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November 24, 2022 – rdspinvestments

November 24, 2022

European stock futures edge higher; ECB minutes, German Ifo due

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Stock Markets 1 hour ago (Nov 24, 2022 02:01AM ET)

European stock futures edge higher; ECB minutes, German Ifo due© Reuters

By Peter Nurse 

Investing.com – European stock markets are expected to open marginally higher in subdued trading Thursday, as investors digest the minutes from the latest Federal Reserve meeting as well as news of fresh stimulus from China.

At 02:00 ET (07:00 GMT), the contract in Germany traded 0.1% higher, in France climbed 0.1% and the contract in the U.K. rose 0.1%.

The from the early November FOMC meeting increased the prospect of the Federal Reserve easing the pace of its aggressive interest rate hikes going forward, helping the main equity indices on Wall Street close higher Wednesday, the day before the Thanksgiving holiday.

Investors now largely expect the to hike by 50 basis points to 4.25%-4.5% at the December policy meeting, after four consecutive increases of 75 basis points.

The publishes the account of its latest meeting later in the session, but markets are not expecting similar largesse with above 10% while the flash November suggested the region had entered a recession.

European Central Bank policymaker Robert Holzmann said on Tuesday he has not decided how he will vote at the next rate-setting meeting in December but he was leaning towards an increase of 75 basis points.

Elsewhere, China announced a new rescue package for its battered property sector as well as a likely cut to the banks’ reserve requirement ratio, but the surging COVID cases still dominate investor sentiment with infections hitting a record high. 

Nomura cut its forecasts for China’s economic growth for this year to 2.8% from 2.9%, and next to 4% from 4.3%, citing a “slow, costly and bumpy” reopening of the country as COVID cases surge.

The for November is due later in the session, while there are a number of ECB speakers due, including Vice President Luis de Guindos, Board member Andrea Enria and Executive Board member Isabel Schnabel.

Crude oil prices fell Thursday, continuing the previous session’s selloff as traders digested the proposed price cap on Russian oil from the Group of Seven countries. 

The G7 is looking at a cap on Russian seaborne oil at $65-$70 a barrel, according to reports Wednesday, although more talks are scheduled for later Thursday as this has yet to be agreed.

The range would be higher than markets had expected, and is seen as less likely to provoke Russian President Vladimir Putin into disrupting global supply.

Elsewhere, the reported that U.S. crude inventories fell by 3.7 million barrels last week, more than expected, but both gasoline and distillate inventories rose substantially.

By 02:00 ET, traded 0.6% lower at $77.50 a barrel, while the contract fell 0.6% to $84.94. Both contracts fell more than 3% last session.

Additionally, rose 0.7% to $1,757.15/oz, while traded 0.4% higher at 1.0439.

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Oil muted as price cap proposal eases supply concerns

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Commodities 11 hours ago (Nov 24, 2022 03:55PM ET)

Oil muted as price cap proposal eases supply concerns© Reuters. FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo/File Photo

By Nia Williams

(Reuters) -Benchmark Brent oil edged lower on Thursday while West Texas Intermediate (WTI) crude held steady, hovering in sight of two-month lows as the level of a proposed G7 cap on the price of Russian oil raised doubts about how much it would limit supply.

A bigger-than-expected build in U.S. gasoline inventories and widening COVID-19 controls in China also added downward pressure on crude prices.

futures were down 29 cents, or 0.3%, to $85.12 a barrel by 15.15 p.m. ET (2015 GMT), while U.S. WTI crude futures rose 2 cents, to $77.96.

Trading volumes were thin because of the Thanksgiving holiday in the United States.

Both benchmarks plunged more than 3% on Wednesday on news the planned price cap on Russian oil could be above the current market level.

European Union governments remained split over what level to cap Russian oil prices at to curb Moscow’s ability to pay for its war in Ukraine without causing a global oil supply shock, with more talks possible on Friday if positions converge.

The G7 group of nations is looking at a cap on Russian seaborne oil at $65-$70 a barrel, a European official said, though European Union governments have yet to agree on a price.

A higher price cap could make it attractive for Russia to continue to sell its oil, reducing the risk of a supply shortage in global oil markets.

Some Indian refiners are paying the equivalent to a discount of around $25 to $35 a barrel to international benchmark Brent crude for Russian Urals crude, two sources said. Urals is Russia’s main export crude.

“The Russian price cap is another catalyst that served to get prices lower over the last little while,” said Bart Melek, global head of commodity market strategy at TD Securities, adding he was fairly bullish on oil despite the headwinds.

Oil prices also came under pressure after the Energy Information Administration (EIA) said on Wednesday that U.S. gasoline and distillate inventories rose substantially last week. [EIA/S]

But crude inventories fell by 3.7 million barrels to 431.7 million barrels in the week to Nov. 18, compared with expectations for a 1.1 million barrel drop in a Reuters poll of analysts.

China on Wednesday reported the highest number of daily COVID-19 cases since the start of the pandemic nearly three years ago. Local authorities tightened controls to stamp out the outbreaks, adding to investor concern over the economy and fuel demand.

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Russia revives Soviet-era Moskvich brand with Chinese model

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Economy 36 minutes ago (Nov 24, 2022 02:56AM ET)

Russia revives Soviet-era Moskvich brand with Chinese model© Reuters. FILE PHOTO: A Roly Poly Nevalyashka doll is seen inside a car during a gathering of Soviet-era Moskvich cars owners and enthusiasts in Moscow, Russia May 21, 2022. The sign reads: “Made in USSR”. REUTERS/Shamil Zhumatov/File Photo

By Gleb Stolyarov and Alexander Marrow

MOSCOW (Reuters) -After a two-decade hiatus, Russia on Wednesday launched production of the Moskvich car brand at a plant near Moscow given up by the French carmaker Renault (EPA:), with a new, modern Chinese design that barely resembles the Soviet-era classic.

While the last Moskvich (“Muscovite”) was a basic three-box saloon or pedestrian hatchback, the Moskvich 3 is a muscular-looking petrol-powered crossover hatchback with alloy wheels, LED slit-headlights and a large central touchscreen display.

In fact, the car looks identical to the Sehol X4 compact crossover made by China’s JAC, also known as the JAC JS4.

Sources told Reuters that JAC’s design, engineering and platform were being used, with parts being delivered from China, and the vehicles shown at the launch displayed numerous JAC stickers bearing part codes.

However, Maxim Klyushkin, the plant’s project manager, declined to confirm that the Chinese firm was Moskvich’s partner.

“We have (Russian truck maker) Kamaz as an external partner and we have a long-distance partner we are working with,” he said. “We are not naming that partner.”

Klyushkin said the car would have an anti-lock braking system (ABS), one of the features that Russia’s Avtovaz has been forced to remove from Lada models because of the Western trade sanctions imposed in response to Moscow’s military campaign in Ukraine.

Renault sold its majority stake in Avtovaz in May to the Russian state for reportedly just one rouble, but with a six-year option to buy it back. It sold its plant, now renamed the Moscow Automobile Factory Moskvich, for another rouble.


With just 600 vehicles slated for production this year, the new car is unlikely to alter the gloomy outlook for the wider industry, whose annual sales could end the year below 1 million for the first time in Russia’s modern history.

The government’s ultimate target of producing 100,000 Moskvich vehicles a year, some of which will be electric, is far below the industry average for a car plant of 200,000-300,000. Tesla (NASDAQ:) makes 22,000 cars a week at its Shanghai plant.

“The first Moskvich cars will come off the production line in December 2022,” Kamaz said in a statement.

Western sanctions over Moscow’s military campaign in Ukraine have not only hampered access to foreign-made components but also helped to drive out foreign manufacturers.

Kamaz and the government have established new supply chains, but not disclosed details.

“The task for the near future is to establish small-node assembly processes with the involvement of local suppliers by the end of 2023,” Industry and Trade Minister Denis Manturov said in a statement.

The ministry said the launch of full-scale production would provide jobs for around 40,000 more people. The car goes on sale in Russia next month, it added, although the price has yet to be disclosed. President Vladimir Putin last week urged carmakers to keep prices down.

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Dollar nears 3-mth low, shares climb after Fed tests the brakes

Dollar nears 3-mth low, shares climb after Fed tests the brakes© Reuters. FILE PHOTO: People walk past an electric board showing Japan’s Nikkei share average in Tokyo, Japan September 14, 2022. REUTERS/Issei Kato

By Marc Jones

LONDON (Reuters) – Shares hit a two-month high and the dollar swooped towards a three-month low on Thursday, after Federal Reserve signals of smaller interest rate rises from next month were followed by the message from Frankfurt that the ECB will plough on.

With Wall Street shut for Thanksgiving, it was up to Europe to continue the rebound in market confidence that has been building for more than a month.

It seemed a bit of a struggle early on when London’s refused to budge, but there were just enough gains in the rest of Europe () and in Asia [.SS][.T] overnight to ensure things kept shuffling forward.

By lunch MSCI’s 47-country index of world stocks was at its highest since mid-September, while German and British government bond yields, which drive Europe’s borrowing costs, had fallen to their lowest levels since October and September respectively. ()

“The Federal Reserve minutes signalled that some sensible voices are trying to drown out Fed Chair Powell’s relentless ‘hike, hike, hike’ chant,” said UBS Chief Economist Paul Donovan.

A “substantial majority” of Fed policymakers had agreed it would “likely soon be appropriate” to slow the pace of interest rate rises, the minutes released on Wednesday showed, although Donovan pointed out that there was no signal of an actual halt yet and various Fed members thought rates might need to go “somewhat higher” than expected.

Futures markets show investors now see U.S. rates peaking just above 5% by May and are pricing in a roughly 75% chance that the Fed now switches to 50 basis point rises rather than the 75 bps it has been using recently.

The ECB’s equivalent minutes out on Thursday showed its rate setters fear that inflation may now be getting entrenched in the euro zone.

“Incoming data so far suggest that the room for slowing down the pace of interest rate adjustments remains limited, even as we are approaching estimates of the ‘neutral’ rate,” one of its most influential Executive Board members Isabel Schnabel said separately.

For the currency markets, it meant the 7-week sell-off in the dollar continued. [/FRX]

The euro rose as high as $1.0447, edging it closer to its recent four-month top of $1.0481, while the dollar weakened 0.6% against the Japanese yen to 138.70 yen and past $1.20 against sterling.

“The dollar could stay pressured for a bit longer, but it’s probably embedding a good deal of Fed-related negatives now,” analysts at ING wrote.


The Fed wasn’t the only focus. Sweden’s crown nudged higher as its central bank increased its rates by three-quarters of a percentage point to 2.5% and signalled more next year.

Germany’s closely followed Ifo business climate index also rose more than expected, following on from some upbeat data from France too, while Turkey surprised no one as its slashed another 150 bps off its interest rates despite eyewateringly-high inflation of over 85%.

The Turkish central bank said that it marked the end of its cuts, however with presidential elections next year creating doubts about that the lira carved down to new record low.

Overnight, Asian markets had seen and South Korean shares both rose around 1%.

The Bank of Korea had reduced its pace of rate increases to 25 basis points. In Japan, data showed manufacturing activity had contracted at its fastest in two years.

Chinese property stocks also stormed nearly 7% higher, after banks there pledged at least $38 billion in fresh credit lines to cash-strapped developers, although the lost 0.25% as the country’s COVID cases continued to surge.

In the oil market, prices were slipping toward a major support level established in September. If they breach it, oil could tumble to levels not seen since before late 2021.

futures fell 0.3% to $85.13. oil futures eased 0.2% to $77.74 per barrel. They had tumbled more than 3% on Wednesday as the Group of Seven (G7) nations considered a price cap on Russian oil above the current market level. [O/R]

Recession fears remain intense. Wednesday’s post-Fed U.S. bond market moves had seen yields on 10-year notes drop to a huge 79-basis-point deficit relative to two-year yields.

Such a curve inversion has not been seen since the dot-com bust of 2000 and, on the face of it, is a signal that investors expect a deep economic downturn in coming months.

Dollar extends losses as Fed minutes signal slower rate hikes

Dollar extends losses as Fed minutes signal slower rate hikes© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration

By Samuel Indyk

LONDON (Reuters) – The U.S. dollar extended losses on Thursday after the minutes from the Federal Reserve’s November meeting supported the view that the central bank would downshift and raise rates in smaller steps from its December meeting.

The eagerly awaited readout of the Nov. 1-2 meeting showed officials were largely satisfied they could now move in smaller steps, with a 50 basis point rate rise likely next month after four consecutive 75 basis point increases.

“The Fed will be happy to move rates by 50 basis points in December and 25 basis points from the first meeting next year,” said Niels Christensen, chief analyst at Nordea, noting that the Fed will still feel it needs to do more to bring inflation down.

“As long as the Fed see a stronger labour market, they don’t have a big concern about tightening,” Christensen said.

The , which measures the greenback against six major peers, was down 0.2% at 105.75, after sliding 1.1% on Wednesday.

The Fed has taken interest rates to levels not seen since 2008 but slightly cooler-than-expected U.S. consumer price data has stoked expectations of a more moderate pace of hikes.

Those hopes have seen the dollar index slide 5.2% in November, putting it on track for its worst monthly performance in 12 years.

“There are not that many dollar buyers around these days after the correction higher in euro-dollar in the first half of November,” Nordea’s Christensen added.

The euro held onto gains after the account of the European Central Bank’s October meeting showed policymakers feared that inflation may be getting entrenched, justifying their outlook for further rate hikes.

The single currency was last up 0.2% at $1.0415, while sterling was trading at $1.2135, up 0.7% on the day. The pound rallied 1.4% on Wednesday after preliminary British economic activity data beat expectations, although it still showed that a contraction was under way.

The euro weakened 0.4% against the Swedish krone after Sweden’s Riksbank raised rates by 75 basis points, in line with expectations in a Reuters poll, but signalled additional hikes would be needed to fight surging inflation.

The yuan [CNY/] firmed after Chinese state media quoted the cabinet as saying that Beijing will use timely cuts in banks’ reserve requirement ratio (RRR), alongside other monetary policy tools, to keep liquidity reasonably ample.

Meanwhile, billionaire investor Bill Ackman said he’s betting the Hong Kong dollar will fall and that its peg to the U.S. dollar could break.

Since May, the Hong Kong dollar has been pinned near the weaker end of its band, although it has lifted a bit in recent weeks as markets start to price a peak in U.S. rates. It was last at 7.8102 per dollar.

The Japanese yen was one of the strongest gainers among major currencies, climbing 0.9% against the dollar to 138.285.

U.S. markets will be closed on Thursday for Thanksgiving and liquidity will likely be thinner than usual.

Real estate stocks power Europe’s STOXX 600 to fresh three-month high

Real estate stocks power Europe's STOXX 600 to fresh three-month high© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 23, 2022. REUTERS/Staff

By Sruthi Shankar and Devik Jain

(Reuters) -Europe’s index closed at a fresh three-month high on Thursday led by gains in real estate stocks after minutes from the Federal Reserve’s November meeting signalled a slowdown in the pace of interest rate hikes.

The pan-European STOXX 600 index rose 0.5% to its strongest level since Aug. 18, although trading volumes were light due to a U.S. market holiday for Thanksgiving.

Wall Street ended with solid gains on Wednesday after the U.S. central bank’s meeting minutes showed a “substantial majority” of policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes.

“It was in line with expectations around signalling smaller rate hikes, however, also underscoring that the terminal rate will be higher,” said Karim Chedid, head of investment strategy for iShares EMEA at BlackRock (NYSE:).

“What is different for the ECB is that the recession we’re expecting for Europe is going to be more protracted. It means that the ECB may not be able to go as far as the Fed and they will have to eventually start cutting rates sooner than the Fed.”

The European Central Bank’s minutes of the October meeting showed policymakers feared that inflation may be getting entrenched, justifying more rate hikes, but for how long and how much remained a debate.

Separately, ECB board member Isabel Schnabel, the most influential hawk, pushed back against recent calls from many of her colleagues for smaller interest rate increases, saying this was premature and could even prove counter-productive.

“Recent comments by ECB officials suggest that the discussion at the December meeting will be much more heated and controversial,” Carsten Brzeski, global head of macro at ING said in a note.

“We currently expect the ECB to hike rates by 50bp in December and by another 25bp in February. The big question will be around quantitative tightening (QT) or in other words, the shrinking of the ECB’s balance sheet.”

Adding to the positive mood on Thursday, a survey by the Ifo Institute showed that German business morale rose more than expected in November and pessimism heading into the coming months eased considerably.

The benchmark STOXX 600 has rallied more than 15% from its Sept. 29 closing lows as an upbeat earnings season and hopes of smaller interest rate hikes by the Fed overshadowed worries about a potential recession in Europe.

The rate-sensitive real estate sector was the top performer in Europe, up 2.5% as the German government bond yields slid. [GVD/EUR]

LEG Immobilien climbed 6.8% after Morgan Stanley (NYSE:) upgraded the German real estate firm’s stock to “overweight”.

Shares of world’s largest classified ads company Adevinta and Polish insurer PZU jumped 7.2% and 6.6%, respectively after posting strong third-quarter results.

China COVID woes, Fed minutes hit dollar, CZ’s crypto fund – what’s moving markets

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Economy Nov 24, 2022 06:55AM ET

China COVID woes, Fed minutes hit dollar, CZ's crypto fund - what's moving markets© Reuters

By Geoffrey Smith 

Investing.com — It’s Thanksgiving, and U.S. stock markets are closed for a well-deserved rest. The rest of the world is giving thanks for a set of Fed minutes that strengthened the ‘dovish pivot’ narrative, squashing the dollar and U.S. bond yields and giving respite to battered currencies the world over. The big outlier is China, where the capital Beijing is heading back into lockdown in all but name, as COVID-19 cases hit a record high. European markets are higher after a surprise improvement in the Ifo index of German business confidence. And Changpeng Zhao promises more details on his crypto recovery fund. Here’s what you need to know in financial markets on Thursday, 24th November.

1. Beijing heads back into lockdown as cases hit record

Beijing is back in lockdown in all but name.

In several of the Chinese capital’s districts, people are being asked to work from home, while non-essential shops are shut and restaurants are open for takeaway only.

Case numbers have tripled in the last week to the highest on record, a pattern repeated across the country as tentative attempts to relax restrictions have inevitably brought about a rise in infections.

The , which has fallen nearly 2% in the last 10 days amid a growing wave of negative news on the health front, was broadly steady.

2. Dollar weakens on Fed minutes

The dollar weakened and 10-year Treasury yields tested a seven-week low after the of the last Federal Reserve policy meeting showed a solid majority in favor of slowing the pace of increases amid growing signs of an economic slowdown.

Disinflation in housing and merchandise goods is in full swing, despite surprising strength in and reported on Wednesday.

By 06:20 ET, the , which tracks the greenback against a basket of developed economy currencies, was down 0.1% at 105.90, testing a three-month low, as returned to levels last seen before the “Trussonomics” debacle. The was down 2 basis points at 3.69%, while the note was down 1 basis point at 4.47%.

3. European stocks advance on Fed minutes, Ifo improvement

With U.S. markets closed for the Thanksgiving holiday, the focus has been on Europe and Asia, where the trend has been generally positive, thanks to the Fed minutes.

The big standout has been China, where local indices fell by as much as 0.6% as the prospects for another economically damaging fight with COVID grew.

By 06:20 ET, the was up 0.5% at its highest in over three months, as a rebounding promised some relief on the import cost front, reducing the pipeline pressure on .

Also helping sentiment was an improvement in the , which corroborated the uptick in S&P’s business survey on Wednesday. The ‘expectations’ component of the Ifo index rose particularly clearly, as the threat of gas rationing receded and the government’s massive relief package moved closer to being enacted.

4. Binance to publish more details on crypto recovery fund

Binance CEO Changpeng Zhao said he will publish more details of his proposed fund to support the crypto industry in the wake of FTX’s collapse.

Zhao had said there had been considerable interest in his idea during a Twitter spaces meeting earlier this month, despite the huge hit to confidence in the sector from revelations of excess, mismanagement, and alleged wrongdoing at FTX before it imploded.

Zhao’s fund is ostensibly aimed at stopping contagion from bringing down healthy crypto companies. Skeptics have suggested that its ultimate intent is to protect Binance itself from becoming the next domino to fall. Zhao insists that Binance’s financial stability is assured.

5. Oil down as China’s COVID outlook darkens

Crude oil prices fell again as the COVID news out of China worsened. China has been the key swing factor in most forecasts for global demand this year and next, and the prospect of widespread lockdowns over the winter – or of a general collapse in consumer confidence if the virus is allowed to spread out of control – is still the biggest risk to those forecasts. Fears that the economic trouble could be compounded by civil unrest are also starting to grow, after violent protests at Foxconn’s (TW:) iPhone factory in Zhengzhou earlier this week.

By 06:45 ET, prices were down 0.3% at $77.69 a barrel, while was down 0.8% at $84.75 a barrel.

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China and India easing away from Russian crude oil may be temporary: Russell

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Commodities 9 hours ago (Nov 24, 2022 08:00AM ET)

China and India easing away from Russian crude oil may be temporary: Russell© Reuters. FILE PHOTO: A well head and drilling rig in the Yarakta oilfield, owned by Irkutsk Oil Company (INK), in the Irkutsk region, Russia, March 11, 2019. REUTERS/Vasily Fedosenko/File Photo

By Clyde Russell

LAUNCESTON, Australia (Reuters) -There are signs that China and India are pulling back from buying Russian ahead of the Group of Seven nations’ proposed price cap and a European Union ban on imports.

However, the more important question for the market is whether any slowing by China and India of purchases from Russia is a temporary factor that will be reversed once participants figure out how to work with, or around, the price cap.

China, the world’s largest crude oil importer, and India, the third-biggest, have increasingly turned to Russian crude this year, buying cargoes at steep discounts as Moscow sought to keep up export volumes after Western countries shunned its oil.

The G7 price cap and the EU ban on imports are aimed at cutting the revenue Russia receives from its exports of crude oil and products and are part of efforts to punish Moscow for its Feb. 24 invasion of Ukraine. Russia calls its actions there “a special operation”.

Chinese refiners have begun slowing their purchases of Russian crude for December arrivals, according to traders and industry players in China.

The reduced volumes from Russia for December come after several months of strong imports. China is forecast to bring in 1.80 million barrels per day (bpd) of Russian crude in November, up from October’s 1.69 million bpd and in line with September’s 1.82 million bpd, according to data compiled by Refinitiv Oil Research.

It is also likely that Russia will overtake Saudi Arabia as China’s biggest supplier of crude in November, with the two leading members of the OPEC+ group having swapped the top spot several times so far this year.


Indian refiners are also wary of buying Russian crude beyond the Dec. 5 date of the EU import ban and the proposed price cap. Leading refiners Reliance Industries and state-controlled Bharat Petroleum are pulling back from placing orders, according to two sources familiar with the purchasing plans.

The lower volumes for December follow strong imports by India of Russian crude in recent months. Refinitiv estimates November arrivals at 1.0 million bpd, which would make Russia the top supplier for the month, ahead of Iraq’s 960,000 bpd.

The question is whether China and India will once again turn to Russian oil in the new year, or whether the uncertainty created by the price cap and EU ban will linger.

It’s likely that both countries will be keen to buy Russian crude, especially if it comes at a steep discount compared to grades from the Middle East and Africa.

But there are several issues that refiners in both countries will have to work around.

Payment and transportation issues such as insurance may become more complex, though it’s likely that refiners and traders are smart enough to work out ways to keep doing business.

In fact, the main difficulty may be in sourcing enough vessels to move crude from Russia’s western ports through to Asia.

Currently, much of the crude China buys from Russia comes from the eastern ports. Refinitiv data shows that of the 3.42 million tonnes of seaborne oil arriving in November, all but 705,000 tonnes came from Pacific and Arctic ports.

China is expected to import 705,000 tonnes of Russian Urals grade, which was the main grade supplied to European refiners from the country’s western ports.

Prior to the attack on Ukraine, China bought only small volumes of Urals crude, but this started to pick up in May, reaching a peak of 739,860 tonnes in June.

The question is whether Russia and China have sufficient tankers in order to increase shipments of Urals crude. These would have to come through the Suez Canal, which limits the size of vessels, or take the long route around the Cape of Good Hope in South Africa.

India, which is closer to Russia’s western ports than China, had stepped up its purchases of Urals after the start of the war in Ukraine. It’s expected to import 3.13 million tonnes of Urals crude in November, down from the record high of 3.54 million in October, but well above the 135,000 tonnes from November last year.

If Russia wants to boost shipments to China and India, or other potential buyers in Asia, it will have to secure more vessels, or strike deals with importers to use their tanker fleets.

It’s this constraint that may limit Russia’s exports to Asia, rather than the G7 price cap.

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Foxconn apologises for pay-related error at China iPhone plant after worker unrest

Foxconn apologises for pay-related error at China iPhone plant after worker unrest© Reuters. FILE PHOTO: The Foxconn logo is seen on a glass door at its office building in Taipei, Taiwan November 12, 2020. REUTERS/Ann Wang

By Yimou Lee and Brenda Goh

TAIPEI/SHANGHAI (Reuters) – Foxconn said on Thursday a pay-related “technical error” occurred when hiring new recruits at a COVID-hit iPhone factory in China and apologised to workers after the company was rocked by fresh labour unrest.

Men smashed surveillance cameras and clashed with security personnel as hundreds of workers protested at the world’s biggest iPhone plant in Zhengzhou city on Wednesday, in rare scenes of open dissent in China sparked by claims of overdue pay and frustration over severe COVID-19 restrictions.

Workers said on videos circulated on social media that they had been informed that the Apple Inc (NASDAQ:) supplier intended to delay bonus payments. Some workers also complained they were forced to share dormitories with colleagues who had tested positive for COVID.

“Our team has been looking into the matter and discovered a technical error occurred during the onboarding process,” Foxconn said in a statement, referring to the hiring of new workers.

“We apologize for an input error in the computer system and guarantee that the actual pay is the same as agreed and the official recruitment posters.” It did not elaborate on the error.

The apology was an about-face from a day earlier when Foxconn said it had fulfilled its payment contracts.

The unrest comes at a time when China is logging record numbers of COVID-19 infections and grappling with more and more lockdowns that have fuelled frustration among citizens across the country. But it has also exposed communication problems and a mistrust of Foxconn management among some staff.

The largest protests had died down and the company was communicating with employees engaged in smaller protests, a Foxconn source familiar with the matter told Reuters on Thursday.

The person said the company had reached “initial agreements” with employees to resolve the dispute and production at the plant was continuing.

Mounting worker discontent over COVID outbreaks, strict quarantine rules and shortages of food had seen many employees flee the enclosed factory campus since October after management implemented a so-called closed-loop system that isolated the plant from the wider world.

Many of new recruits had been hired to replace the workers who had fled – estimated by some former staff to number thousands.

The Taiwanese company said it would respect the wishes of new recruits who wanted to resign and leave the factory campus, and would offer them “care subsidies”. The Foxconn source said the subsidies amounted to 10,000 yuan ($1,400) per worker.


Home to over 200,000 workers, Foxconn’s Zhengzhou plant has dormitories, restaurants, basketball courts and a football pitch across its sprawling roughly 1.4 million square metre facility.

The factory makes Apple devices including the iPhone 14 Pro and Pro Max, and accounts for 70% of iPhone shipments globally.

GRAPHIC: Large bite of the apple (https://graphics.reuters.com/APPLE-INDIA/xmpjkgzxdvr/chart.png)

Apple said it had staff at the factory and was “working closely with Foxconn to ensure their employees’ concerns are addressed”.

Several shareholder activists told Reuters the protests showed the risks Apple faces through its reliance on manufacturing in China.

“The extreme dependence of Apple on China, both as a (consumer) market and as its place of primary manufacturing, we see that a very risky situation,” said Christina O’Connell, a senior manager for SumOfUs, a nonprofit corporate accountability group.

Reuters reported last month that iPhone output at the Zhengzhou factory could slump by as much as 30% in November and that Foxconn aimed to resume full production there by the second half of the month.

The Foxconn source familiar with the matter said it was not immediately clear how much impact the worker protests might have on production for November and that it might take a few days to work that out, citing the large size of the factory.

A separate source has said the unrest had made it certain that they would not be able to resume full production by month-end.

GRAPHIC: Foxconn’s iPhone shipment projections (https://graphics.reuters.com/APPLE-INDIA/znvnbdygevl/chart.png)

Apple has warned it expects lower shipments of premium iPhone 14 models than previously anticipated.

GRAPHIC: More than half of Apple’s revenue is from iPhone sales (https://graphics.reuters.com/HEALTH-CORONAVIRUS/FOXCONN-CHINA/zjpqjqargvx/chart.png)

($1 = 7.1353 )

Ghana plans to buy oil with gold instead of U.S. dollars

Ghana plans to buy oil with gold instead of U.S. dollars© Reuters. FILE PHOTO: Ghana’s Vice-President Mahamudu Bawumia is sworn in at the Independence square in Accra, Ghana January 7, 2017. REUTERS/Luc Gnago/File Photo

ACCRA (Reuters) -Ghana’s government is working on a new policy to buy oil products with gold rather than U.S. dollar reserves, Vice-President Mahamudu Bawumia said on Facebook (NASDAQ:) on Thursday.

The move is meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.

Ghana’s Gross International Reserves stood at around $6.6 billion at the end of September 2022, equating to less than three months of imports cover. That is down from around $9.7 billion at the end of last year, according to the government.

If implemented as planned for the first quarter of 2023, the new policy “will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency,” Bawumia said.

Using gold would prevent the exchange rate from directly impacting fuel or utility prices as domestic sellers would no longer need foreign exchange to import oil products, he explained.

“The barter of gold for oil represents a major structural change,” he added.

The proposed policy is uncommon. While countries sometimes trade oil for other goods or commodities, such deals typically involve an oil-producing nation receiving non-oil goods rather than the opposite.

Ghana produces but it has relied on imports for refined oil products since its only refinery shut down after an explosion in 2017.

Bawumia’s announcement was posted as Finance Minister Ken Ofori-Atta announced measures to cut spending and boost revenues in a bid to tackle a spiraling debt crisis.

In a 2023 budget presentation to parliament on Thursday, Ofori-Atta warned the West African nation was at high risk of debt distress and that the cedi’s depreciation was seriously affecting Ghana’s ability to manage its public debt.

The government is negotiating a relief package with the International Monetary Fund as the cocoa, gold and oil-producing nation faces its worst economic crisis in a generation.

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