>>> What to look at today - 3rd of June 2025

Asian shares posted a modest gain as investors awaited news on trade negotiations after the US pushed for talks between President Donald Trump and China’s Xi Jinping. A gauge of Asian equities edged up 0.1% for their first gain in three sessions, as Hong Kong stocks erased Monday’s losses and jumped 1.3%. Mainland China shares fluctuated after manufacturing activity unexpectedly contracted in May. A weaker yen pushed up Japanese shares 0.2%. Treasuries were steady and a gauge of the dollar strengthened 0.2% after hitting its lowest since 2023 in the last session. US equity-index futures dropped 0.4%, indicating the optimism toward the close of trading Monday may not be repeated. Oil extended its gains while gold dipped 0.4% after trade worries sent investors toward haven assets Monday. In Japan, attention will once again shift to a debt market sale Tuesday that may ramp up pressure on the government to adjust its borrowing plans and calm investor nerves. Hot on the heels of auctions last month that exposed a lack of demand, the finance ministry will sell ¥2.6 trillion ($18 billion) of 10-year notes. Despite high volatility, markets have bounced back from their lows in April when Trump announced his tariff blitz. Investors are keeping a close eye on how the China-US trade spat pans out with the main focus on whether Trump and Xi will hold a conversation to dial down the tensions. The two countries have accused each other of violating a trade agreement reached in May, flaring up trade concerns. Trump has long said that direct talks with Xi were the only way to resolve differences between the nations, but the Chinese leader has been reluctant to get on the phone with his American counterpart — preferring that advisers negotiate key issues. The last known conversation between Trump and Xi took place in January before the US president’s inauguration.  Top Trump economic adviser Kevin Hassett signaled Sunday the White House was anticipating a call this week with the Chinese leader. China hasn’t confirmed any decision for talks between the two presidents even as the US pushes for a dialogue. Meanwhile, Japan’s top trade negotiator Ryosei Akazawa is considering returning to the US for another round of trade negotiations this week as expectations mount for a deal as early as this month. Trump worked the phones Monday and took to social media to try to sway Republican holdouts on his multi-trillion dollar tax bill, encountering conflicting demands from GOP senators even as he urged them to move swiftly.  The legislation, which last month passed the House by one vote, faces opposition from both moderates and ultra-conservatives in the Senate, where Trump can afford to lose no more than three votes.  In geopolitics, Russia and Ukraine wrapped up a second round of talks in Istanbul that failed to bring the two sides closer to ending the war, but laid the groundwork for a new exchange of prisoners. US After Hours MLTX +26.2% surges on FT report that MRK held acquisition talks; CRDO +10.4% sharply higher on earnings.

Nikkei +0.11% Hang Seng +1.12% CSI +0.19% Shanghai +0.31% Shenzen +0.41%

Eur$ 1.1419 CNH 7.1977 CNY 7.2124 JPY 143.10 GBP 1.3518 CHF 0.8186 RUB 78.9500 TRY 39.1486 WTI$ 62.93 Gold 3,364 -0.46% BTC 105,555 +0.56% ETH 2,597.57 +2.11%

S&P -0.36% Nasdaq -0.34% EuroStoxx +0.13% FTSE +0.12% Dax +0.26% SMI
+0.21%
Macro :
- China Commerce Chamber Urges EU to Rethink Possible Trade Curbs
- India, Europe Agree on Nearly Half of Trade Deal Topics: FT
- Musk Taps Investors for Billions Days After Leaving Trump’s Side
- Fresnillo, MBank, Bilfinger Among Additions to Stoxx Europe 600
- Germany’s Proposed EV Tax Break is Insufficient, Car Lobby Says
- Carmaker Stocks Fall as Trump Metal Tariff Hike Threatens Costs
- Copying Saylor’s Bitcoin Strategy Isn’t Working Like It Used To
- Turkey earthquake: Powerful 5.8-magnitude quake felt strongly in Rhodes as tourists wake to ‘whole building shaking’

Keep an eye on :
- AED BB : Aedifica Offers to Buy Cofinimmo at 1.185 Exchange Ratio
- BO DC : Bang & Olufsen Takes Over Its Online Sales in China, Borsen Says
- BA US : Boeing Reaches 737 Max Rollout Rate of 38/Month: Air Current
- BPOST BB : Affirms FY25 EBIT €150-180M, adjusts Rev "exceed" €5.0B (prior grow high single digit) - Guides EBIT to acelerate growth from 2026 onwards- Targets €160-180M/yr capex- Targets leverage ratio reduction to below 2.5x by 2027
- CMR Surgigal (Private) : CMR Surgical Hires Advisers to Begin Work on Sale Process: FT
- COFB BB : Aedifica Offers to Buy Cofinimmo at 1.185 Exchange Ratio
- DHE GY : Delivery Hero Hit by €329 Million EU Fine for Glovo Cartel (1)
- SATS US : EchoStar Elects Not to Make ~$183m in Cash Interest Payments
- EDP PL : Portuguese Regulator Erse Approves 1.5% Increase for Gas Tariff
- ELIS FP : Elis Holder Bpifrance Offers 6.9m Shares, Terms Show, placed at 23.26/share
- ELIS FP : Elis: Elis Buys BugaderíA Neutral in Spain
- ECV GY : KKR Aims to Squeeze-out Encavis’ Holdouts at EUR17.23/Share
- F US : Carmaker Stocks Fall as Trump Metal Tariff Hike Threatens Costs
- GMAB DC : Genmab’s Rina-S Showed 50% ORR in Advanced Endometrial Cancer
- HDD GY : *HEIDELBERGER DRUCK GAINS 4% ON TRADEGATE VS XETRA CLOSE
- JAZZ US : Jazz Pharmaceuticals Announces Phase 3 IMforte Trial Results Showing Zepzelca Plus Atezolizumab First-Line Maintenance Therapy
- BAER SW : Julius Baer sets focused strategy to unleash its full potential through disciplined execution,Julius Baer Aims at Net New Money Improving to 4–5% by 2028
- KCO GY : SVP, Lenders in Advanced Talks to Extend Kloeckner’s Senior Debt
- LGEN LN : L&G Investment Mgmt hires Derek Li as China Institutional Sales
- LR FP : Legrand Buys Linkk Busway Systems in Asia; No Terms
- MSFT US : Microsoft Cuts Hundreds More Jobs After Firing 6,000 Last Month
- MLTX US : Merck held talks to buy Swiss biotech MoonLake Immunotherapeutics for more than $3bn
- PHIA NA : Australian Regulator TGA Sues Philips Electronics Australia
- PRX NA : Prosus Chief Investment Officer Ervin Tu to Step Down
- ROG SW : Roche’s Tecentriq With Lurbinectedin Shows Survival Benefit
- SAN FP : Sanofi Rilzabrutinib Gets US Designation for Sickle Cell Disease
- SENS SW : Sensirion Connected Solutions acquires Kuva Systems to expand methane emissions monitoring portfolio
- SIKA SW : Sika, Sulzer to Establish a Joint Venture to Advance Plastics Recycling , Sika: Each Partner Will Hold a 50 % Stake in JV
- SNOW US : Snowflake to Buy Crunchy Data for $250 Million -- WSJ
- SPT LN : DOJ Says Keysight Must Divest Assets for Spirent Deal to Proceed
- MSTR US : Strategy to List 2.5m Shares of Perpetual Preferred Stock
- ALLEI SS : Swedish Steelmaker Alleima Sees Pricing as Counter to US Tariffs
- TSLA US : Neuralink Raises $650 Million in Series E Funding Round
- 8TRA GY : Goldman Raises Trucking Stocks to Buy as Cycle Nears a Bottom
- 2330 TT : TSMC Sees 2025 Profit Rise to Record; Keeps Sales Outlook (1)
- UMG NA : Universal, Warner and Sony Are Negotiating AI Licensing Rights for Music -- WSJ

>>> Europe : Brokers Upgrades & Downgrades - 3rd of June 2025

>>> Up
* ASM Intl Raised to Overweight at Barclays; PT 600 euros
* EasyJet Raised to Outperform at RBC; PT 650 pence
* Hiscox Raised to Buy at Jefferies; PT 1,500 pence
* SOL PT Raised to 49 euros from 41 euros at Berenberg
* Tecnicas Reunidas Raised to Add at AlphaValue/Baader
* Technoprobe Raised to Buy at Deutsche Bank; PT 9 euros
* UBS Raised to Buy at Jefferies; PT 37 Swiss francs

>>> Down
* ASML Cut to Equal-Weight at Barclays; PT 650 euros
* Blueprint Medicines Cut to Hold at TD Cowen; PT $130
* Blueprint Medicines Cut to Market Perform at Citizens
* Cemex ADRs Cut to Market Perform at Itau BBA; PT $7.50
* Faron Pharma Cut to Reduce at Inderes; PT 253.32 pence
* Gerresheimer Cut to Hold at Deutsche Bank; PT 58 euros
* Gerresheimer Cut to Hold at Bankhaus Metzler; PT 50 euros
* GSK Cut to Hold From Buy by Berenberg
* GSK ADRs Cut to Hold at Berenberg; PT $41
* Kering Cut to Reduce at AlphaValue/Baader
* Poste Italiane Cut to Equal-Weight at Morgan Stanley
* Rio Tinto ADRs Cut to Hold at Jefferies; PT $63
* Soitec Cut to Hold at Berenberg; PT 50 euros
* *Yubico Cut to Hold From Buy by Berenberg, Target Cut to SEK160.00 From SEK270.00

>>> Initiation
* Alter Ego Media S.A Rated New Overweight at Euroxx Securities
* Booking Reinstated Buy at William O'Neil
* Elis Rated New Buy at Jefferies; PT 30 euros
* Emilshus Rated New Buy at Nordea; PT 60 kronor
* Fonciere Inea Rated New Outperform at Oddo BHF; PT 42 euros
* Harbour Energy Rated New Neutral at SpareBank; PT 210 pence
* Reckitt ADRs Rated New Outperform at BNPP Exane; PT $17.30
* Safran Rated New Outperform at Haitong Intl; PT 296.64 euros
* Uranium Energy Rated New Outperform at BMO; PT $7.75

>>> Call
* Deutsche Bank Raises S&P 500 Target to 6,550 After Cutting It
* Elis Gets Another Buy as Jefferies Sees Compelling Growth Ahead
* GSK Downgraded to Hold at Berenberg as Awaits Product Roll-Outs
* UBS Reaching Turning Point on Capital, Jefferies Upgrades to Buy

>>> Stoxx 600 Pre-Market Indications

  • QinetiQ (QY6 TH) +3.7%
  • BAE (BSP TH) +2.5%
  • RENK Group (R3NK TH) +1.6%
  • Rolls-Royce (RRU TH) +1.5%
  • Cofinimmo (COF TH) +1.5%
    • *AEDIFICA OFFERS TO BUY COFINIMMO AT 1.185 EXCHANGE RATIO
  • ASM Intl (AVS TH) +1.2%
    • Semiconductors Rebound as Europe Tech Scorecard Stays Defensive
  • Gerresheimer (GXI TH) +1%
  • Rheinmetall (RHM TH) +1%
  • UBS (0UB TH) +1%
    • UBS Reaching Turning Point on Capital, Jefferies Upgrades to Buy
  • Thyssenkrupp (TKA TH) -0.9%
  • Bakkafrost (6BF TH) -2.4%
  • NKT (NKT TH) -2.8%

>>> TradeGate Pre-Market Indications

DAX:
  • Rheinmetall (RHM TH) +1.5%
  • Merck KGaA (MRK TH) +1.1%
MDAX:
  • RENK Group (R3NK TH) +2.1%
  • Hensoldt (HAG TH) +1.9%
  • Gerresheimer (GXI TH) +1.4%
  • Aixtron (AIXA TH) +1%
  • Thyssenkrupp (TKA TH) -1%
SDAX:
  • Heidelberger Druck (HDD TH) +4%
  • IONOS Group SE (IOS TH) +1.4%
  • SUSS MicroTec (SMHN TH) +1.3%
  • Schaeffler (SHA0 TH) +1.1%
  • Borussia Dortmund (BVB TH) +0.4%
  • Deutz (DEZ TH) +0.3%
  • SMA Solar (S92 TH) -0.5%
  • ProSieben (PSM TH) -0.8%

WWD : Middle East Luxury Sales Surge 6% to $12.8 Billion While Global Market Con

Middle East Luxury Sales Surge 6% to $12.8 Billion While Global Market Contracts, According to New Report from Chalhoub Group
Michael Chalhoub shares his outlook on the region's defiant growth and projection to reach $15 billion by 2027.

DUBAI — The Gulf region saw 6 percent growth in luxury sales to $12.8 billion last year, in sharp contrast to global markets, which saw a 2 percent decline.

New market data released by Chalhoub Group reveals the region’s luxury ecosystem is one of the strongest globally, powered by the beauty segment’s explosive growth, sustained tourist spending, and aggressive retail expansion that defied the headwinds hammering luxury markets from New York to Shanghai.

“The Gulf region’s outperformance is not just a short-term rebound but the result of several structural tailwinds that we believe are sustainable,” said Michael Chalhoub, who took over as the company’s chief executive officer in January. He sat down with WWD to detail the findings of its report “GCC Personal Luxury 2024: Unstoppable” and break down the sharp eight-point performance gap between the region and the rest of the world.

Within the region’s luxury landscape, beauty emerged as the standout performer with 12 percent growth, led specifically by skin care’s 17 percent surge. Asian beauty brands in the region grew 26 percent annually from 2022 to 2024 — far outpacing Western markets, which rose 15 percent, according to the report. These numbers drive business strategy.

“We’re aiming at accelerating skin care growth in the region, particularly through high-potential segments like wellness and Asian beauty,” Chalhoub explained.

The company is doubling down on localized social and influencer marketing, noting that over 90 percent of Gen Z consumers in the Gulf region use Instagram, YouTube, or TikTok in their skin care journey. “We are working closely with global partners to tailor brand strategies to local market dynamics and to co-develop go-to-market approaches that ensure price consistency and an optimized channel mix across our 6,000-plus point of sale network.”

While beauty drives the growth narrative, luxury fashion brands — Louis Vuitton, Dior, Hermès, Chanel, and Loro Piana — represent over half of the fashion market in the Gulf states.

Perhaps nowhere are Chalhoub’s strategic ambitions more evident than in Saudi Arabia, which currently represents only 18 percent of the regional luxury market but saw double-digit growth in 2024.

“Saudi Arabia represents one of the most exciting frontiers for luxury globally, driven by a young, digitally engaged population, deep national pride, and a rapidly evolving cultural and retail landscape,” Chalhoub said. “It is a market where authenticity matters. With most of the population made up of Saudi nationals, we focus on co-creating culturally resonant experiences and championing local creativity.”

Chalhoub’s incubator Fashion Lab supported 10 homegrown Saudi brands in 2024 through partnership with the Saudi Fashion Commission’s 100 Brands initiative. The company has scaled its Saudi workforce to nearly 5,000 team members, 70 percent of whom are women.

Retail real estate has also matured with the opening of flagship projects like Solitaire Mall, exemplifying a shift toward immersive, experience-led retail ecosystems. “We are starting to see the results of our investments in Saudi Arabia over the past few years, with this exciting double-digit growth, but there is room for more,” he said.

Digital Transformation and Reinvention Strategy

While the Gulf region’s e-commerce penetration lags global averages at 13 percent versus 20 percent, it’s growing rapidly at 13 percent annually and represents Chalhoub’s primary growth vector.

“To support rapid growth and omnichannel expectations, we are investing heavily in infrastructure and innovation,” said Chalhoub. A new logistics hub will significantly enhance last-mile delivery capabilities.

The company is also implementing AI and automation while maintaining “white glove services,” doubling down on their micro-fulfillment center strategy to bring two-hour delivery to Dubai and Riyadh.

Chalhoub’s technology commitment extends to rolling out more artificial intelligence initiatives. “We’ve hired a head of AI and put in place an AI strategy with nine specific areas where we want to use AI for the group. We’re launching a proprietary Gen AI tool to support customer service,” he revealed.

Tourism Dynamics Drive Growth

The regional luxury market’s resilience partly stems from evolving tourism patterns. Russian tourists remain the top luxury spenders in the UAE as economic sanctions have restricted their European travel options, while regional consumers have dramatically shifted their spending patterns since COVID-19.

“Regional tourism is also a big part of the UAE luxury sector,” added Chalhoub.

Before the pandemic, nearly 66 percent of Gulf nationals shopped for luxury fashion abroad, mostly in Europe. Now, two-thirds prefer regional shopping due to improved pricing and luxury experiences.

“To meet those needs of luxury globetrotters, we are building elevated end-to-end customer journeys both offline and online,” explained Chalhoub, pointing to initiatives like the Elite Styling Lounge in Dubai Mall, which offers curated private shopping experiences.

The company works closely with brand partners to merchandise collections based on location, with Dubai Mall — which welcomed 111 million visitors in 2024 — receiving different assortments than other locations to cater to tourists versus local consumers.

Looking Ahead to 2027

With the Gulf region’s personal luxury market projected to reach $15 billion by 2027, Chalhoub Group’s roadmap includes continued retail expansion with eight new luxury malls planned in Saudi Arabia and the UAE, new category development in wellness and Asian beauty, and accelerated e-commerce growth.

The challenge lies in maintaining regional dominance and successfully expanding.

“We have continued to strengthen our regional leadership through new joint ventures, store openings and driving growth through e-commerce,” Chalhoub said. “We need to disrupt ourselves before we get disrupted. We constantly try to reinvent ourselves, to reinvent our customer journey, to reinvent our staff needs and skill sets.”

Chalhoub also shared the group is planning international expansion to markets beyond the Middle East as a geographic diversification strategy. They are strengthening their Latin American presence through Saint-Honoré, where they’ve invested for nearly a decade, as well as a planned opening in the U.S.

“We view international development as a strategic diversification for our group, which is currently concentrated in the Middle East. This step is an essential move to reduce our reliance on one single region,” he explained.

9to5.com : Court documents reveal OpenAI is coming for your iPhone


If you’re Apple, this is the kind of internal document that you knew existed, but still hits hard. Especially in the middle of a global antitrust reckoning and internal… whatever the heck is going on in there.
A recently unsealed OpenAI file outlines the company’s ambitions for ChatGPT. In short? They’re coming for Siri with everything they’ve got.

The super-assistant
Thanks to the DOJ’s ongoing case against Google, we now have a rare look at how OpenAI views its competition, and where it sees ChatGPT heading next.
The document (via The Verge), titled “ChatGPT: H1 2025 Strategy” and dated late 2024, describes a significant evolution of OpenAI’s LLM to turn it into a “super-assistant”:
“What exactly is a super-assistant? It’s an intelligent entity with T-shaped skills. It’s an entity because it’s personalized to you and available anywhere you go — including chatgpt.com, our native apps, phone, email, or third-party surfaces like Siri. It’s T-shaped because it has broad skills for daily tasks that are tedious, and deep expertise for tasks that most people find impossible (starting with coding). The broad part is all about making life easier: answering a question, finding a home, contacting a lawyer, joining a gym, planning vacations, buying gifts, managing calendars, keeping track of todos, sending emails. The deep part is about [REDACTED] — though as we reach less engaged users, we’ll need to keep an eye on [REDACTED].”

Contrary to Apple, OpenAI’s plan seems on track
If you have been keeping up with ChatGPT’s evolution, you know that this is exactly what OpenAI has been doing in H1 2025. From the recent rollout of cross-chat memory, to Operator, which gives ChatGPT agentic capabilities to directly manipulate platforms and interfaces, it’s all there.
In a nutshell, the document paints a future where ChatGPT isn’t just something you open in a browser or in an app, but something that’s always with you, always listening, and always ready to help. You know, like Siri (even with its ChaGPT integration) was supposed to be:
“One that knows you, understands what you care about, and helps with any task that a smart, trustworthy, emotionally intelligent person with a computer could do.”
The plan hinges on OpenAI’s new generation of models, combined with agentic tools for web browsing, code writing, and device control. It doesn’t specifically mention hardware, which is where the recently announced bombshell Jony Ive partnership would come in, but you know this is in there somewhere, under all that redaction.

The Siri partnership is not enough
However, the biggest competitive threat to Apple isn’t just how the technology works, but where.
OpenAI makes it clear that they want to challenge gatekeepers, specifically naming “powerful incumbents who will leverage their distribution to advantage their own products”. ChatGPT has been Siri’s fallback for almost a year now, but OpenAI obviously wants more:
“Real choice drives competition and benefits everyone. Users should be able to pick their AI assistant. If you’re on iOS, Android, or Windows, you should be able to set ChatGPT as your default. Apple, Google, Microsoft, Meta shouldn’t push their own AIs without giving users fair alternatives. The same goes for search engines: Google, Apple, Microsoft should offer users a choice for their default search engine and make their underlying indexes accessible to AI assistants, including ChatGPT.”
Their antitrust pitch to regulators seems pretty ready to go.
Meanwhile, Apple’s own AI roadmap is all over the place. Siri leadership was recently moved under Vision Pro executive Mike Rockwell, while Robby Walker, who previously ran Siri, is now leading a new internal project called “Knowledge.” That initiative is said to be Apple’s answer to ChatGPT. However, as Bloomberg‘s Mark Gurman’s reported, “it’s already been plagued by some of the same problems that delayed the Siri overhaul.“

Hey Siri, what now?

FT : UK must spend £68bn to modernise military, defence review suggests

UK must spend £68bn to modernise military, defence review suggests
Drones and artificial intelligence will be needed to increase warfighting capability

The UK will need to spend about £68bn to prepare its armed forces for modern warfare, a long-awaited strategic defence review suggests, laying bare the budgetary pressures on Sir Keir Starmer’s government.

The review of weapons the UK will need to wage a sustained war against a rival nation recommends a greater use of drones, autonomous vehicles and artificial intelligence that will turn the British soldier into a “digital warfighter”.

However, it also argues the UK needs to spend significant sums on big-ticket items such as new nuclear warheads, submarines and fighter jets. The shares of major British defence companies rose on Monday.

“This is the most profound change to Britain’s armed forces in 150 years,” the review’s co-author General Sir Richard Barrons said.

Starmer declined to give a firm date on Monday for when Britain’s defence spending would rise to 3 per cent of GDP, the government’s target level, as he vowed the UK’s slimmed-down armed forces will reach “warfighting readiness”.

The government has pledged to increase spending from 2.3 per cent of GDP to 2.5 per cent by 2027, an increase of about £6bn a year.

Matthew Savill of the Royal United Services Institute think-tank, said: “Given the existing pressures in the budget, and the need to rebuild the foundations of defence, it’s very unlikely that the increase . . . would be enough without other cuts.”

The SDR report released on Monday said the goal is to “increase national warfighting readiness so that, if needed, the UK can transition to, scale for, and sustain a war against a ‘peer’ adversary”.

Britain “should also learn from Ukraine’s extraordinary experience in land warfare, drone, and hybrid conflict to develop its own modern approach to warfighting”, the report added, referring to Russia’s full-scale invasion of the country.

“The threats we face are more serious and unpredictable than at any time since the end of the cold war,” defence secretary John Healey told MPs.

“Our adversaries are working more in alliance with one another while technology is changing how war is fought. For too long our army has been asked to do more, with less.”

Recommendations in the SDR report cost at least £67.6bn through to the late 2030s, according to previously detailed costings and estimates from industry experts of new announcements.

The 62 SDR recommendations — all accepted by the government — include a £15bn investment in new nuclear warheads, and up to 12 new attack submarines developed by the Aukus partnership with the US and Australia by the end of the next decade: the equivalent of a new boat every 18 months.

Sid Kaushal, a naval warfare expert at Rusi, said the programme could cost roughly £2.6bn per boat, based on the equivalent US Virginia class block V guided-missile attack submarines.

The SDR also recommended procuring new F-35 stealth fighters and the Global Combat Aircraft Programme, a 6th-generation fighter to be produced by the UK, Italy and Japan.

Justin Bronk, a Rusi expert on air power, said the GCAP warplanes were likely to cost the UK at least £10bn to £12bn to develop, while a second tranche of 27 new F-35s on top of 48 already purchased could cost £100mn per aircraft.

Rather than increase the size of the army beyond the current target of 73,000, the SDR report said smarter technology could allow a “10-fold increase in lethality”.

It added that “much of the army’s capabilities — including Challenger 2 tanks, AS90 artillery, and ammunition — have recently been gifted to Ukraine”, and had not been refreshed since the 1990s.

“As the army rebuilds, investment must be paired with changes to how it is organised, operates and is equipped . . . it can deliver a 10-fold increase in lethality by harnessing precision firepower, surveillance technology, autonomy, digital connectivity and data,” the report said.

Despite the 73,000 target for army numbers, “there remains a strong case for a small increase in regular numbers when funding allows”, while reserve troops must be rapidly expanded.

The SDR report also said £1bn should be spent on a digital targeting platform, as well as creation of a national cyber and electronic warfare command.

One infantry combat veteran criticised the focus on technology saying “there appears to be no notion as to the reality of modern war — in terms of mass, in terms of casualties”.

The Institute for Fiscal Studies think-tank estimated Starmer’s commitment to raise defence spending to 2.5 per cent of national income by 2027 would force the government to keep public investment in other areas flat from this year up to 2029-30.

If the government wanted to increase military spending to 3 per cent of GDP by the end of the decade, it would need to find an additional £17bn in 2030, IFS researchers said.

Ben Zaranko, associate director at the IFS, said: “That’s more than 10 times what the government is saving by means testing winter fuel payments. You are going to have to do 10 winter fuel payment reforms, and that seems challenging.”

FT : Sizewell C nuclear project to get go-ahead during Anglo-French summit

Sizewell C nuclear project to get go-ahead during Anglo-French summit
UK ministers hope to sign up private sector investors for new Suffolk power plant later this month

The new Sizewell C nuclear power station is expected to get the final go-ahead during an Anglo-French summit in London next month, as UK ministers edge towards securing billions of investment from the private sector.

The UK government — which owns the Sizewell C project alongside French state-owned energy company EDF — is keen to begin construction at the Suffolk site, the second in a proposed fleet of new nuclear reactors to help boost Britain’s supplies of low-carbon electricity.

Darren Jones, a Treasury minister, told the Financial Times earlier this year that the final investment decision for Sizewell C, where shareholders formally commit to the investment, would be “at the spending review” on June 11. 

Ministers are expected to reaffirm the government’s intention to invest in Sizewell in or around the spending review, according to people close to the situation, with details expected on how much they could allocate in taxpayer support for the project.

However, the final go-ahead is not expected until an announcement by Prime Minister Sir Keir Starmer and French President Emmanuel Macron during the Franco-British summit in London between July 8 and July 10, according to people close to the talks in Britain and France.

By then the government and EDF will have received final bids from several private investors who have been given a deadline of late June, allowing the formal final investment decision to proceed.

Groups expected to bid for a stake in Sizewell include insurer Rothesay, backed by the Singaporean infrastructure fund GIC, the Canadian pension fund CDPQ, Amber Infrastructure Partners, Brookfield Asset Management, pension fund USS, Schroders Greencoat and Equitix, people close to the talks have said. 

Centrica, the owner of British Gas, has also confirmed that it is in talks to invest in the project.

Chris O’Shea, Centrica’s chief executive, told the FT last week that he wanted to get a “reasonable return, cap on exposure to overruns in terms of cost and schedule, and a sensible cash injection profile which sees the money going in over time. If we get that, we will be a very happy investor”.

One potential investor said terms were “generous”. Another potential investor who declined to be named said the government had “gone a long way to make it attractive”.

The project remains controversial, however, given that it will be paid for by higher energy bills during construction.

“Any private investors that came on board at the eleventh hour will have been bribed by generous terms at the expense of consumers,” said Alison Downes of the Stop Sizewell C campaign.

Sizewell’s management has rejected industry claims that its final cost could ultimately come close to £40bn but has refused to offer their own estimate. 

Sizewell C is set to be only the second new nuclear power plant built in a generation in Britain, following Hinkley Point C, which EDF is building in Somerset but is heavily delayed and well over budget.

EDF has tried to get Sizewell C off the ground for years. Its efforts were further complicated when the British government forced out EDF’s former partner, China General Nuclear Power Corp, on security grounds in November 2022. 

Sizewell C was meant to get an investment sign-off in late 2024 but the project’s timescale has slipped. In 2022 the British state said it would co-invest directly with EDF on the project and has steadily increased its ownership of the project.

As of December 31, the UK government’s stake was 84 per cent, compared with EDF’s 16 per cent. A person familiar with the situation said EDF has since lowered its stake further.

Schroders Greencoat, Brookfield, GIC, Amber, Rothesay, CDPQ and Equitix declined to comment. A government spokesperson said: “We don’t comment on speculation.”

EDF declined to comment. USS had not responded to a request for a response at the time of publication.

FT : Private credit could ‘amplify’ next financial crisis, study finds

Private credit could ‘amplify’ next financial crisis, study finds
Industry may become a ‘locus of contagion’ during market upheaval, report from US officials and bankers says

Private credit is now so intertwined with big banks and insurers that it could become a “locus of contagion” in the next financial crisis, a group of economists, bankers and US officials has warned.

Researchers from Moody’s Analytics, the Securities and Exchange Commission and a former top adviser to the Treasury Department found private credit funds have become enmeshed with the banking system, creating “new linkages [that] introduce new modes of systemic stress”.

“Their opaqueness and role in making the financial network more densely interconnected mean they could disproportionately amplify a future [financial] crisis,” the group said on Tuesday in a study published by Moody’s Analytics.

Private credit has boomed in recent years as regulations put in place following the 2008 financial crisis prompted banks to tighten their lending standards. Funds, which generally lend to riskier companies with significant debt loads, are subject to looser oversight than banks — something that has prompted concern as the sector has grown.

The report, written by Mark Zandi at Moody’s Analytics, Samim Ghamami of the SEC, and former Treasury adviser Antonio Weiss, is one of the most comprehensive analyses to date on how private credit would affect the broader financial system during a period of market upheaval.

The researchers relied on financial reporting and the stock prices of publicly listed middle-market corporate lenders, known as business development companies, as their proxy for the otherwise opaque private credit industry. They found that during recent moments of market stress, business development companies had become more tightly correlated with the turmoil in other sectors than they were previously.

“Today’s network of interconnections in the financial system is more distributed, with a denser web of connections than it had pre-crisis, when the system operated more like a ‘hub and spoke’ model with banks at the centre of the network,” the report said, noting that private credit firms, other speciality financial groups and insurers have taken a greater role in lending.

Private credit firms maintain they are better at lending than banks because they rely on capital from institutional investors with longer time horizons and not subject to “runs” such as bank deposits, which can lead to broader contagion in moments of panic.

“Banks are increasingly involved in private credit and other non-bank financial institutions through partnerships, fund financing and structured risk transfers that allow them to maintain economic exposure to credit markets while shifting assets off balance sheet,” the Moody’s Analytics study said.

The Boston Federal Reserve last month had similarly warned that banks were exposing themselves to new channels of risk by lending to private credit funds and other similar groups.

Fitch Ratings this week said that private credit’s “evolving products and asset classes requires close monitoring, with many untested through market cycles”.

The Moody’s Analytics report said the private credit sector should be required to share more public data on its lending, and for financial regulators to emphasise private credit in their overall “systemic risk monitoring”.

“The objective is not to stifle the beneficial innovation that private credit provides but to shine a light on its risks and linkages so that a rapidly growing part of corporate finance, and potentially other sectors, does not become a blind spot.”