Asian markets falling after US downgrade

Stock markets in the Asia-Pacific region fell following Fitch's decision to downgrade the US long-term rating from AAA to AA+.

Fitch decision, which was announced just before markets opened in Asia, prompted investors to flee risky investments, that is, to sell off stocks and look for defensive assets, which are considered to be the Japanese yen and the Swiss franc.

However, this also seems questionable to some individuals, given the recent dynamics of the Japanese yen.

Thus Japan's Nikkei index was dropping on August 2 by 2.46%, Hong Kong Stock Exchange index (Hang Seng Index, HSI) - by 2.23%, Shanghai (SSEC) - by 0.84%.
South Korea's KOSPI index fell by 1.83%, Australia's S&P/ASX 200 - by 1.17%.

This plunge in Asia-Pacific market indices was the biggest in almost a month.

Follow us on Telegram and Twitter

Still no oil for US

Replenishment of the Strategic Petroleum Reserve (SPR) in the US has been delayed again.

The US Department of Energy (DOE) has rejected a proposal by President Biden's administration to purchase oil to replenish the nation's reserves.

US authorities are eager to replenish the SPR after a historic 180 million barrel drawdown, which reduced it to about half its size in an effort to curb high gasoline prices.

But the Department of Energy is not accepting offers for the possible purchase.

“The DOE remains committed to its replenishment strategy for the SPR, including direct purchases when we can secure a good deal for taxpayers; exchange returns; and cancellation of planned sales where drawdown is unnecessary, in coordination with Congress,” Energy Department Deputy Chief of Staff Bridget Bartol said.

Oil prices have rallied above $80 a barrel.
So DOE doesn't want to buy at such high prices, but it seems the Biden administration is in a big hurry.

Follow us on Telegram and Twitter

‼️All private messages that come from allegedly this channel — scam

Do not pass on confidential information to such accounts and block them immediately.

Biden wants to arm Taiwan via Ukraine budget

The administration of US President Joe Biden will ask Congress to fund arms for Taiwan as part of a supplemental budget for Ukraine, the Financial Times reported.

If the legislation is passed by Congress, Taiwan will receive weapons for the first time through a US taxpayer-funded system known as "Foreign Military Financing”.

This program provides grants and loans to help countries purchase weapons and defense equipment produced in the United States as well as acquiring defense services and military training.

The White House is expected to submit a request this month.

Looks like the US is gradually losing interest in Ukrainian issues

Follow us on Telegram and Twitter

Brazil opposes BRICS expansion

Brazil is resisting gathering momentum in the BRICS group of major emerging economies to add more member countries, but debate over admission criteria seems inevitable at this month's summit, Reuters reported citing its sources.

China, Russia and South Africa are mostly in favor of expansion, while India and Brazil seek a clear process for admitting new members that is acceptable to the entire group.

BRICS currently accounts for more than 40% of the world's population and about 26% of the global economy. Some 30 countries have expressed interest, and over a dozen have already submitted formal applications to join BRICS.

Brazil is concerned that the group will lose credibility if other countries are admitted. India, on the other hand, "has reservations about expansion," believing that new members should be admitted only "through consensus."

Brazil will insist at the upcoming summit that any expansion should be gradual, maintain regional balance and keep pre-eminent roles for the five permanent members, sources said.

New members could be admitted as partner countries participating in summits without becoming full members as in other international organizations, they added.

Follow us on Telegram and Twitter

Saudi Arabia aiding Yemen's сrisis

Saudi Arabia is giving Yemen's presidential council $1.2 billion to help the conflict-torn country's struggling economy, a Saudi source told Reuters on Tuesday.

Fighting with Houthi group, which is allegedly backed by Iran, has largely ceased in northern Yemen, but the Saudi-backed government based in Aden has struggled with a weak currency and high prices.

The Yemeni official said the donation will be used to pay government salaries, buy fuel for power plants and import food.

The war in Yemen is seen as one of several proxy battles between Iran and Saudi Arabia, which earlier this year agreed to restore ties.

The Houthi movement pushed the Saudi-backed government out of Sanaa in late 2014 and has de facto control of northern Yemen. They claim they are rebelling against a corrupt system and foreign aggression.

Follow us on Telegram and Twitter

Shell shall fell - out of Nigerian fields

Shell will sell its stakes in onshore oil fields in Nigeria to local businessmen. The reason for the sale is the inability to control the situation on the ground, Bloomberg reported.

A joint venture with Nigeria's ND Western Ltd. was developing oil in the Niger Delta and coastal shallow waters.

In 2021, Shell decided to get rid of its stake in the venture on the grounds that the company's new concept of operations with the transition to new sources of energy excludes a concession with Nigeria, where there is constant theft and regular oil spills.

The sale was halted by a Nigerian court a year ago, but now the issue has been revisited and Shell is awaiting a favorable decision.

The company has confirmed that it is moving away from onshore oil development due to its inability to control the situation on the ground, while maintaining its oil production in deepwater offshore Nigeria.

Follow us on Telegram and Twitter

US Embassy to evacuate from Niger

The US government is preparing an order to evacuate most US Embassy personnel from Niger, Politico reported.

A final decision has not yet been made, but it is imminent, says the US diplomat.

Reports have also surfaced that the deputy head of the rebels, Gen. Salifou Mody, is traveling to Mali to secure the support of the Wagner group. This will put the US military in Niger in a difficult position.

The US military has 1,100 troops in Niger, mostly stationed at Air Base 101 in Niamey and Air Base 201 in Agadez, where US drones are deployed with $100 million in US funding.

US troops had been training and advising the Niger's military, but due to the current situation, the Pentagon has largely suspended that mission.

Follow us on Telegram and Twitter

Brazil expressed support for BRICS expansion

Brazilian President Lula da Silva has denied reports that Brazil does not want BRICS expansion.

"I think it is extremely important that Saudi Arabia, the UAE, if they want to, Argentina, join BRICS," he said during a meeting with foreign media.

Lula da Silva did not rule out BRICS expansion after the summit in South Africa, but said the decision to include new members should be unanimous.

Follow us on Telegram and Twitter

India is turning to its own laptops

India has imposed import restrictions on laptops, tablets and personal computers with immediate effect, according to a government notification issued on Thursday, in a bid to boost local manufacturing.

"Their import would be allowed against a valid licence for restricted imports," the notice said.

"The move's spirit is to push manufacturing to India. It's not a nudge, it's a push,” said Ali Akhtar Jafri, former director general of MAIT, an electronics manufacturing organization.

The incentive scheme is key to India's ambitions to become a powerhouse in the global electronics supply chain, with the country targeting annual production worth $300 billion by 2026.

Follow us on Telegram and Twitter

EU upset with Russia's low-priced grain

The head of European diplomacy Josep Borrell resented Russia's efforts to offer cheap grain to developing countries. In his opinion, Moscow is trying to make them dependent in this way.

According to Borrell, EU had made every effort to ensure that the sanctions did not affect the food security of third countries.

The Kremlin has already denied these allegations.

"Russia has always been and remains a reliable supplier, fulfilling all its obligations. It could do even more, meeting the growing demand, if it were not for the sanctions restrictions that are illegal from the point of view of international law, which we have to face," said Dmitry Peskov, the Kremlin spokesman.

🤡 European grain is expensive - that's okay.
Russian grain is affordable - that's causing dependence.

Follow us on Telegram and Twitter

🇷🇺 US recognizes Russia as an example

Russia’s ability to withstand sanctions imposed by Western countries will be a subject for analysts to study in the future, writes Wall Street Journal.

“How Russia managed to avoid collapse and achieve some growth during the year despite an economic blockade by the West will become a future case study for analysts pondering when sanctions make sense as a policy tool,” the publication states.

Nicholas Mulder, a professor of history at Cornell University, said the West’s attempt to impose sanctions on a country as large as Russia could be an instructive example in the long run.

“Russia’s huge size makes it impossible to cut it off from the global economy. It remains the main source of raw materials for developed economies, and for developing countries – the most important supplier of food and fertilisers,” the newspaper writes with reference to Mulder.

Russia has repeatedly stated that the country will cope with the sanctions pressure. Moscow noted that the West lacks the courage to recognize the failure of sanctions against it.

Follow us on Telegram and Twitter

UK raises rates to 5.25%

The Bank of England raised interest rates to 5.25% from previous 5%, signaling a prolonged period of tighter borrowing conditions.

The key rate was increased by a quarter point, a smaller hike than expected. The bank warned that further action may be needed if inflation persists and that their stance will remain sufficiently restrictive for a long time.

The bank also revised its growth and inflation forecasts, painting a bleak picture for the next general election.

There is growing division within the Monetary Policy Committee on how to respond to rising wages and prices alongside weakening economic activity.

The forecasts suggest the UK economy will avoid a recession, but there is still a significant risk of contraction.

The committee expects the economy to stagnate until 2025.

Follow us on Telegram and Twitter

Less oil from Saudi Arabia

Saudi authorities announced the extension of a voluntary cut in oil production by 1 million bpd (barrels per day) for September, SPA news agency reported.

At the same time, in the future the production cut may be extended and increased.

The report says that this reduction comes in addition to the earlier decision to reduce production by 500 thousand barrels per day. Thus, the total volume of production cuts in September will amount to 1.5 million barrels per day.

The cuts are said to be a precautionary measure aimed at maintaining stability and balance in the oil market.

This immediately supported oil prices, which rushed down after the downgrade of the US credit rating. Brent crude oil prices exceeded the $84 per barrel mark.

Follow us on Telegram and Twitter

Africa urges unblocking of Russian fertilizers in EU ports

African countries urge to unblock Russian fertilizers in the ports of the EU as soon as possible, stated Vincent Magwenya, the official representative of the President of South Africa, at a press briefing.

"African states, including South Africa, are pushing for a quick resolution of all issues so that more than 200,000 tons of Russian fertilizers blocked in European ports reach the world market, including Africa," he stressed.

Magwenya noted that this issue was discussed at the Russia-Africa summit held in St. Petersburg.

During the summit, Russian President Vladimir Putin noted that only two small shipments of 262,000 tons of Russian fertilizers blocked in Europe were sent to Malawi and Kenya.

So the rest remain blocked, despite the fact that many countries are in dire need of it.

Follow us on Telegram and Twitter

Americans' financial vulnerability rising

An increasingly smaller proportion of Americans are able to cover a $400 bill in an emergency, according to a Bloomberg survey.

The survey found that the percentage of US adults who claimed they could handle an unexpected $400 expense in the third quarter without taking on debt decreased by two points, reaching 46%.

Just over one-third of respondents stated that they would need to resort to some form of debt, such as borrowing from credit cards, to cover such an expense. Additionally, close to one in five individuals admitted that they wouldn't be able to pay it at all.

These figures indicate that US adults are becoming more financially vulnerable due to high prices, despite reassurances of disinflation and strong consumer demand.

Furthermore, the majority of respondents across various categories reported an increase in actual emergency expenses. Notably, medical emergencies saw a significant rise, with a median expense of $380, an increase of $62 compared to the last quarter.

Follow us on Telegram and Twitter

🇸🇦🇷🇺 Saudi Arabia and Russia extend oil output cuts ahead of OPEC+ meeting

OPEC+ leaders Saudi Arabia and Russia are continuing oil production cuts into the fall, announcing August 3 they will extend supply cuts through at least September.

Saudi Arabia will continue its 1 million barrels per day (bpd) cut, which keeps crude production at a two-year low of 9 million bpd, while Russia will cut export supplies by 500,000 bpd for August to 300,000 bpd for September.

Saudi Arabia's energy ministry said in a statement that the kingdom's output could go even lower if necessary.

Key OPEC+ ministers will discuss output strategy and market conditions at an August 4 meeting of the Joint Ministerial Monitoring Committee.

Analysts believe that maintaining the production cuts will keep oil prices above $80 per barrel through the end of the year, though any upside would be capped by high levels of OPEC spare capacity and non-OPEC supply growth.

Follow us on Telegram and Twitter