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Japan has ruled out the major risks of private credit to domestic consumers for now
Satsuki Katayama, Japanese Finance Minister, said that private credit is not a major problem in Japan at the moment. However, he noted that risks related to this $2 trillion industry may be discussed next week at the G7 finance summit. "Japan’s exposure to private credit is not very large." "It's not like there are no investments, but at this stage we don't view this as an important issue in Japan," she said at a press conference. Her comments coincide with the 'Financial Services Agency of Japan' checking private credit exposure in major financial institutions amid growing concerns about emerging strains within the $2 trillion private?credit market. Katayama stated that she keeps herself updated with the latest developments by receiving briefings from financial watchdogs. She added that the Group of Seven finance ministers meeting in Washington next week could raise questions regarding the risks and whether they are being monitored adequately. She added, "I do not think that the current situation has developed to the same extent as past crises." Retail investors in the United States are fleeing the private credit funds due to concerns about transparency, valuations, and disruptions related to artificial intelligence. In recent years, Japanese banks have increased their financing of global private credit funds to increase returns. (Reporting and editing by Christian Schmollinger; Makiko Yamazaki)
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Stocks are shaky after Israeli attacks on Lebanon test ceasefire with Iran
Asian stocks rose early on Friday, but gains were limited as traders questioned whether the U.S. and Iran?ceasefire this week would last. They also remained cautious about fragile hopes for peace talks between Israel and Lebanon. Investors became nervous when Iran cited the ongoing attacks by Israel on Lebanon as one of its main sticking points in its agreement with America. MSCI's broadest Asia-Pacific share index outside Japan rose 0.5%. The South Korean Kospi led the way with a 1.9% increase. Japan's Nikkei added 1.5% while S&P500 e-minis futures traded flat after reversing earlier losses. The U.S.-Iran truce led to a sharp rise in Asian markets, but yesterday the risk-on attitude was tested," said Rupal garwal Asia quant strategist for Bernstein in Singapore. She said: "We think this could be the start of the end, and it's an opportunity for investors who want to focus on fundamentals and trends from before the war." "We recommend adding some beaten-down stocks back." The S&P 500 gained 0.6% on Thursday. MSCI's global equity benchmark also made modest gains. This was after Israeli Prime Minister Benjamin Netanyahu reportedly said that he wanted direct talks with Beirut a day after the most devastating bombardment in the war, which killed over 300 people in Lebanon, and put the U.S. Iran ceasefire 'in danger. Brent crude jumped 1% to $96.63 a barrel after trading resumed in Asia. Hezbollah fired a missile towards Israel, which triggered air?raid? sirens across the country, including in Tel Aviv. The Strait of Hormuz is largely closed for shipping. Marine traffic was well below 10% of its normal volume on Thursday, as Tehran asserted control of this strategic waterway which typically transports one-fifth of all global oil and gas shipments. Oil prices soared and energy supply was tightened as a result of the closure of the Strait during the six week Iran War. Donald Trump, the U.S. president, issued a stern warning. In a Truth Social post, he stated that Iran is doing a "very bad job" in allowing oil through the Strait. "That's not the agreement that we have!" He wrote to emphasize Washington's frustration at the intensifying market turmoil. The U.S. Dollar Index, which measures greenback strength against a basket of six currencies, rose 0.1% to 98.92 after data released on Thursday showed that weekly jobless claims increased 16,000?to 219,000, and continuing claims?fell 38,000?to 1.794?million, the lowest since May 2024. The Core PCE Price Index also increased 0.4% for the second consecutive month, reflecting an increase year-on-year of 3.0%. The yield on the 10-year Treasury Bond in the United States was up by 0.6 basis points at 4.285%. Fed funds futures indicate traders are bringing forward expectations of the Federal Reserve cutting rates by 25 basis points to April 2027. According to the CME Group's FedWatch, the implied probability that the U.S. Central Bank will remain on hold during its April 2027 meeting has dropped to 49.6% from 64% last Thursday. Investors have requested to withdraw more than 15 percent of their assets from Carlyle’s flagship private-credit interval fund. The group announced this in a letter to shareholders on Thursday. Bitcoin fell 0.7% to $71,903.27 while Ether was 1.0% down at $2,191.81. (Reporting and editing by Gregor Stuart Hunter)
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Russian diplomat: Moscow won't abandon Cuba; help with energy
After talks in Havana, the Russian deputy minister of foreign affairs was quoted saying that Russia would never abandon or betray Cuba. The Russian government also plans to assist Cuba with energy issues related to an embargo by the United States. Sergei Ryabkov was quoted by Russian news agencies as saying that Moscow would not abandon its interests in Western Hemisphere, no matter what the United States said. Ryabkov stated that Moscow's support for Cuba will go beyond the shipload of oil the country sent to the island last week. Ryabkov said, "I'm certain that recent events in our relations will lead us to move forward and find solutions to some of the most difficult problems that have arisen from the illegal and absolutely unacceptable U.S. blockade on the island." "We can't betray Cuba. This is not possible. "We cannot let it go on its own." Ryabkov stated that Cuba's energy requirements were a priority. It is too early to predict what will happen next. Ryabkov stated that we would not limit our supplies to just the cargo on the tanker Anatoly Kolodkin. The agencies quoted him as saying: "Russia has no intention of leaving the Western Hemisphere, regardless of what Washington may say." "They're obsessed with pushing Russia out of the area." He said that the U.S., Israel and other countries' attacks on Iran have "made it clear that using force and sanctions to impose political diktats does not work". The Russian-flagged Anatoly Koodkin arrived in Cuba last week with 700,000 barrels - the largest delivery of Russian crude oil since Washington cut off the island fuel supply. The United States claimed that it allowed the tanker to transport fuel because of humanitarian reasons. The Russian government has been trying to rekindle its close relationship with Cuba during the Soviet period and has urged the United States to not blockade Cuba. In February, Cuban Foreign Ministry Bruno Rodriguez met with President Vladimir Putin and Sergei Lavrov his Russian counterpart during a trip to Moscow. (Reporting and Editing by Stephen Coates).
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Fortescue, Australia's Fortescue, will accelerate diesel elimination plans in Pilbara
Fortescue, an Australian mining company, announced on Friday that it was accelerating the rollout of its 'off-grid green energy system' to 'eliminate fossil fuels from Pilbara mines, especially diesel. The world's largest mining companies rely on diesel as their primary energy source, but it is expensive, volatile and carbon-intensive. Therefore, they are increasingly looking to replace this with renewable power. By the end of 2028 it is expected that the world's fourth largest iron ore mining company will have completed its Pilbara Green Grid, including a 1.2 gigawatt solar power, more than 600 megawatts of wind energy and 4-5 GW hours of battery storage. Fortescue expects to have 290MW installed of renewable energy capacity by the beginning of next year to meet its fixed ore processing facility?energy needs, enabling 'green processing" throughout its Pilbara operations. The company plans to use the'system' for all its operations without fossil fuels, 24 hours a day, later next year. This is well ahead of its plans for decarbonisation. This initiative is part of Fortescue's efforts to decarbonise and achieve "Real Zero" by 2030. The company wants to establish itself as a green energy leader in the world. (Reporting and editing by Shreya Biwas in Bengaluru)
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USA Rare Earth is considering building a French magnet plant
USA 'Rare Earth' is looking at building a magnet plant? in France, said its CEO?on Thursday? after agreeing to pay a 40 million euro ($47 million) stake in French rare-earth processing firm Carester. The United States, Europe, and other countries are working to secure domestic supplies of rare Earths. These are essential for green energy, electronics, and defence sectors, as well as reducing their dependency on China, the world's largest producer. USA Rare Earth, in its quest to create an integrated rare-earths operation that includes mining, processing and magnet manufacturing, will purchase a 12.5% stake from Carester. Carester is currently building a processing facility in southern France. InfraVia is a fund for critical minerals seeded by France. It will also purchase a 12.5% share in Carester USA Rare Earth?added. Barbara Humpton, CEO of the company, told investors in a conference call that "They" (the French government), are interested in supporting a possible USA Rare Earth Magnet-making Facility in southern France. France, which is aiming to be a European hub in the rare earths industry, also has a Solvay-owned rare earths plant. Carester was founded in 2019 by former Solvay employees. Robert Steele, CFO of USA Rare Earth, declined to provide a timeline for the project or any other details. USA Rare Earth has a magnet production plant in Stillwater (Oklahoma) that is scheduled to open later this year. The company agreed in January to a debt-and equity funding package of $1.6 billion with the U.S. Government. Humpton said in an interview that the Carester investment is partly to gain access to French expertise on rare earths processing. Humpton, a former Siemens employee who was appointed CEO in October, said that the best thing to do when there is limited knowledge and expertise, is to build an ecosystem and share it. Analysts say that Carester's French facility will produce heavy rare earths which are needed for magnets. However, they may be hard to obtain due to expected shortages. USA Rare Earth receives a 15-year supply agreement and an offtake agreement. This will allow it to sell processed heavy rare oxides and send material for processing from its Round Top Mine in Texas. Less Common Metals of USA Rare Earth, a British company that produces rare metals and alloys, signed a deal in May 2013 with Carester to build a factory in France. Carester received?216 millions euros from Japanese sources as well as the French government for its Caremag unit. This unit is expected to produce 1,400 tons of rare earth oxides per year using recycled magnets and mining concentrats.
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Descalzi confirms that Italy has replaced Cingolani at Leonardo with Mariani
The Italian Treasury confirmed an earlier report that Lorenzo Mariani would be the new Chief Executive Officer of Leonardo Defence Group, replacing Roberto Cingolani. Rome, as expected, also proposed the reappointment of Claudio Descalzi at Eni's helm and Flavio Cataneo, Enel's, to their respective energy groups. Cingolani did not win a second term, despite a rise in sales and orders at the state-controlled group since he became its leader in 2023. He also secured a number partnerships with European competitors. Leonardo's shares, which had more than quadrupled in value under Cingolani, dropped this week amid reports of his possible removal, amid rumours he was no longer popular with Prime Minister Giorgia Melons. Meloni did not respond to opposition calls for an explanation of media reports that suggested she was about to remove Cingolani. Leonardo's management changed as it competed for business with the defence and aerospace sectors, where governments around the world are increasing their military spending due to the conflict in Ukraine and the Middle East. Mariani is currently the managing director of MBDA for Italy, which Airbus, BAE Systems, and Leonardo jointly own. In 2023, he was widely considered as a potential leader of Leonardo but lost to Cingolani. HORSE TRADE Often, the process of naming new employees at state-controlled firms involves lengthy and sometimes fraught discussions among political leaders. Rival factions jockey for influence while names are often changed last minute. Descalzi will be able to continue his long-standing leadership role at Eni with the new three-year contract that begins in May of this year. Analysts said that the challenge for the Energy Group and its top management over the next three years will be to support the growth of its new units, and to ensure that the returns promised to investors are delivered. Eni also faces criticism from environmentalist groups for its involvement with fossil fuels, and their contribution to global warming. Treasury announced that Giuseppina di Foggia will become the new chairman of energy major. She is currently the chief executive officer of power grid operator Terna. Igor De Blasio will lead Enav air traffic controller, replacing Paqualino Monti. Two sources have said that Monti would be appointed to the top of Terna at the end of this month. Treasury announced that Paolo Scaroni - a former CEO at both Enel & Eni - has been reappointed as chairman of Enel. (Reporting and editing by Gavin Jones, Elvira Fonte and Angelo Amante)
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Venezuelan legislature approves mining laws to open up sector to foreign investors
The National Assembly of Venezuela, controlled by the governing party, approved a law on mining that is expected to?open the sector to private and foreign investment. This follows the easing of restrictions in the U.S. economy to encourage foreign investment. Since the January raid in which President Nicolas Maduro was captured, the administration of U.S. president Donald Trump has supported the efforts of acting President Delcy Rodriguez. Trump has repeatedly praised Rodriguez's?cooperation with the U.S. The law allows domestic, foreign, state owned and private companies to exploit "strategic mineral" and gold. The concessions are for 30 years maximum, but they can be extended up to two 10-year periods. According to the law mineral?deposits are the property of state, and disputes can be settled through arbitration. The law also imposes a tax on companies that carry out primary mining up to 6% and a tax up to 13%. The law that says the central banks will be in charge of gold sales was passed unanimously. The Trump administration is a big fan of the bill, and U.S. Interior Secretary Doug Burgum said during a visit to the United States in March that it would create opportunities for businesses and that Rodriguez had promised to ensure the security of mining companies. Rodriguez has repeatedly stressed the same message. She said last month that 120 energy investors, mostly from 'the United States', had visited 'Venezuela after she assumed her post. Investors will be given legal and security assurances. (Reporting from Vivian Sequera in Caracas and DeisyBuitrago in Houston; additional reporting by MariannaParraga in Houston; writing by Julia Symmes Cobb).
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State news agency reports that attacks have reduced Saudi oil production and East-West pipeline flows.
Saudi state-run news agency SPA reported on Thursday that attacks on Saudi energy plants 'have reduced the kingdom's capacity to produce oil by 600,000 barrels per day, and its East-West pipeline throughput by 700,000 barrels per days, according to an official source at the energy ministry. SPA reported that the attacks, as well as previous strikes against some facilities, disrupted key operations in Riyadh and Yanbu Industrial City. SPA reported that seven Saudi employees, including one Saudi national who was part of the industrial security staff at the Saudi energy company, were injured in the attack. Sources in the ministry did not say who fired the missiles. Saudi Arabia has been 'under attack by hundreds of Iranian missiles, drones, and drones, since the beginning of the U.S. Israel war with Iran. Most of these were intercepted. Tehran has launched attacks on Israel and Gulf Arab countries that host U.S. Military installations. The source from the ministry said that one of the 'pumping stations' on the East-West pipeline in the Kingdom was damaged, which reduced throughput by 700,000 bpd. The source said that the pipeline is currently the main route to supply global markets. Source: The Manifa oilfield, which was also attacked, saw its production capacity reduced by about 300,000 barrels per day. A previous attack at the Khurais facility had already cut production capacity in Saudi Arabia by another 300,000 barrels per day. This brings the total Saudi production reduction to around 600,000 barrels per day, the source said. SPA reported that the attacks affected major refineries, such as SATORP in Jubail, Ras Tanura, SAMREF in Yanbu, and Riyadh, which directly affected exports of refined goods to global markets. Fires also affected processing facilities in Ju'aymah, which impacted exports of natural gas liquids and liquefied petrol gas. As conflict spreads throughout the region, the?strikes against key oilfields and pipeline infrastructure as well as refining hubs highlight the risks to the global energy supply. Saudi Arabia, the top oil exporter in the world, is a major player on global crude markets. A disruption of its production, refinery system, or export routes for a long time could cause a shortage and increase price volatility. According to the ministry source, continued attacks will reduce supply and slow recovery. This would affect energy security in consuming countries. It would also increase volatility on oil markets. SPA reported that the disruption has already depleted a large portion of emergency and operational inventories, limiting their ability to compensate for supply shortages. (Reporting and editing by Enas Alashray and Yomna ehab)
Oil prices increase after attacks on Saudi oil installations
The oil prices climbed in the early hours of Friday's trading, following the attacks on the?Saudi energy industry, and the markets assessing the risk premium from the ongoing closure of Strait of Hormuz. This was despite the fragile truce that the U.S. has reached with?Iran. Brent crude futures rose 83 cents or 0.87% to $96.75 per barrel at 0100 GMT. West Texas Intermediate futures rose $1.04 or 1.06% to $98.91 per barrel.
In a recent note, IG analyst Tony Sycamore stated that the initial relief after President Trump's announcement of a two-week ceasefire has given way to underlying concerns.
Iran and the U.S. announced a ceasefire on Tuesday, but the fighting continued after the announcement.
Sycamore stated that "all eyes are firmly focused on tanker tracker flow through the Strait of Hormuz to look for signs of increased activity before Friday's scheduled peace talks in Pakistan." Analysts believe Pakistan will push for a durable peace agreement in the talks, but it may not have the leverage to force the reopening of?Strait of Hormuz. A Tehran official said on April 7 that Iran would like to charge fees for ships crossing the strait as part of a peace agreement. Western leaders, as well as the U.N. shipping agency, have rejected the idea.
The conflict that began February 28 with the U.S. and Israel's air attacks on Iran has effectively closed down the crucial artery of oil and gas flow. John?Paisie of energy consultants Stratas Advisors said that Brent prices could reach as high as $190 a barrel if the Strait of Hormuz continues to flow at its current rate.
If Iran permits increasing flows, the price of oil will be more moderate but still far above pre-war levels. Saudi Press Agency reported that attacks on Saudi Arabian oil production have reduced the kingdom's production by 600,000 barrels per day and the throughput of its East-West Pipeline has been reduced by 700,000 barrels per day. JPMorgan analysts said in a recent research note that the announcement "changes the narrative from an episodic disruption to one of a measurable shock." JPMorgan says that drone and missile attacks have damaged 50 infrastructure assets in the Gulf over the past six weeks. Around 2.4 million barrels per day of oil refining have also been shut down.
(source: Reuters)