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Russia could sell electricity to Kyiv via the Zaporizhzhia Nuclear Plant
The 'head' of Russia's state nuclear corporation stated on Friday that Russia will control the relaunch and operation the Zaporizhzhia Nuclear Power Plant when it is safe. However, it would also be willing to talk about selling electricity to Ukraine. The comments of Rosatom chief Alexei Likhachev revealed the gap between Moscow and Kyiv regarding the status of this plant, which Russian troops captured in the early weeks of the 2022 war. Peace talks are centered around the fate of the southern Ukraine plant. Donald Trump, the U.S. president, has proposed that American nuclear plants in Ukraine, including Zaporizhzhia be owned or managed by America. Volodymyr Zelenskiy, the Ukrainian president, said in December the U.S. proposed a joint trilateral operation with an American as the chief manager. He said Kyiv proposed a joint Ukrainian-U.S. operation of the plant with an American chief manager. PREPARE TO RESTART OPERATIONS Likhachev, the Russian minister of energy and industry, said that six reactors at the plant are currently being kept cool in order to ensure safety. However, he added that preparations were underway to restart them as soon as security permitted. He said that 'Russia has issued operating licenses for two of the units. A third is coming soon and licences are also being prepared for the other units. Likhachev, after meeting Rafael Grossi, director of the International Atomic Energy Agency, told reporters: "We are prepared to restart the work. The necessary equipment is available." He said: "As soon we have the chance, we'll start up and operate the station under IAEA oversight." Likhachev described an example in which Rosatom would operate the plant, but that "commercial aspects could be viewed on a multilateral basis". He added that "under certain conditions, it could be discussed whether electricity is supplied to Ukraine". Likhachev stated that the 6 gigawatts could be used to power data centers. "We may have new partners here...we're talking about the United States among others." GROSSI: PEACE AND CALM ARE NEEDED Grossi said to reporters: "We are in need of peace and calm. A nuclear power plant cannot operate if it is threatened by a violent or kinetic act. You cannot, of course start a nuclear plant "overnight." Russia and Ukraine were at war over this plant in southern Ukraine. They have often accused each other that they had shelled it. Likhachev stated that the number of artillery attacks, drone strikes and mortar fire has increased in recent months. Grossi was praised for his role in organizing the latest ceasefire - the 5th so far – around the plant to allow repairs to the external power lines which help keep the nuclear materials from overheating.
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Weekly gain is driven by the Mideast war, not aluminium.
Aluminum fell on Friday as the dollar gained strength, but shipping disruptions due to the ongoing Middle East conflict kept it on track for a weekly rise. Open outcry official activity showed that benchmark three-month aluminum?on London Metal Exchange was?down by 0.9% to $3,485.50 a metric ton. The metal was set to finish the week with a 1.3% gain after reaching a near four-year high Thursday. Last week, the metal jumped 10%. Tom Price, Panmure Liberum's analyst, said that the dollar was "the biggest mover." The dollar rose to its highest level in more than three months on Friday, as turmoil in the markets left it as a safe haven. Dollar-denominated metals are more expensive to holders of other currencies. Price said that the fundamental drivers of aluminium production in the Gulf were soaring energy costs, and they had difficulty obtaining raw materials. "Even if?didn't, they couldn't ship out. It's a nightmare. This means that about 2 to 3 millions tons of capacity are at risk. Price stated that there is no quick-fix solution. Last year, the world produced 73.8 millions tons of primary aluminum. LME aluminium stocks The?lowest level since July was 445,300 tonnes. Spread between cash LME Aluminium contract and three-month forward Last year, the price of metal was $29 per ton lower than it is today. This indicates a demand for metal in the near future. In China, however, Shanghai exchange aluminium ?stocks The number of tons sold increased by?5.6% compared to last week, reaching 416,425 for the first time since April 2020. Copper also fell?1.2%, to $12,874 per ton, due to macroeconomic concerns. This is the third consecutive daily loss. Nickel dropped 1.3% to $17.520, while tin fell 3.1%?to $48,875 and the price of lead was down by 0.9%?at $1.929.50 after reaching its lowest level since May. Zinc, the only metal to gain, rose 0.2%, or $3,308. (Reporting and editing by Sonia Cheema; Additional reporting by Dylan Duan and Amy Lv in Shanghai; Lewis Jackson and Diti Pjara in Beijing)
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What are the echoes of 2022? The markets look back at Russia's playbook for the Middle East conflict
The world markets are 'rocked' by a Middle East conflict that could cause another inflationary shock. They're looking to the past for clues as to what will happen next. The global economy was recovering from the COVID-19 epidemic when the surge in?energy prices exacerbated inflation. Equities were down and investors sought safety with the dollar. George Lagarias is the chief economist of wealth manager Forvis-Mazars. He said that there are parallels in the sense that the global economy has been weakening due to the trade war. The trade war is a major inflationary factor that could be amplified by an increase in oil prices. The markets' reaction to the Middle East conflict is similar to that of the Russia/Ukraine conflict at the beginning of February 2022. The energy market has seen volatility that rivals the chaos after Russia invaded Ukraine. Brent crude oil is up around 40% since U.S.-Israel strikes a couple of weeks ago, and it was nearing $120 by Monday. Brent crude oil is expected to settle around 15% higher in 2022 at the 2-week mark after reaching its highest level since 2008. Richard de Chazal, William Blair's macro-analyst, said that the oil market "has moved from a world where supply was essentially frictionless for ten or twenty years before the pandemic to a world which is consistently being hit by supply shocks after supply shocks". Since the Middle East conflict began, the dollar has risen by 2.6%. This is the same as its gains in 2022?over the exact same number of days. SAFE HAVEN SHARP-UP Other assets have acted entirely differently. This time, European wholesale gas prices rose by a little over 58%, which is a much more muted response than the nearly four-fold increase in 2022, which reflects Russia's major role as a gas supplier. Germany's 10-year Bund has increased by 30 basis points, while it fell more than 10 basis points four years ago. The markets have been more willing to accept the expectation of higher inflation this time. In 2022, after a sharp fall in yields as pricing pressures became apparent, yields spiked. These fears are less pronounced this time, and the eurozone's five-year inflation swap, which spiked in 2022, is still well-anchored around 2.18%. This is near the ECB target of 2%. The underlying inflationary impulses, however, are the same as four years ago when price pressures following the pandemic forced global rates to rise aggressively. Lagarias, Forvis Mazars’s Lagarias, downplayed any likelihood of similar actions in the near future. He said that central banks would need to see inflationary pressures in core numbers for at least two to three months. "That's unlikely, and if that does happen, it is probably not due to Iran." Gold, which soared by almost 8% after?Russia invaded Ukraine has dropped about 3% in the aftermath of the Iran War. RBC strategist Christopher Louney stated that the clear link between the crisis and energy markets meant "there was less immediate need for a general purpose hedge", which contributed to gold's weakening along with higher bond yields, and the dollar. EUROPEAN Shares Play Copy Cat Four years ago, European shares faced a steep selloff. They dropped about 10% in the first two weeks after war. They are now down 5%. Europe was in the midst of a storm by 2022 due to its geographical location and energy dependence on Russia. Although the Middle East may be further away, Europe is still vulnerable due to its dependence on energy imports. Barclays equity analysts said Europe's STOXX 600 could reach 550 points, or a 13% drop from the closing level of February 27. The market conditions in Europe prior to the conflict is one difference. Stocks were already at record highs in 2022, in anticipation of Russian invasion. BAD ENERGY The CBOE Oil Volatility Index has reached its highest level in five years, 120%. This is higher than the peak of 102 % that was hit after Russia invaded Ukraine 2022. Beyond energy, volatility is nowhere near the level that's generally considered to be crisis territory. The?VIX equity volatility index is at a warm 25. This is below the highs in April 2025 of 60, and the COVID's 80. In February 2022 it reached a peak of 38 before reversing. The ICE BofA MOVE bond volatility index has risen to 95. This is its highest level since June 2025. It remains below a peak of 140 at the beginning of March 2022. The FX volatility is barely moving.
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US consumer spending and core PCE inflation firmed up in January
U.S. Consumer Spending increased slightly more than anticipated in January. This, along with the continued strength of underlying inflation as well as the ongoing war in the Middle East, bolstered the views of economists that the Federal Reserve will not be cutting interest rates for some time. The Bureau of Economic Analysis of the Commerce Department reported that consumer spending, which is responsible for'more than two thirds of the economic activity', rose by a margin of 0.4% after rising by the same margin last December. Consumer spending was expected to increase by 0.3%, according to economists polled. This follows a 0.4% rise in December. BEA has yet to catch up with data releases due to delays caused by the government shutdown last year. The U.S. and Israeli war on Iran could have a negative impact on consumption, as it has increased oil prices. AAA data shows that retail gasoline prices have increased by more than 20% to $3.60 a gallon since the war began. The war also causes volatility on the stock market. Economists warn of wealth loss among households with higher incomes, which could force them to reduce their spending. The main drivers of the economy and consumer spending are high-income households. As tariffs on imported goods increased prices, lower-income households already cut back. Economists predicted that the economic drag would be felt during the second quarter. Kathy Bostjancic is the chief economist for Nationwide. She said that gasoline prices are expected to increase to $3.75 per gallons in the U.S. in the next few weeks. It could take the rest of the year before prices return to the pre-conflict levels near $3 per gallons. The spike in diesel fuel prices could lead to higher transportation costs, which will increase price pressures throughout the supply chain. The disruption in agricultural fertilizer shipments is likely to increase?food prices. Before the war, inflation was high. BEA reported that the Personal Consumption Expenditures Price Index increased?0.3% after?rising by 0.4% in December. PCE inflation increased by 2.8% in the twelve months to January after increasing by 2.9% in December. PCE prices rose 0.4% excluding volatile food and energy after a similar gain in December. The so-called core PCE price index was expected to rise 0.4% in January. Core PCE inflation increased 3.1% on an annual basis after increasing?3.0% in the previous month. The U.S. Central bank tracks the PCE inflation measure for its 2% target. Next Wednesday, the Fed is expected keep its overnight benchmark interest rate between 3.50% and 3.75%. The window of opportunity for interest rate reductions is closing. Financial markets expect a single cut this year, in September. (Reporting and editing by Chizu Nomiyama; Lucia Mutikani)
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After US oil sanctions are eased, Britain urges allies to keep up pressure on Russia
A Downing Street spokesperson said on Friday that Britain and its partners should continue to exert collective pressure on Russia via sanctions. This follows a chorus of Europeans criticizing the United States for easing sanctions on Russian oil. "It is a U.S. decision, but we have a clear position." "All?partners must continue to put pressure on Russia, and its war chest," said the spokesperson for Keir Starmer. The United States has granted a 30-day waiver to countries that want to purchase sanctioned Russian oil and petroleum products that are stranded on the sea. This is to help stabilize global energy markets, which have been roiled by war with Iran. The move was criticized by European allies, who argued that it could complicate Western efforts to deny Russia revenue for its war in Ukraine. The spokesperson stated that Western sanctions have deprived Russia of at least $450billion since the start of the Ukraine war, adding that "our sanctions are working". He said that the best way to get a "fair peace" in Ukraine was through collective pressure. The spokesperson stated that "we?remain devoted to exerting maximum economic pressure on Russia in pursuit of a fair and lasting peace in Ukraine." (Reporting and editing by William James; Alistair Smout)
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Global EV sales fell again in February
Benchmark Mineral Intelligence's (BMI) data on Friday showed that global EV registrations dropped 11% in February. This was largely due to China, which saw its?largest? drop of sales since the COVID-19 epidemic began early 2020. China, as governments around the world slowed down policies to encourage the purchase of electric vehicles, has stopped funding auto trade-ins. A tax exemption for EV purchases expired in China at the end last year. BMI reported that China, the world's biggest EV market, saw a 32% drop year-on-year in battery-electric and plug-in hybrid registrations in February. This is a proxy measure of sales. This was in line a 34% decline in total car sales for the month, as reported by the China Association of Automobile Manufacturers. Charles Lester, BMI Data Manager, said that consumers are price-sensitive. In February, worldwide registrations dropped for the second consecutive month to just under one million vehicles sold. This is their lowest level since 2024. The North American EV market shrank by 35%, to less than 90,000 units, for a fifth consecutive month, following the termination of a tax credit program in the United States, last September, and the proposals made by the Trump administration to further reduce Co2 emissions standards. Trump's policies, coupled with a cooling of global demand for electric cars, have forced carmakers that are most exposed to the U.S. to write down over $70 billion. Europe has also retreated from its emission targets. In February, EV sales on the continent increased by 21%. This is a growth rate that has not slowed down compared to last year. The number of EVs registered in other parts of the world increased by 78% to more than 180,000 vehicles, as Chinese automakers expanded their presence on Asian markets, in Australia and in Europe. They also fought off fierce domestic competition.
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TEPCO delays commercial launch of Kashiwazaki - Kariwa nuclear reactor
Tokyo Electric Power announced 'on Friday that it is likely to delay the start of commercial operations at the 'Kashiwazaki Kariwa nuclear power station due to a minor leak in electricity transmission. TEPCO announced that it has decided to suspend?from the No. 6 reactor of the plant. The electricity leak was detected by an alarm in the reactor No. A spokesperson for the utility said that the utility had planned to restart commercial operations on March 18, but needed time 'to investigate the issue.' It is unclear how long this delay will last. The spokesperson stated that the reactor showed no abnormalities, and it continues to operate safely. TEPCO stated that when the reactor is disconnected from the transmission system its output will be reduced to?about 20%, but the reactor?will?remain?in operation. The spokesperson stated that once the output is reduced to 20% it takes about a week for the output to be restored to 100%. Kashiwazaki Kariwa is the largest nuclear power plant in the world. It was the first reactor to restart for TEPCO since the Fukushima catastrophe of 2011. Reporting by Yuka?Obayashi and Kantaro?Komiya Editing Chang-Ran Kim
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Indonesia Minister says high oil prices may cause budget deficit to exceed mandated limit
The senior Indonesian economic minister stated on Friday that the government may impose an additional tax on certain commodities such as palm oil if it 'needs' to reduce the impact of rising global oil prices on the budget. Airlangga Hartarto said that Indonesia, as a global commodity powerhouse, the world's biggest producer of nickel and palm oil, could impose additional tax on nickel, copper, and gold. President Prabowo said that austerity measures can be taken to mitigate the effects of the?rising oil prices in the world'. Airlangga, a government modeller, said that if oil prices remained high due to the Iran War it would be hard to maintain the fiscal deficit within the legal mandate of 3% GDP without cutting spending or reducing the economic growth. He said that he would have to consider these scenarios and the possibility of issuing an emergency order in the event the deficit limit was exceeded. He said that the government had 'predicted three scenarios for predicting?how the Middle East War could impact Southeast Asia’s largest economy. He said that under the first scenario where the Middle East war lasted five months, and crude oil was $86 per barrel in this year, the rupiah fell to 17,000 against the dollar. This would mean the growth rate would remain at 5.3% but the fiscal surplus would reach 3.18%. Airlangga stated that if crude oil averaged $97 the growth rate would fall to 5.2%, and the deficit would reach 3.53%. In the worst-case scenario, crude would average $115. This would result in a deficit of 4%. The oil prices continued to rise on Friday, as the Middle East conflict and resulting disruptions in the Gulf outweighed U.S. measures to reduce supply concerns. Brent futures May LCOc1 rose?88 cents or 0.9% to $101.34 per barrel at 0918 GMT. This is a 9% weekly rise. U.S. West Texas Intermediate crude for April CLc1 rose 26 cents or 0.3% to $95.99 per barrel, resulting in a weekly increase of 6%. Goldman Sachs forecasted on Friday that Brent oil prices would be over $100 per barrel in March, and $85 in May due to the Middle East war, the damage to energy infrastructure in the Middle East, and the disruptions along the Strait of Hormuz.
Dollar on course for second consecutive weekly increase; Euro, yen are at multi-month-lows
The U.S. Dollar was set to?gain a second weekly gain as investors moved?towards safer assets on Friday, as the Middle East war pushed investors towards safe-haven currencies. Energy-sensitive currencies like the euro and the yen fell to multi-month-lows. The economies of Japan and the euro zone, which heavily depend on crude imports would be severely affected by a sharp rise in oil prices.
The economists are still wary about monetary tightening, as the dependence of these economies on fuel imports will likely lead to a rise in energy prices that could weigh on economic growth. The euro dropped to its lowest level since August and Japan warned it would take action to prevent a decline in the yen which had reached its lowest point in 20 months. Volkmar Baur is a Commerzbank forex strategist. He said that recent statements from the U.S. government about the potential for a quick end to the conflict made the market less responsive. U.S. president?Trump said in a virtual G7 meeting on Wednesday that Iran was "about to surrender", Axios on Friday reported, citing three G7 officials briefed about the contents of the conversation.
The rising oil prices fuelled fears of a weaker economy and increased inflation. Brent futures dipped on Friday after an Indian tanker left the Strait of Hormuz. They had jumped in previous sessions. The U.S. issued a 30-day permit for countries to purchase Russian oil and petroleum products that were stranded on the sea. This was done to ease supply concerns. The International Energy Agency released a record 400,000,000 barrels of crude oil from strategic stockpiles on Wednesday.
Mark Dowding said that there is only so much the IEA could do in the long term. Analysts have argued that the emergency measures taken to ease oil supply disruptions could be sending a negative message to markets, that there is little room for a quick de-escalation. Dollar index, which measures greenbacks against a basket currencies, has reached its highest level since November 28. This is partly due to the safe-haven appeal of the dollar, but it's also because the U.S. exports energy. The index rose by 0.40%, to 100.10, and was poised for a gain of 1.25% this week.
EURO LOWEST IN 7 1/2 MONTHS
The euro has fallen to its lowest level in August, $1.1438. It was last down by 0.40% on $1.1464. Investors are awaiting the European Central Bank's policy meeting on Thursday. Traders bet that the surging oil price could force the central bank to raise rates this year.
Economists say that a prolonged closing of the Strait of Hormuz is needed to justify ECB monetary 'tightening' to combat inflation.
Citi however argued that a few "insurance" increases could not be excluded, and the central bank may open the door for this next week. Citi's main argument is that the ECB should not act because of uncertainty.
The greenback reached its highest level since January against the Swiss Franc, at 0.7894. It was last up by 0.18%, at 0.7875.
YEN IN INTERVENTION Territory
The yen fell to 159.69/$, its lowest level since July 2024. It was last unchanged at 159.37. Satsuki Katayama, Japan's Finance Minister, said that Japan was ready to take action against yen movements that affect people's daily lives. She also stated on Friday that she is in constant contact with U.S. authorities regarding?foreign currency issues. Analysts said that the recent hesitation by officials to promote the currency could push the yen down to 165 yen to the dollar.
Chris Turner, head forex strategy at ING said that Japan's authorities were firmly in the intervention zone.
The Australian dollar fell 0.40% against the greenback, to $0.7046. (Reporting and editing by Lincoln Feast; Pooja Dasai, Louise Heavens and Lincoln Feast)
(source: Reuters)