China's CXMT IPO tests the limits of semiconductor self-reliance

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• U.S.-Iran: the blockade widens the shipping risk. The United States struck Iranian coastal defenses and missile sites and reimposed a naval blockade of Iranian ports. Iran threatened to cut more regional energy exports and said the conflict had become an existential war. Reuters reported that Hormuz carried about one-fifth of global oil and gas shipments before the war, while Brent settled at $84.95 a barrel on Wednesday. 3
• U.S. economy: producer prices cool. Final-demand producer prices fell 0.3% in June, the largest monthly decline in 14 months. Prices were still up 5.5% from a year earlier, but falling energy costs helped push the data lower; markets responded with higher stocks, a softer dollar and lower Treasury yields. The risk is that renewed oil disruption reverses the relief. 4
• Europe: ten states challenge ETS2. Italy, Poland and eight other EU countries asked Brussels to rethink the bloc's planned carbon price on heating and transport fuels. ETS2 is scheduled to begin in 2028 and has already been delayed by a year. The coalition says the current economic and geopolitical climate is the wrong moment for a new consumer-facing climate charge, giving the group enough votes to block changes it opposes. 5
• Canada: wildfire smoke reaches U.S. cities. Smoke from fires in northwestern Ontario pushed Toronto's Air Quality Health Index above 10, the highest-risk category, and IQAir ranked the city as the world's most polluted major city. New York also reached unhealthy levels. Canadian and U.S. authorities advised residents to reduce strenuous outdoor activity, with smoke expected to linger into the weekend. 6
• Finance: Morgan Stanley rides trading and deals. Second-quarter net revenue reached a record $21.35 billion, while equity-trading revenue rose 69% to $6.3 billion. Investment-banking revenue climbed 58% to $2.44 billion as IPO and merger activity strengthened. Chief executive Ted Pick said the bank expects a multiyear financing cycle for AI investment. 7
• India: fuel export taxes change overnight. From July 16, the government raised the export duty on diesel to 15.5 rupees a litre from 8.5, and on aviation turbine fuel to 14.5 from 7.5. The petrol duty fell to 2.5 rupees from 4. The move is designed to capture windfall revenue as global oil prices rise during the U.S.-Iran escalation. 8
• France: debt arithmetic turns harsher. A government-commissioned independent report said public debt could rise from about 118% of GDP in 2026 to above 130% by 2030 if spending is not curbed. It estimated that stabilizing the debt ratio by 2032 would require about 126 billion euros in cumulative fiscal tightening, alongside targeted structural reforms rather than broad cuts. 9
• China: growth becomes more uneven. Second-quarter GDP grew 4.3% year on year, its slowest pace in more than three years, according to Nikkei Asia's report using official data. First-half industrial output rose 5.4%, helped by robotics and semiconductors, while June exports jumped 27%. Domestic demand was weaker: June retail sales grew only 1%, and first-half fixed-asset investment fell 5.7%. 10
• Ukraine and EU: drone production gets a bloc-wide framework. Kyiv and the European Union agreed to combine Ukraine's battlefield know-how with the bloc's industrial capacity to scale drone production. Ursula von der Leyen called it the EU's first bloc-wide arrangement of this kind; the deal did not include a public funding figure or production target. 11

Quote of the day

"There will be technology and power bottlenecks and constraints, but I think we can agree the market for artificial intelligence and real productivity enhancement is here."

Ted Pick, Morgan Stanley chief executive. 7

Further reading

• Explainer: What is CXMT and how did it become China's DRAM champion? Reuters' backgrounder on CXMT's market position, technology gap and role in China's push for semiconductor self-reliance.
• China's GDP growth rate of 4.3% marks slowest pace in over three years Nikkei Asia's read on why strong exports and industrial output are not yet translating into a balanced recovery.