Markets under pressure as trade war shifts gear

A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here . You can listen to an audio version of the newsletter by clicking the same link. London (CNN Business) Europe and the United States have barred the import of Russian oil to cut off a crucial revenue source for the Kremlin. But the plan to pile pain on President Vladimir Putin, forcing him to reconsider his war in Ukraine, hasn't worked . Russia's government is making just as much money from energy exports as it was before the invasion. Meanwhile, inflation is surging globally, adding to political pressure on heads of state such as US President Joe Biden, British Prime Minister Boris Johnson and French President Emmanuel Macron. That's forcing leaders from top economies who have gathered in Germany for a G7 meeting to consider a new route: slapping price caps on Russian crude . "The goal here is to starve Russia, … [Read more...] about Price cap on Russian oil could shake up the market

Telfs-Buchen, Austria (CNN) Ukrainian President Volodymyr Zelensky told G7 leaders during a virtual meeting Monday that he wants the war in Ukraine to end by the end of 2022, according to a source familiar with his remarks , as leaders worked to starve Russia of its oil revenues and mitigate the economic fallout of the conflict. The dual missions -- sustain support for Ukraine while easing economic pressures at home -- have defined this year's summit of leading democracies, held high in the Bavarian Alps. While largely united, the leaders are all facing their own political imperatives to see a momentum shift in the fighting and bring an end to the conflict quickly. To that end, leaders were nearing an agreement to try capping the price of Russian oil, depriving the country of revenues that have soared amid the global spike in energy prices. Details were still being ironed out, including whether the top buyers of Russian oil would agree to the limits, but US officials … [Read more...] about G7 leaders work to ‘starve’ Russia of oil money as Zelensky says he wants the war over by the end of the year

- A + A KUALA LUMPUR (June 27): Shares of Hengyuan Refining Co Bhd rose on Monday (June 27) in line with the positive broader market sentiment, expectations of higher oil consumption and improved profit margins. Hengyuan closed 35 sen or 7.74% higher at RM4.87 on volume of 2.61 million shares, much higher than the 200-day average volume of 1.4 million. The stock has rebounded 12.21% from last Monday's low of RM4.34. At the current price, the company is valued at RM1.46 billion. When contacted, MIDF Research analyst Imran Yassin Yusof said the general market sentiment was positive on Monday, which gave a boost to oil and gas stocks. "It could also be some bargain hunting activities," he added. Bursa Malaysia's Energy index rose 1.65% or 11.17 points to 688.66 to emerge as second biggest gainer after the Technology index, which was up 2.83% or 1.77 points to 64.39. Thong Pak Leng, vice-president of equity research at Rakuten Trade Sdn Bhd, said high crude … [Read more...] about Hengyuan Refining shares up almost 8% amid positive market sentiment

KUALA LUMPUR: Southern Cable Group Bhd is targeting higher overseas revenue in the financial year ending Dec 31, 2022 (FY22) on the back of improving regional demand in line with recovering economic activities. As at March 31, Southern Cable is slated to fulfil RM628.6mil worth of orders in hand over the next two years, of which overseas represent less than 1%. In a statement, the cable and wire manufacturer said it also hopes to penetrate into the United States market in the second half of 2022. Managing director Tung Eng Hai said the group is ready to support the improved economic activity, especially in the existing markets of Myanmar and Singapore, as they accelerate the pace of infrastructure and development projects. “Building on our strong track record in supplying power cables and wires, we are also undergoing final stages of testing and evaluation for our in-house developed XHHW-2 industrial cables for a customer in the US, for use in residential, commercial and … [Read more...] about Southern Cable targeting higher exports in FY22

- A + A MUMBAI/MANILA (June 27): Signs of distress flashing in bond markets suggest the world's poorest nations are set to see a wave of debt restructurings. But a growing cohort of investors say that is a buying opportunity. Panic selling in the aftermath of Sri Lanka's economic collapse has sent the average yield in junk-rated emerging economies to almost 900 basis points above US Treasuries, the highest risk premium in 13 years except for the Covid-19-related rout in 2020, according to JPMorgan Chase & Co data. Yet, initial fears about a widespread default Armageddon across emerging markets is easing, and money managers are looking beyond the handful of countries that may reschedule their debt. This shift in perception means at least some smaller developing nations, called frontier markets, have been unduly punished in the recent sell-off and now offer highly attractive yields. Even in the event of debt restructuring, their bonds will offer greater recovery … [Read more...] about Frontier-debt buyers look past default risk in hunger for yield

- A + A (June 27): The wipeout in Bitcoin may have run its course, a range of technical indicators suggest. Momentum measures and insights from options bets signal ebbing selling pressure and a possible trading range of US$20,000 to US$25,000 — though the usual caveats apply about the mercurial nature of cryptocurrencies. The largest digital token has slumped about 70% from a November record and was little changed at US$21,343 as of 8:38 a.m. Monday in London. It slid below US$18,000 earlier this month, before retaking the closely watched US$20,000 level. Tightening monetary policy, withering speculative ardor and collapsing digital-asset projects have spurred a broad crypto rout in 2022. But the mood in global markets is turning less dour on tentative hopes that the price pressures driving interest-rate hikes may be cresting. The lessons of Bitcoin’s past swoons suggest it’s in the vicinity of its bear-market low, according to Glassnode. This “bear market is now … [Read more...] about Bruised bitcoin due relief after crypto wipeout, charts show

Borrowing costs of Indian states are likely to rise in the coming weeks as the Reserve Bank of India ’s (RBI) rate hike cycle becomes more entrenched and the supply of state papers rises, money market experts and bankers told Moneycontrol on June 27. A majority of those expect the yield on the 10-year state development loan (SDL) to rise above 8 percent in the coming weeks. “In the first quarter of this fiscal year, supply of debt was limited. But in the second half of this fiscal year, we expect state debt supply to rise and that should put upward pressure on (state) bond yields,” said Ritesh Bhusari, deputy general manager, treasury, at South Indian Bank. To put in perspective, the cut-off yield for 10-year SDL ranged from 7.83 percent to 7.86 percent at an auction on June 21, according to data from the RBI. Prior to that, at an auction on June 14, Tamil Nadu’s 10-year paper was sold at a cut-off yield of 7.94 percent, while Haryana’s 10-year bond was sold at 7.95 percent. … [Read more...] about States’ borrowing cost set to rise on higher debt supply, RBI’s rate cues, experts say

- A + A MUMBAI/BUENOS AIRES/LONDON (June 27): It only took 24 hours last month for Prime Minister Narendra Modi's government in India — the world's second-largest producer of wheat — to shelve its plans to "feed the world". In April, Modi had said publicly that the world's most populous democracy was ready to fill part of the gap left by Ukraine in global grains markets by increasing its wheat exports, following five consecutive record harvests. India traditionally exports only a modest amount of wheat, retaining most of its crop for domestic consumption. On May 12, India's Ministry of Commerce & Industry said it was preparing to send delegations to nine countries to export a record 10 million tonnes of wheat this fiscal year — sharply up the previous season. But a barrage of alarming data changed all that. First came a downward revision to India's wheat crop in early May as a sudden heatwave hammered yields. Then data on May 12 showed inflation in the nation … [Read more...] about Food export bans, from India to Argentina, risk fueling inflation

This article first appeared in The Edge Malaysia Weekly, on June 20, 2022 - June 26, 2022. - A + A IF Bank Negara Malaysia’s eight-member monetary policy committee (MPC) raises the overnight policy rate (OPR) by 25 basis points (bps) at its next scheduled meeting on July 6, it will mark its first back-to-back increase since mid-2010, when interest rates were normalised following the recovery from the 2008 global financial crisis. It will not be the first central bank to do so. Compared with just a month ago, more economists now (at the time of writing) reckon that a 25bps hike will happen in July, but many still think a pause is possible in July ahead of the Hari Raya Aidiladha celebrations. In any case, at least one more rate increase (if not two) is expected to take place by the conclusion of the Sept 8 meeting to bring the OPR to at least 2.25% (if not 2.5%), consensus data show. “Our house has also shifted expectations for Bank Negara to frontload … [Read more...] about The State Of The Nation: What the Fed’s 75bps hike and near 4% terminal rate mean for the OPR

- A + A FRANKFURT (June 27): European Central Bank (ECB) policymakers gather on a Portuguese hillside on Monday with the sinking feeling that their rush to tackle the inflation shock they failed to forecast risks both a recession and echoes of the euro area's sovereign debt crisis. As president Christine Lagarde and colleagues meet in the resort of Sintra for their version of the Federal Reserve's (Fed) Jackson Hole conference, they face competing tasks: cool the fastest consumer-price growth in the euro's history without delivering an economic downturn or sparking a 2012-style spike in borrowing costs in Italy, the region's third-largest economy, and other vulnerable states. Markets are already sounding an alert on what may lie ahead. Italian government bond yields jumped past 4% this month for the first time since 2014 as investors took fright at the ECB's plan to raise interest rates in July for the first time in a decade. With that hike locked in, and another … [Read more...] about ECB’s pivot towards rate hikes feeds fears of new bond crisis