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VTB Russia expects the rouble to fall to 90 per dollar by 2025
A top VTB executive said that the Russian rouble would weaken to 90 cents against the U.S. Dollar by 2025, due to a fall in the central bank's forex sales. This will follow a rally that has been successful in fighting inflation. According to LSEG, based upon over-the counter quotes, the Russian currency had gained more than 40% against the U.S. Dollar in 2018. It was trading 0.5% higher at 78.70 per U.S. Dollar by 1230 GMT Friday. The central bank was able to reduce its interest rate to the lowest level in 20 years in part due to the lower inflation in June. This month, more cuts are expected. Dmitry Pyanov is the first deputy CEO at VTB. He claims that Russia's central banks has been supporting the rouble by selling foreign currencies. Pyanov is also VTB’s CFO and the first senior executive who has suggested that the rouble’s rally was deliberate policy to combat inflation. He said that the rouble would gradually weaken due to the expected decline in central bank forex sales this year, as a strong currency hurts exporters and will put pressure on regulators. Pyanov said in an interview that he believes the rouble is at its current peak and won't grow any further. Many Russian economists, government officials, and business executives believe that the rouble has become overvalued. The central bank has said that it does not target exchange rates, allowing the rouble's value to fluctuate freely. It attributes the recent rouble appreciation to geopolitical issues and the weak demand for imported goods, with firms and consumers refusing to take out loans to purchase these items. The central bank is increasing its net forex sales in July by 31%, to 9.76 billion rubles ($124 million). This will help maintain the rouble's current value despite calls for it to weaken. Pyanov criticized this policy. He said that the floating exchange rate system of the central bank only worked in one direction. It prevented the rouble's excessive weakness, but not its strengthening. As the exchange rate starts to fall, the central banks begins selling foreign currency. He said that's why he calls it "a floating rouble but only in one way". Markets should also take into consideration this policy. (Writing and editing by Andrew Osborn, Rachna uppal, Gleb Bryanski)
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Japan will begin testing mining rare-earth clay from the seabed by early 2026
The head of the government-backed Minamitori Island project announced on Friday that Japan will begin testing mining for rare-earth rich mud off Minamitori Island in January of next year. Minamitori Island is located 1,900 km (1,180 mi) southeast of Tokyo. Tokyo wants to ensure a stable supply of minerals despite China's tightening of export controls. China's decision on rare-earths magnets, alloys and mixtures to restrict exports is causing concern among global manufacturers. In an interview, Shoichi Ishii told us that the goal was to ensure a domestic supply in order to improve national security rather than allow private companies to make money from rare earths. He added that this would be the first time in the history of mankind to try and extract mud from deep seabeds for separation and refinement of rare earth elements. As part of its efforts to improve maritime and economic security, the Japanese government has launched a project to increase domestic production of rare earths. Ishii stated that surveys have confirmed the existence of rare-earth rich mud at a depth of between 5,000 and 6,000 meters in Japan's exclusive economy zone (EEZ), near Minamitori Island. Ishii stated that the mud may contain neodymium and dysprosium, both of which are used as motor magnets for electric vehicles, as well gadolinium or terbium used in high-tech products. The mud will be extracted using pipes from a deep-sea research vessel operated by Japan Agency for Marine-Earth Science and Technology. The project, if successful, will launch a trial operation of a system that can recover 350 metric tonnes of mud each day by January 2027. The project has been funded by the government, but no details have been released on the size of investment and estimated reserves.
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As the deadline for a trade agreement nears, stocks and the dollar drop as Trump's budget bill passes.
Stocks fell on Friday, as U.S. president Donald Trump passed his tax-cut bill and focused attention on his July 9 deadline to countries to sign trade agreements with the world's largest economy. Dollar also fell against major currency, with U.S. market already closed for holiday-shortened week. Traders considered the impact on Trump's spending bill that is expected to increase the national debt by an estimated $3.4 trillion. The pan-European STOXX 600 Index fell by 0.8%. This was mainly due to losses in spirits producers such as Pernod Ricard, Remy Cointreau and others after China announced it would begin imposing duties up to 34.9% for brandy imported from the European Union on July 5. U.S. S&P futures dipped 0.6% after a 0.8% overnight gain for the cash index, which reached a new all-time high closing. Wall Street will be closed for Independence Day on Friday. Trump announced that Washington will begin sending letters on Friday to countries specifying the tariff rates they will be facing on exports into the United States. This is a significant shift from his earlier promises to reach scores of individual agreements before a deadline on July 9, when tariffs may rise dramatically. Tony Sycamore is an analyst with IG. He said that investors are "now waiting for July 9", and the lack of optimism in the market for trade agreements has contributed to some of the weakness of equity markets, especially those export-dependent Asia, such as Japan and South Korea. Investors cheered Thursday's surprisingly robust employment report, sending all three major U.S. equity indices higher in a short session. Sycamore stated that "the U.S. Economy is Holding Together Better Than Most People Expected, Which Suggestions to Me That Markets Can Easily Continue to Do Better (From Here)". After the closing, the House narrowly passed Trump's signature 869-page Bill, which avoids the prospect of an immediate U.S. Government default, but adds trillions in debt to fund border security and military spending. TRADE IS THE KEY OBJECTIVE IN ASIA Trump announced that he expects "a couple" of more trade deals after signing a deal on Wednesday with Vietnam to add to the framework agreements with China, and Britain which are so far his only achievements. Scott Bessent, the U.S. Treasury secretary, said this week that an agreement with India was close. The White House had once said that agreements with Japan and South Korea would be announced as soon as possible. However, it appears that progress has stalled. The U.S. Dollar Index had its worst half-year since 1973, as Trump's chaotic implementation of sweeping tariffs raised concerns about the U.S. Economy and the safety Treasuries. However, the index rallied by 0.4% on Wednesday before retracing a portion of these gains on Friday. As of 1100 GMT, it was down by 0.1% to 96.96. The euro rose 0.2% to $1.1773, and the sterling remained at $1.3662. The U.S. Treasury Bond market is closed for the holiday on Friday, but the 10-year yield rose 4.7 basis point (bps) at 4.34%. Meanwhile, the 2-year yield increased 9.3 bps at 3.882%. The price of gold rose 0.4%, to $3,336 an ounce. This is on track to be a weekly increase as investors once again sought safe-haven assets because they were worried about the fiscal situation and tariffs in the United States. Brent crude futures dropped 64 cents a barrel to $68.17, while U.S. West Texas Intermediate oil also fell 64 cents a barrel to $66.35, after Iran reiterated its commitment to non-proliferation. (Reporting from Lawrence White in London, and Kevin Buckland, in Tokyo. Editing by Stephen Coates and Alexandra Hudson, Joe Bavier and Kim Coghill)
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Sources say that OPEC+ is set to increase oil production again on Saturday.
Sources from the producer group said that eight OPEC+ nations are likely to increase their oil production for August during a Saturday meeting, in an effort to regain market shares. According to anonymous sources, the group that includes Saudi Arabia and Russia is expected to agree on an increase of 411,000 barrels a day in August. OPEC+, if they had agreed, would have increased their supply targets by 1.78 million bpd or 1.5% of the global oil consumption. The actual increases have been lower, as some members have delivered cuts to compensate past overproduction. Sources said that the group had decided on Friday to move the date of the meeting forward by one-day. One of the sources said that it wasn't clear yet if 411,000 barrels per day would be the final deal. OPEC+ changed its policy dramatically this year after years of production cuts totaling more than 5,000,000 bpd. The eight members began to reverse their most recent cut of 2.2m bpd in April, and then accelerated their increases in May, July and June, despite crude prices being impacted by the additional supply. The acceleration was a result of some members, like Kazakhstan, producing way more than their target, which angered other members who were sticking to the agreed-upon cuts. Kazakh production returned to growth and reached a new high last month, a source with knowledge of the data said this week. The field, led by Chevron, was ramping up. OPEC+, a grouping of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia is seeking to increase its market share in the face of increasing supplies from other producers, such as the United States. About half of all oil produced in the world is produced by this group. In their July decision, the OPEC+8 have increased production by 1.37 million bpd. It is 62% of their production cut of 2,2 million bpd. Reporting by Ahmad Ghaddar, Olesya Astakhova. (Editing by David Goodman Alex Lawler Mark Potter and Mark Potter.
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Health Rounds: Plastic waste can be used to make a widely used pain medication
Researchers have found that common bacteria can convert plastic waste into acetaminophen (an over-the-counter painkiller), which researchers discovered. Acetaminophen is made from fossil fuels, and it's the main ingredient of Tylenol, also known as Paracetamol in certain countries. AstraZeneca helped develop the new method that transforms a polyethylene terephthalate molecule into Tylenol’s active ingredient. The process produces virtually no carbon dioxide emissions. Researchers said that the plastic can be converted into the drug in less than 24 hrs at room temperature, by using a similar fermentation process to beer brewing. PET, a lightweight, strong plastic that is used in water bottles and food packaging accounts for over 350 million tons annually. This work shows that PET plastics are not just waste materials or materials destined to be made into more plastic. Microorganisms can transform it into new products that are valuable, such as those with the potential to treat disease. Researchers said that more work needs to be done before PET can produce acetaminophen commercially. MICROPLASTICS FOUND WITHIN HUMAN REPRODUCTIVE FLUIDS According to the results of a study presented at the European Society of Human Reproduction and Embryology conference in Paris, the majority of women and men have microplastics present in their reproductive fluids. Researchers said that the presence of microplastics raises questions about their potential risk to fertility and reproductive healthcare. Plastic particles smaller than 5 millimeters were found in the fluid surrounding developing eggs within the ovaries of 20 women or 69%. In 12 out of 22 men (or 55%), microplastics were detected in the seminal fluid. Researchers said that both types of fluids play a critical role in conception, whether natural or assisted. In both groups, the microplastic polymers included polytetrafluoroethylene (Teflon), polystyrene, polyethylene terephthalate, polyamide, polypropylene and polyurethane. Emilio Gomez-Sanchez, the study leader at Next Fertility Murcia, Spain, said that microplastics in animals can cause inflammation, DNA damage, hormonal disruptions and tissue damage. In a separate talk at the meeting Manel Boussabeh, of Fattouma Bourguiba Hospital, Monastir (Tunisia), and his colleagues reported that microplastics found in test tubes impaired sperm motility and damaged DNA. Researchers have found microplastics in both the testicles and the urine of humans and dogs. The data from canines suggests that the particles could contribute to reduced fertility. Restoring a protein can turn off chronic inflammation A report published in Nature suggests that researchers can stop chronic inflammation, while preserving the cells' ability to respond to injuries and short-term illnesses. This is done by targeting a newly discovered protein. Chronic inflammation is caused by an immune system that has gone into overdrive. This can be seen in persistent conditions like arthritis, inflammatory colitis or obesity. Acute inflammation, such as pain, fever and swelling, resolves fairly quickly. Researchers have found that during chronic inflammation, a protein which controls inflammatory genes is degraded. In test tube studies, restoring a protein called WSTF prevented chronic inflammation of human cells, without interfering acute inflammation. This allowed appropriate immune responses for short-term threats. Researchers then developed a medicine to protect WSTF and suppress chronic inflammation. This is done by blocking WSTF's interaction with another cell nucleus protein. Researchers have tested the drug successfully to treat mice with fatty-liver disease or arthritis, and to reduce inflammation of chronically inflamed cells in knees obtained from patients undergoing surgery for joint replacement. Researchers found that WSTF was lost in patients with fatty hepatitis but not in healthy people's livers. Zhixun Dou, the study leader at Massachusetts General Hospital, said that chronic inflammation is a major cause of death and suffering. However we have a lot to learn about how to effectively treat this condition. Our findings allow us to distinguish between chronic and acute inflammation and identify a new way of stopping chronic inflammation caused by aging and diseases.
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Copper prices fall as attention shifts towards the U.S. tariff deadline of July 9.
Copper prices fell on Friday, as attention shifted to President Donald Trump’s July 9 deadline for imposing tariffs on countries who have not yet signed trade agreements. The benchmark copper price on the London Metal Exchange was $9,875 per metric ton as of 1017 GMT. It had earlier reached a three-month peak at $10,020.5 per ton. Traders said volumes are low and will likely remain that way due to the Independence Day holiday on July 4 in the United States. Trump announced that his administration would begin sending letters to 10-12 countries later on Friday informing them about the tariff rates their products will be subject to in the United States. The traders reported that the caution due to the fact that several major trading partners including the European Union (EU), Japan, and India are still trying to negotiate an agreement with the U.S. has triggered the profit-taking of long positions or bets for higher prices. The 21-day moving median of around $9,760 is the first technical support for copper. There are also concerns about the availability of aluminium on the LME due to large holdings in warrants (#LMEWHL) and contracts near by (#LMEFBR), as well as a slowdown in outflows. Deliveries to approved warehouses of the London Exchange. Since June 25, the LME's aluminum stocks have increased by more than 20,000 tonnes to 356,975 tonnes. Metal earmarked at 2% or cancelled warrants indicate that only a small amount is due to be delivered. A weaker dollar provided some support to industrial metals Friday. Traders said that the Federal Reserve's prospects of holding rates steady following Thursday's strong employment report could increase the U.S. dollar and impact metals demand. Aluminum Lead fell 0.2% to 2,059 a tonne, while tin dropped 0.4% to 33,710 a metric ton. Nickel also declined 0.5%, to $15,370.
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Moscow bourse stops trading in Uzhuralzoloto after state demands ownership stake
The central bank of Russia has ordered that the Moscow Exchange suspend trading in shares owned by gold producer Uzhuralzoloto. A Russian court announced on Thursday that the Prosecutor-General had filed a suit to transfer ownership of shares held by Konstantin Strukov, an investor in Uzhuralzoloto, to the government. This is part of a escalation this year of the seizures of assets domestically through Russian courts. In a Friday statement, UGC stated that it was in constant contact with the Central Bank and that its "priority is to protect our minority shareholders." Strukov is the owner of 67.85% of UGC, Russia’s fourth largest gold producer. He told the TASS agency on Friday that he "works quietly" in Chelyabinsk where he is the deputy speaker of regional parliament. He declined to comment about the decision to seize his stock. News agencies reported that Russian investigators searched the UGC offices in connection with criminal charges relating to violations of environmental laws and industrial safety laws. According to the agencies, who cited a source from law enforcement, on Thursday, prosecutors wanted to convert Strukov’s entire stake in UGC into state property. Strukov's fortune, estimated by Forbes to be $1.9 billion, has been placed under sanctions by several Western countries. Britain was one of them, as it said that his role as director of a Russian company involved in the extractives sector supported Russia's government. (Reporting Anastasia Lyrchikova; Writing by Lucy Papachristou, Editing by Mark Trevelyan).
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Sources say that the sale of Panin Bank's stake in Indonesia is stalled due to pricing mismatch.
Three sources familiar with the matter claim that the sale of a majority stake in Bank Pan Indonesia, or Panin Bank, listed on Jakarta's stock exchange by ANZ Australia and Indonesia’s Gunawan Family has been stalled because of a mismatch of pricing. The combined stake is equivalent to approximately 86% of Panin Bank. This bank was valued at $1.45 billion on Friday, based on the 1,140 rupiah share price on the Jakarta Stock Exchange. According to LSEG, the Gunawan family holds 46.5% of the shares. It is willing to reduce its holdings. ANZ, an Australian bank, owns around 39.2%. CIMB Group, DBS Group, and other regional lenders showed interest in the sale earlier this year. Both banks, however, did not make binding bids because they could not meet the sellers' expectations. One source said that the sellers wanted a price tag more than double the current Panin Bank price-to book ratio. LSEG data shows that Panin Bank's shares were traded at 0.75 book value in the first quarter ending March 2025. Sources who declined to give their names as it was a private matter said that the sale process could resume once the price gap is reduced. One source added that CIMB remains interested in and open to discussions. ANZ Citi DBS declined comment. Panin Bank Director Herwidayatmo stated that the management of the bank is not involved in this process. She referred the question to the controlling shareholders. Gunawan Family could not be contacted for comment. CIMB has not responded to a request for comment sent via email. ANZ, together with the Gunawan Family, began a joint sale last year. They put the combined controlling share on the market. The sale is part of ANZ’s strategy to reduce low-returning business lines, and to reduce exposure to retail banking and wealth management in Asia in order to boost return on Equity. Panin Bank, founded in 1971 by Mu'min Ali Gunawan, was listed at the Jakarta Stock Exchange in 1982. According to its website, the bank's business ranges from consumer finance to private wealth. ($1 = 4.2240 ringgit) ($1 = 16,190.0000 rupiah)
Worldwide stocks plunge, bond prices rally as US information spooks
Surprisingly weak U.S. work data on Friday stired fears of an economic downturn ahead, prompting financiers to dump stocks and turn to safehaven bonds.
Treasury rates surged, sending yields to multi-month lows.
Oil price benchmarks fell by more than $3 per barrel at their session lows. The U.S. dollar index dropped over 1%. to its weakest since March.
Richly valued technology firms bore much of the pain, and an. index of European bank stocks headed for its biggest weekly. decline in 17 months on soft profits.
The VIX stock exchange volatility procedure, dubbed Wall. Street's fear gauge, rose over 40%.
Friday's U.S. jobs report revealed job growth slowed more than. expected in July and unemployment increased to 4.3%, pointing to. possible weakness in the labor market and greater vulnerability. to economic crisis.
Markets were currently rattled by downbeat earnings updates. from Amazon and Intel and Thursday's softer-than-expected U.S. U.S. factory activity survey in addition to the regular monthly U.S. non-farm payrolls report, which showed task growth dropped to. 114,000 brand-new hires in July from 179,000 in June.
The information raised expectations of numerous rate cuts by the. Federal Reserve this year, which simply today decided to keep. rates unchanged.
The tasks information are signifying considerable further progress. that the Federal Reserve made a policy error by not decreasing the. fed funds rate this week, said Jamie Cox, handling partner for. Harris Financial Group in Richmond, Virginia.
It's very possible the Fed changes its inter-meeting. communications on the balance of dangers to get rid of all doubt about. a September rate cut.
With thin summertime trading most likely exaggerating relocations, a depression. that began in Asia with a 5.8% drop for Japan's Nikkei,. its biggest everyday fall since March 2020 during the COVID-19. crisis, rippled through Europe and headed for Wall Street.
MSCI's gauge of stocks around the world. fell 16.09 points, or 2.00%, to 787.31.
The Nasdaq Composite lost 417.98 points, or 2.43%,. to 16,776.16. The index has actually fallen more than 10% from its July. closing high, confirming it remains in a correction after concerns. grew about costly appraisals in a weakening economy.
The Dow Jones Industrial Average fell 610.71. points, or 1.51%, to 39,737.26, the S&P 500 lost 100.12. points.
Europe's STOXX 600 fell near to 3%, with. financials and technology the worst hit.
Emerging market stocks fell 24.30 points, or. 2.23%, to 1,063.50.
MSCI's broadest index of Asia-Pacific shares outside Japan. closed 2.48% lower 2.48%, at 553.72, while. Japan's Nikkei fell 2,216.63 points, or 5.81%, to. 35,909.70.
The Fed has actually kept benchmark loaning costs at a 23-year high. of 5.25% -5.50% for a year, and some experts think the world's. most prominent central bank may have kept financial policy. tight for too long, running the risk of an economic downturn.
Cash markets on Friday hurried to price a 70% chance of the. Fed, which was already widely expected to cut rates from. September, carrying out a jumbo 50 basis points cut next month. to guarantee versus a downturn.
The employment report flashes a warning signal that this. economy does have the ability to turn rather quickly, stated. Charlie Ripley, Senior Financial Investment Strategist for Allianz. Financial Investment Management in Minneapolis.
Ultimately, today's employment data ought to embolden the. committee to cut policy by more than 25 basis points at the next. conference.
RUSH AWAY FROM TECH, TO SAFE HOUSES
Shares in U.S. chipmaker Intel toppled to a more. than 11-year low and ended up down over 26%, after suspending. its dividend and revealing substantial job cuts along with. underwhelming revenues forecasts.
Expert system chipmaker Nvidia, among. the greatest factors to the tech rally, dropped 1.8%
Up more than 700% because January 2023, Nvidia has left many. possession managers with an outsized direct exposure to the fortunes of this. single stock.
Safe-haven purchasing went complete throttle, with government debt,. gold and currencies traditionally all rallying. They are possessions. viewed as most likely to hold worth during market mayhem.
The yield on benchmark U.S. 10-year notes. fell 18 basis points to 3.798%.
The 2-year note yield, which typically moves. in step with interest rate expectations, fell 28.5 basis points. to 3.8798%.
In foreign exchange markets, the yen included nearly 2%,. extending a fast bounceback after the Bank of Japan. raised rate of interest to levels hidden in 15 years.
In products, spot gold lost 0.37% to $2,436.31. an ounce and U.S. gold futures settled 0.4% lower to. $ 2,4769.8.
Oil rates took a struck on the development concerns, with global. benchmark Brent futures settled down $2.71, or 3.41%, to. $ 76.81 a barrel. U.S. West Texas Intermediate unrefined futures. ended up down $2.79, or 3.66%, at $73.52.
(source: Reuters)