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The next test of the AI trade arrives today, as South Korean memory-chip maker SK Hynix's American depositary receipts begin trading under the temporary ticker SKHYV.

Shares were priced at about a 3% premium to Thursday's close of its ordinary shares in South Korea. The $26.5 billion offering attracted demand for roughly seven times the shares available, forcing the chipmaker to scale back allocations to major investors, according to Bloomberg.

The company sold 177.9 million ADRs at $149 each, raising $26.5 billion, surpassing Alibaba's US debut to become the third-largest listing in history. Each ADR represents one-tenth of a Seoul-listed common share, giving US investors direct exposure to the world's leading supplier of high-bandwidth memory amid the AI boom that could soon unlock the Physical AI boom.

According to the report, Baillie Gifford, Coatue Management, and Situational Awareness Partners received about $5 billion of ADRs, roughly $2 billion less than indicated. Over 500 institutional investors placed orders, including long-only funds, technology specialists, and sovereign wealth funds. The allocation remained concentrated, with 10 investors taking half the deal and the top 25 accounting for about two-thirds.

Wall Street analysts weighed in with their first takes of the deal, courtesy of Bloomberg:

Jung In Yun, CEO at Fibonacci Asset Management

• "I take 3% premium as a constructive signal. It shows that global investors are still willing to pay up for direct US access despite the recent volatility in Korean equities"
• From the company's and banks' perspective, the level looks sensible; it is strong enough to demonstrate demand, but not so aggressive that it creates unnecessary aftermarket risk
• In the current market, a clean, stable debut matters more than squeezing out the last few percentage points of valuation

Sanghyun Park, founder of Clepsydra Capital

• It shows global funds accept paying up to bypass local index and currency friction and direct exposure to the company's HBM dominance
• The banks capitalized on the limit to conversion that prevents arb traders from instantly erasing the spread on the first trading day
• This avoids the typical Korea Discount seen with legacy local names and points toward a TSMC-style scarcity model
• "Since 3% is just the primary floor and the float is so heavily choked, we could easily see the premium gap much higher once US trading opens on Friday"

Travis Lundy, an independent special situations analyst who publishes on Smartkarma

• "To me that is not that much of a premium. Eminently reasonable given the current swap rates on owning SK Hynix" local shares
• The 3% premium to Thursday's close is actually a discounted price to Wednesday's close and every other close for the past few weeks when investor demand was "multiple times" the offering size
• There is an interesting dynamic whereby if the headroom expands, it will take pressure off the banks to fund local into swaps, which should reduce the swap rate, which should in turn reduce the ADR premium slightly

Dilin Wu, a strategist at Pepperstone Group

• "The 3% premium tells you the roadshow demand was strong enough to price above Thursday's Korean close — and that's the first concrete evidence that the accessibility premium is real"
• The real test will be the first two weeks of trading before upcoming earnings; if the ADR consistently trades above the Korean share dollar equivalent, it confirms US investors are willing to pay a premium for accessibility — and that should pull the Korean shares higher
• The ADRs could be included in the Nasdaq 100 in December; once that inclusion happens, passive fund inflows from vehicles like the Invesco QQQ become a mechanical buying force

Francis Oh, head of Asia business development at Rex Financial, which provides exchange-traded products

• "The current 3% premium should not be over-interpreted at this early stage"
• "TSMC's 18% premium reflects structural friction that accumulated over years, not a level established immediately post-listing; any meaningful convergence or divergence for SKHY toward comparable levels is more likely to unfold as a gradual"

SK Hynix's ADR offering comes weeks after SpaceX tapped the public markets in the largest initial public offering in history, while Alphabet is raising $85 billion to fund its AI buildout. Traders are betting heavily that AI-related demand is a secular growth story for memory stocks, which have historically been viewed as more cyclical.

Bloomberg expects that the US debut of SK Hynix will unlock a new "wave of leverage ETFs" tied to the chipmaker's American depositary receipts. It expects ProShares, Leverage Shares and Rex Shares are some of the fism planning to products taht offer 2x daily returns on the memory chip giant.

Bloomberg Intelligence noted:

A fresh pool of leveraged US-listed ETPs would mean the daily rebalancing flows would grow larger, potentially fueling already heightened volatility. The size of the leveraged products also made it difficult to meet the promise of delivering twice daily returns, creating a tracking gap.

The key question is whether SK Hynix's blockbuster ADR offering can juice memory stocks again, especially after our note earlier this week, "South Korea Falls Into Bear Market As Memory Euphoria Fizzles."

US equity futures are flat on the final trading session of the week, with Tech lagging, as traders hold off on big bets ahead of the weekend, with the fragile truce in the Middle East keeping geopolitical risk front of mind. Overnight, the US said Iran talks will continue, a positive step amid the recent escalation near the Strait of Hormuz (then again the market never reacted negatively to the latest strikes in the first place). As of 7:45am ET, S&P futures are flat and Nasdaq futures are down 0.2%; pre-market, Mag 7 stocks are mixed: META +1.8%, MSFT +0.9%, while NVDA and AAPL are down 0.6% and 0.4%, respectively. Notably, META has been outperforming since the announcement of its Muse Spark AI model and its strategy for the cloud business. SemiAnalysis, whose "unbiased", often wrong but never in doubt, views at some point be investigated by a regulator, also struck a positive note on META’s AI development (here). Bond yields are 1–2 bp lower, and USD is mostly unchanged. Commodities are mixed: WTI is down 0.2%; base metals are higher, while precious metals are mostly lower. The US economic data calendar empty for the session. Next week includes June CPI, PPI data. Fed calendar empty for the session. 

In premarket trading, Magnificent 7 stocks are mixed with Meta rising 3% after research firm SemiAnalysis posted a positive report on the social media giant’s AI compute business (Microsoft +0.4%, Amazon unchanged, Alphabet +0.1%, Apple -0.4%, Tesla unchanged, Nvidia -0.4%).

• CCC Intelligent Solutions (CCC) jumps 9% after Reuters reports that the insurance software company is exploring a sale.
• Circle Internet Group (CRCL) gains 13% after the stablecoin issuer received approval from the US Comptroller of the Currency to establish “First National Digital Currency Bank, N.A.,” a national trust bank that will offer digital asset services.
• Delta Air Lines (DAL) slips 2.8% after the airline posted second quarter results.
• EquipmentShare.com (EQPT) gains 13% after the company announced a $500 million share buyback.
• Fermi (FRMI ) down -17% after offering $350 million in convertible senior notes
• Twilio (TWLO) climbs 2% as Stifel upgrades to buy on the company’s potential to capitalize on the current AI cycle.
• WD-40 (WDFC) rises 14% after the lubricant spray maker boosted its net sales forecast for the full year.

In other AI news, JPMorgan has built an array of AI-powered investing agents that beat 60/40 portfolio in back-tests. OpenAI and Google confirmed they have been supplying AI services to Singapore-based subsidiaries of Alibaba, Baidu and Tencent, the Financial Times reports. Netflix is said to be considering steps to deal with signs of declining subscriber engagement, according to the WSJ.  Bayer sold a minority stake in its contraceptives business to Apollo for €3 billion ($3.4 billion) and will use the funds raised to help cover its ballooning litigation costs tied to the herbicide Roundup. Polymarket is seeking regulatory approval to offer margin trading in the US, which would let users bet on events with less capital upfront.

We end a week characterized by thematic rotations, signs of a summer trading lull and low volatility at the index level. Brent crude traded near $76.50 a barrel, swinging between small gains and losses after a volatile stretch. Talks between the US and Iran are continuing despite days of fighting that drove a steep drop in traffic through the Strait of Hormuz. The risk of further escalation is expected to keep investors cautious as they close out the week.

“Over the weekend, discussions between the US and Iran are expected to continue,” said David Manso, chief investment officer at CaixaBank AM. “Oil prices could provide a useful gauge of investor sentiment and expectations regarding the evolution of the situation.”

Yet away from geopolitics, things are about to get busier soon, with Tuesday’s blitz of five major US bank results heralding the start of the earnings season. And speaking of rotation, Lilian Chovin at Coutts in London, notes that the firm has moved a bit underweight US equities. “Other regions are probably better placed right now to navigate the coming few months. Obviously by reducing our US exposure, we have reduced our exposure to tech mega cap.”  The Coutts team remains positive on the AI theme, he explains. “It’s more nuanced than people selling tech to go into defensive sectors. We’ve seen a rotation within tech, caused by some noise around semiconductors.” 

After an unprecedented rally in chipmakers and other AI buildout stocks helped markets shrug off higher oil prices and elevated bond yields, the bar is now high for companies to justify their lofty valuations. For hyperscalers, the onus is on proving that the spending can generate strong returns.

“What remains to be confirmed is whether growth can hold up despite that pressure, with the AI capex cycle continuing to support investment, revenues and earnings,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “Expectations are high, but the real test is whether earnings can keep validating the expansion story.”

This morning another company capitalized on the chip bubble when SK Hynix raised $26.5 billion in its ADR offering, the largest ever US first-time share sale by a foreign company. The company sold 177.9 million ADRs for $149 apiece, each equivalent to a 10th of a Seoul-traded common share. Hynix’s US debut is set to spur a wave of leveraged ETF product launches. 

Analysts have upgraded S&P 500 earnings estimates ahead of the second-quarter reporting season, setting the bar high in “an atypical move,” according to HSBC strategists. The Street now expect profits to rise 22% from a year earlier, the highest in the post-pandemic period. Meanwhile, with Q2 reports due shortly, an interesting set-up is emerging between earnings season expectations and headline risk, notes Bloomberg’s equity derivatives specialist Christian Dass. Persistently low implied correlation leaves the VIX vulnerable to a sharp repricing if markets become increasingly driven by macro headlines rather than stock specific fundamentals.

In politics, Trump fired two Democratic members of the US Election Assistance Commission, while the Republican member resigned. Graham Platner’s exit from the Maine Senate race has set off a scramble to find a replacement to take on Republican incumbent Senator Susan Collins, with at least six Democrats entering the field.

In other assets, carry trades are seeing the most compelling backdrop in more than two decades, according to Goldman Sachs, while an unprecedented divergence in the oil-market crack spread gauge are prompting Vanguard to buy insurance against stickier-than-expected US inflation. 

Trade during the European session has been indecisive and non-committal alongside a particularly slow news cycle. The Stoxx 600 has oscillated around the unchanged mark: tech and energy sectors are the worst performers, while telecoms and miners are the biggest gainers. Here are some of the biggest movers on Friday:

• EasyJet shares jump as much as 15% after the budget airline received a fresh bid from private equity firm Apollo that beats a rival proposal from Castlelake. The shares remain below both offer prices.
• Vodafone shares soar as much as 14% after its biggest shareholder Emirates Telecommunications Group agreed to sell its entire 16% stake in the firm to a vehicle controlled by billionaire Xavier Niel.
• Voestalpine, Salzgitter and ArcelorMittal rose after JPMorgan upgraded the steel producers. The bank says it expects 2Q reporting to focus on the impact of cuts to EU steel imports and import tariffs effective from July, which have the potential to transfer demand to EU steel producers.
• EMS-Chemie shares gain as much as 3.5% after it reported better-than-expected first-half sales and profit and raised its net sales forecast for the year.
• Hays shares rise as much as 13% after the recruitment company reported stronger-than-expected fourth-quarter fees and forecast full 2026 profit to be at top end of the consensus range.
• St James’s Place shares fall as much as 7% after Financial News reported that one of the wealth manager’s largest advice firms has decided to exit the group, spotlighting ongoing retention troubles.
• Duerr shares fall as much as 4% as Berenberg downgrades the German stock to hold from buy and slashes its price target almost in half, citing dependency to automotive original equipment manufacturers.
• Glenveagh Properties drops as much as 5.1% after being downgraded at Deutsche Bank, as analysts believe the Irish housebuilder is fairly valued following recent gains.
• Troax shares fall as much as 6.6% after Berenberg downgraded the Swedish maker of machinery parts and warehouse fittings to hold from buy, citing a tough automotive end-market and the likelihood of a slow margin recovery.

The mood in Asia was more upbeat with the MSCI APAC index up 0.8%, boosted by a rally in tech shares. Asian stocks climbed, boosted by a rally in tech shares amid optimism ahead of the US listing by South Korean chipmaker SK Hynix. The MSCI Asia Pacific Index jumped as much as 1.7%, the most in a week. Shares of Samsung Electronics and SK Hynix were the top contributors to the benchmark’s advance and led a 5% surge in the Kospi. Japan’s Nikkei 225 was up almost 2%. SK Hynix raised $26.5 billion in its American depositary receipt offering, powering through recent volatility in global semiconductor stocks. Meanwhile, Samsung Electronics’ Executive Chairman Jay Lee is seeking to meet with Nvidia’s Jensen Huang in the US late July to discuss the former’s investment plans in South Korea’s southwest area, according to a media report. Elsewhere, trading in Taiwan was halted as a strong typhoon approached the island. Japan called on its pension funds, which include one of the world’s largest, to invest in domestic assets. Here Are the Most Notable Movers

• Shares of Japanese wafer maker Sumco rallied as much as 15% to hit their upper daily limit after Micron’s plan to invest in Taiwan’s GlobalWafers was seen as a sign of rising demand in the sector.
• Lenovo’ shares rise as much as 9.2% after Morgan Stanley upgrades the Chinese device maker and more than doubles the price target, citing its ability to pass through higher component costs amid AI-driven demand.
• Zhipu shares drop as much as 9.7% in Hong Kong, paring a sharp three-day rally, after Goldman initiated coverage at neutral, saying their valuation fairly reflects the competitiveness of the company’s AI models.
• Mitsubishi Motors shares climbed as much as 17%, the most since December 2024, after the vehicle maker announced a tie-up to produce humanoid robots with a Tokyo-based startup.
• Fast Retailing shares slipped as much as 3.7%, the most since May 12, after the Uniqlo owner’s 3Q earnings beat was seen as priced in

In FX, the dollar dipped 0.1% in a third straight day of losses. Bonds extended a rebound, with the yield on 10-year Treasuries falling two basis point to 4.54%. The yen outperformed major currencies, rising 0.4% after Japanese Finance Minister Satsuki Katayama said the government wants pension funds to increase investment in domestic assets.

In rates, treasuries are slightly richer across the curve following similar price action across European bonds with oil prices steady. US yields are 1bp-2bp lower with curve spreads within a basis point of Thursday’s close, 10-year near 4.535% with bunds and gilts in the sector also about 1.5bp richer on the day. During Asia session, yen and JGBs advanced after Japan’s Finance Minister Satsuki Katayama called on pension funds, including the GPIF, to invest in domestic assets. Long-end JGB yields ended more than 10bp lower. US session has no major scheduled events.  IG dollar issuance slate empty so far. Four borrowers priced $2.25b in new US investment-grade bonds Thursday, pushing weekly volume through $51b and more than double forecasts. Issuers paid about 2bps in new issue concessions on deals that were 4.2 times covered.

In commodities, Brent crude futures are down 0.5% and around the $76/bbl mark with traders awaiting further directional clues from events in the Middle East. WTI crude oil futures little changed as US and Iran continue talks despite a flare-up in fighting. Precious metals are on the back foot with spot gold and silver down 0.6% and 0.8% respectively. Bitcoin is higher by 1.5%. 

The US economic data calendar empty for the session. Next week includes June CPI, PPI data. Fed calendar empty for the session. Next week Federal Reserve Chairman Warsh testifies before the House Financial Services and Senate Banking Committees on its Semi-Annual Monetary Policy Report.

Market Snapshot

Top Overnight News

US-Iran negotiations on a permanent peace deal are continuing, according to an American official, despite two days of clashes that threatened to unravel the ceasefire. BBG

Israel shared new intelligence with the U.S. that it said indicated a fresh Iranian plan to kill President Trump, people familiar with the matter said, a finding that would mark an escalation in the war between Washington and Iran. This news that comes just 24 hours after Trump unexpectedly switched back to the old Air Force One for his return flight from the NATO summit in Turkey as a “security precaution” (the New Air Force One doesn’t have the same security features as the old one). Iran for years has vowed openly to retaliate against Trump for the assassination of Qassem Soleimani, who was a top general in the Islamic Revolutionary Guard Corps, in the president’s first term. WSJ 

The UAE boosted crude production to an all-time high last month, pumping 4.1 million b/d on average in June. IEA 

Global diesel market faces a significant supply crunch as Russia bans exports due to domestic shortages following Ukraine strikes. FT

Japan’s Finance Minister, Satsuki Katayama, sparked a jump in the yen on Friday when she said the government would pursue policies to encourage pension funds to buy more Japanese assets. Japan’s biggest public pension fund will likely ignore the call to boost domestic investment, at least in the short run, because of strict rules governing asset allocation and its public mandate. BBG

Japan’s producer prices picked up in June to the fastest pace since early 2023, reinforcing the case for the BOJ to keep hiking rates. BBG

Taiwan halted trading on its stock exchange and closed schools as Typhoon Bavi approached the island. TSMC postponed its monthly sales disclosure to Monday. BBG

South African economic growth is on an upswing as efforts to improve governance and critical infrastructure are lifting bottlenecks that have held it back for years, according to Standard Bank’s chief economist. BBG

SemiAnalysis thinks Meta should be talked about alongside OpenAI and Anthropic as the top three frontier AI labs in the world (of the hyperscalers, SemiAnalysis thinks Meta, not Google, has the best chance of catching up with Anthropic and OpenAI). SemiAnalysis, which may or may not have a conflict of interest

Trump fired two Democratic members of the US Election Assistance Commission, while the Republican member resigned.

Graham Platner’s exit from the Maine Senate race has set off a scramble to find a replacement to take on Republican incumbent Senator Susan Collins, with at least six Democrats entering the field: BBG

A more detailed look at global markets courtesy of Newsqauwk

Asia-Pac stocks traded entirely in the green, as they followed the tech-led gains seen stateside. Military strikes continued on Thursday, but energy prices and equity markets seemed to have brushed it aside and instead took a stronger liking to President Trump’s comments, in which he said Iran had reached out to the US and wanted to make a deal, easing concerns over a further escalation that could threaten energy infrastructure. To note, the Taiwan markets were closed due to the typhoon, and worries of the typhoon hitting China and Japan. ASX 200 initially opened with modest losses but has since reversed and printed modest gains. Metals & Mining topped the sector pile, cutting 4 consecutive days of losses, while Health Care was the sector laggard. Nikkei 225 gained, with SUMCO leading the way as it benefited from the semiconductor strength stateside. On the earnings front, Seven & I and Fast Retailing both posted strong earnings and raised their FY guidance; however, shares traded lower after highlighting the effects of a weaker yen. KOSPI surged, helped by gains in Samsung Electronics while SK Hynix shares traded choppy ahead of its US ADR listing. The choppiness in SK Hynix comes as investors position themselves for the ADR, with analysts stating that the US ADR may be preferred over its domestic listing, due to US ADRs commonly trading at a premium (typically at a 5-15% premium). Shanghai Comp. and Hang Seng were firmer, with another set of IPOs in Hong Kong, resulting in 15 listings this week. Today, markets were focused on Nexchip Semiconductor. The IPO price was set at HKD 32.30/shr, and shares rose at the open and briefly topped HKD 36/shr but have since come off.

Top Asian News

• Japanese Finance Minister Katayama said they are to pursue steps to promote investment in Japanese assets by GPIF and others.
• Japanese Finance Minister Katayama does not comment on specific bond yield levels; specific monetary tools are up to the BoJ, closely monitoring economic indicators and market situations. Important that the government position secures market confidence. Will ensure fiscal sustainability to gain market trust. BoJ can adjust monetary policy regardless of what the government said. Predicts gradual increases in interest rates as the government is engaged in a proactive fiscal policy. Want to speed up discussions on expansion of JGB products targeting households.
• Japan's GPIF spokesperson said they are aware of Finance Minister Katayama's comments but declines to comment.
• Japan's Economy Minister Kiuchi said the government has consistently communicated its stance of taking policy that heeds to fiscal sustainability.

European bourses (STOXX 600 -0.1%) began the session on a weaker footing despite APAC optimism ahead of SK Hynix’s US debut (KOSPI +2.5% at close). Geopolitical newsflow quietened overnight, as such energy benchmarks are off best levels with Brent around USD 75/bbl. IBEX continues to outperform after it slumped earlier in the week (also has more defensive composition), while tech heavy AEX is the worst performer as top constituent ASML looks to SK’s ADR debut. European sectors opened with a positive bias and continue this way. Comms and Travel/Leisure outperform, Tech and Energy are the laggards for the above factors. In terms of individual movers, Infineon (-2.7%) said it is raising prices in some segments; EasyJet (+14%) agreed to a GBP 5.7bln takeover by Apollo at 715p/shr; Vodafone (+11%) French telecom tycoon Niel acquired E&’s stake for a GBP 0.15/shr premium.

Top European News

• UK Chancellor Reeves is to announce a new City "skills compact" that will commit financial firms to retraining thousands of workers for the AI revolution, The Guardian reported.

FX

• G10s are mixed against the Buck. JPY leads after FinMin Katayama touted measures to promote domestic inflows, Kiwi continues to eek gains post-RBNZ as markets look to price a cumulative 50bps tightening by year end and NOK is the worst performer after broadly cool inflation data.
• USD a touch weaker as JPY firms alongside the tempered recent Gulf updates. Geopolitical newsflow quietened overnight, with energy benchmarks off best levels with Brent around USD 75/bbl, about 5 Bucks off the week’s highs. DXY slipped throughout APAC as the JPY firmed, but found buyers below 21DMA at 100.85 which has proven support in recent sessions.
• JPY digests updates from FinMin Katayama who said she was to pursue steps to promote investment in Japanese assets by GPIF and others. This, on the face of it, would be a textbook tactic to encourage domestic investment and passively limit outflows, especially with a large composition (50%) of pension funds allocated to foreign investments. Several strategists note this is a positive sign in attempts to shore up the currency; though CapEco said “Much of its domestic bond portfolio is invested passively, and shifting more assets into domestic bonds would come at a sizeable fiscal cost if it requires selling equities”, and others highlight Katayama is not in a position to direct changes, it would be under the jurisdiction of the Labour Ministry. USD/JPY gradually trundled lower from a 162.50 peak, to mark a trough below 161.30 (session low 161.28), with a modest kneejerk lower on not-too-surprising BoJ sources. ING notes the JPY-funded carry keeps risks to the upside for the pair.
• NOK is the clear underperformer vs. both the USD and SEK after the soft inflation data series. Most metrics cooled beneath expectations, core Y/Y the sole figure rising above consensus, albeit unch. from May. CPI-ATE, the Norges Bank’s preferred gauge of inflation fell was 2.9%, well below the Bank’s estimate of 3.3%, will likely provide conviction for doves with the bank likely to remain on hold in the August meeting; then tighten in September should the next (August) CPI metrics not provide a dovish surprise. NOK/SEK fell from a 0.9940 peak to mark a trough at 0.9882. 8th July low at 0.9861 is the next level below.
• South Korean Forex Authority said USD/KRW market remains misaligned with economic fundamentals.

Fixed Income

• Overall, fixed benchmarks are firmer in reaction to the modest but increasing pullback seen in the energy space overnight and as JGBs lead on domestic updates.
• JGBs got to a high of 127.76 in the European morning, continuing the overnight rally after comments from Japanese Finance Minister Katayama, who said that pension funds should be encouraged to invest more in the domestic market. Commentary that underpinned Japanese assets across the board, and sent the 10yr yield lower by around 16bps on the day, down to 2.71% and now essentially flat on the month, reversing from the 2.89% YTD high.
• Commentary that also lifted peers at the time. While the shift would be a positive for the Japanese market generally, there are a few unknowns, most pertinently being whether Katayama can make such an announcement as the GPIF is under the Labour Ministry, not the Finance Ministry. As such, for FX in particular, there is an argument that Katayama’s commentary is conducting another form of jawboning, and therefore the move may well fade in the days/weeks ahead, unless a relevant official to the GPIF (i.e. Ueno, or PM Takaichi) backs the shift publicly.
• USTs got to a 109-12 peak in the early morning, as energy hit a low and the JGB-driven move topped out. Since, newsflow has been particularly light with the market essentially waiting for a resumption of negotiations or strikes, though as is often the case we might not get clarity on the next step until the weekend.
• Bunds followed suit, peaking at 125.74 with gains of around 35 ticks. Specifics limited. Continued focus on the EU funding plans, and the lack of agreement on the next 7yr plan is arguably supporting EGBs for net-contributing nations, as no agreement would see the current EUR 1.4tln figure continue as opposed to the planned uplift to EUR 2tln.
• Gilts opened lower by a few ticks, before then swiftly moving above the 88.00 mark to a 88.07 peak, in-fitting with the above. Action that leaves it just above Wednesday’s high but someway shy of the 88.93 opening level at the start of the week. Last night the first tally was done for the Labour nominations, and while the count theoretically leaves space for a challenger it is not realistic and therefore Burnham is now formally, for all intents and purposes, the incoming UK PM.
• Italy sold EUR 7.5bln vs exp. 6.0-7.5bln 3.00% 2029, 3.35% 2033 & 3.95% 2041 BTPs.
• China's MOF sold 2-year and 3-year bonds. 2-year sold at 1.2305%. 3-year sold at 1.2629%.
• Australia sold AUD 900mln 1.75% 2032 AGBs: b/c 3.16x (prev. 4.10x), average yield 4.6189% (prev. 4.1987%).

Commodities

• The geopolitical situation appears to have calmed down this morning, with no fresh reports of strikes on Iran/regional neighbours. However, the situation remains tense given some of yesterday’s actions. Iran reported a couple of strikes at two military bases, but US officials denied any involvement of this. Despite the earlier reports, some Iranian officials denied any explosions taking place.
• Despite the recent flare-up, a US official stated that the US remains committed to a resolution with Iran and technical discussions are ongoing. This, alongside the lack of new strikes overnight has led to a bearish bias in crude benchmarks this morning. Brent Sep’26 (-0.2%) is only mildly lower and trades at the towards the mid-point of a USD 75.36-76.95/bbl range. Some mild downticks were seen in the benchmark after the release of the IEA Oil Market Report. It cut 2026 oil demand, noted that the UAE is upping its supply and oil transits are passing through the Hormuz.
• Spot gold (-0.6%) trades lower this morning, hovering on either side of the USD 4.1k/oz mark; currently within a USD 4,094-4,134/oz band. The range today is very thin, amidst the lack of pertinent newsflow and fairly steady USD. Elsewhere, base metals hold a negative bias. 3M LME Copper trades within a USD 13,455-13,562/t range. For aluminium, analysts at Morgan Stanley recently stated that they see a smaller supply deficit in 2026, and likely to move into a surplus from 2027.
• Oman has set its OSP at USD 69.29/bbl for September delivery.
• IEA OMR: forecasts global oil demand in 2026 to fall by 1.05mln BPD (prev. exp. 1.12mln); global oil demand recovery is under way. Global oil demand estimated at 103.46mln bpd for 2026 and is expected to grow by 2mln BPD in 2027 and reach 105.47mln BPD. Oil supply may expand 7.5mln BPD in 2027 if transits improve.
• A fire broke out at two oil product storage facilities due to a UAV attack in the Rostov region, according to the governor; fires are being pushed out in Taganrog's Seaport, reported no injuries.
• Krasnodar task force said a fire has broken out at the Ilsky oil refinery due to the fall of a drone's debris, Interfax reported.
• QatarEnergy set August Marine Crude OSP at Oman/Dubai -USD 5/bbl; Land Crude OSP at -USD 4.50/bbl, according to a pricing document.
• China National Summer grain output reached 150.7mln tonnes, +0.7% Y/Y.

Trade/Tariffs

• China's MOFCOM announces a temporary ban on helium exports.
• US White House announces the adjustment of imports of commercial aircraft, jet engines, and aircraft and engine parts into the US; no immediate tariffs be imposed under section 232 to address the threatened impairment to the national security.

Central Banks

• BoJ reportedly to keep rates unchanged in July but maintain policy guidance and also raise growth outlook, according to sources.
• PBoC injected CNY 20bln via 7-day reverse repos with rate maintained at 1.40%.
• PBoC set USD/CNY mid-point at 6.7989 vs exp. 6.7931 (prev. 6.8036); strongest midpoint since February 2023.
• NBP's Wnorowski said signal about possible motion to cut interest rates in September is premature; do not see space for more than one cut this year.

Geopolitics: Middle-East

• Qatar, Pakistan and other regional mediators are trying to de-escalate tensions between the US and Iran and revive negotiations on a nuclear deal, Axios reported citing sources.
• A member of the National Security Commission of Iran's parliament said the UAE will pay the price for cooperating with America.
• A US official said talks with Iran will continue, Fox's Hasnie reported; The administration is still committed to finding a resolution so technical talks continue to prevent Iran from having a nuclear weapon. Iran's attacks on ships in the streets are acts of terrorism. The MoU is performance-based, and Iran's actions constitute failed performance at an unacceptable level.
• Israel reportedly shared new intelligence with the US that indicated a new Iranian plan to kill US President Trump, WSJ reported citing sources.
• A US official said the US remains committed to a resolution with Iran and technical discussions are ongoing.
• Turkey has decided it will not join the Canadian Defence Bank initiative at this point, sources suggest.
• The Israeli army said "we will continue our operations to eliminate any threat and will not allow Hezbollah to harm us", Al Jazeera reported.
• Al Jazeera reported that Israeli forces are conducting extensive demolitions in southern Lebanon.
• Krasnodar task force said a fire has broken out at the Ilsky oil refinery due to the fall of a drone's debris, Interfax reported.
• Pakistan has begun mediating between Libya's rival eastern and western data centres with the backing of the US and Saudi Arabia, Nikkei reported citing sources.
• Lebanese media reported of new Israeli drone strikes in southern Lebanon, Tasnim reported.
• Four Japanese-linked vessels remain in the Persian Gulf, Kyodo reported.
• Konarak Governor said this area was targeted by enemy fighter jets in two stages on Thursday evening.

Geopolitics: Ukraine

• Ilsky (138k BPD), Russia oil refinery fire has now been extinguished.

US Event Calenadar

• The US economic data calendar empty for the session

DB's Jim Reid concludes the overnight wrap

I was hoping that by now the latest on the Iranian conflict wouldn’t be the lead story but it has of course returned to the top of the headlines this week. The latest is that Bloomberg reports overnight indicate that “technical talks” continue between US and Iranian officials despite the clashes this week. There were also Bloomberg reports that President Trump and PM Netanyahu spoke Thursday according to the PM’s office. To be fair sentiment turned back more positively late Wednesday night when Trump suggested that the Iranians were desperate for a deal. So markets have generally been more positive since.

So for now we can go back to trying to guess whether we’ll wake up to the KOSPI being up or down more than 5%. If you guessed in the positive side this morning you’d be correct as it’s surging +5.11% as I type, after officially entering bear-market territory yesterday. The rally has of course been driven by strong gains in semiconductor stocks with the record-breaking $26.5 billion listing by chipmaker SK Hynix helping to reinforce confidence that the AI investment cycle remains intact. Elsewhere in the region, Hong Kong’s Hang Seng Index (+1.85%) has climbed to its highest level since June 17, while Japan’s Nikkei 225 (+1.77%) is also posting strong gains. The CSI 300 (+0.49%), Shanghai Composite (+0.75%), and S&P/ASX 200 (+0.51%) are also up. US and European futures are down between a tenth and two tenths of a percent though. 10yr USTs are -1.2bps lower trading at 4.54% and oil is fairly flat.  

In Japan, long-dated government bond yields are falling and the yen strengthening after Finance Minister Satsuki Katayama indicated that the government intends to encourage pension funds, including the Government Pension Investment Fund (GPIF), to increase allocations to domestic financial assets. The 20-year JGB yield is down -7.8bps at 3.78%, while the 10-year is -8.7bps lower at 2.778%. The Japanese yen (+0.51%) is rallying for a second consecutive session, trading at 161.54 against dollar as we go to print. There is some scepticism here internally as to whether it'll be easy to encourage domestic pension funds to automatically buy more JGBs. The view is that asset allocations decisions are more slow moving and might actually favour equities first. However for now the move is being seen as a sign that action is being considered.  

Ahead of all that, markets saw a bit of a relief rally yesterday, thanks to easing geopolitical fears, decent tech headlines, and a respectable batch of data. So collectively, that helped to power bonds and equities on both sides of the Atlantic, particularly as falling oil prices reassured concerns about a fresh surge of inflation. So by the close, that meant the S&P 500 (+0.81%) and Europe’s STOXX 600 (+0.78%) both advanced, whilst yields on 10yr Treasuries (-4.2bps) and bunds (-0.8bps) also fell back.  

Those oil price declines followed headlines suggesting that the escalation between the US and Iran might not prove as serious as initially feared. Most notably, sentiment was supported by comments from President Trump late on Wednesday night, that we mentioned yesterday, saying that Iran wanted “to make a deal so badly”. So when US and European markets reopened yesterday, they were buoyed by the fact that Trump was still talking about some kind of agreement. So that supported oil prices lower, with Brent crude down -2.20% on the day to $76.30/bbl. And in turn, that eased fears around inflation, with the 1yr Euro inflation swap (-9.0bps) falling to 2.05%, after rising 27bps on Wednesday.

This backdrop meant that investors dialled back their expectations for imminent rate hikes again, particularly in Europe. For instance, the amount of ECB rate hikes priced by December came down -8.5bps on the day to 31bps. And over at the Fed, the probability of a hike at the upcoming July meeting fell back from 31% to 24%. So that provided a decent tailwind for sovereign bonds in turn, with yields on 10yr bunds (-0.8bps), OATs (-7.2bps) and BTPs (-7.0bps) all coming down.

Whilst lower oil prices helped sentiment, markets got another boost yesterday from the latest tech headlines, which saw the Philly semiconductor index (+3.06%) post its best daily performance in 3 weeks. That included a very strong gain for Micron (+4.52%), who raised their planned spending on new US plants to $250bn by 2035, which was $50bn on top of previously announced commitments. The rally also saw the SK Hynix ADR officially became the largest foreign company offering as the South Korean chipmaker raised $26.5bn – greater than expected and just ahead of the $25bn previously raised by Alibaba.

So that chip rally helped to lift US equities more broadly, with the S&P 500 (+0.81%) recovering after back-to-back declines on Tuesday and Wednesday. The rally was fueled by investors rotating from defensives industries back into growth and cyclical names. Autos (+2.91%), Tech Hardware (+1.99%), Semis, +(1.90%), and Banks (+1.61%) were the best performing S&P 500 industry groups, while Consumer Staples (-2.04%), Food & Bev (-1.77%), and Household Products (-1.58%) lagged. And in Europe, the STOXX 600 (+0.78%) advanced for the first time this week with a similar rotation from defensives into cyclicals.

Speaking of tech, there was an interesting acknowledgement of AI-driven inflation from New York Fed President Williams. He spoke about the potential for demand driven by AI to raise inflation, and said if it “creates a sustained impulse to demand relative to supply in inflation, I do think that’s the kind of situation where you don’t look through this”. Meanwhile on inflation more generally, he said that if core PCE were at “two-tenths a month in the second half of this year, that would be consistent with my view of a disinflationary process that’s continuing”. But he also said if it were higher, “ that would be a sign of inflation a bit more persistent.”

The other Fed news from yesterday was the release of the leadership teams of the five task forces that Chair Warsh announced to examine the Fed’s current approach and processes. The areas that the Fed are examining are the communications strategy, the use of the balance sheet, the quality and reliance on existing data sources, productivity and jobs, and inflation framework. The teams are mix of former policy makers, academics, and corporate leaders. 

Staying on central banks, yesterday also brought the minutes of last month’s ECB meeting, where they hiked rates for the first time since 2023. It spoke of inflation pressures, and said how “Further indirect effects were in the pipeline, pointing to more broadening of inflationary pressures across the economy”. Moreover, there was an acknowledgment that “memories of the 2022 high-inflation episode could make households and firms react more quickly than in the past, increasing the risk that price-setting and wage-bargaining behaviour would adjust.” Interestingly, there was also a discussion about what happened in 2011, when the ECB hiked rates before reversing course shortly after as the sovereign debt crisis became more severe. But the view was there were key differences with that period, including the lack of financial stress.

Finally, the latest US data yesterday offered fresh reassurance on the labour market, with the weekly initial jobless claims coming in at 215k in the week ending July 4 (vs. 217k expected). So that took the 4-week moving average down to 218.75k, and so far at least, claims remain well beneath their summer peaks in 2023, 2024 and 2025. However, existing home sales unexpectedly fell in June, falling back to an annualised rate of 4.09m (vs. 4.20m expected).

Looking at the day ahead now, and data releases include Italy’s industrial production for May, and Canada’s employment for June. Otherwise, central bank speakers include the ECB’s Vujcic and Stournaras.

Via The Cradle

French Foreign Minister Jean-Noel Barrot on Thursday said that Paris is developing "alternative routes" following a return to war between the US and Iran, singling out Syria as a primary gateway to Persian Gulf oil.

"Among all the efforts we have made since the start of this crisis, there is the idea of preparing alternative routes so that we are not dependent on blockages here or there," Barrot said.

The foreign minister noted that Syria is currently reunifying after the collapse of former Syrian president Bashar al-Assad's government, and could emerge as a "new regional hub." He also identified Syria as a strategic corridor for Gulf oil to mitigate supply disruptions in the Strait of Hormuz.

Barrot emphasized that France intends to expand trade and economic cooperation with Damascus while securing a pathway for Gulf producers.

The transition requires comprehensive infrastructure assessments and security guarantees, the foreign minister said, viewing these efforts as essential to securing global energy markets.

The announcement follows French President Emmanuel Macron's visit to Damascus on Tuesday, where he met with former Al-Qaeda chief and self-appointed Syrian President Ahmad al-Sharaa to discuss regional stability.

Joining Macron on his visit, TotalEnergies head Patrick Pouyanne described the nation as being "at the crossroads of the Middle East," positioning it as a vital transit link between Iraq and the Mediterranean Sea. 

Syria is not united. When Shara'a failed to take Suwayda, his forces massacred well over a 1,000 Druze civilians. And the last move, Rojava, ended the only democratic and inclusive structure within Syria.

EU & US are sponsoring the rise of a new sectarian autocracy. https://t.co/FU1s79m0I4

— Gargari (@Gargaristan) July 8, 2026

Since April, Iraq has been transporting oil through Syria by truck for re-export, exporting over 600,000 tons of fuel oil between April and June to bypass the closure of the Strait of Hormuz.

Last month, officials from both countries discussed rehabilitating the shared Kirkuk-Baniyas oil pipeline and establishing energy transit mechanisms.

While TotalEnergies has signed a memorandum of understanding (MoU) for an offshore exploration block in the Mediterranean, Pouyanne clarified that no other specific projects are underway. 

He acknowledged that current conditions remain volatile, stating, "Today, it's clear that the security situation still doesn't allow us to operate, but I think it is a positive initiative to come here, to Damascus."

His remarks preceded reports of two bombs detonating near the Four Seasons Hotel where the French delegation stayed. 

#Syria | The Syrian Interior Ministry says the two explosive devices were planted only a short time before they were discovered in the area. Surveillance cameras covering the site are the primary source of evidence in the ongoing investigation. Officials also say CCTV footage… pic.twitter.com/WQeKIhVVgq

— Basha ???? (@BashaReport) July 7, 2026

Pouyanne noted, "We should give the government time to take control of the country. We shouldn't ask too much," concluding, "We need to be a little patient."

German Chancellor Friedrich Merz newly announced Thursday that his government has struck a deal with the United States to buy American-made Tomahawk cruise missiles and station them in Germany.

"On the sidelines of the NATO summit in Ankara we also agreed with the American government that Tomahawk missiles would be purchased by us and stationed in Germany," Merz said. "With this we are closing an important strategic gap in our defense. And at the same time we will work on developing our own European systems and deploying them in Europe."

He announced this while informing parliament that the results of this week's NATO summit in Turkey "exceeded all of my expectations" -  which he said bolstered the alliance as a "united, strong and self-confident" one.

Russia loomed large in the background of his speech, given he offered a final goal of moving toward "a future where our country is not susceptible to blackmail, but rather can confidently meet every threat posed to our free way of life using its own strength."

Germany makes its own cruise missiles, the Taurus, but their range of just over 300 miles is three to five times shorter than the Tomahawk.

With this deal, Berlin is seen as greatly bolstering its long-range strike abilities, at a moment this has also been a big focus in Ukraine, in terms of inflicting damage deep inside Russian territory.

When it comes to actual deep-strike deterrence, Washington has long had the biggest monopoly on long-range capabilities in comparison to European militaries and EU domestic production.

The operational range of a Tomahawk missile varies between about 800 to 1,700 miles, depending on the specific block variant and flight profile.

While the missile is relatively slow compared to more recent developments in missile technology, it is effective as it's able to fly so low, almost at tree line level, thus better evading radar.

"Operational missiles are launched by a solid-fueled booster rocket and carried to their target by a turbofan jet engine," one source reviews.

Germany's Chancellor Merz:

On the sidelines of the NATO meeting in Ankara, we agreed with the American government that U.S. Tomahawk missiles will be purchased by us and stationed in Germany.

We are closing an important strategic gap in our defense while simultaneously working… https://t.co/LlN2EpJYAy pic.twitter.com/dbLOUTmutf

— Adam Scott (@chefcascottccc) July 9, 2026

"The Tomahawk flies near the surface at 550 mph and uses satellite-assisted navigation and TERCOM (Terrain Contour Matching) radar to guide it to a target up to approximately 1,500 miles distant," the source notes. "It can carry either a conventional or a nuclear warhead."

Update(21:00ET): Here's what President Trump said from Ankara on Wednesday which left many wondering just what he was referring to: "They want to take out the U.S. leader—me," he said in reference to the Iranians. "I’m on every list. I saw this morning, I’m on every single one of their lists. And so far, I guess I’ve been a little bit lucky, but that maybe doesn’t last very long."

The Wall Street Journal in a Thursday evening report says that Israel has provided fresh intelligence to the White House indicating just such a Tehran-linked plot. The timing is quite curious and interesting given it comes just as the warring sides standing on the brink of returning once again to full-scale war:

Israel shared new intelligence with the U.S. that it said indicated a fresh Iranian plan to kill President Trump, people familiar with the matter said, a finding that would mark an escalation in the war between Washington and Iran.

Iran for years has vowed openly to retaliate against Trump for the assassination of Qassem Soleimani, who was a top general in the Islamic Revolutionary Guard Corps, in the president’s first term. 

The Israeli embassy in Washington declined to comment. Iran’s Mission to the United Nations didn’t immediately respond to a request for comment. The White House referred The Wall Street Journal to comments the president made on Wednesday. 

The Israelis have remained deeply dissatisfied with terms laid out in the previously agreed-to MoU, and so have every incentive to goad Washington further into the conflict. Certainly many within the US administration know this, and so might be taking this new 'intelligence warning' - which was leaked rather quickly to major media - with the appropriate degree of skepticism. 

Meanwhile the US says it is still engaged in 'technical talks' with Iran, despite the past days of tit-for-tat bombings. "Technical talks between the US and Iran are continuing, according to a US official, following two days of clashes that threatened to shatter an already fragile ceasefire between the two nations," reports Bloomberg, also late in the day Thursday. "The US is still committed to finding a solution with Iran, the official said Thursday, speaking on condition of anonymity to discuss the matter."

So it appears there's still hope that things might not spiral further. As for the alleged assassination plot, this isn't the first time Iran has faced such accusations, and each time Tehran officials have vehemently denied them.

*  *  *

Just as the US nighttime strikes were significantly bigger than prior rounds in June, so has Iran's 'retaliation' been bigger - chiefly on Gulf states and American bases there.

In the overnight and Thursday daytime hours, Iranian ballistic missiles and drones have targeted Kuwait, Qatar, Bahrain, and even faraway Jordan. The country is reporting that it has intercepted several missiles, which targeted Muwaffaq Salti Air Base - jointly operated by US and Jordanian forces. Oil prices have persisted above prewar levels on Thursday.

"Jordan has intercepted eight Iranian missiles in its airspace after sirens sounded across the country, according to the armed forces," reports Al Jazeera. "Falling shrapnel did not cause any casualties or material damage, it added."

Following the US bombing of the Islamic Republic for a second consecutive night, which came after Iranian forces sought to enforce its own shipping route and protocol on the Strait of Hormuz (which saw several international vessels attacked), Tehran has newly confirmed it in turn struck "US bases and strategic centers” in Bahrain, Kuwait, and Qatar.

In particular the IRGC has claimed that two US bases in Kuwait and two base in Bahrain were attacked - and the Iranian elite force is threatening more to come. US Central Command (CENTCOM) says the rate of its strikes have grown to about 14 times the number of targets hit in the last late June flare-up in fighting.

Sirens blared in several cities in Jordan as Iranian missiles were intercepted.

Jordanian Armed Forces confirmed at least eight missiles were intercepted. pic.twitter.com/2aRvPCsY2Q

— Al Jazeera Breaking News (@AJENews) July 9, 2026

According to the figures cites in the NY Times:

U.S. forces have struck more than 170 Iranian military targets in the past two days, including air defense systems, drone and missile storage sites, military speed boats, and logistics infrastructure along the coast near the Strait of Hormuz, according to the U.S. Central Command. 

CENTCOM released footage of some of the fresh strikes:

According to a release from U.S. Central Command, in the most recent wave of U.S. strikes against Iran in response to the Iranian targeting of commercial shipping, 90 military targets, including military logistics infrastructure, missile and drone storage sites, air defense… pic.twitter.com/c1sRyvbN5H

— OSINTdefender (@sentdefender) July 9, 2026

In some instances civilian infrastructure like rail lines and bridges have reportedly been hit, which marks a return to the opening months of Operation Epic Fury, when targets all across the country were damaged or obliterated.

Little that's confirmable in the way of damage has come out of the Gulf states at this point: 

Kuwait said that it had intercepted three ballistic missiles, a cruise missile and 10 drones early Thursday morning and that falling debris had injured one person and caused material damage. Bahrain’s military said it had intercepted and destroyed several drones and missiles after Iran launched attacks on Thursday.

Iran also said that it had launched an attack in Qatar, a key mediator in Iran’s talks with the United States. The Qatari authorities did not confirm any strikes but did issue a public security alert early this morning that it later lifted.

Iranian state sources have said the two days of renewed American attacks have killed 14 people and wounded 78. The casualty count could be much higher given that strikes and counterstrikes could be extended as an offramp becomes more elusive. Explosions have been observed along the Iranian coast, including Bushehr, Chabahar, Bandar Abbas, and Sirik.

VIDEO | Footage shows the Chabahar maritime traffic control tower following last night's US attack.

The tower was attacked in an attempt to disrupt Iran's control over the Strait of Hormuz. pic.twitter.com/wM5KLRhgqN

— The Cradle (@TheCradleMedia) July 9, 2026

As for potential offramp, President Trump is still claiming that Tehran wants to make a deal "badly" - and even specified to reporters aboard Air Force One that Iran "called a while ago" make just such a request. Most pundits and reporters, after hearing the same line literally dozens of times over the past months, are skeptical to say the least. 

While this remains Trump's public-facing rhetoric, a fresh Thursday report in The Wall Street Journal offers a contrasting account. "Angered by the strikes, Trump pressed them on whether they believed Iran was serious about reaching a final deal," WSJ writes. "In the end, after discussing it with his senior aides, the president decided they weren't."

Reports by Iranian state-run media of a cruise missile impact on the site of the Bushehr Nuclear Power Plant in Southern Iran. pic.twitter.com/T9hKKx80NJ

— OSINTdefender (@sentdefender) July 9, 2026

Trump had later (on Wednesday) said from Ankara at the NATO summit, "To me, I think it’s over." He then emphasized: "I don't want to deal with them…They’re liars, they’re cheats, they’re sick people."

As for Tehran's position, "An Iranian diplomat said Wednesday that the US had violated the peace deal by setting up a shipping lane that wasn’t coordinated with Tehran, contending that it justified the Islamic Republic’s decision to fire at traffic," according to the same report.

?? Axios, which has frequently published official U.S. and Israeli leaks throughout the war, reports that the White House is preparing for what could become a multi-day or even multi-week military campaign against Iran centered on the Strait of Hormuz after President Trump… https://t.co/s0A4M71boV

— Drop Site (@DropSiteNews) July 9, 2026

From there, Secretary of War Pete Hegseth warned alongside Trump that the United States would hit Iran "even more, and even deeper" - after that the Pentagon announced it would "further degrade their ability to threaten freedom of navigation in the Strait of Hormuz."

A US official was also quoted in the WSJ as saying Iran had chosen "the path of violence" and so will face the consequences.

The US has once again bombed fishing boats under the pretext of hitting IRGC fast attack boats. pic.twitter.com/WYYEkOnaw1

— Arya Yadeghaar (Backup) (@AryJeayBackup) July 9, 2026

*  *  *

More overnight developments

via Newsquawk...

Overnight strikes:

• At the direction of the Commander in Chief, US Central Command forces have started conducting additional strikes against Iran to further degrade their ability to threaten freedom of navigation in the Strait of Hormuz. The United States is holding Iran accountable for recent unjustified aggression against commercial shipping and civilian crews freely navigating a vital international waterway.
• US military base in Kuwait was hit in an Iranian retaliatory attack, while explosions heard at the US Fifth fleet HQ in Bahrain.
• Iranian missiles targeted the Azraq base in eastern Jordan, Fars reported.
• Iranian opposition sources report that maritime industries, shipyards, and the Revolutionary Guards' naval base in Bandar Abbas were attacked, report Kan News.

US Commentary:

• US President Trump said Iran called a while ago, they want to make a deal.
• US President Trump's frustration with Iran was due in part to his anger over the Strait not being fully open yet and that Iran hit ships transiting the Strait, CNN reported citing a US official. The official added that Trump is losing patience with the pace of negotiations, specifically Iran's appearing to slow walk Washington on the nuclear talks.
• US President Trump posted "This is in retribution for yesterday’s bombing of ships by Iran. If it happens again, it will get much worse!".
• US President Trump said Iran was just hit very hard, we have many ways to win; do not know if Iran will honour a deal but Iran wants to make a deal badly. Europe wants to help on Iran.
• A US official said the ceasefire with Iran has been halted, at least temporarily, CNN reported.
• "Everything depends on Iran's response - if they continue to shoot, the night's events could become a daily, weekly event. We are prepared," i24News reported citing a US source.
• The length and severity of the new campaign depends entirely on Tehran's next moves, Axios reported citing a US official; The White House is preparing for a multi-day or multi-week exchange of fire with Iran over the Strait of Hormuz.
• Israel has no connection to the US strikes on Iran, Al Arabiya reported citing an Israeli military source. Any attempt to target Israel will be met with a swift, decisive and strong response.

Iran Commentary:

Iran's Bushehr Governor said that US attacks on a nuclear plant in the region are not true.
Iran's advisor to the Supreme Leader Rezaei said "martyr Khamenei taught us not to fear American and showed that falsehood will perish. Await the hard slap from the Iranians".
Iran's IRGC said they will respond to the targeting of a bridge in Aqqala, Al Arabiya reported.
Iran's IRGC said two US bases in Kuwait and two base in Bahrain were attacked, response will be extended to other US bases in the region if the US repeats its attacks.
Iranian Parliament Speaker Ghalibaf said America has not yet learned that bullying and breach of promise are no longer free, adds the Strait of Hormuz will only open with Iranian arrangements, not American threats.
The US attack on Bushehr did not cause any damage to the nuclear power plant, Nour news reported citing a source.

Lebanon:

• "The US ambassador in Beirut: Negotiations between Lebanon and Israel have moved to Rome for technical reasons", via Al Arabiya. Preparations are underway regarding the start of work in the pilot areas.
• Israeli Defence Minister Katz said they will remain within the Lebanon security zone and will operate within it until Hezbollah is disarmed.
• Others

Authored by Michael Kern via OilPrice.com,

BP has started to simplify its portfolio and cut costs, and will make fewer but better choices in which projects to invest, chief executive Meg O’Neill said on Thursday.

“We are taking concrete action to grow long-term value for shareholders: simplifying our portfolio, reducing costs, maintaining tight discipline on capex and strengthening the balance sheet,” O’Neill, the first female CEO of a Big Oil company, wrote in a LinkedIn post to reflect on the first 100 days as top executive of BP.

“We need to be deliberate about where we invest and where we don’t. We need to make fewer, better choices and hold ourselves to account,” O’Neill wrote.

“Investors should be able to rely on us in the same way our customers do,” the executive added.

BP has already simplified its structure by bundling operations into two businesses, Upstream and Downstream, with trading connecting both to create value.

Despite the unprecedented disruption in the energy industry in recent months, BP has continued to simplify the company and reduce costs to make the supermajor more attractive to investors, she said.

As part of the portfolio simplification, BP is reportedly considering an exit from the UK North Sea, due to unfavorable taxation policies in Britain.

BP is the last supermajor to haven’t either sold or combined its UK North Sea business in recent years. Shell and Equinor combined their oil and gas assets in a standalone company, Adura.

TotalEnergies merged its assets with NEO NEXT to create NEO NEXT+, in which the French supermajor holds a 47.5% interest.

This week, BP announced a divestiture offshore Canada, as it agreed to sell its non-operated interest in the Bay du Nord offshore oil development to Equinor.

The sale marks another step in BP’s strategy to streamline its upstream portfolio and tighten capital allocation.

Bettering yourself financially or at least giving your children the opportunity for a more prosperous future has driven people to emigrate to the United States for generations. But is the next generation still better off in this day and age?

The answer is yes, but not by that much.

At least, as Statista's Katharina Buchholz reports, this is the verdict given in a discussion paper published by the Federal Reserve Board of Washington D.C. in 2024. 

It concludes that millennials' median household income at 36 to 40 years old was still 18 percent higher than that of Generation X at the same age.

A millennial born in 1982 would have turned 40 in 2022, the last year the study looked at.

You will find more infographics at Statista

Gen X achieved a similarly low increase of median household incomes over Baby Boomers at 16 percent.

This is in contrast to the post-war generation, which at age 36-40 earned 27 percent more than the Silent Generation.

For this generation growing up during World War II, the number still stood at 34 percent on average.

Taking as a baseline the Greatest Generation, which was born between 1900 and 1927, the Silent Generation earned 34 percent more, while Boomers made a cumulative 70 percent more, Gen X took home 97 percent more and finally Millennials brought in 133 percent more than the Greatest Generation even when adjusted for inflation.

The data also shows that the Silent Generation worked 14 percent more hours than the generation before and Boomers worked another 14 percent more.

However, working hours have been relatively stable for generations since.

While the numbers show that average income wealth rose in the United States over time and that more people gained access to at least a middle-class life over the decades, this doesn't mean that everybody is necessarily making more than those who came before. 

A study published in 2017 and widely reported then showed that only 50 percent of people born in 1984 made more than their parents at age 30.

For those born in 1940 and turning 30 in 1970, this number had still been above 90 percent.