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Official from the OECD says that inflation is the biggest threat to debt markets, which are facing a 'big test'.
A senior OECD official said that inflation is the biggest?risk to global bond markets. This comes as energy prices have risen following?the U.S. and Israeli air war against Iran. Carmine Di Noia, OECD director of financial affairs and enterprise affairs, said in an interview before the release of Wednesday's annual debt reports by the Paris-based organization that "Now we 'are having another huge stress test." Investors are worried about inflation and higher energy costs, as oil prices have increased by 16% in the last week. Di Noia said that if this happens, the higher bond yields will "put even more pressure" on the debt markets, given financing needs remain high and borrowing costs are still high. SHORTER MATURITIES RAISES RISK OF REFINANCING The OECD anticipates that governments and businesses will borrow $29 trillion in this year. This is up from $25 trillion last year. Di Noia stated that they have reduced the maturity of the new debts they sell, and higher yields may reinforce this dynamic. He noted that the conflict had stoked unrest at a moment when investors on bond markets were changing. The OECD has warned that price-sensitive investors, such as hedge funds, are taking a 'larger role' in the markets. According to the OECD, the share of corporate bonds maturing within 10 years or less has reached its lowest level since 2009 and is expected to be the lowest ever in 2025. This increases the risk of refinancing. At a record $13.5 billion, it reached 80% for OECD nations in 2025. As more debt is due earlier and yields rise, debt costs will increase faster. The emerging markets are especially vulnerable, as over a third (35%) of their debt is due to mature in the next 3 years. The rate increases to combat inflation after the pandemic pushed up government interest rates and raised yields on bonds. The OECD stated that by 2024, these had already surpassed defence spending. AI DEBT COULD transform the corporate bond market The OECD stated that the soaring borrowing by AI firms as they race to expand their data centres and processor requirements may make corporate bonds more "equity like". The report stated that nine major hyperscalers will need to finance $4.1 trillion in capital expenditures until 2030. If the nine companies were to fund half of this on the bond market, they would be responsible for 15 percent of global corporate issuance. Amazon, Alphabet, Google, Meta, and Microsoft are among them. Di Noia stated that the convergence of the two markets could make it more difficult for investors to hedge their risk and diversify their investments, as the nine make up 12%?of the global stock market capitalisation. AI infrastructure could also require an additional investment of $5 trillion by 2030. This is likely to increase borrowing in sectors such as real estate, energy, and IT hardware. The OECD has warned that this raises questions about the market's ability to absorb a new supply in the same magnitude. This is especially true given the fact that sovereign borrowing continues to grow and the changing nature of investors. (Reporting and editing by Dhara Raasinghe, Emelia Sithole Matarise and Yoruk Bahceli)
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MORNING BID AMERICAS-Seoul-sapping selloff
By Mike Dolan March 4th - Mike Dolan, Editor at Large, Finance and Markets, explains what matters today in U.S. markets. The Middle East crisis has shocked Asia's stock market on Wednesday. South Korea's Kospi plunged 12%, its worst ever day. Japan's Nikkei index and Taiwan's benchmark both lost about 4%. The Korean won has hit its weakest level in 17 years. Seoul and other Asian centres were forced to suspend their trading due to the scale of the selling. Below, I'll go into more detail. Check out my column about why gold has lost some of its "safe-haven" shine this week. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. SEOUL-SAPPING SELLOFF The conflict has caused a rise in prices and uncertainty about the supply of energy products to Asia's major manufacturing economies. There were some signs that the markets are easing up as investors wait for further developments. The U.S. Brent crude oil price and the global Brent crude were both up another 3%, but remained below Tuesday's highs of 8 months and 19 months. Europe's stock prices popped up 0.5%, in what appeared to be a pause following two days of heavy trading. U.S. futures for stocks were also marginally higher. The dollar's increase has largely flattened, despite the fact that government bond yields continue to rise. The dollar's rise was mostly flattened out, even though government bond yields continued to climb. The President announced plans to provide insurance for shipping and possibly naval support to help energy supply companies exit an effectively shut Gulf. These moves may have a marginal impact, but it could take time. The world markets are now thinking in terms of weeks, not days, when they ask about the end of this energy blockade. Conflict in Iran and the surrounding region cannot be predicted. After the death of Ayatollah Khamenei, many are now focused on who will be the next Supreme Leader. A New York Times article that claimed Tehran officials made a secret approach to Washington on the weekend to find a solution to the conflict gave some investors hope. Investors who believe that the Gulf tensions will ease soon are wrong. There is plenty to worry about. One of the biggest concerns is about private credit funds like Blackstone and BlackRock. The ADP private sector jobs survey and ISM service sector survey are both scheduled to be released today. It is possible to 'pay more attention' to the former, given that Friday will bring out a?big U.S. Payrolls Report. Chart of the Day The European gas price has risen this week due to the disruption of energy supplies in the Middle East, and Qatar specifically. It is now at its highest level in three years - nearly 20% more than it was this time last. Gas storage levels in Europe are well below the five-year average as the Iran conflict unfolds. The EU told its member states on Wednesday that it did not expect any immediate impact to the supply of natural gas. Watch today's events * U.S., February ADP employment figures (8.15 AM EST), S&P Global/ISM Services?PMIs (9.45-10.30 AM EST). * U.S. Federal Reserve issues latest Beige Book * U.S.? corporate earnings: Broadcom Want to receive Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed here are the author's. These opinions do not represent the views of News. News is committed to the Trust Principles and to integrity, independence, freedom from bias, and impartiality.
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South African financiers create $122 million Water Conservation Bond
South African financiers have prepared a bond of 2 billion rands ($122 million) to fund water conservation initiatives dedicated to the restoration of?strategic catchments. The five-year bond, backed by Rand Merchant Bank and Development Bank of Southern Africa (DBSA), aims to finance eco restoration. This includes removing invasive plants from catchment areas and rehabilitating them to improve water security. The outcome-based facility will link returns with measurable environmental improvements. "The facility...will support the conservation?of?water catchments to ensure that these areas are healthy," Mookho Mathaba said, climate finance specialist with DBSA. This initiative is a reflection of the growing involvement of the private sector as South Africa struggles with its constrained finances and water challenges. According to a DBSA report, investments in the 'water sector' will need to total 256 billion rand per year through 2050. This leaves a funding gap of 91 billion rand every year. This?deal focuses on nature-based solutions, while traditional bonds focus on infrastructure such as dams and pipes. RMB confirmed that it was involved, but said details were confidential. If the bond is successful, it will be in line with wider?efforts?to tap debt markets?for sustainable infrastructure financing,?helping?to address South Africa's increasing water shortages. $1 = 16.3292 Rand (Reporting and editing by Sfundo parakozov and Alexander Winning).
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Wood Group fined $17 Million by Britain for incorrect results
The Financial Conduct Authority of Britain fined Wood Group nearly 17?million pounds ($17.39 million) on Wednesday for publishing incorrect information in its financial reports for 2022 and 2023, as well as the first half 2024. Financial watchdog stated that following the poor performance?of certain projects, the company’s accounting judgements were inappropriately affected by a desire to maintain previous financial results. Wood Group's issues became apparent in November 2024. By April 2025, the share price plummeted by 85%. The following month, shares were suspended. Later in the year, Wood Group agreed to be taken over by Dubai-based Sidara for $292 million. Sidara, after a regulatory investigation in August 2025 had lowered its bid for Wood Group and made the 'completion of the deal conditional on the British company publishing their delayed 2024 results. Wood 'Group has met all the regulatory requirements for the transaction earlier this week and expects the transaction to be closed on March 10.
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TSX futures are rising as Middle East crises boost oil and gold prices
Futures tracking Canada’s main stock index rose Wednesday as rising tensions in the Middle East drove up oil prices for a fourth consecutive day while demand for safe-haven gold boosted the price of the futures. As of 5:20 a.m., March futures for the?S&P/TSX 'composite index? were up 0.36%. ET. As the conflict enters its fifth day, it has shocked investors around the world. Goldman Sachs CEO David Solomon stated that it would take two weeks for the markets to digest the effects of the war in Iran. Oil prices rose?but a little slower than previous sessions, as traders considered the possibility of a Middle East supply disruption. On Tuesday, President Donald Trump stated that the U.S. Navy would be able to begin escorting oil tankers through Strait of Hormuz. Mark Carney, the Canadian Prime Minister, said on Wednesday that the current conflict is a "failure of the international system" and that the U.S. did not consult its allies prior to striking Iran. Brent crude futures rose 3%, while U.S. West Texas intermediate crude crude gained 2.8%. Investors rushed to buy the safe-haven gold, which gained over 2%. Silver prices rose by 5.4%, and copper prices also firmed. Toronto's benchmark stock index fell 2.2% on February 2, logging its biggest drop in three weeks. Fears of inflation due to the prolonged Middle East crisis led to a "broad-based" decline, with miners leading the way. On Tuesday, a Brazilian court halted a transfer of mineral rights for a gold asset?sale?from Equinox Gold?to Chinese metal -miner CMOC. CLICK CODES TO GET CANADIAN MARKETS NEWS TSX Market Report Canadian Dollar and Bond Report Global Stocks Poll for Canada Canadian Markets Directory (Reporting and Editing by Shreya Biwas; Utkarsh T. Hathi)
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Copper and other base metals are lifted by China factory data
On Wednesday, copper prices recovered from two sessions of losses due to better than expected private factory data from China, the top metals consumer. The aluminium price rose to its highest level in more than a month, on the back of supply concerns resulting from the escalating conflict in the Middle East. This region is a major producer of this metal. The benchmark three-month copper price on the London Metal Exchange rose 1.5%, to $13,150 per metric ton at 1030 GMT. LME copper has fallen 3% in the last two sessions due to fears that the Mideast conflict will hinder economic growth and metals demands. China's factory data is mixed. The official "purchasing managers' index" tracking large state owned manufacturers came in slightly lower. The metals market was focused on the?second survey? of smaller private producers, which exceeded analysts' expectations, with new orders volumes increasing for the ninth consecutive month. The PMIs were positive, and we are moving in the right direction with good orders, and positive growth. Robert Montefusco, broker at Sucden Financial, said that people are once again buying copper. We've had some big swings in this week. LME aluminium rose 1.7% to $3.305 per ton. It had reached $3.318 at its highest since January 29. Norsk Hydro, a Norwegian company, announced on Tuesday that it would be shutting down its joint venture for aluminium in Qatar. LME aluminum has risen 5% this week, after Israel and the U.S. launched an attack against Iran at the weekend. Around 8% of the global aluminium production is produced in this region. Ewa Manthey is a commodities strategist at ING. She said that the disruption has "hit a market which was already tight". LME inventories are falling, premiums have risen and the spread between LME cash and benchmark three-month contracts has tightened. She added that the shortages began even before the war. ($1 = 6.9161 Chinese yuan renminbi) (Reporting by Eric Onstad, additional reporting by Lewis Jackson and Dylan Duan in China; Editing by Shailesh Kuber) ($1 = 6.9161 Chinese Yuan Renminbi)
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Italy is ready to reactivate its coal-fired plants in the event that the Gulf Crisis worsens
Italy's Energy Minister?said Wednesday that the country could reactivate some coal-fired?power stations if conflict in?the Middle East leads to an energy shortage. Gilberto Pichetto Fratin, Minister of Energy and Environment in Italy, said that "there are coal-powered stations in Italy that I would not like to reactivate. But they're there in reserve for our country." Israeli and U.S. Forces?struck Iranian targets on Tuesday. This prompted Iranian strikes against energy infrastructure in other Gulf States considered U.S. Allies in a area that accounts for just under a third global oil production. Iran also targeted tankers in the Strait of Hormuz. Through this strait, about a fifth of all oil and gas liquefied flows. The Strait of Hormuz was effectively closed to traffic for a 4th day following the attack by Iran on five ships. Italy's gas supply is diverse, including Norway, Algeria, and Azerbaijan, among others. The country also has a relatively large amount of gas stored. Pichetto?Fratin stated that "on the (energy security) front, our nation is... quite safe in terms of quantitative safety." He added, "We do not have an extreme?severe situation in terms of?the quantity of resources. I'm referring primarily to gas."
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Spain is hit by US Trade Worries, Europe's STOXX600 ticks up
Spanish stocks slid Wednesday following fresh threats of a trade embargo from the White House. Other regional benchmarks also climbed after a brutal global sell-off that dragged stock prices to more than one-month lows amid fears about the Middle East conflict. The pan-European STOXX 600 index was up 0.6% to 607.92 by 0939 GMT. This follows two sessions in which the index lost more than 4% since Friday's record high. The benchmark index rose the most in the Technology and Healthcare sectors. The STOXX Volatility Index, Europe's fear gauge after four sessions of gains, has slipped 2.3 points. Spain also slipped. Regional bourses tried to?recover from multi-week lows. The IBEX 30 dropped as much as 1% following a threat by U.S. president Donald Trump to impose a trade ban on Spain after Madrid refused to allow the U.S. to use its bases in missions related to strikes against Iran. The broad banking index continued to decline for a third session in a row. Chris Beauchamp is chief market analyst for IG Group. He said: "It's rare that there's an obvious catalyst, but you can't argue with the fact that Trump made a peeved remark about Spain yesterday night. Vistry's shares fell 17.8% when the UK-based homebuilder announced that its CEO and Chairman, Greg Fitzgerald, intended to step down. The roles will be divided after his retirement. OIL CLIMBS HIGHER, JITTERS? PERSIST Israeli and U.S. troops continued to pound targets in Iran, starting on Saturday. This prompted retaliatory attacks from Tehran against U.S. allies across the Gulf region. These strikes have targeted establishments such as oil refineries and U.S. Embassies. The price of oil has risen by more than 13% in the last week. Europe is reliant on energy and goods shipped through the Strait of Hormuz, which means that the route is choked. Alternative routes could mean longer journeys, higher costs and a rapid impact on everything from transportation to consumer prices. The oil sector is down 0.6% for a second session in a row. The markets are also dealing with a mixed picture of the economy. The PMI showed that euro zone services expanded slightly faster in February. Germany's economic growth reached a four-month high. France was still in contraction and Italy's growth cooled. Adidas, among other stocks fell 7.4% after its earnings results. ASM International rose 5.1% after it said that its first-quarter revenue in 2026 is expected to reach 830 million euros. (Reporting and editing by Rashmi Aich, Krishna Chandra Eluri, and Avinash P. in Bengaluru)
Indian shares fall as Mideast conflict drives up oil prices and fuels inflation fears
The rupee fell to a new low, and bonds also dropped as oil prices rose due to the Middle East conflict, causing inflation worries and shaking financial markets worldwide.
The Nifty 50 fell by 1.55%, to a six-month-low closing price of 24,480.50. And the BSE Sensex dropped 1.4%, to an 11 month-low of 79116.19. The benchmarks each lost around 4% in three sessions.
Other Asian markets fell 4.1% with a market crash of record in South Korea. This was due to fears that a larger Middle East conflict could cause an energy shock, which would increase inflation and delay rate cuts.
Brent crude futures were up 3.1% at $83.95 per barrel by 10:00 GMT. In four sessions, they have gained 18.7%.
India imports 80% its crude oil needs, so a sustained increase in crude oil price could hurt the growth of India.
Macquarie analysts led by Suresh Ganapathy said that any spike in oil prices for India would have implications on current account deficits, fiscal deficits and inflation. It also put downward pressure on the Indian rupee.
15 of the 16 major sectors posted losses on Wednesday. The small and mid-caps lost 2.1% and 2.2% respectively.
The Nifty India volatility index has jumped up to 21,14. This is its highest level since the 9th of May 2025. This indicates a surge in investor anxiety.
Arun Kejriwal is the founder of Kejriwal Research and Investment Services. He said, "The Middle East conflict dominates sentiment at this time and markets take the easy route out when they are in doubt."
Kejriwal stated that fresh investments will not be made in the near future as investors will be cautious and prune their portfolios. He added that while India may find relief from crude prices through Russian imports, and domestic inflows could offer some support, stocks whose earnings have been?hit by recent disruptions, will suffer.
According to Interfax, Russian Deputy Premier Alexander Novak stated?on? Wednesday that Moscow is?ready? to increase oil supply to China and India.
Larsen and Toubro fell 4.5%, after falling 5% the previous day.
The Nifty heavyweights - HDFC Bank, ICICI Bank, and Reliance Industries all fell 1%.
Oil marketing companies such as Bharat Petroleum Corporation (BP), Hindustan Petroleum Corporation (HPC) and Indian Oil Corporation (IOC) lost between 4.8% and 5.5%.
Tire makers like MRF, JK Tyre, and Ceat have lost between 2.7% and 8%.
Interglobe Aviation, the airline operator, fell 2.8% from 6.4% the previous session. The conflict forced carriers to cancel flights in Europe and the Middle East.
(source: Reuters)