Highlights for the morning: xAI raises $10 bln, EU close to US deal, gold on the rise

Ilon Musk's xAI has completed raising $5 billion in debt financing and received an additional $5 billion in strategic equity investments - the money will be used to develop its AI infrastructure and Grok platform. Gold rose for the second day in a row, trading around $3310 an ounce, amid expectations of a Fed rate cut and a falling dollar. At the same time, Bombardier announced a $1.7 billion order for its Challenger and Global business jets with the possibility of increasing the deal to $4 billion. These and other topics are covered in our review of key events for the morning of July 1.

Elon Musk's startup xAI has completed raising $5 billion in debt financing and received a separate $5 billion in strategic investment capital, Morgan Stanley said, reported by Reuters. The funds will be used to expand AI infrastructure, including building data centers, amid increasing competition in the industry.

Morgan Stanley reported that the debt round included the issuance of secured bonds and term loans. The deal was oversubscribed - leading global investors in debt instruments took part in it.

Reuters previously reported that xAI was preparing to close a $5 billion debt financing led by Morgan Stanley despite sluggish investor demand. Bloomberg stated that xAI is also in talks to raise $4.3 billion in equity investment. xAI did not respond to Reuters' request for comment.

According to Morgan Stanley, the proceeds will be used to further develop AI solutions, build a data center and develop Grok's flagship platform.

In addition to debt financing, xAI is also in talks to raise about $20 billion in equity investment - a deal that could value the company at more than $120 billion, the agency points out. Some investors value it up to $200 bln.

Gold rose for a second straight day amid optimism that the U.S. Federal Reserve will resume interest rate cuts as soon as this year, while investors continue to keep a close eye on U.S. trade talks ahead of a July 9 tariff deadline, reports Bloomberg.

The cost of an ounce of gold is holding around $3310 after the growth of 0.9% on Monday, when traders began to actively lay the probability of at least two rate cuts in 2025. Attention is also focused on the U.S. jobs report, which will be released on Thursday and could be a catalyst for a fall in government bond yields - which traditionally supports gold prices, the agency specifies.

Gold is up about 25% since the start of the year and is now trading less than $200 below its April record, helped by heightened geopolitical and trade risks. Uncertainty surrounding Donald Trump's trade policies and capital withdrawal from dollar-denominated assets crashed the dollar index by nearly 11% in the first six months of the year - its worst performance since 1973.

«Despite recent losses, gold has the most near-term upside potential if the dollar continues to fall,» said Commonwealth Bank of Australia analyst Vivek Dhar.

By 8:44 a.m. Singapore time, the spot gold price was up 0.3% to $3311.6 an ounce. The Bloomberg Dollar Spot Index declined 0.1% after falling 0.5% on Monday.

Platinum added 0.6 percent to $1367.10 an ounce, following a nearly 29 percent rise in June, the best monthly result on record. The growth was driven by a severe supply shortage on the spot market, strong demand from Chinese jewelers and speculative buying from the U.S. and China. Silver and palladium also rose in price.

The EU has expressed willingness to strike a trade deal with the U.S. that includes a 10 percent universal duty on a significant portion of EU exports, but is pushing for lower rates on key sectors - pharmaceuticals, alcohol, semiconductors and civil aviation, reports Bloomberg.

In addition, the EU is seeking quotas and exemptions from the U.S. that would effectively soften existing U.S. duties: 25% on cars and auto parts and 50% on steel and aluminum, the agency's sources said.

The European Commission, which conducts trade negotiations on behalf of the EU, considers such a deal rather favorable to the US, but still acceptable to sign. The EU must conclude an agreement with Donald Trump's administration by July 9 - after that date, almost all of the bloc's exports to the United States will be subject to a 50 percent duty.

Earlier, Bloomberg wrote that the two sides are increasingly confident of reaching an interim agreement before the deadline, which would extend the talks. It should cover tariff and non-tariff barriers, purchases of U.S. goods and potential areas for cooperation.

EU Trade Commissioner Maroš Šefčovič will lead a delegation to Washington this week to push the talks forward. The EU is also keen to discuss in advance not only existing duties but also possible new U.S. restrictions.

The European Commission estimates that current U.S. duties cover €380 billion - about 70% of the bloc's exports to the United States.

Bombardier announced it has received an order for 50 Challenger and Global business jets, along with an accompanying service agreement, worth $1.7 billion, reports Reuters. Deliveries will begin in 2027. The company's shares were adding 2.5% on the Toronto Stock Exchange (TSE).

The company specified that the customer, who wished to remain anonymous, also received an option to purchase another 70 airplanes. If these options are exercised, the total value of the deal will exceed $4 bln.

Earlier this year, Bombardier said it expected a slowdown in new orders in the first half of the year followed by a recovery in activity.

The Montreal-based company also said in May that it plans to deliver more than 150 business jets in 2025, up from 146 deliveries in 2024.

- Asia-Pacific stock markets were mixed on Tuesday as investors assessed the record performance on Wall Street and the global impact of Donald Trump's trade policies, whose 90-day delay on imposing duties is set to end next week. US Treasury Secretary Scott Bessent said «there are countries that are negotiating in good faith». However, he added that the duties could «go back into effect» at the level announced on April 2 «if we can't reach an agreement because they're balking.»

- Mainland China's CSI 300 index started the day with a 0.2% decline. The Caixin/S&P Global China Manufacturing Business Activity Index for June amounted to 50.4, exceeding Reuters analysts' forecast of 49 points.

- Japan's Nikkei 225 index was down 1.1 percent after hitting an 11-month high in the previous session, while the broader Topix index fell 0.8 percent.

- In South Korea, the Kospi index rose 1.7% and the Kosdaq small-company index added 0.7%.

- In Australia, the S&P/ASX 200 index was up 0.2 percent.

- Hong Kong's markets are closed due to a public holiday.

- U.S. stock futures were slightly lower in the morning hours of the Asian session. The day before  two of the three key indices on Wall Street -  S&P 500 and Nasdaq Composite - rose 0.5% and closed trading at new all-time highs. The Dow Jones Index added 0.6% to end the day at 44,094.77.

This article was AI-translated and verified by a human editor