Climate Change Increases Intensity Of Heat Wave Scorching UK

Thailand's embattled Prime Minister Paetongtarn Shinawatra faced the prospect of losing her government's majority on Friday, as a vital coalition partner looked set to demand her resignation and senators launched a legal bid to remove her from office.

Paetongtarn, the politically inexperienced daughter of divisive tycoon and former premier Thaksin Shinawatra, is fighting fires on multiple fronts, struggling to breathe life into a stagnant economy facing steep U.S. tariffs and under pressure to take a tougher stand on a territorial row with Cambodia that has seen their troops mobilise at the border.

The United Thai Nation party, the second-largest partner in her alliance, will demand Paetongtarn, 38, step down as a condition for it to remain in the Pheu Thai Party-led coalition, two UTN sources told Reuters, requesting anonymity because they were not authorised to speak to media.

"If she doesn't resign, the party would leave the government," one source said. "We want the party leader to tell the PM as a courtesy."

Though Paetongtarn received a boost on Friday with another coalition partner, the Democrat Party, pledging its support, Thailand's youngest premier is still in an untenable position, with her majority hinging on UTN staying in the alliance following Wednesday's exit by the larger Bhumjaithai Party.

It is unclear when UTN will announce its position and a spokesperson said the party would wait for its leader to inform the prime minister of its decision.

Reflecting concerns in financial markets, the Thai baht weakened for a fifth consecutive session on Friday and was on course to log its worst week in four months.

TUMULTUOUS PAST

Paetongtarn's battle to stay in power demonstrates the declining strength of Pheu Thai, the populist juggernaut of the billionaire Shinawatra family that has dominated Thai elections since 2001, enduring military coups and court rulings that have toppled multiple governments and prime ministers.

But Paetongtarn is facing domestic anger and the prospect of an internal revolt over Wednesday's embarrassing leak of a phone call between her and Cambodia's influential former leader Hun Sen - once seen as a Shinawatra family ally - which her critics say posed a threat to Thailand's sovereignty and integrity.

During the conversation, Paetongtarn called for a peaceful resolution of the border dispute and disparaged an outspoken Thai army general who she said "just wants to look cool", a red line in a country where the military has a high profile and significant political clout.

Pressure mounted on Friday from outside her government, with 69 senators petitioning both the Constitutional Court and an anti-graft agency over the phone conversation leak, seeking a determination and an investigation, respectively, into whether Paetongtarn breached leadership moral standards.

Activists also met on Friday to schedule a major protest in Bangkok starting on June 28 to demand Paetongtarn resigns, among them groups with a history of crippling rallies against Shinawatra administrations.

Paetongtarn has not commented on the turmoil in her government and has tried to present a united front on the Cambodia issue, appearing on Thursday alongside military chiefs and vowing to defend sovereignty.

The premier visited military units at the Cambodia border on Friday, where she handed out food packages to soldiers and was given a tour by Lieutenant General Boonsin Padklang, the regional commander whom she criticised in the leaked call.

Paetongtarn's options for staying in power are limited unless her allies can succeed in behind-the-scenes horse-trading.

A snap election could damage Pheu Thai and play into the hands of the progressive opposition People's Party, the largest force in parliament.

Two Pheu Thai sources told Reuters the party is confident Paetongtarn can avoid resigning or dissolving parliament and her government is considering a major cabinet reshuffle to fill vacant positions.

Source: Reuters

If Americans thought eggs were expensive, wait until they open their electricity bills.

The soaring costs of eggs during the past three years became a politically charged example of consumer inflation in the US. While they’ve recently fallen to the lowest since December — to the satisfaction of President Donald Trump — electricity rates show no sign of moderating.

Power charges in the US jumped 4.5% in the past year, almost double the gains for the broader consumer price index. Driving that is supercharged demand from data centers and manufacturing in the face of tight supply, said Calvin Butler, chief executive officer of Chicago-based utility Exelon Corp.

Coal and natural gas plants are being retired, and not enough replacement sources are being built. Trump’s policies aim to slow those fossil-fuel closures while ending tax incentives for wind and solar power.

“When you have increased demand and limited supply, you’re going to pay more,” Butler said in an interview. Exelon set aside $50 million to help low-income customers pay high summer bills.

The impact from data centers and artificial intelligence is already here. Rapid development of these power-hungry facilities increased electricity costs by $9.3 billion on the largest US grid, operated by PJM Interconnection.

People from Illinois to Washington likely will see that reflected in utility bills starting this month. Surging demand is “almost entirely the result of large load additions from data centers,” according to a report from PJM’s watchdog.

Of course, power prices have been a contentious issue for years — and AI isn’t the only aggravating factor. Weather disasters, for example, have necessitated grid repairs and fortifications.

Egg costs climbed more than 50% in the past two years, and electricity threatens to follow the same path.

In Virginia, home to the world’s biggest cluster of data centers, the facilities are expected to boost the amount residents pay for power generation and transmission by as much as 26% this decade and 41% the next.

That’s not going over well in certain quarters. A daily newsletter from an opponent of the centers is capturing the rising anger of some residents, publishing missives titled “The Cloud Comes at a Cost” and “Vive la Résistance.”

One of the biggest foreign takeovers in Australian history will force regulators and politicians to weigh control over critical energy infrastructure against the need to address a looming domestic gas shortfall. Santos Ltd.’s board agreed this week to back a $19 billion bid from a group led by Abu Dhabi National Oil Co., a state-owned firm. Yet the ASX-listed company’s shares remain at a discount to the offer, reflecting investor uncertainty about the Foreign Investment Review Board, which has blocked similar deals.

Oil slumped after Trump signaled a decision on whether to strike Iran will be made within two weeks, easing fears about an imminent attack from the US.

Apollo Global Management Inc. is nearing an agreement with Electricite de France SA to provide as much as £5 billion ($6.7 billion) of financing for the Hinkley Point C nuclear power plant in the UK.

China Mineral Resources Group Co. has become the single biggest force in the nation’s $130 billion market for iron ore imports, just three years after the government-run trader was founded.

The potential $8 billion sale of Aethon Energy Management to Mitsubishi Corp. would mark another milestone for the H.L. Hunt family’s century-long legacy in the Texas oil industry.

Greenland has given permission to a Canadian mining company to explore for molybdenum, a metal critical to steel production, amid growing demand from the defense industry.

Companies led by Meta Platforms Inc. signed long-term contracts for more than 2.8 gigawatts of solar, wind and geothermal energy in May, pushing 2025’s tally close to the record 16.8 gigawatts announced at the same point last year, according to BloombergNEF. With major nuclear deals disclosed already in June, Big Tech is on a clean-energy buying spree in the Americas, which saw more transactions than a year earlier. Momentum in the Europe, Middle East and Africa region is slowing.

A warming planet, complex geopolitics and fierce competition are putting companies’ operations under increasing scrutiny. The Bloomberg Sustainable Business Summit returns to London on June 26 to explore ways to bolster resilience and mitigate risk.

Source: Bloomberg Europe

Top U.K., France and Germany diplomats are pushing for eleventh-hour diplomacy with Iran in Geneva on Friday, as Washington weighs the possibility of joining Israel's military campaign against Tehran over the next two weeks.

Iran and Israel have been trading fire for the past week, in the latest climax of tensions that have been simmering since the Tehran-backed Hamas' terrorist attack against the Jewish state in October 2023. Israel has since been fighting a war on multiple battles against the Palestinian militant group and other Iranian proxies, such as Lebanon's Hezbollah and Yemen's Houthi — which Tehran says are acting independently.

The conflict has risked further escalation since the start of the week, amid signals that the U.S. — historically a close ally and weapons supplier of Israel — could intervene militarily against Tehran.

"Based on the fact that there's a substantial chance of negotiations that may or may not take place with Iran in the future, I will make my decision whether or not to go within the next two weeks," U.S. President Donald Trump said, according to a statement read out on Thursday by White House Spokesperson Karoline Leavitt.

Following a Thursday meeting with U.S. Secretary of State Marco Rubio and special envoy for the Middle East Steve Witkoff, U.K. Foreign Minister David Lammy said the three "discussed how a deal could avoid a deepening conflict" and that "a window now exists within the next two weeks to achieve a diplomatic solution."

"There is no room for negotiations with the U.S. until Israeli aggression stops," Iranian Foreign Minister Abbas Araghchi, who is expected to attend talks in Geneva, was quoted as saying on Iranian state TV on Friday, according to Reuters.

Trump's aversion to Iran's nuclear program has been a central point of his statesmanship across both mandates. The White House leader pulled the U.S. out of the Joint Comprehensive Plan of Action (JCPOA) during his first presidency, tightening the noose on Iran's coffers through a string of stringent financial and oil-linked sanctions.

Self-proclaimed 'peacemaker' Trump has so far fruitlessly pursued a second nuclear program deal since the start of his second term, initially expressing a preference for a diplomatic breakthrough — the likes of which European officials are now hoping to strike.

"In the United States, [there are] many political officials who are convinced that we must not once more make the errors of the past. What we saw in Libya, what we saw in Afghanistan, what we saw in Iraq, we do not want to see reproduced," French Foreign Minister Jean-Noël Barrot said in a TV interview with French media, according to a CNBC translation.

Notably, the U.K., France and Germany — alongside Iran's allies Russia and China — were previously involved in the JCPOA with Washington and Tehran.

Markets have been rattled by the possibility of the conflict destabilizing the wider oil-rich Middle East and potentially drawing in the world's largest economy, spurring investors on a flight to safe-haven assets and broader focus on defense companies and initiatives.

Source: CNBC

UK banks are offering unusually high interest rates to clients in order to attract cash, the latest sign of how the Bank of England’s balance-sheet reduction is shrinking liquidity in the system.

The rate offered by banks most keen to attract overnight deposits has aligned with the BOE’s key rate for the first time since May 2020, excluding a brief up-tick over year-end, according to Sterling Overnight Index Average (SONIA) data published Friday. The reading represents the amount banks pay to borrow sterling from other financial institutions.

It shows that banks are willing to offer more to attract clients’ cash as the BOE shrinks liquidity by trimming its bond holdings and ending loan programs. The data adds to other signs of increased demand for excess cash, including a record £70 billion ($94 billion) usage of a BOE repo facility on Thursday.

The developments underscore the delicate balancing act for officials as they look to wean markets off years of abundant liquidity. The central bank’s Executive Director of Markets Vicky Saporta has urged lenders to step up use of its routine facilities to avoid possible market stresses as the BOE runs down its balance sheet.

“It’s another indicator that liquidity conditions are tighter than the BOE thinks,” said Moyeen Islam, a strategist at Barclays.

The rates alignment is unusual because, with cash abundant after years of central bank bond purchases, banks would typically compensate deposits to clients at levels below Bank Rate. That reflected a lesser need to attract liquidity, and allowed them to profit from the spread between the rate they paid out to clients and the rate they secured by depositing cash at the BOE.

The central bank faces a crunch point as it reduces its balance sheet of gilts at a pace of £100 billion ($135 billion) a year through a mix of not reinvesting the proceeds of maturing bonds and active sales. Analysts have speculated officials may slow this so-called quantitative tightening from October as the BOE approaches the preferred minimum range of reserves, or PMRR.

“There is growing evidence that the market is closer to equilibrium reserve position, calling into question the need for a further renewal of active quantitative tightening,” said Islam.

The central bank’s aim is to wean markets off abundant liquidity fueled by years of gilt purchases, and instead provide cash via repo operations. That transition raises the risk of volatility, though, and officials are monitoring sterling money markets for signs of tension.

One metric the BOE has said it is watching is the spread between the main SONIA benchmark — which represents a trimmed mean of overnight deposit rates offered by banks — and the BOE’s key rate. SONIA has been converging with the Bank Rate since the beginning of this year though remains around three basis points below it.

Drilling down into the SONIA data, the 90th percentile of transactions — or those most willing to accept deposits — hit 4.25% Friday. That’s the same as the BOE’s key rate, or the amount lenders can obtain by depositing cash at the central bank.

Source: Bloomberg Europe

Oil prices fell more than 3% on Friday as President Donald Trump holds off for now on helping Israel to destroy OPEC member Iran's nuclear program.

Global benchmark Brent fell $2.78, or 3.53%, to $76.07 per barrel. U.S. crude oil gained 84 cents, or 1.12%, to $74.30 per barrel.

Trump said Thursday that he would make his decision on striking Iran within the next two weeks, but wanted to provide space for potential negotiations to take place over the Islamic Republic's nuclear program.

"Based on the fact that there's a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks," Trump said in a statement read aloud by White House Press Secretary Karoline Leavitt on Thursday.

Though Trump is holding back, Israel is escalating its attacks on Iran after eight days of conflict. Prime Minister Benjamin Netanyahu has ordered Israel's military to intensify its strikes on strategic and government targets in Iran, after an Iranian missile hit a major hospital in southern Israel, Defense Minister Israel Katz said on Thursday.

Source: CNBC

Hotter weather in Europe this summer risks driving up demand while causing output from hydropower and nuclear plants to fall, according to research firm Energy Aspects.

Higher-than-usual temperatures across western Europe next month could add about 3 gigawatts of extra demand, it said, while generation from hydro and nuclear power is expected to take a hit of a similar dimension.

The region relies on those and other fuel sources during summer to balance output from renewables, and is likely to draw on natural gas to make up for any shortfalls. Traders are closely watching how heat waves develop across Europe as they could impact how much gas is put into storage ahead of next winter.

Longer-term forecasts show temperatures remaining above normal levels throughout July. That risks pushing gas generation up by more than 4 gigawatts and also bolstering coal and lignite activity in Germany, according to Energy Aspects.

European power contracts for delivery in July have edged up as a result, with the research firm seeing further upside for prices. French contracts are the most sensitive to heat, due to the potential for reduced generation from nuclear as rivers get too hot to cool reactors, and as air conditioning needs rise.

Electricite de France SA has already said that a heat wave that’s spreading across the country may force it to curb nuclear output later this month due to the rising temperature of the Rhone river.

Healthy hydro stocks in Spain are likely to limit the impact of heat on local prices, while in Germany demand does not typically respond as much to higher temperatures.

French power contracts for delivery in July have risen about 16% this week. The equivalent contract in Spain is up about 8%.

Source: Bloomberg Europe