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Venezuelan bonds rise after debt restructuring by government
Venezuelan bonds rose on Thursday, after the country announced its sovereign restructuring. It also said it had appointed financial advisors. These are key steps in launching one of the largest and most complex debt restructurings ever. Data from Tradeweb showed that some of the Venezuelan government's defaulted dollar bonds rallied by more than two cents, with the maturity bid for 2031 at 60.486 cents per dollar. This was the highest price in over a decade. Bonds issued by the state oil company Petroleos de Venezuela PDVSA also saw gains. The latest rally follows the announcement by the government late on Wednesday that it would aim for a "comprehensive" and "orderly" overhaul of debts, including both sovereign and PDVSA debts. It also aimed to achieve "substantial relief from debt burdens. The government announced that Centerview Partners had been appointed as its financial advisor. Venezuela defaulted in 2017 on its external debts due to U.S. Sanctions, but its bonds have been steadily rising since Donald Trump took office as President of the United States at the beginning of last year. Since the U.S. ousted President Nicolas Maduro last January, momentum for a debt restructuring has been building. Since then, Washington's relations with acting Venezuelan president?Delcy Rod have become closer. In a client note, JPMorgan analyst Ben Ramsey stated that the plan was to move "expeditiously" with financial advisers. "We are keeping Venezuela at MW (marketweight), pending an improved assessment of the debt sustainability framework." The South American nation, which has the largest oil reserves in the world, and its state oil company Petroleos de Venezuela are estimated to owe $150 billion to $170 billion of debt and interest. This burden must be reduced for the economy to remain viable. (Reporting and editing by Andrew Heavens; Karin Strohecker)
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Top Monte dei Paschi investor warns against Banco BPM merger, Generali stake sale
The second largest investor in Banca Monte Dei Paschi di Siena warned that the bank could be "absorbed" into Banco BPM if a merger were to occur. He also urged Generali not to sell their stake in Generali. Francesco Gaetano Caltagirone is an 83-year old billionaire who owns 10,2% of MPS. He made these comments in an interview to Corriere della Sera, after voting against Luigi Lovaglio's return as CEO last month. Caltagirone, a financial powerhouse in Italy, is close to Prime Minister Giorgia Melons. Its holdings include a stake in Generali. Caltagirone’s intervention highlights the growing tension over the future of MPS as Rome presses to consolidate Italy's?fragmented bank industry. His opposition to any potential Banco BPM tie up and to the sale of Generali's stake highlights shareholder unease over Lovaglio’s plans. This could complicate efforts for a merger that is seen as crucial to?the long-term future of?the bank. Caltagirone stated that he hoped Lovaglio would be able to adapt to the needs of a MPS chief who could build consensus and establish a clear, long-term strategy. He's worked very hard, but no one is a man for every season. He said, "I hope he can change." He warned that the shareholder vote last month could lead to MPS being "absorbed" into Banco BPM as part of a merger, with the combined company's headquarters most likely located in Milan instead of Siena. Banco BPM has been an investor in MPS for some time and a partnership between the two companies is long considered. Caltagirone who is from Sicily but built his empire in Rome, complained that large Italian banks were concentrated in the north. He supported the MPS takeover of Mediobanca, a Milan-based bank that landed Generali's stake. Caltagirone stated that he opposed the merger of Mediobanca with MPS, which Lovaglio pursues. He also challenged Lovaglio's belief that Generali's 13% stake was not necessary for the bank. He said that large Italian lenders are interested in?Generali due to potential partnerships and the favourable capital treatment of insurance holdings. He said: "If it's something that all the big banks want, then I don’t see why it would be a good idea for one bank to sell it."
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Gold prices rise as Trump and Xi meet
The gold price rose on Thursday as investors waited for any signs of a possible resolution to the Iran War. As of 0732 GMT, spot gold was up 0.4% to $4,707.08 an ounce. U.S. Gold Futures for June Delivery rose 0.4% to $4,713.80. The yields on the benchmark 10-year U.S. Treasury note have decreased, which has lowered the opportunity costs of gold holdings. GoldSilver Central's Managing Director Brian Lan said, "Gold is consolidating right now as everyone is watching what happens in the high level talks between the U.S.A. and China." Lan said, "I think there is an opportunity for investors to get into gold because it is currently a little bit down. Xi Jinping, the Chinese president, told Trump on Thursday that trade negotiations were progressing. He also warned that disagreements over Taiwan could lead to a dangerous course and even conflict. Analysts say that Trump will likely seek China's support to end the unpopular and costly conflict he started with Israel late in February. However, analysts believe he won't get the help he needs. Data released on Wednesday revealed that U.S. Producer Prices posted their largest increase in four-years in April. This was boosted by the soaring cost of goods and services, which is the latest indication of rising inflation. Kevin Warsh was confirmed by the U.S. Senate as the new chair of the Federal Reserve. The U.S. Central Bank is grappling with an intensifying inflation that may make it difficult to implement the interest rate cuts Trump has 'demanded. According to the?CME Group’s FedWatch tool, traders have priced out a Fed interest rate cut for this year. Markets now see a 28% likelihood of a rise by December. Gold is often considered to be a hedge against rising inflation. However, the metal tends to lose value when interest rates rise. Gold discounts in India reached a record-breaking $200 per ounce on Wednesday as an increase in prices following an import duty hike led to investors selling their gold in an environment of already low demand, according to bullion dealers. Spot silver dropped 0.7% to $87.33 an ounce. Platinum fell 0.5% at $2,126.90 and palladium fell 0.1% to $1,498.28.
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Honda announces first annual loss after $9 billion writedown on EVs, cancels EV goals
Honda Motors posted its first loss as a publicly listed company in more than 70 years on Thursday. The firm was hit with a restructure of its electric vehicle?business that cost?more $9 billion, and the firm canceled its long-term sales target for EVs. Honda's worst financial report released since it listed on the stock exchange in 1957 shows how a legacy automaker can lose money if they make a bet on EVs and then find that demand is weaker than expected. Toshihiro Mibi, the CEO of Japan's largest automaker, announced on Thursday that Honda has scrapped its goal to have EVs account for a fifth or more of new vehicle sales in 2030. It also canceled a target?to shift completely to electric and fuel-cell vehicles by 2040. Mibe also said Honda would suspend indefinitely its Canada EV Project, an $11 Billion investment plan?to manufacture EVs and battery in what would have?been the Japanese firm's biggest ever investment in Canada. Shares on No Dividend Cut Honda shares briefly reached a two-month peak before closing 3.8% higher on Thursday. The company pledged to return at least 800 billion Japanese yen over the next three years, and maintained the 70 yen annual dividend both for the new fiscal year and just concluded. Honda has made a pledge to focus on its motorcycle business as a way to generate cash and to support shareholder returns. Its auto operation, however, continues to be lagging in terms of execution and scale. James Hong, Macquarie's head of mobility research, said that the overall execution was very slow. He said that some of the steps taken by the company as part its strategy were not new, like using more Chinese components. The company's operating loss for the fiscal year ended in March was 414.3 billion yen, compared to a median estimate by LSEG of 315.6 billion yen. A year ago it had a 1.2 trillion yen profit. Honda recorded total losses related to EVs of 1,45 trillion yen in the fiscal year that ended March. It expects additional costs of 500 milliards yen in the fiscal year that just began. Honda had estimated EV write-down costs of up to 2,5 trillion yen in March. The company expects to be profitable 'this year', with a profit of 500 billion yen on the back of cost-reduction measures as well as its profitable motorcycle business. Honda's earnings statement stated that the motorcycle business would expand its production capacity in India and target record sales of 22.8 million units. The motorcycle division achieved record sales and profits in the fiscal year that ended in March. This helped the company to offset the negative impact of a bruising writedown on the EV business as well as the sliding sales in other key markets, including China. Hong said Honda's motorcycle division also faces margin pressure as a result of a shift to electric vehicles in certain key markets, such as India and Vietnam. He said, "They only have a short time to act." The company estimates that rising material costs, as well as the Middle East conflict's impact, will cause its operating profit to drop by 313 billion yen in the current fiscal period. ($1 = 157.8300 yen)
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The anti-corruption court in Ukraine arrests Zelenskiy’s former chief of Staff
Andriy Yeramak, former head of the administration of Volodymyr Zelenskiy, and close ally to him, was arrested on charges of money laundering by Ukraine's anti-corruption court on Thursday. The court set bail for Yermak at 140 million hryvnias (3.19 million dollars), which will allow him to be released pending a ruling on his case. Yermak has denied all allegations made against him. After the court's ruling, Yermak said to reporters: "I do not have that 'kind of money' and my lawyer will work with friends and associates (to raise'money for bail). My legal team will appeal. We will use all legal avenues to pursue justice and truth. Yermak was named as a suspect by Ukrainian authorities 'on Monday. It was the closest anti-corruption officials had ever come to the inner circle of the president. Ukraine's anticorruption agencies released a statement in which they said that Yermak was suspected of being part of a criminal gang who laundered $10.5 million via an elite housing project outside the capital Kyiv. Yermak, despite not being elected to his position, was widely regarded as the second most powerful Ukrainian after Zelenskiy. Former film producer and entertainment attorney, he often sat at the president's right hand at public events. He was also Kyiv’s chief negotiator during U.S.-backed talks for peace with Russia. His resignation last year was part of a wider government shake-up that aimed to'restore trust in the President's Office, which had been tainted by accusations of centralised powers. Analysts say that charges?against Yermak will not pose an immediate threat for Zelenskiy but could cause him to suffer a longer-term damage to his reputation if he decides to run for reelection following the war.
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Gold prices remain steady as Trump-Xi meetings and the Iran war are in focus
Gold prices held steady on Thursday as investors focused on the talks between 'U.S. President Donald Trump met with Chinese?President Xi Jinping and looked for any signs of progress on the Iran War. As of 0602 GMT, spot gold remained unchanged at $4,689.49 an ounce. U.S. Gold Futures for June Delivery fell 0.2% to $4,696.40. GoldSilver Central's Managing Director Brian Lan said, "Gold is consolidating right now as everyone is watching what happens in the high-level talks between China and the U.S." Lan said: "(Gold is) a bit 'downward-biased, and I believe that this is also an opportunity for investors looking to get into the metal." Trump will be meeting with Xi at a series in Beijing to discuss economic gains, maintain a fragile 'trade truce' and negotiate thorny issues like the Middle East conflict. Analysts say that Trump will likely not get the support he needs. Data released on Wednesday revealed that U.S. Producer Prices posted their largest increase in four-years in April. This was boosted by the rising costs of goods and services. It is yet another sign of inflation accelerating. The?U.S. The Senate has approved Kevin Warsh to be the chair of the Federal Reserve. According to CME Group’s FedWatch tool, traders have priced in a Fed rate cut for this year. Instead, they see a 28% likelihood of a rise by December. Gold is a good hedge against inflation. However, as interest rates rise, it tends to weigh down on this non-yielding material. Gold discounts in India reached a record-breaking $200 per ounce on Wednesday as an increase in prices after an import duty rise triggered investor selling in a weakening demand environment. Spot silver dropped 0.9%, to $87.19 an ounce. Platinum fell 0.2%, to $2,133.35. Palladium rose 0.1%, to $1,501.25.
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Eneos buys Chevron's Singapore refinery and Asian assets for $2.2 Billion
Eneos Holdings announced on Thursday that it would purchase U.S. giant Chevron's 50 percent stake in Singapore?Refining Company and other assets throughout Southeast Asia, Australia and Australia. This will be its first venture into refining outside of Japan. Eneos stated that the deal, which includes Chevron’s assets in Vietnam, Australia Philippines and Malaysia, is expected to be closed by 2027. Chevron is looking to sell its refining assets and storage facilities in Asia, to reduce costs and streamline operations. This investment is a major step towards strengthening the business platforms that connect Japan to Southeast Asia and Oceania. It also brings together the competitive strengths developed in each market, allowing our group to grow to the next level. Eneos has nine refinery complexes operating in Japan. This includes a joint venture between Eneos and PetroChina. The sale is expected to be completed by the end of May, according to a previous report. CHEVRON DIVERSTMENT SRC runs a refinery that produces 290,000 barrels per day in Singapore. The other half of the company, Singapore Petroleum Co., is owned by PetroChina. Andy Walz is the president of Chevron’s downstream, chemicals, and midstream. SRC's stake sale in Bukom is the second largest refinery deal to be made in Asia after Shell sold the complex in 2024. Chevron sold its Hong Kong retail station to Thai refiner Bangchak Corp. for $270 millions. The sale includes Chevron’s Penjuru Terminal and Lubricants Facility in Singapore. This facility has a storage capability of approximately 400,000 cubic meters, or roughly 2.5 million barrels. Analysts said that acquiring a fuel terminal at one of the largest oil storage hubs in the world will increase a company's trading abilities, particularly on refined fuel. Eneos's growth downstream is a strategic move, given that its domestic market in Japan has been saturated for a long time and is expected to continue to shrink, according to Wood Mackenzie Asia Pacific's research director in oils and refining. This refers to the decline in Japan's demand due to a declining population. "Not only the refinery, but other things will sweeten the deal." Morgan Stanley has been appointed by Chevron as the agent for the sale of refinery assets and stakes in Asia. Reporting by Katya Glubkova in Tokyo and Yuka Obaashi in Singapore, with editing by Muralikumar Aantharaman & Neil Fullick.
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Mike Dolan: ROI-Fed might have to hike its prices to maintain its credibility
It may not be sufficient to wait out the oil crisis. Federal Reserve officials may have to show that they will take action to achieve their inflation targets, just as European counterparts seem to be determined to do. If that happens, it could be a big deal given what Wall Street forecasters are currently thinking. The crude oil futures for the end of year are at their highest levels since the Iran 'war began, with little evidence of a lasting peace agreement. The latest U.S. April inflation data showed that the damage to?already high prices was escalating. The Fed's target of 2% for annual consumer price inflation has not been met since February 2021. Producer prices rose the most since March 2022, when Russia invaded Ukraine. They also increased at the fastest annual rate in three years. You can manipulate the numbers in a thousand different ways, but there is no doubt that core inflation and "trimmed-mean inflation rates" that remove the extreme monthly price movements are on the rise. The price trend is now moving higher, as has the overall trend. The regional Fed presidents are concerned that the central bank’s inability of returning to its target could undermine its credibility over the long term and push inflation expectations and market prices even higher. Susan Collins, the president of Boston Fed, is the latest to express concern. Collins stated on Wednesday that "more than five years of inflation above target has lowered my patience to 'look through' another supply-shock." "I can imagine a scenario where some policy tightening would be needed to ensure that inflation returns to 2% durably and in a timely fashion." Collins is not the only one. The more hawkish members of the Fed's Policymaking Council echo Collins' view. Beth Hammack of the Cleveland Fed, for instance, was among three policymakers to dissented against the Fed's easing bias in its last statement. She said that the statement should be neutral about whether or not the next step is up or down, or if it's just on hold. The hawkish nature of the central bank is not hidden by talk of a split. Many Fed watchers believe that only three of the 18 Fed board members or regional presidents are dovish. And Warsh only replaces one of the doves. The only way up is up? How likely is the next Fed action if a prolonged energy squeeze continues to affect core goods and service prices? Fed futures markets that bet confidently on two rate cuts up until the attack on Iran in late Febuary now see no further easing. They place an 80% probability of a 25 basis-point increase in the policy rate of 3.625% over the next year. This week, the yields on two-year Treasury bonds topped 4% once again. The 30-year bond rate is now above 5% and the average 30-year fixed-rate mortgage rates are at 6.46%, above 6% for almost four years. Fixed-income markets are already bracing themselves for a shift in Fed policy, and it's not what most people had in mind when Warsh first was nominated back in January. The 'persistence of forecast rate cuts suggests that the investment world is still focusing on further easing. This is based on the assumption that the Gulf conflict will end and oil prices will fall, re-opening the Fed door. Only one economist and strategist polled three weeks earlier expected that rates would rise by mid-year. Median view was two further cuts in that time. Even though the poor inflation data has forced many banks and forecasters? to delay their timelines for easing, rate reductions remain on the table. UBS Global Wealth Management pushed back its expectations for the next cut by three months, to September. However, it still expects that two cuts will be made in December and February next year. Morgan Stanley's mid-year outlook still pencils a Fed reduction next year. It also predicts an S&P 500 rise of 11% and a decline in 10-year Treasury rates to 4.2%. All these investment firms hedge their bets with different scenarios, which is understandable considering the geopolitical uncertainty. Even though the market for rates may have partially repricing, there would?have to a tsunami of changes in forecasts if the Fed's next move was indeed upward. The opinions expressed are those of Mike Dolan a columnist at. This column is great! Open Interest (ROI) is your new essential source of 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.
Investor Caltagirone voices concern over possible Monte dei Paschi-Banco BPM merger
Francesco Gaetano Caltagirone, an Italian businessman, said that the merger of Banca Monte Dei Paschi d'Isena (MPS), and Banco BPM would weaken?the historic Tuscan bank?and could pose a risk to?Italian saving.
In recent weeks, speculation on the market has increased over the long-promised merger between Banco BPM (the world's oldest banking institution) and Caltagirone, the second largest investor in the bank.
BPM CEO Giuseppe Castagna stated last week that the bank is well-positioned to take advantage of?Italian M&A and is examining all options. Credit Agricole CAGR.PA, a French bank, is the largest shareholder in BPM. It also owns 3.7% in MPS. Credit Agricole played a major role in the febrile shareholder vote on April 15 that restored the Tuscan bank’s former CEO Luigi Lovaglio.
Caltagirone supported the alternative CEO option during the vote.
Caltagirone, Corriere della Sera, said: "I am afraid that the result of the recent shareholders meeting will facilitate the'merger of MPS with BPM and destroy something that has been in Siena since five centuries.?And, on another hand, it could lead to a new assault on Italian savings."
In an interview, he told the Italian paper that he felt that there was a "strong pressure" for BPM, rather than MPS, to be absorbed by BPM. This would result in the'shifting of MPS headquarters from 'Milan to Milan and eroding the local expertise, as well as all the economic activities built around this over the centuries. (Reporting and editing by Alexander Smith, Gianluca Smeraro)
(source: Reuters)