In addition to the stress test, supervisors have been telling banks for months to prepare for politically motivated disruption

International News via Reuters:

The European Central Bank will test banks’ resilience to geopolitical turmoil next year, chief ECB supervisor Claudia Buch said on Tuesday, as part of a growing focus on risks, from tariffs to sanctions.

The ECB has long warned that geopolitics is one of the biggest risks for euro zone banks amid conflicts in Ukraine and Gaza, as well as the trade war stoked by U.S. President Donald Trump. It will now assess banks’ preparedness to that type of risk, but with a twist.

In typical stress tests, banks are given scenarios and must calculate how much capital would be wiped out under each. In this exercise, however, the ECB will hand out levels of capital depletion and tell banks to come up with scenarios that could cause them.

“In the 2026 thematic stress test exercise, we will follow up on this year’s stress test by asking banks to assess which firm-specific geopolitical risk scenarios could severely impact their solvency,” Buch told the European Parliament.

In addition to the stress test, supervisors have been telling banks for months to prepare for politically motivated disruption, including a global dollar drought if the Federal Reserve withdraws its lifelines.

As part of the ECB’s regular supervisory work, banks have been told to watch their exposure to other countries, both via operations abroad and through credit to exporters, central bank sources have told Reuters.

Cyber attacks are seen as a risk too, particularly in Baltic countries, which have previously been the targets of Russian hackers, the sources said.

Supervisors are not telling banks to cut their exposures and they are not making specific recommendations at this stage, but rather urging banks to tighten their controls and think about contingency plans.

An ECB spokesperson declined to comment.

Next year’s ECB exercise will be part of banks’ self-evaluation of their capital needs, known in regulatory jargon as the Internal Capital Adequacy Assessment Process.

The ECB runs thematic health checks on euro zone banks every other year, when there is no European Union-wide stress test by the European Banking Authority.

Its latest, in 2024, was about cyber-resilience.

The results of the EBA’s latest stress test, which includes some U.S. tariffs in its adverse scenario, will be announced in early August.

Editing by Kirsten Donovan and Mark Porter

Trump had threatened the southeast Asian country with a 32% tariff rate effective August 1 in a letter sent to its president last week

International News via Reuters:

U.S. President Donald Trump on Tuesday announced a trade deal with Indonesia, the latest pact in a bid to cement better terms with trading partners and reduce a massive trade deficit, even as the European Union readied retaliatory measures should talks between Washington and its top trading partner fail.

“Great deal, for everybody, just made with Indonesia. I dealt directly with their highly respected President. DETAILS TO FOLLOW!!!” Trump said in a post on Truth Social.

Indonesia’s total trade with the U.S. – totalling just under $40 billion in 2024 – does not rank in the top 15, but it has been growing. U.S. exports to Indonesia rose 3.7% last year, while imports from there were up 4.8%, leaving the U.S. with a goods trade deficit of nearly $18 billion.

The top U.S. import categories from Indonesia, according to U.S. Census Bureau data retrieved on the International Trade Centre’s TradeMap tool, last year were palm oil, electronics equipment including data routers and switches, footwear, car tires, natural rubber and frozen shrimp.

Susiwijono Moegiarso, a senior official with Indonesia’s Coordinating Ministry for Economic Affairs, told Reuters in a text message: “We are preparing a joint statement between U.S. and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform (the public) soon.”

Trump had threatened the southeast Asian country with a 32% tariff rate effective August 1 in a letter sent to its president last week. 

Trump sent similar letters to roughly two dozen trading partners this month, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20% up to 50%, as well as a 50% tariff on copper.

The August 1 deadline gives the targeted countries time to negotiate agreements that could lower the threatened tariffs. Some investors and economists have also noted Trump’s pattern of backing off his tariff threats.

Since launching his tariff policy, Trump has clinched only a few deals despite his team touting an effort to bring home “90 deals in 90 days.” So far, framework agreements have been reached with the United Kingdom and Vietnam, and an interim deal has been struck with China to forestall the steepest of Trump’s tariffs while negotiations continue between Washington and Beijing.

EU READIES RETALIATION 

The breakthrough with Indonesia came as the European Commission, the EU’s governing body, gets set to target 72 billion euros ($84.1 billion) worth of U.S. goods – from Boeing aircraft and bourbon whiskey to cars – for possible tariffs if trade talks with Washington fail.

Trump is threatening a 30% tariff on imports from the EU from August 1, a level European officials say is unacceptable and would end normal trade between two of the world’s largest markets. 

The list, sent to EU member states and seen by Reuters on Tuesday, pre-dates Trump’s move over the weekend to ramp up pressure on the 27-nation bloc and responds instead to U.S. duties on cars and car parts and a 10% baseline tariff.

The package also covers chemicals, medical devices, electrical and precision equipment as well as agriculture and food products – a range of fruits and vegetables, along with wine, beer and spirits – valued at 6.35 billion euros.

Following a meeting of EU ministers in Brussels on Monday, officials said they were still seeking a deal to avoid Trump’s heavy tariff blow.

But EU trade chief Maros Sefcovic said those at the meeting expressed unprecedented resolve to protect EU businesses using European countermeasures if negotiations with Washington fail to produce a deal.

Reporting by Philip Blenkinsop in Brussels and David Lawder in Washington; Additional reporting by Richard Lough in Paris; Amanda Teresia, Stefanno Sulaiman and Gayatri Suroyo in Jakarta; Editing by Daniel Wallis

Trade unions in Britain have raised concerns that without the new orders, some BAE final assembly production lines would run out of work in the 2030s

International News via Reuters:

British defence company BAE Systems is confident on winning new orders for Typhoon military jets from countries such as Qatar, Saudi Arabia and Turkey, its European air sector boss told reporters on Tuesday.

“We’re working with the UK government on a number of those campaigns presently,” Richard Hamilton, Managing Director for Europe and International in BAE Systems Air sector, said at the group’s facility in Warton, northern England.

Asked whether he was confident that those sales campaigns would result in new orders for the aircraft, he said: “yeah, absolutely”, adding that there was potential for new orders of up to 150 new Typhoons.

Underpinning that confidence in the new export order, he said, was Britain’s commitment to funding upgrades to Typhoon’s capabilities, which extends the aircraft’s lifespan.

“The confidence it gives the export partner, you know, with the Saudis, with the Turkish, when they see that this thing has a life, it just makes the whole conversation so much easier,” he said.

Trade unions in Britain have raised concerns that without the new orders, some BAE final assembly production lines would run out of work in the 2030s.

Reporting by Sarah Young; Editing by Catarina Demony

The UTJ lawmakers said their walkout would come into effect after 48 hours

International News via Reuters:

A religious party has quit Israel’s ruling coalition in a dispute over military service, leaving Prime Minister Benjamin Netanyahu with a razor-thin majority in parliament but still enough political support to secure a potential Gaza ceasefire.

Six members of United Torah Judaism (UTJ) handed in resignation letters overnight from posts in parliamentary committees and government ministries, in protest against lawmakers’ failure to guarantee future exemption from military conscription for ultra-Orthodox religious students.

Shas, a second ultra-Orthodox party closely allied with UTJ, may follow and leave the government with no parliament majority.

The UTJ lawmakers said their walkout would come into effect after 48 hours, giving Netanyahu two days to try and resolve the crisis which has dogged his coalition for months.

Even if that fails, parliament goes on summer break at the end of July, which would give the prime minister a further three months to seek a solution before any loss of his majority could threaten his position.

Netanyahu is also facing pressure from far-right parties in his coalition over ceasefire talks underway in Qatar.

The indirect negotiations between Israel and Palestinian militant group Hamas aim to halt fighting in Gaza for 60 days to allow half of remaining hostages held by Hamas to be released and aid to flow into the battered enclave.

It would also open a further phase of talks on ending the war entirely.

National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich want Israel to press on with the war, but Netanyahu would still be likely to have enough cabinet votes to secure a ceasefire without them.

“As soon as the right deal is on the table, the prime minister will be able to pass it through,” a close aide to Netanyahu, Topaz Luk, told Army Radio on Tuesday.

MILITARY EXEMPTIONS

Israelis have become increasingly weary of the 21-month war in Gaza, which began with a surprise attack by Hamas on October 7, 2023 that led to Israel’s single deadliest day with 1,200 killed and 251 taken hostage by the Palestinian militants.

Israel’s subsequent offensive against Hamas has since killed more than 58,000 Palestinians, according to health officials, displaced almost the entire population of Gaza, led to a humanitarian crisis and left much of the enclave in ruins.

It has also exacted Israel’s highest military death toll in decades, with around 450 soldiers killed so far in Gaza combat. This has added fuel to an already explosive debate over a new conscription bill at the center of Netanyahu’s political crisis.

Ultra-Orthodox seminary students have long been exempt from mandatory military service. Many Israelis are angered by what they see as an unfair burden carried by the mainstream who serve.

Ultra-Orthodox Jewish leaders say full-time devotion to holy scriptures study is sacrosanct and fear their young men will steer away from religious life if they are drafted into the military.

Last year the Supreme Court ordered an end to the exemption. Parliament has been trying to work out a new conscription bill, which has so far failed to meet UTJ demands.

Reporting by Steven Scheer and Maayan LubellEditing by Stephen Coates, Crispian Balmer, Peter Graff

Russia was ready to continue direct negotiations with Ukraine

International News via Reuters:

The Kremlin said on Tuesday that U.S. President Donald Trump’s recent statements, including a threat of sanctions on buyers of Russian exports, are serious and require analysis.

In a major policy shift underscoring his growing frustration with President Vladimir Putin, Trump on Monday announced new deliveries of weapons to Ukraine and warned that buyers of Russian exports could face sanctions unless Russia agrees to a peace deal on Ukraine.

Trump, who has said he wants to be remembered as a peacemaker, later told the BBC, referring to Putin: “I’m disappointed in him, but I’m not done with him. But I’m disappointed in him.”

Asked about Trump’s recent statements, Kremlin spokesman Dmitry Peskov said: “The U.S. president’s statements are very serious. Some of them are addressed personally to President Putin.”

“We certainly need time to analyse what was said in Washington. And if and when President Putin deems it necessary, he will definitely comment.”

Peskov continued, apparently referring to news of fresh weapons deliveries to Kyiv: “Decisions which are being made in Washington, in NATO countries, and squarely in Brussels, are perceived by the Ukrainian side not as a signal for peace, but as a signal to continue the war.”

He reiterated that Russia was ready to continue direct negotiations with Ukraine and was still waiting for a signal from Kyiv on when the next talks could take place.

Reporting by Gleb Stolyarov; Writing by Lucy Papachristou; Editing by Gleb Bryanski

The return was carried live by a joint SpaceX-Axiom webcast

International News via Reuters:

NASA retiree turned private astronaut Peggy Whitson splashed down safely in the Pacific early on Tuesday after her fifth trip to the International Space Station, joined by crewmates from India, Poland and Hungary returning from their countries’ first ISS mission.

A SpaceX Crew Dragon capsule carrying the four-member team parachuted into calm seas off the Southern California coast at around 2:30 a.m. PDT (0930 GMT) following a fiery reentry through Earth’s atmosphere that capped a 22-hour descent from orbit.

The return flight concluded the fourth ISS mission organized by Texas-based startup Axiom Space in collaboration with SpaceX, the private rocket venture of billionaire Elon Musk headquartered near Los Angeles.

The return was carried live by a joint SpaceX-Axiom webcast.

Two sets of parachutes, visible through the darkness and light fog with infrared cameras, slowed the capsule’s final descent to about 15 mph (24 kph) moments before its splashdown off San Diego.

Minutes earlier, the spacecraft had been streaking like a mechanical meteor through Earth’s lower atmosphere, generating enough frictional heat to send temperatures outside the capsule soaring to 3,500 degrees Fahrenheit (1,927 degrees Celsius). The astronauts’ flight suits are designed to keep them cool as the cabin heats up.

The Axiom-4 crew was led by Whitson, 65, who retired from NASA in 2018 after a pioneering career that included becoming the U.S. space agency’s first female chief astronaut and the first woman ever to command an ISS expedition.

She radioed to mission control that the crew was “happy to be back” moments after their return. A recovery ship was immediately dispatched to secure the capsule and hoist it from the ocean onto the deck of the vessel.

The crew members were to be extricated from the capsule one by one and undergo medical checkups before the recovery vessel ferries them to shore, a process expected to take about an hour.

FOUR ASTRONAUTS, FOUR NATIONS

Now director of human spaceflight for Axiom, Whitson has now logged 695 days in space, a U.S. record, during three previous NASA missions, a fourth flight to orbit as commander of the Axiom-2 crew in 2023 and her fifth mission to the ISS commanding Axiom-4.

Rounding out the Axiom-4 crew were Shubhanshu Shukla, 39, of India, Slawosz Uznanski-Wisniewski, 41, of Poland, and Tibor Kapu, 33, of Hungary.

They returned with a cargo of science samples from more than 60 microgravity experiments conducted during their 18-day visit to the ISS and due for shipment to researchers back on Earth for final analysis.

For India, Poland and Hungary, the launch marked the first human spaceflight of each country in more than 40 years and the first mission ever to send astronauts from their government’s respective space programs to the ISS.

The participation of Shukla, an Indian air force pilot, is seen by India’s space program as a precursor of sorts to the debut crewed mission of its Gaganyaan orbital spacecraft, planned for 2027.

Uznanski-Wisniewski is a Polish astronaut assigned to the European Space Agency, while Kapu is part of his country’s Hungarian to Orbit (HUNOR) program, though he is not the first person of Hungarian descent to board the space station.

Billionaire Charles Simonyi, a Hungarian-born software designer who became a U.S. citizen in 1982, has twice visited the ISS as a space tourist, in 2007 and 2009, hitching rides aboard Russian Soyuz capsules.

But like many wealthy individuals from various countries who have paid their own way for joyrides to space, Simonyi was not flying on behalf of his homeland or any government.

Dubbed “Grace” by its crew, the newly commissioned capsule flown for Axiom-4 was launched from NASA’s Kennedy Space Center in Cape Canaveral in Florida on June 25, becoming the fifth vehicle in SpaceX’s Crew Dragon fleet.

The Ax-4 team arrived at the ISS on June 26, welcomed aboard by the station’s latest rotating crew of seven occupants – three U.S. astronauts, one Japanese crewmate and three Russian cosmonauts. The two crews parted company again early on Monday when Crew Dragon Grace undocked to begin its voyage home.

Axiom-4 also marks the 18th crewed spaceflight logged by SpaceX since 2020, when Musk’s rocket company ushered in a new NASA era by providing American astronauts their first rides to space from U.S. soil since the end of the space shuttle program nine years earlier.

For Axiom, a 9-year-old venture co-founded by NASA’s former ISS program manager, the mission builds on its business of putting astronauts sponsored by private companies and foreign governments into low-Earth orbit.

Axiom also is one of a handful of companies developing a commercial space station of its own intended to eventually replace the ISS, which NASA expects to retire around 2030.

Reporting by Steve Gorman in Los Angeles; Editing by Jamie Freed and Kim Coghill