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Source: India releases water from its dams and warns Pakistan about cross-border flooding
An Indian government source reported that India opened Wednesday all gates on major dams in its part Kashmir region after heavy rains and warned Pakistan about the possibility of downstream floods. Pakistan has confirmed that Islamabad was notified of the flood warning and issued an alert to three rivers flowing into Pakistan from India. In recent weeks, India and Pakistan's arch-rivals have been devastated by monsoon rainfall and flooding. According to Pakistani officials, the Punjab province in Pakistan's heartland faces an "exceptionally" high risk of flooding because of a combination heavy rains as well as the excess water India releases from its dams. The excess water then flows across Pakistan's border. Pakistan's Punjab is the breadbasket of Pakistan and home to more than half its 240,000,000 people. A source in India said that 200,000 cubic seconds of water could be released. One cusec is equal to 28 cubic litres per second or one cubic foot. The release of Indian water was not clear whether it would be an event that would happen once or in phases. On Tuesday, a Pakistani official in disaster management warned that India will release controlled amounts of water over the next few days. Pakistan claims that New Delhi has ignored two flood warnings issued by Pakistan since Sunday. Since a brief conflict that took place in May, the nuclear-armed nations are in a standoff. It is their most intense fighting in decades. Any flooding in Pakistan, which India blames on India, could further exacerbate relations. India releases excess water from its dams if they are too full. The excess flows into Pakistan as both nations share rivers. On Wednesday, Pakistani authorities called on army troops to assist in rescue and relief efforts in areas of Punjab Province that were already inundated. Pakistan started forced evacuations because of floods on Saturday. Flooding in Pakistani Punjab has displaced more than 167,000 people, including almost 40,000 who have left on their own accord following flood warnings issued since August 14. Since the beginning of the monsoon in late June, the death toll in Pakistan from flooding has reached 802, with half of those deaths occurring in just this month. Punjab was divided into two provinces when the two countries gained their independence in 1947. Asif Shahzad reported from Islamabad, and Krishna N Das edited the story in New Delhi.
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Instant View- Trump's tariffs against India are now in effect
The U.S. President Donald Trump doubled tariffs on Indian goods to up to 50% as planned on Wednesday. This escalated tensions between the two world's largest democracies. COMMENTARY: MADHAVI ARORA CHIEF ECONOMIST, EMKAY GLOBAL "While tariffs may add a downside tail risk to forecasts, it's too early to think about actual forecast changes." The impending global trade reset will not be easy, even though we are closely watching the results of the ongoing China-U.S. negotiations. The RBI and other EM central bankers may follow the U.S. Fed in the future, but will also have to deal with risk-aversion noise through financial market channels. UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK: The onset of tariffs of 50% along with exemptions suggest an effective tariff of around 31%. We would see major disruptions in labour-intensive sectors such as gems, jewellery, textiles, etc. if these rates continued to rise throughout the year without any agreement. The high share of exports from micro, small and mid-sized enterprises is likely to further cloud the outlook for consumption and demand. Tariff increases could have a $25-50 billion impact on annualised GDP depending on their scale. We see a 20-30 bp risk of a downward revision to our current GDP estimation of 6.2%. TERESA JOHAN, LEAD ECONOMIST NIRMAL BANK INSITUTIONAL EQUITIES We estimate that the impact on GDP will be about 36 billion dollars or 0.9% annually. We believe that India is under increasing pressure to reach a deal as soon as possible, because the impact of a delay on the economy and the growth of labour-intensive sectors such as textiles, gems and jewelry is significant. Already there are reports of plant closures and dumping on the domestic market. "India may be willing to buy more U.S. weapons and oil, and reduce tariffs on some imports. However, agricultural products such as soybeans and dairy are still sensitive." RADHIKA RAO SENIOR ECONOMIST DBS BANK The impact of the second 25% duty, which will take effect on Wednesday, is asymmetrical. The central bank will be on alert for signs of growth risks, as well as possible relief in credit and liquidity. "Meanwhile other counterefforts will be crucial, such as seeking alternative markets and strengthening trade and investments ties via multilateral trade agreements as well as bilateral ones. The door to negotiations could reopen in the second half of the year, depending on other geopolitical events. RAJESWARI SENGUPTA ASSOCIATE Professor, INDIRA GANDHI INSTITUTE FOR DEVELOPMENT RESEARCH "The government needs to adopt a less protectionist, more trade-oriented strategy in order to increase the demand which is currently slack. To encourage trade and foreign direct investment, it could be beneficial to sign free trade agreements or regional agreements with several countries. Tariffs and other non-trade barriers can also be reduced. AASTHA GUDWANI IS THE INDIA CHIEF ECONOMIST AT BARCLAYS "We estimate that 70% ($55 billion), of India's imports from the United States, are under threat. This increases downside risks for growth. It has come a very long way from being a "good friend" to a "bad trading partner". SUJAN HAJRA, CHIEF ECONOMIST AND EXECUTIVE DIRECTOR OF THE ANAND RATHI GROUP "Washington’s 50% tariff is an annoyance, but not a major blow." India's trade surplus could increase by 0.5%, the growth rate could drop by half a point, and the rupee might weaken. Up to 2 million jobs could be at risk in near future. The bigger picture, however, is not as gloomy. India's export base, corporate earnings, and inflation outlook are all intact. And domestic demand is strong enough to cushion any blow. AAKANKSHA SHRAWAN ASSISTANTPROFESSOR, NATIONAL INSITUTE OF PUBLIC FINANCE and POLICY "The government must broaden its horizons, and take the right steps to position itself so that it can capitalize on India's most neglected component: services. "There is an urgent need for a re-examination of the government initiatives that are aimed at promoting India's service imports (Service Export from India Scheme; Software Technology Park Scheme; Digital India Internship Scheme); and governing bodies, such as Service Export Promotion Council (MEITY) and Service Export Promotion Council (SEPC)." Reporting by Tanvi, Kashish, and Nikunj Ahri. Editing by Muralikumar Anantharaman. Clarence Fernandez, and Lincoln Feast.
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Gold falls as the dollar strengthens, but Fed turmoil limits losses
Gold prices fell on Wednesday due to an increase in the dollar. However, renewed concerns about the independence of the U.S. Central Bank after President Donald Trump threatened to fire Federal Reserve governor Lisa Cook, lent support to gold. As of 0508 GMT spot gold was down by 0.5% to $3,375.06 an ounce after reaching its highest level since Tuesday, August 11. U.S. Gold Futures for December Delivery eased by 0.2% to $3425.30. Gold is less appealing to other currency holders because the dollar index has risen by about 0.3%. "Short-term investors are making a little profit now." Gold is still supported, especially now that we are starting to see the Federal Reserve adopt a more dovish position," said Kelvin Wong, senior market analyst at OANDA. We could still see in the near future that there is potential upward pressure for the level to reach $3,400. Above it will be $3,435." Trump announced that he would remove Cook due to alleged irregularities in the mortgage loan process, a move which could test the limits of the presidential authority over the U.S. Fed. Cook responded that Trump does not have the authority to dismiss her from central bank and she won't resign. Trump has repeatedly criticized Fed Chair Jerome Powell's slowness in acting and urged the U.S. Central Bank to reduce rates. The focus now shifts to Personal Consumption Expenditures Prices Index, the Fed’s preferred inflation measure, which is due on Friday, for more clues on the interest rate path following dovish comments from Powell at the Jackson Hole Symposium last week. According to CME FedWatch Tool, the markets are pricing in a 87% chance that the Fed will cut rates by a quarter point at its September 17 meeting. Gold that does not yield is usually a good investment in an environment with low interest rates. Other than that, silver spot fell 0.4%, to $38.42 an ounce. Platinum was unchanged at $1,348.20, and palladium rose 0.5%, to $1,098.96.
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Wall Street Journal, August 27,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. A senior Exxon Mobil executive talked with Rosneft in Russia this year about returning the Sakhalin Project if the U.S. gave the greenlight as part of the Ukraine peace process. Elon Musk’s SpaceX has launched its giant Starship for a 10th test flight, aiming to overcome setbacks in development and achieve long-awaited technical milestones that are key to the Mars Rocket's reusable construction. Cracker Barrel has announced that it will keep its old logo and scrap plans to create a new one after social media backlash including criticism from U.S. president Donald Trump. Stephen Miran, an economic advisor, and David Malpass, former World Bank Group president, are two potential candidates. - Trump Media & Technology Group, Crypto.com and a blank check acquisition company have agreed on a deal to launch a venture which will follow a treasury style strategy to acquire the native token of the cryptocurrency platform CRO. (Compiled by Bengaluru Newsroom)
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EU auto groups call for changes to CO2 emissions targets that are 'no more feasible'
The European Union's targets for reducing CO2 emissions are no longer achievable, according to the leaders of European automotive manufacturers and suppliers associations. The European Commission's President Ursula von der Leyen will host executives from the automotive industry on September 12, to discuss the future for the sector. This sector is under threat by both Chinese competition with electric vehicles, and U.S. Tariffs. In a letter sent to von der Leyen by Ola Kaellenius, the CEO of Mercedes-Benz, and Matthias Zink CEO at Schaeffler AG for powertrain and chassis, they said that they were committed in achieving EU's goal of net zero by 2050. They said that EU manufacturers are now dependent on Asia for their batteries. This is due to the uneven charging infrastructure and higher manufacturing costs, as well U.S. Tariffs. They argued that the bloc should go beyond targets for new vehicles, like 55% reductions in CO2 emissions from 2021 for cars, 50% for vans, by 2030, and 100% for both by 2020. Vans have a 9% market share in the new EU car market. Electric cars are around 15%. In today's world it is simply not possible to meet the rigid CO2 targets set for cars and vans in 2030 and 2035. They wrote that penalties and legal mandates would not be the driving force behind the transition. The letter stated that "EVs are the frontrunners but must be accompanied by (plug-in hybrid) vehicles, range-extenders, highly efficient internal combustion engine vehicles, and hydrogen and decarbonised fossil fuels." The two chiefs of associations said that CO2 regulations for heavy-duty trucks, buses and other vehicles must be reevaluated. The Commission decided in March to grant automakers an extra year to reach the CO2 reduction targets originally set for 2025. The centre-right group of von der Leyen has also called on the EU to lift its ban on combustion engine by 2035. Reporting by Philip Blenkinsop, Brussels Editor: Matthew Lewis
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India's heavy rainfall causes floods and 30 people are killed in a landslide along a pilgrimage route
The ANI news agency reported on Wednesday that heavy rains triggered a landslide along a famous Hindu pilgrimage path in India's north-eastern region of Jammu. At least 30 people were killed, and floods prompted an official warning for people to remain indoors during the night. The weather officials predict more rain, thunderstorms and gusty winds in the mountainous region Ladakh. Meanwhile, heavy rain is expected to fall on the federal territory Jammu and Kashmir. Omar Abdullah said that the authorities were fighting to restore the telecom services, as the communication was "almost inexistent". ANI, which has a small stake in the company, reported that at least 30 people were killed by a landslide on Tuesday near the shrine Vaishno Devi. Last week, 60 people were killed and 200 others missing in Kishtwar, Indian Kashmir. The authorities also ordered the closing of educational institutions in Jammu. According to weather officials, 368 mm (14.5 inch) of rain fell on Tuesday. Rakesh Kumar, Jammu District official, told reporters that the rivers Tawi Chenab and Basantar had overflowed their alert levels causing flooding in low-lying area. Television images showed cars falling into a large hole after a collapsed bridge on the Tawi River. Some highways connecting Jammu with the rest of India also suffered damage. In recent weeks, monsoons have also ravaged Pakistan, India's arch-foe and neighbour. Pakistan warned on Tuesday that the eastern province of Punjab was in "very high or exceptionally high" risk of flooding due to a combination heavy rains, and India's decision of releasing water from two dams. Officials said that the number of people displaced in the province has now exceeded 150,000. Nearly 35,000 left on their own accord after heavy rains since August 14 triggered flood warnings. (Reporting and editing by Clarence Fernandez; Tanvi Mehta)
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The French crisis is back, and so is the MORNING BID Europe
Ankur Banerjee gives us a look at what the future holds for European and global markets The markets have chosen to temporarily ignore the Trump v Fed drama, and instead focus on the political crisis in France. This has led to a steep selloff of stocks and bonds for the second largest economy in the eurozone. The gamble taken by Francois Bayrou, French Prime Minister Francois Bayrou to gain support for his unpopular plan of debt reduction has backfired Tuesday, causing the country's political and financial instability to worsen. FRENCH WORRIES Investors are keeping an eye on France’s blue-chip CAC40, which has dropped more than 3% in the past week. They will also be watching the banking stocks as they have taken the biggest hit. The bond market's reaction is also crucial, after the gap between French 10-year yields and German 10-year rates, which measures the premium that investors need to pay to own French debt, increased on Tuesday to 79 basis points, its highest level since April. We've been in this situation before. In 2024, France's last Prime Minister, Michel Barnier was ousted by a vote of no confidence over the budget after only three months, following a second snap election held in July. The stock futures market and currencies were relatively calm during Asian hours, but the light economic calendar may cause political and fiscal concerns to take center stage. The bond market is rumbling again, with the U.S. Treasuries Curve steepening. This comes after Donald Trump ordered the firing of Federal Reserve governor Lisa Cook on Monday. It was an unprecedented decision that could result in a legal battle. Cook plans to sue to stop her dismissal. The markets are nervous, but they have largely shrugged off any attack on the Fed’s independence. In fact, the yield of the 30-year Treasury Note has not threatened to break 5%. This is what would be expected. Investors may be complacent, or they might be waiting for institutional money to move away from U.S. assets. History tells us that everything is fine until it isn't. Look at Turkey. NVIDIA The earnings report of Nvidia on Wednesday will no doubt be the main event. It will determine the risk appetite for the near term and whether AI darlings' sky-high valuation is justified. The fate of Nvidia China's business depends on the outcome of the ongoing trade war between Washington and Beijing. Investors will pay attention to this. LSEG data revealed that the $4.4 trillion AI chips maker is expected to report a rise of 53% in its second-quarter revenue, to $46 billion. However, this may not satisfy investors, as the jump is still a long way from the triple-digit increases it has seen for many quarters. This is the problem for a stock which has increased 35% in the past year and moves the market with every move. Options traders have priced in an increase of $260 billion to the market capitalisation of the company after the results. The following are key developments that may influence the markets on Wednesday. * Germany GfK consumer sentiment for September
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Instant View- Trump's tariffs against India are now in effect
The U.S. President Donald Trump doubled tariffs on Indian goods to up to 50% as planned on Wednesday. This escalating tension between the two world's largest democracies, and strategic partners. COMMENTARY: RADHIKA RAO SENIOR ECONOMIST DBS BANK The impact of the second 25% duty on Wednesday, despite India's modest exports to the U.S. being only 2.3% of its GDP, will be asymmetric. The central bank will be on alert for signs of growth risks, as well as possible relief in credit and liquidity. Other counter-efforts, such as seeking alternative markets and strengthening trade & investments ties via multilateral and bilateral trade agreements, will also be important. The door to negotiations could reopen in late year, depending on other geopolitical events. RAJESWARI SENGUPTA is an Associate Professor at the INDIRA GANDHI INSTITUTE FOR DEVELOPMENT RESEARCH. "The government needs to adopt a less protectionist, more trade-oriented strategy in order to increase the demand that is already low. "Another way to encourage FDI and support trade is by signing free trade agreements and regional agreements with several countries. Lowering tariffs and non-trade obstacles, as well as lowering tariffs, could also be a good idea." AASTHA GUDWANI IS THE INDIA CHIEF ECONOMIST AT BARCLAYS "We estimate that 70% ($55 billion), of India's imports into the U.S., are under threat. This is a serious concern for growth. It has changed a lot from a "good trading partner" to "a bad friend." Reporting by Tanvi, Kashish Tandon, and Nikunj Ahri. Editing by Muralikumar Aantharaman
Sources say that the US EPA may cancel 7 billion dollars in solar energy grants.
Two sources informed on the subject said that the Trump administration is weighing whether or not to end a $7 billion grant designed to power low- and moderate-income homes with solar energy.
Sources claim that the Environmental Protection Agency may terminate grants to 60 tribes, nonprofit groups and states in this week. The grants were given out during the administration of Joe Biden. The sources claimed that they had been briefed on the situation by a representative of the EPA. They spoke under condition of anonymity.
New York Times was the first to report on EPA's decisions.
EPA stated that it has not reached a decision about the program.
An EPA spokesperson stated that "with the passage of One Big Beautiful Bill, EPA works to ensure that Congressional intent is fully realized in accordance with law."
The Inflation Reduction Act, Biden's climate change law for 2022, funded the EPA's Solar for All program. The majority of grantees is state energy agencies who are developing programs for rooftop and community solar arrays.
The Trump administration is trying to reduce federal funding for solar and wind power, calling it expensive and unreliable.
Three Solar for All grantees contacted said that they have not heard from EPA regarding the status of their grants.
Hilary Shohoney is the chief of staff for the Bonneville Environmental Foundation. The non-profit received Solar for All grants totaling $130 million for solar projects located in Montana, Idaho, and Wyoming. Solar for All is also in line with President Obama's pledge to "unleash American Energy" by increasing local generation, strengthening the nation's energy independence and creating jobs for rural families. Reporting by Nichola Jaiswal and Rishabh Groom, Bengaluru and Los Angeles respectively. Editing by Franklin Paul & Timothy Gardner
(source: Reuters)