China’s Belt and Road strafed by Vladimir Putin 3 Mar 2022 As Russia’s president intensifies shelling of Ukrainian cities, Beijing’s infrastructure and technology push into eastern Europe looks increasingly vulnerable. That’s bad news for Chinese trade security. It also could further slow its shrinking investment across the region.
ECB’s inflation problem has bigger Ukrainian twist 2 Mar 2022 Christine Lagarde faces the same commodity price surge as her Canadian peer, who just hiked interest rates, and Fed Chair Jerome Powell, who is set to do the same. But a less robust euro zone economy is more exposed to the war on its doorstep. Her least bad option is to dawdle.
Vladimir Putin tests even Wall Street’s values 2 Mar 2022 American banks like Goldman have earned nearly $500 mln in investment banking fees since Russia annexed Crimea in 2014. They're not known for taking principled stands when money is at stake. With even oil giants responding to Putin's aggression, though, this could be the moment.
Russia exodus tests fund managers’ liquidity limit 2 Mar 2022 Western funds worth over $4 bln have suspended redemptions after Moscow froze equity trading, while MSCI may kick the country out of its emerging market benchmarks. The crisis once again exposes the flimsiness of asset managers’ promise that customers can sell when they want.
India’s Russian romance will be hard to stifle 2 Mar 2022 New Delhi is under pressure to join others aligning behind Ukraine. Beyond protecting its defence-equipment supplies, however, the ties to Moscow help check China’s influence. And the energy transition even makes a case for the oil-hungry nation to deepen the relationship.
Oligarch sanctions’ devil no longer in the detail 1 Mar 2022 Brussels froze assets of Russian billionaires like Alexei Mordashov and Mikhail Fridman. Unlike U.S. sanctions, their companies don’t automatically get hit. Even so, counterparties may in any case decide steel group Severstal and investor LetterOne are too toxic to deal with.
Ukraine war is tectonic shift for global finance 1 Mar 2022 Investor turned anti-corruption campaigner Bill Browder joins Dasha Afanasieva on The Exchange podcast to explain why tougher sanctions from the West, including freezing oligarch assets, threaten Russian President Vladimir Putin’s grip, and cripple the country’s economy.
How Europe can kick its Russian gas habit 1 Mar 2022 Conflict in Ukraine shows the folly of the continent depending on gas from Moscow. Speeding up renewable energy would help. To get to zero in a decade, however, Europe will also need other sources of gas, more nuclear power, multi-nation coordination and even consumer rationing.
Oil lubricates Beijing’s Russian tightrope 1 Mar 2022 China relies on crude from the now pariah state for nearly a fifth of total imports. Though the pair can sidestep Western sanctions on Moscow and settle most transactions in yuan, being too helpful could backfire on Beijing. Its banks will be caught in the crossfire either way.
Russian economic collapse will be hard to avoid 28 Feb 2022 The central bank more than doubled its main policy rate to 20% to support the plunging rouble. It won’t be enough. But further hikes or capital controls would compound pain in an economy where Western sanctions are spurring a run on banks. Moscow has few viable policy options.
Capital Calls: Buffett, Sanctions, Defence, Canada 28 Feb 2022 Concise views on global finance: The Oracle of Omaha has seen value in his company’s own stock; Switzerland breaks with traditional neutrality over Ukraine; military-equipment stocks are surging; and Ottawa may let the Rogers-Shaw telecom merger follow a discouraging U.S. path.
Investors in Russia face mark-to-no-market problem 28 Feb 2022 The rouble tanked and Moscow’s bourse froze after the West intensified sanctions against President Vladimir Putin. Money managers and foreign companies face the prospect of writing off Russian assets. Uncertainty about who bears those costs will ricochet around global markets.
Germany is turning fiscal exceptions into the rule 28 Feb 2022 Chancellor Olaf Scholz will hike defence spending to 2% of GDP and invest 100 bln euros in the military. A historic foreign-policy shift is just the latest instance of Berlin finding ways around its budget rules. Scrapping them would be simpler given a looming energy transition.
BP’s bruising Russian exit almost worth the pain 28 Feb 2022 The UK oil giant is getting out of its 20% stake in $39 bln Rosneft. Russia’s pariah status maximises the hit to its income statement. But the crisis has forced BP to take a step that could eventually allow investors to take a more generous view of its green transition.
Sanctions shock-and-awe reverberates beyond Russia 27 Feb 2022 Western allies will limit Moscow’s ability to use its currency reserves and kick some of the country’s banks out of the SWIFT payment system. While details are vague for now, it looks like a targeted attempt to undermine Russia’s financial system. Other countries, notably China, will take notice.
Russia is dry run for bigger China sanctions test 25 Feb 2022 The threat of penalties didn’t stop Vladimir Putin from invading Ukraine. Sanctions would have even less chance of preventing China from taking control of Taiwan. The deeper the trade ties, the greater the chance of self-harm. And China has a head start in creating workarounds.
Biden’s fossil-fuel enmity backs him into a corner 25 Feb 2022 The U.S. president’s climate stance has made him few friends in the oil patch. But U.S. drillers can fill gaps caused by Russia’s invasion of Ukraine. Expediting applications and rolling back regulations is a climbdown, but it would curb two foes: rising prices and low popularity.
Western banks face Russian triple whammy 25 Feb 2022 EU and U.S. bank stocks tumbled after Vladimir Putin invaded Ukraine. The conflict may blunt the benefits of higher interest rates and inflict losses on cross-border loans. In a worst-case scenario, Raiffeisen, UniCredit and SocGen could have to write off their Russian units.
Russia’s wheat clout can hit world where it hurts 25 Feb 2022 The grain’s price hit a record high after the invasion of Ukraine, source of 8% of world exports. A long conflict in a country called the “breadbasket of Europe” would mean global shortfalls. President Vladimir Putin would cause even more disruptions if he curbed Russian exports.
China’s yuan plausibly mimics a safe-haven asset 25 Feb 2022 The currency, once subject to speculative swings, has stayed stable as Russia attacks Ukraine. It’s buttressed by a big trade surplus and central bank conservatism, both of which might change, but it has clearly gained traction with serious investors.