Latest News
-
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)
-
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.
-
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.
-
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.
-
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)
-
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)
-
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)
-
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.
Andy Home: Trump's tariff threats presage turbulent times for Dr Copper
Doctor Copper has been trying since late January to estimate the impact of U.S. tariffs on imports, ever since President Donald Trump included copper in his list of tariffs along with steel and aluminum.
After the launch of a Section 232 investigation - the same national security tool that paved Trump's way to steel and aluminum tariffs during his first term, and extended them in Trump’s current term - the threat is set to become a reality.
Tariff trade has played out so far in the arbitrage of the U.S. Copper price on CME and international copper prices traded on London Metal Exchange.
This may change, as financial arbitrage causes a realignment in flows on the physical market.
A raid on LME's inventory indicates that it has already happened.
Mind the Widening Gap
The LME copper product is an international contract that has delivery locations on all three continents. However, the CME contract is a U.S.-cleared product with only domestic delivery points.
Arbitrage between these two contracts is the ideal forum to trade the potential U.S. tariffs on imports.
When Trump mentioned aluminium, steel and copper as possible targets for tariffs in the same breath, the CME premium over London shot up to more than $1000 per metric ton.
The CME premium was based on the fact that LME copper traded just above $9,000 per tonne, implying a tariff of 10% on imports.
Transatlantic gap was steadily closing in absence of further comments by the Trump administration prior to Tuesday's shocking announcement that U.S. Import dependency would be subject of a National Security Investigation.
The U.S. premium for the CME's May contract has risen again from $500 to more than $800 per ton in the past 24 hours.
It is clear that the U.S. premium could be much higher if copper were to be subjected to the same tariff rate of 25% as steel and aluminum from next month.
LME STOCKS RAID
The LME price of three-month copper has remained stable at $9,500 per tonne, despite the CME price having risen sharply.
Early-year rallies have stalled because of concerns over how Trump's tariff policy, which is broader, will impact on global trade and growth. This is especially true in China, as it's the largest copper purchaser.
There's a lot of chaos beneath the calm surface, in the form time-spread instability.
The benchmark spread between three-months cash and the benchmark cash
The Valentine's Day massacre was a clearing-out of liquidity, but the tighter tone that followed is due to a clearance-out of physical stock held in LME Warehouses.
In preparation for the physical loading out, almost 100,000 tons of copper stored at LME have been cancelled in the last four working days.
The total on-warrant stocks of copper have fallen from 258,000 tons to 161,225 tonnes in just one week.
COMPLEX ARBITRAGE
It makes sense to send as much copper to the United States as possible, to take advantage of the metal being in place prior to tariffs.
The physical arbitrage trade is more complex than financial arbitrage. This was evident when the CME suffered a squeeze in May last year.
The CME list of brands that can be delivered is largely restricted to Canadian, domestic and South American producers. This reflects the refined import mix of copper in the United States.
LME stocks are largely made up of Chinese and Russian brands. These two brands together accounted 74% of the total stocks on warrant at the end January.
The United States banned imports of Russian metal about a year ago. Imports from China already face a 10% blanket duty.
Instead of LME-stored steel being shipped directly to the United States it is likely that South American shipments would be rerouted, and LME steel used to fill in the supply gaps.
As happened last year it is possible that Chinese producers deliver metal to LME storage in Asia due to a high U.S. Premium causing a global roundabout of metal.
Coming Home
The U.S. Secretary for Commerce Howard Lutnick is given 270 days to complete the Section 232 Report on Copper. However, it appears that this will be a fast-tracked process.
It is also clear that the results will be positive, as Lutnick accused international actors of "attacking [our] domestic production."
Lutnick told the press at a briefing on Tuesday that "it's time to bring copper home."
Tariffs alone are unlikely to reverse the trend of copper processing, where ever more capacity has migrated to China.
He's correct, there is probably a large amount of copper headed to the U.S. It all depends on where the copper comes from, and how much turmoil is created by transporting it to the U.S.
These are the opinions of the columnist, an author for.
(source: Reuters)