Germany’s Finance Minister Christian Lindner warned that a weak euro might be driving up inflation in Europe and encouraged the European Central Bank to increase interest rates, an unusual step that underlines the growing concerns in Europe’s largest economy about the rapid pace of price increases.
The euro has fallen close to parity against the dollar in recent weeks and is currently trading at around $1.05, down from about $1.22 a year ago. That partly reflects the relative weakness of the eurozone economy, which has been squeezed by surging energy prices, as well as the anticipation of further interest-rate increases by the Federal Reserve.
Russia Pays Bond Coupons Ahead of Likely U.S. Payment Block
Russian finance officials said Friday that they had pushed through around $100 million in interest payments due under some of the country’s foreign-currency debts, ahead of a likely change in U.S. sanctions next week that is expected to curtail Moscow’s ability to keep paying its sovereign debt.
Russia’s Finance Ministry said it had submitted roughly $71.3 million due under a dollar-denominated bond due 2026 and 26.5 million euros, equivalent to about $28 million, under a euro-denominated bond due 2036, according to Russian state media agency TASS.
U.K. Home Prices Rise in May to New High But Pace of Growth Seen to Slow
U.K. house prices rose in May to a new high for the fourth consecutive month, though there are signs the frenetic pace is starting to ease, according to new data from property portal Rightmove PLC.
The average price of property coming to the market rose by 7,400 pounds ($9,230) in May, an increase of 2.1% and hitting a record of GBP367,501.
Russia Says It Has Taken Complete Control of Mariupol After Surrender of Last Defenders
KYIV, Ukraine-Russia said it had taken complete control of the southeastern port city of Mariupol on Saturday after the surrender of the last remaining Ukrainian forces there, while Moscow’s troops pressed an offensive in the country’s east.
Ukrainian President Volodymyr Zelensky described the soldiers and marines who had defended Mariupol through a monthslong siege as national heroes. He said the military had told them to get out and save their lives.
Israeli Prime Minister Naftali Bennett Avoids Government Collapse
TEL AVIV-An Israeli lawmaker who quit the government this past week decided to rejoin the ruling, yet shaky, coalition helping Prime Minister Naftali Bennett to stay in power and avoid new elections for the time being.
The sudden resignation on Thursday of Ghaida Rinawie Zoabi, an Arab lawmaker from the left-wing Meretz party, brought Mr. Bennett’s coalition down to 59 seats out of 120 seats in the Knesset, Israel’s parliament. With Ms. Rinawie Zoabi’s return, Mr. Bennett’s coalition now counts 60 seats, split evenly with the opposition. The opposition needs 61 lawmakers to vote to dissolve the parliament and send Israel to its fifth election in a little over three years.
Dior Lands in Venice With Tony Hawk, Luxury ‘Skate Shoes’ and a Buzzy Collaboration
In many ways, the fashion show Thursday near the Venice boardwalk by French luxury house Dior delivered coastal California conventions.
There was a sweatshirt with an impossibly perfect wave stitched along the front, marshmallowy skate shoes (albeit in satin) and a front row cameo from Mr. 900 himself, Tony Hawk.
Saudi Sovereign-Wealth Fund Buys Stake in Royal’s Investment Firm
Saudi Arabia’s sovereign-wealth fund bought a stake Sunday in a firm owned by billionaire Prince al-Waleed bin Talal, further intertwining the government with a high-profile investor who was once detained by the state over corruption allegations.
The Public Investment Fund agreed to pay Prince al-Waleed $1.51 billion for 16.9% of Kingdom Holding Co., a figure based on the closing price on the last trading day before the transaction was announced, according to a filing with the Saudi stock exchange.
Stock Market Bottom Remains Elusive Despite Deepening Decline
U.S. stocks are in the midst of their longest selloff in decades.
Whether they are close to bottoming is anyone’s guess.
Conditions Are Ripe for a Deep Bear Market
With the S&P 500 briefly on Friday down 20% from its January peak, it is very tempting to start trying to call the end of the selloff. The problem is that only one of the conditions for a rally is in place, that everyone’s scared. That worked beautifully for timing the start of the 2020 rebound, but this time around may not be enough.
The other requirements are that investors start to see a way through the challenges, and that policy makers start to help. Without those, the risk is a series of bear-market rallies that don’t last, hurting dip buyers and further damaging investor confidence.
Higher Rates Raise Risk of Future Fed Losses
The Federal Reserve’s plans to raise interest rates aggressively to combat high inflation could have an overlooked and uncomfortable side effect for the central bank: capital losses.
The potential for losses hinges on obscure monetary plumbing. The Fed’s $9 trillion portfolio, sometimes called a balance sheet, is full of mostly interest-bearing assets-Treasury and mortgage-backed securities-with an average yield of 2.3%. On the other side of the ledger-the liability side of the Fed’s balance sheet-are bank deposits held at the Fed known as reserves, which are also interest bearing, as well as currency in circulation.
Biden Kicks Off Economic Group Linking U.S., Asia
President Biden and leaders from a dozen countries in the Indo-Pacific region on Monday endorsed a new economic platform meant to counter China’s influence through cooperation on global issues such as supply chains, clean energy and digital rules.
The Indo-Pacific Economic Framework marks the Biden administration’s most ambitious attempt to build economic ties with Asian nations after the U.S. under then-President Donald Trump pulled out of the Trans-Pacific Partnership in 2017. U.S. officials said the framework represented a new approach to cooperation that moves beyond a traditional trade agreement.
China’s Markets Are Tested by Foreign Outflows and a Falling Currency
HONG KONG-A withdrawal of foreign capital from China and a weaker yuan have prompted comparisons with 2015, when Beijing faced a vicious cycle of outflows and currency depreciation.
China has plugged many of the holes that once allowed its citizens and companies to move money out of the country, making a destabilizing exodus of homegrown funds less likely this time around.
China Spends Far More Than Others to Help Favored Industries, Report Finds
China spends much more in helping favored industries with state-directed funds, cheap loans and other government incentives than other major economies, according to a new study expected to intensify the debate in Washington and elsewhere over Beijing’s use of industrial policy.
The study, to be published by the Center for Strategic and International Studies on Monday, finds that China’s backing of its companies amounted to at least 1.73% of its gross domestic product in 2019-the most recent year for which comprehensive data is available-and the trend is continuing.
Rising Risk of Recession Creates New Headache for Biden
The Federal Reserve’s efforts to slow inflation are raising the possibility of higher unemployment, a slower-growing economy and a recession, prospects that could create new headaches for the Biden administration.
As the country heads into midterm-election season, much of the political discussion has centered around solid economic growth and robust employment versus the damaging impact of inflation. More recently, warnings about the prospect of an economic downturn-which could come in 2023 according to some estimates-have complicated the economic picture in a new way.
Crypto Might Have an Insider Trading Problem
Public data suggests that several anonymous crypto investors profited from inside knowledge of when tokens would be listed on exchanges.
Over six days last August, one crypto wallet amassed a stake of $360,000 worth of Gnosis coins, a token tied to an effort to build blockchain-based prediction markets. On the seventh day, Binance-the world’s largest cryptocurrency exchange by volume-said in a blog post that it would list Gnosis, allowing it to be traded among its users.
Biden Says U.S. Would Intervene Militarily if China Invaded Taiwan
TOKYO-President Biden said the U.S. would get involved militarily to defend Taiwan if China tries to take it by force, issuing a stark warning to Beijing and appearing to break with the longstanding American policy of strategic ambiguity.
“Yes. That’s the commitment we made,” Mr. Biden said Monday at a news conference in Tokyo during his first trip to Asia as commander-in-chief. He was responding to a question about whether the U.S. would get involved militarily in response to a Chinese invasion of Taiwan after declining to send American troops to Ukraine to fight Russia’s invasion.
Biden Says U.S. Is Prepared if North Korea Conducts Missile Test
SEOUL-President Biden said Sunday the U.S. is prepared for the possibility that North Korea will conduct a missile test soon.
“We are prepared for anything North Korea does. We’ve thought through how we would respond to whatever they do,” Mr. Biden told reporters here. “I am not concerned, if that’s what you’re suggesting.”
Biden Keeps Eye on Domestic Politics as He Travels Through Asia
TOKYO-President Biden is roughly 7,000 miles from the White House, but domestic affairs have taken a prominent role as he travels through South Korea and Japan in his first trip to Asia as commander in chief.
(MORE TO FOLLOW) Dow Jones Newswires
May 23, 2022 05:44 ET (09:44 GMT)
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