Oil rises on Mideast risk
Brent crude futures were up 23 cents, or 0.3%, to $68.75 a barrel by 11:04 a.m. ET (1504 GMT), while US West Texas Intermediate crude futures rose 67 cents, or 1%, to $67.05 a barrel.
US President Donald Trump has said letters notifying smaller countries of their US tariff rates would go out soon, and has also alluded to prospects of a deal with Beijing on illicit drugs and a possible agreement with the European Union.
'Near-term prices (are) set to remain volatile due to the uncertainty over the final scale of US tariffs and the resultant impact on global growth,' said Ashley Kelty, an analyst at Panmure Liberum, adding that prices would likely settle lower in the medium term.
The oil market was also reacting to a tightened inventory scenario, said John Evans, analyst at PVM Oil Associates. US crude inventories fell by 3.9 million barrels last week, government data on Wednesday showed, compared with analysts' expectations in a Reuters poll for a 552,000-barrel draw.
Last week, the International Energy Agency said that oil output increases were not leading to higher inventories, which showed markets were thirsty for more oil.
'Oil thinking has been distracted from the Middle East, and the reminders of Israel's attacks into Syria and the drone attacks on oil infrastructure in Kurdistan are timely and once again add a little fizz to proceedings,' Evans said.
Drone attacks on oilfields in Iraq's semi-autonomous Kurdistan region have slashed crude output by up to 150,000 barrels per day, two energy officials said on Wednesday, as infrastructure damage forced multiple shutdowns.
Markets were continuing to look for signals of tighter supply or higher demand, but clarity was lacking, said Phil Flynn, senior analyst for Price Futures Group.
'Everybody is waiting for the boogie man, but the boogie man hasn't shown up yet,' Flynn said. Meanwhile, a tropical disturbance in the northern Gulf of Mexico was not expected to develop into a named storm as it makes its way west before moving onshore in Louisiana later on Thursday.
Rainfall totals in Southeast Louisiana were expected to be about four inches (10 cm), according to the US National Hurricane Center.
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Express Tribune
3 minutes ago
- Express Tribune
China's GDP grows 5.3% in H1 despite global headwinds
Listen to article Defying all predictions, China's economy grew by 5.3% year-on-year in the first half of 2025, according to preliminary data released by the National Bureau of Statistics (NBS), as Beijing rejigged its trade strategy in the wake of US President Donald Trump's tariff offensive. Beijing stayed ahead of the curve and outmanoeuvred the trade assault by reconfiguring supply chains, broadening its export footprint beyond US markets and shoring up domestic demand to keep growth on track. The overall size of GDP reached 66,053.6 billion yuan ($9.1 trillion), demonstrating China's resilience despite global economic headwinds. The 5.3% GDP growth was higher than the average prediction of 5.1% made by 40 economists interviewed by Reuters. "This is a hard-won achievement, particularly considering the sharp fluctuations in the international situation and heightened external pressures since the second quarter," said NBS Deputy Commissioner Sheng Laiyun. He credited the "highly valuable" numbers to stable progress in the implementation of macro-policy, industrial growth topped by high-tech industries and 68.8% from domestic demand. The breakdown shows that the primary industry contributed 3,117.2 billion yuan, with a YoY increase of 3.7%, driven mainly by stable production in agriculture. The secondary industry accounted for 23,905 billion yuan, up 5.3%, and the services sector witnessed the highest growth, contributing 39,031.4 billion yuan, up 5.5%. China's GDP grew 5.4% YoY in the first quarter and 5.2% in the second, showing steady economic momentum despite the global turmoil spawned mainly by Trump's trade tariffs. The manufacturing sector continues to be the engine of China's economic growth. Industrial output grew 6.8% YoY in June, a sharp pickup from May's 5.8% growth. High-tech industries, new-energy cars and robotics industries were the main drivers of growth, showing the country's strategic focus on technological independence and industrial upgrade. "China will still pursue high-level self-reliance and strength in science and technology," said Wen Bin, Chief Economist of China Minsheng Bank. He believes new schemes, such as the science and technology bond board and associated financial instruments, would further boost tech-led development. High-tech production rose by 9.7% in June, contributing to overall industrial growth. Industries like electric vehicles (EVs), lithium batteries and high-end machinery are witnessing consistent demand both locally and globally. The Chinese government has been promoting industrial innovation through subsidies that target specific sectors, tax breaks and investment incentives, further cementing the sector's growth. "Booming industries, especially the use of digital and green technologies, drove tremendous breakthroughs across industries — illustrating the pace of the nation's technological advances," said Peking University Economist Cao Heping. Despite ongoing global trade uncertainties, Chinese exporters have benefited from reviving international demand and a short-term trade truce with the US. In June 2025, exports expanded by 5.8% YoY, after a 4.8% rise in May. This is the best export growth since mid-2024. Hu Qimu, Deputy Secretary-General of the Forum 50 for Digital-Real Economies Integration, told Xinhua: "The first-half GDP growth reflects the strong resilience of China's economy, underpinned by its comprehensive industrial system and vast market capacity." China's total exports went up by almost 6% in the first half of 2025, ensuring a healthy trade surplus of about $586 billion. Exports to Southeast Asia shot up by 16.8% YoY, showing the country's increasing trade partnership with regional members via agreements like the Regional Comprehensive Economic Partnership (RCEP). China's huge domestic market remains a pillar, supporting long-term economic expansion. Retail sales rose 4.8% in June, after higher 6.4% gains in May. The moderation is attributed by analysts to a mix of risk-averse consumer behaviour and gradual rebalancing in the real estate market. Still, policy measures to spur consumption, such as subsidies for environmentally friendly appliances, electric cars, and rural revitalisation measures, are helping to support it. The introduction of "trade-in" programmes for home appliances and incentives for car replacements have moderated some consumers' wariness. The services sector also recorded a good 5.5% expansion in the first half, reflecting steady demand across segments like transport, finance, health care and internet services. The services industry now represents virtually 60% of China's GDP, highlighting the nation's shift to a more consumption- and services-based economy. The policymakers have used a cautious yet bold strategy to maintain economic growth. The People's Bank of China (PBoC) slashed interest rates earlier this year and pumped in liquidity to stimulate lending and spur business activity. Targeted fiscal policies have aimed at upgrading infrastructure, high-tech industry, and small- and medium-sized enterprises. China has given emphasis to structural change and specific interventions. "China's economic performance this year is a visible rebound and upturn — owing primarily to more solid macroeconomic policies, pointing to a string of monetary easing measures — and a significant boost in fiscal spending," writes Xi Junyang, Professor at Shanghai University of Finance and Economics. International economists are of the view that this strategy demonstrates faith in the intrinsic health of the economy and avoids over-expansion of credit. Considering the Chinese economy's stable path, a number of global financial institutions such as Goldman Sachs, Deutsche Bank and Morgan Stanley have now upped their projections for the country's economic growth rate in 2025. Local authorities have been given the ability to speed up infrastructure expenditure and bring forward strategic projects, such as digital economy centres and renewable energy facilities, further supporting growth. The provisional trade truce with the US, reached in May 2025, has brought welcome relief for Chinese exporters. Analysts foresee a YoY growth in the 5-5.2% range, slightly higher than the government's official target. They believe China's push for high-quality, innovation-based growth is setting the foundation for long-term development. The government's measures to spur domestic demand, promote green technologies, and stabilise property markets are seen supporting the economic momentum. The writer is a student and independent contributor
Business Recorder
an hour ago
- Business Recorder
Sanctions eroding USD's global reach
History may hold US President Donald Trump responsible for undermining the pervasive influence of his country in several international agencies dating back to when the US was the sole superpower - from 1989 subsequent to the collapse of the Soviet Union roughly around 2017: World Trade Organisation (WTO) by raising tariffs on all imports into the US, North Atlantic Treaty Organisation (insisting on greater equality in contributions by member countries and threatening to revisit Article 5 which stipulates that all member countries will come to the assistance of a member if attacked), and International Atomic Energy Agency (by bombing nuclear sites in Non-Proliferation Treaty signatory Iran thereby taking away the protection implicit to signatories). But what President Trump cannot be solely held responsible for is the global momentum towards de-dollarisation mainly due to the overuse of sanctions by administrations dating back to 2000, including his own first term. Sanctions have become the tool of first resort for American presidents, which has compelled heavily sanctioned countries to consider trading in a currency other than the dollar through a messaging/transfer system that is not hostage to US-led sanctions. The Society for Worldwide Interbank Financial Telecomm unication (SWIF T) was founded in 1973, essentially to replace telex, and has since become a global provider of secure financial messaging services. It is headquartered in Belgium and is a member owned cooperative connecting 11000 banks, financial institutions and corporations in more than 200 countries/territories and is overseen by G-10 banks — Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, UK, and USA – countries defined as the West, unequivocally led by the US. In 2006-07, SWIFT allowed financial institutions to comply with FATF SR VII (fighting terrorist financing by mentioning more detailed information about the payment ordering customer). SWIFT then began to liaise closely with Financial Action Task Force to combat money laundering and terror related financing by providing information and data and worked with the US Treasury's terrorist finance tracking program. In 2010 financial institutions began to include underlying customer information; and to comply with sanction laws, increasingly used by the US-led West as a foreign policy tool. However, SWIFT maintained that compliance rested with financial institutions and competent authorities and that it did not arbitrarily select which jurisdiction's sanctions to follow but because it is incorporated in Belgium it complies with related European Union regulation, confirmed by the Belgium government. In 2012, twenty-nine years after SWIFT was founded, it's framework was reviewed, and a SWIFT Oversight Forum was established in which the G-10 banks were joined by ten other central banks from major economies: Reserve Bank of Australia, People's Bank of China, Hong Kong Monetary Authority, Reserve Bank of India, Bank of Korea, Bank of Russia, Saudi Arabian Monetary Agency, Monetary Authority of Singapore, South African Reserve Bank and Central Bank of the Republic of Turkey. The influence of the Bank of Russia, sanctioned by the US, is non-existent, given that Western banks have frozen the 300 billion dollars of Russian reserves they held and appropriated the interest and on-lent it to Ukraine. Notwithstanding SWIFT's claims of neutrality three subsequent decisions allowed the US-led West to determine which country or entity was to be sanctioned, and the selection in at least three cases, notably Iran, North Korea and Russia, mirrored US foreign policy thrust. In 2012, pursuant to international and multilateral action to intensify financial sanctions against Iran, EU regulation 267/2012 was passed – a regulation that prohibited SWIFT from providing service to EU sanctioned Iranian banks. In March 2016 SWIFT restricted access of North Korean banks, reportedly due to UN sanctions and concerns about their role in illicit activities. And in 2022, two days after the Russian invasion of Ukraine, at Ukraine government's request, SWIFT disconnected all designated Russian entities and their Russian based subsidiaries/entities as well as Belorussian and the country's designated subsidiaries from SWIFT Network in compliance with the EU Council Regulation (765/2006). Today 1400 financial institutions in over 100 countries use CIPS which relies on SWIFT's messaging service for over 80 percent of its transactions. It uses SWIFTs standard for syntax in financial messages as those formatted to SWIFT standards can be read and processed by many well-known financial processing systems, whether or not the message travelled over the SWIFT network. Be that as it may, due to digital real time transfer of funds, SWIFT is unlikely to remain the primary source of money transfer for long. China overtook the US in purchasing power parity (PPP) nine years ago in 2016, and by 2022 the International Monetary Fund (IMF) rated the Chinese economy in PPP terms to be 23 percent larger than the US, the World Bank rated it 19.8 percent larger than the US and even the CIA considered China larger by 16 percent. No doubt fully cognizant of its growing economic power, in 2015 Peoples Bank of China launched a Cross Border Interbank Payment System (CIPS) to (i) facilitate international Renmibi transactions; (ii) provide real time clearing and settlement; and (iii) operate independently and alongside SWIFT. It is a matter of time that with the rising rivalry between China and the US, CIPS may delink from SWIFT sooner rather than later. In 2021 Shaikh Muhammad Shariq, Chief Representative of the National Bank of Pakistan, while addressing the Pakistan Investment Forum and the Cross-border E-commerce Conference held in Pakistani Embassy Beijing noted that 'ICBC and Bank of China, Karachi branches are providing CNY clearing & settlement services in Pakistan. ICBC Karachi branch has also obtained the direct participation qualification of the first cross-border CNY clearing mechanism of CIPS in South Asia to facilitate and ensure quick and smooth CNY clearing to improve bilateral trade.' Another emerging platform, BRICS (Brazil Russia India China South Africa), has begun talks on replacing the dollar and developing an alternate payment system bypassing SWIFT and reducing reliance on Western financial institutions. This demand is not only from the sanctioned countries but also other countries grappling with Trump tariffs, demand to curtail economic and trade relations with China and last but not least due to the ongoing de-dollarization of the global economy. In 2021, the Atlantic Council concluded that sanctions have a poor record, rarely change a target's behaviour and often generate negative unintended consequences, and urged US policymakers to focus on whether sanctions are likely to produce the desired result rather than simply serving as a tool to signal displeasure. That exhortation has yet to resonate with the Trump administration and the threat of punitive sanctions against Russia in 50 days, unless it agrees to the terms of a ceasefire dictated by the US, would generate secondary sanctions (defined as those countries that continue to trade with Russia). Neither Russia nor its major trading partners, China, Brazil and India, appear to be concerned with China's s Xi Xinpeng dismissing the threat by stating that China would deepen its ties with Russia. To conclude, Pakistan's trade with Russia is less than one billion dollars while our trade with the US is around 3 billion dollars, less than 4 percent of the sum of our exports and imports, however the US exercises tremendous influence over all multilateral institutions (barring the Infrastructure Bank set up by China) – institutions from which Pakistan borrows heavily to avert the existing looming threat of default (ironically since 2019 even China has shown a reluctance to extend rollovers to Pakistan without being on a rigidly monitored IMF programme) and hence the threat of secondary sanctions by the US are going to play a key role in the country's decision to trade with Russia. Copyright Business Recorder, 2025
Business Recorder
an hour ago
- Business Recorder
Wall Street Week Ahead: Industrial sector's gains to be tested as earnings ramp up
NEW YORK: The industrial sector has led the way for US equities during a topsy-turvy year on Wall Street, but its strength will be tested as earnings season heats up. S&P 500 industrials, which include aerospace companies, electrical equipment and machinery makers, transportation firms and building products companies, have gained 15% so far in 2025. That's the best year-to-date performance of the S&P 500's 11 sectors and more than double the gain of the overall index. Momentum for the industrials sector and the broader market will be in focus with a heavy upcoming week of second-quarter earnings, which includes reports from more than one-fifth of the S&P 500, led by Alphabet and Tesla, the first of the 'Magnificent Seven' megacap tech and growth companies to report. The S&P 500 has surged 26% since April, as investors shook off fears about a recession which had stemmed from President Donald Trump's 'Liberation Day' tariff announcement. This earnings season 'seems to be especially important because of the rebound that the market has had,' said Chuck Carlson, chief executive officer at Horizon Investment Services. 'I would think that that has built in a fair amount of optimism in terms of earnings.' A number of industrials will be in the earnings spotlight as well. Aerospace and defense stocks have boosted the sector's performance this year, driven by heightened geopolitical tensions in the Middle East and Ukraine and fresh spending commitments by Germany and other nations. The S&P 500 aerospace and defense industry group has surged 30% this year. Defense companies to report in the coming week include RTX, Lockheed Martin and General Dynamics. GE Aerospace, whose shares have soared about 55% this year, raised its 2025 profit forecast on Thursday. Another industrial company spun off from legacy General Electric last year, GE Vernova, has seen its shares skyrocket over 70% this year, making it the best-performing industrial sector stock. The power equipment maker's results are due Wednesday. The push for reshoring infrastructure and expansion of artificial intelligence, which has lifted demand for cooling systems and factory automation, are two themes that have supported a number of stocks in the industry, including Eaton and Rockwell Automation, said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. Another stock that has supported the industrial sector this year: Ride-hailing giant Uber, whose shares are up roughly 50%. 'Unlike many non-Tech groups, there are a lot of solid stories here that don't rely on macro forces to deliver solid forward returns,' Nicholas Colas, co-founder of DataTrek Research, said in a note on Wednesday. Large cap industrials still look attractive despite the group's recent run, Colas said.
