September 4, 2022

FBI found more than 11,000 government records at Trump’s Florida home - Financial Markets Worldwide

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World 4 hours ago (Sep 04, 2022 12:15AM ET)


FBI found more than 11,000 government records at Trump's Florida home© Reuters. FILE PHOTO: An aerial view of former U.S. President Donald Trump’s Mar-a-Lago home after Trump said that FBI agents searched it, in Palm Beach, Florida, U.S. August 15, 2022. REUTERS/Marco Bello/File Photo


By Sarah N. Lynch and Jason Lange

WASHINGTON (Reuters) -The FBI recovered more than 11,000 government documents and photographs during its Aug. 8 search at former President Donald Trump’s Florida estate, as well as 48 empty folders labeled as “classified,” according to court records that were unsealed on Friday.

The unsealing by U.S. District Judge Aileen Cannon in West Palm Beach came one day after she heard oral arguments by Trump’s attorneys and the Justice Department’s top two counterintelligence prosecutors over whether she should appoint a special master to conduct a privilege review of the seized materials at Trump’s request.

Cannon deferred ruling immediately on whether to appoint a special master but said she would agree to unseal two records filed by the Justice Department.

Former U.S. Attorney General William Barr, who was appointed by Trump, questioned the usefulness of such an appointment.

“I think at this stage, since they’ve (FBI) already gone through the documents I think it’s a waste of time” to have a special master, Barr said in an interview on Fox News.

Barr, who left the post in late December 2020, defied Trump by not backing his false claims that the presidential election that year had been stolen from him.

In the interview, Barr added that he saw no “legitimate reason” for Trump having documents at his Florida estate if they were classified.

He added, “I frankly am skeptical of this claim (by Trump) that ‘I declassified everything.’ Because frankly I think it’s highly improbable and second, if he sort of stood over scores of boxes not really knowing what was in them and said ‘I hereby declassify everything in here,’ that would be such an abuse, show such recklessness that it’s almost worse than taking the documents.”

One of the records, released on Friday, provides a little more detail about the 33 boxes and other items the FBI found inside Trump’s Mar-a-Lago estate, as part of its ongoing criminal investigation into whether he illegally retained national defense information and tried to obstruct the probe.

It shows that documents with classification markings were at times co-mingled with other items such as books, magazines and newspaper clippings.

Also found were unspecified gifts and clothing items.

Of the more than 11,000 government records and photos, 18 were labeled as “top secret,” 54 were labeled “secret” and 31 were labeled “confidential,” according to a Reuters tally of the government’s inventory.

“Top secret” is the highest classification level, reserved for the country’s most closely held secrets.

There were also 90 empty folders, 48 of which were marked “classified,” while others indicated that they should be returned to staff secretary/military aide.

It is not clear why the folders were empty, or whether any records could be missing.

The other record that was unsealed is a three-page filing by the Justice Department updating the court about the status of its investigative team’s review of the documents seized.

That filing, dated Aug. 30, said investigators had completed a preliminary review of the materials seized and will investigate further and interview more witnesses.

The Justice Department’s criminal investigation could be potentially put on pause if Cannon agrees to appoint a special master to come in and conduct an independent third-party review of the seized records.

However, Cannon signaled at Thursday’s hearing she might be willing to permit U.S. intelligence officials to continue reviewing the materials as part of their national security damage assessment, even if a special master is appointed.

The Justice Department has previously said in court filings it has evidence that classified documents were deliberately concealed from the FBI when it tried to retrieve them from Trump’s home in June.

The Justice Department also opposes the appointment of a special master, saying the records in question do not belong to Trump and that he cannot claim they are covered by executive privilege, a legal doctrine that can be used to shield some presidential communications.

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Pakistan Finance Minister expects economy to grow more than 3.5% this FY – Bloomberg News

Economic Indicators 4 hours ago (Sep 04, 2022 12:16AM ET)

Pakistan Finance Minister expects economy to grow more than 3.5% this FY - Bloomberg News© Reuters. FILE PHOTO: Pakistan’s finance minister Miftah Ismail speaks during an interview in Islamabad, Pakistan December 28, 2017. Picture taken December 28, 2017. REUTERS/Faisal Mahmood/File Photo

(Reuters) – Pakistan Finance Minister Miftah Ismail expects the economy to grow more than 3.5% for the fiscal year that started in July, Bloomberg News reported on Saturday.

Ismail predicted inflation, running at the highest in 47 years and the second-highest in Asia, was close to its peak and would average 15% for the year, the report said.

Curbs on luxury items may remain in place for longer than currently anticipated, Ismail was quoted as saying.

Ukraine and Russia: What you need to know right now - Financial Markets Worldwide

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World 2 hours ago (Sep 04, 2022 10:20AM ET)


Ukraine and Russia: What you need to know right now© Reuters. Russian President Vladimir Putin meets with Iranian President Ebrahim Raisi in Tehran, Iran July 19, 2022. President Website/WANA (West Asia News Agency)/Handout via REUTERS


(Reuters) – Ukrainian President Volodymyr Zelenskiy has told Europeans to expect a difficult winter as the Russian assault on his country leads to cuts in oil and gas exports by Moscow.


* European gas buyers already grappling with record-high prices face further pain when the markets open on Monday after Russia said one of its main supply pipelines to Europe would remain shut indefinitely, sparking fears over energy rationing.

* The European Union expects Russia to respect existing energy contracts but is prepared to meet the challenge if it fails to do so, Economic Commissioner Paolo Gentiloni said on Saturday.

* Germany’s government will use income from windfall taxes to lower end-consumer prices for gas, oil and coal, German Chancellor Olaf Scholz said, announcing measures to mitigate the impact of rising energy prices on its population.

* Germany’s gas storage facilities have reached the October goal of 85% despite the extended halt of the Nord Stream 1 pipeline delivering gas from Russia, data from European operators group GIE showed on Saturday.

* Sweden aims to offer 250 billion Swedish crowns ($23.23 billion) in liquidity guarantees to energy firms to help avert a financial crisis, Finance Minister Mikael Damberg said on Sunday.

* Russia does not support an oil production cut at this time and it is likely OPEC+ will keep its output steady when it meets Monday, the Wall Street Journal reported on Sunday, citing people familiar with the matter. (


* China’s top legislator Li Zhanshu will attend the seventh Eastern Economic Forum in Vladivostok this week, the official Xinhua news agency reported, becoming the most senior Chinese official to visit Russia since the Ukraine war began.

* Giorgia Meloni, set to lead a new Italian government with two parties once close to Moscow, warned of the risk posed to Western nations by Russia’s invasion of Ukraine, calling it the “tip of the iceberg” in a struggle for influence.


* The Zaporizhzhia plant continues to supply electricity to the grid through a reserve line despite losing connection to the last remaining main external power line, the International Atomic Energy Agency said on Saturday.

* An official from the Russian-installed administration in Zaporizhzhia told a radio station the situation around the nuclear plant has been calm so far on Sunday after accusing Ukrainian forces of trying to attack the plant two days in a row. Ukraine says Russia attacked the plant itself.

* Turkish President Tayyip Erdogan told Russian President Vladimir Putin in a phone call that his country can play a facilitator role regarding the plant, his office said on Saturday.

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John Paul I, 'Smiling Pope' for a month, moves towards sainthood

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FEMA says too early to say when Mississippi water plant will be fixed

FEMA says too early to say when Mississippi water plant will be fixed By Reuters – Sep 04, 2022

By David Brunnstrom and Kanishka Singh WASHINGTON (Reuters) – It is too early to say when a water treatment plant in Mississippi’s state capital of Jackson that failed last week…

More shelling raises nuclear fears as Kyiv, Moscow await UN report


More shelling raises nuclear fears as Kyiv, Moscow await UN report© Reuters. FILE PHOTO: A view shows the Russian-controlled Zaporizhzhia Nuclear Power Plant during a visit by members of the International Atomic Energy Agency (IAEA) expert mission, in the course of Ukraine-Russia conflict outside Enerhodar in the Zaporizhzhia regi


By Tom Balmforth

KYIV (Reuters) -Power at a critical nuclear plant in Ukraine was all but cut off on Monday for the second time in two weeks as Kyiv accused Moscow of pushing the war to the brink of nuclear catastrophe, one day before the U.N. nuclear watchdog was due to issue an assessment of the Zaporizhzhia power station. .

Ukraine and Russia have accused each other of risking catastrophe by shelling near the plant, which officials said disrupted power lines and taken the sole remaining reactor at Europe’s largest nuclear plant offline.

The International Atomic Energy Agency, citing information supplied from Ukraine, said the plant’s backup power line had been cut to extinguish a fire but that the line itself was not damaged and would be reconnected.

The plant has enough electricity to operate safely and will be reconnected to the grid once the backup power is restored, the watchdog agency said in a statement before releasing its full findings in a fuller report on Tuesday.

Ukrainian President Volodymyr Zelenskiy on Monday warned of a near “radiation catastrophe” and said the shelling showed Russia “does not care what the IAEA will say.”

“Again – already for the second time – because of Russian provocation, the Zaporizhzhia station was placed one step away from a radiation catastrophe,” he said in his nightly video message.

The nuclear concerns add to the ongoing energy fight between Moscow and the West since Russian troops invaded Ukraine in late February as the larger military conflict continues.

European markets on Monday went into free-fall as Russia kept its main gas pipeline to Germany shut. Meanwhile, Kyiv made its boldest claim yet of success on the battlefield in its week-old counter-offensive against Russian forces in the south.

The six-reactor Zaporizhzhia plant in southern Ukraine has become a focal point of the six-month conflict after Moscow took control of the facility in March, even as Ukrainian engineers continue to operate it, raising the spectre of a nuclear accident.

Ukraine’s state nuclear company Energoatom said the plant’s last working reactor block was disconnected from Ukraine’s grid after Russian shelling disrupted power lines.

Vladimir Rogov, a Russian-installed official in Zaporizhzhia region, said Ukrainian shelling had damaged a containment vessel next to the second reactor but its operation was unaffected.

Following days of silence about their new offensive, Ukrainian officials posted an image online of three soldiers raising a flag over a town in Kherson province, a southern region occupied by Russia since the war’s early days.

The image of the flag being fixed to a pole on a rooftop, purportedly in Vysokopyllya in the north of Kherson, was released as Zelenskiy on Sunday announced Ukrainian forces had captured two towns in the south and one in the east without identifying them.


After months of enduring punishing Russian artillery assaults in the east, Ukraine has at last begun its long-awaited counter-attack, its biggest since it repelled Russian forces from the outskirts of Kyiv in March.

Ukraine had kept most details of its new campaign under wraps, banning journalists from the frontline and offering little public commentary in order to preserve tactical surprise.

Russia has said it pushed back assaults in Kherson, but in a rare acknowledgment of the Ukrainian counter-offensive, TASS news agency quoted a Moscow-installed official in the region as saying plans for a referendum on joining Russia had been put on hold due to the security situation.

In a Monday evening update, the Ukrainian general staff said its forces had driven back Russian forces in an unspecified area near Kramatorsk – a key town in eastern Donetsk region – while Russian forces had shelled about a dozen towns in the south.

Still, Zelenskiy has warned European countries that they could face a cold winter.

On Monday evening, a missile strike by Russian forces destroyed an oil depot in Kryvorizsky district in Dnipropetrovsk region, emergency authorities in the area said on Facebook (NASDAQ:) following earlier nearby Russian missile strikes.


Moscow blames disruption to equipment repairs and maintenance caused by Western sanctions for its halt to the flow of gas through Nord Stream 1, its main pipeline to Germany. Russia was due to reopen the pipeline on Saturday but is now shut indefinitely.

“Problems with gas supply arose because of the sanctions imposed on our country by Western states, including Germany and Britain,” Kremlin spokesman Dmitry Peskov said on Monday.

Europe and the United States say Russia is using energy as a weapon but add they are collaborating to ensure supplies.

European countries have also rolled out billions of euros in aid that last week helped drive European gas prices back down sharply from record highs.

But the weekend news about Nord Stream’s extended shutdown sent prices soaring once again on Monday, with the main European benchmark up by more than 35%, bringing fears of a bleak winter for consumers and businesses across the continent.

share index was down well over 2%, the Euro sank below 99 U.S. cents for the first time in decades, and the pound was not far off mid-1980s lows against the dollar as Liz Truss was announced as Britain’s next prime minister.

Russia’s Peskov vowed retaliation for the latest Western move aimed at capping the price of Russian oil exports from December designed to reduce Moscow’s main source of income.

In Russia, which has effectively banned independent media since President Vladimir Putin launched his “special military operation” Feb. 24, a judge on Monday revoked the license of liberal newspaper Novaya Gazeta, one of the last unofficial voices.

The ruling was “a political hit job, without the slightest legal basis”, said its editor, Dmitry Muratov, who won last year’s Nobel Peace Prize for the paper’s fight for free speech.

A Russian court also sentenced a former journalist to 22 years in prison for treason after prosecutors said he disclosed state secrets. His supporters say the case is retribution for him exposing details of Russia’s international arms deals.

Ex Burger King workers get another bite at ‘no-hire’ conspiracy lawsuit - Financial Markets Worldwide

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Economy 5 hours ago (Sep 04, 2022 02:10AM ET)

Ex Burger King workers get another bite at 'no-hire' conspiracy lawsuit© Reuters. FILE PHOTO: The sign on a Burger King restaurant is shown in Miami, Florida October 28, 2013. REUTERS/Joe Skipper/File Photo

By Barbara Grzincic

(Reuters) – A federal appeals court has revived a potential class action against Burger King over its prior use of a “no-hire” clause that blocked all franchisees from hiring each other’s employees.

The 11th U.S. Circuit Court of Appeals Wednesday reversed a ruling by a district court judge in Miami, who dismissed the workers’ claims that the no-hire clause was an unlawful conspiracy to suppress wages and employee turnover.

The 11th Circuit said the judge erred in finding that Miami-based Burger King Worldwide, its parent companies, and its franchisees had all operated as a “single economic enterprise” that was categorically incapable of conspiring with itself.

“(T)here’s just no question that Burger King and its franchisees compete against each other and have separate and different economic interests,” and that, “in the absence of the No-Hire Agreement,” each franchised restaurant “would pursue its own economic interests and therefore potentially and fully make its own hiring decisions, including about wages, hours, and positions,” Circuit Judge Robin Rosenbaum wrote for the panel.

“They might even attempt to entice stand-out employees to leave one restaurant and join their own. But the No-Hire Agreement removes that ability,” Rosenbaum wrote, joined by Circuit Judge Charles Wilson and Senior Circuit Judge Frank Mays Hull.

Dean Harvey of Lieff Cabraser Heimann & Bernstein, lead counsel for Jarvis Arrington, Sandra Munster and Geneva Blanchard, declined to comment on the pending litigation. The workers’ appeal drew amicus support from the U.S. Justice Department.

Burger King and its attorneys did not immediately respond to requests for comment.

The lawsuit was one of many filed by fast-food workers since 2016, when the U.S. Justice Department and the Washington state attorney general began targeting the industry’s ubiquitous use of no-hire or “no-poach” agreements.

Burger King dropped the no-hire clause from its franchise agreements in 2018 as part of a settlement with the Washington attorney general. Several other fast-food chains did the same.

In lawsuits by pre-2018 workers, however, the chains have argued that there was no conspiracy or, in the alternative, that any restraint of trade was not unreasonable.

The judge in the Burger King case found it unnecessary to consider the latter argument, but Burger King urged the 11th Circuit to uphold the dismissal on that ground anyway. The International Franchise Association and the Florida Chamber of Commerce agreed in separate amicus briefs.

The panel declined, saying “those inquiries are best left to the district court” on remand.

The case is Arrington, et al. v. Burger King Worldwide Inc., Burger King Corp., and Restaurant Brands International (NYSE:) Inc., 11th U.S. Circuit Court of Appeals, No. 20-13561.

For Arrington et al.: Dean Harvey of Lieff Cabraser Heimann & Bernstein, Yaman Salahi formerly of Lieff Cabraser, and Derek Brandt of McCune Wright Arevalo

For Burger King: Stuart Singer of Boies Schiller & Flexner; Luis Suarez of Heise Suarez Melville

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Energy & Precious Metals – Weekly Review and Outlook - Financial Markets Worldwide

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Commodities 23 hours ago (Sep 04, 2022 04:15AM ET)

Energy & Precious Metals - Weekly Review and Outlook © Reuters.

By Barani Krishnan — A bad week for oil before an OPEC+ meeting? It’s hard to imagine, but that’s what’s been happening of late. “It is what it is”, as the saying goes.

Until May, crude had a picture-perfect setting. Month after month from November, prices of Brent and West Texas Intermediate rose without stop, even posting double-digit gains in December and January. 

Then, OPEC+ – comprising the 13-member Saudi-led Organization of the Petroleum Exporting Countries and its 10 allies led by Russia — had a near indomitable hold on the market. 

Russia’s invasion of Ukraine and the global disruption of commodities that followed; Moscow’s ability to hold the West at ransom over energy; and the Saudis’ mollycoddling of Vladimir Putin sent crude prices to 14-year highs, creating the illusion of an OPEC+ that could just not be outwitted.

But things have changed since, the fledgling US recession being one, along with the potential for a deeper slowdown across Europe. 

In recent weeks, talk has heated up on the likelihood of the Iran nuclear deal being revived to unlock U.S. sanctions that could allow up to a million barrels of oil from the Islamic Republic to be legitimately exported on the global market.

The White House that there was no Iran deal as yet. 

But it also said there should be no link between the reimplementation of the Iran nuclear deal and Tehran’s obligations under the nuclear Non-Proliferation Treaty.

That was the strongest signal yet that Washington really wanted a revival of the deal, agreed between Iran and six global powers in 2015 under the aegis of the Obama administration. The Trump administration that came on later canceled the deal in 2018 and placed sanctions on Tehran. President Joe Biden, on entering office in January last year, allowed negotiations to begin with the aim of reviving the deal.

And, just as the trade thought it was over, China’s Covid problems resurfaced this week, with public transport shut down in key districts of the Shenzhen technology hub. Almost 18 million Shenzhen residents were scheduled to be tested twice for coronavirus over the weekend as subway and bus services were suspended.

Add to that the possibility of another large U.S. over the next two weeks and you have a perfect storm for oil bulls. A relatively strong  for August, released Friday, suggested the Federal Reserve would be in a position to carry out a 75-basis point rate hike for a third straight time when the central bank meets on Sept 21.

WTI ended down 6.7% for the week, back beneath $90 per barrel. Brent lost 6.4%, sliding below $95.

“It’s hard to believe that oil can lose this much in a week ahead of an OPEC+ meeting,” said John Kilduff, founding partner at New York energy hedge fund Again Capital. 

“The truth is OPEC+ still has a vice grip on this market and with all the noise it’ll likely be making at Monday’s meeting, there’s every chance that oil can roll back a substantial part of this week’s losses. The question is whether the gains would hold since we’ll be having thinner volumes too from Monday’s market closure for Labor Day.”

Oil: Market Settlements and Activity 

New York-traded , the benchmark for U.S. crude, did a final trade of $87.25 a barrel after settling the session up 26 cents, or 0.3%, at $86.87. WTI’s session peak was $89.61. 

WTI was down in three prior sessions, losing 3.3% on Thursday, 2.3% on Wednesday, and 5.5% on Tuesday. That left the U.S. crude benchmark down 6.7% for the week.

, the London-traded global benchmark for oil, did a final trade of $93.28 after settling Friday’s trade up 66 cents, or 0.7%, at $93.02. The session high was $95.28. 

Like WTI, Brent was down in three prior sessions, losing 4.5% on Thursday, 2.8% on Wednesday, and 5% on Tuesday. For the week, it fell 6.4%

Oil: WTI Technical Outlook

WTI needs to get above $96.50 per barrel in the coming week in order to sustain a rally, Sunil Kumar Dixit, chief technical strategist at said.

“WTI’s weekly oversold stochastics of 3.66/12.08 continue to remain in negative formation pointing to further losses,” Dixit said.

“Short-term recovery may show some move towards $91.37–$92.60 and $95.80-$96.30. However, it will require strong acceptance above $96.50.”

Dixit, however, said he expected WTI to test the monthly Middle Bollinger Band of $82.57 and make a rebound towards $97, extending the run-up to $101-$104 over the next two weeks.

“But in the event of strong selloff beyond $82, WTI will find value buyers at $77, which is 78.6% Fibonacci level.”

Gold: Market Settlements and Activity 

There are just about three weeks left for the next Federal Reserve decision on rates. Yet it may feel like the longest three weeks to gold bulls who have seen only red almost day after day of recent trading.

The benchmark gold futures contract on New York’s Comex, , did a final trade of $1,722.60 an ounce, after settling Friday’s trade down $13.30, or 0.8%. Prior to that, December gold was down five sessions in a row, after its last positive close of $1,771.40 on August 25. 

For the current week itself, December gold slid 1.6%, adding to the back-to-back slide of 0.7% and 2.9% in the last two weeks. Gold futures have also fallen six months in a row since its last positive close of $1,954 in January, losing almost 12% in that stretch. 

Worse than futures was the , which is more closely followed than futures by some traders, which was up $15.20, or 0.9%, to $1,712.84.

Gold: Price Outlook 

Dixit of SKCharting said he does not expect gold to drop substantially below $1,670 an ounce.

“A positive overlap in gold’s oversold Daily Stochastics reading of 25/11 indicates a short-term rebound,” Dixit said.

“Yet this recovery may be short-lived and the $1,726-$1,735 resistance zone can push gold down again towards the $1,700-$1,690 breaking zone, where the 200-week Simple Moving Average of $1,671 can be tested.”

In the intermediate term, gold could attempt $1,800 again, said Dixit.

“The $1,726-$1,735 resistance zone can return gold for one more retest of $1,700-$1,690 that could extend to $1,671. From there, the push higher could see $1,760-$1,785-$1,800.”

“We don’t see any major drop below $1,670.”

Disclaimer: Barani Krishnan does not hold positions in the commodities and securities he writes about.

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Scholz promises 65 billion euros to shield Germans through tough winter - Financial Markets Worldwide

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Economic Indicators 8 hours ago (Sep 04, 2022 12:31PM ET)

Scholz promises 65 billion euros to shield Germans through tough winter© Reuters. FILE PHOTO: Petrol prices are displayed at a bft petrol station one day before the fuel discount in Germany expires after a temporary reduction of the energy tax to the minimum level set by the EU came to an end in Bonn, Germany, August 31, 2022. REUTERS/

By Thomas Escritt

BERLIN (Reuters) -Germany will spend at least 65 billion euros ($64.7 billion) on shielding customers and businesses from soaring inflation, Chancellor Olaf Scholz said on Sunday, two days after Russia announced it was suspending some gas deliveries indefinitely.

The measures, agreed after 22 hours of talks between the three coalition parties, included benefit hikes and a public transport subsidy, to be paid for from a tax on electricity companies and by bringing forward Germany’s implementation of the planned 15% global minimum corporate tax.

Russia’s invasion of Ukraine in February has led to inflation worldwide and prompted warnings of social and economic turmoil as the world weans itself off cheap energy and flexible global supply chains.

In Germany, where year-on-year inflation was running at 7.9% in August, the effect has been exacerbated by Russia’s reduction in volumes of gas pumped to the country, which has caused a surge in the price of energy fuelling Europe’s largest economy.

“Russia is no longer a reliable energy partner,” Scholz told a news conference, adding that Germany’s earlier preparations meant that it would get through the winter heating season.

Gas stores reached 85% of capacity on Saturday, almost a month ahead of schedule, partly thanks to corporate consumers cutting consumption.

But while supplies were sufficient, the government would need to help shield consumers and businesses from the higher costs, he said.

“You’ll never walk alone,” he added, switching to English to recite a song famously adopted by fans of English soccer club Liverpool.

The energy crunch came into sharper relief when Russia’s state-controlled energy giant Gazprom (MCX:) said on Friday that it was keeping closed its main Nord Stream 1 pipeline, the biggest single pipeline carrying Russian gas to Germany.

Scholz rejected suggestions that losing the steady flows of cheap Russian gas off which Germany has prospered for dedcades could herald a new, darker era for his country.

“Germany will come through this time as a democracy because we are very economically strong and we are a welfare state: the two together are important,” he told ZDF television. “With every new windpark, we will become more independent.”

The latest package brings to 95 billion euros the amount allocated to inflation-busting since the Ukraine war began in February. By contrast, the government spent 300 billion euros on propping up the economy over the two years of the pandemic.

Finance Minister Christian Lindner said the 65 billion announced on Sunday could be increased if electricity prices rose further. The windfall tax – dubbed a “coincidence tax” to assuage his party’s objections to the original term – would bring in revenue in the “two-digit billions”, he said.

Part of the proceeds would be used to offer 1.7 billion euros in tax breaks to 9,000 energy intensive companies, a government document showed.

($1 = 1.0049 euros)

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UK PM favourite Truss promises immediate action on energy - Financial Markets Worldwide

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Commodities 2 hours ago (Sep 04, 2022 07:46AM ET)

UK PM favourite Truss promises immediate action on energy© Reuters. Conservative leadership candidate Liz Truss arrives at Broadcasting House ahead of her appearance on BBC’s Sunday with Laura Kuenssberg show in London, Britain September 4, 2022. REUTERS/Phil Noble

By Elizabeth Piper

LONDON (Reuters) -British foreign minister Liz Truss said on Sunday she would set out immediate action in her first week in power to tackle rising energy bills and increase energy supplies if she is, as expected, appointed prime minister.

The governing Conservative Party is widely expected to name Truss its new leader, and Britain’s new prime minister, on Monday at a time when the country faces what is forecast to be a long recession, double-digit inflation and industrial unrest.

It is a long and costly to-do list for the incoming leader who will replace Prime Minister Boris Johnson. Truss said she would be bold in tackling the flagging economy, repeating her pledge to spur growth to fix its long list of ills.

Writing in the Sunday Telegraph, she said she understood how challenging the cost of living crisis was for Britons and she would take “decisive action to ensure families and businesses can get through this winter and the next”.

“If elected, I plan within the first week of my new administration to set out our immediate action on energy bills and energy supply,” she said.

“A fiscal event would follow later this month from my Chancellor, with a broader package of action on the economy.”

The Sunday Times newspaper cited insiders at the finance ministry as saying the cost of Truss’s plan would easily exceed 100 billion pounds ($115 billion), most of which would be added to government borrowing.

Pressed in an interview with the BBC on her plan, Truss declined to offer any details saying it was not proper to go into her precise strategy before she had taken office. She did not comment on the 100 billion pounds figure.

“I will act if elected prime minister within one week,” she told the Sunday with Laura Kuenssberg show.


In the Telegraph, she said her approach would be two-fold – immediate action to tackle the cost of living crisis and a plan to deliver economic growth. She would also appoint a Council of Economic Advisers to get “the best ideas” for the economy.

“We need to take the difficult decisions to ensure we are not in this position every autumn and winter. Sticking plasters and kicking the can down the road will not do. I am ready to take the tough decisions to rebuild our economy,” she wrote.

Her rival, former finance minister Rishi Sunak, also sought to burnish his credentials to tackle rising energy bills, saying he would offer all Britons some financial support, with additional help to those on the lowest incomes and pensioners.

After weeks of mud-slinging in an often bad-tempered leadership contest, Monday will make the beginning of a transfer of power from Johnson, who was ousted as leader after months of scandal drained his party’s support for him.

The winner of the most votes among Conservative members will be announced on Monday, and the next day, the new prime minister will meet Queen Elizabeth and be asked by her to form a government.

Beyond the immediate cost-of-living crisis, the new prime minister will also have to tackle a growing number of strikes, long waiting lists in the public health service, and a court ruling next month on Scotland’s bid for independence.

In a sign that relations might be strained with Scotland if Truss comes to power, Scottish first minister Nicola Sturgeon said she would do her best to work with the foreign minister.

“If she governs as she has campaigned over the summer, she will be a disaster not just for Scotland but for the UK,” Sturgeon told Sky News. “But let’s hope that’s not the case.”

($1 = 0.8690 pounds)

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Top 5 Things to Watch in Markets in the Week Ahead

Top 5 Things to Watch in Markets in the Week Ahead© Reuters

By Noreen Burke — The escalating energy row between Moscow and the West is set to occupy investors’ attention in the week ahead after Moscow vowed to keep its main gas pipeline to Germany shut. The European Central Bank is set to deliver a big rate hike to combat soaring inflation. Federal Reserve Chair Jerome Powell is due to make an appearance before the central bank goes into its blackout period before its next meeting. Stocks will likely remain volatile as traders return after the Labor Day holiday and OPEC+ is meeting Monday to discuss cutting output to support oil prices. Here’s what you need to know to start your week.

1. Energy row

The standoff over Russian gas and oil exports after Moscow vowed to keep its main gas supply pipeline to Germany shuttered and G7 countries announced a planned price cap on Russian oil exports aimed at hitting Russian resources to fight the war in Ukraine.

The latest Nord Stream pipeline shutdown, which Russia says will last for as long as it takes to carry out repairs, added to fears of winter gas shortages that could pull major economies into recession and lead to energy rationing.

Europe has accused Russia of weaponizing energy supplies in what Moscow has called an “economic war” with the West in the wake of Russia’s invasion of Ukraine. Moscow blames Western sanctions and technical issues for supply disruptions.

The European Commission has warned that a full cut-off of Russian gas supplies to Europe, if combined with a cold winter, could reduce GDP across the European Union by as much as 1.5% if countries did not prepare in advance.

2. ECB rate hike

The ECB looks set to deliver a second large rate hike at its upcoming meeting with inflation in the Eurozone, already at record highs, rapidly approaching double digits.

hit a high of 9.1% in August, well above the ECB’s 2% target as soaring energy bills exacerbate a cost-of-living crisis.

The only question for investors is whether the central bank will deliver another 50-basis-point hike, as it did in July, or opt for an even bigger 75-basis-point increase, despite the looming prospect of a recession this winter.

In a recent speech, ECB board member urged central banks to act forcefully to curb inflation, even if that drags their economies into a recession.

3. Fedspeak

Fed Chair is to speak at a Cato Institute conference on Thursday and investors will be on the lookout for any indications that the Fed is leaning towards another 75-basis-point at its September 20-21 meeting or whether a 50-basis-point hike may be on the cards.

Friday’s for August was a mixed bag – while the economy added more jobs than expected, moderated and the ticked higher, keeping alive the debate over the size of the next Fed hike.

Expectations for aggressive Fed action have solidified since a hawkish speech by Powell at the Fed’s Jackson Hole conference last month.

The economic calendar is light, but the Institute for Supply Management publishes its August on Tuesday, with economists expecting a reading of 55.5.

4. Stock market volatility

U.S. stocks ended the week lower on Friday as early gains on the back of the nonfarm payrolls report were overshadowed by worries about the European energy crisis.

An uptick in the U.S. unemployment rate eased concerns over the prospect of aggressive Fed rate hikes, but markets erased gains on news of the latest Nord Stream pipeline shutdown.

All three main indexes posted their third straight weekly loss, with the down 2.99%, the falling 3.29% and the shedding 4.21%.

A summer rally in stock markets has taken a hit since Powell’s at Jackson Hole, where he warned that the Fed’s fight against inflation could result in economic pain.

looks set to remain elevated when traders return after the long Labor Day weekend on Tuesday, with investors shifting their attention to U.S. inflation data due mid-month, the final piece of major economic data before the Fed’s September meeting.

5. OPEC+ meeting

The Organization of the Petroleum Exporting Countries and allies, including Russia, is due to meet on Monday and energy traders will be paying close attention after Saudi Arabia recently raised the possibility of production cuts.

Surging energy costs this year have plagued global economies as Russia’s invasion of Ukraine exacerbated supply concerns.

have eased over the summer amid uncertainty over the demand outlook from China’s COVID-19 curbs and as central banks around the world hiked interest rates to combat soaring inflation, weighing on the global economic outlook.

OPEC+ last week revised market balances for this year and now sees demand lagging supply by 400,000 barrels per day, against 900,000 bpd forecast previously. The producer group expects a market deficit of 300,000 bpd in its base case for 2023.

–Reuters contributed to this report

EU gas price rockets higher after Russia halts Nord Stream flows

EU gas price rockets higher after Russia halts Nord Stream flows© Reuters. Pipes at the landfall facilities of the ‘Nord Stream 1’ gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke

By Susanna Twidale and Nora Buli

LONDON/OSLO (Reuters) -European gas prices rocketed as much as 30% higher on Monday after Russia said one of its main gas supply pipelines to Europe would stay shut indefinitely, stoking renewed fears about shortages and gas rationing in the European Union this winter.

The benchmark gas price surged as high as 272 euros per megawatt hour (MWh) when the market opened after Russia said on Friday that a leak in Nord Stream 1 pipeline equipment meant it would stay shut beyond last week’s three-day maintenance halt.

The Dutch TTF October gas contract had eased to 256 euros, up 23% on the day by 0723 GMT but almost 400% higher than a year ago. This year’s price surge has squeezed struggling already consumers and forced some industries to halt production.

Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia says the West has launched an economic war and sanctions have hampered pipeline operations.

The Nord Stream pipeline, which runs under the Baltic Sea to Germany, historically supplied about a third of the gas Russia exported to Europe but it was already running at just 20% of capacity before flows were halted last week for maintenance.

Russian gas being supplied via Ukraine, another major route, has also been reduced, leaving the EU racing to find alternative supplies to refill gas storage facilities for winter. Several states have trigger emergency plans that could lead to energy rationing and raising prospects for a recession.

“Supply is hard to come by, and it becomes harder and harder to replace every bit of gas that doesn’t come from Russia,” said Jacob Mandel, senior associate for commodities at Aurora Energy Research.

Sky-high power costs have already forced some energy-hungry industries, including fertiliser and aluminium makers, to scale back production, and led EU governments to pump billions of euros into schemes to help households.


EU countries’ energy ministers are due to meet on Sept. 9 to discuss options to rein in soaring energy prices including gas price caps and emergency credit lines for energy market participants, a document seen by Reuters showed.

German Chancellor Olaf Scholz said on Sunday that Germany, the EU’s economic power house and Europe’s largest gas consumer, had been preparing for a total halt in gas deliveries.

Germany is at phase two of a three-stage emergency gas plan. Phase three would see some industry rationing.

In its race for alternative gas supplies, Germany is rapidly installing temporary liquefied (LNG) terminals to enable it to receive gas from producers further afield, and it is planning to build permanent LNG facilities.

Norway, a major European gas producer, has also been pumping more fuel into European markets.

“There’s plenty of scope to replace that (Russian) gas with LNG imports for now, but when the weather turns cold and demand starts to pick up in the winter in Europe and Asia, there’s only so much LNG out there that Europe can import,” Mandel said.

The global market for LNG was already tight as the world economy sucked up supplies in the recovery from the pandemic, even before the Ukraine crisis added to challenge.

Klaus Mueller, president of Germany’s Federal Network Agency energy regulator, said in August that even if Germany’s gas stores were 100% full, they would be empty in 2-1/2 months if Russian gas flows were halted completely.

Germany’s storage facilities are now about 85% full, while facilities across Europe hit an 80% target last week.

Although Russian gas has still flowed to Europe via Ukraine, albeit at reduced levels, analysts said those supplies could also become a casualty of the conflict.

“We’re shifting focus to the (gas) … that continues to flow to Europe through Ukraine,” James Huckstepp, EMEA gas analyst at S&P Global (NYSE:) Platts, said in a Twitter (NYSE:) post, adding it was “only a matter of time…” before those faced disruptions.

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