Key Takeaways
- Thailand and Cambodia have reportedly agreed to a ceasefire beginning July 28th, following five days of deadly border clashes that displaced over 270,000 people.
- The EU and US have finalized a significant trade deal, setting a 15% tariff on most EU exports to the US, including automobiles, while the EU commits to purchasing $750 billion in US energy and investing $600 billion in the US.
- The European Commission has launched an in-depth investigation into Abu Dhabi's ADNOC's proposed €15 billion takeover of Covestro (ETR:1COV) under the Foreign Subsidies Regulation, raising concerns about potential market distortions.
- The Kremlin has not ruled out a potential meeting between President Putin and former US President Trump in Beijing in September, coinciding with China's 80th anniversary of the end of World War II commemoration.
- Singapore Airlines (SGX:C6L) reported a 59% year-over-year drop in 1Q net income to S$186.1 million, primarily due to reduced interest income and losses from associated companies like Air India.
Leaders from Thailand and Cambodia are reported to have agreed to a ceasefire effective July 28th, aiming to halt ongoing border clashes that have resulted in at least 35 deaths and displaced over 270,000 people from both sides of the border. The talks, mediated by Malaysian Prime Minister Anwar Ibrahim, also saw the presence of ambassadors from the United States and China. While Cambodia's Prime Minister Hun Manet emphasized the goal of an immediate ceasefire, Thailand's acting Prime Minister Phumtham Wechayachai expressed doubts about Cambodia's sincerity.
A major trade agreement has been struck between the European Union and the United States, with the US imposing a 15% tariff on the vast majority of EU exports, including cars, semiconductors, and pharmaceuticals. In return, the EU has committed to purchasing $750 billion in US energy and making an additional $600 billion in investments in the US. European Commission President Ursula von der Leyen hailed it as "the biggest deal ever," aiming to bring stability and predictability to businesses on both sides of the Atlantic. German Economy Minister Robert Habeck acknowledged the importance of the deal in "challenging times" but noted that some sectors in Germany would need to adjust.
The European Commission has initiated an in-depth investigation into Abu Dhabi National Oil Company (ADNOC)'s proposed €15 billion acquisition of German chemicals manufacturer Covestro (ETR:1COV). The probe, conducted under the Foreign Subsidies Regulation, aims to assess whether subsidies from the United Arab Emirates could distort competition within the EU internal market. A final decision on the acquisition is expected by July 28th.
In other geopolitical news, the Kremlin has stated it does not rule out a meeting between Russian President Vladimir Putin and former US President Donald Trump in Beijing in September. This potential meeting would coincide with China's commemoration of the 80th anniversary of the end of World War II. Separately, the International Atomic Energy Agency (IAEA) is set to visit Iran within the next two weeks to restart technical conversations, as a late August deadline looms for the invocation of the UN Snapback mechanism on sanctions.
In corporate developments, Diageo (LSE:DGE) is reportedly engaging Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) for a review of its East African unit. Meanwhile, Singapore Airlines (SGX:C6L) reported a significant 59% year-over-year decline in its first-quarter net income, reaching S$186.1 million. This drop was primarily attributed to reduced interest income from lower cash balances and interest rate cuts, as well as losses incurred from associated companies, notably Air India. Despite the profit decline, the airline noted continued healthy demand for air travel in the second quarter, with passenger load factor for the group airlines improving slightly to 87.6%.
On the monetary policy front, ECB policymaker Peter Kazimir stated he doesn't foresee any "significant change that would force my hand to act in September" regarding interest rates. He indicated that a major hit to the labor market, rather than inflation risks, would be necessary for him to consider further action. Kazimir also noted that the US-EU trade deal reduces uncertainty, though its impact on inflation remains unclear.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.