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Australian shares fall as US CPI clouds Fed rate-cut hope
Australian shares dropped on Wednesday led by mining and banking companies after the latest U.S. data showed that tariffs could be driving prices up, dampening expectations for rate cuts in the near future by the Federal Reserve. The S&P/ASX 200 Index ended the day at 8561.8, a 0.8% decrease. The benchmark index had closed 0.7% higher than it did on Tuesday. This was a record closing. Data released on Tuesday showed that U.S. consumer price rose at the fastest rate in five months in June. This indicates that the intensifying import tariffs imposed by President Donald Trump are starting to affect households, and may put the Federal Reserve in a difficult position. The rate-sensitive sub-index of financials fell more than 1%, reaching its lowest level in three weeks. The top lenders Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) both lost more than 1% each. "June CPI is a late alarm...sounding in the local market and hitting names that are sensitive to rates, as well as growth stocks. The RBA should wait and see, especially in light of the current tariff situation, said Hebe Chen. CBA has been particularly affected by the financial sector's pressure due to tariff-related uncertainties and changing rate expectations. CBA had previously traded at a premium compared to its benchmark. The ASX-listed gold mining giant Newmont Corporation's shares fell 5.7% after its finance director resigned on Tuesday, causing the largest drag on the sub-index mining, which dropped 1%. South32, a miner with diversified operations, was another of the biggest losers. Its shares fell 3% after UBS lowered its price target due to concerns about its Mozal aluminum smelter. Rio Tinto, a global iron ore mining company, reported on Wednesday its highest second-quarter production since 2018. Simon Trott was appointed CEO of the company after trading hours on Tuesday. The shares of this company were down for most of the session, but ended up slightly higher. The benchmark S&P/NZX 50 Index in New Zealand ended the day at 12,754.59, up 0.5%. (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Vijay Kishore)
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Abu Dhabi's ADNOC intends to transfer 24,9% stake in OMV unit to XRG
Abu Dhabi National Oil Company announced on Wednesday that it intends to transfer its 24,9% stake in Austria's OMV AG, to its XRG Investment unit. This will be done ahead of the creation of a new chemicals company combining OMV and ADNOC companies. ADNOC bought a 24,9% stake in OMV last year from Abu Dhabi sovereign fund Mubadala without disclosing financial terms. ADNOC and OMV merged their polyolefin business earlier this year to create a chemical company with a $60 Billion enterprise value. Khaled Salmeen, CEO of ADNOC Downstream, told Khaled Salmeen in March that the merged entity Borouge Group International, or BGI, is expected to become the fourth largest polyolefins company by production capacity behind Sinopec, CNPC, and ExxonMobil. BGI announced in March that it would combine two joint ventures: Borealis, owned 75% by OMV, 25% by ADNOC; and Borouge owned 54% by ADNOC and 36.5% by Borealis. ADNOC's statement of Wednesday said that it was progressing in preparations for the proposed BGI. The statement stated that XRG would hold ADNOC's 46.94% proposed shareholding in BGI upon the completion of the transaction. This is subject to regulatory approvals.
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TotalEnergies warns of lower oil and gas sales in Q2 results
In a trading update published on Wednesday, TotalEnergies said that lower prices for oil, liquefied gas, and hydrocarbons will affect its second-quarter earnings. However, the company's production of hydrocarbons has increased slightly. Total said that the hydrocarbon production will increase by around 2.5% per year in the second quarter 2025. A 20% decline in Brent crude prices -- from $85 a barrel last year to $67.9 a barrel in the second half of 2025 -- will mean lower earnings for the upstream sector. Crude oil prices dropped in the second quarter, as OPEC+ (made up of the Organization of Petroleum Exporting Countries, and its allies, such as Russia), began to undo the self-imposed production reductions of 2,17 million barrels a day that were imposed in April. Shell reported lower earnings from gas trading and a drop in its downstream chemicals business. BP also warned about lower sales of oil and gas. Total has said that lower LNG prices, and reduced price volatility, resulted in their traders earning less money than they did both the last quarter and second quarter of 2024. The downstream sales of refined fuels will be flat in comparison to last year, when they made $379 million. The integrated power business will bring in between 500 million and 550 million dollars, up from 506 million last year. Total's overall refining margin remains 21% lower than a year earlier. The company will report its second-quarter earnings on July 24, according to the schedule. Reporting from Gdansk by Alban Kachr; editing by Milla Nissi Prussak and Joe Bavier
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Sources: India's GAIL is in the initial stages of talks with Alaska LNG for a long-term LNG contract
Three industry sources familiar with the matter have confirmed that India's GAIL, the state-owned gas company in India, is in the initial stages of talks to purchase liquefied gas from the proposed Alaskan LNG project. This comes as South Asia expands its capacity for imports. The discussions with Glenfarne developer come at a time when India is working to increase its energy imports to the United States in order to narrow its surplus trade as part of an broader trade deal with Washington, to avoid the impositions of heavy U.S. Tariffs. The sources stated that GAIL's talks are preliminary, as the landed LNG cost will be the key deciding factor in the deal. Glenfarne announced last month that fifty firms had expressed formal interest in Alaska LNG contracts. The project championed and pushed by U.S. president Donald Trump has been on paper for over a decade. GAIL has not responded to emails seeking comment about the talks. In an email to the company, it stated that "Glenfarne doesn't comment or confirm individual commercial agreements but Alaska LNG’s growing momentum is a reflection of its competitive economic and strategic advantages." India, which is the fourth largest LNG importer in the world, wants to increase its gas share to 15% of its energy mix by 2030. This will be up from 6% at present, and reduce its carbon footprint. GAIL intends to increase its Dabhol LNG Terminal's capacity from 5 million metric ton per annum to 6.3 millions ton per annum by the middle of 2027, and then to 12.5million ton per annum by the end of 2031-3. GAIL has invited companies to submit initial bids earlier this year. It is looking to purchase equity in a project, whether it be an existing LNG or a brand new project which would be completed by 2030. The Alaska LNG project, worth $44 billion, could export supercooled gas up to 20 millions metric tons annually. Alaska Governor Mike Dunleavy stated in March that the project may start exporting LNG as early as 2030. Glenfarne is expecting to make its final investment decision on the first stage of the project in the fourth quarter this year. This phase will consist of a 765 mile (1231 km) pipeline that will deliver gas to the Anchorage region from the far north of the state. Last month, Thailand's oil and gas giant PTT signed a contract for 20 years to purchase 2 million tons of LNG per year from the Alaska LNG Project. Other power producers, such as South Korea's JERA and Japan's largest producer of electricity, JERA, await clarity regarding the cost and financing of the project. GAIL has signed contracts to purchase 15.5 million tonnes of LNG annually, including 5.8 millions tons from the United States. (Reporting from Nidhi verma in New Delhi, Additional reporting by Curtis Williams at Houston; Editing and proofreading by Sonali Paul).
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Dollar soars as Fed rate cuts bets are lowered, causing Asia shares to struggle
The Asian stock market was under pressure Wednesday, while the dollar rose to its strongest level against the yen in early April. This is after U.S. Inflation suggested that tariffs were pushing up prices, reducing expectations of Federal Reserve policy ease. The yield on U.S. Treasury bonds reached its highest level in over a month. This lifted the dollar, especially against the yen. Tech shares, however, remained resilient after a 4% rise in the artificial intelligence darling Nvidia over night. Brent crude has remained at $69 per barrel. The data released on Tuesday shows that U.S. consumer price rose by 0.3% in the month of June. This was in line with expectations, but it was also the biggest gain since January. Economists attribute the increase in prices of goods like coffee and home furnishings, to the Trump administration’s increasing import tariffs. The Fed has kept interest rates at the same level as it awaited indications on the inflationary effect of tariffs that Chair Jerome Powell said he anticipated in the summer. Taylor Nugent is a senior economist with National Australia Bank. In a podcast, he said: "We know that Fed Chair Powell and a few colleagues are waiting for the tariff effects to be seen. This data has bolstered that view." Nugent stated that as a result of this, the markets have seen "a fairly substantial trimming of Fed expectation" regarding rate cuts. This has led to a decline in so-called risky assets, such as equity. Traders are currently pricing in 44 basis points in U.S. interest rate reductions this year. The odds of a quarter point cut in September is 56.5%. Investors will be closely monitoring the producer price data, due on Wednesday. They are looking for any signs that inflationary pressures may also be building in factories. The KOSPI, the South Korean equity index, fell 1% and Australia's benchmark equity index lost 0.8%. Hong Kong's Hang Seng remained flat, after a loss of early gains. The Nikkei, Japan's technology and exporter-heavy stock index, was little changed despite a series of small gains and losses. A weaker yen provided support. Taiwan's tech heavy benchmark increased by 0.9%. U.S. S&P futures eased by 0.2% after a 0.4% drop for the cash index overnight. The STOXX50 futures for Europe fell 0.3%. Earnings season is also a major focus for investors, beyond the Fed and President Donald Trump's tariffs. JPMorgan Chase's and Citigroup's results were better than expected, but the market reaction was mixed. Wells Fargo lowered its net interest income forecast for 2025, despite exceeding expectations in the second quarter. Goldman Sachs Morgan Stanley, and Bank of America are among the banks that will be reporting earnings on Wednesday. The 10-year Treasury yields in the United States rose to a record high of 4.495% Wednesday, the highest level since June 11. The dollar remained close to its multi-week high versus major peers. The dollar index is little changed at 98.525, after reaching a high of 98.699 for the first since June 23. The U.S. dollar was unchanged at 148.835 Japanese yen and had earlier risen to 149.19 for the first since April 3 in the wake of Trump's "Liberation Day tariff announcement". The euro rose 0.2% to $1.1619 in an attempt to recover from the three-week low reached on Tuesday of $1.1593 Bitcoin, the cryptocurrency, added about 1%, to $117.890. It stabilised after its 6% drop earlier this week, from Monday's high of $123,153.22. Gold increased by 0.5%, trading at $3,338 per ounce. Brent crude futures dropped 18 cents, to $68.89 per barrel. U.S. West Texas Intermediate futures were down 31 cents at $66.83. Both contracts closed more than $1 lower the previous session.
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Drones attack oilfields in Iraqi Kurdistan for the third time this week
On Wednesday, drones carrying bombs attacked oilfields in Iraq’s Kurdistan region. Two fields operated by Norway’s DNO had to stop production. DNO, the oil and gas company that operates the Tawke-Peshkabir fields in the Zakho region, bordering Turkey, has temporarily suspended production following explosions which caused no injuries. Kurdistan’s counter-terrorism agency posted a Facebook message that three drones were used to attack the fields, but no one was injured. Only material damage occurred. DNO stated that "the damage assessment has begun and the company anticipates restarting production as soon as the assessment is complete." Later, another oilfield operated by U.S. based Hunt Oil was also attacked in the Dohuk area of northern Iraq. The attack was not further described. A drone attack on Tuesday halted the production of the Sarsang Oilfield in Iraq's Kurdistan Region, just hours before the U.S. operator had signed a contract with the Iraqi Government to develop another oilfield. The attack has not been claimed by any group, but Iraqi Kurdistan's security sources have said that preliminary investigations suggest the drone was launched from areas controlled by Iran-backed militias. Two drones damaged the water pipes in the Khurmala field near Erbil, Iraqi Kurdistan on Monday.
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New Zealand weather events prompt government housing protections to be re-thought
New Zealand's government may end bailouts to homeowners who have been affected by landslides and floods as it creates a climate change framework. In recent years, as severe weather events caused by climate change have increased in frequency and intensity, the government has spent billions on buying properties. Christopher Luxon, New Zealand's Prime Minister, told Radio New Zealand that the government "won’t be able" to continue bailing people out in this manner. "We have to figure out how to handle these situations going forward, and who is responsible and if there's a shared liability." He made his comments as authorities in the South Island began cleaning up areas affected by floods that occurred this month. The flooding, according to local officials, affected approximately 800 homes. On Wednesday, the government announced a compensation package of NZ$600,000. ($356,700.) for farmers, growers, and forest owners who were affected by floods. Climate Sigma research estimates that by 2060, at least 14,500 homes, worth about NZ$12,5 billion, could be affected by at least one damaging flooding, or around 300 to 400 homes per year. Climate Minister Simon Watts stated in an email the government is working on getting bipartisan support for a national adaption framework to give New Zealand confidence. He said that the work was complex and difficult. It is vital that any changes are long-lasting. It is likely that any policy changes will be implemented slowly. Recent independent reports commissioned by Ministry of Environment suggested that a transition would be made over a period of 20 years, to allow for pricing adjustments as the expectations of government bailouts become lessened. When it rains hard, flooding occurs on Graham McIntyre's property. Water rushes through the house. He said that the three rivers that run through his land, which he purchased 25 years ago in Auckland, are like a "wave" coming through. He wants the authorities to purchase his house in Taupaki, and relocate the town centre nearby. Both towns were inundated in 2023. "Can't do anything" Policymakers, property experts and researchers in New Zealand and Australia warn that climate change is an issue homebuyers haven't priced into their budgets. The Ministry of Environment recommended that owners be given more information on the impact of natural hazards, so they can decide whether or not to stay in a particular area and pay the associated costs. In New Zealand, property records increasingly include information about flood and landslide risks or histories of both. Homeowners in areas at risk are concerned that their homes will lose value. McIntyre replied, "You can do nothing." You can't give up. You can't change it." Kelvin Davidson said that it was hard to estimate the impact of climate risk on property prices because of limited data about events such as flooding and different acceptance of risks by buyers. He said that "the rubber hasn't hit the road" in terms of price.
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China's surplus crude is a major factor in the June surge of refiners' options, says Russell
In June, China increased the rate at which it builds crude oil stocks as its strongest imports for almost two years overshadowed a rise of refinery processing. China's crude surplus reached 1.42 million barrels a day (bpd), up from 1.40 in May, and was the fourth consecutive month that the level of 1 million bpd was exceeded. China's crude surplus for the first half 2025 was 1.06 million barrels per day, after strong oil imports in the second quarter overcame the soft start of the year. China's refiners have options in the coming months. They can trim imports, if they feel that oil prices are too high as a result last month of the Israel-Iran war. China does not reveal the volume of crude oil flowing in or out of its strategic and commercial stockspiles. However, an estimate can still be made by subtracting the amount processed from the total crude available through imports and domestic production. According to calculations based upon official data released Tuesday, refiners processed 15,15 million bpd during June. This is an 8.8% increase from May, and the highest since September 2023. In June, crude oil imports from the world's biggest importer reached 12,14 million barrels per day, the highest rate since August 2023 and an increase of 7.1% compared to May. In June, domestic oil production increased to 4.43 million barrels per day (bpd) from 4.35 in May. After subtracting the 15.15 million barrels per day of refinery output, there is a surplus 1.42 million barrels per day. Not all this excess crude has likely been stored, as some is processed in plants that are not included in the official data. Even if you ignore the gaps in official data, there is no doubt that since March China has imported crude oil at a rate far greater than what it requires to meet its own domestic fuel needs. Price Moves China is known to import more crude oil than necessary when the price of crude oil is low. However, it pulls back when prices increase. Imports surged in the second quarter, despite falling crude oil prices at the time the cargoes were arranged. Brent crude oil futures fell from $75.47 per barrel on April 2, to a low of $58.50, a four-year high on May 5. This was the period when cargoes arriving in the second quarter could have been secured. In contrast, China's low crude imports during the first quarter occurred after prices rose in the window where those cargoes were purchased. Brent rose from $70.85 per barrel in December to $82.63 on January 15. This meant that China's refiners faced rising import costs on cargoes arriving during the first quarter. Brent prices have fluctuated in recent weeks due to the conflict that erupted between Israel and Iran, later joined by United States. Brent crude oil reached a six month high of $81.40 per barrel on June 23, but has since moderated, ending at $68.71 a barrel on Tuesday. Concerns are growing over the economic impact on the world of higher import tariffs announced by U.S. president Donald Trump. China's refiners may reduce imports in August and September due to this volatility, but it depends on whether or not the spike in June is a temporary blip in an otherwise declining price trend. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
Draft shows EU plans to give new subsidies to farmers who save water
A draft proposal seen by revealed that the European Commission had drafted plans for new subsidies to be offered to farmers who invest to waste less water when the huge farm subsidy program is renewed.
Around 387 billion euro is the value of EU's Common Agricultural Policy's (CAP) farming subsidies. This represents about a third in the overall budget of 2021-2027. The EU is preparing to have tough negotiations on its next budget, for the period after 2027, in later this year.
According to a draft EU policy proposal aimed at addressing the pressures on Europe's water supply from climate change and industry, the next CAP will include "transition packages" that provide advice and financial support to farmers in order to improve water management.
The draft stated that "The Commission will include in the future CAP Transition Packages to support and reward the farmers who engage in transformational and structure changes to improve their environmental and climate performances of their holdings. This includes a better management of water."
Subventions could be used to help farmers buy more drought-resistant plants or irrigation systems that use less water.
Climate change is affecting agriculture the most. Europe's farmers have already suffered from increasing droughts and flooding that have ruined recent cereal and fruit crops.
In response to the intense political pressure of farmers protesting against EU rules that they claim are too burdensome, the EU has also loosened up other environmental measures for farming.
As part of its plans to reduce bureaucracy, the European Commission proposed Wednesday that environmental conditions for existing EU farm subsidies be weakened.
In the draft water strategy of the Commission, it was stated that European Investment Bank would also increase their spending on investments in water sector. This includes restoring ecosystems such as wetlands which can act as a buffer against flooding.
The EU has not yet decided on the exact amount of EIB financing.
The European Commission spokesperson didn't immediately respond to an inquiry for comments on the draft. It is scheduled to be published by June. (Reporting and editing by Kirsten Doovan; Kate Abnett)
(source: Reuters)