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India expects 300 GW of power demand in the next year and supports local clean-energy manufacturing
Manohar Lal, India's Power Minister, said late on Wednesday that India must 'prepare to meet peak demand for electricity of approximately?300 gigawatts in the coming year. He also urged faster development of 'clean energy - supply chains at home. Lal, who spoke at the India Energy Storage Week, said that India had already reached a peak demand record of 271 gigawatts. The demand could reach 276-280 GW in this year and then climb to 300 GW by next year. He said that demand would continue to rise every year as data centres expand, AI adoption grows and EV use increases. Preparations will be required for a demand of around 300 GW in 2019. Minister said that the increase in electricity demand will require more?investment into energy storage and grid infrastructure, as India continues to?expand renewable energy capacity. He also called for a faster use of equipment produced locally in clean energy projects. India, he said, should reduce its import dependency even if the initial costs were higher. India imports many components for solar energy storage and other projects. This includes batteries and cells. Lal stated that "nothing is bigger than the nation" citing the necessity to conserve foreign currency and improve energy security in the face of?geopolitical uncertainties. Lal's remarks come at a time when India is seeking to increase?domestic production across?renewable-energy and energy storage supply chains while reducing its reliance on foreign suppliers. Minister also linked the "push for independence" to increasing geopolitical insecurity, citing recent tensions in West Asia as well as volatility on global energy markets. Lal stated that "whether it's power, gas, or petroleum, we have to develop our own capabilities in the country." India has taken a number of measures to expand renewable energy and encourage manufacturing at home. (Reporting and editing by Sethuraman N; Aurora Ellis)
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IMF hopes to engage in discussions on the central banks' change to forward guidance
A top official at the International Monetary Fund said that they hope to engage central banks in coming months about changes in how they use forward guidance for monetary policy. She stressed the importance of communication in these uncertain times. Petya Brooks, deputy research director at the International Monetary Fund, told reporters on Wednesday that while forward guidance was a valuable tool in the past it is understandable that policymakers will revisit the scope and modalities over time. Kevin Warsh, the new Federal Reserve chairman who assumed office in May, announced plans to review communication policies and reduce forward guidance for monetary policy. He organized a consensus in his first meeting as the?chair to adopt a simplified policy statement, which removed any references to rate actions that the central bank may take 'in the near future. Warsh reaffirmed his position at the annual forum of the European Central Bank in Sintra (Portugal) last week. He said that it is important for central banks make decisions based on the "real economy." At the same event, Christine Lagarde of the European Central Bank, Andrew Bailey of Bank of England and Tiff Macklem of Bank of Canada expressed their reservations regarding forward guidance. Brooks stated that the IMF is taking note but stressed the importance of continued communication, particularly given the volatility and uncertainty in the current economic environment. She said that in a high-uncertainty environment, central bank communication is crucial to give a sense of (how) central banking thinks about shocks, their impact and monetary policy. She said that while forward?guidance was a helpful tool in the past (especially at the zero lower boundary), it is only natural to revisit its scope and modalities as time goes by. We are taking note and hope to discuss this issue in the months ahead. Pierre-Olivier Gourinchas was the former IMF chief economist and told reporters before he left last month that central banks should move away from "strong forms" forward guidance, as it has in the past bound them to future actions regardless of economic conditions. Reporting by Andrea Shalal, Editing by Chizu nomiyama
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Wall Street is jittery as Trump declares interim Iran deal "over"
Wednesday, oil prices rose more than 5% and global bond and stock prices fell as investors fled risky assets after U.S. president Donald 'Trump' said that the memorandum signed with Iran for ending the Gulf Conflict was "over". Wall Street opened lower, as renewed tensions in the Middle East weighed down sentiment. This was further reinforced by a warning from the International Monetary Fund about the impact of the conflict on global growth for this year. Investors are also closely watching the minutes of the Fed meeting, which will be released later on Wednesday. This is the first Fed meeting under the new chairman Kevin Warsh. They're looking for hints about how he might steer the central banks policy and messaging. The Dow Jones Industrial Average fell nearly 1% during early trading. European shares fell 1%. The MSCI index of global stocks fell by 0.71%. Trump said that he didn't want to have talks with Tehran. He was in Ankara, Turkey, for a NATO summit. He said, "As for me, dealing with them is a waste." OIL PRICES CLIMB After the U.S. and Iranian forces exchanged attacks in Gulf, market sentiment was already fragile. Brent crude futures jumped 5.65% to $78.42 per barrel, the highest in a single day since late may. U.S. crude climbed 5.28% to $74.21 per barrel. Although this was far below the peak of $120 at the heights of the conflict, the inflation risk was still enough to cause a new wave of volatility in the bond markets, especially since the months of conflict had reduced global oil inventories. The U.S. Strategic Petroleum Reserve has seen its crude oil stocks fall to their lowest levels since 1983. This leaves the markets more susceptible to future supply shocks. Chris?Beauchamp is the chief market strategist for IG. He said: "It really weighs on sentiment." The benchmark yield on 10-year U.S. Treasury notes rose for the seventh consecutive day, reaching a new one-month record of?4.58%. The VIX volatility indicator was up by 8.8% but it was still lower than the March highs. Investors have been questioning the value of top performing semiconductor and AI stocks in recent weeks. Shares of Samsung Electronics fell for the second session in a row on Wednesday, even though the company reported a 19-fold increase in profits. Analysts and investors worry that the demand for memory chips'may slow down in the second half of this year. The dollar index on currency markets, which measures the greenback against currencies such as the yen, the euro and others, dropped 0.07%, to 101.1. The yen was hovering around 162.5, which is not far off from its 40-year lows. Reporting from Amanda Cooper in London, and Pete Schroeder Washington. Additional reporting by Tom Westbrook Singapore. Editing by Kevin Buckland and Jan Harvey. Hugh Lawson.
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Trump on Iran: US likely to strike them again Wednesday night
U.S. President Donald Trump warned Iran the United States would likely launch additional strikes on Wednesday night, following the attacks of the previous day. "I'll give a little warning. We're going hit them hard tonight," Trump said to reporters before his meeting with Ukrainian president Volodymyr Zelenskiy at the NATO Summit in Turkey. Trump had said to reporters in Ankara that a memorandum-of-understanding between the United States & Iran, which served as an initial ceasefire agreement, was "over". He did not say that Washington would go back to full-fledged warfare, and it was not clear if the negotiations to turn the ceasefire into an agreement permanent would continue. "I don’t know if there will be a deal." Trump stated that he may not make a deal. Iran claimed that it had?targeted U.S. sites in Bahrain?and Kuwait?after U.S. forces struck Iranian targets as a response to attacks against tankers in the Strait of?Hormuz. In addition to the renewed hostilities, the increased tensions have raised'safety and... security concerns in the Strait of...Hormuz. Shipping data shows that at least four oil and.gas.tankers turned back, rather than try to cross the vital supply route. Reporting by Gram Slattery, Doina Chiacu, and Humeyra Pauk; editing by Michelle Nichols
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Scientists warn that China's ability to cope with catastrophic storms will be tested in 2026.
Scientists warn that extreme weather conditions will only become more common this year. Weather systems are expected to bring severe weather conditions that will test the resilience of both the densely populated urban areas and rural communities. The National Climate Center of China expects that up to six typhoons will form in the South China Sea and the Northwest Pacific in July. This is more than the normal 3.8. Three of these storms could land, which is more than the average of 1.8. It said that the intensity of cyclones would also be higher. Scientists claim climate change is exposing the second largest economy in the world to more destructive weather events. This year, the El Nino pattern that could fuel stronger typhoons (as hurricanes are called in Asia-Pacific) and increase temperatures, has been a cause for concern. China is preparing for Super Typhoon Bavi, the second tropical storm to hit in one week. Bavi, which measures more than 1,000 km in diameter and has winds exceeding 290 kph (182 mph), briefly touched down on the U.S. Island of Rota at the Western Pacific. Last week, the typhoon Maysak hit China's southernmost province Hainan. It then swept quickly into the Chinese region Guangxi where it caused the most damage. Maysak's remnants also caused at least two tornadoes to form in central China. Benjamin Horton is the dean of City University of Hong Kong's School of Energy and Environment. He said, "The problem of these events is they just keep increasing." Horton warned that the magnitude of these events was increasing, and that there wasn't time to recover or become resilient. He expects to see more frequent and intense cyclones in this year, which will drop unprecedented amounts rainfall, leading to floods, landslides and crop damage, as well as a loss of life. He said, "This will just repeat itself over and over again." WATER, WATER EVERYWHERE Hengzhou, which is at the epicenter of the Guangxi flooding, was hit with heavy floodwaters after the dams of local reservoirs failed. Officials have confirmed that at least six people are dead in Guangxi and 375,000 other people are affected. Death toll expected to increase. A call for assistance posted on Chinese social networks on Tuesday stated that "at least 1,000 people are trapped in the mountains, and it is dark everywhere. We need urgent rescue." The post has not been independently verified. CCTV reported that after the failure of an intermediate-sized reservoir, on Monday, large quantities of silt and mud were carried by floodwaters into downstream villages and farms. CTV reported that in some homes, floodwaters had reached the second-floor, trapping people on roofs while violent torrents of water rushed all around them. Hengzhou is a largely rural city with more than one million residents. It has six reservoirs of medium size and over 200 smaller ones. The canal project, which is expected to be completed in September, will cost 70 billion yuan (10.3 billion dollars). Hui Su is the chair professor of Department of Civil and Environmental Engineering, Hong Kong University of Science and Technology. El Nino shifts typhoons westward towards China's coastline, increasing risks. Climate change also makes storms more destructive and wetter. The United Nations weather agency increased its forecast last week?for a rapid emergence of an El Nino in the months to come. El Nino, defined by the World Meteorological Organization, is a periodic increase in sea surface temperature over the eastern and central Pacific Ocean. This could potentially raise global temperatures, and lead to extreme weather.
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IMF cuts 2026 global growth to 3%; sees rebound in 2020
The International Monetary Fund lowered its global growth forecast for 2026 again on Wednesday, to 3.0%. It warned of the ongoing risks caused by the Middle East war, trade fragmentation, and possible corrections in the market expectations regarding AI. Global lender said the war had prevented a more severe downturn in the global economy, and that the demand-driven growth in the tech industry helped?to _offset the drop in energy supply caused by the war. Growth is expected to rebound in 2027 at 3.4%, which is below the 3.5% average seen in 2024-2025. The IMF increased its headline inflation forecast for 2026 by 0.3 percentage point to 4.7%, from April. However, it said that the rate should fall to 3.9% in 2019. The IMF said that energy prices are 25% higher than they were before the February 28 war started and will remain so. According to the new forecast, the Strait of Hormuz is expected to begin reopening in mid-July and reach prewar conditions by march 2027. The IMF stated that the global economy has fared better than expected in the wake of the conflict. It also noted that the outlook for countries with a strong technology integration and energy exporters was more positive. However, commodity importers who are less well-positioned to reap the benefits from AI development saw their growth projections lowered. Global trade growth is expected to drop sharply from 5% to 3.5% by 2026, following a year of heavy front-loading in anticipation of U.S. Tariffs. It will then rebound to 4.3% in 2027. Deniz Igan of IMF Research Department’s World Economic Studies division said that the global economy proved more resilient in April than expected, despite the effects of war and the closing of the Strait of Hormuz. Prices were up, confidence was low, but the release of strategic reserves and commercial inventory, along with increasing energy efficiency, helped offset supply shortages. Private sector also quickly adapted, finding alternate routes and supplies. She said, "So far, things are going well, but it doesn't remove the risks that exist, especially with the war." The collapse of the deal and renewed fighting would pose major risks because countries are largely out of reserves and have little room for maneuver. After three oil tankers were struck in the Strait of Hormuz by the U.S. military, the U.S. military launched a new round of strikes on Iran and revoked the license that allowed the country to export its oil. This put pressure on the fragile ceasefire. Igan added that the simultaneous efforts of many countries to rebuild oil reserves may also cause a spike in prices. She said that if there was a perception of a longer period, both the incentive to use reserves and the space to do so would shrink quickly. Igan stated that inflation and inflation expectations are rising, but mainly in the short term. There is little evidence to suggest that they will change in the medium-term. SCENARIOS HAVE CHANGED The IMF’s updated World Economic Outlook has dropped the three scenarios that it released in April before the United States reached a ceasefire agreement with Iran, and reverted to a more traditional baseline forecast. The April reference forecast assumed a shorter conflict. The IMF raised its forecast for 2027 by 0.1 percent points to 2.2%, compared with the April forecast. The forecast was lowered from 1.1% to 0.9% in April and the 2027 forecast remained unchanged at 1.2%. The growth forecast for Japan in 2026 was lowered by 0.1 percentage points to 0.6%. In 2027, the forecast was raised by the equivalent amount to 0.7%. The forecast for 2027 was also raised by 0.3 percentage points, to 4.5%. China's growth is now expected to reach 4,6% in 2026. This is up from April's forecast of 4.4%. In?2027, growth will reach 4,1%, which was up from April's 4%. India, which is one of the fastest-growing economies in the world, was also downgraded to 6.4% from 6.5% for 2026, while the IMF raised its forecast for 2027 to 6.7%. The IMF raised its forecast for 2027 by 1.9 percentage point to 6.5%. (Reporting and editing by Christian Schmollinger; Andrea Shalal)
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The benchmark interest rate of the Romanian central Bank is 6.5%
The central bank of Romania?held the benchmark interest rate to 6.5% on Wednesday as expected, due to the fact that inflation has fallen from double digits during the third quarter but is still a little above target. All the analysts surveyed by expected this decision. The bank expects the inflation rate to drop to 5.5% before year's end, but does not expect that it will return to its target range of 1.5%-3.5% until after the third quarter of 2027. The third quarter is expected to see a sharp drop in inflation as the effects of the higher electric costs and tax increases imposed last year to lower the largest budget deficit within the European Union, and maintain Romania's investment grade rating, fade. The central bank stated that "the annual?inflation is expected to shrink slightly in June before posting a?substantial decline in the?third quarter." "At the time, it is expected that disinflationary forces will become more evident over the longer term, due to the aggregate demand and the budget correction which began in 2025, but continued into 2026." The bank stated that political uncertainty following the 'collapse of a pro European government' two months ago, and the failure to reach an agreement on a new majority in parliament, as well as the breakdown of the 'interim agreement' between the U.S. Four parties in Romania's ex-broad coalition government?have put forward competing candidates for the position of prime minister. This has extended a political crises that has stalled policies and threatened access to EU funds, which are?underpinning Romania's economy amid dwindling domestic demand. Analysts predict that the central bank will keep the benchmark interest rate at 6.5% for the entire year 2026, and also the first quarter 2027. (Reporting and editing by Emelia Sithole Matarise; Luiza Ilie, reporting)
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Oil jumps, stocks fall as Trump says interim Iran deal 'over'
The oil price surged by?more?than 5% on Tuesday, while the global stock and bond markets fell as investors fled risky assets after U.S. president Donald?Trump declared that the memorandum signed with the?Iran in order to end the Gulf Conflict was "over". Trump said this while he attended a NATO summit in Ankara. He also added that he didn't want to engage Tehran. He said, "I think it's a waste of my time to deal with them." The market sentiment was already fragile following the exchange of attacks between U.S. forces and Iranian forces in the Gulf. Brent crude futures jumped 5% to $78 per barrel, the highest in a single day since late May. Although this was far below the peak of $120 at the height the conflict, the inflation risk was still present, especially since the months of conflict had reduced global oil inventories. "It is clear that the market doesn't want it and this really weighs on sentiment," said Chris?Beauchamp. Chief market strategist at IG. The benchmark 10-year U.S. Treasury notes yields have risen for the seventh consecutive day, reaching a new one-month record of 4.58%. In Europe, German and Italian 10-year bond yields?rose to their highest levels in a full month, at 3.075% apiece, and respectively 3.9%. The U.S. Strategic Petroleum Reserve crude stock levels fell to their lowest since 1983 according to data released this week. This leaves the markets more vulnerable to supply shocks in future. Khoon 'Goh, Asia Research Head at ANZ Singapore, stated that the main issue is whether or not we can still see oil flowing through the Strait of Hormuz and whether traffic continues to pass. STOCKS DROP European shares fell 1.6% on the way to the largest one-day decline in the STOXX600 since mid-March. U.S. Futures dropped 0.9% to 1.3%. The VIX volatility indicator jumped almost 13%, its biggest one-day increase in more than a month. However, it was still lower than the March highs. In recent weeks the stock market has been under pressure as investors have questioned the valuations for some of this year’s best-performing semiconductors and AI-related stocks. Samsung Electronics' shares fell for the second consecutive session on Wednesday despite the company announcing a?19-fold increase in profit. Analysts and investors worry that the demand for memory chips may slow down in the second half. In the past few weeks, the market has shifted away from chip stocks to other sectors, such as financials and consumer stocks, and then back again to the hyperscalers who have dominated the market for the last year. Samsung's results showed that investors are questioning valuations as some bottlenecks within the AI supply chain, such as data centres or memory chips, start to clear and pricing for AI models become harder to predict. Marieke Blom, ING's global head of research and chief economist, said: "You could see the?market trying to determine what pricing power it will have. This can lead to fluctuations in valuations." We also see that capex expenditure is increasing relative to EBITDA, meaning that the amount that can be supported via share buybacks and so on is decreasing. We may also see "pressure on valuations" in certain parts of the AI-chain. The dollar is rising, pushing the euro up to $1.14 while the yen remains at 162.5, just below its 40-year-low. The minutes of the Federal Reserve's meeting last month are due on Wednesday. Traders believe that new chair Kevin Warsh may reduce the details to soften any possible policy message. Reporting from Tom Westbrook and Amanda Cooper, both in Singapore; editing by Kevin Buckland and Hugh Lawson.
Gold prices fall after Trump declares Iran deal 'over
Gold prices dropped on Wednesday, as oil prices surged and inflation fears intensified after U.S. president Donald Trump declared that the conflict with Iran is "over."
Gold spot dropped 0.8%, to $4.072.69 an ounce at 09:11 am EDT (1310 GMT), after reaching its lowest level in the previous session since July 2.
U.S. Gold Futures for August Delivery fell 1.8% to $4.083.20 an ounce.
David Meger is the director of metals and futures at High Ridge Futures.
Iran has escalated hostilities after U.S. forces attacked Iranian targets as a response to attacks against tankers in Strait of Hormuz. Crude oil prices increased by more than 5%.
Inflation can be fueled by higher energy prices, and this could lead to higher interest rates in order to control the price pressures. Gold is often seen as a hedge to inflation but the metal's non-yielding nature makes it less appealing in an environment with high interest rates.
The Federal Open Market Committee minutes for its June 16-17 meeting are due at 2:00 pm EDT (1800 GMT) to provide further clues about monetary policy.
Meger stated that the market is searching for information to help clarify the path of future rate increases.
According to the CME FedWatch Tool, traders are now pricing in a 67% probability of an increase in U.S. interest rates in September. This is up from 62% Tuesday.
In a note published on Tuesday, Bank of America said that its 2026 gold forecasts will be reduced by 14% to $4,360 due to a more hawkish Fed. However, it added that $5,000 is still within reach once the tightening cycles ends.
Silver spot fell by 2.42%, to $58.5681 an ounce. Platinum dropped 3.6%, to $1.582.13, while palladium declined 4.3%, to $1.221.97.
(source: Reuters)