching a record-high earlier 'this week.
The Nikkei Index benchmark was down 1.58 % at 66 406,17 but is still on track for a small gain this week. The Topix index, which is a broader measure of the market, rose 0.01% to 3,952.44.
The Nikkei closed at a record high of 68.402.13 on Wednesday, and it has gained 34% this year.
The Nasdaq, the tech-heavy stock market in the U.S., closed lower overnight after Broadcom missed its revenue targets. This dampened euphoria about AI investments.
The broader market was also supported by data that showed real wages in Japan rose by 1.9% in April, for the fourth consecutive month.
"While AI and semiconductor-related stocks are down today, we're seeing gains across a broad range of other sectors and stocks," said Wataru Akiyama, ?an equities strategist at Nomura Securities. "Wage increases lead to higher consumption which leads to better?corporate performance. This is believed to be contributing to the overall resilience of Japanese stocks."
The Nikkei Index saw 136 advancers and?88 decliners.
Sumco, Ibiden, and Renesas Electronics were the biggest losers in this index.
Top gainers included Japan Steel Works with an 8.9% increase, Trend Micro with a 7% rise, and T&D Holdings at 6%.
(source: Reuters)