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17:54
PDT

OpenStar aims to produce medical isotopes, addressing a multi-billion dollar market.

OpenStar Technologies Ratu Mataira New Zealand Japan Fusion Industry Association Jeff Bezos Bill Gates The Open San Francisco DXY

– The company is leveraging New Zealand's talent and resources for its fusion technology.

– OpenStar's reactor design is considered more scalable than traditional methods.

– The fusion industry has seen $4.5 billion in new funding over the past year.

– Government support is crucial for the commercialization of fusion technology.

nuclear fusionmedical isotopessupply chain riskgovernment support

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And provide that role of confining the plasma and keeping that plasma hot. And you can get the power plant back up and running in about two weeks. So that's the first point. And then the second point is, the mission of OpenStar and companies like us is to provide clean and abundant energy for the world. But there are other very valuable things that we can do before we get to that milestone. That can help us put a commercial engine in behind what we are trying to achieve. And so for us, that would be an application like producing medical isotopes, which is itself a multi-billion dollar industry per annum, has massive supply chain challenges occurring over the next five years, and we're literally saving lives with the products that we would be producing. It's very interesting that your home is New Zealand. The OpenStar got started there because it's supposed to be nuclear free, right? What do you find in terms of the supply chain, the talent in order to grow your business just quickly if you can? Yeah, the supply chain and the talent is fantastic. So I mean we live in a globally interconnected economy where we can pull in what we need where we can't make in New Zealand. But on the talent, you've got to remember that New Zealand is now the third most frequent rocket launching nation on earth. Japan now relies on us to send our satellites into space with high responsiveness. We are the kind of country that can work at this kind of highest level of human ingenuity and so our ability to draw in those engineers locally is fantastic. But I must say I'm here in San Francisco for a reason.

Analysis

OpenStar Technologies is positioning itself as a key player in the nuclear fusion sector, aiming to provide clean energy and tackle supply chain challenges in the medical isotope industry. The company's focus on leveraging New Zealand's talent and resources highlights its strategic advantage in a globally interconnected economy.

Investors should note that OpenStar's dual approach—developing fusion technology while addressing immediate market needs like medical isotopes—could create a robust commercial engine. This strategy not only mitigates risks associated with long-term fusion commercialization but also taps into a multi-billion dollar industry with pressing supply chain issues.

17:52
PDT

OpenStar is developing a device called Tahi to demonstrate performance aspects of its technology.

OpenStar Technologies New Zealand government LCOE New Zealand DXY

– The New Zealand government is supporting OpenStar's efforts in nuclear fusion.

– The focus on maintainability could differentiate OpenStar from competitors.

– Faster progress in fusion technology may lead to increased investment.

– Commercial viability remains a key challenge for the nuclear fusion industry.

nuclear fusiongovernment supportenergy innovation

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was junior, right? In order to see whether he can work at many times scale, what's the next phase for you? So the next phase for us is to build a device we call Tahi. Tahi is our demonstration of all of the performance aspects of our particular technology. So junior was very much a demonstration of plugging together technologies that had not been put together before and showing that they worked as expected. Now we need to prove the performance and we want to do it in a scenario that's not yet nuclear. So that reduces the cost. It allows us to move significantly faster. And so Tahi allows us to say, if we spend X dollars here, it turns into Y performance here and affects our LCOE here. And so we can answer the majority of the questions that we need to by building that device. And that's what we have New Zealand government support to do over the coming years. You're seen as a more high-risk, high-reward sort of bet when it comes to nuclear fusion technology given that it could become a simpler endeavor but at the same time it's a very theoretical and engineering challenging work. How do you compare to competitors, especially in trying to make this commercially viable? So there are probably two major distinctions. So the first which I've already touched on is maintainability. So when you build these really complicated machines typically, we would say they have the dipoles for simplest kind of arrangement.

Analysis

OpenStar Technologies is advancing its nuclear fusion technology with the development of a device called Tahi, aimed at demonstrating performance aspects without the costs associated with nuclear scenarios. This approach allows for faster progress and clearer cost-performance metrics, supported by the New Zealand government.

The focus on maintainability and simplicity in reactor design could position OpenStar favorably against competitors in the nuclear fusion space, which often deal with complex machinery. As the industry seeks commercial viability, the emphasis on engineering solutions over theoretical challenges may attract significant investment and interest from stakeholders.

17:49
PDT

Nuclear fusion funding reached $4.5 billion in the last year.

Fusion Industry Association OpenStar Technologies Ratu Mataira New Zealand government Jeff Bezos Bill Gates CEO The Fusion Industry Association Star Technologies The New Zealand In February San Francisco DXY

– OpenStar Technologies is developing a levitated dipole reactor.

– Recent breakthroughs in plasma heating signal progress towards commercial viability.

– High-profile investors are backing fusion startups, indicating confidence in the sector.

– Commercial grid power from fusion reactors is targeted for the 2030s.

nuclear fusionenergy transitioninvestment trends

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The Fusion Industry Association says the transition of nuclear fusion generation from the lab to the marketplace is now firmly underway with around four and a half billion dollars of new funding in the last 12 months. Tech billionaires including Jeff Bezos and Bill Gates are among the prominent backers of fusion startups. One of the players in this race is OpenStar Technologies. The New Zealand government-backed startup is betting on a levitated dipole reactor design considered more scalable than traditional Tokamak. In February, it floated a half-ton magnet in plasma heated to over 1 million degrees Celsius, signaling a breakthrough in its push for sustained fusion. The company aims to bring reactors to market in the 2030s with plans to supply commercial grid power during that decade. Joining us from San Francisco is the founder and CEO of OpenStar Technologies, Ratu Mataira. Ratu, it's really great to have you with us. So how close are we to commercial viability, not only for you but for the broader nuclear fusion industry? First of all, thank you for having me. It's a pleasure to be here. And I think this is what excites us about our industry right now is we've long told a story about decades of working on the science. And now we're seeing engineering solutions that are creating pathways to scale. It's a large part of what we did and the first prototype that we built. And of the Sizzle Reel that you just saw.

Analysis

The Fusion Industry Association reports a significant transition in nuclear fusion generation, with approximately $4.5 billion in new funding over the past year, backed by tech billionaires like Jeff Bezos and Bill Gates. OpenStar Technologies, a New Zealand government-backed startup, is advancing its levitated dipole reactor design, aiming for commercial viability in the 2030s after a recent breakthrough in plasma heating.

Smart money should note the growing momentum in fusion technology as engineering solutions emerge, potentially reshaping the energy landscape. The backing from high-profile investors indicates a strong belief in the scalability and future profitability of fusion energy, which could disrupt traditional energy markets.

17:45
PDT

Japan's nuclear industry is recovering post-Fukushima.

Helical Fusion Japan Bloomberg Intelligence Mitsubishi Heavy Hitachi Helical Cellulators The Japanese PRIVATE CL=F

– Helical Fusion aims for a commercial reactor by the 2030s.

– Data center power demand in Japan is set to double by 2030.

– Government support is crucial for fusion technology advancement.

– Nuclear energy is becoming a key player in carbon-free electricity.

nuclear energyfusion technologydata center demandgovernment support

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isn't just about bringing yesterday's reactors back online. It's also giving new life to the race for tomorrow's technology, nuclear fusion. Helical fusion is one of the players betting on that future, founded in 2021 by leveraging decades of research. It aims to deliver the world's first commercially viable fusion reactor by the 2030s. Our technology is called Helical Cellulators, which was invented in Japan around 70 years ago. This kind of double helical structure of the magnetic coil is Helical Cellulators feature. And this is very good at steady state plasma performance in the reactors. We aim to construct not just a scientific device, but a commercial fusion propellant. pipelines. And this health care accelerator coil will enable us to create a twisted field inside reactors. Yet the industry's comeback faces hurdles beyond the science. Fusion remains years away from commercialization, costs are massive, and Bloomberg Intelligence says continued government support and international partnerships will be critical. The Japanese government is very positive to support fusion reactors or fusion pipelines system so we believe we can go together with the Japanese government to make the fusion power plant real in Japan.

Analysis

Japan's nuclear revival is gaining momentum as the government supports the development of fusion technology, with Helical Fusion aiming to deliver a commercially viable reactor by the 2030s. This shift towards nuclear energy is driven by the need for carbon-free electricity, particularly for data centers, which are projected to see a doubling in power demand by fiscal 2030.

Smart investors should note that while fusion technology presents a promising future, significant hurdles remain, including high costs and the need for ongoing government support. The focus on nuclear energy, especially in Asia, indicates a strategic pivot towards sustainable energy solutions amidst rising global energy demands.

17:43
PDT

Japan's nuclear industry is recovering post-Fukushima.

Mitsubishi Heavy Hitachi Japan Fukushima Chernobyl Bloomberg Intelligence ASEAN AI Asia Pacific PRIVATE USDCNH

– Data center power demand in Japan is set to double by fiscal 2030.

– Small modular reactors (SMRs) could improve public acceptance of nuclear energy.

– ASEAN countries are encouraged to adopt standardized nuclear models.

– The shift towards nuclear is part of a global trend for carbon-free energy.

nuclear energydata center growthenergy securitycarbon-free electricity

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Decades of engineering expertise, established reactor makers, and a deep network of specialized suppliers range from major reactor builders like Mitsubishi Heavy and Hitachi to critical components suppliers such as Japan's steelworks. However, Japan's nuclear industry is also shaped by the legacy of the Fukushima disaster. Here's a look at the country's complex relationship with the technology and how it's making a comeback now. Japan was once one of the world's biggest producers of nuclear power, but the 2011 Fukushima disaster, the world's worst nuclear accident since Chernobyl, reshaped its energy policy. All 54 of Japan's reactors were taken offline, imported fossil fuels filled the gap, and public confidence in atomic energy collapsed. Fifteen years later, Japan's nuclear revival is gathering pace. It's part of a broader global shift as governments seek carbon-free, around-the-clock electricity to power everything from AI to advanced manufacturing. And nowhere is that demand growing faster than in data centers. Japan is already Asia Pacific's second largest market after mainland China. Bloomberg Intelligence says Japanese data center power demand is set to double to 37 terawatt hours by fiscal 2030.

Analysis

Japan's nuclear revival is gaining momentum as the country seeks to address its energy needs following the Fukushima disaster. With a growing demand for carbon-free electricity, particularly in data centers, Japan is positioning itself as a key player in the nuclear energy sector once again.

Smart money should note that Japan's data center power demand is projected to double by fiscal 2030, highlighting a significant opportunity for nuclear energy to meet this rising need. The coordinated approach among ASEAN countries towards small modular reactors could further enhance cost efficiency and public acceptance of nuclear power in the region.

17:40
PDT

Nuclear energy is becoming central to addressing global energy demands, particularly for AI and data centers.

Japan China India South Korea Bangladesh Adani Group Reliance Industries Nobuo Tanaka International Energy Agency ASEAN Three Mile Island Germany CL=F

– Small modular reactors (SMRs) are gaining traction due to their safety and localized power generation capabilities.

– Asia is leading the nuclear revival, with significant investments and policy shifts in countries like Japan, India, and South Korea.

– ASEAN countries are urged to collaborate on nuclear models to reduce costs and improve public acceptance.

– The geopolitical context is pushing nations to reconsider nuclear energy as a viable solution for energy security.

nuclear energyenergy securitysmall modular reactorsregional cooperation

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is everywhere. We have to have a technology which is resistant to the proliferation risk. When it comes to building that sort of nuclear ecosystem, who do you think across Asia is doing it well? Asia is the best place to test that kind of model because Asia is a very gross center of economy and they have experienced the very risk of energy security from the Middle East oil, gas, etc. And also, it can be a very good peaceful arrangement of ASEAN can show that nuclear can play a very important role in their alliance and coalition and the peaceful use of energy for the future. So I really want that ASEAN will carefully take a close look at what kind of models of SMRs are available. It is growing in many countries, not yet established, but there are many different types. So I think ASEAN should take a good study of the models, as well as I think ASEAN countries should learn from our mistakes in Fukushima. It is a human error. Human error, you can learn from our mistakes and then avoid the risks of accidents. That kind of well-prepared policy of ASEAN can make Asia as a center of the future sustainable nuclear.

Analysis

Asia is emerging as a leader in nuclear energy development, with countries like Japan, China, India, and South Korea making significant strides to enhance their nuclear capacity. The focus on small modular reactors (SMRs) is particularly noteworthy, as they offer a safer and more localized energy solution, which could alleviate public concerns and support the growing demand for power in data centers and AI industries.

The geopolitical landscape and energy security issues are driving a renewed interest in nuclear power, especially in Asia. ASEAN countries are encouraged to adopt standardized models for SMRs, which could lower costs and enhance regional cooperation, positioning Asia as a hub for sustainable nuclear energy solutions.

17:37
PDT

Small modular reactors (SMRs) are seen as safer and more acceptable than traditional nuclear reactors.

Nobuo Tanaka International Energy Agency Germany Japan China India South Korea Bangladesh Adani Group Reliance Industries US Three Mile Island

– SMRs can provide dedicated power for industries like data centers, reducing reliance on the grid.

– Public acceptance of nuclear energy may improve with localized solutions.

– Asia is leading the push for nuclear energy revival, with significant investments planned.

– Countries are under pressure to secure energy for competitiveness in AI and technology sectors.

nuclear energy revivalenergy independenceAI power demandpublic acceptance of nuclear

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You mentioned small modular reactors and SMRs. How big of a game changer are they? This is going to be interesting because small modular reactors can be dedicated power for the data center or AI generation. So it's not connected to the grid but used particularly to the industry for the heat or particularly for the data centers. So I think, and also the small modular reactors' best point is that it's the safety and the reduced risk of accidents. The emergency planning zone of SMRs can be contained within the plant. That means you don't have the evacuation plan for the surrounding population. This will give a much better public acceptance of the reactor, and the design of the small modular reactor can fit local needs, right? Data center needs or more backup to the renewables or security issues. So I think local people can accept small modular reactors much better than large reactors which serve urban areas but not themselves. They're only sharing the risk. That is the reason why the negative reaction happens from the host community. I mean, you mentioned what happened in Fukushima. We have Three Mile Island as well. We have Chernobyl as well. And we have nuclear generation electricity actually having since the 1990s or so.

Analysis

The discussion highlights the potential of small modular reactors (SMRs) as dedicated power sources for data centers and AI generation, emphasizing their safety and localized acceptance. This shift towards SMRs could reshape energy strategies, particularly in regions wary of traditional nuclear power due to historical accidents like Fukushima and Chernobyl.

Investors should note that the growing acceptance of SMRs could lead to increased investments in nuclear energy infrastructure, particularly in Asia, where countries are looking to secure energy independence and meet rising power demands. The focus on localized energy solutions may also drive innovation in energy technology and regulatory frameworks.

17:35
PDT

Electrification is essential for reducing oil and gas dependency.

Germany ASEAN Japan Fukushima Middle East CL=F

– Nuclear small modular reactors are gaining importance.

– Germany may reconsider its nuclear policy amid energy security concerns.

– Asian countries are encouraged to adopt a standardized nuclear model.

– Coordinated procurement could reduce nuclear costs.

energy securitynuclear energygeopolitical risks

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Electrification is a key element of reducing dependency on oil and gas from the Middle East. They are urged to pursue this electrification, and nuclear small modular reactors, in particular, will play a very important role. However, they must learn from Japan's mistakes, such as Fukushima. I want to get there, but first, let me ask about what's happening globally regarding the awareness of the need for nuclear power in the energy mix, especially given the geopolitical upheavals we've seen in the past few years. Yes, thanks to the current climate change mitigation, economic issues, and energy security concerns, nuclear focus is very much at the center of energy policy discussions. Germany may change its policy against nuclear turmoil in favor of it, as the prime minister announced. Asia needs a policy for very safe and affordable nuclear energy. For that, I strongly urge Asian countries, particularly ASEAN, to take a coordinated position on the nuclear model. If they have a similar and standardized nuclear model, costs will be smaller because they can form coalitions for purchasing and procurement, which will push providers to reduce prices. At the same time, regulatory frameworks need to be addressed.

Analysis

Electrification is becoming crucial for reducing dependency on Middle Eastern oil and gas, with small modular reactors positioned to play a significant role. The geopolitical climate and energy security concerns are driving a renewed focus on nuclear power, particularly in Asia, where coordinated policies could lower costs and enhance safety.

17:33
PDT

India aims for 100 GW of nuclear capacity by 2047.

Adani Group Reliance Industries India U.S.Three Mile Island Germany France International Energy Agency Nobuo Tanaka EU Prime Minister Narendra Modi CL=F

– Adani Group and Reliance Industries are investing heavily in nuclear energy.

– Three Mile Island is returning online, marking a U.S. nuclear revival.

– Europe's nuclear decisions are gaining momentum but face political challenges.

– Asia is at the forefront of the global nuclear capacity increase.

nuclear energy expansionenergy policyglobal energy demandpolitical risk in energy

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Around 2040, India has set a target of 100 gigawatts of nuclear power capacity by 2047. That's an 11-fold jump from its current installed base. Giants like the Adani Group and Reliance Industries have made major commitments to nuclear this year, after Prime Minister Narendra Modi opened up the strategically sensitive sector. In the U.S., nuclear energy is also making a comeback. One of the most striking developments is that Three Mile Island, the site of the most famous U.S. nuclear accident, is returning online to power data centers. The nuclear renaissance is here, and Asia is leading the way. Despite that push by companies and the Trump administration to accelerate nuclear power capacity, its complex regulatory framework, labor shortages, and the fragmented distribution grid prevent the U.S. from scaling up its energy buildout. Meanwhile, in the EU, major decisions on going nuclear are gaining momentum but remain politically sensitive. Germany famously shut down all of its nuclear plants following the Fukushima disaster. Europe's nuclear energy leader, France, is grappling with disruptions caused by its aging power plants, forcing the government to revert to oil-fueled generation. Let's discuss the prospects for nuclear energy globally. Joining us now is Nobuo Tanaka, a former executive director at the International Energy Agency, and of course, you continue working with the agency in an emeritus status.

Analysis

Asia is leading a nuclear energy renaissance, with countries like India targeting significant increases in capacity by 2047, while the U.S. faces regulatory and logistical challenges despite a push for nuclear revival. The complex landscape in Europe shows momentum for nuclear decisions, but political sensitivities remain high, particularly in Germany and France.

Smart money should note the strategic commitments from major corporations in India, such as Adani Group and Reliance Industries, which signal a robust private sector push into nuclear energy. Additionally, the return of Three Mile Island to service highlights a shift in U.S. energy policy, despite existing hurdles, indicating potential investment opportunities in the nuclear sector as global demand for energy rises.

17:31
PDT

Energy is the biggest constraint for AI development.

Japan China India South Korea Bangladesh Bloomberg NEF AI US NEF While Japan USDCNH PRIVATE

– Countries are increasingly turning to nuclear power to meet energy demands.

– Asia is at the forefront of the global nuclear revival.

– Japan is gradually restarting its nuclear reactors post-Fukushima.

– South Korea's power demand is expected to grow significantly due to the AI boom.

energy policynuclear energyAI developmentinfrastructure investment

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GPUs, not the HBMs, and not the real estate, does the toughest bottleneck in the build-out of data center capacity. It's power. Here's a look at why this is leading many countries to conclude that nuclear energy may be the answer, and why Asia is setting the pace. Energy is the biggest constraint of the global AI build-out, and many countries are turning to nuclear power to address it. That demand will require long-term policy commitments, major engineering and logistical advances, and vast amounts of capital. Governments are under pressure to secure enough power to stay competitive in the AI race while keeping costs under control and voters on side. And as the US and Europe debate how far and how fast to invest, much of Asia is already moving ahead. Perhaps nowhere better reflects the global nuclear revival than in Japan, 15 years after the Fukushima disaster prompted the shutdown of all its reactors, the country is gradually bringing nuclear power back online. Global nuclear capacity is set to climb 44 percent over the next decade. Bloomberg NEF puts Asia at the center of those ambitions. While Japan has begun to restart its reactors, China, India, South Korea, and Bangladesh are among nations building new ones. South Korea, a major beneficiary of the AI boom, has turned to nuclear to support its growing power demand for its memory chip industry. Bloomberg NEF estimates South Korea's power demand will grow 22...

Analysis

Energy constraints are emerging as a critical bottleneck in the global AI build-out, prompting many countries to consider nuclear power as a viable solution. Asia is leading this nuclear revival, with Japan restarting reactors and other nations like China and South Korea ramping up new nuclear projects to meet growing energy demands.

The shift towards nuclear energy highlights a strategic pivot in energy policy, as governments seek to balance competitiveness in the AI sector with sustainable energy solutions. This trend may create investment opportunities in nuclear technology and energy infrastructure, particularly in Asian markets where demand is surging.

17:26
PDT

Japanese equities down, led by communication and technology sectors.

Japan Brent crude Bank of Japan communication services technology stocks energy stocks CPI BOJ Bloomberg Deals Bloomberg This Weekend Bloomberg Television Haslinda Armin PRIVATE

– Energy stocks gaining as Brent crude remains above $100.

– Core CPI in Japan accelerated to 1.6% year-on-year.

– Bank of Japan's expectations for policy changes have been moved forward.

– Japanese yen under pressure with yields at multi-year highs.

energy pricesJapanese monetary policysector rotation

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Welcome to Balanced of Power. You're watching Bloomberg Deals. Welcome to Bloomberg This Weekend. This is Bloomberg Television. The global economic playbook is being rewritten, and the levers of power are moving in real time. To see where the world is headed, you have to look where the action is. I'm Haslinda Armin in Singapore. I'm Minne Kadoshi in Mumbai. Welcome to Imaging the New Economy podcast. Each month, we dive deep into how the world's economy is evolving. After a down day for Japanese equities today, we're seeing losses being led by communication services and technology stocks. Energy, though, is gaining ground today. Not surprising given that we have Brent still trading above that $100 a barrel level. We had June core CPI here in Japan accelerating from the previous month, coming in at 1.6% year-on-year growth. BOJ high expectations have been moved forward, but the Japanese yen continues to be under pressure. However, in the yield space right now, we're seeing those yields soaring to multi-year highs.

Analysis

Japanese equities are experiencing a down day, primarily driven by losses in communication services and technology stocks, while energy stocks are gaining ground as Brent crude remains above $100 a barrel. The Bank of Japan's high expectations have been moved forward, yet the Japanese yen continues to face pressure amidst soaring yields to multi-year highs.

The divergence in sector performance highlights a potential rotation in investor sentiment, favoring energy amid geopolitical tensions. Additionally, the pressure on the yen and rising yields may signal a shift in monetary policy expectations, which could impact foreign investment flows into Japan.

17:22
PDT

U.S. effective tariff rate projected to rise to 10.7%.

Trump administration U.S. Trade Representative Jameson Greer Taiwan Japan Korea USTR President Trump Supreme Court Trade Representative

– Alleviations granted to Taiwan, Japan, and Korea.

– Trump administration remains committed to trade agenda.

– Shift towards Section 301 investigations noted.

– Court rulings have not deterred trade policy actions.

trade policytariff rates

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Planned rates on various economies, 60 in total. What we're seeing today is that the proposed rates are actually coming in slightly lower than what was proposed. We had expected the U.S. effective tariff rate to rise to about 11 percent or 11.1 percent. We're seeing that only go up to about 10.7 percent based on some numbers that we just ran a few moments ago. And that's primarily due to some additional alleviation for, including Asian economies, Taiwan, Japan, Korea, which all were given some credit for some of the trade deals that they've signed with the U.S. When we look at the evolution of President Trump's tariffs, are there—is there anything that sticks out to you, especially given perhaps some of the timelines, the new timelines that we're seeing for some of these tariffs and what he's hoping to achieve in the next few months? Sure. So the biggest takeaway is that the Trump administration is not letting that court ruling stop its trade agenda. We saw a pivot after that Supreme Court ruling in February. The USTR, the U.S. Trade Representative, Jameson Greer, initiated several investigations under Section 301, which is a far more durable authority. It's been tested in court. And so we've seen that shift moving toward more tested authorities that are not going to be.

Analysis

The proposed U.S. effective tariff rate is expected to rise to about 10.7%, slightly lower than the anticipated 11% due to alleviations for certain Asian economies. The Trump administration continues to pursue its trade agenda despite recent court rulings, shifting focus to more durable authorities under Section 301 for investigations.

17:19
PDT

Trump's nuclear deal hinges on Saudi-Israeli normalization.

President Trump Saudi Arabia Israel Palestinian state Houthi Bloomberg Michael Heade Chinese Red Sea Bab-e-on-Mandab President Biden Abraham Accords PRIVATE

– Saudi Arabia demands recognition of a Palestinian state as a condition.

– Concerns over potential Saudi enrichment complicate negotiations.

– Houthi attacks on vessels pose risks to oil supply routes.

– Chinese-owned tankers successfully navigate the Red Sea despite tensions.

geopolitical riskenergy marketsMiddle East relations

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And I think he just sees a bigger picture here. The bigger picture for President Trump is trying to do something here with Saudi Arabia and Israel, right, this civil nuclear agreement, which has ruffled a few feathers, concerned feathers. But he's also now thrown out the demand that this depends on normalization of ties between Saudi Arabia and Israel. Yeah, which throws a bit of a spanner in the works, because this is just basically what President Biden had said he wanted, that the deal would go ahead, provided that Saudi Arabia normalizes with Israel or joins the Abraham Accords, where some of the Gulf States have normalized relations with Israel. But Saudi Arabia has made it clear that that is dependent on Israel recognizing a Palestinian state. And the current administration in Israel, there's no chance that's going to happen, particularly after October 7, 2023. That's just a long way off the agenda. So it's difficult to see how this proceeds. And the Israelis are quite concerned about the prospect of potential enrichment in Saudi Arabia, which President Trump also said is not going to happen. So, yeah, look, a lot of uncertainty there, but, you know, it would be a significant deal if it comes to pass and probably for American firms, if this does go ahead in some form, perhaps they fudge their way to get through that. But, yeah, it sort of raises questions over it. Bloomberg, out of Michael Heade there with the latest. And two Chinese-owned tankers carrying Saudi crude have successfully exited the Red Sea via the Bab-e-on-Mandab choke point despite Houthi attacks on vessels in the region.

Analysis

President Trump is attempting to negotiate a civil nuclear agreement with Saudi Arabia and Israel, contingent on the normalization of ties between the two nations. However, Saudi Arabia insists that this normalization is dependent on Israel recognizing a Palestinian state, which remains unlikely under the current Israeli administration.

The situation presents significant uncertainty for American firms involved in potential deals, as the geopolitical landscape complicates negotiations. Smart money should note the implications of Saudi enrichment concerns and the ongoing Houthi attacks on vessels, which could disrupt oil supply chains in the region.

17:17
PDT

US strikes on Iran continue without compromise.

Iran US President Trump Iraq Houthis Saudi Arabia Kazakhstan Russia Black Sea Michael Heade Iraqi Prime Minister New York Times PRIVATE CL=F

– Potential for significant military action from President Trump.

– Escalating tensions affecting oil supply routes.

– Choke points in oil supply are becoming critical.

– Geopolitical risks are likely to drive oil prices higher.

geopolitical riskenergy market volatility

▸ Full transcript

This is now a 13th night, consecutively, of strikes from the US on Iran. It's bringing up Bloomberg editor, Michael Heade. So, certainly no signs that either side are willing to move towards a compromise at this point. But for energy markets, this is seeming like a wake-up call. Yeah, I think so, Heidi. As you mentioned that the idea of a truce that was taken by the Iraqi Prime Minister, according to the New York Times, to Iran and was rejected, it sort of just underlines that we're stuck in this period of escalation and we've had Axios reporting that President Trump is considering a really huge strike on Iran, sort of really ratcheting up the pressure. The Houthis, of course, who've said that they strike a couple of Saudi ships in the Red Sea. So, you know, if you want to talk about the definition of kicking a hornet's nest, this is sort of exactly what it looks like right now. So it really is concerning. And even if you go beyond the Middle East and the Black Sea, in terms of getting oil out of Kazakhstan or Russia, that's getting hard. So it's really, really, there's a few choke points around the place now. It's interesting, because we're just over 100 days out from the midterms. We know that the war is both unpopular and expensive for President Trump. He's standing firm, though, at a time when we know the Iranian side historically are very good at waiting out laws of attrition. Yeah. I mean, look, I don't think he has a... He doesn't have a lot of choice because even the memorandum of understanding, it gave her run on an enormous...

Analysis

The ongoing strikes by the US on Iran are escalating tensions, with no signs of compromise from either side, raising concerns in energy markets. The situation is compounded by reports of potential significant military action from President Trump, which could further destabilize oil supply routes, particularly in the Middle East and Black Sea regions.

Smart money should note that the geopolitical risks are intensifying, particularly with choke points for oil supply becoming increasingly vulnerable. This could lead to higher oil prices and increased volatility in energy markets, as historical patterns suggest that prolonged conflicts often result in sustained price increases.

17:15
PDT

Oil prices exceed $100 per barrel.

UN Iran Gaza Ukraine Antonio Guterres US Security Council CL=F

– Geopolitical risks are becoming more pronounced.

– UN's effectiveness in conflict resolution is questioned.

– Investor sentiment may shift due to rising energy prices.

– Trust issues among Security Council members could prolong crises.

geopolitical riskenergy market volatility

▸ Full transcript

I would like to see a UN that is back at the table in the scenarios of conflict. I would like to see a UN that has revealed trust but has used that trust to deliver results on the ground. The UN must be more present, especially in the peace and security arena, that we would have moved from where we are today to a UN that is delivering better in peace and security, both on the prevention side and ending of conflict side. Because in reality, global security, peace and stability is something that is incumbent on the Security Council and the lack of trust between the members today, particularly between the permanent members, means that crises go on without solutions being found. The candidates vying to succeed Antonio Guterres as the US Secretary-General are laying out their visions for leading the global body at a time when conflicts in Iran, Gaza, and Ukraine, as well as divisions among global powers, have deepened concerns about its effectiveness and relevance. And of course, the upshot when it comes to broader energy markets is that we now have oil prices beyond the $100 per barrel level, which is a bit of a wake-up call for investors who have been pretty happy to shrug off or at least put aside geopolitical risk in their calculus.

Analysis

Oil prices have surpassed the $100 per barrel level, signaling a wake-up call for investors who have previously downplayed geopolitical risks. The ongoing conflicts in Iran, Gaza, and Ukraine, coupled with divisions among global powers, raise concerns about the effectiveness and relevance of the UN in addressing these crises.

Smart money should note the increasing pressure on energy markets and the potential for heightened volatility as geopolitical tensions escalate. The lack of trust among permanent members of the Security Council may hinder effective conflict resolution, impacting global stability and investor sentiment.

17:13
PDT

SK Hynix limits ADR conversions, impacting share premium.

SK Hynix U.S.Fed New York Times Iran Iraq Houthi militants China AI Tencaps Alphabet Tesla

– U.S. Treasury yields rise to multi-year highs.

– Inflation expectations are influenced by energy prices.

– AI investment remains strong but faces valuation pressures.

– Consumer optimism is growing, but real income growth is needed.

Fed policyinflation expectationsAI investmentenergy prices

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Responsibility is to make the UN relevant again, to deliver, to touch the hearts and souls of people on the ground, to serve people on the ground, and not to confuse activity with impact. Well, I believe moral authority is always needed. And you always need to speak out on the issues where violence of human rights has been or where the violence of human rights has been.

Analysis

SK Hynix is under pressure, down more than 2%, due to limiting conversions of its sole shares into U.S.-traded ADRs, which could maintain a premium gap for some time. The broader market is reacting to rising U.S. Treasury yields and inflation expectations, particularly influenced by energy prices and geopolitical tensions in the Middle East.

Smart money should note the potential impact of hawkish Fed expectations on debt financing for foundries and hyperscalers, as well as the implications of rising energy prices on inflation. The AI investment landscape remains intact, but valuations may face pressure, necessitating a focus on earnings to determine value amidst uncertainty in growth and revenue visibility.

17:08
PDT

Australian commodities, especially copper, are gaining traction in the AI supply chain.

Australia Greg Kim Bo-liu Tencaps Alphabet Tesla Intel CEO AI In Australia Kim Bo And Heidi S&P 500 GOOGL TSLA

– Data centers with existing agreements are preferred for energy security.

– Smaller Australian businesses in the picks and shovels sector are emerging as investment opportunities.

– U.S. tech stocks are experiencing volatility despite strong earnings reports.

– Market sentiment may not align with the fundamentals of tech companies.

AI supply chainenergy securityU.S. tech volatility

▸ Full transcript

Over the last few years, there has been a little bit of a second, you know, all that investigation and remediation and the like. I think Greg is a good CEO for the time being and the core business itself, which is very well positioned for what is to come and the volatility in the global energy markets and the like. So certainly the earnings looking very, very strong for the next 12 months. What else do you like in Australia? Yeah, so in Australia we like the, you know, obviously the commodity side, the copper side. We do think that it becomes a very important critical part into that whole AI supply chain or the picks and shovels. And then we're going to, we like the data center, but we do prefer the data centers that already have existing properties and existing agreements, because I think energy security is very, very important. So we think that's doing very well. And then from there on, we like, you know, the whole long list of picks and shovels. In Australia, surprisingly, we'll have a whole many, many of them that's coming through as smaller businesses. Jumbo, always great to chat with you. Kim Bo-liu, who is the lead portfolio manager at Tencaps, Jerry. And Heidi, take a look at some of those tech movers across Asia today. We're following some of those semiconductors, bakers, the suppliers, to big tech across the U.S. as well. We had a down day for the U.S. The S&P 500 seeing its biggest drop in about a month. We had Alphabet falling despite strong results. Tesla plunging, profit declining despite their strong electric vehicle deliveries. We were following Intel suppliers as well because Intel jumped after hours after the.

Analysis

The Australian market is showing strong potential in the commodity sector, particularly copper, which is becoming increasingly critical for the AI supply chain. The focus on energy security is driving interest in data centers with existing properties, indicating a shift towards stability in volatile energy markets.

Smart money should note the growing importance of smaller Australian businesses in the 'picks and shovels' sector, as they may offer unique opportunities amidst larger tech players. Additionally, the recent downturn in U.S. tech stocks, despite strong earnings from companies like Alphabet, suggests a potential disconnect between market sentiment and underlying fundamentals.

17:06
PDT

Chinese AI supply chain presents diversification opportunities for global investors.

China AI national team USDCNH

– Government support in China is intensifying for AI development.

– Consumer optimism is rising, but real growth data is yet to materialize.

– Investors should focus on stocks tied to national champions in the AI space.

– The sustainability of consumer optimism remains uncertain without real income growth.

AI investmentconsumer optimism

▸ Full transcript

It was interesting to see the global AI conference taking place. Certainly on the ground, there's a lot of excitement and government support in the whole AI space. I think the model differential is getting closer and closer to the U.S. leadership. I think this is absolutely defocused by the government there in China. I do think that as a global investor, the Chinese AI supply chain is a very interesting diversification for the rest of the world. And that is going to lead the price lower for some of the utilization ultimately of those language models. And that's interesting, right? Because for a long time, we'd get bad data print, bad data print, no reaction in terms of stimulus. Now it feels like the national team is back as well. The AI space are national champions. Is that a one-way bet for these stocks then? Yes, so I think for these stocks, that's where you want to put some of your bets in. And then the next is that the consumer front is clearly going to be a more sustainable part of the area. We feel there is a green shoe; we feel the consumer is becoming a lot more optimistic. However, the real data is still yet to come through. We need the real growth, the real income growth to come through, and perhaps that's in the next few quarters.

Analysis

The global AI conference highlighted significant excitement and government support for the AI sector in China, suggesting a narrowing gap with U.S. leadership. Investors should note that while the consumer front appears optimistic, real income growth data is still pending, indicating potential volatility ahead.

17:04
PDT

AI investment theme remains intact despite valuation pressures.

AI hyperscalers data centers

– Focus on earnings is crucial for determining value in the AI sector.

– Hyperscalers' investments indicate a shift towards foundational tech suppliers.

– Volatility in valuations may arise from uncertain future growth visibility.

– Companies with strong fundamentals may outperform in the current environment.

AI investmentvaluation pressuresearnings focus

▸ Full transcript

And how long is that going to last? In terms of the AI investment, the entire thematic is intact. Only thing is the valuation part for the extremely expensive part of that AI chain is going to be under a little bit more pressure. It is going to have to be led by the earnings itself. How do you at this point with valuations, with the enormous amount of spend and expectations, but not all of visibility going into next year and future years in terms of growth and profit and revenue? How do you determine what's good value at this point? I think what we love to gain exposure to is though, because the hyperscaler committed so much money into those data centers and then there's the company that's supplying those businesses, what we're seeing is that part of the... So, the bigs and shovels. Bigs and shovels, absolutely.

Analysis

The AI investment theme remains intact, but valuations for the expensive segments of the AI chain are under pressure, necessitating a focus on earnings to determine value. The hyperscalers' significant investments in data centers highlight the importance of companies supplying these businesses, indicating a potential shift in focus towards foundational technologies in the AI space.

Smart money should note that while the AI narrative is strong, the lack of visibility into future growth and profitability could lead to volatility in valuations. The emphasis on earnings as a driver of value suggests that companies with solid fundamentals may outperform those relying solely on hype.

17:02
PDT

SK Hynix limits ADR conversions, impacting share premiums.

SK Hynix U.S.Iran New York Times Houthi militants Federal Reserve Treasury market Strait of Hormuz SK Red Sea FEDFUNDS CL=F

– U.S. Treasury yields reach yearly highs amid inflation concerns.

– Oil prices above $100 are influencing market expectations.

– Fed's hawkish stance may affect debt levels in tech sector.

– Geopolitical tensions are complicating energy market dynamics.

Fed policyinflation expectationsgeopolitical risksenergy prices

▸ Full transcript

We're seeing a little bit of pressure with SK Hynix down more than 2%. We have now learned that they're limiting conversions of their sole shares into U.S.-traded ADRs, so 2.5% of outstanding shares. So what that means is that we could see hiding that premium from ADRs over sole shares still wide for a while. It would be very interesting, Sherry, to see how all of this plays into the fact that we are building these expectations for a more hawkish Fed. How does that impact debt levels? How does that impact the debt financing that we've seen with a lot of these foundries and hyperscalers as well, right? So take a look at the broader picture as being reflected in the Treasury market. This as we continue to see the building of expectations that inflation expectations are going to start getting carried away with oil beyond that $100 mark level. We're seeing U.S. Treasury yields rising to the year's highs. Now, the Fed begs really being sparked with what we're seeing in energy prices, a threat of escalation, the seemingly short-term lack of lackliness that we're going to come back to peace talks. And in fact, we just had an earlier report from the New York Times saying that that Iraqi-delivered peace proposal has been rejected by Iran and that the parties are really not much closer on key issues, including what happens with the Strait of Hormuz at a time. We're also seeing other fronts being opened regionally, the Red Sea with those Iranian-backed Houthi militants as well. Yield on the short end two years climbing to 4.37 percent.

Analysis

SK Hynix shares are under pressure, down more than 2%, as the company limits conversions of its sole shares into U.S.-traded ADRs, affecting the premium on ADRs. This situation coincides with rising U.S. Treasury yields and inflation expectations driven by escalating oil prices, which could impact debt financing for tech foundries and hyperscalers.

16:59
PDT

Asian markets face a volatile opening after Wall Street's decline.

Japan U.S.Iran Bank of Japan AI trade semiconductor supply chain oil CPI US AI BOJ Wall Street CL=F DXY

– Higher US yields and oil prices are influencing market sentiment.

– Japan's June Core CPI rose to 1.6%, impacting BOJ policy outlook.

– The yen is nearing its weakest level since 1986.

– Geopolitical tensions are affecting global inflation and monetary policy.

inflation riskgeopolitical tensionsenergy crisissemiconductor investments

▸ Full transcript

This is Asia trade, we're counting down to Asia's major market opens after a down day on Wall Street. We had higher US yields at $100 oil, not to mention that the AI trade remains fragile. It is at this point where we see the recognition of the energy crisis, potentially impacting global inflation and monetary policy. Does that also stop bleeding through to the exuberance that we continue to see in the AI trade? Those Intel numbers provide just the latest catalyst to justify the enormous amount of spending in that space that we continue to see. All of that spending is expected to help some of these companies across Asia, of course, part of that semiconductor supply chain. When it comes to higher oil prices and the ongoing war between Iran and the U.S., we've already seen the results here in Japan as well. June Core CPI came in at around growth of 1.6% year on year, accelerating from the previous month. This is a lot to do with just higher oil prices and it will factor into the BOJ's policy decision, which we have next week. Take a look at how markets in Japan are opening because we continue to watch the Japanese yen very close to that 164 level against the US dollar. We're talking about the weakness that we haven't seen since 1986, despite the fact that we continue to get all of this rhetoric from the government.

Analysis

Asian markets are bracing for a volatile opening following a down day on Wall Street, driven by higher US yields and oil prices nearing $100. The fragility of the AI trade is highlighted as rising energy costs and geopolitical tensions, particularly between Iran and the U.S., impact inflation and monetary policy decisions in Japan.

The acceleration of Japan's June Core CPI to 1.6% year-on-year signals potential shifts in the Bank of Japan's policy, especially as the yen approaches its weakest level since 1986. Smart money should note that the ongoing energy crisis could dampen the exuberance in the AI sector, despite significant investments in semiconductor supply chains across Asia.

16:55
PDT

Nikkei and Kospi both down over 1%.

Nikkei Kospi Bank of Japan Japan South Korea GDP CPI August Bank PRIVATE

– Kospi had previously gained for three consecutive sessions.

– Yen weakness at its lowest since 1986.

– Japan's core CPI accelerated to 1.6% in June.

– Bank of Japan's policy decision is upcoming.

currency depreciationinflation trendsmonetary policy

▸ Full transcript

Session potentially loses more than 1 percent for the Nikkei and the Kospi as well. This comes at a time when the Kospi had already gained ground for three consecutive sessions, rallying on a GDP beat that puts an August Bank of Korea hike back in play. We've also been watching those CPI numbers and inflation in Japan as the yen hits its weakest level since 1986. The core CPI accelerated 1.6% for the month of June, potentially giving that extra push to the Bank of Japan in its decision next week. The market opens in Sydney, Seoul, and Tokyo next. This is Bloomberg.

Analysis

The Nikkei and Kospi are both experiencing losses, with the Kospi's recent gains being overshadowed by concerns over inflation and currency weakness. The Japanese yen has hit its weakest level since 1986, prompting speculation about potential Bank of Japan policy shifts in response to rising CPI figures.

Smart money should note the implications of the yen's depreciation on export competitiveness, particularly as Japan's inflation accelerates. Additionally, the potential for a Bank of Japan rate hike could shift market dynamics, influencing investor sentiment across the region.

16:50
PDT

Iran rejects US-C5 deal, increasing geopolitical tensions.

Iran US China Iraq Trump administration Elizabeth Warren Rick Scott Friedrich Mertz Germany IMF Cambodia Hun Manet USDCNH

– US Treasury report criticizes China's currency transparency without new designations.

– Growing calls for formal investigations into China's currency practices.

– Cambodia's Prime Minister emphasizes combating sophisticated criminal networks.

– Emerging markets face risks from criminal activities in special economic zones.

geopolitical tensionscurrency manipulationemerging market riskscriminal networks

▸ Full transcript

This is for the interests of all countries. Criminal networks can attack countries that they don't have alignment with politically. Anything they can exploit, they'd exploit. They can attack both the US and China at the same time for the benefit of money from scam operations or drug operations. So I see all this cooperation doesn't have to be confined within or be a hostage to an area of what we call geopolitics. It's sometimes too overblown when we focus on the negativities, but overall the positive relationship between even the main China and the US has existed for a long time and through multiple channels. Do you talk about how these criminal groups are becoming more sophisticated? A UN report shows that now they're even acting like corporations, using, for example, in the Southeast Asian region, some of these criminal groups, concessions within special economic zones to operate. And Cambodia has dozens of such zones. What is Cambodia doing to ensure that such zones are not being used to facilitate criminal activity? Yes. We have learned from experience from other countries. We have strict instructions for our security agencies to work with local governments and agencies in charge of the SEZ.

Analysis

Iran has rejected the US-C5 deal presented by the Iraqi leader, signaling ongoing tensions in the region. Meanwhile, the US Treasury's report on China's currency management highlights a lack of transparency but stops short of labeling any country as a currency manipulator, reflecting a cautious approach amidst rising trade tensions.

The sophistication of criminal networks operating in Southeast Asia, particularly within special economic zones, poses significant risks that may not be fully appreciated by investors. Cambodia's proactive measures to combat these networks could influence regional stability and investment attractiveness, suggesting a need for vigilance in emerging markets.

16:48
PDT

Korean won reaches highest level in 10 weeks.

Korean won U.S. Treasury Australia U.S.President Trump Cambodia Hun Manet Bloomberg FTA TV South Korean United States PRIVATE DXY

– Australia's Trade Minister opposes new U.S. tariffs.

– U.S. tariffs to be implemented on imports from major partners.

– Cambodia's Prime Minister focuses on online scam networks.

– Emerging economies face significant risks.

currency managementtrade tensionsemerging market risks

▸ Full transcript

We're also watching the Korean won, which at least for today is trading at the highest levels in about 10 weeks. We're getting now the latest from the South Korean government that they will continue their close communication with the U.S. Treasury when it comes to their currency. Do also watch for the Aussie dollar as well. We have kept an eye on the Aussie given the latest tariff threats from the United States. We are now hearing from Australia's Trade Minister saying that the U.S. tariffs should be removed, that the new U.S. tariffs aren't justified and are inconsistent with the U.S.-Australia FTA. Remember, President Trump is now rebuilding his global tariff wall using a new legal path and will begin collecting import duties of at least 10 percent on imports from major trading partners such as Australia starting Friday. Well, Cambodian Prime Minister Hun Manet is promising to do more to tackle transnational online scam networks. He spoke exclusively with Bloomberg's April Hong, who joins us now from Phnom Penh. So clearly, sizable risks for these emerging economies as well, right? What did you guys talk about? Yeah, I spoke exclusively with the Cambodian Prime Minister in his first international TV interview. And you're right, this is coming at a time where the country's energy and terror challenges are being compounded by the border consul.

Analysis

The Korean won is trading at its highest levels in 10 weeks, with the South Korean government emphasizing close communication with the U.S. Treasury regarding currency management. Meanwhile, Australia's Trade Minister argues that new U.S. tariffs are unjustified and inconsistent with the U.S.-Australia Free Trade Agreement, as President Trump prepares to implement a 10% import duty on major trading partners starting Friday.

Smart money should note the potential for increased volatility in currency markets as nations respond to U.S. tariff policies. Additionally, Cambodia's Prime Minister is addressing online scam networks, highlighting the broader risks emerging economies face amid global economic pressures.

16:46
PDT

No new currency manipulators named by U.S. Treasury.

U.S. Treasury Department China Germany Friedrich Mertz IMF Japanese yen RMMB USDCNH

– Growing pressure on China regarding yuan valuation.

– Shift in German leadership sentiment towards currency policies.

– IMF indicates yuan may be undervalued.

– Potential implications for Japan's currency strategy.

currency manipulationtrade tensionsglobal competitiveness

▸ Full transcript

There were no changes to that monitoring list. There were no additional countries named currency manipulators. So in some ways, it's a non-story, but the other side of the story is that there is growing sentiment that something has to be done to address the fact that China might be limiting gains in the RMMB to help spur its exports. We all know that China has been leaning on exports and its competitiveness, price competitiveness overseas at a time of domestic economic sluggishness. What about other trading partners with China? Are we seeing any kind of cohesion when it comes to an attitude towards the Yuan policies and practices? Yeah, well I think right now obviously the world is flummoxed by trade tensions, no doubt. If a big exporting nation like Germany, for one, sees some weakness, and I mentioned Friedrich Mertz, he more recently has called out, you know, highlighting the calls for efforts to address the cheap yuan. And that really marks a significant shift in the German leadership. We also had the IMF and other bodies indicate that there are indications that the yuan is potentially undervalued. But again, I might also want to focus your conversation just now on the Japanese yen. U.S. Treasury did kind of put the cross.

Analysis

The U.S. Treasury Department's semiannual report did not label any major trading partner as a currency manipulator, despite growing concerns about China's currency management practices. This reflects a lack of immediate action, but there is increasing pressure from U.S. lawmakers and international bodies regarding the undervaluation of the yuan and its impact on global trade dynamics.

Smart money should note the shift in sentiment from Germany's leadership, as calls to address the cheap yuan indicate a potential for coordinated international pressure on China. Additionally, the implications of Japan's currency policies may become more pronounced as the U.S. Treasury highlights concerns about the yen, suggesting a broader reevaluation of currency strategies among major economies.

16:44
PDT

US Treasury accuses China of lack of transparency in currency management.

US Treasury Department China Donald Trump Elizabeth Warren Rick Scott Friedrich Mertz Germany US Treasury Department Chief North Asia Stephen Engel Hong Kong USDCNH

– No major trading partner labeled as a currency manipulator.

– Trump administration favors tariffs over currency policy attacks.

– Increased calls for investigation into China's currency practices from US senators.

– Political pressure may influence future US-China trade relations.

currency manipulationUS-China trade relationspolitical pressure

▸ Full transcript

The US Treasury Department has accused China of a lack of transparency around its currency management, but has left its foreign exchange monitoring list unchanged and stopped short of labeling any major trading partner as a currency manipulator. For more, let's bring in our Chief North Asia correspondent, Stephen Engel, in Hong Kong. Steve, anything that stands out to you in this version of the semiannual report? Well, we all know that the Trump administration, as evidenced by today's news flow about the new tariffs announced by the Trump administration, that Donald Trump likes to use tariffs to sort of address the trade imbalances that he perceives around the world and not necessarily use or attack another nation's currency policies through policy. But again, there have been more amplified calls on Capitol Hill from senators like Elizabeth Warren and Rick Scott. They've called on the Treasury to actually start a formal investigation into possible causes of manipulation of currency by China. Friedrich Mertz also has raised concerns in Germany. I'll get to that in just a little bit. But right now in this report, Treasury did find a relative lack of transparency. Now, Treasury did, I might add, on this manipulation issue. You're absolutely right.

Analysis

The US Treasury Department has accused China of a lack of transparency regarding its currency management but has not labeled any major trading partner as a currency manipulator. This reflects the Trump administration's preference for tariffs over direct currency policy attacks, despite increasing calls from US senators for a formal investigation into China's currency practices.

Smart money should note that the lack of formal action from the Treasury may embolden China to continue its current currency policies without fear of repercussions. Additionally, the amplified calls for investigation indicate rising political pressure that could influence future US-China trade relations and market sentiment.

16:41
PDT

Iran rejects US-C5 deal, escalating tensions.

Iran US Iraq President Trump Bloomberg New York Times PRIVATE

– US military strikes on Iran continue.

– Diplomatic efforts appear fragile.

– Potential for increased oil price volatility.

– Geopolitical risks impacting inflation expectations.

geopolitical riskoil market volatility

▸ Full transcript

It feels very persuasive. In doing more, in the meantime, though, we do have some reporting from the New York Times that Iran has rejected the US-C5 deal presented by the Iraqi leader. The details are not immediately clear, with an Iranian official saying that it was the only offer on the table. So that deal from President Trump was carried to Tehran by the Iraqi prime minister, according to officials on both sides. But it has since been rejected as we see a 13th night of strikes from the US on Iran. More on the Asia trade, this is Bloomberg.

Analysis

Iran has rejected the US-C5 deal presented by the Iraqi leader, which could escalate tensions in the region as the US continues its military strikes on Iran. This rejection highlights the fragility of diplomatic efforts and may have broader implications for oil markets and geopolitical stability.

Smart money should note that the ongoing military actions and diplomatic failures could lead to increased volatility in oil prices, further impacting inflation expectations globally. The situation underscores the interconnectedness of geopolitical risks and market dynamics, particularly in energy sectors.

16:39
PDT

Japan's core inflation rose to 1.6% year-on-year.

Bank of Japan Japan Heineck Samsung Micron Bloomberg BOJ Middle East PRIVATE

– Market expectations for BOJ intervention are increasing.

– Chipmakers are benefiting from heightened demand for data centers.

– Geopolitical tensions in the Middle East pose risks to market stability.

– Investors are anticipating potential rate hikes across developed markets.

inflation riskBOJ policygeopolitical tensionssemiconductor demand

▸ Full transcript

Building lots of data centers, therefore buying lots and lots of chips from Heineck, Samsung, Micron, and the others. So that's a good story for them in the short term, and in the short term, their valuations there are going to look very compelling because the prices have come down, but the earnings expectations are continuing to creep higher. The difficulty is that what's going on in the Middle East threatens to unhinge the longer-term view. In terms of being unhinged again, inflation is picking up for the first time in three months for Japan. Is it a green light? I mean, we're hearing so many proponents, including from within Bloomberg, I have to say that we're going to need to do something crazy, 50 basis points more, something really dramatic to be able to re-anchor these expectations. Yeah, they do need to do something. By now, it's pretty clear, I think their hesitation over the past week or so about doing anything more than just jaw-boning underscores that they need to do more than even just intervention. You know, famous last words like they might decide to intervene before I finish speaking, but it does look as though any intervention is only going to have a limited impact. So the question is, yeah, can the BOJ act? It needs to act, you would argue. There's a growing thought that the BOJ might surprise with a 25 basis point hike next week when it's expected to...

Analysis

Japan's inflation has picked up for the first time in three months, raising concerns about the Bank of Japan's (BOJ) need for intervention. The geopolitical tensions in the Middle East could disrupt longer-term market stability, despite short-term gains in chipmakers due to increased demand for data centers.

Smart money should note that the BOJ may surprise markets with a 25 basis point hike next week, as the urgency for action grows amid rising inflation expectations. The interplay between inflation and geopolitical risks is likely to create volatility in both equity and bond markets, particularly for sectors reliant on stable economic conditions.

16:37
PDT

Two rate hikes expected in developed markets within six months.

Brent Intel Fed mega techs developed markets AR

– Brent crude prices above $120 are influencing market dynamics.

– Rising bond yields and credit spreads signal increased risk.

– Mega tech companies are accumulating debt without buybacks.

– Market volatility may increase as debt markets face pressure.

geopolitical riskdebt market volatilityinflation pressures

▸ Full transcript

Very close to two rate hikes priced in in the coming six months on average across every developed market. So that's the sort of pace of tightening that was both expected and I think pretty much delivered back in March and April when the war really got going. We saw Brent go above 120 at some stage. We've got the sort of pricing for rate hikes now that we have when Brent was $20 a barrel higher. So that tells you that those markets have fully woken up to the war risks, and then that is cascading across everything else. You mentioned bond yields are on the rise, credit spreads are finally lifting off lows that people had been saying looked unsustainable. And that's a big risk, especially now that we have a world where mega techs are borrowing lots of money and not carrying out buybacks because in order to keep up they need to take on that debt. And that's going to make a lot of people nervous because a lot of the big crashes have precisely happened when debt markets rolled over. Let's talk about that a bit more because at the moment, again, markets have been very good at bifurcating what's going on in the real world and the enormous amount of money that's been justified going into AR. Intel's just provided another catalyst to rotate back in, right?

Analysis

The market is pricing in nearly two rate hikes across developed markets in the next six months, reflecting heightened awareness of war risks, particularly with Brent crude prices above $120. Rising bond yields and credit spreads indicate a shift in market sentiment, especially as mega tech companies increase their debt levels without buybacks, raising concerns about future market stability.

Smart money should note that the current pricing for rate hikes is based on oil prices that are significantly higher than previous levels, suggesting that the market is now fully attuned to geopolitical risks. The potential for increased volatility in debt markets could lead to broader implications for equity markets, particularly as tech companies navigate their borrowing strategies amidst rising rates.

16:35
PDT

Yen pressure linked to Fed rate hike expectations.

Yen Fed Iran Garfield Reynolds Yoshio Kinohara Middle East Iran War DXY FEDFUNDS CL=F

– Oil prices above $100 heighten inflation concerns.

– Geopolitical tensions are impacting market volatility.

– Earnings disappointments may arise from macro risks.

– Investors are currently underestimating war risks.

inflation riskgeopolitical tensionscurrency pressureinterest rate expectations

▸ Full transcript

The yen is coming under pressure, partly because of the positive pressure for the dollar, due to expectations that the Fed may raise interest rates. It's also tied to the oil markets in the Middle East, which is definitely beyond what Japanese officials can control by themselves. They have to be reactionary to what they do about this. It's really bad for the administration if they don't do anything on this, because regular households are definitely feeling the pain and expressing their concerns about this. Economy and government reporter Yoshio Kinohara will get a little bit more on the yen, but of course, a broader inflation picture globally is coming into focus now with the escalation of the Iran War putting price pressures back at center stage, the ultimate macro risk for traders. This is set to trigger earnings disappointments, wider credit spreads, and more volatility in stock and bond markets. Let's get more from Garfield Reynolds, who leads our markets live Asia coverage. Investors have been very good at setting aside the war risk as something that's just almost background noise; it's not going away. Does that 100-plus market for oil change things? That does look to be a wake-up call, which has in particular sparked rates traders to definitively shift their views.

Analysis

The yen is under pressure due to expectations of a Fed interest rate hike and its ties to the volatile oil markets, particularly influenced by the ongoing conflict in the Middle East. This situation is exacerbating inflation concerns globally, which could lead to earnings disappointments and increased volatility in stock and bond markets.

Smart money should note that the rising oil prices above $100 may serve as a wake-up call for traders, prompting a reassessment of risk in the markets. The interplay between currency pressures and geopolitical tensions could lead to significant shifts in investor sentiment and asset allocation strategies.

16:31
PDT

Brent crude prices exceed $100, raising inflation concerns.

Brent crude Fed Japan Intel NK225 Bank of Japan CPI For Japan FEDFUNDS NK225 CL=F

– Japan's core CPI growth accelerates, but core-core inflation decelerates.

– Chipmakers may benefit from positive Intel outlook.

– Japanese yen remains stable around 164, affecting foreign inflows.

– Asian markets show malaise, with NK225 down 1.2%.

inflation outlookenergy pricescentral bank policyAsian markets

▸ Full transcript

We are seeing the impact when it comes to crude markets right energy prices that broader inflation outlook really rearing its ugly head. Brent crude at last trade higher by just about 7 percent above that $100 level. All of this is feeding through to Fed expectations in terms of what it means for global inflation and what it means for central bank policy. At the same time, we're also watching the sort of malaise we're expecting for some parts of the Asian markets today. Chipmakers, yes, will get that boost likely when it comes to the pretty optimistic numbers and outlook from Intel, but broadly we are seeing that down day at the NK225 down by just about 1.2%. For Japan though, the yen is not doing a whole lot other than kind of sticking pretty stubbornly around that almost 164 handle. But the question is whether it's going to start negatively impacting stocks if it starts sort of eating into appetite for foreign inflows. And it's already doing a lot when it comes to the inflation numbers, right? Especially when it comes to import bills getting inflated. Now we have breaking news out of Japan. When it comes to the core CPI numbers, we're seeing an acceleration of June prices year on year, 1.6 percent growth. This is an acceleration from 1.4 percent in the previous month. Interestingly, take out energy as well, and you have core-core inflation only growing at 1.7 percent, which is a deceleration from the previous month. So it gives you an idea that we are seeing the higher oil prices lifting that electricity bill.

Analysis

Brent crude prices surged over 7% to surpass the $100 mark, significantly impacting Fed expectations regarding global inflation and central bank policy. Meanwhile, Japan's core CPI accelerated to 1.6% year-on-year, driven by rising energy costs, although core-core inflation showed a deceleration, indicating mixed inflationary pressures.

16:27
PDT

U.S. tariffs cover nearly all imports from 60 economies.

U.S.Japan Iran John Herskovitz Bloomberg Tokyo Studio Bloomberg East PRIVATE

– Countries are likely to respond, particularly in Asia.

– Immediate market reactions to tariffs have been muted.

– Geopolitical tensions, especially with Iran, may increase market volatility.

– No retaliation has been observed yet from affected countries.

trade policygeopolitical risk

▸ Full transcript

So it's not that the U.S. is accusing these countries of using forced labor. The U.S. says that the laws and regulations on the books in these countries, the regulation, and the monitoring, aren't up to snuff. And because of that, goods made with forced labor are getting into the supply chain and making their way to the U.S. Other countries won't be happy with the tariff. Not at all. I mean, we haven't seen, we've seen some denial of this, but we haven't seen any retaliation yet. It comes at the start of the trading day in Asia, so we're in Japan now. Japan's government is almost certain to comment on this, as well as all of the other major economies in the region. So we'll see some pushback coming as the hours go on in the day, which because the day is just starting here in Asia. Yeah, we'll be watching the markets. Although it's been interesting lately, we haven't seen such a big reaction when it comes to new tariffs given, of course, everything else that's happening in the world, including the war in Iran. Of course, John Herskovitz here in the Tokyo Studio Bloomberg East Asia government editor with the latest on U.S. tariffs. We have more ahead on the Asia trade. This is Bloomberg.

Analysis

The U.S. is imposing new tariffs on nearly all imports from 60 economies, citing inadequate regulations against forced labor. This move is likely to provoke pushback from affected countries, particularly in Asia, as the trading day begins there.

Smart money should note that while immediate market reactions to tariffs have been muted, the broader geopolitical tensions, especially related to the war in Iran, could amplify volatility in global markets. The lack of retaliation so far suggests a cautious approach from impacted nations, but this could change as the situation develops.

16:25
PDT

U.S. tariffs cover nearly all imports from 60 economies.

United States President Trump Bloomberg John Herskovitz Supreme Court PRIVATE

– Significant carve-outs exist for automobiles, energy, and pharmaceuticals.

– Previous tariffs are expiring, prompting this new move.

– Potential inflationary pressures could arise from these tariffs.

– Strategic shift in trade policy may impact global supply chains.

trade policyinflation risksupply chain disruption

▸ Full transcript

Ranked one of the top smart cities in the world, how can innovation scale and have a global impact? Innovation scales based on the quality of the solution and the capacity of its people. Here in Dubai, we're building solutions for the region, but actually, we're also building solutions for the world. The key word here is really agility. How agile is your system to really embrace those innovations and flip your regulations in favor of those innovations? The U.S. is imposing new tariffs on most major trading partners, marking its biggest move yet to rebuild President Trump's tariff wall after a setback from the Supreme Court. Bloomberg editor John Herskovitz joins us with more on this, and really coming into place when the previous tariffs are expiring on Friday. So how all-encompassing are these? The number of economies is 60. It's almost all of the imports that the U.S. gets; it's nearly 100 percent. So it's a lot that's out on the table, but there are also huge carve-outs for sectors like automobiles, energy, and pharmaceuticals, things covered by existing trade agreements. So a lot of countries, the biggest economies in the world, almost all goods with these huge carve-outs as well. We know that President Trump has many legal tools to pursue tariffs.

Analysis

The U.S. is imposing new tariffs on nearly all imports from 60 economies, marking a significant move to rebuild President Trump's tariff wall. This comes as previous tariffs are set to expire, indicating a strategic shift in trade policy that could impact global supply chains.

Smart money should note the extensive carve-outs for key sectors like automobiles and pharmaceuticals, which may mitigate some immediate market disruptions. However, the broad scope of these tariffs suggests a tightening of trade relations that could lead to inflationary pressures across various industries.

16:22
PDT

SpaceX plans to transition from Falcon 9 to Starship.

SpaceX Elon Musk AI IPO PRIVATE

– The next Starship test is delayed due to weather conditions.

– Elon Musk's ambitions include AI data centers in space.

– Stock price volatility follows SpaceX's massive IPO.

– Strategic importance of Starship's success is emphasized.

space technologyAI investmentIPO volatility

▸ Full transcript

For the Falcon family, we have heard previously publicly said by SpaceX that it intends to off-ramp its Falcon 9 rocket for Starship, but thus far until now we haven't had that timeline. So when it does stop, this is going to be incredibly strategically important and a major undertaking because it needs to then really push through these setbacks that it's seen with Starship, cement the tech leaps as well to bring that to market in the span of a year and a half. This coming, of course, at a time when we've seen yet another delay to the next major test of its Starship rocket to Friday now due to unfavorable weather. It will be carrying these upgraded Starlink satellites intended to burn up later in the atmosphere, but that has been delayed. But all of this is also central to, of course, Elon Musk's ambitions to put AI data centers in space, so much scrutiny, particularly given the stock price volatility post that massive IPO. More ahead here on the Asia trade, this is Bloomberg.

Analysis

SpaceX's Falcon 9 rocket is set to be off-ramped for Starship, marking a significant strategic shift as the company aims to overcome setbacks and bring new technology to market within 18 months. The next major test of the Starship rocket has been delayed again due to unfavorable weather, impacting Elon Musk's broader ambitions for AI data centers in space amidst stock price volatility following a massive IPO.

Smart money should note that the delays in Starship testing could hinder SpaceX's timeline for technological advancements, potentially affecting investor confidence. Additionally, the focus on AI data centers in space may signal a shift in investment priorities that could reshape the competitive landscape in the tech sector.

16:20
PDT

Global oil supply is under strain due to geopolitical tensions.

U.S.Middle East Nicholas Wather Bloomberg SPR Good Hope Bloomberg Oil Reporter CL=F PRIVATE

– U.S. strategic petroleum reserves are limited and not expected to be replenished soon.

– Inflationary pressures could increase if oil supply disruptions occur.

– The fragility of oil supply chains is a growing concern for the global economy.

– Market participants should monitor developments in the Middle East closely.

geopolitical riskoil supplyinflation

▸ Full transcript

Possibly as much as a month longer, if it has to redirect instead of going by the Bad or Man-Dead route down by the south, go up north around Suez, go around the Cape of Good Hope to get to Asia, that's a really long time to wait for oil at a time when the world is starving for barrels. Yeah, so how much oil do governments have around the world right now in the form of strategic reserves, for example? I think in this case, we came into the last squeeze in the crisis with relatively comfortable supply. All these work around U.S. SPR was being released, people were releasing their SPRs around the world. And so there was this sense that there was a chance for supply and demand to balance. And so when some of that demand destruction was happening, people stopped. There comes a point when, like in a way, prices don't go that high, right? But right now I think what we're seeing is that a lot of those solvers have already been deployed. And last that has been reported, there are no plans for the U.S. to deploy more SPRs. So in terms of like emergency barrels that can solve the crisis this time round, they aren't really there. So I think what's important to remember, of course, is that ultimately crude is the lifeblood of the global economy. If those flows stop coming, if the heartbeat of the Middle East stops, then I think very soon that fuel crisis is going to be felt across the globe. And that's definitely going to hit things like inflation. Nicholas Wather, I heard the Bloomberg Oil Reporter with the latest, as we've seen no let up between the U.S. and Iran.

Analysis

Oil prices are under pressure as global supply concerns mount, particularly due to geopolitical tensions in the Middle East. The U.S. has limited emergency reserves available to address potential supply disruptions, which could exacerbate inflationary pressures worldwide.

The current situation highlights the fragility of global oil supply chains, with strategic reserves already depleted and no immediate plans for further releases. This could lead to significant economic repercussions if the flow of crude is interrupted, impacting inflation and overall market stability.

16:18
PDT

Brent Crude prices have risen above $100 due to geopolitical tensions.

Brent Crude Houthi Saudi President Trump Republicans Bloomberg News GOP Our Bloomberg News Editor Middle East Nikola Slotnik PRIVATE CL=F

– Inflation is a critical issue for the upcoming midterms, affecting Republican strategies.

– The ongoing conflict in the Middle East is likely to sustain high oil prices.

– Political pressure is increasing on President Trump regarding inflation management.

– The situation may impact both oil bulls and bears negatively.

geopolitical riskinflation concernsmidterm elections

▸ Full transcript

Decision on that remains to be seen, but it definitely doesn't feel like things are calming down anytime soon. At the same time, we're seeing the broader oil market inflation picture changing, which is not popular within Trump's own party or with the broader domestic audience. We're just over 100 days out from the midterms. Does the president seem to be feeling any of this pressure? Yes, definitely. There are a lot of Republicans that are in tight spots, and inflation is the topic of the moment for both parties to be talking about. For the Republicans, they're on their back foot trying to defend against this. As you mentioned, Brent Crude popped above $100 a barrel today, following the Houthi attacks on the Saudi tankers. It doesn't seem like things are cooling off anytime soon, which is bad news for the Republicans in the midterms. Our Bloomberg News Editor talked about bad news for the GOP, and perhaps it's also bad news for oil bulls because we're actually seeing President Trump's latest threats of escalation in the Middle East have sent Brent Crude back above $100 for the first time since May. Let's get more with old reporter Nikola Slotnik. What are we seeing in terms of the physical market as well in supplies? I think it's very clear.

Analysis

Brent Crude has surged above $100 a barrel following Houthi attacks on Saudi tankers, exacerbating inflation concerns ahead of the midterms. The political pressure on President Trump is mounting as inflation becomes a central issue for both parties, complicating the GOP's position as they face tight races.

16:16
PDT

Crude prices surged by 7% amid Middle East tensions.

Bloomberg President Trump Iran Houthi U.S.Middle East New York crude gold PM Bloomberg Crypto Red Sea New York PRIVATE GC=F CL=F DXY

– Ongoing U.S. military strikes against Iran mark the 13th consecutive night.

– Lack of urgency for peace talks could prolong market instability.

– Regional proxies complicate the geopolitical situation.

– Inflation fears are rising globally due to supply concerns.

geopolitical riskoil market volatilityinflation concerns

▸ Full transcript

The transactions and the technology. Bloomberg Crypto, Tuesdays only on Bloomberg. Take a look at what we're watching when it comes to oil markets. Crude is set for that weekly gain to be held as this ongoing Middle East crisis continues to fuel supply fears and inflation fears globally. That weekly surge that we're seeing follows Houthi attacks on tankers in the Red Sea, opening up another front in the Middle East conflict where President Trump is threatening to extend U.S. strikes on Iran and inflict, quote, major military punishment on both Iran and the Houthis. Of course, this extra complicated element of having these regional proxies come into play now also needs to be considered. Break crude's last trade was up by 7 percent. We are seeing New York crude pretty flat at the moment. Not a lot of moves when it comes to gold as well, taking into account what we've seen with the strength in the U.S. dollar and the inflation picture. We are now hearing U.S. forces starting another night of strikes against military targets in Iran at 6:45 PM Eastern, marking the 13th consecutive night of U.S. strikes against Iran. Let's bring up Bloomberg News editor Brian Peach. So there's no let-up it seems. There doesn't seem to be any urgency when it comes to either Iran or the U.S. regarding recommencing or having these peace talks take place. What are we hearing from President Trump in terms of the U.S. military?

Analysis

Oil markets are experiencing a surge due to ongoing Middle East tensions, with crude prices rising by 7% amid fears of supply disruptions. The situation is exacerbated by U.S. military actions against Iran, which are likely to prolong instability in the region.

Smart money should note that the lack of urgency for peace talks between the U.S. and Iran could lead to sustained volatility in oil prices. Additionally, the involvement of regional proxies complicates the geopolitical landscape, potentially impacting global supply chains and inflationary pressures.

16:13
PDT

New tariffs imposed on 60 economies.

Iran President Trump Google DeepMind Bloomberg PRIVATE GOOGL

– Focus on forced labor in trade policy.

– Potential reshaping of global supply chains.

– Increased costs for companies may arise.

– Ethical considerations influencing trade decisions.

trade policysupply chain riskethical sourcing

▸ Full transcript

Iran will get the outlook for global supplies. Plus, the administration of President Trump rebuilds its tariff wall, slapping new levies on some 60 economies after an investigation into forced labor. Details coming up, this is Bloomberg. I have shifted from science fiction to reshaping human capability. We need someone who left Google's DeepMind to bridge that gap between digital brains and automation. A lot of people sit in the office with their own computers, but is that really the natural form for humans to work?

Analysis

The Trump administration is imposing new tariffs on around 60 economies following an investigation into forced labor, which could impact global supply chains. This move signals a shift in trade policy that may reshape international economic relations and supply dynamics.

The focus on forced labor highlights a growing trend where ethical considerations are influencing trade decisions. Investors should note that this could lead to increased costs for companies reliant on global supply chains, potentially affecting margins and pricing strategies.

16:11
PDT

Brent oil prices exceed $100, impacting market sentiment.

Brent oil President Trump Intel Cambodia Heidi Stradewarts Shivriyanne Konjan Sivani Samsung South Korea Alphabet Microsoft Amazon USDCNH

– Intel's revenue forecast exceeds expectations, driven by AI demand.

– Asian governments are heavily investing in AI and semiconductor sectors.

– Korea's industrial policy serves as a model for other nations.

– The competition between the US and China in AI is intensifying.

AI investmentsemiconductor competitiongeopolitical tensions

▸ Full transcript

When it comes to politicians getting involved, we've seen sort of a different picture across Asia where governments are really putting very heavy investments, sort of an industrial policy towards artificial intelligence, towards semiconductors as well, especially across South Korea, for example. What does this mean in terms of competition among economies? And some of these players as well, a lot of these government-related projects are to do with Samsung, as King Heineck's, for example. Look, I mean, Korea, I think, is almost a poster child, what you see there. You see it from the government down to obviously the memory boom. Go back a few years ago, I mean, the Korean market was not going to be front and center relative to where it is today. You're going to see other countries, I think, take that lead. The private-public partnerships are going to be extremely important because this is an armchair that's happening globally. US, China. When it comes to memory, you look at what Korea has done. I think many other countries are looking to say, okay, how did they plan? No country wants to watch the AI revolution from the stands. They don't want to watch it from the outside in. And I think that right now is sort of the balance that we're seeing play out across time. Dan Ives, good to have you with us, partner and senior managing director at Yorkville Ives. We continue to watch the latest AI trade and also watching the latest on breaking news.

Analysis

Asian stocks are poised for declines as Brent oil surpasses $100 amid escalating tensions in Iran, while Treasury yields reach their highest levels of the year. Intel's strong revenue forecast, driven by AI data center demand, signals a robust outlook for chipmakers despite geopolitical headwinds.

The significant government investments in AI and semiconductors across Asia, particularly in South Korea, highlight a competitive landscape where countries are eager to participate in the AI revolution. This trend suggests that private-public partnerships will be crucial in shaping the future of technology and economic competitiveness globally.

16:09
PDT

China is leading in robotics and power within the AI sector.

China United States OpenAI AI US Middle East USDCNH

– The gap in open-source AI models between the US and China is narrowing.

– Investors should consider the broader implications of US-China competition in AI.

– Regulatory challenges are expected to intensify, impacting technology adoption.

– The political landscape will play a crucial role in shaping AI regulations.

AI competitionregulatory environmentemerging markets

▸ Full transcript

When it comes to the AI names outside of these top markets, are you perhaps more compelled by the opportunities in China, given the developments in Moonshot and what looks like a pretty rapid closing of that AI gap? Yeah, look, this is a two-horse race between the US and China. The reality is when it comes to robotics, China is leading; when it comes to power, they're leading. When it comes to open source, what we see on the models, that gap is going to continue to narrow. I think for China now, it's really what you want to see in terms of the use cases relative to big tech playing out within China. But it's our view that you can't just play the US-China market; you have to also think about where this is, what's the ripple effect? It's going to be the Middle East; it's going to be India. But right now, it's the US and China that are at the top of the mountain, and you're seeing continued competition, which is good for ultimately for investors. How difficult might the regulatory environment become? We've had another case this week of potentially AI going awry, right? When it comes to OpenAI, is this going to become more of an issue for politicians worldwide? And we see these sort of regulatory curbs when it comes to the technology and the scale. I think that's gonna be front and center. It's gonna be a clear political issue when it comes to the midterms and data center build-out.

Analysis

The competition between the US and China in AI is intensifying, with China leading in robotics and power, while the gap in open-source models is narrowing. Investors should consider the ripple effects of this competition beyond just the US and China, particularly in regions like the Middle East and India.

Regulatory challenges surrounding AI are likely to become a significant political issue, especially as incidents of AI misuse arise. This could impact the pace of technology adoption and data center expansions, making it crucial for investors to monitor regulatory developments closely.

16:07
PDT

Brent oil prices exceed $100, impacting Asian stock outlook.

Brent oil President Trump Intel Microsoft Amazon Alphabet AI TAC GOOGL MSFT AMZN TSLA

– Intel's revenue forecast significantly surpasses estimates due to AI demand.

– Cloud growth metrics from Microsoft and Amazon are critical for tech sector performance.

– High expectations for earnings season may lead to market volatility.

– Geopolitical tensions are influencing market sentiment.

geopolitical riskcloud growthsemiconductor demandearnings season

▸ Full transcript

But you piece it together with what we see from Alphabet, with what we see across TAC. And I think this sets the tone for what we're going to see in earnings season over the next few weeks. Which ones are you watching closely right now? I think, look, it's the rest of the hyperscalers because you got to see how Microsoft and Amazon ultimately perform in terms of that cloud growth. I think that's one of the best barometers relative to that. But we saw it in Alphabet. But now you guys see it in Microsoft as well as Amazon because that pieces together where we're ultimately going to see a cross-tech. It speaks to our view that this is a true fourth industrial revolution playing out. And we're just in the early stages of it, and the earnings season further validates what we're seeing across the board with enterprise spending. Expectations are so high though. I mean, the way that Alphabet is trading despite the results, what sort of metrics will you be watching to see how stocks also move? And is that a clear reflection or the appropriate reflection of their strength? You know, it's a great question. I think right now the issue is you're in between cat-backs and monetization stage. But if you saw Alphabet, I mean, that cloud growth was phenomenal. And now it all comes down to investors, where's the patience? You see that wouldn't be my Tesla.

Analysis

Asian stocks are set for declines as Brent oil surpasses $100, influenced by geopolitical tensions and President Trump's threats regarding Iran. Meanwhile, Intel's revenue forecast has exceeded estimates, driven by strong demand from AI data center customers, indicating a robust spending boom in the chip sector.

Investors should note the significant impact of cloud growth metrics from major players like Microsoft and Amazon, as these will serve as key indicators for the tech sector's performance in the upcoming earnings season. The current market sentiment reflects a cautious optimism, but high expectations may lead to volatility if results do not meet investor patience.

16:03
PDT

Intel's profit estimate doubled due to AI data center demand.

Intel Konjan Sivani AI CPU PC Our Bloomberg Intelligent Senior Semiconductor Analyst PRIVATE

– Positive outlook for semiconductor and AI-adjacent companies.

– Unexpected strength in Intel's PC segment indicates supply constraints.

– Continued demand from hyperscalers may justify increased spending.

– Overall market sentiment for chipmakers is improving.

AI demand surgesemiconductor recoverysupply constraints

▸ Full transcript

Intel doubled that profit estimate in the second quarter on the back of the AI data center order surge. That comeback story is really gaining steam and it does raise the outlook for both revenue and spending there. So all of this tells us for broader markets, for these Asian chipmakers and AI-adjacent names, that support could continue when it comes to just these continuously impressive results that we've been getting. Chipmakers, memory suppliers, despite some of the volatility for stock prices, the outlook for that underlying business continues to improve at places like Intel. The big question, of course, has been how long these hyperscalers can keep ramping up. Whether demand will start to become muted, is that going to be enough to justify all of this spending once the cost that's getting passed on by some of these companies as well. But we are looking like a very bright after-hours picture for this space. But let's get more. Our Bloomberg Intelligent Senior Semiconductor Analyst, Konjan Sivani, joins us now. So take us through these numbers. What really jumped out to you in terms of what has just provided more of a catalyst for reassurance for investors? Yeah, I mean, finally, after a long time, things are really turning around for Intel, especially on the execution terms. On the demand side, like you mentioned, the AI boom is really driving the server CPU demand, which is helping everyone in this space, including Intel. And this was somewhat expected, this goodness in the server CPUs. What really surprised us was the beat in the client, which is the PC side. I mean, look, there is a supply constraint.

Analysis

Intel's profit estimate for the second quarter has doubled, driven by a surge in AI data center orders, signaling a robust recovery in the semiconductor sector. This positive momentum raises expectations for revenue and spending across AI-adjacent companies and chipmakers, despite ongoing volatility in stock prices.

The unexpected strength in Intel's client segment, particularly in PC sales, highlights a potential supply constraint that could further support pricing power. Investors should note that the AI boom is not only benefiting server CPU demand but also revitalizing the broader semiconductor market, suggesting a more sustained recovery than previously anticipated.

16:01
PDT

Brent oil prices exceed $100, impacting market sentiment.

Brent oil President Trump Intel Cambodia Phnom Penh Heidi Stradewarts Shivriyanne AI Prime Minister As Sherry PRIVATE CL=F

– President Trump's rhetoric raises geopolitical tensions.

– Intel's revenue forecast surpasses expectations, driven by AI demand.

– Asian stocks are expected to decline amid these pressures.

– Chip makers may benefit from ongoing AI spending.

geopolitical riskAI spending boomoil price volatility

▸ Full transcript

Welcome to the Asia trade. I'm Shivriyanne in Tokyo. The top story is this hour. Asian stocks are set for declines as Brent oil soars above $100, with President Trump threatening a further escalation of the war in Iran. Treasury yields are hitting their highest levels of the year. Intel is higher in late trade as well, as its revenue forecast shatters estimates with AI data center customers clamoring for its chips. Cambodia's Prime Minister tells Bloomberg exclusively that he's ready to do more to crack down on international scam networks; we're live in Phnom Penh. And I'm Heidi Stradewarts in Sydney. Take a look at the setup for trading across Asia. As Sherry mentioned, it's really that confluence of geopolitics, a threatening escalation when it comes to the U.S. around war, as well as keeping an eye on what's going on with chip makers. Intel's doubling of profit estimates certainly suggests that the spending boom for AI is alive and well, which bodes well for chip makers going into this session in Asia. However, elsewhere we are seeing broadly that Malaysia is looking to set in a bit for Asian stocks. Searching past $100 certainly doesn't help that at all, but we have seen quite a lot of price action over the past few days with all of these earnings.

Analysis

Asian stocks are set for declines as Brent oil surges above $100, influenced by President Trump's threats of escalating conflict in Iran. Meanwhile, Intel's stock rises in late trade following a revenue forecast that significantly exceeds estimates, driven by strong demand from AI data center customers.

The geopolitical tensions surrounding oil prices could lead to increased volatility in Asian markets, while Intel's robust performance highlights a sustained boom in AI-related spending, suggesting a favorable outlook for chip manufacturers. Investors should consider the implications of these dynamics on broader market sentiment and sector performance.

15:59
PDT

Caroline Rodriguez-Berquette leads audience polls at 46%.

Caroline Rodriguez-Berquette Michelle Bachelet Rebecca Greenspan Fernanda Espinosa Maki Cell United Nations UN Caroline Rodriguez PRIVATE

– No woman has ever held the UN Secretary-General position.

– Candidates emphasize the need for true representation and credibility.

– Fernanda Espinosa and Maki Cell tie in audience support.

– The selection process for the new Secretary-General is ongoing.

global governancefemale leadershipinternational relations

▸ Full transcript

The epitome, the gold standard, if you wish, of someone who's been actively involved in making those decisions. Well, and you can hear the people behind us. They just put one of the polls up on the screen here of who the audience actually thinks would be best suited to carry forward those UN reforms. Overwhelmingly, Caroline Rodriguez-Berquette at 46 percent. The next closest candidate is Michelle Bachelet at 14. And of course we have Rebecca Greenspan at 13 percent, too. You know, it is worth noting as well, in the 80-year history of the UN, there has never been a woman leading the organization. There has never been a woman secretary-general. So perhaps this could be an indication we could see the first. Absolutely. And this is something that several of the candidates talked about in their prepared remarks, the idea that when we get forward, were we going to have true representation. The final question, who convinced you the most in this town hall and according to the audience polls. Once again, Caroline Rodriguez-Proquet of Guyana, 49%. Fernanda Espinosa, that's a tie with Maki Cell, by the way. Absolutely. It was a wonderful evening, and I hope that our viewers and our audiences got a lot out of it. That will do it for us at the United Nations. This is Bloomberg.

Analysis

Caroline Rodriguez-Berquette leads the audience poll for the next UN Secretary-General with 46%, indicating strong support for a potential first female leader of the organization. This reflects a growing demand for representation and reform within the UN, as candidates emphasize the need for credibility and proactive conflict prevention.

Smart money should note the historical significance of this potential leadership change, as it could influence global diplomatic dynamics and the UN's effectiveness in addressing international conflicts. The emphasis on representation may also signal a shift in how global governance is perceived and executed, potentially impacting international relations and investment flows.

15:57
PDT

Candidates stress rebuilding trust and credibility for the UN.

United Nations Maria Fernanda Espinosa Rafael Mariano Grossi MacCissola Senegal UN Cissola Senegal Permanent Five

– Maria Fernanda Espinosa advocates for conflict prevention strategies.

– The UN's effectiveness is questioned amid ongoing global conflicts.

– The veto power of the Permanent Five complicates negotiations.

– A selection for the next Secretary General is expected in September.

UN credibilitygeopolitical tensions

▸ Full transcript

It is interesting we hear the candidates speaking; they talked about rebuilding trust and credibility, which seems to be key for the candidates. MacCissola Senegal used that word repeatedly. You even heard from Rafael Mariano Grossi from Argentina talking about this idea; I think he used the phrase a new deal with regards to the relationship that the UN has with its member states and, of course, with the people as well. It is a challenging situation, though, because credibility is at stake right now. I mean, a lot of questions arise: where has the UN been when it comes to the wars that we're seeing, the conflicts that we're seeing around the world? It has not been present. Well, it's kind of interesting too. We heard from Maria Fernanda Espinosa talking about this idea of actually trying to prevent some of these conflicts before they start, and you pushed back on a couple of the responses there as to exactly how they would be able to negotiate with the world powers who are at the center of a lot of these conflicts and whether they would be receptive. Well, the question is that paralysis, right? I mean, that veto power that the Permanent Five has. It takes only one of them to veto, and it's over. And we should point out, this selection process is going on right now. There are straw polls behind the scenes to determine who is liked the best. At some point, probably in the month of September, we will actually have a selection. I do think we want to go to the next question because there were three questions that we pulled our.

Analysis

Candidates for the next UN Secretary General emphasize the need to rebuild trust and credibility with member states and the global community. The ongoing conflicts and the UN's perceived inaction raise questions about its effectiveness and the challenges the next leader will face in negotiating peace and cooperation among world powers.

The discussion highlights a critical insight: the UN's credibility is at stake, and the ability to prevent conflicts before they escalate is essential. The veto power held by the Permanent Five complicates negotiations, suggesting that any future leader must navigate a complex geopolitical landscape to restore faith in the UN's role.

15:54
PDT

Eli Lilly is investing billions in manufacturing to meet demand for obesity drugs.

Eli Lilly Prozac United States Medicaid Silicon Valley United Nations New York City Romain Bostic DXY

– Insurance coverage for obesity medications is patchy across states.

– The company is shifting towards a technology-oriented culture.

– Challenges include patent expirations and competition from generics.

– Sustaining success in the pharmaceutical market is becoming increasingly difficult.

pharmaceutical competitioninsurance coveragesupply chain management

▸ Full transcript

For the biggest problems in health care. The traditional challenge for pharmaceutical companies is maintaining success. Drugs have a shelf life. Their patents expire. Competition emerges. There are generic formulations of medication. Eli Lilly has had examples of this. It was dominating the market for depression medication with Prozac. Eli Lilly right now almost presents more as like a technology company with the kind of culture and hours that you might see in Silicon Valley and not Indianapolis. Although many people have benefited, not enough. As that bound and products like that can change the lives of about 40% of U.S. adults who have obesity or overweight. Insurance coverage has really lagged behind the need. Only around a dozen or so states right now that currently cover the drugs through Medicaid. So insurance coverage has been really patchy and that's made it difficult for a lot of people who need these drugs to access them. Lilly has been pouring billions of dollars into manufacturing. They've made sure that they can really control their supply chain in order to supply this enormous demand. A challenge now for Lilly is can it extend and sustain the kind of success it has had over the past few years? From the United Nations in New York City, I'm husband Armin. And I'm Romain Bostic. We just heard from six candidates vying to be the next secretary.

Analysis

Eli Lilly faces challenges in sustaining its recent success in the pharmaceutical market, particularly in the obesity drug sector, where insurance coverage remains inconsistent. The company is investing heavily in manufacturing to meet demand, but the expiration of patents and competition from generics could threaten its market dominance.

Smart money should note that while Eli Lilly is positioning itself as a technology-driven company, the underlying issues of access to medication due to insurance limitations could hinder broader market growth. The focus on supply chain control is crucial, but the long-term viability of its product pipeline remains uncertain amidst evolving competition.

15:52
PDT

Texas is a key player in the global space economy.

Texas SpaceX Blue Origin NASA Axiom Space Intuitive Machines Firefly Aerospace Governor Abbott Texas Space Commission II West Texas Van Horn

– SpaceX and Blue Origin are major tenants in Texas.

– The Texas Space Commission is increasing funding for space businesses.

– Cost reductions in space exploration are expected due to competition.

– Investors should watch for growth opportunities in the Texas space sector.

space economy growthgovernment fundingcost reduction in space

▸ Full transcript

Larger commercial players as well. With the global space economy currently valued at over $650 billion, one American state in particular is betting big on this rapidly growing sector. Governor Abbott, coming to you from the great state of Texas. Texas is a really good snapshot of the new direction that the space industry is taking. The biggest tenant in Texas is SpaceX, so they have set up shop with their star-based facility on the southern tip of Texas. Another big tenant is Blue Origin in West Texas outside of Van Horn. And then you also have a big cluster of companies in Houston, the home of NASA's Johnson Space Center. So you have Axiom Space, you have Intuitive Machines, and then in Central Texas, Firefly Aerospace has its rocket facility and development center. Last year, the Texas Space Commission gave out $150 million in grants to support space business in the state. It's due to double that by the end of this year. What we wanted to do is make it well known that those companies who had already decided to be set up here in Texas, that they didn't leave, and that they are also helped to expand their existing footprint. And lift off the crew of Artemis II, now bound for the moon. The NASA standpoint, because of that competition, they're lowering the overall cost.

Analysis

Texas is positioning itself as a leader in the burgeoning space economy, with significant investments and a cluster of major companies like SpaceX and Blue Origin establishing operations in the state. The Texas Space Commission's funding initiatives are set to double, indicating strong governmental support for the sector's growth.

The competitive landscape in the space industry is driving down costs for NASA and other players, which could lead to increased accessibility and innovation in space exploration. Investors should note the strategic importance of Texas as a hub for space technology and the potential for lucrative opportunities as the sector expands.

15:50
PDT

Cuba is experiencing a severe jet fuel shortage.

Cuba Raul Castro U.S.Trump administration Justice Department United States Cuban Communist Party The Trump Cuban President Raul Castro Will Castro CL=F

– U.S. trade embargo and recent actions signal a tough stance on Cuba.

– Economic unrest is leading to unprecedented suffering on the island.

– The indictment of Raul Castro may impact the Cuban government's stability.

– Potential opportunities for investment may arise from changes in U.S.-Cuba relations.

geopolitical riskenergy supplytourism volatility

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Cuba had some kind of economic relationship. When we had prohibition in the United States, Cuba became a haven for American tourists. Cuba is just 90 miles south of Florida. It's in the heart of the Caribbean. It's been seen as kind of a strategic platform for U.S. rivals. The U.S. has had a broad trade embargo on Cuba since shortly after the revolution in the 1960s. Cuba is ruled by a single party, the Cuban Communist Party, and it controls the legislature. The military controls all facets of society. Socialism or death. But the socialist idealism that birthed Cuba has ground to a halt, literally running out of gas. There is a dire jet fuel shortage in Cuba as the U.S. is moving to cut off the country's oil supply. The crippling blackouts and a teetering economy have supported unrest on the island. We have an unprecedented degree of suffering on the island. The Trump administration has taken a hard line. Cuba has always posed a national security threat. Tonight the Justice Department unsealed an indictment against former Cuban President Raul Castro. Will Castro actually face this prosecution? The message the indictment sends to the Cuban government is that the U.S. is serious. Amid the upheaval, many are looking for change, and some see opportunity. I would really like Cuba to be made.

Analysis

Cuba faces a dire jet fuel shortage exacerbated by U.S. efforts to cut off its oil supply, leading to crippling blackouts and economic unrest. The indictment of former Cuban President Raul Castro signals a hardening stance from the U.S. government, which may create both challenges and opportunities for change on the island.

Smart money should note that the combination of economic distress and political upheaval in Cuba could lead to increased volatility in the region. Investors may find opportunities in sectors that could benefit from a potential shift in U.S.-Cuba relations, particularly in tourism and energy.

15:48
PDT

The new Secretary General must prioritize restoring trust and communication within the UN.

Michelle Bachelet Maria Fernanda Espinosa Rafael Mariano-Garosi Rebecca Greenspan Caroline Rodriguez-Berquette Mackie Saul United Nations UN Rafael Mariano Caroline Rodriguez Secretary General United Nations General Assembly

– Financial stability is critical, with 72 member states currently behind on dues.

– Reform implementation and accountability are essential for the UN's future effectiveness.

– The focus will be on making the UN leaner yet more impactful.

– Engagement with member states and staff is crucial for successful reforms.

UN reformfinancial stabilityglobal cooperation

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Good faith with all those willing to help ensure the UN continues to be the tremendous power of force for good it has been for decades. I think millions around the world truly needed. Thank you, Ms. Bachelet. Michelle Bachelet, Maria Fernanda Espinosa, Rafael Mariano-Garosi, Rebecca Greenspan, Caroline Rodriguez-Berquette, Mackie Saul. One of you may be the 10th Secretary General of the United Nations, a Secretary General who will inherit a world more divided, more technologically complex, and yet probably more interconnected than at any point in the UN's 81-year history. But there are going to be a lot of challenges that one of you will have to face as the next leader. And the decisions that the next leader will make over the next several months will have an inordinate impact on the next 81 years of this institution and the ability to be an effective steward for the world's 8 billion people. From all of us at Blimbug, thank you to the President of the United Nations General Assembly and her team for their partnership in presenting this town hall. And thank you for joining us. Good night.

Analysis

The next Secretary General of the United Nations will face unprecedented global challenges, including division and technological complexity, which will significantly influence the institution's future. The decisions made in the coming months will shape the UN's effectiveness in serving the world's population, emphasizing the need for strong leadership and reform.

15:45
PDT

Restoration of trust and communication within the UN is a priority.

UN Michelle Bachelet

– Focus on senior management appointments based on competence and integrity.

– Commitment to financial stability amid unpaid dues from member states.

– Aiming for a leaner but more effective UN structure.

– Engagement with member states on management challenges is crucial.

UN reformfinancial stabilityinternational relations

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Trust and communication with the staff members of this organization need to be restored. Basically, what I would do is recover the mandate of this institution in full, making the UN relevant, preventing conflict, and protecting people. Throughout my tenure, my overarching priority will be to be present and active wherever, whenever, and however I can be of service to the purposes and principles of the UN. I believe it is good to set objectives for the first period to focus on and accomplish them. In my first 100 days, I will prioritize appointing key senior management officials based on proven competence and integrity, while also ensuring gender and geographical balance. Personally, I want to engage with member states on key management challenges early on. This means making substantial progress in how to deepen and accelerate reforms that combine greater efficiencies and effectiveness. The goal will always be to make the UN leaner but stronger; we don't want to make the UN weak. In these areas, I will work and engage with members and staff, as I know they want a very strong UN. I will try to secure financial stability.

Analysis

The focus on restoring trust and communication within the UN is paramount, with an emphasis on making the organization relevant and effective in conflict prevention and protection of people. The new leadership aims to prioritize senior management appointments based on competence and integrity while ensuring gender and geographical balance, signaling a shift towards a more accountable and efficient UN.

Smart money should note the commitment to financial stability and reform implementation, as 72 member states have yet to pay their dues, indicating a potential liquidity issue. The emphasis on a leaner yet stronger UN suggests a strategic pivot that could impact international relations and funding flows for humanitarian efforts.

15:43
PDT

72 member states have unpaid dues, indicating a trust deficit.

UN Secretary General member states UNAT As Secretary General

– Emphasis on competence and integrity in leadership decisions.

– Shift towards a performance-based business model for the UN.

– Focus on reform implementation and financial stability.

– Visible leadership during crises is prioritized.

UN reformfinancial stabilitymember state engagement

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Cabinet and a reformed executive office based on three issues: competence, competence, competence plus one, which is integrity. As Secretary General, I need to ensure that my decisions are well-informed and timely, and that I'm able to advise and inform member states. Number two, focus on reform implementation and financial stability. Let me reveal something here: today, 72 member states have not yet paid their dues to the organization. This is, of course, not only a financial issue; I think it is a message that we need to regain the trust of member states so they see value for money, so they see that this organization is to become more accountable, more transparent, and more impact-driven. Of course, accelerate implementation and follow through the UNAT package and the decisions that have been made by member states. I think UNAT, as I have said, is a very good start, but more is needed to transition from budget cuts and mergers of agencies and programs to a new business model for the UN based on impact performance and accountability. And number three, I will be present and visible while the crisis and conflicts are. I will make prevention not a slogan but an operating principle.

Analysis

The Secretary General emphasized the need for competence and integrity in leadership while addressing the financial stability of the UN, noting that 72 member states have yet to pay their dues. This highlights a critical trust deficit that must be addressed to ensure accountability and transparency within the organization.

Smart money should note the shift towards a performance-based business model for the UN, moving away from budget cuts and agency mergers. The focus on reform implementation and visible leadership during crises indicates a proactive approach that could enhance the UN's effectiveness and member state engagement.

15:41
PDT

Candidates prioritize reform and accountability in the UN.

United Nations Bretton Woods institutions IFIs Carolyn Mackie Sol UN The Secretary General

– Focus on preventive diplomacy and humanitarian aid.

– Commitment to geographical balance in leadership.

– Emphasis on collaboration with member states and financial institutions.

– Need for a clear vision to restore trust in the UN.

UN reformhumanitarian aiddevelopment financing

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The Secretary General and the Secretariat and the staff need to talk to them, to listen to them, not to sugarcoat problems, but to take care of them. We need to look at developmental areas with the wisdom that the new times and the new economic circumstances require. But that needs to walk the walk, and not simply to talk the talk. When it comes to reform, of course, it is important. Everybody's a reformer now. Let's see what happens on January 1st. We will have to see and separate what is within the mandate of the Secretary-General and their resolutions, not wasting time on what is in the hands of the membership to have this honest dialogue, to determine what is the level of our ambition, and what we really want to do with the UN. It is perfectly possible. We shouldn't lose hope. A UN that works, although it sounds incredible, is possible. Well, just to recall, 100 days is a little more than three months, no? And it's hard to be a regional here, but...

Analysis

The candidates for the next Secretary General of the United Nations emphasized the need for reform and accountability within the organization, highlighting the importance of listening to member states and addressing global challenges. They expressed a commitment to building trust and improving the UN's effectiveness through strategic partnerships and a focus on human rights and development.

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