BofA Sees Bank Of Canada Holding Rates In October, Says December Cut More Likely

Last year, China's battery industry average utilization rate cratered to just a third of maximum capacity amid severe overcapacity following years of massive investment and expansion. This put smaller manufacturers under severe pressure and fueled further industry consolidation, while also forcing producers to increasingly seek overseas markets. Luckily, these efforts appear to be paying off: China Energy Storage Alliance has reported that Chinese battery storage forms secured ~200 overseas orders totalling 186 gigawatt-hours (GWh) in the first half of this year, good for a more than 220% year-over-year surge. Not surprisingly, just 5.34 GWh– less than 3% of the total--came from the United States amid hefty tariffs by the Trump administration compared to nearly 60% that came from the Middle East, Europe and Australia.

Back in April, the Trump administration imposed duties of up to 3,521% on solar imports from Vietnam, Cambodia, Malaysia and Thailand, with the finalized tariffs applying to shipments from China’s solar heavyweights, including JinkoSolar and Trina Solar. Further, Chinese firms are increasingly diversifying their production bases in a bid to mitigate growing tariff risks from Washington. Currently, Chinese solar manufacturers have installed ~80% of overseas capacity including solar wafers, solar cells and modules in Southeast Asia.

“The industry used to say that you either go overseas or exit the game,” said Gao Jifan, chairman of Trina Solar.

“Now, due to tariffs, simply exporting isn’t enough; you must also localise production abroad.”

China’s battery storage sector is also benefiting from a rebound by the local markets thanks to policy support by Beijing. China’s National Energy Administration recently unveiled a plan to mobilize 250 billion yuan (~$32 billion) in new investment to build 180 gigawatts of new energy storage capacity by 2027. Lately, Chinese companies that operate in the energy storage space have been posting robust growth as fundamentals continue to improve. During the first half of 2025, 47 of 55 listed companies in the Chinese energy storage sector were profitable. China’s Contemporary Amperex Technology Co., one of the largest li-ion battery manufacturers in the world, reported H1 2025 operating revenue of RMB178.886 billion ($25.15 billion), good for a 7.3% increase year over year while net profit attributable to shareholders clocked in at RMB30.485 billion, up 33.33%. In its interim report, CATL revealed that sustained rapid growth in demand for energy storage cells driven by the global clean energy transition has been driving its impressive performance.

That said, battery storage expansion is expected to be a global trend: energy research and consulting firm Wood Mackenzie has projected that global investment in battery storage will reach approximately $1.2 trillion by 2034. This investment will be needed to support the installation of over 5,900 GW of new wind and solar capacity during that period. The report emphasizes that advanced, grid-forming battery technology is crucial for maintaining grid stability as renewable energy sources become more prevalent.

U.S. Battery Storage Explodes

For years, battery systems have only played a marginal role in U.S. electricity networks, with power utilities focusing more on building out capacity from natural gas plants and renewable energy sources. According to energy data portal Cleanview, five years ago, the United States had 74 times more wind farm capacity and 30 times more solar capacity than battery capacity within its power generation system.

However, steady cost declines coupled with rising energy density levels have encouraged utilities to ramp up their battery installations, with battery storage output now exceeding other power sources in certain power markets. And, it’s boom time for the U.S. utility-scale battery storage market: currently, there are only around 5 times more solar and wind capacity in the country compared to battery capacity, thanks in large part to a 40% decline in battery prices since 2022. Currently, 19 states have installed 100 MW or more of utility-scale battery storage. According to Cleanview, there are just under 30,000 megawatts (MW) of utility battery capacity across the U.S., good for a massive 15-fold increase since 2020. For some context, the U.S. solar sector has added 84,200 MW over the timeframe, while the wind sector has increased its capacity by just 7,000 MW. Falling costs is the biggest reason for the surge in U.S. battery deployments: according to financial advisory and asset management firm Lazard the levelized cost of electricity (LCOE) for utility-scale solar farms paired with batteries ranges from $50-$131 per megawatt hour (MWh). This makes the pair competitive with new natural gas peaking plants (LCOE of $47 to $170 per MWh) and even new coal-fired plants with LCOE of $114 per MWh.

According to Lazard's 2025 LCOE+ report, new-build renewable energy power plants are the most competitive form of power generation on an unsubsidized basis (i.e., without tax subsidies). This is highly significant in the current era of unprecedented power demand growth in large part due to the AI boom and clean energy manufacturing. Renewables also stand out as the quickest-to-deploy generation resource, with the solar plus battery combination often boasting far shorter deployment times compared to constructing new natural gas power plants. California is, by far, the national leader in utility-scale battery storage, accounting for ~13,000 MW or about 42% of the national total. According to the California Energy Commission, the California Independent System Operator has installed ~21,000 MW of solar capacity and ~12,400 MW of battery capacity, allowing the state to rely heavily on batteries during peak demand periods.

Source: Zero Hedge

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Source: investing

South Korea and the US are focusing on the structure of a $350 billion investment pledge by Seoul, rather than a currency swap, according to Finance Minister Koo Yun Cheol.

Officials in Washington including Treasury Secretary Scott Bessent now see the potential for a shock to Seoul's foreign-exchange market from an "upfront" deployment of funds, Koo told Bloomberg TV in an interview on Wednesday that also touched on weakness in the won stemming from the unfinished deal, car tariffs and AI technology.

"Secretary Bessent fully understands the difficulties in Korea's FX market and is having internal discussions on how to respond to the situation," Koo said.

The comments come ahead of US President Donald Trump's visit to South Korea next week for the Asia-Pacific Economic Cooperation summit in Gyeongju. Trump is expected to meet with President Lee Jae Myung and Chinese President Xi Jinping for separate bilateral talks that may shape trade relations for years to come.

Koo said Seoul is prioritizing the negotiation of a balanced composition for the investment package, likely involving a mix of direct investments, loans, and guarantees. With talks still underway, he declined to elaborate on the breakdown, adding that Korea's need for any financial safeguards will ultimately depend on how the deal is built.

"Whether a currency swap is needed — and to what extent — will depend entirely on how the deal is structured. It may not be necessary at all, or it could be arranged on a smaller scale," he added.

South Korean Prime Minister Kim Min-seok told Bloomberg last month that the investment pledge would shock the Korean economy without a swap agreement. The Bank of Korea said earlier this week that $20 billion a year is probably the maximum the government can provide without affecting the currency market.

Koo's indication that the swap itself is not the sticking point, suggests that Seoul's raising of the issue may have gained it some bargaining leverage in the negotiations.

Presidential policy chief Kim Yong-beom flew back to Washington on Wednesday alongside Industry Minister Kim Jung-kwan, just days after returning home. Koo said the government is aiming to finalize the deal during next week's APEC summit and will make every effort to meet that goal.

The renewed push follows a separate $550 billion investment pledge between the US and Japan, formalized through a memorandum of understanding. That deal raised eyebrows for some of its conditions. The memorandum stipulated that if Tokyo didn't provide funds for projects suggested by Trump within 45 days, the US could consider raising tariffs. Details of the structure of the Japanese investment pledge also remain opaque.

The prolonged negotiations between Washington and Seoul, which have dragged on for more than two months since the initial deal was announced in late July, suggest a finalized Korean deal may be more detailed than Japan's.

With the details still unresolved, US tariffs on Korean cars remain at 25%. That leaves Korean automakers at a disadvantage compared with Japanese rivals, who now face levies of just 15%.

South Korea, which has long enjoyed a zero tariff on auto exports to the US under a free trade agreement, is now at risk of losing that edge. Japan previously faced a 2.5% tariff, meaning Korea benefited from a relative advantage, one that would disappear if both countries are subjected to the same 15% rate under the new framework.

Koo said Seoul has repeatedly flagged this disadvantage to Trump and other US officials. But he said Washington hasn't been particularly receptive on that point. Korean negotiators will continue to press their case, he added.

The concerns over the currency impact of the investment pledge come at a time of weakness in the won. The currency hit its weakest against the dollar since 2009 in April and after a short-lived rally has started to weaken again. The won was around 1432.55 against the dollar on Wednesday evening in Seoul.

"We believe much of the recent depreciation reflects market concern that the deal hasn't been finalized," he said. "Once the tariff issue is resolved, that uncertainty will likely fade."

Despite earlier speculation that the US might object to the currency's decline as a bid to gain a competitive advantage, Koo said Treasury officials have expressed no concern on that front and fully understand Korea's situation.

Koo said the government is accelerating plans to launch 24-hour trading of the won that would further enhance market access and reduce the so-called Korea discount on equities. That's also a key prerequisite for MSCI Developed Market inclusion. Technical preparations are already underway, and the goal is to implement the new system as quickly as possible, Koo added.

Beyond trade and currency, Koo stressed that Korea's broader economic strategy hinges on building an innovation-driven economy. The government is channeling resources into artificial intelligence, digital transformation, and deep-tech sectors to address structural challenges such as population aging, a declining birthrate, and rising debt-to-GDP levels.

He said the government's 58% debt projection represents a worst-case scenario assuming most of its targeted investments fail. But even partial success — say, 10% of its innovation projects — could yield high-bandwidth memory-level breakthroughs that boost productivity, expand economic growth, and improve fiscal stability.

"We're not simply expanding the budget — we're concentrating spending on transformative technologies," Koo said. "Even limited success could reduce our debt ratio."

Source: Bloomberg Europe

The BTC/USDT 4-hour chart shows Bitcoin slipping under the lower trendline of a bear flag, a continuation pattern that often signals further downside following a brief consolidation.

BTC/USDT four-hour chart. Source: TradingView

First, it has transferred 5,252 BTC, worth about $588 million, to major exchanges including Coinbase, Binance, and Kraken, according to Arkham data.

Source: Arkham

Meanwhile, the whale’s new $234 million short position on Hyperliquid, opened near $111,190 per BTC, is already sitting on about $6.7 million in unrealized profit, suggesting confidence that the downtrend has further to go.

Source: Hypurrscan.IO

Source: Cointelegraph

Source: kitco

The Bank of England is "closely monitoring" standards in leveraged finance markets and watching out for signs of forced selling by investors after the high-profile collapse of two US companies, according to an executive at the bank.

Officials want to see what the fallout from Tricolor Holdings and First Brands Group says about "underwriting standards in practice, where the risk has been distributed within the financial system, the ability of those who ultimately hold the risk to be able to withstand this shock and behaviorally what might they do in response," Martin Arrowsmith, co-head of the central bank's Market Based Finance Division, said at a conference Wednesday.

The collapse of two large constituents in credit markets has set firms looking at their books for distress, and the likes of JPMorgan Chase & Co.'s Jamie Dimon suggesting there are "cockroaches" triggering losses in corporate lending.

Bank of England Governor Andrew Bailey stoked the debate on the systemic threat posed by private credit, stressing in comments Tuesday to a Parliament committee the critical role ratings companies will play in thwarting a sequel to the great financial crisis.

While Arrowsmith said he wasn't concerned about any individual credit outside of the UK, he is interested in how banks and investors such as managers of collateralized loan obligations behaved in response to problems.

"For instance, the actions of some of the CLOs to sell out of the exposure, while sensible individually, if it was a more widespread issue and there's lots of quasi forced selling, what does that mean for the functioning of some of these markets in stress," he said at the Association for Financial Markets in Europe's High Yield and Private Credit Conference.

He said that the Bank of England, along with other policymakers, has been watching and calling out some of the "looseness" in markets for a while, and has been talking about issues in the so-called broadly syndicated lending space for at least a decade.

Source: Bloomberg Europe