2025-07-02 11:26
France reports two deaths in heatwave, 300 taken to hospital Italy issues red alerts in 18 cities Swiss reactor shut down due to high river-water temperatures Two die in wildfire in Spain's Catalonia a day ago LONDON, July 2 (Reuters) - Wildfires have killed two people in Spain and two others have died in France because of a heatwave that has gripped Europe and forced the closure of a nuclear reactor at a Swiss power plant. With scorching temperatures again on Wednesday, Spanish officials said a wildfire in Catalonia had killed two people a day earlier and France's energy minister reported two deaths with a direct link to the heatwave, with 300 others taken to hospital. Sign up here. Italy issued red alerts for 18 cities because of the extreme heat and Turkey has been tackling wildfires in what meteorologists say is an "exceptional" heatwave because it has come so early in Europe's summer. The blaze in Torrefeta in the Catalonia region of Spain destroyed several farms and affected an area stretching for about 40 km (25 miles), official said. It was largely contained though more wind and thunder storms were expected on Wednesday. "The fire was extremely violent and erratic due to storms and strong winds, generating a convection cloud that complicated extinguishing efforts," the fire service said. Authorities in the Spanish city of Barcelona said on Tuesday they were also looking into whether the death of a street sweeper at the weekend was heat-related. Spain experienced its hottest June on record this year, and France had its hottest June since 2003, Energy Minister Agnes Pannier-Runacher said. Weather forecaster Meteo France said red alerts remained for several areas of central France, but that heat was easing in the west, though intense thunderstorms with possible heavy bursts of rainfall were expected in many parts of the east. Temperature highs were expected around 39 Celsius (102.2°F), with up to 34 C in Paris, and 36 C to 38 C in Strasbourg, Lyon, Grenoble and Avignon. In Italy, Florence was expected to bear the brunt of the heat with a top temperature of 39 C during the day. Red alerts were issued in 18 cities, including Milan and Rome. There was a risk of violent and sudden rain and storms, particularly along the central Appennine mountain region and Sardinia and Sicily. Swiss utility Axpo shut down one reactor unit at the Beznau nuclear power plant and halved output at another on Tuesday because of the high temperature of river water. Water is used for cooling and other purposes at nuclear power plants, and restrictions were expected to continue as temperatures are monitored. Scientists say greenhouse gas emissions from burning fossil fuels are a cause of climate change, with deforestation and industrial practices being other contributing factors. Last year was the planet's hottest on record. https://www.reuters.com/sustainability/climate-energy/two-die-spain-wildfire-two-deaths-france-european-heatwave-2025-07-02/
2025-07-02 11:11
BERLIN, July 2 (Reuters) - Germany's cabinet on Wednesday gave its backing to a deal with the Netherlands to support gas extraction from a cross-border reservoir in the North Sea, the economy ministry said, as Berlin seeks to boost domestic gas production. Following the turmoil of the Ukraine war and Germany's decision to halt Russian imports, the government has focused on finding alternatives, including trying to increase domestic gas exploration and extraction. Sign up here. Natural gas production in Germany has been declining for decades. At around 4.8 billion cubic meters in 2022, it accounted for only 5.5% of Germany's annual use. Dutch energy company One-Dyas, which is leading the project, estimates it will be able to extract between 4.5 and 13 billion cubic meters of gas from the "N05-A" field over several years. This would represent roughly 6% to 16% of the approximately 80 billion cubic meters consumed by Germany in 2024. For extraction to happen, several layers of approval are needed in Germany and it is unclear how long that would take. The Dutch authorities have already agreed the necessary legislation. The outline agreement backed on Wednesday in Germany lays out how the cross-border gas reserves will be assessed and divided, as well as taxes and royalties and cooperation between authorities in the two countries. The western state of Lower Saxony, where the fields are located on the German side, will make its own decisions on whether to approve specific applications for gas production, the ministry said, adding the agreement does not grant production permission. The project was put on hold under the previous Green-led economy ministry and faces legal challenges by environmental groups that say it poses risks to the UNESCO Wadden Sea World Heritage Site. "The German government is handing Borkum and the Wadden Sea over to fossil fuel industrialisation," Sascha Mueller-Kraenner, DUH environmental group director, said, adding that this would have devastating consequences for biodiversity in the North Sea. https://www.reuters.com/sustainability/boards-policy-regulation/germany-backs-cross-border-gas-agreement-with-netherlands-2025-07-02/
2025-07-02 11:08
OSLO, July 2 (Reuters) - DNO (DNO.OL) , opens new tab has sold its entire gas production over a four-year period from the Norwegian continental shelf to French utility Engie (ENGIE.PA) , opens new tab for an undisclosed sum, the Norwegian company said on Wednesday. It said the deal had been facilitated by a loan from a U.S. bank as U.S. lenders step up funding to the fossil fuel industry, adding it was in discussions over a similar offtake agreement and related financing facility for its North Sea oil production. Sign up here. The offtake agreement takes effect from October 1 and covers DNO's increased gas production after its acquisition of assets from Sval Energi in March, DNO said in a statement. Sval's acquisition quadrupled DNO's North Sea production to about 80,000 barrels of oil equivalent per day, about half of it natural gas. Engie did not immediately respond to a request for comment. While DNO did not disclose the volume of the four-year contract with Engie, last year DNO and Sval Energi produced 1.82 bcm of gas from the Norwegian continental shelf. DNO has entered into a financing facility with an unnamed U.S. bank for up to $500 million, which will be used to repay Sval Energi's debts and for general corporate purposes. "We have received strong interest by buyers to prepurchase our enlarged North Sea production," DNO's Executive Chairman Bijan Mossavar-Rahmani said in a statement. https://www.reuters.com/business/energy/dno-sells-four-years-norwegian-gas-output-engie-2025-07-02/
2025-07-02 10:42
Bank projects inflation above 2% to 4% tolerance band all year "Nothing to discuss" in terms of rate cuts, deputy governor says Need to see faster and durable disinflation to consider easing Weak economy not disinflationary due to high price expectations BUDAPEST, July 2 (Reuters) - Hungary's central bank would need to see faster and more durable disinflation to consider any easing in monetary conditions, a deputy governor told Reuters, adding that rate cuts were off the table as long as inflation exceeded the bank's tolerance band. The bank left its base rate on hold at the European Union's joint highest level of 6.5% for the ninth straight month in June while inflation rebounds despite efforts by Prime Minister Viktor Orban's government to tame it ahead of a 2026 election. Sign up here. Hungary and neighbouring Romania recorded the 27-member bloc's highest inflation rates in the first quarter based on EU data, preventing rate cuts despite slowing growth in Romania and protracted stagnation in Hungary. Deputy Governor Zoltan Kurali said with inflation rebounding to 4.4% in May, there was "nothing to discuss" in terms of policy easing, despite the bank's latest forecasts projecting hardly any economic growth for a third successive year. "A single headline inflation reading dipping into our (2% to 4%) tolerance band is not a sufficient condition on its own for us to consider easing monetary conditions," he said in an interview late on Tuesday. "Inflation needs to return sustainably toward the 3% target on the policy horizon," said Kurali, a former investment banker and head of Hungary's debt agency AKK, who joined the bank in April. Kurali avoided direct comment to questions on whether the bank had any room to lower interest rates this year and said the bank was currently not providing forward guidance. But with its June forecasts showing inflation exceeding the bank's target range all year, Kurali's comments suggest the bank is all but certain to avoid rate cuts despite lingering analyst bets on a small reduction by the end of 2025. Asked why the prolonged weakness of Hungary's economy has failed to rein in price growth, Kurali said high inflation expectations played a key role and justified keeping monetary conditions tight. He said the forint's recent stability versus the euro would have a dampening impact on inflation and inflation expectations via the FX transmission channel, and it was positive that monetary transmission worked effectively in money markets. However, with Orban's government imposing controls on food prices and forcing telecoms companies, banks and insurers to forego planned fee hikes until after the 2026 election, the risk of an inflation rebound looms when they adjust prices again. Kurali also said the bank was reviewing its international reserves management strategy to make it "more active and more flexible," while firmly ruling out the inclusion of any crypto assets. He said the strategy would "not be drastically different from current practice". "There will be no crypto in any shape or form," he said of the bank's reserves, which stood at 45.8 billion euros ($54.0 billion) at the end of May, consisting mostly of euro-denominated assets and gold. ($1 = 0.8485 euros) https://www.reuters.com/markets/europe/no-scope-rate-cuts-with-inflation-outside-tolerance-band-hungary-central-banker-2025-07-02/
2025-07-02 10:41
NEW DELHI, July 2 (Reuters) - India is exploring building three new strategic oil reserves to boost its emergency stockpile and strengthen energy security, the head of the company in charge of strategic reserves said on Wednesday. India, the world's third-biggest oil importer and consumer, imports more than 80% of its oil needs and is constantly diversifying its crude sources to mitigate the impact of geopolitical crises on its oil procurement. Sign up here. State-run engineering consultancy Engineers India Ltd (ENGI.NS) , opens new tab is doing feasibility studies to build the new reserves, Indian Strategic Petroleum Reserve Ltd's CEO L R Jain told Reuters. "In case of exigencies, we will be better prepared," he said. India currently has strategic petroleum reserves at three locations - Mangalore, Padur and Vizag - in southern India to store up to 5.33 million tons of crude that could be tapped in the case of supply disruptions. It plans to create a new 5.2 million-5.3 million ton reserve at salt caverns at Bikaner in the desert state of Rajasthan, and a 1.75-million ton facility at Mangalore in southern Karnataka state, he said. It will also create a reserve in Bina, central Madhya Pradesh state, with capacity yet to be decided, he said. After feasibility studies, the projects will require approval from the federal cabinet. They will come in addition to a new 2.5 million-ton strategic petroleum reserve at Padur and a 4 million-ton facility at Chandikhol in eastern Odisha state that have already been approved. India has over the years overhauled its policy on strategic petroleum reserves to allow private participation and commercialisation, mirroring the model adopted by countries such as Japan and South Korea which allow private lessees, mostly oil majors, to trade the crude. "We are looking for 90 days of reserves," Jain said. "And Indian fuel demand is also rising, so we need additional storage." Expanding oil storage capacity would also help India join the International Energy Agency, which requires its members to hold a minimum of 90 days of oil consumption. India's storage capacity, including that held by companies and in transit, is currently sufficient to meet its fuel demand for 75 days. https://www.reuters.com/sustainability/boards-policy-regulation/india-plans-new-strategic-oil-reserve-enhance-energy-security-2025-07-02/
2025-07-02 10:37
LONDON, July 2 (Reuters) - Global stocks are tiptoeing higher, while the U.S. dollar continues to struggle at three-year lows against a basket of currencies. Federal Reserve Chair Jerome Powell says the central bank is in no rush to raise rates - despite pressure from President Donald Trump. With a week to go until the July 9 deadline tariffs and a raft of key employment data in the next two days, market activity is, for the most part, pretty subdued for now. Mike Dolan is enjoying some well-deserved time off over the next two weeks, but the Reuters markets team is here to provide you with all the information you need to start your day. Sign up here. Today's Market Minute * U.S. Senate Republicans passed President Donald Trump's massive tax-cut and spending bill on Tuesday by the narrowest of margins. The legislation now heads to the House of Representatives for possible final approval, though a handful of Republicans there have already voiced opposition to some of the Senate provisions. * The Iranian military loaded naval mines onto vessels in the Gulf last month, a move that intensified concerns in Washington that Tehran was gearing up to blockade the Strait of Hormuz following Israel's strikes on sites across Iran, according to two U.S. officials. * The United States could reach a trade deal with India that would help American companies compete in the South Asian country and leave it facing far lower tariffs, President Donald Trump said on Tuesday, while casting doubt on a possible deal with Japan. * A core tenet of sovereign debt investment is that strong institutions keep down a country’s borrowing costs and vice versa. So then why, ask professors Ugo Panizza and Mitu Gulati, has the bond market’s response to U.S. President Donald Trump’s institutional norm-busting been so tame? * It’s easy to come up with reasons to be bearish about U.S. equities given elevated valuations and the uncertainty surrounding the country’s economic outlook. But Stephanie Guild, Chief Investment Officer of Robinhood Markets, claims there is a positive trend cutting across all this negativity: capital expenditure growth. Deadline? What deadline? Blink and you'll miss it. Two weeks ago, markets were fretting about the prospect of all-out war in the Middle East, as Israel and Iran bombed one another. One week ago, global markets were rallying in relief as the oil price cratered following the U.S. attack on Iran's nuclear facilities, and a fragile ceasefire that appeared to be holding. Now, with a week to go until Trump's July 9 deadline on tariffs, markets have moved on to how long Federal Reserve Chair Jerome Powell can resist pressure from the president to cut interest rates. Markets are already preparing for a Trump loyalist to replace Powell when his term expires next May. Almost four quarter-point cuts over the next year are now priced into the equation in 2026, up from closer to three just a month ago. Investors have largely expressed their views on tariffs through the currency market and, as far as forex is concerned, July 9 is shaping up to be just another day at the office. Implied currency options volatility - a measure of demand from traders to buy protection against large price swings - surged in early April, when Trump unveiled his raft of tariffs on practically every country on the planet, and continued to do so even after he'd hit the pause button on April 9, peaking shortly afterwards. Since then, volatility has subsided, whether for stocks, bonds or currencies, as investors have become more immune to the president's on-again-off-again approach to trade policy. And that's no surprise. Having said he would secure 90 deals in 90 days, so far there is just one fairly limited deal in the bag, with the UK. In fact, Trump's to-ing and fro-ing on tariffs has been so frequent, it's given rise to the acronym TACO, which stands for "Trump Always Chickens Out", something many investors now factor in when placing trades. Last Friday, Trump said the July 9 deadline was not fixed. "We can do whatever we want," he told reporters at the White House. Then, on Tuesday, he said he wasn't thinking of extending it at all, mentioning Japan as his latest bugbear. In the face of such dizzying switches, forex traders are assuming there will ultimately be some kind of market-soothing pause, reversal, compromise or general can-kicking while the U.S. administration attempts to hash out agreements. Implied volatility for euro options expiring on July 9 is around 8.5%, very much in line with its recent range. For comparison, a month ago, the one-month options - which then expired on July 9 - were at exactly this level, while two-month options two months ago were above 9%. Back in early April, at the time of the pause, three-month euro implied volatility topped 10%. The pattern is virtually identical for all the major currencies that are exposed to tariffs, including the Canadian dollar, Japanese yen and Mexican peso. It's not just currencies either. The VIX volatility index, known as Wall Street's "fear index", has been trading below the attention-grabbing 20 mark, for much of the last two months following a spike to 60 in early April. Drilling down, weekly VIX futures that expire on July 9 have drifted into "sanguine" territory, at around 18.65 from a peak above 20 in mid-June, when Israel/Iran hostilities boiled over. In the run-up to Liberation Day, the weekly VIX futures contract that expired on April 2 hit a top of around 25. Central bankers, major asset managers, private equity giants, politicians, the heads of the world's largest companies and just about everyone has cited tariffs as the biggest uncertainty facing the world right now. As always with markets, someone will be right and someone will be wrong. There is still some time to go before July 9. Chart of the day The monthly ADP private payrolls report is due later in the day and, based on a survey of economists by Reuters, is expected to have risen by 95,000 in June, up from May's three-year low of 37,000, but below June 2024's 150,000 rise. The ADP report usually lands two days before the more comprehensive monthly non-farm payrolls report and, although there is no correlation between the two, investors inevitably use ADP as some form of steer on what to expect from the upcoming government report. Since hitting a COVID-era peak of 807,000 in late 2021, private sector payrolls growth has been moderating. Today's events to watch * June ADP payrolls report * Tesla second-quarter deliveries * ECB Forum on Central Banking 2025 in Sintra, Portugal wraps up * EIA weekly crude inventories * World UFO Day on the anniversary of the Roswell incident Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. https://www.reuters.com/business/finance/global-markets-view-usa-2025-07-02/
