Wealthion Macro Bites 6-25
Brent erased all its wartime gains after flows through the Strait of Hormuz ramped up following progress on a U.S.-Iran peace deal. Brent futures are falling for a fourth straight session, (dropping below its $72.48 prewar closing price) before fluctuating around that level. WTI hovered below $70. In a dramatic reversal, key oil markets are suddenly awash with supply, with buyers inundated by offers from the Middle East.
May PCE numbers landed the annual rate at 3.4% after rising 0.3% for the month. Both are in line with Dow Jones consensus. The core reading was the highest since October 2023. For the all-items reading, the PCE index showed inflation running at a seasonally adjusted 4.1% annual rate, the highest since April 2023.
Reuters reports Orion Critical Mineral Consortium (joint venture between Orion Resource Partners, the U.S. International Development Finance Corporation, and Abu Dhabi's ADQ sovereign wealth fund) is in advanced discussions to establish three new public-private partnerships in Asia as it seeks to fund a $20 billion global pipeline of critical minerals opportunities. The Asian ventures would be CMC’s third area of regional focus, joining the U.S. and Middle East.
Orion CEO Oskar Lewnowski projected that accelerating demand for critical minerals, driven by the growth of data centers & hyperscalers, continued urbanization, and rearmament and replacement of munitions, will require an estimated $2.4 trillion in investment by 2050, with at least $800 billion over the next 15 years. Lewnowski noted, "The amount of money needed is huge. So to activate that kind of pipeline, we need all hands to battle stations."
Adani Group Chair Gautam Adani announced plans to build up to 10 GW of nuclear power capacity by 2035. Looking to expand its use of clean energy, India last year opened its nuclear generation sector to domestic and foreign firms in the private sector. The Indian government aims to expand nuclear capacity to 100 gigawatts by 2047 from about 8 gigawatts at present. State-run Nuclear Power Corp of India (currently sole operator of India’s nuclear plants) aims to have 50 GW of capacity while the country's state-run coal plant operator NTPC is aiming for 30 GW of nuclear capacity.
The U.S. DOE’s Office of Energy Dominance Financing (EDF) has conditionally committed to $17.5B in loans to finance purchase of long-lead items for up to 10 Westinghouse AP1000 reactors. The loans advance last year's Executive Order on Reinvigorating the Nuclear Industrial Base by aiming to develop 10 new large nuclear reactors with complete designs under construction by 2030.
Bloomberg reports at least 4 of the 11 banks participating in Hong Kong’s new gold clearing system are importing large stocks of 400oz bars (to facilitate physical delivery) in preparation for the mechanism’s planned July launch.
China on Wednesday announced a whistleblower hotline to encourage organizations and citizens to report a wide range export control breaches (incl. transshipment) and smuggling of restricted critical minerals (with rewards to be granted to tipsters in certain cases).
Euro Stoxx 50 +0.7%, S&P futures +0.65% and Nasdaq futures + 2.0%. DXY dollar index +0.12%, spot gold -0.35% and spot silver -0.25%. Brent futures -0.95% ($73.04) and WTI futures -0.85% ($69.71).
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