Latest News
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Nxtra, owned by Bharti Airtel in India, raises $1 billion during data center boom
In a deal valued at $3.1 billion, India's Bharti Airtel owned Nxtra Data will raise $1 billion from Alpha Wave Global and Carlyle Global. Anchorage Capital is also a part of the deal. The deal is the latest of a series of investments made by Indian?conglomerates Reliance & Adani in recent months in data infrastructure to position India as an emerging hub for AI. India's role in the global AI boom is limited because of its lack of large-scale chip production. Data centers are therefore India's best entry point to this fast-growing market. Alpha Wave, a private equity firm, will lead the fundraise by investing $435 million. Bharti Airtel is expected to invest $290 million. Carlyle Global will pump in $240m, and Anchorage Capital $35m. Bharti Airtel, India's largest mobile carrier by users, has announced that it will keep its controlling interest in Nxtra. Nxtra plans to use the funds to expand its services and scale up its infrastructure. (Reporting by Nandan Mandayam in Bengaluru; Editing by Tasim Zahid)
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G7 ready to take all necessary measures to stabilize the energy market
They said that finance leaders of the Group 'of Seven' economic powers are ready to take 'all necessary measures'?to protect energy market stability, and to limit wider economic spillovers due recent volatility. The G7 central bankers, finance and energy ministers, and the United States, Canada and Japan along with Britain, France, Germany, Italy and France held a teleconference on Monday to coordinate their actions as the war in Iran disrupts the global energy market. Prices for OIl? rose to a new record high on Monday. The G7 stated in a press release after the meeting, organized by France, the group's president this year, that they were "ready to take all necessary steps in close coordination with partners, to maintain the stability and security of the energy market". The 32 members of the International Energy Agency agreed to release 400 million barrels from their strategic oil stockpiles earlier this month in order to combat an increase in global crude prices. The G7 stated that it supports efforts to 'keep energy flowing' and noted IEA options for managing demand depending on the national circumstances. The G7 also urged countries to "refrain from imposing unjustified restrictions" on exports of oil, gas and related products. Satsuki Katayama, Japanese Finance Minister, said that the likelihood of oil prices rising and supply concerns impacting markets and economic growth had increased. She said, "As a result, we all agreed that this situation cannot continue." The?statement stated that the G7 central banks were committed to maintaining monetary policy based on data. This is because economists believe that higher energy prices are likely to drive inflation. Charlotte Van Campenhout and Leigh Thomas contributed to the report, with additional reporting from Leika Kihara, in Tokyo. Editing was done by Benoit Van overstraeten, Barbara Lewis, and Barbara Lewis.
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Powell: Fed will 'wait and watch' to see how war effects economy
Federal Reserve Chair?Jerome Powell said on Monday that the U.S. Central Bank can wait to see the impact of the Iran War on the economy and inflation. He noted that policymakers usually look past shocks like those caused by higher oil prices. Powell told a Harvard University macroeconomics class that he felt his policy was in a "good?place" to watch how the war with Iran will affect the economy and inflation. The Iran war is now in its fifth week, and the U.S. As gasoline prices increase to an average of around $4 per gallon, the Fed is faced with a dilemma between its two mandates: full employment and price stabilization. Powell stated that "inflation expectations appear to be well-anchored beyond the short term." Powell said, "We're not facing the decision yet, because we do not know the economic impact, but we will certainly consider that larger context when making that decision." After a two-day meeting on policy, the Fed held its overnight interest rate constant in the range of 3.5%-3.75% earlier this month. Powell, in a press conference following the meeting, said that he wanted to see the 'tariff-driven inflation of goods prices subside, before deciding whether to ignore the 'inflation rise caused by the Iran War, or to respond with tighter monetary policies to prevent inflation from accelerating. Since then, investors' concerns about inflation have contributed to an increase in Treasury yields. A University of Michigan survey also showed that household expectations for prices in the next year had risen. Other measures have been more optimistic, such as a widely-watched market-based indicator.
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Brent reaches record monthly increase as Houthi attack escalates Gulf conflict
The oil prices continued to rise on Monday. Brent is on track for a monthly record after the Yemeni Houthis launched their first attack on Israel, escalating the Iran War. Brent futures were up 66?cents (0.6%), or $113.23 per barrel, at 1031 ET (1431 GMT), after closing 4.2% higher Friday. U.S. West Texas Intermediate?futures rose $2.2 or 2.2% to $101.83 following a 5.5% gain in the previous session. Brent's price has risen by 58% in the last month. This is the highest monthly increase since 1988. Brent also outperformed gains during the Gulf War of 1990. U.S. Crude, on the other hand, has increased by 51%, its largest monthly gain since May 2019. The gains were largely due to Iran's closure of the Strait of Hormuz. This chokepoint is responsible for about one-fifth of all global oil and natural gas supplies. The conflict began February 28 when U.S. and Israeli airstrikes on Iran. It has now spread across the Middle East and heightened concerns about shipping routes in the Arabian Peninsula, Red Sea and Gulf of Aden. Israel's army said that it intercepted drones launched by Yemen on Monday. This was two days after the Houthis, who are aligned with Iran, fired missiles towards Israel for the very first time since the U.S. and Israel war against Iran began. Hezbollah, a Lebanese militant group backed by Iran, also launched rockets against Israel on Monday. The Houthis are yet to attack the Red Sea shipping, which accounts for 15% of all global maritime traffic. Robert Yawger is the director of energy futures for Mizuho. TRUMP ISSUES IRAN WARNING AGAIN Trump warned Iran on Monday to reopen Strait of Hormuz, or face U.S. attack on its oil?wells and power plants. Trump said in a post on social media that "great progress has been achieved, but if for some reason a deal cannot be reached soon, which is likely to happen, and the Hormuz Strait does not become immediately 'Open for Business', we will end our lovely'stay in Iran' by destroying all their Electric Generating Plants (EGPs), Oil Wells (Oil Wells) and Kharg Island." Trump had previously said that he would stop attacking Iran's energy grid until April 6. Trump had earlier said that as more U.S. soldiers arrived in the Middle East the U.S. has been meeting with Iran "directly and indirect" and Tehran's leaders were "very reasonable". Iran however described U.S. proposals to end a war in the Middle East for a month as "unrealistic and illogical" and launched more missiles at Israel on Monday. Israel's military claimed on Monday it was targeting Iranian government infrastructure in Tehran. Trump's April 6 deadline - by which the U.S. may resume attacks on Iranian energy infrastructure -- has not had a reassuring impact. "The market now wants to see concrete signs of deescalation and not just rhetoric," SEB Research said in a recent note. Separately, the finance leaders of the Group of Seven said that they were ready to take 'all necessary measures' to protect energy market stability and to limit wider economic spillovers due to recent volatility. OIL DISRUPTIONS Kpler data showed that Saudi crude exports from the Strait of Hormuz were redirected to Yanbu port in the Red Sea last week. This was 4.658 billion barrels of oil per day. This was a significant increase from the average 770,000 barrels per day in January and Feb. Analysts at JP Morgan said that if exports from Yanbu are disrupted, Saudi Arabia would have to shift its focus to Egypt's Suez Mediterranean (SUMED), which runs to the Mediterranean. The attacks in the region intensified at the weekend, damaging Oman's Salalah airport despite attempts to start ceasefire talks. Binh Son Refining and Petrochemical, a Vietnamese company, said that it was in talks to purchase crude oil with Russian partners. The company also said that it would buy more crude oil from Africa, America and Southeast Asia. The ANH, Colombia's national hydrocarbon agency, announced on Monday that the country's oil output fell by 2.74% in February from a year ago.
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Japan asks G7 for more measures to stabilize energy markets
Japan's industry minister said that if the Iran -war continues, the Group of Seven wealthy nations and the International Energy Agency should be prepared to take additional flexible measures to stabilize?energy markets. Ryosei Acazawa, after a meeting online with G7 Finance Ministers, Energy Ministers, and Central Bank Governors, told reporters that these actions could include coordinated additional oil stockpile release at the appropriate time. He said that in Asia, "soaring energy prices and supply concerns are becoming more acute. Shortages of fuel and raw material disrupt global supply chains, and could have a negative impact." The U.S.-Israeli war against?Iran, which began on February 28, has spread throughout the Middle East and killed thousands of people. It also caused the biggest disruption in global energy ever. Iran launched more missiles at Israel on?Monday after describing U.S. peace proposals as "unrealistic and illogical". Export restrictions have been implemented by a number countries, including China, who are dependent on oil, gas, and other products imported from the Gulf to maintain local supplies. The G7 has called on nations to "refrain" from imposing unjustified restrictions on exports of hydrocarbons, and products related. Kyodo News Agency in Japan reported Monday that the Philippine Government had purchased 142,000 barrels from Japan, which?arrived March 26. Akazawa stated that Japan had?supply chain in place across Southeast Asian nations and, from the perspective to maintain these chains, it was important to ensure fuel supplies in each country of the region. He added, "While giving top priority in securing stable domestic energy supplies, we intend to keep close communication with each of the countries." (Reporting and editing by Joe Bavier; Yuka Obayashi)
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Bangladesh seeks US waiver to import Russian diesel as energy crisis deepens
Officials said that Bangladesh approached the U.S. on Monday to request a temporary waiver of sanctions in order to import Russian diesel. Middle East turmoil is disrupting global energy markets and straining fuel supplies. Officials from the energy ministry said that Dhaka had requested a similar waiver to India and proposed imports of up 600,000 metric tonnes of Russian diesel. Monir Chowdhury is a joint-secretary at the Department of Energy and Mineral Resources. State-run agencies have increasingly relied on the volatile market to fill in the energy gap. The 175 million strong nation is dependent on imports to meet?95% its needs. Fuel rationing has been implemented by the government, but restrictions were lifted for the Eid al-Fitr holiday. Chowdhury stated that "we are looking to buy anywhere including the U.S.A., Russia?Uzbekistan?Kazakhstan?Angola and Australia". Bangladesh also increases imports of existing partners. In April, the Bangladesh Petroleum Corporation will import 40,000 metric tonnes of diesel from India's Numaligarh Refinery Limited, which is nearly twice as much as it received in March. The 'country is also looking for more than $2.5billion in external financing, to help support fuel and liquefied?gas imports. It is battling rising energy prices and mounting pressure on its foreign exchange reserves due to a volatile market. (Reporting and editing by Arun Koyyur; Ruma Paul)
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Gold gains for the second consecutive session but set for a monthly fall
Gold prices rose for the second consecutive session on Monday, as demand for safe-haven assets increased. However, they were still headed towards a monthly drop as inflation fears and expectations of rising global interest rates were sparked by the Middle East conflict. Gold spot rose 1.6%, to $4,564.00 per ounce at 8:51 am. ET (1251 GMT), after reaching its lowest level since early November. U.S. Gold Futures for April Delivery gained 1.5% to $4,594.00. Jim Wyckoff is a senior analyst at Kitco Metals. He said that the focus of the market in the near term will be the war, crude-oil prices, bond yields and the U.S. Dollar index. Iran launched a barrage of missiles towards Israel and vowed to punish the aggressor as Israeli forces pounded Tehran. Oil prices also rose when Yemen's Houthis joined the conflict. As energy prices continue to rise, markets are reassessing their expectations for interest rates. Gold is used to hedge against inflation, geopolitical unrest and other risks. However, it does not pay interest. This makes it less appealing when interest rates are high. Investors will be looking for additional policy signals in the remarks of U.S. Federal Reserve Chairman?Jerome Powell, and?New York Fed president John Williams on Monday. "I believe Powell will try to walk a thin line and be neutral. If his comments are hawkish then gold prices could be under pressure. But if they're dovish the price will rise," said Wyckoff. This week, there are a number of economic reports due, including U.S. jobs openings, retail sales, ADP's employment report, and nonfarm payrolls. Silver spot rose by 2.5%, to $71.36 an ounce. Spot palladium rose 4.3%, to $1436.56, while spot platinum gained 3.0% to $1919.23. Ashitha Shivprasad, Bengaluru (reporting); Alexander Smith, editing)
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McGeever: ROI-Bond Blues hits Big Tech at worst possible time
The Middle East conflict and the resulting shock to energy supplies will cause a surge in market interest rates. The spike in borrowing costs couldn't have been worse for U.S. technology firms that plan to spend over $600 billion on artificial intelligence this year. The AI capex surge is unprecedented. Big Tech's expected $630 billion capital?expenditure this year is more than 2% GDP. This includes AI data centers, chips, and cloud computing. More than $800 billion is projected to be spent next year, which is close to 3% GDP. Big Tech has historically used cash to finance expansion. They still have plenty of cash: according to some estimates, the combined cash and equivalents held by the five biggest hyperscalers is over $350 billion. Apple and Microsoft's credit ratings are higher than the U.S. Government. They're burning it through. According to?Apollo Global Management, at the end of the last year, approximately 60% of hyperscalers operating cash flow was used for capex. This is now close to 70%. If this trend continues, it's possible that soon almost every dollar earned will be allocated to capex. Morgan Stanley analysts say that Big Tech's capex for this year and the next will be $1.4 trillion. This is nearly 90% of the expected $1.6 trillion in operating cash flow. The credit markets are becoming increasingly important to tech giants. Bank of America analysts predict that hyperscalers will issue debt this year in excess of $175 billion. This is up from $121 billion the previous year, and six times more than the average annual debt of $28 billion over the five preceding years. The scale of borrowing is greater when you look at the entire sector. Analysts at MUFG estimate that investment-grade issuance from tech and AI firms last year totaled more than $245 billion. This is not far from the $298 billion accumulated over the past decade. The BEAR Case Last week, I outlined the bullish U.S. Tech narrative. This is based on the idea that hyperscalers will be able to weather the exogenous shock. Capital Economics reports that since the Iran War broke out, four weeks ago tech earnings have grown faster than any other industry, including energy. Investors are sceptical that AI investments and borrowing will produce adequate returns. Roundhill's "Magnificent 7" exchange-traded funds fell 5% in the last week. This puts its monthly loss at around 10%, and its drop from October highs near 20%. It is a cause for concern. Leverage used to finance AI will increase pressure on the balance sheets of hyperscalers, while at the same time every dollar of incremental profit will be harder to achieve. This pessimism is only going to grow if interest rates on the market continue to rise. This is the biggest monthly increase since October 2024. If it increases by a few more basis points before March 31, the 10-year U.S. Treasury yield will be at its highest since October 2024. The spread widening in the corporate bond market has been a relatively tame fifteen basis points over the same time period. This could change. Big Tech could be hit by a double whammy: higher interest rates and increasing debt obligations, on one hand, and the prospect of squeezed profit margins and falling share prices on another. The impact on the broader market and economy could be significant, considering how important these companies are for overall U.S. earnings. It's hard to imagine how the economy can go into recession if the capex binge, one of the biggest collective investments in a single industry ever made, comes to fruition. If rising yields or falling share prices derail these plans, a perfect storm could occur with increased inflation, higher borrowing costs and a weakening hiring market. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
Trump's trade threats and tariffs
Donald Trump has been in office since January 20.
The United States has issued numerous tariff threats.
These can be broad - such as a tariff on all imported goods from abroad - or targeted at certain sectors, countries, or regions to try and get them to comply with his demands.
Trump's threats are constantly changing, and other nations and businessmen are unsure of what to expect next.
Here's a summary of Trump’s threats and actions in relation to trade.
BROAD TARIFFS
Trump's vision is based on a gradual roll-out of tariffs that will apply to all U.S. imported goods.
Trump's economics team was tasked earlier this month with developing plans to impose reciprocal tariffs against every country that taxes U.S. imported goods, as well as counteracting non-tariff barriers, such vehicle safety regulations that exclude U.S. automobiles and value added taxes that increase the cost of their products.
In recent decades, tariffs have been reduced to a small fraction of U.S. taxes. Economists claim that Trump's policies are inflationary, as businesses who import goods and pay tariffs will pass on the costs to consumers.
Global trading partners may impose counter-tariffs on U.S. agricultural and energy exports. This could lead to a global trade war that would create uncertainty for investors and businesses.
Specific COUNTRIES
Trump's tariff proposals are aimed at several key trading partners.
MEXICO AND CANADA : Mexico was the U.S.'s largest trading partner in 2024, and Canada ranked second. Trump announced that he would impose tariffs on imports coming from Mexico and Canada, which will go into effect February 4, as a retaliation against migration and the fentanyl trade. The proposed tariffs included 25% on the majority of goods imported from Mexico and Canada with a 10% tariff for energy imports.
Trump suspended the tariffs until March 4 in order to negotiate with these two countries.
Trump said Monday that tariffs against Canadian and Mexican imports were "on schedule and on time" despite efforts made by both countries to improve border security and stop the flow of drugs into the U.S. before a deadline of March 4.
Canada exports mainly crude oil, other energy products and cars and auto parts as part the North American automotive manufacturing chain. Mexico exports a variety of goods to the U.S., including industrial and automotive products.
CHINA: Trump imposed a 10% additional tariff on all Chinese imports to the U.S. which went into effect on 4 February after repeatedly warning Beijing that it wasn't doing enough in order to stop the flow of illegal drugs into the United States.
Trump has said that the EU, and other countries, have alarming trade surpluses. He said that the products of the other countries will be subject to tariffs, or he would demand that they purchase more oil and natural gas from the U.S. despite the fact the U.S.'s gas export capacity has reached its limit.
In a statement released on 14 February, the European Commission stated that the "reciprocal trade policy" was a step backwards.
RUSSIA: Trump threatened to hit Russia and "other participating countries" with tariffs, taxes and sanctions if an agreement to end the conflict in Ukraine was not reached soon.
INDIA/BRICS NATIONS : Indian Prime Minister Narendra modi met with Trump mid-February in Washington and offered to discuss easing tariffs and buying more U.S. gas, oil and combat aircraft. He also discussed possible concessions.
India is the largest trading partner of the United States and imposes a high tariff on U.S. products.
Trump threatened to impose tariffs on the BRICS nations if they didn't agree not to create a new currency.
COLOMBIA - Trump announced that he would impose 25% tariffs on Colombian products after the country refused flights with migrants who were to be deported by the U.S. The two sides reached an agreement.
PRODUCTS
METALS: Trump announced on February 9 that he would impose tariffs on all imports of steel and aluminum used by automakers and aerospace companies as well as in construction and infrastructure.
According to World Bank statistics, the U.S. imports more aluminum than any other country in the world. According to the International Trade Administration, it has been running a steel trade deficit for over a decade. The International Trade Administration reports that it is the world's second-largest steel importer, with over half of its volumes coming from Canada.
Trump ordered on Tuesday a new investigation into the possibility of new tariffs on imports of copper to rebuild U.S. manufacturing of this metal, which is critical for electric vehicles, military equipment, semiconductors, and a variety of consumer goods.
Just over half of the refined petroleum products in the U.S. are produced domestically
Copper
It consumes every year.
SEMICONDUCTORS : Trump stated that tariffs would start at "25%" or more, and increase substantially over a period of one year. However, he did not specify when they will be implemented.
Taiwan Semiconductor Manufacturing Co, the world's biggest contract chipmaker, produces semiconductors for Nvidia and Apple, among other U.S. customers, and 70% of its revenues in 2024 will come from North American clients.
PHARMACEUTICALS : Imposing tariffs of 25% or more on pharmaceuticals imported could be a burden on Japan. This is the home to major drugmakers like Takeda Astellas Daiichi Sankyo Eisai and Takeda.
India's economy would also be affected, as the U.S. is the largest market for most generic drugmakers in the country. Exports to that country account for 31% of all industry exports.
Trump announced that levies for automobiles could be implemented as early as April 2. For example, the European Union collects a duty of 10% on imported vehicles, which is four times higher than the 2.5% U.S. tariff rate for passenger cars. The U.S. charges a 25% duty on pickup trucks imported from other countries than Mexico and Canada.
Trump also floated the idea that tariffs of up to 100% would be imposed on other vehicles including EVs. In 2024, the automobile industry will account for more than $200 billion in imports from Canada and Mexico. (Reporting and editing by Maju Sam, Lincoln Feast, Seher Dareen and Sriraj Kalluvila in Bengaluru, and Margueritachoy, Anmol Choubey and Anmol Anil in Bengaluru)
(source: Reuters)