US oil prices have declined by a third from a recent peak in October. That has led to speculation that shale operators will curtail drilling in the face of diminished profits. However, the number of horizontal drilling rigs in the US rose by five to 934 this week, according to Baker Hughes, the oilfield services company. Saudi Arabia faces pressure from US president Donald Trump to sustain supply levels in spite of slumping oil prices. Mohammed bin Salman, the Saudi crown prince, Russian president Vladimir Putin and Mr Trump are among the leaders at the G20 summit convened on Friday in Buenos Aires.
Deutsche Bank offices in Frankfurt were raided on Thursday morning by about 170 police officers, prosecutors and tax inspectors as part of a broad criminal investigation into alleged money laundering. The suspicious transactions happened from 2013 to 2018, two people familiar with the details of the investigation told the Financial Times, and were carried out in the bank’s wealth management division, a unit that came under the remit of Christian Sewing until he was promoted to chief executive of Deutsche in April. The investigation is targeting two Deutsche employees, aged 50 and 46, the Frankfurt prosecutor’s office said, without naming the suspects. It said other Deutsche employees who have not been identified are also part of the probe. The trigger for the investigation were documents published in 2013 and 2016 as part of the so-called Panama Papers and “offshore leaks” disclosures, where millions of records detailing the use of tax havens to shield wealth were passed to an international consortium of journalists.
Anwar Ibrahim, the likely future prime minister of Malaysia, has condemned Goldman Sachs’ role in the 1Malaysia Development Berhad scandal as “disgusting” and demanded reparations in excess of the $600m the bank gained in fees from the state investment fund. Mr Anwar said Goldman should return “significantly more” than the $600m the bank was paid for arranging three bond sales because “it’s a cost to the image of the country, it’s a cost to investments and now it’s a burden shouldered by the government because of the complicity of so many of these so-called credible, renowned financial institutions”.
The bank has previously insisted it had no knowledge of a bribery and embezzlement scheme that US prosecutors claim saw about $2.7bn plundered from 1MDB after the bank helped the state-backed fund raise $6.5bn in 2012 and 2013. It has also said it is co-operating with those investigating the fund. Bitcoin dropped again on Tuesday, extending its recent falls and pushing towards the $4,000 level amid a broad cryptocurrency sell-off sparked by disagreements within the coin developer community and persistent concerns about regulatory scrutiny. On Tuesday morning bitcoin, the most actively traded digital currency, fell by more than 10 per cent to a low of $4,237, its weakest level since October 2017, according to Refinitiv data. This follows steeper moves earlier in the week also among its closest peers. Ethereum, the third-largest cryptocurrency by market capitalisation has fallen by 14 per cent in the last 24 hours to $139.66. XRP, a token associated with Ripple, was one of the few good performers on Tuesday, rising by 0.5 per cent in to $0.4827. Other major cryptocurrencies like bitcoin cash, stellar, and litecoin, have experienced heavy blows. Overall, bitcoin is down 66 per cent since the beginning of the year, while the broader asset class — known to be extremely volatile — has seen its collective market capitalisation reduced by around three-fourths since the beginning of the year.
Russia has detained three Ukrainian naval ships and their crews after capturing them under gunfire in the disputed Black Sea region, with the west calling for Moscow and Kiev to de-escalate the most serious maritime incident between the warring neighbours since the 2014 invasion of Crimea. Ukraine’s parliament will decide on Monday whether to support President Petro Poroshenko’s call for a 60-day period of martial law in response to Sunday’s naval clash, which saw Russian ships fire on the three vessels, injuring several crewmen. Mr Poroshenko is seeking the authority in order to mobilise Ukrainian forces more quickly if tensions escalate. The Kremlin claims Russian naval forces were provoked and only captured the Ukrainian ships after they illegally entered its territorial waters near a maritime chokepoint shared by both countries. Dmitry Peskov, Kremlin spokesman, condemned what he called a “dangerous act of provocation” by Kiev.
An Abu Dhabi sovereign wealth fund has sued Goldman Sachs over the 1Malaysia Development Berhad scandal, accusing the US bank of bribing its officials during a “massive global conspiracy”. The International Petroleum Investment Company, a former partner of the 1MDB fund, filed a lawsuit in New York on Wednesday seeking unspecified punitive damages from Goldman and individuals, including Tim Leissner, a former partner at the bank who has pleaded guilty to conspiracy charges over the affair. In 2015, IPIC guaranteed billions of dollars of bonds arranged by Goldman and issued by 1MDB. After the Malaysian fund defaulted, the government in Kuala Lumpur at the time agreed to repay IPIC in a settlement that has since been challenged by the new government.
Cryptocurrencies have been crashing again. Bitcoin has slumped to its lowest price in more than a year. More than $600bn in claimed “market capitalisation” has vanished from the universe of pseudo-money and digital tokens since early January. Bitcoin — the first and best known of the cryptocurrencies, created from clever mathematics and organised via a global computer network that sidesteps the banking system — is now priced at around $5,500. That’s a far cry from the all-time high of around $20,000 last December. Other cryptocurrencies have fared even worse. Ripple, the banker-friendly centralised cryptocurrency that gained more than 36,000 per cent in 2017, has lost about 85 per cent of its value since the start of 2018.
Venezuela is suffering from the ravages of hyperinflation. Alas, the word “hyperinflation” is thrown around carelessly and misused frequently in the financial press. Indeed, the debasement of language in the popular press has gone to such lengths that the word “hyperinflation” has almost lost its meaning.
Just what is Venezuela’s inflation rate? Today, the annual inflation rate is 60,324%, and the monthly rate is 94%. How do I measure elevated inflation? The most important price in an economy is the exchange rate between the local currency – in this case, the bolivar – and the world’s reserve currency, the U.S. dollar. As long as there is an active black market (read: free market) for currency and the black market data are available, changes in the black market exchange rate can be reliably transformed into accurate measurements of countrywide inflation rates. The economic principle of purchasing power parity (PPP) allows for this transformation. The application of PPP to measure elevated inflation rates is both simple and very accurate. Running to more than 400 pages, the provisional text agreed by London and Brussels unwinds 45 years of deep integration, protecting certain rights, defining outstanding obligations and establishing a transition period in which both sides can adjust. To come into force, the Brexit deal requires approval by, in sequence, the UK cabinet, an EU summit, the House of Commons and the European Parliament. Commitments made in the document run to 2030 and beyond. The agreement will not only determine the nature of Britain’s exit from the EU, but also influence the country’s future relationship with the union. Financial settlement Britain will honour all its financial commitments to Brussels so that no EU country pays a euro more to the common budget as a result of Brexit.
|
PurposeMajor markets news headlines which captured the markets. Archives
March 2021
Categories |