2025-07-18 11:23

Q2 revenue falls 5.7%, but beats consensus Flags currency exchange hit of CHF 186 million on H1 sales No change yet in customer behaviour amid trade war, CEO says July 18 (Reuters) - Swiss lift maker Schindler (SCHP.S) , opens new tab reported a nearly 6% drop in its second-quarter sales on Friday, as U.S. President Donald Trump's trade war drove up the value of the Swiss franc. The value of the Swiss currency, seen as a safe haven amid economic turmoil, has grown around 12% against the U.S. dollar since the start of the year. Sign up here. As Schindler makes a vast majority of its sales in foreign currencies, this means their value suffers a negative impact when converted into francs. The company, which also makes escalators and moving walkways, saw a 5.7% revenue drop to 2.75 billion francs ($3.43 billion) in the quarter, which exceeded analysts' mean estimate of 2.65 billion, LSEG data showed. Currency conversions impacted sales by 186 million francs in the first half of the year, it said. Schindler's shares, which have gained around 17% since the start of the year, were down 2.4% as of 1108 GMT. The company is working to pass on some tariff costs to its customers, like it had said in April, CEO Paolo Compagna told Reuters. "There's a pricing action in place, and in magnitude of customers, we go piece by piece," he said, adding the company had not seen a change in the market environment or customers' behaviour yet. "Everyone talks about these question marks towards the future, but by now, it's not yet there," Compagna said. Schindler has focused on the digitalization of its business in recent years, a move that it expects to drive growth through enhanced customer loyalty as services become more efficient. "Our efforts in modernization are paying off, driving solid organic growth at a time of macro-economic uncertainty and severe currency headwinds," Compagna said in the earnings statement. The company also confirmed its guidance for 2025. ($1 = 0.8027 Swiss francs) https://www.reuters.com/markets/europe/schindlers-sales-hit-by-strong-swiss-franc-beat-expectations-2025-07-18/

2025-07-18 11:11

EU sanctions target Russian energy and financial sectors EU tries to cap Russian oil at 15% below market price Concerns remain over enforcement and impact on Russian oil exports BRUSSELS, July 18 (Reuters) - The European Union on Friday agreed an 18th package of sanctions against Russia over its war in Ukraine, including measures aimed at dealing further blows to the Russian oil and energy industry. The EU will set a moving price cap on Russian crude at 15% below its average market price, EU diplomats said, aiming to improve on a largely ineffective $60 cap that the Group of Seven major economies have tried to impose since December 2022. Sign up here. "The EU just approved one of its strongest sanctions packages against Russia to date," EU foreign policy chief Kaja Kallas said on X. "We will keep raising the costs, so stopping the aggression becomes the only path forward for Moscow." G7 PRICE CAP INEFFECTIVE SO FAR Yet Russia has so far managed to sell most of its oil - the lifeblood of its state finances - above the previous price cap as the current mechanism makes it unclear who must police its implementation. Traders doubt the new EU sanctions will significantly disrupt Russian oil exports. Kremlin spokesman Dmitry Peskov shrugged off the EU move, which would, at current prices, aim to cap the price of Russian crude at roughly $47.60 per barrel. Benchmark Brent futures rose marginally on Friday to about $70. "We have repeatedly said that we consider such unilateral restrictions illegal, we oppose them," Peskov told reporters. "But at the same time, of course, we have already acquired a certain immunity from sanctions, we have adapted to life under sanctions." The package also bans transactions related to Russia's Nord Stream gas pipelines under the Baltic Sea, and with Russia's financial sector. Kallas said 105 ships in Russia's "shadow fleet", the term used by Western officials for ships that Moscow uses to circumvent oil sanctions, had been blacklisted, along with Chinese banks that "enable sanctions evasion", which she did not name. Ukrainian President Volodymyr Zelenskiy called the decision "essential and timely" as Russia intensifies its air war on Ukrainian cities and villages. Foreign Minister Andrii Sybiha added: "Depriving Russia of its oil revenues is critical for putting an end to its aggression." US DECLINES TO BACK EUROPE ON PRICE CAP The European Union and Britain have been pushing to lower the G7 cap for the last two months after a fall in oil futures made the level of $60 a barrel largely irrelevant. But the United States has resisted, leaving the EU to move forward on its own, but with only limited power to enforce the measure, analysts and oil traders say. As the dollar dominates global oil transactions, and U.S. financial institutions play the central role in clearing payments, the EU cannot block trades by denying access to dollar clearing. Agreement on the new EU package was held up for weeks as Slovakian Prime Minister Robert Fico demanded concessions on a separate plan to phase out EU dependence on Russian oil and gas. Fico announced on Thursday night that he was ending his opposition. Countries such as Greece, Cyprus and Malta had expressed concerns about the effect of the oil price cap on their shipping industries. But Malta, the last of the trio to hold out, also came on board on Thursday. https://www.reuters.com/world/europe/eus-new-russia-sanctions-aim-more-effective-oil-price-cap-2025-07-18/

2025-07-18 11:11

ROME, July 18 (Reuters) - Italy is concerned about trade tensions triggered by the threat of U.S. tariffs, and about the devaluation of the dollar, its economy minister told his international partners on Friday at a meeting of G7 finance chiefs in Durban, South Africa. "We are concerned about the impact of economic uncertainty and persistent trade tensions on our economies," Minister Giancarlo Giorgetti said in a statement issued by his staff on the sidelines of the gathering. Sign up here. In an escalation of a trade war that has angered U.S. allies and rattled investors, President Donald Trump this month announced a 30% tariff on imports from Mexico and the European Union starting on August 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal. Italy in April estimated a negative impact of 0.3% on its economic output this year, under the assumption of a 20% U.S. tariff on European Union countries. "The weakening of the U.S. dollar exchange rate is adding to the effect of increased trade tariffs," Giorgetti said in his comments in Durban on Friday. The minister also said that firms that have helped Russia fund its war on Ukraine by doing business with Moscow should be excluded from Ukraine's reconstruction, reiterating a position he has already expressed. https://www.reuters.com/markets/us/italy-g7-warns-about-risks-trade-tensions-dollar-weakening-2025-07-18/

2025-07-18 10:56

VERZENAY, July 18(Reuters) - Champagne producers in northeastern France need to find new markets after U.S. President Donald Trump threatened 30% tariffs on EU exports, the chairman of a French industry group said, suggesting Brazil, Southeast Asia and South Africa as options. The U.S. is the biggest market for champagne with 10% of champagne exports by volume and 15% by value and producers say the tariffs will push up prices for consumers and threaten jobs all along the supply chain, including in the United States. Sign up here. "The repercussions for all family champagne exports will be severe because it will mean lost income from bottle sales, which will also affect the grape harvest quotas we will be allowed to collect," said Stephane Vignon, whose family has been producing Champagne in Verzenay since 1946. With 70% of champagne sales currently concentrated in just five countries, tariffs should push producers to seek new markets, said Maxime Toubart, chairman of industry group Comite Champagne (Champagne Committee). He said France's cognac industry, which is mainly reliant on exports to China and the U.S. where it could also face duties, provides a cautionary tale for champagne producers on the need to diversify. But replacing U.S. sales is not easy, he said. "We can't just say we'll sell three million fewer bottles in the U.S. and put them in Japan instead. So actually, there is no alternative today to this fall in volume," he said. Total champagne exports fell more than 10% last year but rose slightly in the first four months of 2025 ahead of a 10% tariff in April, farm office FranceAgriMer said. "If tomorrow the 30% tariff is implemented, I think it will definitely impact the relationship," said Hugo Drappier of the Drappier Champagne house. "We've always managed to build a relationship of trust with our clients through the quality of our wines ... Let's hope that relationship isn't broken." https://www.reuters.com/business/trumps-tariffs-threaten-take-fizz-out-champagnes-crucial-us-market-2025-07-18/

2025-07-18 10:44

MADRID, July 18 (Reuters) - A proposal by Spain's competition watchdog CNMC to raise the guaranteed return on investments in power grids to 6.46% is not enough to stop Spain losing much-needed capital to other countries, power utilities lobby Aelec warned on Friday. A massive blackout that hit Spain and Portugal on April 28 reignited a debate about investment needs in the country's power networks and the return on such investments. Sign up here. Power companies invest in grids in exchange for a stable return, which in Spain is currently set at 5.58%, with consumers ultimately paying that guaranteed rate through their electricity bills. Aelec said the guaranteed return on investments for electricity distribution should be around 7.5%, a level in line with the rates being applied in other countries. "We run the risk of capital flight and investment being attracted away from Spain to other European Union countries, thereby jeopardising the implementation of investments for the energy transition," Marta Castro, Aelec's head of regulation, told reporters. The new remuneration will cover the 2026-2031 period. The CNMC proposal is open to feedback until August 4. Spain's grid operator REE, owned by Redeia (REDE.MC) , opens new tab, manages the trunk grid, and carries out investments envisaged in government plans. Power companies including Iberdrola (IBE.MC) , opens new tab and Endesa (ELE.MC) , opens new tab control and invest in local distribution grids, which take electricity to the final customers. Energy giants like Iberdrola and Enel have increased their focus in recent years on expanding and upgrading power grids while taking a more selective approach to renewable energy projects. https://www.reuters.com/sustainability/boards-policy-regulation/spains-energy-lobby-calls-higher-proposed-return-grid-investment-2025-07-18/

2025-07-18 10:41

LONDON, July 18 (Reuters) - For all the persistent questions and doubts about what happens next, the U.S. economy is beating forecasts again during the summer and Wall Street stocks are clocking new highs. It's Friday, so today I'll provide a quick overview of what's happening in global markets and then offer you some weekend reading suggestions away from the headlines. Sign up here. Today's Market Minute * U.S. President Donald Trump's administration will ask a court to allow the release of grand jury testimony in the case of deceased convicted sex offender Jeffrey Epstein, after some of his supporters reacted in fury to a report concluding there was no evidence to support long-running theories about his case. * Britain's stock market finally appears to be reversing years of underperformance against the rest of Europe, as a UK/U.S. trade deal, lighter regulation and cheap stocks deliver juicy returns that are starting to attract foreign investors. * Federal Reserve Chair Jerome Powell on Thursday responded , opens new tab to a Trump administration official's demands for information about cost overruns for a renovation project at the central bank's Washington headquarters campus. * No matter what happens with Chair Powell moving forward, the supposedly sacrosanct notion of Fed independence has already been shattered, writes ROI columnist Jamie McGeever. * U.S. President Donald Trump has singled out the coal industry as a key driver of U.S. energy dominance, but utilities have identified quicker and cheaper paths to boost power supplies, argues ROI columnist Gavin Maguire. Positive surprises and new stock records The week's big drama surrounded the mounting political pressure on the Federal Reserve Chair, which continued to smolder. Jerome Powell responded overnight to White House demands for information about cost overruns for a renovation project at Fed headquarters - an issue some think could yet be used as a reason for President Donald Trump to fire the Fed boss. But U.S. economic updates in the backdrop were unexpectedly upbeat. Following on from Wednesday's forecast-beating industrial numbers for June and relatively benign producer price data, Thursday saw an equally impressive jump in retail sales for the month, another drop in weekly jobless claims and a surprise jump in the Philadelphia Fed's business confidence survey for July. There were one or two blots in the day's releases, such as another drop in housing indexes and rising input price components in the Philly Fed poll, but the overall picture has cut across much of the pessimism about the state of the economy. Along with decent second-quarter corporate earnings so far, the week's economic health checks have been enough to lift the S&P 500 (.SPX) , opens new tab and Nasdaq (.IXIC) , opens new tab to new record highs, and stock futures are positive again ahead of Friday's bell. Capturing how investors have been slightly caught off guard, U.S. economic "surprise" indexes have returned to their most positive since May. But, also partly reflecting why U.S. markets continue to lag many major bourses around the world, the equivalent surprise indexes for the euro zone and G10 countries as a group are even more positive and at their highest over a year. The flip side of the economic numbers - which leave the Atlanta Fed's GDP model showing 2.4% growth for the second quarter - is that it casts some doubt on any urgency for Fed easing. Despite that, Fed board governor Christopher Waller - tipped by some as a possible Trump pick to replace Powell as Chair - continued to say rates could be cut as soon as this month. Waller said he had not been approached about the Fed Chair role and that his views were not political. "The economy is still growing, but its momentum has slowed significantly, and the risks to the employment mandate have increased," he said. Treasury yields fell back, with 30-year bond yields slipping under 5% again early on Friday. The dollar (.DXY) , opens new tab retreated with them. Back on the earnings slate, streaming giant Netflix's stock (NFLX.O) , opens new tab slipped in overnight trading even after a positive report that saw the final season of "Squid Game" lift its revenue and guidance. The company raised revenue guidance for 2025 to $45.2 billion, citing a weakening U.S. dollar as a one tailwind - a factor that may well be replicated through the rest of the earnings season. Overseas markets were mostly buoyant too on Friday, with Japan's Nikkei (.N225) , opens new tab notably bucking the trend ahead of weekend elections. Prime Minister Shigeru Ishiba's Liberal Democratic Party and its partner Komeito are expected to lose their majority in the upper house and strategists now focus on whether Ishiba will remain in his position or step down. With attention on the economy, a weak yen and related inflation, there's also concern a new Japanese government may be forced to loosen fiscal policy further, with a possible cut in the national consumption tax. Recently restive Japanese government bonds, however, rallied into the weekend and yields fell back. The yen held steady after sharp losses this month. Japan's core inflation slowed in June but different cuts of the report showed more concern and annual rates have now stayed above the central bank's 2% target for well over three years. Ishiba met with U.S. Treasury Secretary Scott Bessent on trade on Friday and officials said Japan and the United States have agreed to carry on a "constructive dialogue". The U.S. House of Representatives on Thursday finally passed the so-called "Genius Act" to create a regulatory framework for U.S.-dollar-pegged cryptocurrency tokens known as stablecoins, sending the bill to Trump for signing. Seen as a watershed for the digital asset industry, House lawmakers also passed two other crypto bills, sending them next to the Senate for consideration. One lays out a regulatory framework for crypto and the other would ban the U.S. from issuing a central bank digital currency. Bitcoin was steady just under $119,000 on Friday. Weekend reads * IMBALANCE OF PAYMENTS: If you like deep dives into U.S. current account and investment deficits, a paper published by the Peterson Institute this month gives it the full treatment. Tamim Bayoumi and Joseph Gagnon reckon setting the net investment position on a sustainable path requires a plausible trade adjustment of 2% of GDP - implying a drop in the dollar's real effective exchange rate of 15-20%. , opens new tab "Were the United States to lose its 'exorbitant privilege', the adjustment rises to over 3% of GDP, implying a correspondingly larger depreciation." * 3000 ARRESTS A DAY: For senior White House aide Stephen Miller, architect of Trump's immigration crackdown, things were going according to plan when he set an aggressive quota of 3,000 arrests per day in late May, pushing immigration officers into more communities and businesses and triggering protests and political tensions. Ted Hesson, Jeff Mason and Kristina Cooke of Reuters report on how this created "a moment of dissonance" at the top of the administration - profiling Miller, his powerful role and relationship with the President. * REFORM THE REFORM: Germany's decision to go it alone this year and lift its debt brake to fund re-armament and infrastructure leaves recently reformed European Union fiscal rules in a pickle - even if it was widely applauded. In a piece for Bruegel, Lucio Pench says the EU should not change overarching fiscal targets , opens new tab to accommodate the German shift but instead re-engineer last year's reforms to ensure monitoring dwells squarely on public debt sustainability via risk-based methodologies. * CHINA TRADE WAR WINS: As the world tries to figure out where Trump goes next with his unfolding tariff war, Council on Foreign Relations fellow Zongyuan Zoe Liu says China is winning the trade war in many ways , opens new tab. In a piece on Project Syndicate, she reckons the Beijing feels "it has weathered the storm and emerged more confident, more self-reliant and more convinced that its long game is paying off." * 'ONLY DRONES': The evolution of the war in Ukraine into the most drone-intensive conflict ever has eaten away at Russia's ability to exploit traditional advantages in troop numbers, according to Ukrainian commanders. But Reuters' Max Hunder, Sabine Siebold and Manuel Ausloos report that despite the changes in warfare, Russian forces are still making slow but steady advances - catching up in UAV technology and, like its enemy, churning out drones at a rate of millions a year. Chart of the day As extreme anxiety about U.S. trade policy ebbed around mid-year, financial markets calmed considerably and unexpectedly robust June economic soundings have lifted U.S. economic surprise indexes to their highest since May. As ever, the "surprise" index is as much down to excessive pessimism in high-frequency forecasts as it is a reflection of renewed economic strength. The Atlanta Fed's real-time GDP growth estimate for the second quarter is running at about 2.4% - where it was back in May. Today's events to watch * U.S. weekly June housing starts/permits (8:30 AM EDT), July University of Michigan survey (10:00 AM EDT) * U.S. corporate earnings: American Express, Huntington Bancshares, Regions Financial, Charles Schwab, 3M, Truist Financial, Schlumberger * G20 Finance and Central Bank Meeting in South Africa Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-07-18/