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Mike Dolan: The G7's historic role in FX is undermined by the action between Japan, US and ROI
The absence of full G7 firepower in last week's joint U.S. and Japanese intervention to support yen was as telling as the actual operation. The coordinated global show of force has been replaced by a bilateral transaction, reducing the effectiveness of the effort and lowering hopes for a "grand bargain" in exchange rates. The timing and rationale for the joint yen purchase have been the subject of reams?of analysis. Scott Bessent, the U.S. Treasury secretary and Satsuki Katayama, his Japanese counterpart have both spoken out publicly on this move and its many nuances and intentions. The?yen is still holding on to much of its initial boost amid fears over possible repeat interventions. Currency markets are left with more questions than answers. Will Bank of Japan rate increases reinforce the salvo? Why was Washington concerned about the impact of a massive Japanese interference on the U.S. Treasury Bond Market? Japan, as the largest foreign owner of U.S. Treasuries at that time, may have been forced to liquidate its Treasury holdings in order to fund an extensive, long-term dollar selling campaign. Bessent might have calculated that U.S. involvement -- the Federal Reserve providing Japan dollars through repo transactions, while the U.S. was selling euros instead of dollars -- would lower that risk. If the goal was to curb excessive weakness and speculation - a goal that is likely shared by the G7 countries - then why wasn't the entire club involved to give it more weight? This is a stark statement about the relationship within the G7 and the retreat away from multilateralism, especially in Washington and Tokyo. It even coincides with President Donald Trump’s 18-month retreat on?global military, diplomatic and trade alliances. The G7 round has been the catalyst for most coordinated exchange rate actions among major Western economies, excluding the famous Plaza and Louvre agreements of the 1980s that weakened and stabilised the dollar. The last coordinated intervention on the yen currency was to sell it after its dangerously inflated in response to the devastating earthquake and tsunami of 2011. All G7 countries played a role in this. The last time the G7 nations bought yen together was during the Asian Crisis in 1998. This was a bilateral exchange with Washington that took place shortly before the formation of the euro in 1999. The three G7 central bankers acted in concert to provide liquidity after the 2001 9/11 market shocks. G7 SHOCK and AWE The euro?s early troubles are perhaps best example of non-yen. The European Central Bank intervened late in 2000 due to steep, persistent losses against both the dollar and the yen following the formation of the euro in 1999. This campaign began as well with a collective G7 Thunderbolt. Joint euro purchases allowed the ECB continue, and eventually draw a line beneath the new common currency. Other G7 members were conspicuously absent last week, particularly as the U.S. was the only one involved in the operation. An ECB spokesperson refused to comment when contacted by despite a source who was familiar with events stating that the ECB and the Fed had spoken about this matter. This doesn't indicate much coordination and the communication seems to have been after the event. The International Monetary Fund has also not made a statement about the issue, which is responsible for monitoring exchange rate policies and external imbalances. The French-led G7 summits this year and the finance meetings did not mention exchange rate coordination, except for brief references to the standard language about excessive volatility that has been embedded in communiqués since 2017. The Evian G7 Summit conclusions in June on the global economy and trade imbalances stated that "we also reaffirm existing G7 exchange rates commitments." It didn't seem like the leaders - or their finance chiefs a month earlier - spent much time discussing the issue. Even though the yen had already reached a 40 year low. Trump's administration, which rejects multilateralism openly, seems to prefer to do things their way: through one-to-one negotiations rather than global agreements. Perhaps Prime Minister Sanae Takaichi's Japan sees it similarly. Both are bound by the bilateral trade agreements that were produced by Trump's unilateral policy last year. Japan's countervailing promise of half a trillion dollars worth of U.S. investments to secure its tariff ceasefire may have even contributed to the excessive pressure on the Japanese yen. Bessent explained that there was also a local angle. China's currency, the yuan, is the most important, but is outside of the G7's jurisdiction. This will only become a collective issue when the G20 meets in Miami,?in December. The G7 big guns have either ceased to speak on foreign exchange or they may be absorbed by the currency markets over time. Markets are now wondering if Washington's dislike of multilateralism will continue beyond the current administration, or if it will lead to increased or decreased currency volatility. The opinions expressed are those of Mike Dolan a columnist at. This column is great! Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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SBM Offshore's revenue has more than doubled, resulting in a new upward revision of its outlook
SBM Offshore, a Dutch floating production specialist, raised its '2026 forecast for the second year in a row on Thursday. The company said that the first-half revenue had more than doubled due to the sale of FPSO One Guyana and increased activity. The company's consensus estimate of $4.65 billion was beaten by the $4.9 billion generated in revenue. Earnings before interest, taxes, depreciation and amortization (EBITDA), which is a measure of earnings, rose 92%, to $1.3 billion. The company increased its 2026 revenue forecast from $6.9 billion to $7.6 billion and raised?its EBITDA directional target from $1.8 billion to $1.9 billion. The company stated that the revenue upgrade reflected both new contracts won by Brazil's state run oil?firm,?Petrobras, and additional work completed during the period. The pro-forma 'directional backlog' increased by 14% at the end of June to $35.6 billion. The company employs a 'direction reporting' system, which "books revenue from payments made during construction phase before leases start."
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MORNING BID - AI stocks are learning to fly, but they don't have wings
Satoshi Sugiyama gives us a look at what the European and global markets will be like tomorrow. Tom Petty sang in "Learning to Fly" that "what goes up, must come down". This is a pattern that can be seen in AI stocks. South Korea's KOSPI, a tech-heavy stock, fell 4% on Thursday in Asia after gaining nearly 6% just the day before. Japan's Nikkei also fell 1.6% after a jump of 3.66%. Taiwan's benchmark index was flat following a gain of nearly 2.9%. These moves were in line with losses on Wall Street as Elon Musk's AI and satellite company SpaceX, and U.S. listed chipmaker Advanced Micro Devices saw their stocks tumble due to recurring concerns over massive AI spending. The U.S.'s conflict with Iran is also characterized by a similar pattern of recurring and reversing. Reports said that a proposed deal between Iran and Oman would give Tehran control over inbound traffic to the Strait of Hormuz. This is a vital route for global energy supply. The U.S. did not immediately react to the proposal. While U.S. president Donald Trump claimed a deal was imminent to reopen?the strait, U.S. officials repeatedly said they would not agree to Iran having control of access to the strait. Investors are waiting for further developments. Oil prices were trading in the range of $70-a-barrel. Brent crude futures rose 0.45% to $80.91 a barrel, and U.S. Crude?edged 0.31% higher at $75.45. Traders also considered the Federal Reserve’s rate path in advance of Friday’s closely-watched nonfarm payrolls report. The ADP private employment data released on Wednesday showed that U.S. private sector?job creation slowed down in July compared to June, and fell short of market expectations. A survey by the Institute for Supply Management showed that the services sector was growing strongly, but input costs were also rising. This could lead to inflation. The following are key developments that may influence the markets on Thursday. Economic Events Germany's industrial orders for June United States: jobless claims (Reporting and editing by Sonali Paul; Satoshi Sugiyama)
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South Korea's President orders full-scale response to heatwave
The heatwave in South Korea is set to peak on Thursday over Seoul, with temperatures expected to reach 39 degrees Celsius. This extreme weather has already been blamed for 20 deaths. "Extreme heat of a magnitude we've never experienced continues day after day." "Heatwave conditions that were once only seen in foreign news reports have now become our reality," said President Lee Jae Myung at a heatwave meeting on Thursday. Lee instructed local and ministry governments to mobilize all personnel and resources available until the heatwave subsides. He stressed the importance of 'protecting lives and safety and strengthening safeguards for vulnerable citizens, and enforcing stricter enforcement of rest breaks during the hot hours for outdoor workers. Seoul's forecast temperature is close to the 39.6 C record set by the city in August 2018 during its last heatwave. Forecasters predict that Seoul could experience one of the hottest days ever recorded in its modern history. According to the Korea 'Meteorological Authority (KMA), temperatures in some neighbourhoods barely dropped below 30 C over night, while media showed people seeking shelter in department stores, streams and other air-conditioned spaces. Media reported that the Korea Baseball Organization canceled all 10 games scheduled on Wednesday and Thursday because some spectators fainted due to the heat, including a fan who collapsed at a game in Incheon. Meteorologists claim that Typhoon Dolphin may have contributed to the hot conditions, even though it poses no direct threat to South Korea. The KMA said Dolphin had helped to strengthen the?easterly wind that crosses the Korean Peninsula's mountains and descends over western regions in hot, dry air. This has intensified heat in Seoul and other places. (Reporting and editing by Ed Davies, Stephen Coates, and Kyu-seok Shim)
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Iran's progress on the Hormuz Agreement cited as a reason for oil prices to drop
Investors cautiously awaited signs of progress in the U.S. Iran peace 'deal' and the reopening of the Strait of Hormuz. Brent crude futures dropped 33 cents or 0.42% to $79.12 per barrel at 0418 GMT. U.S. West Texas Intermediate Futures fell 42 cents or 0.56% to $74.80 per barrel. Brent settled slightly higher on Wednesday while WTI edged down. Iran and Oman reached an agreement on the geographic coordinates of a shipping route that would pass through the Strait of Hormuz. A joint announcement is being finalised if certain third parties do not interfere. Yuki Takashima is an economist with Nomura Securities. He said that "some selling pressure" emerged after reports of progress in the talks between Iran and Oman. Investors are closely monitoring whether both sides can reach an agreement, Takashima said. Prices have returned back to levels when the United States and Iran signed a interim peace accord on June 17. According to a senior?Iranian official and two regional officials, a proposed deal?between Iran & Oman would allow Tehran to control ships entering the?Gulf via the Strait of Hormuz. This is one of the largest concessions made to Iran to date. The U.S. did not immediately comment on the proposal. Although President Donald Trump said that a deal to reopen the strait was imminent, U.S. officials repeatedly stated they would not agree to Iran having access to the most important energy trade route in the world. Iran warned Gulf states against any new U.S. attacks on its territory, claiming that this would trigger retaliation across the region's critical energy infrastructure, according to sources. Tehran is attempting to increase the cost of military actions by threatening Washington’s closest regional allies. The'real pivot point is now the direction of U.S. Iran discussions. Meaningful progress in this area is necessary before energy flows can be realistically restored," ING -analysts stated on Thursday. Shipping data shows that Gulf oil and condensate exported in July were mostly stable and about 40% lower than pre-war levels. Yemen's Iran aligned Houthis claimed that a Saudi tanker was attacked by missiles off the coast of Yanbu, a port city in the Red Sea. Another Saudi tanker was also targeted with missiles from the Gulf of Aden. Saudi Arabia has not confirmed either incident. Takashima stated that concerns about Houthi attacks on Red Sea shipping are limiting optimism regarding the end of shipping disruptions in Middle East. The Energy Information Administration reported that U.S. crude stock levels rose on Wednesday as refineries slowed down processing and imported increased. Reporting by Yuka Obaashi in Tokyo, Siyi Liu from Singapore and Lincoln Feast. Editing by Sonali Paul.
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Traders and trackers say Sinopec increases Russian oil imports in order to offset Mideast supply reductions
According to multiple trade sources and ship tracking information, China's state owned?Sinopec Corp., the world's largest refiner, increased purchases of Far East Russian Oil to compensate for Middle East oil supplies that were reduced by the Iran War. Sinopec has been able to maintain a relatively stable output and export fuel surpluses on a strong margin due to its purchases of Russian oil, which is cheaper than competing grades from Brazil and West Africa. This was despite China's decision in March of limiting the overseas sale of fuel products, as a way of protecting domestic supply during trade disruptions caused by war. According to sources who spoke under condition of anonymity, Sinopec purchased 30 to 40 shipments or 241,000 to 322,000 barrels per day of Eastern Siberia - Pacific Ocean (ESPO), for deliveries from July to September. This is 5%-6% of the refiner’s 5.2 million barrels per day processing capacity. Sinopec's representative stated that the company doesn't discuss operational issues publicly. "Sinopec’s crude demand appears to be at its lowest point following the relaxation of fuel export regulations, but recovery is still selective," said Emma Li. She's the lead China analyst for ship tracker Vortexa Analytics. China, the world's largest crude buyer, has drastically reduced its total crude imports since the beginning of the Iran War. In June, purchases were down 41% compared to the previous year. It has however, lowered its fuel export limits for July and August. Li said that rather than a broad-based increase in imports, the demand has shifted to barrels with better delivery certainty and lower shipping costs. These are primarily short-haul Russian Far East shipments as well as onshore inventories. According to Li, Sinopec?saved 7.4 million barrels ESPO during July. The majority of these barrels were delivered into Rizhao Port, the main refining hub in Shandong Province. According to Li and four traders that closely monitor ESPO trading, the refiner bought at least 10 ESPO cargoes in each of August and September. ESPO is usually shipped on Aframax vessels that can carry 740,000 barrels. SAUDI CUTTING CUTS ARE STEEP China and India are the largest Russian oil purchasers since the start of the Ukraine War, but China's state refiners including Sinopec suspended their purchases in October, after Washington imposed sanctions on top Russian producers Rosneft & Lukoil. Beijing has not recognised what it calls unilateral sanctions and independent Chinese refiners continue to buy Russian oil. Sinopec reported that it resumed Russian oil purchase in March and early April following a temporary U.S. exemption. The company purchased roughly 10 cargoes, and increased volumes as soon as the waiver ended, due to the Iran War reducing supply. Four people with knowledge of the matter, who declined to provide further details, said that recent ESPO purchases were made through intermediaries. Sinopec began buying Russian oil with Chinese yuan in the early days during the Ukraine War. Before the Iran War, nearly half of?Sinopec's crude oil was sourced from the Middle East. It was also one of Saudi Arabia's largest customers. According to trade sources, Sinopec didn't buy any Saudi crude in June or July and only took 2 million barrels of oil in August. This is far less than the 20 millions Saudi barrels that it imported both in March and April, and less than one fifth of the average 11 million barrels per month it bought in the year before the Iran War began. Traders said that September-loading ESPO would be discounted by $1 to $2 per barrel compared to Brent benchmark, and about $10 less than other grades like Middle Eastern Oman or Brazil's Tupi. Before the Iran War, Russian ESPO crude was traded at a discounted price of around $10 per barrel. (Reporting Chen Aizhu; Siyi Liu; Trixie Yap, Additional reporting by Florence Tan. Editing by Tony Munroe & Tom Hogue.
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Copper prices at their highest level since mid-May, as US inventories increase amid tariff uncertainty
The price of copper rose to its highest level in 12 weeks on Thursday, as the uncertainty surrounding tariffs continued to drive more metals into the United States. Benchmark 'three-month copper' on the LME dipped 0.08% to $14,099.50 per metric tonne as of 0325 GMT after touching $14,178 early in trade, a level not seen since May 13. The most active copper contract on SHFE rose 0.38% to 107,580 Yuan ($15.944.39) per tonne, after briefly reaching the highest level since May 14, at 108.030 yuan. The LME Cash Copper Contract Premium over the Three-Month Contract On Thursday, the spread increased to $117.50 per ton, signaling a tightening of supply in the near term. Since months, copper prices have been rising on the U.S. COMEX Exchange above the London benchmark due to uncertainty about?potential import duties. The COMEX front-month copper contract reached a new record on Wednesday. This maintained a large premium over LME Copper. COMEX inventories As of Wednesday, the number of short tons (653,300 tons) had increased to 720140. Stocks in LME-monitored warehouses The Shanghai Futures Exchange The meanwhile has continued to decline. StoneX Senior Metals Demand analyst Natalie Scott-Gray, in a Weekly Update, estimated that at least 1.2 millions metric tons had entered the United States after a Section 232 Investigation into Copper Imports was ordered in Feb 2025. Scott-Gray? added that 64% of the global visible copper inventories now reside in the United States. Amador Pantoja, a union leader, said that the suspension of the expansion project at Codelco's flagship El Teniente Mine, which is owned by the Chilean state miner Codelco, could last as long as two years. Codelco announced on Tuesday that it had halted its project to develop the Andes Norte underground section after recent studies revealed greater seismic risks than originally estimated. The broad market sentiment was still sensitive to the developments in the Middle East. Brent crude futures dipped a little bit lower. The oil benchmark has fallen over 12% in the past week. Aluminium ticked up 0.12% on the LME. Zinc remained unchanged, while lead grew by 0.11%. Nickel fell by 1.95% and tin dropped 0.94%. On the SHFE, aluminium rose 0.17%. Zinc rose 1.33%. Lead was unchanged. Nickel plunged by 2.16%. Tin added 0.26%. ($1 = 6.7472 Chinese Yuan Renminbi) Reporting by Dylan Duan, Lewis Jackson and Ronojojo Mazumdar.
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Gold reaches seven-week high on Strait of Hormuz, reopening hope
Gold rose for a fourth consecutive session on Thursday, reaching its highest level in seven weeks. This was due to lower oil prices, a weaker dollar, and lower Treasury yields. There were also growing expectations about the reopening of the Strait of Hormuz. By 0132 GMT, spot gold had risen 1% to $4,285.84 an ounce, its highest level since 18 June. Bullion posted its largest daily gain since February on Wednesday. U.S. Gold Futures increased 0.9% to $4345.80. The sharp rally was a result of the growing optimism that a diplomatic breakthrough is nearing completion in the Middle East. This would?increase the downward pressure on oil and make central banks less likely to increase rates. He added that a sustained break above 200-day moving median could pave the way for a stronger recovery towards the $5,000 mark. According to two senior Iranian officials and a senior Iranian official, a proposed deal between Iran & Oman would allow Tehran control of ships entering the Gulf via the Strait of Hormuz. On Thursday, oil prices fell. Due to concerns about energy-driven inflation, spot gold has fallen 19% since February 28, when the U.S. Iran conflict began. Gold tends to do better when interest rates are low, as it pays no interest. Market expectations of a U.S. interest rate hike in September have dropped from 67% to?55% two days ago. The yield on benchmark U.S. 10 year notes fell, and the U.S. Dollar?index also came under pressure. Dollar-priced goods become cheaper for holders of other currencies when the U.S. dollar weakens. Investors also await the release of the U.S. nonfarm payrolls data for July, scheduled to be released on Friday. ADP's national employment report revealed that U.S. private pay growth slowed down in July. Joshua Rotbart of J. said that a soft payrolls number would support gold further, while a strong recovery could create short-term pressure, as markets reassess their policy timeline. ?Rotbart & Co. Silver spot gained 0.1%, to $62.16. Platinum rose 1.7%, to $1764.10, after reaching its highest level since the middle of June. Palladium rose 1.1%, to $1,377.83. This is the third session in a row that palladium has risen.
Officials say six people were killed in Balakliia and Sumy by Russian airstrikes.
Authorities said that on Thursday, firefighters worked to put out fires and clear debris in the eastern Ukrainian city of Balakliia following Russian attacks on homes overnight.
In the northern region of Sumy, at least '19 people were wounded and three killed in Russian airstrikes.
The Ukrainian police reported on Telegram that 12? more people were injured in the city of Sumy following an attack using guided aerial bombs.
Six people were injured in a 'drone attack' on a van in the southern region of Kherson.
Both Russia and Ukraine deny that they have targeted civilians in the conflict sparked by Russia's invasion?of?Ukraine?in February 2022.
(source: Reuters)